REPRESENTATION AGREEMENT
REPRESENTATION AGREEMENT, dated as of March 31, 1997, between
CBS INC., a New York corporation ("Owner"), and WESTWOOD ONE, INC., a Delaware
corporation ("Representative").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, Owner owns and operates the CBS Radio Networks
(collectively, the "Networks"), which provide news, sports and other programming
to affiliated stations nationwide; and
WHEREAS, Representative is engaged, among other
things, in the business of operating radio networks; and
WHEREAS, Owner desires to engage Representative to represent
Owner with respect to the day-to-day business and operations of the Networks and
the Designated Network Offices (as defined in Section 8.4), and Representative
is willing to provide such representation, on the terms and subject to the
conditions set forth in this Agreement.
NOW, THEREFORE, the parties hereto covenant and agree as
follows:
ARTICLE 1
Services
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Section 1.1. Provision of Services.
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(a) Description. Owner hereby engages Repre sentative, as an
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independent contractor, and Representative hereby accepts such engagement, on
the terms and subject to the conditions set forth in this Agreement, to
represent Owner in the day-to-day business and operations of the Networks and
the Designated Network Offices and, except as otherwise provided herein, to make
all decisions relating to such operations not requiring Owner Approval (as
defined in Section 10.1), and to provide such additional services, if any, as
Owner may request in writing from time to time on terms mutually satisfactory to
the parties hereto (all of the foregoing collectively, the "Services"). The
Services shall include making all decisions (subject to the provisions of
Section 10.1 (Owner Approval --------------- Matters)), with respect to (i)
sales of commercial time on the Networks, (ii) ------- marketing with respect to
the Networks, (iii) relations with all radio stations affiliated with one or
more of the Networks and (iv) subject to the provisions of Section 6.2
(Programming), programming for the Networks (including, without -----------
limitation, the execution, renewal, amendment, modification or termination of
all Personal Services Contracts (as defined in Section 8.1(b)) and Programming
Agreements (as defined in Section 8.1(c)), other than those related to Owner
Programming (as defined below). As used herein, "Owner Programming" shall mean
(i) the programming provided pursuant to the News Agreement (as defined in
Section 6.2(a)), (ii) the programming listed on Schedule 1.1(a) hereto
(including the Programming Agreements and Personal Services Contracts listed
therein) and (iii) such other programming (and the related Personal Services
Contracts and Programming Agreements) for the Networks as may from time to time
be derived from or associated with programming broadcast by or talent associated
with the CBS Television Network (e.g., college football bowl games). The ----
Services shall not include the exercise by Owner of its rights and obligations
under this Agreement, which rights and obligations shall be exercised and
performed by, or as directed by, the executive management and Board of Directors
of Owner. The parties hereto acknowledge that Representative is being engaged to
provide the Services principally due to its expertise in such matters.
(b) Manner. The Services shall be performed by Representative
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with such care as a prudent manager would use in the conduct of his company's
affairs, and Representative
shall accord the Networks the same priority as Representative accords its own
operations and the operations of other radio networks managed or represented by
Repre sentative. In providing the Services and representing Owner with respect
to the Networks, Representative shall use its reasonable commercial efforts to
(i) promote the Networks as an advertising medium and (ii) seek to preserve and
maximize the long-term value of the Networks, including the "CBS Radio Network"
tradename. Representative shall, at Representative's expense, furnish to Owner
the services of such full-time and part-time employees of Representative,
including, without limitation, executive, technical, marketing, research and
sales personnel and such other personnel as may be required properly to render
the Services. Representative hereby undertakes, on the terms set forth in the
first sentence of this Section 1.1(b), to cause the Services to be provided such
that Owner complies in all material respects with all obligations required
thereof by the Network Agreements (as defined in Section 8.1) and by all
applicable laws, rules and regulations.
(c) Affiliate Matters. Subject to the provisions of Sections
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8.3 (New Affiliation Agreements) and 10.1 (Owner Approval Matters), in providing
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the Services and represent ing Owner with respect to the Networks,
Representative shall use its reasonable commercial efforts to retain affiliates
of the Networks, conduct affiliate relations, and seek to extend Affiliation
Agreements (as defined in Section 8.1(a)) and enter into new Affiliation
Agreements.
(d) Consultation. Owner and Representative will consult with
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each other from time to time with respect to the Services, the Networks and the
performance of their respective obligations hereunder and under the other
agreements contemplated hereby.
Section 1.2. Reports; Access to Information.
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(a) Notice. Representative shall notify Owner as promptly as
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practicable after the occurrence of any of the following:
(i) receipt by Representative of (A) any notice or inquiry
from any governmental authority with respect to the transactions
contemplated by this Agreement or the other agreements contemplated
hereby or (B) any written notice from any governmental authority or
third party of any claim or legal process or notification that, in the
reasonable opinion of Representative, is or is likely to become
material to the Networks; or
(ii) any other development that, in the reason able opinion of
Representative, materially affects or is likely to materially affect
the Networks or the ability of Representative to fulfill its
obligations under this Agreement.
(b) Requests for Information. Representative promptly shall
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provide to Owner such information (including financial information) concerning
the results of operations and business of the Networks as Owner reasonably may
request from time to time.
(c) Access. Representative shall make available for inspection
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by Owner or its representatives, during normal business hours, Representative's
books of account relating to the Networks, and all other records, books and
other information received, compiled or otherwise maintained by Representative
with respect to the Networks, and all other documents reasonably requested by
Owner and its officers, managerial employees, counsel and auditors.
(d) Advertising Information. Without limiting
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the foregoing provisions of this Section 1.2, during the
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last six months of the Term (as defined in Section 2.1), in order to facilitate
Owner's determination whether to seek to extend the term of this Agreement or
take other actions with respect to the Networks upon expiration of the Term,
Representative shall make or cause to be made available to Owner and its
representatives such information as Owner reasonably requests relating to the
historical advertising revenues of the Networks during the Term and the booked
advertising sales relating to the Networks.
Section 1.3. Title. Representative acknowledges that, except
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as provided in Section 4.2 (Working Capital), it will acquire no right, title or
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interest in any property or assets of Owner by reason of this Agreement or
Representative's provision of the Services hereunder. Representative further
acknowledges that all records, books and other information received, compiled or
otherwise maintained by Representative with respect to the Networks in
connection with Representative's provision of the Services hereunder are solely
the property of Owner and shall be returned to Owner promptly upon the
expiration or earlier termination of the Term; provided, however, that Owner
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shall, upon reasonable request of Representative and at reasonable times, and
subject to such confidentiality arrangements as Owner reasonably requests,
permit Representative to make reasonable examination of such books, records and
other information and permit Representative to make copies of the relevant
portions of such books, records and other information.
Section 1.4. Power of Attorney. Subject to the provisions of
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Sections 6.2 (Programming) and 10.1 (Owner Approval Matters), Owner appoints
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Representative its attorney-in-fact for the Networks during the Term and
authorizes Representative, in the name and on behalf of the Networks, to make,
execute, deliver, acknowledge, swear to, file and record all documents as may be
necessary, in the discretion of Representative, in the performance of the
Services hereunder.
ARTICLE 2
Term
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Section 2.1. Term. The term during which the Services shall
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be provided (the "Term") shall be a period of two (2) years commencing at 12:01
a.m. on March 31, 1997 (the "Effective Date") and terminating on the earlier of
(a) 11:59 p.m. on March 30, 1999 and (b) the termination of this Agreement
pursuant to Article 14 (Termination).
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ARTICLE 3
Payments
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Section 3.1. Representation Rights Fee. Representative shall
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pay to Owner for the right to render Services under this Agreement a fixed
representation fee (the "Representation Rights Fee") of $22,000,000. The
Representation Rights Fee shall be payable quarterly in arrears (a) in four (4)
equal installments of $2,500,000 on each of June 30, 1997, September 30, 1997,
December 31, 1997 and March 30, 1998, and (b) in four equal installments of
$3,000,000 on each of June 30, 1998, September 30, 1998, December 31, 1998 and
March 30, 1999.
Section 3.2. Commitment Fee. In consideration of Owner's
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agreement set forth in Section 6.4(b) (O&O Commitment-Commitment),
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Representative shall pay to Owner, for each twelve-month period during the Term
(each, a "Contract Year") ----------- (each, an "Annual Commitment Fee"). The
Annual Commitment Fee shall be payable quarterly in arrears in four (4) equal
installments on June 30,
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September 30, December 31 and March 30 of each Contract Year. Notwithstanding
the foregoing, the Annual Commitment Fee shall be subject to adjustment as
provided in Sections 6.4(a) (O&O Commitment-O&O Affiliated Stations), 6.4(c)
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(O&O Commitment-Transfers of O&O Affiliated Stations) and 6.4(d) (O&O
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Commitment-Additional O&O Affiliated Stations). Each date on which a payment of
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the Representation Rights Fee or the Annual Commitment Fee is required to be
made under this Article 3 is referred to herein as a "Payment Date."
Section 3.3. Unconditional Obligations. Except as
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otherwise set forth herein, the obligations of Representative to pay the
Representation Rights Fee and the Annual Commitment Fee are unconditional.
ARTICLE 4
Expenses; Working Capital
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Section 4.1. Operating Expenses.
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(a) General. From and after the Effective Date, subject to
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Section 4.1(b), all expenses of representing and operating the business of the
Networks and operating the Designated Network Offices arising from events which
occur from and after the Effective Date, including, without limitation, those
expenses described in the Networks' budget attached hereto as Schedule 4.1 (the
"Budget") and the expenses of performing Owner's obligations under all Network
Agreements, shall be the responsibility of, and shall be borne by,
Representative.
(b) Designated Network Offices. Subject to the provisions of
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Section 8.4 (Designated Network Offices), (i) in the case of each Designated
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Network Office owned by Owner or an affiliate of Owner, Owner will allocate
expenses to each such Designated Network Office in accordance with its
historical practices (but in no event in excess of the amounts set forth in the
Budget (for the periods covered thereby)) and (b) in the case of each other
Designated Network Office, Representative shall be responsible for all
obligations of Owner or its affiliate accruing from and after the Effective Date
under the applicable lease.
(c) No Expense Reimbursement. Representative shall not be
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reimbursed for any out-of-pocket costs or expenses incurred by or on behalf of
Representative in connection with or relating to the provision of the Services.
Section 4.2. Working Capital.
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(a) February Statement. Attached hereto as Schedule 4.2(a) is
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a statement (the "February Statement"), which has been prepared in accordance
with the principles set forth in Schedule 4.2(a), setting forth the calculation
of Working Capital (as hereinafter defined) of the Networks as of February 28,
1997. The Working Capital as of such date is set forth under the caption
"Working Capital Retained."
(b) Opening Working Capital Statement. Not later than 120
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days after the Effective Date, Representative shall prepare a statement in
accordance with those principles, practices and captions utilized in preparing
the February Statement which shall set forth the Working Capital of the Networks
as of the opening of business on the Effective Date (the "Opening Working
Capital Statement"), and deliver the Opening Working Capital Statement to Owner.
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(c) Resolution of Disputes. After delivery of the Opening
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Working Capital Statement pursuant to Section 4.2(b), Owner shall have thirty
(30) days to review the Opening Working Capital Statement (the "Review Period")
and notify Representative in writing (in reasonable detail) (a "Dispute Notice")
of any proposed adjustments thereto. If Owner does not so notify Representative
during the Review Period, the Opening Working Capital Statement and
Representative's calculation of the Working Capital of the Networks as of the
opening of business on the Effective Date shall be deemed final and binding on
both parties (absent manifest error). If Owner delivers a Dispute Notice during
the Review Period and Owner and Representative fail to resolve (which resolution
may include, for example, the exclusion from Working Capital of any account
receivable or payable as to which a dispute exists) any dispute with respect to
any such proposed adjustment to the amount of Working Capital set forth in the
Opening Working Capital Statement within ten (10) business days following
delivery of such Dispute Notice (the "Negotiation Period"), such dispute shall
be submitted to a nationally-recognized firm of independent public accountants
jointly selected by Owner and Representative whose determination with respect to
any such proposed adjustment(s) shall be final and binding on both parties
(absent manifest error); provided, however, that if Owner and Representative
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fail to agree upon such firm within five (5) business days following the
Negotiation Period, each of Owner and Representative shall during such five (5)
business day period name such a firm, and such firms shall in turn select a
third such firm (the firm selected pursuant to this Section 4.2(b) being
referred to as the "Referee"), whose determination with respect to any such
proposed adjustment(s) shall be final and binding on both parties.
Representative and Owner agree to share equally the costs and expenses of the
Referee, but each party shall bear its own legal and other expenses, if any.
(d) Opening Working Capital Amount. The amount finally
---------------------------------
determined as the Working Capital as of the Effective Date pursuant to this
Section 4.2 is referred to in this Agreement as the "Opening Working Capital
Amount".
(e) Definition of Working Capital. For purposes of this
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Agreement, "Working Capital" shall mean, as of any date, the excess of the
current assets (excluding cash) over the current liabilities of the Networks as
of such date, calculated in accordance with the principles, practices and
captions utilized in preparing the February Statement.
(f) Transfer of Working Capital. On the Effective Date, Owner
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shall transfer to Representative all assets (including accounts receivable), and
Representative shall assume Owner's liabilities (including accounts pay able),
included in Working Capital as of the Effective Date. Following the Effective
Date, (i) each of Owner and Representative shall use reasonable efforts to
collect all accounts receivable included in Working Capital as of the Effective
Date and (ii) Owner shall remit promptly to Representative all amounts received
by Owner as payments in respect of accounts receivable included in Working
Capital as of the Effective Date. If any of the accounts receivable included in
Working Capital as of the Effective Date have not been collected as of December
31, 1997, Owner shall purchase such uncollected accounts receivable ("Opening
Purchased Accounts Receivable") from Representative not later than January 10,
1998 for 85% of their gross amount (before agency commissions), less any reserve
for doubtful accounts reflected as an offset to a current asset on the Opening
Working Capital Statement (such amounts, in the aggregate, the "Opening
Purchased Accounts Receivable Amount"), except that Owner will not be required
to purchase any accounts receivable as to which Representative has waived the
right to collect all or a portion of the sum due. For purposes of determining
whether or not an account receivable has been collected, all payments of
accounts receivable shall be applied against the oldest outstanding account
receivable from the applicable obligor, unless such obligor specifies the
receivable against which payment is being made. The Opening Purchased Accounts
Receivable Amount shall be paid by reducing the amount of the Opening Working
Capital Balance, as provided in Section 14.5(a)(ii) (Certain Matters
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Upon Termination - Release of Rights; Payment). If Owner is required to, and
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does, purchase any such accounts receivable, Representative will execute
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appropriate documents of assignment transferring such Opening Purchased Accounts
Receivable to Owner and, if Owner so requests, Representative will attempt to
collect such Opening Purchased Accounts Receivable as agent for Owner and to
remit promptly to Owner any sums that are collected.
(g) Interest Payments. The Opening Working Capital Balance (as
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defined in Section 14.5(a)(ii)) shall bear interest, during each six-month
interest period during the Term, at a rate (the "Interest Rate") per annum equal
to 50 basis points above the six-month London interbank market rate ("LIBOR")
(as set forth on the Telerate Screen as of 10:00 A.M., London time, two business
days prior to the beginning of such interest period or, if such rate does not
appear on such screen at such time, such rate shall be determined by reference
to such other publicly available service for displaying LIBOR rates as may be
agreed upon by Owner and Representative). For purposes of this Section 4.2(g),
the Opening Working Capital Balance shall be deemed to include the Severance
Amount (as defined in Section 7.2(f)) from the date that is forty-five (45) days
after the Effective Date until the Severance Amount has been paid by
Representative to Owner in accordance with the provisions of Section 7.2(f)
(Transferred Employees -- Severance). Interest shall be paid annually on March
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30, 1998 and March 30, 1999 in immediately available funds; provided, however,
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that if this Agreement is terminated prior to the expiration of the Term, the
payment required to be made pursuant to Section 14.5(a)(ii) (Certain Matters
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Upon Termination Release of Rights; Payment) shall be accompanied by a payment
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of all interest accrued under this Section 4.1(g) through the date of such
payment unless Owner has exercised the Purchase Right (as defined in Section
14.6(a)), in which event the Opening Working Capital Balance shall continue to
bear interest until Owner or Representative, as the case may be, makes the
payment contemplated by Section 14.6(g) (Purchase of Final Working Capital -
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Payment).
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ARTICLE 5
Revenues
Section 5.1. Advertising Revenues. During the Term,
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Representative shall have the exclusive authority, subject at all times to
compliance with all applicable laws, rules and regulations and all Network
Agreements (including all Advertising Arrangements (as defined in Section
8.1(d))), to sell for its own account commercial time on the Networks and,
subject to the provisions of Section 14.6 (Purchase of Final Working Capital),
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to retain all revenues from the sale of such commercial time.
ARTICLE 6
Owner Agreements
Section 6.1. License Agreement. On the Effective Date, Owner
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and Representative shall enter into a license agreement in the form attached
hereto as Exhibit A (the "License Agreement") pursuant to which Owner shall
grant to Representative a royalty-free license to use the tradename "CBS Radio
Network" in connection with Representative's performance of the Services during
the Term.
Section 6.2. Programming. (a) News Agreement. On the
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Effective Date, Owner and Representative shall enter into a programming
agreement in the form attached hereto as Exhibit B (the "News Agreement").
(b) Programming Decisions. (i) During the Term, Owner shall
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continue, in the ordinary course of business, to make all decisions (other than
with respect to the Services) concerning the Owner Programming, including all
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decisions relating to the execution, renewal, amendment, modification or
termination of all Personal Services Contracts and Programming Agreements
related thereto (including those Personal Services Contracts and Programming
Agreements described on Schedule 1.1(a), collectively, the "Owner Programming
Agreements"); provided, however, that no renewal, amendment, modification or
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termination that materially affects Representative's obligations in respect of
such Owner Programming shall be made without the prior consent of the Manager
(as defined in the Infinity Agreement) or, if the Infinity Agreement has been
terminated, Representative. Owner shall consult with Representative with respect
to such decisions involving any proposed execution, amendment, modification,
renewal or termination of any Owner Programming Agreement (it being understood
that Representative shall not have any right hereunder to approve any of the
foregoing). Notwithstanding anything to the contrary contained in this
Agreement, it is understood and agreed that Representative shall make a
decisions with respect to whether the Networks should carry Owner Programming
not currently carried by the Networks.
(iiDuring the Term, Representative shall, in the
ordinary course of business, make all decisions concerning the programming on
the Networks (other than the Owner Programming), including all decisions
relating to the execution, renewal, amendment, modification or termination of
all Personal Services Contracts and Programming Agreements (other than the Owner
Programming Agreements). Without the written consent of Representative, Owner
shall not execute, amend, modify, renew or terminate any Personal Services
Contract or Programming Agreement that is not an Owner Programming Agreement.
Owner has advised Representa tive, and Representative acknowledges, that
Representative's decisions with respect to programming that is not Owner
Programming may have an effect on Owner's strategies with respect to the CBS
Television Network. Accordingly, Repre sentative shall consult with Owner with
respect to decisions involving any proposed execution, amendment, modification,
renewal or termination of any Personal Services Contract or Programming
Agreement that is not an Owner Programming Agreement (it being understood that
Owner shall not have any right hereunder to approve any of the foregoing).
Section 6.3. Technical Services Agreement. On the Effective
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Date, Owner and Representative shall enter into a service agreement in the form
attached hereto as Exhibit C (the "Technical Services Agreement").
Section 6.4. O&O Commitment. (a) O&O Affiliated Stations.
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Attached hereto as Schedule 6.4(a) is a true, correct and complete list, which
has been prepared by Owner, of all radio stations owned and operated by Owner
that are affiliates of one or more of the Networks as of the date hereof (each,
an "O&O Affiliated Station" and, collectively, the "O&O Affiliated Stations").
Schedule 6.4(a) also sets forth, among other things, the amount of affiliate
compensa tion budgeted to be paid or allocated by or on behalf of the Networks
to each such O&O Affiliated Station during the year ending December 31, 1997.
If, during the course of any three-month period during the Term, (x) the average
number of commercial minutes per week actually provided by all O&O Affiliated
Stations in an individual market is less than 95% of the number of budgeted
commercial minutes per week for all O&O Affiliated Stations in such market, or
(y) fewer than 95% of such commercial minutes aired by all O&O Affiliated
Stations in an individual market are aired during the daypart during which they
are specified to be aired, Owner and Representative will discuss in good faith
making appropriate adjustments to the Annual Commitment Fee. For purposes of the
foregoing, a Transferred Station (as defined in Section 6.4(c) shall no longer
be deemed an O&O Affiliated Station and, accordingly, the foregoing
calculations shall be made without reference to the budgeted commercial minutes
for any Transferred Station. Owner shall cause each O&O Affiliated Station, in a
timely manner, to complete and submit to the Networks an affidavit of
performance certifying (i) the actual number of budgeted commercial minutes
provided during each week during the Term and (ii) that all commercials aired
during such week were aired during the specified daypart and, if not, the
deviation from such specified daypart.
(b) Commitment. Owner hereby agrees to cause all of the O&O
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Affiliated Stations to continue to be affiliates of the Networks with which it
is affiliated as of the date hereof until the earlier of (i) the expiration or
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earlier termination of the Term or (ii) with respect to any O&O Affiliated
Station, such time as such O&O Affiliated Station no longer is owned and
operated by Owner.
(c) Transfers of O&O Affiliated Stations. If, during the
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Term, an O&O Affiliated Station is sold, exchanged or otherwise transferred by
Owner (a "Transferred Station") (the effective date of any such transfer being
referred to as the "Transfer Date"), the amount of the Annual Commitment Fee for
the Contract Year in which the Transfer Date occurs and the following Contract
Year (if any) shall be reduced, effective as of the Transfer Date, by an amount
equal to the affiliate compensation for the Transferred Station set forth in
Schedule 6.4(a) with respect to such Transferred Station (prorated for the
remaining period of the Contract Year in which the Transfer Date occurs). Any
such reduction in respect of a Contract Year shall be applied to reduce equally
all remaining installments of the Annual Commitment Fee in such Contract Year.
Owner shall use its reasonable commercial efforts to cause the purchaser of a
Transferred Station to assume the Affiliation Agreement applicable to such
Transferred Station and thereby have such Transferred Station continue to be
affiliated with those Networks with which it is affiliated immediately prior to
the Effective Date.
(d) Additional O&O Affiliated Stations. If, during the Term,
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(i) Owner acquires a radio station and desires that such station become an
affiliate of the CBS Spectrum Radio Network or the CBS Radio Network (if not
already an affiliate thereof), or (ii) Owner desires that a radio station
currently owned and operated by Owner and not affiliated with either or both of
such Networks become an affiliate of such Network(s) with which such station is
not affiliated, Representative shall, if so requested by Owner, enter into an
affiliation agreement on behalf of such Network(s) with respect to such station
and the Annual Commitment Fee shall be increased by an amount to be agreed upon
in good faith by the parties (prorated for the remaining period of the Contract
Year in which the Transfer Date occurs). Any such increase in respect of a
Contract Year shall be applied to increase equally all remaining installments of
the Annual Commitment Fee in such Contract Year.
(e) No Limitations on Owner. Nothing contained in this Section
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6.4 shall restrict or limit in any respect whatsoever Owner's right to sell,
transfer or otherwise dispose of any radio station which is or becomes an O&O
Affiliated Station.
ARTICLE 7
Employee Matters
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Section 7.1. Current Employees. Owner has provided to
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Representative a true, correct and complete list of all employees of Owner
employed on the date hereof principally in connection with the business of the
Networks (the "Network Employee"). Such list sets forth, for each Network
Employee, his or her hire date (and any other date relevant to credit for
employee benefits purposes) and separately identifies those Network Employees
(i) who are active employees as of the date of such list (including those on
vacation, sickness or an authorized leave of absence of less than six months for
any reason, including disability) and (ii) who are not actively working on such
date by reason of a leave of absence of more than six months.
Section 7.2. Transferred Employees. (a) Designated Employees.
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Representative has advised Owner as to those Network Employees that
Representative desires to employ from and after the Effective Date (the
"Designated Employees").
(b) Notification to Designated Employees. Prior to the
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Effective Date, Owner shall notify in writing each Designated Employee of the
pending transfer of such Designated Employee's employment by Owner to
Representative on the Effective Date and that, if such Designated Employee
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accepts such offer of employment pursuant to the terms set forth below, such
Designated Employee will be employed by Representative beginning on the
Effective Date (or such later date provided in Section 7.1(c)) at a comparable
rate of pay and position and in the same city as in effect for each such
Designated Employee immediately prior to the Effective Date.
(c) Offer of Employment. Representative shall offer employment
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as of the Effective Date to all Designated Employees and shall employ, effective
as of the Effective Date, all the Designated Employees who accept such offer of
employment. For any Designated Employee who accepts such offer of employment but
is not actually at work on the Effective Date, Representative shall not be
obligated to employ such Designated Employee unless such Designated Employee
shall return to work no later than the date which is the earlier to occur of (A)
the date on which any previously authorized leave of absence expires or is
terminated and (B) the date that is sixty (60) days from the Effective Date, and
the date of effective employment for any such Designated Employee shall be the
date of return to employment within such period (all such Designated Employees,
when employed by Representative, are referred to as the "Transferred
Employees").
(d) Benefits. (i) Effective on the Effective Date (or on the
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date of effective employment, if later), Representative shall provide the
Transferred Employees with benefits which are substantially equivalent in the
aggregate to the benefits enjoyed by similarly situated employees of
Representative.
(ii) Effective as of the Effective Date (or
on the date of effective employment, if later), each Transferred Employee (and
the eligible dependents thereof) shall be eligible for coverage under the
employee benefit plans of Representative and shall cease to accrue benefits
under the employee benefit plans of Owner. Representative's plans shall not
contain exclusions for pre-existing conditions unless such exclusions were
applicable to Transferred Employees under Owner's medical, dental and health
plans prior to the date of coverage under Representative's plans.
(iii) Representative's medical, dental and
health plans providing benefits to Transferred Employees shall afford each
Transferred Employee (and the eligible dependents thereof) full credit for the
amount of all deductibles and co-pays paid for the plan year under Owner's plans
that includes the Effective Date (or the date of effective employment, if
later).
(iv) Benefits provided under any employee
benefit plan (as defined in Section 7.2(g)) of Representa tive shall credit each
Transferred Employee for purposes of eligibility and vesting under such plans
with all service with Owner, to the extent that such service was credited under
comparable plans of Owner.
(v) For purposes of determining the amount
of any entitlement of any Transferred Employee under Representative's vacation
policy, Representative will take into account and credit such Transferred
Employee's length of service with Owner. With respect to any accrued but unused
vacation time to which any Transferred Employee is entitled under a vacation
policy applicable to such Transferred Employee (the "Vacation Policy") prior to
the Effective Date, Representative shall allow such Transferred Employee to use
such accrued vacation to the same extent and on the same basis as such
Transferred Employee could have used such unused time had such Transferred
Employee remained an employee of Owner; provided, however, that if
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Representative deems it necessary to disallow such employee from taking such
accrued vacation, then Representative shall be liable for and pay in cash to
each such Transferred Employee an amount equal to such vacation time in
accordance with the terms of the Vacation Policy.
(e) Allocation of Responsibility. Except as otherwise provided
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in Section 4.2(f) (Working Capital - Transfer of Working Capital), Owner shall
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be solely responsible for all salaries and other compensation payable to or
9
accrued by or on behalf of any Transferred Employee in respect of any period of
employment by Owner prior to the Effective Date (or the date of effective
employment, if later), and Representative shall be solely responsible for any
salaries and other compensation payable to or accrued by or on behalf of any
Transferred Employee in respect of any period on and after the Effective Date
(or the date of effective employment, if later).
(f) Severance. Owner shall be responsible for all severance
---------
obligations, if any, to all Network Employees who (x) are not Transferred
Employees, (y) are Transferred Employees but resign their employment with
Representative within sixty (60) days following the Effective Date (it being
understood that any such employee may not be entitled to receive severance
payments from Owner in such circumstances) or (z) are Transferred Employees
whose employment with Representative has been terminated by Representative
within ninety (90) days following Effective Date (or the date of effective
employment, if later) (collectively, "Terminated Employees"). This section does
not purport to increase, decrease, eliminate or create any severance rights with
respect to any third party. The amount of severance actually paid by Owner to
Terminated Employees pursuant to this Section 7.2(f) shall be paid in accordance
with the terms of severance policy previously delivered to Representative and
shall be referred to herein as the "Severance Amount." Owner shall inform
Representative in writing of the Severance Amount not later than July 15, 1997,
and Representative shall pay the Severance Amount to Owner not later than five
(5) business days after Owner delivers such notice to Representative; provided,
--------
however, that such amount shall be payable solely from the proceeds, if any, of
-------
Working Capital as of the Effective Date.
(g) Indemnification. (i) Owner shall indemnify and hold
---------------
Representative harmless from all Losses (as defined in Section 11.1) arising out
of any (A) claims under any "employee benefit plan" within the meaning of
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), maintained or contributed to by Owner, including, without limitation,
any Internal Revenue Service ("IRS") claim relating to the qualification of any
employee benefit plan and accompanying trust under the Internal Revenue Code of
1986, as amended (the "Code") and (B) except to the extent included in the
Working Capital liabilities assumed by Representative pursuant to Section 4.2(f)
(Working Capital - Transfer of Working Capital), claims for employment-related
---------------------------------------------
obligations, with respect to any Network Employees (other than Transferred
Employees) regardless of when accrued or incurred and with respect to any
Transferred Employees to the extent accrued or incurred prior to the Effective
Date or the date of effective employment, if later, or by reason of any
transactions taking place as of the Effective Date or the date of effective
employment, if later, including, without limitation, salaries, bonuses, deferred
compensation, accrued but unpaid vacation days, accrued but unpaid sick leave,
relocation obligations, tuition reimbursement obligations, severance obligations
(subject to the limitations set forth in Section 7.2(f) (Transferred Employees -
-----------------------
Severance)), medical, dental or life insurance obligations and workers
---------
compensation obligations.
(ii) Representative shall indemnify and hold Owner
harmless from all Losses arising out of any (A) claims under any employee
benefit plan, including, without limitation any IRS claim relating to the
qualification of any employee benefit plan and accompanying trust under the
Code, maintained or contributed to by Representative and (B) claims for
employment-related obligations with respect to any Transferred Employee accrued
or incurred on or after the Effective Date or the date of effective employment,
if later, including, without limitation, salaries, bonuses, deferred
compensation, vacation obligations, relocation obligations, tuition
reimbursement obligations, severance obligations (except as set forth in Section
7.2(f) (Transferred Employees-Severance)), medical, dental or life insurance
--------------------------------
obligations and workers compensation obligations.
10
(h) No Third-Party Beneficiaries. Nothing in this Agreement
------------------------------
shall require the continued employment of any Transferred Employee or prevent
Representative from taking any action or refraining from taking any action with
respect to a Transferred Employee which Owner could take or refrain from taking
prior to the date hereof. No provisions of this Agreement shall create any third
party beneficiary rights of any employee or former employee (including any
beneficiary or dependent thereof) of Owner in respect of continued employment
(or resumed employment) with Owner or with Representative or in respect of any
other matter.
ARTICLE 8
Network Agreements and Arrangements
-----------------------------------
Section 8.1. Owner hereby represents and warrants to
Representative as follows:
(a) Affiliates. Set forth on Schedule 8.1(a) hereto, with
----------
respect to each Network, is a true, correct and complete list of all radio
stations affiliated with such Network as of the date thereof (all affiliation
agreements with radio stations affiliated with one or more of the Networks in
effect from time to time during the Term are referred to herein as "Affiliation
Agreements").
(b) Personal Services Contracts. Set forth on Schedule 8.1(b)
---------------------------
hereto is a true, correct and complete description of all personal services
contracts of Owner with respect to the Networks as of the date thereof (as the
same may be amended, modified, renewed or extended by Owner or Representative
during the Term in accordance with this Agreement, and together with all other
personal services contracts entered into by Owner or Representative during the
Term with respect to the Networks in accordance with this Agreement, the
"Personal Services Contracts").
(c) Programming Agreements. Set forth on Schedule 8.1(c)
-----------------------
hereto is a true, correct and complete list (as of the date thereof) of all
broadcast rights agreements between Owner and third parties with respect to the
provision of programming to or for the Networks (as the same may be amended,
modified, renewed or extended by Owner or Representative during the Term in
accordance with this Agreement, and together with all other broadcast rights
agreements entered into by Owner or Representative during the Term with respect
to the Networks in accordance with this Agreement, the "Programming
Agreements").
(d) Advertising Sales. Set forth on Schedule 8.1(d) hereto is
------------------
a true, correct and complete list (as of the date thereof) of the booked gross
advertising sales, by advertiser/product, for the Networks for the period from
December 30, 1996 through December 28, 1997 (all agreements and arrangements
with advertisers or their representatives relating to the Networks as in effect
from time to time during the Term are referred to herein "Advertising
Arrangements").
(e) Network Offices. Set forth on Schedule 8.1(e) hereto is
----------------
true, correct and complete list of the locations of all Network Offices and
occupancy information with respect to each such Network Office.
As used in this Agreement, "Network Agreements" refers collectively to all
Affiliation Agreements, Personal Services Contracts, Programming Agreements and
Advertising Arrangements.
Section 8.2. Performance of Network Agreements. During the
-----------------------------------
Term, Representative shall pay, satisfy and discharge the liabilities,
obligations and commitments of Owner arising or accruing after the Effective
Date under all Network Agreements.
11
Section 8.3. New Affiliation Agreements. Subject to the
----------------------------
provisions of Section 10.1 (Owner Approval Matters), all Affiliation Agreements
----------------------
entered into during the Term shall be required to be entered into by
Representative on behalf of Owner, and Representative shall not enter into any
such new Affiliation Agreement in its own name.
Section 8.4 Designated Network Offices. Not later than April
--------------------------
15, 1997, Representative shall specify to Owner in writing those Network Offices
that Representative intends to operate on or after the Effective Date (the
"Designated Network Offices"). Without limiting the provisions of Sections
4.1(a) (Operating Expenses - General) and 4.1(b) (Operating Expenses -
-------------------------------- ----------------------
Designated Network Offices), if Representative determines on or after the
----------------------------
Effective Date that it no longer intends to utilize any Designated Network
Office, Representative shall so notify Owner in writing not less than ninety
(90) days prior to the date on which Representative intends to vacate such
premises and, if Owner or an affiliate is the landlord of such premises,
Representative shall have no further responsibility for the expenses of
operating such Designated Network Office from and after the date such premises
are so vacated. If the landlord for any such premises is not Owner or an
affiliate of Owner, Representative shall be responsible for any and all costs
and expenses, including fees and penalties, in connection with the cessation of
use of such premises (whether resulting from the continuation or termination of
the lease, or otherwise), and all other amounts payable by the tenant under the
applicable lease.
Section 8.5. Assignments. Owner is not assigning and shall
-----------
have no obligation to assign any Network Agreement or any other agreement to
Representative.
ARTICLE 9
Infinity Agreement
------------------
Section 9.1. Waiver of Infinity Agreement. Effective as of
----------------------------
the Effective Date, Representative hereby permanently waives the provisions of
Section 4.1(a)(i) of the Management Agreement, dated as of February 3, 1994 and
amended as of December 16, 1996 and as of March 26, 1997, between Representative
and Infinity Broadcasting Corporation (the "Infinity Agreement"), but only
insofar as such provisions conflict with the common ownership by Westinghouse
Electric Corporation of Infinity Broadcasting Corporation and the Networks and
the activities of the officers of Infinity Broadcasting Corporation relating to
the Networks. Representative is delivering to Owner on the date hereof a true,
correct and complete copy of the Infinity Agreement.
ARTICLE 10
Owner Approval Matters
----------------------
Section 10.1. Owner Approval Matters. Notwithstanding anything
----------------------
to the contrary contained herein, Representative shall not take any of the
following actions without the prior written approval of the Chairman or the
Chief Financial Officer of CBS Radio: (a) institute any legal proceedings on
behalf of the Networks (other than ordinary course collection matters instituted
by Representative following not less than thirty (30) days' prior written notice
to Owner); or (b) enter into, terminate, extend or modify in any material
respect any Affiliation Agreement.
12
ARTICLE 11
Conditions
----------
Section 11.1. Conditions. The rights and obligations of the
parties hereto that are to commence on the Effective Date shall be subject to
the following conditions, which may be waived by the applicable party:
(a) Representations, Warranties and Covenants. The
-----------------------------------------
representations and warranties of the other party made in this Agreement shall
be true and correct in all material respects as of the Effective Date as though
made on such date, and the other party shall have performed all obligations
required to be performed by it under this Agreement at or prior to the Effective
Date. Each party shall have received an officer's certificate of the other
party, dated the Effective Date, to the foregoing effect.
(b) Absence of Certain Termination Events. There shall not
-------------------------------------
have occurred an event that would permit either party to terminate this
Agreement pursuant to Section 14.2 (Termination for Change in FCC Rules or
---------------------------------------
Policies; Legal Proceedings) or, in the case of Owner, would permit Owner to
-----------------------------
terminate this Agreement pursuant to Sections 14.3(a) (Owner Termination
------------------
Events-Termination of Infinity Agreement) or 14.3(b) (Owner Termination
--------------------------------------------- ------------------
Events-Loss of Key Executives).
-----------------------------
ARTICLE 12
Indemnification
---------------
Section 12.1. Indemnification.
---------------
(a) Indemnification of Representative by Owner. From and after
------------------------------------------
the Effective Date, Owner shall indemnify and hold Representative, its
affiliates and their respective directors, officers, affiliates, employees and
agents, and the successors and assigns of any of them, harmless from and against
any and all actions, claims, damages and liabilities (and all actions in respect
thereof and any legal or other expenses in giving testimony or furnishing
documents in response to a subpoena or otherwise and whether or not a party
thereto), whether or not arising out of third party claims, including reasonable
legal fees and expenses in connection with, and other costs of, investigating,
preparing or defending any such action or claim, whether or not in connection
with litigation in which such person is a party, and as and when incurred
(collectively, "Losses"), caused by, relating to, based upon or arising out of
(directly or indirectly) (i) any liabilities, obligations or commitments of
Owner or the Networks (whether absolute, accrued, contingent or otherwise)
existing as of or prior to the Effective Date or arising out of facts and
circumstances existing as of or prior thereto, which were not expressly assumed
by Representative hereunder; (ii) any breach of, or inaccuracy in, any
representation or warranty of Owner in this Agreement, the License Agreement,
the News Agreement, the Technical Services Agreement or any certificate or other
document delivered pursuant hereto or thereto or in connection herewith or
therewith; and (iii) any breach of any covenant or agreement of Owner contained
in this Agreement, the License Agreement, the News Agreement or the Technical
Services Agreement.
(b) Indemnification of Owner by Representative. From and after
------------------------------------------
the Effective Date, Representative shall indemnify and hold Owner, its
affiliates and their respective directors, officers, affiliates, employees and
agents, and the successors and assigns of any of them, harmless from and against
any and all Losses caused by, relating to, based upon or arising out of
(directly or indirectly) (i) any liabilities, obligations or commitments
13
(whether absolute, accrued, contingent or otherwise) (x) assumed by
Representative hereunder or (y) arising or accruing after the Effective Date
under the Network Agreements or Representative's performance of the Services or
operation of the Networks on or after the Effective Date through the expiration
date or termination date hereof (except to the extent caused by, relating to,
based upon or arising out of (directly or indirectly) the matters described in
clauses (ii) and (iii) of Section 12.1(a) or actions taken by Owner under the
Owner Programming Agree ments); (ii) any breach of, or inaccuracy in, any
representation or warranty of Representative in this Agreement, the License
Agreement, the News Agreement, the Technical Services Agreement or any
certificate or other document delivered pursuant hereto or thereto or in
connection herewith or therewith; and (iii) any breach of any covenant or
agreement of Representative contained in this Agreement, the License Agreement,
the News Agreement or the Technical Services Agreement.
Section 12.2. Procedure for Indemnification.
-----------------------------
(a) Notice of Claims. In the event of a claim for breach of
-----------------
the representations and warranties contained in this Agreement or for failure to
fulfill a covenant or agreement, the party asserting such breach or failure
shall provide a written notice to the other party which shall state specifically
the representation, warranty, covenant or agreement with respect to which the
claim is made, the facts giving rise to an alleged basis for the claim and the
amount of liability asserted against the other party by reason of the claim.
(b) Procedures -- Third Party Claims. If any suit, action,
--------------------------------
proceeding or investigation shall be commenced or any claim or demand shall be
asserted by any third party (a "Third Party Claim") in respect of which
indemnification may be sought by any party or parties from any other party or
parties under the provisions of this Article 12, the party or parties seeking
indemnification (collectively, the "Indemnitee") shall promptly provide written
notice to the party or parties from which indemnification is sought
(collectively, the "Indemnitor"); provided, however, that any failure by an
-------- -------
Indemnitee to so notify an Indemnitor will not relieve the Indemnitor from its
obligations hereunder, except to the extent that such failure shall have
prejudiced the defense of such Third Party Claim. The Indemnitor shall have the
right to control (except where an insurance carrier has the right to control or
where an insurance policy or applicable law prohibits the Indemnitor from taking
control of) the defense of any Third Party Claim; provided, however, that the
-------- -------
Indemnitee may participate in any such proceeding with counsel of its choice and
at its own expense unless there exists a conflict between the Indemnitor and the
Indemnitee as to their respective legal defenses, in which case the fees and
expenses of any such counsel shall be reimbursed by the Indemnitor. Except as
otherwise set forth herein, the Indemnitee shall have the right to participate
in (but not control) the defense of any Third Party Claim and to retain its own
counsel in connection therewith, but the fees and expenses of any such counsel
for the Indemnitee shall be borne by the Indemnitee. The Indemnitor shall not,
without the prior written consent of the Indemnitee, effect any settlement of
any pending or threatened proceeding in respect of which such Indemnitee is, or
with reasonable foreseeability could have been, a party and indemnity could have
been sought to be collected from the Indemnitor, unless such settlement includes
an unconditional release of such Indemnitee from all liability arising out of
such proceeding (provided, however, that, whether or not such a release is
-------- -------
required to be obtained, the Indemnitor shall remain liable to such Indemnitee
in accordance with Section 12.1 (Indemnification) in the event that a Third
---------------
Party Claim is subsequently brought against or sought to be collected from such
Indemnitee). The Indemnitor shall be liable for all Losses arising out of any
settlement of any Third Party Claim; provided, however, that the Indemnitor
shall not be liable for any settlement of any Third Party Claim brought against
or sought to be collected from an Indemnitee, the settlement of which is
effected by such Indemnitee without such Indemnitor's written consent, but if
settled with such Indemnitor's written consent, or if there is a final judgment
for the plaintiff in any such Third Party Claim, such Indemnitor shall (to the
extent stated above) indemnify the Indemnitee from and against any Losses in
14
connection with such Third Party Claim. The indemnification required by Section
12.1 (Indemnification) shall be made by periodic payments of the amount thereof
during the course of the investigation or defense, as and when bills are
received or Losses are incurred.
Section 12.3. Survival of Representations, Warranties and
----------------------------------------------
Covenants. The representations and warranties contained in this Agreement, the
---------
License Agreement, the News Agreement, the Technical Services Agreement or any
certificate, document or instrument delivered pursuant hereto or thereto shall
survive for a period of six (6) months following the termination of this
Agreement (the "Survival Period"). No claim may be brought under this Agreement
unless the requisite written notice is given on or prior to the termination of
the Survival Period. In any event such notice is given prior to the termination
of the Survival Period, the right to indemnification with respect thereto shall
survive until such claim is finally resolved and any obligations thereto ar
fully satisfied. Any investigation by or on behalf of any party thereto shall
not constitute a waiver as to enforcement of any representation or warranty
contained herein.
ARTICLE 13
Events of Default and Cure Periods
----------------------------------
Section 13.1. Events of Default. The following shall, after
-----------------
the expiration of the applicable cure periods (if any) as set forth in Section
13.2 (Cure Periods), each constitute an "Event of Default" under this Agreement.
------------
(a) Non-Payment. Representative's failure to pay when due the
-----------
fees or other amounts payable by Representative under this Agreement, the News
Agreement or the Technical Services Agreement;
(b) Default in Covenants. Either party defaults in any
----------------------
material respect in the performance of any covenant or undertaking contained in
this Agreement, the License Agreement, the News Agreement or the Technical
Services
Agreement;
(c) Breach of Representation. Any representation or warranty
-------------------------
made by either party to this Agreement, the License Agreement, the News
Agreement or the Technical Services Agreement proves to have been false or
misleading in any material respect as of the time made.
(d) Bankruptcy. Either party (a) makes a general assignment
----------
for the benefit of creditors, or (b) files or has filed against it a petition
for bankruptcy, for reorganization or an arrangement, or for the appointment of
a receiver, trustee or similar creditors' representative for the property or
assets of such party under any federal or state insolvency law, which, if filed
against such party, has not been dismissed or discharged within sixty( 60) days
thereafter.
Section 13.2. Cure Periods. Except for an Event of Default
-------------
described in Section 13.1(a) (as to which there shall be a ten (10) day cure
period), an Event of Default shall not be deemed to have occurred until thirty
(30) days after the non-defaulting party has provided the defaulting party with
written notice specifying the event or events that, if not cured, would
constitute an Event of Default and specifying the actions necessary to cure the
default(s) within such period. Such thirty (30) day period may be extended for a
reasonable period of time if the defaulting party is acting in good faith to
cure and such delay is not materially adverse to the other party.
15
ARTICLE 14
Termination
-----------
Section 14.1. Termination Upon Default. Upon the
------------------------
occurrence of an Event of Default, the non-defaulting party may terminate this
Agreement, provided that it is not also in material default of this Agreement,
the License Agreement or the News Agreement. Without limiting Owner's remedies
hereunder in connection with a default by Representative, if Representative has
defaulted in the performance of its obligations, all amounts accrued or payable
to Owner hereunder or under the News Agreement or the Technical Services
Agreement up to the date of termination which have not been paid shall
immediately become due and payable.
Section 14.2. Termination for Change in FCC Rules or
--------------------------------------
Policies; Legal Proceedings. Either party may terminate this Agreement upon
-----------------------------
written notice to the other if:
(a) FCC Matters. There has been a material change in FCC rules
-----------
or policies that would cause this Agree ment to be in violation thereof and such
change is in effect and not the subject of an appeal or further administrative
review; provided, however, that in such event the parties shall negotiate in
-------- -------
good faith and attempt to agree to an amendment to this Agreement that will
provide the parties with a valid and enforceable agreement that conforms to the
new FCC rules or policies.
(b) Legal Proceedings. An action or proceeding shall have
------------------
been instituted by any governmental authority seeking to restrain, prohibit or
otherwise limit in any material respect the consummation of the transactions
contemplated hereby or the performance by any party of its obligations hereunder
or under the License Agreement, the News Agreement or the Technical Services
Agreement, or a court or governmental authority shall have issued any order
restraining, prohibiting or limiting in any material respect the consummation of
such transaction or the performance of such obligations, or which could
reasonably be expected to adversely affect the business of the Networks.
Section 14.3. Owner Termination Events. Owner may terminate
------------------------
this Agreement if:
(a) Termination of Infinity Agreement. The Infinity
---------------------------------
Agreement shall have expired without renewal or shall have been terminated
pursuant to Section 3.2 thereof; or
(b) Loss of Key Executive. Neither Xxx Xxxxxxxx nor a
------------------------
successor reasonably satisfactory to Owner shall be actively engaged in managing
the business of Representative.
Section 14.4. Representative Termination Events.
---------------------------------
Representative may terminate this Agreement, upon not less than ninety (90)
days' prior written notice to Owner, if:
(a) Termination of Infinity Agreement. The Infinity Agreement
---------------------------------
shall have (i) expired without renewal, (ii) been terminated pursuant to Section
3.2(a) or 3.2(c) thereof or (iii) been terminated pursuant to Section 3.2(b)(i)
thereof; or
16
(b) Loss of Key Executive. Neither Xxx Xxxxxxxx nor a
------------------------
successor reasonably satisfactory to Representative shall be actively engaged in
managing the business of Representative. Notwithstanding the foregoing,
Representative may not terminate this Agreement pursuant to this Section 14.4
(other than pursuant to Section 14.4(a)(iii) and other than if Xx. Xxxxxxxx'x
employment by Manager (as defined in the Infinity Agreement) has been terminated
by Owner) prior to the first anniversary of the Effective Date.
Section 14.5. Certain Matters Upon Termination.
--------------------------------
(a) Release of Rights; Payment. Except as provided in Section
---------------------------
14.6 (Purchase of Final Working Capital), if this Agreement expires or is
------------------------------------
terminated for any reason in accordance herewith:
(i) Representative shall cease providing the Services
and, following such expiration or termination, shall
cooperate with Owner in connection with the resumption by Owner
of overall management of the Networks;
(ii) Representative shall, on the expiration date or, in
the case of earlier termination, not later than sixty (60)
days following the termination date, pay to Owner, by wire
transfer of immediately available funds, the sum of (x) an
amount (the "Opening Working Capital Balance") equal to (A)
the Opening Working Capital Amount, minus (B) the Severance
-----
Amount actually paid to Owner pursuant to Section 7.2(f)
(Transferred Employees-Severance), minus (C) the Opening
------------------------------- -----
Purchased Accounts Receivable Amount and (y) accrued
interest thereon as provided in Section 4.2(g)
(Working Capital-Interest Payments); and
---------------------------------
(iii) In the case of earlier termination, Representative
shall pay to Owner, by wire transfer of immediately available
funds, not later than sixty (60) days following the
termination date, all amounts of the Representation Rights
Fee and the Annual Commitment Fee accrued through the
termination date, together with interest thereon at the
Interest Rate from and including the next scheduled Payment
Date through but excluding the actual date of payment;
provided, however, that if Representative terminates this
-------- -------
Agreement pursuant to Section 14.4 (other than Section
14.4(a)(iii) and other than if Xx. Xxxxxxxx'x employment
by Manager has been terminated by Owner), Representative
shall pay to Owner, by wire transfer of immediately available
funds, not later than sixty (60) days following the termination
date, all remaining installments of the Representation Rights
Fee and the Annual Commitment Fee for the remainder of the
Term, together with interest thereon at the Interest Rate
from and including the next scheduled Payment Date through
but excluding the actual date of payment.
(b) Indemnification Rights Survive. No expiration or
----------------------------------
termination of this Agreement shall terminate the obligation of any party to
indemnify the other under Section 7.2(g) (Transferred Employees -
---------------------------
Indemnification) or Section 12.1 (Indemnification) or limit or impair any
--------------- ---------------
party's rights to receive payments due and owing hereunder on or before the date
of such termination.
17
Section 14.6. Purchase of Final Working Capital.
---------------------------------
(a) Purchase Right. Notwithstanding anything to the contrary
--------------
contained in this Agreement, Owner shall have the right (the "Purchase Right"),
but not the obligation, upon the expiration or earlier termination of the Term,
to acquire all of Representative's right, title and interest in and to, and
shall in connection therewith assume Representative's liabilities included in,
all items of Working Capital set forth in the Final Working Capital Amount (as
hereinafter defined).
(b) Exercise. If Owner desires to exercise the Purchase Right
--------
(i) upon expiration of the Term, Owner shall provide written notice to such
effect to Representative not less than sixty (60) days prior to the end of the
second Contract Year or (ii) in connection with a termination of this Agreement
other than upon its expiration, Owner shall provide written notice to such
effect to Representative prior to the effective date of any such termination.
(c) Final Working Capital Statement. Not later than sixty
-------------------------------
(60) days after the expiration date or effective date of any such termination,
as the case may be (in any such case, the "Termination Date"), Representative
shall prepare a statement in accordance with those principles, practices and
captions utilized in preparing the Opening Working Capital Statement which shall
set forth the Working Capital of the Networks as of the close of business on the
Termination Date (the "Final Working Capital Statement"), and shall deliver the
Final Working Capital Statement to Owner.
(d) Resolution of Disputes. The provisions of Section 4.2(c)
(Working Capital-Resolution of Disputes) shall apply mutatis mutandi to the
---------------------------------------- ------- -------
review by Owner of the Final Working Capital Statement delivered pursuant to
Section 14.6(c) and the resolution of any disputes relating to the calculation
of the Final Working Capital Amount.
(e) Final Working Capital Amount. The amount finally
---------------------------------
determined as the Working Capital as of the Termination Date pursuant to this
Section 14.6 is referred to in this Agreement as the "Final Working Capital
Amount".
(f) Transfer of Final Working Capital. If Owner exercises
---------------------------------
the Purchase Right, on the Termination Date, (i) Representative shall transfer
to Owner all assets (including accounts receivable), and Owner shall assume
Representative's liabilities (including accounts payable), included in the Final
Working Capital Statement, (ii) to the extent practicable, Representative shall
assign, transfer and convey to Owner all of Representative's rights in, to and
under all Advertising Arrangements existing on the Termination Date relating to
the Networks (collectively, the "Assigned Advertising Arrangements") (it being
agreed that Representative shall use its reasonable efforts to promptly obtain
and deliver to Owner, at Representative's expense, any necessary consents to the
assignment of the Assigned Advertising Arrangements to Owner) and (iii) Owner
shall assume from Representative all liabilities, obligations and commitments of
Representative arising or accruing on or after the Termination Date pursuant to
the Assigned Advertising Arrangements (solely to the extent of the Networks'
interest therein). Following the Termination Date, (i) each of Owner and
Representative shall use reasonable commercial efforts to collect all accounts
receivable included in Working Capital as of the Termination Date and (ii)
Representative shall remit promptly to Owner all amounts received by
Representative as payments in respect of accounts receivable included in Working
Capital as of the Termination Date. If any of the accounts receivable included
in Working Capital as of the Termination Date have not been collected as of the
date that is nine months following the Termination Date, Representative shall
purchase such uncollected accounts receivable ("Final Purchased Accounts
Receivable") from Owner not later than ten days following the expiration of such
nine month period for 85% of their gross amount (before agency commissions),
less any reserve for doubtful accounts reflected as an offset to a current asset
on the Final Working Capital Statement (such amounts, in the aggregate, the
"Final Purchased Accounts Receivable Amount"), except that Representative will
18
not be required to purchase any accounts receivable as to which Owner has waived
the right to collect all or a portion of the sum due. For purposes of
determining whether or not an account receivable has been collected, all
payments of accounts receivable shall be applied against the oldest outstanding
account receivable from the applicable obligor, unless such obligor specifies
the receivable against which payment is being made. The Final Purchased Accounts
Receivable Amount shall be paid, by wire transfer in immediately available
funds, not later than the expiration of such ten-day period. If Representative
is required to, and does, purchase any such accounts receivable, Owner will
execute appropriate documents of assignment, transferring such Final Purchased
Accounts Receivable to Representative, and if Representative so requests, Owner
will attempt to collect such Final Purchased Accounts Receivable as agent for
Representative and to remit promptly to Representative any sums that are
collected.
(g) Payment. Not later than ten (10) days following the final
-------
determination of the Final Working Capital Amount, (i) if the Final Working
Capital Amount exceeds the Opening Working Capital Balance (plus accrued
interest thereon as provided in Section 4.2(g) (Working Capital - Interest
---------------------------
Payments)), Owner shall pay to Representative, by wire transfer of immediately
--------
available funds, an amount equal to the amount of such excess, and (ii) if the
Opening Working Capital Balance (plus accrued interest thereon as provided in
Section 4.2(g) (Working Capital - Interest Payments)) exceeds the Final Working
------------------------------------
Capital Amount, Representative shall pay to Owner, by wire transfer of
immediately available funds, an amount equal to the amount of such excess.
Section 14.7. Attorneys' Fees and Costs. In the event any
action or proceeding is commenced by either party to enforce the provisions of
this Agreement or to seek remedies for a breach or wrongful termination of this
Agreement, the prevailing party in such an action or proceeding shall be
entitled to the award of its reasonable attorneys' fees and costs incurred in
and relating to such an action or proceeding.
ARTICLE 15
Representations and Warranties
------------------------------
Section 15.1. Representations and Warranties of Owner.
---------------------------------------
Owner hereby represents and warrants that:
(a) Organization and Standing. Owner is a corporation duly
--------------------------
formed, validly existing and in good standing under the laws of the State of New
York, and has all necessary corporate power and authority to carry on the
business of the Networks and to perform its obligations hereunder.
(b) Authorization and Binding Obligation. Owner has all
necessary power and authority to enter into and perform this Agreement, the
License Agreement, the News Agreement and the Technical Services Agreement and
the transactions contemplated hereby and thereby, and Owner's execution,
delivery and performance of this Agreement, the License Agreement, the News
Agreement and the Technical Services Agreement have been duly and validly
authorized and all necessary action on its part. This Agreement has been, and
upon execution and delivery thereof on the Effective Date each of the License
Agreement, the News Agreement and the Technical Services Agreement will have
been duly executed and delivered by Owner and constitutes and will constitute
its valid and binding obligations enforceable against Owner in accordance with
their respective terms.
(c) Absence of Conflicting Agreements or Required Consents.
---------------------------------------------------------
The execution, delivery and performance of this Agreement, the License
Agreement, the News Agreement and the Technical Services Agreement by Owner: (i)
do not and will not violate any provision of Owner's organizational documents;
(ii) do not and will not require the consent of or any filing with any third
19
party or governmental authority; (iii) do not and will not violate any
applicable law, judgment, order, injunction, decree, rule, regulation or ruling
of any governmental authority; and (iv) do not and will not, either alone or
with the giving of notice or the passage of time, or both, conflict with,
constitute grounds for termination or acceleration of or result in a breach of
the terms, conditions or provisions of, or constitute a default under any
agreement, lease, instrument, license or permit to which Owner is now subject.
(d) Network Agreements. Each Network Agreement is valid and
-------------------
enforceable in accordance with its terms and (i) neither Owner nor, to the
knowledge of Owner, any other party thereto, is in breach of or in default of
under any such Network Agreement, (ii) to the knowledge of Owner, there has not
occurred an event which, after the giving of notice or the lapse of time or
both, would constitute a default, or result in a breach of, any such Network
Agreement, (iii) contains the full extent of the monetary obligations (whether
absolute, accrued, contingent or otherwise) of Owner under such Network
Agreement, (iv) none of the rights of Owner under any such Network Agreement
would be subject to termination or modification as a result of the consummation
of the transactions contemplated by this Agreement and (v) no consent or
approval of any third party is required under any Network Agreement to the
consummation of the transactions contemplated hereby.
(e) Opening Working Capital. The accounts receivable and the
-----------------------
accounts payable of Owner reflected on the Opening Working Capital Statement
will have arisen from bona fide transactions in the ordinary course of business.
(f) Absence of Proceedings. There is no action, suit or
------------------------
proceeding, at law or an equity, by or before any court, tribunal or
governmental authority pending or, to the knowledge of Owner, threatened, which,
if adversely determined, would materially and adversely affect Owner's ability
to perform its obligations hereunder or under the License Agreement, the News
Agreement or the Technical Services Agreement or the validity or enforceability
of this Agreement or such other agreements.
Section 15.2. Representations and Warranties of
---------------------------------
Representative. Representative hereby represents and warrants that:
--------------
(a) Organization and Standing. Representative is a corporation
-------------------------
duly formed, validly existing and in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority to perform its
obligations hereunder.
(b) Authorization and Binding Obligation. Representative has
-------------------------------------
all necessary power and authority to enter into and perform this Agreement, the
License Agreement, the News Agreement and the Technical Services Agreement and
the transactions contemplated hereby and thereby, and Representative's
execution, delivery and performance of this Agreement have been duly and validly
authorized by all necessary action on its part. This Agreement has been, and
upon execution and delivery thereof the License Agreement, the News Agreement
and the Technical Services Agreement will have been duly executed and delivered
by Representative and constitutes and will constitute its valid and binding
obligations enforceable against Representative in accordance with their
respective terms.
(c) Absence of Conflicting Agreements or Required Consents.
---------------------------------------------------------
The execution, delivery and performance of this Agreement, the License
Agreement, the News Agreement and the Technical Services Agreement by
Representative: (i) do not and will not violate any provision of
Representative's organizational documents; (ii) do not and will not require the
consent of or any filing with any third party or governmental authority; (iii)
do not and will not violate any applicable law, judgment, order, injunction,
decree, rule, regulation or ruling of any governmental authority; and (iv) do
not and will not, either alone or with the giving of notice or the passage of
20
time, or both, conflict with, constitute grounds for termination or acceleration
of or result in a breach of the terms, conditions or provisions of, or
constitute a default under any agreement, lease, instrument, license or permit
to which Representative is now subject.
(d) Absence of Proceedings. There is no action, suit or
------------------------
proceeding, at law or an equity, by or before any court, tribunal or
governmental authority pending or, to the knowledge of Representative,
threatened, which, if adversely determined, would materially and adversely
affect Representative's ability to perform its obligations hereunder or under
the License Agreement, the News Agreement or the Technical Services Agreement or
the validity or enforceability of this Agreement or such other agreements.
ARTICLE 16
Confidentiality
---------------
Section 16.1. Confidentiality. Representative shall treat
---------------
confidentially all records, books and other information of any type received or
compiled for the benefit of Owner hereunder in connection with this Agreement.
Representative agrees not to disclose any such records, books and information to
any third party (other than directors, officers, partners, employees or outside
advisors of such party and other than expressly in the performance of such
party's obligations hereunder) without the prior written consent of Owner. The
foregoing agreement shall not be applicable to any information that is (i)
publicly available when provided or that thereafter becomes publicly available
other than through a breach by such party of its agreements hereunder, (ii)
required to be disclosed by Representative by judicial or administrative process
in connection with any action, suit, proceeding or claim or otherwise by
applicable law or (iii) known by Representative on the date of this Agreement,
not otherwise primarily related to the business of the Networks or any Network
Office and not otherwise subject to a confidentiality agreement with or other
obligation of secrecy to Owner or any other party. Information shall be deemed
"publicly available" and not subject to Representative's agreement hereunder if
such information becomes a matter of public knowledge or is contained in
materials available to the public or is obtained by Representative's from any
source other than Owner (or its directors, officers, partners, employees or
outside advisors), provided that such source has not to Representative's actual
knowledge entered into a confidentiality agreement with Owner with respect to
such information.
ARTICLE 17
Miscellaneous
-------------
Section 17.1. No Partnership or Joint Venture. This Agreement
-------------------------------
is not intended to be and shall not be construed as a partnership or joint
venture agreement between the parties. Except as otherwise specifically provided
in this Agreement, no party to this Agreement shall be authorized to act as
agent of or otherwise represent the other party to this Agreement.
Section 17.2. Entire Agreement; Schedules; Amendment; Waiver.
----------------------------------------------
This Agreement, the License Agreement, the News Agreement and the Technical
Services Agreement, and the exhibits and schedules hereto and thereto, embody
the entire agreement and understanding of the parties hereto and supersede any
and all prior agreements, arrangements and understandings relating to the
matters provided for herein. No amendment, waiver of compliance with any
provision or condition hereof, or consent pursuant to this Agreement, shall be
effective unless evidenced by an instrument in writing signed by the party
against whom enforcement of any amendment, waiver or consent is sought. No
failure or delay on the part of Owner or Representative in exercising any right
or power under this Agreement shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any other or
21
further exercise thereof or the exercise of any other right or power. The rights
and remedies of the parties to this Agreement are cumulative and are not
exclusive of any right or remedies which either may otherwise have.
Section 17.3. Further Assurances. Each of Owner and
------------------
Representative agrees to execute and deliver such instruments and take such
other actions as may reasonably be required to carry out the intent of this
Agreement.
Section 17.4. Benefit and Assignment. This Agreement shall
----------------------
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns. Neither Representative nor Owner may assign
its rights under this Agreement without prior written consent of the other party
hereto.
Section 17.5. Headings. The headings set forth in this
--------
Agreement are for convenience only and will not control or affect the meaning or
construction of the provisions of this Agreement.
Section 17.6. Governing Law. The construction and
-------------
performance of this Agreement shall be governed by the laws of the State of New
York without regard to its principles of conflict of laws.
Section 17.7 Notices. All notices, requests, demands and other
-------
communications which are required or may be given under this Agreement shall be
in writing, and addressed as follows:
If to Owner:
CBS Radio
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With copies to:
CBS Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Law Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Westinghouse Electric Corporation
Westinghouse Building
11 Stanwix Street
Pittsburgh, Pennsylvania 15222-1304
Attention: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
22
If to Representative:
Westwood One, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Chairman
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. XxXxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any such notice, request, demand or communication shall be deemed to have been
duly delivered and received (a) upon hand delivery thereof during business
hours, (b) upon the earlier of receipt of three (3) days after posting by
registered mail or certified mail, return receipt requested, (c) on the next
business day following delivery to a reliable or recognized air freight delivery
service, and (d) on the date of transmission, if sent by facsimile during normal
business hours (but only if a hard copy is also send by overnight courier), but
in each case only if sent in the same manner to all persons entitled to receive
notice or a copy. Any party may, with written notice to the other, change the
place for which all further notices to such party shall be sent. All costs and
expenses for the delivery of notices hereunder shall be borne and paid for by
the delivering party.
Section 17.8. Severability. If any of the provisions of this
------------
Agreement shall be held unenforceable, then the remaining provisions shall be
construed as if such unenforceable provisions were not contained herein. Any
provision of this Agreement which is unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such unenforceability
without invalidating the remaining provisions hereof, and any such
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. To the extent permitted
by applicable law, the parties hereto hereby waive any provision of law now or
hereafter in effect which renders any provisions hereof unenforceable in any
respect.
Section 17.9. Counterparts. This Agreement may be
------------
executed in two or more counterparts, each of which will be deemed an original
and all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this
Representation Agreement as of the date first above written.
CBS INC.
By:__________________________
Name:________________________
Title:_______________________
WESTWOOD ONE, INC.
By:_________________________
Name:_______________________
Title:______________________
23
EXHIBIT 10.11
