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EXHIBIT 10.12
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ASSET PURCHASE AGREEMENT
BY AND AMONG
CBS RADIO, INC.,
CBS RADIO LICENSE, INC.,
AND
ENTERCOM COMMUNICATIONS CORP.
DATED AS OF AUGUST 13, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE I. - DEFINITIONS
1.1 DEFINITIONS....................................................2
ARTICLE II. - PURCHASE OF ASSETS.............................................6
2.1. PURCHASE AND SALE OF ASSETS....................................6
2.2. ALLOCATION OF VALUES...........................................6
2.3. NON-ASSIGNABLE CONTRACTS.......................................7
ARTICLE III. - LIABILITIES...................................................7
3.1. ASSUMPTION OF LIABILITIES BY ENTERCOM..........................7
3.2. OTHER LIABILITIES..............................................8
ARTICLE IV. - REPRESENTATIONS AND WARRANTIES.................................8
4.1. BY CBS.........................................................8
4.2. BY ENTERCOM...................................................16
ARTICLE V. - CONDITIONS.....................................................17
5.1. MUTUAL CONDITIONS.............................................17
5.2. CONDITIONS OF ENTERCOM........................................18
5.3. CONDITIONS OF CBS.............................................18
5.4. EFFECT OF TIME BROKERAGE AGREEMENT ON CLOSING
CONDITIONS..................................................18
ARTICLE VI. - COVENANTS AND OPERATIONS PRIOR TO CLOSING.....................19
6.1. COVENANTS OF CBS..............................................19
6.2. NEGATIVE COVENANTS OF CBS.....................................21
6.3. NO CONTROL....................................................22
6.4. NO SOLICITATION OR HIRE OF EMPLOYEES
AND PROGRAMMING.............................................22
6.5. COVENANTS OF ENTERCOM.........................................23
6.6. REAL PROPERTY SURVEYS.........................................24
ARTICLE VII. - ACTIONS PRIOR TO CLOSING.....................................25
(i)
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7.1. APPLICATION TO COMMISSION.....................................25
7.2. COMPLIANCE WITH CBS FINAL JUDGMENT............................25
7.3. XXXX-XXXXX-XXXXXX NOTIFICATION................................25
7.4. INSPECTION....................................................26
7.5. CONFIDENTIALITY...............................................26
ARTICLE VIII. - CLOSING.....................................................27
8.1. CLOSING.......................................................27
8.2. PRORATIONS....................................................27
8.3. CLOSING DELIVERIES TO ENTERCOM................................28
8.4. CLOSING DELIVERIES TO CBS.....................................29
8.5. COVENANTS OF FURTHER ASSURANCES; AVAILABILITY OF
RECORDS.....................................................30
8.6. RISK OF LOSS; DAMAGE TO PROPERTY..............................30
8.7. TAXES ON TRANSACTION..........................................30
ARTICLE IX. - TERMINATION, DEFAULT AND INDEMNIFICATION......................31
9.1. TERMINATION...................................................31
9.2. EFFECT OF TERMINATION.........................................31
9.3. REMEDIES......................................................31
9.4. INDEMNIFICATION...............................................31
ARTICLE X. - INTENTIONS OF THE PARTIES AS TO FORM OF TRANSACTION............34
10.1. CBS' INTENTION................................................34
10.2. ENTERCOM'S INTENTION..........................................34
10.3. INDEPENDENT TRANSACTIONS......................................34
ARTICLE XI. - GENERAL PROVISIONS............................................35
11.1. EXPENSES OF THE PARTIES.......................................35
11.2. BROKERS.......................................................35
11.3. SURVIVAL OF COVENANTS, REPRESENTATIONS,
AND WARRANTIES..............................................35
11.4. CONFIDENTIALITY...............................................36
11.5. AMENDMENT AND WAIVER..........................................36
11.6. EFFECT OF THIS AGREEMENT......................................36
11.7. TERMS GENERALLY...............................................36
11.8. HEADINGS......................................................37
11.9. COUNTERPARTS..................................................37
(ii)
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11.10. GOVERNING LAW; JURISDICTION...................................37
11.11. BULK SALES LAWS...............................................37
11.12. ASSIGNMENT....................................................37
11.13. NOTICES.......................................................37
11.14. ATTORNEYS' FEES...............................................39
11.15. TEMPORARY SUBLEASE FOR WBMX...................................39
(iii)
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT MADE AND ENTERED INTO THIS 13TH
DAY OF AUGUST, 1998, BY AND AMONG CBS RADIO, INC., A DELAWARE CORPORATION
("CRI"), CBS RADIO LICENSE, INC., A DELAWARE CORPORATION ("CRLI"), (CRI AND
CRLI, COLLECTIVELY, "CBS"), AND ENTERCOM COMMUNICATIONS CORP., A PENNSYLVANIA
CORPORATION ("ENTERCOM").
RECITALS
WHEREAS, pursuant to the Authorizations, CBS owns and operates
(directly or indirectly through one or more subsidiaries) radio stations
WEEI(AM) and WRKO(AM), Boston, Massachusetts (collectively, the "Stations"), and
owns all of the Assets relating to the Stations;
WHEREAS, Entercom desires to purchase the Assets from CBS;
WHEREAS, CBS is willing to sell the Assets to Entercom;
WHEREAS, CBS and Entercom have agreed, subject to prior
approval by the Commission and certain other conditions, that CBS shall sell,
assign, transfer and convey the Assets to Entercom or one or more Affiliates
designated by Entercom, in the manner and for the consideration described in
this Agreement; and
WHEREAS, CBS is required to notify the United States
Department of Justice ("DOJ") of this Agreement, pursuant to the final judgment
in United States v. CBS Corporation and American Radio Systems Corporation, Civ.
No. 98-0819 (D.D.C. filed March 31, 1998) (the "CBS Final Judgment"), and CBS
may not consummate the sale contemplated hereby unless CBS has received written
notification from DOJ that DOJ does not object to the sale or, in the event that
DOJ objects, until the sale has been approved by the United States District
Court for the District of Columbia (the "Court"). Pursuant to the CBS Final
Judgment, CBS is required to take all steps necessary to operate the Stations as
separate, independent, ongoing, economically viable and active competitors to
the other stations owned by CBS and its Affiliates in the Boston area and must
take all steps necessary to insure that the management of such stations is kept
separate and apart from CBS.
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:
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ARTICLE I.
DEFINITIONS
1.1 DEFINITIONS. As used herein, the following terms shall have the following
respective meanings:
"ADJUSTMENT TIME" shall mean with respect to each Station,
12:01:00 a.m. Eastern Standard or Daylight Time, as appropriate, on the Closing
Date.
"AFTRA CONTRACT" shall have the meaning set forth in Section
3.1.5.
"AFFILIATE" shall mean, with respect to any person or entity,
a person or entity controlling, controlled by or under common control with such
person or entity.
"AGREEMENT" shall mean this Asset Purchase Agreement.
"APPRAISAL" shall have the meaning set forth in Section 2.2.1
hereof.
"ASSETS" shall mean the Property and all of the Authorizations
relating to the Stations.
"ASSIGNMENT APPLICATIONS" shall have the meaning set forth in
Section 7.1 hereof.
"AUTHORIZATIONS" shall mean all of the licenses, permits, and
authorizations granted by the Commission with respect to the operation of the
Stations and all applications for Authorizations for the Stations pending before
the Commission.
"BARTER AGREEMENTS" shall mean contracts for the sale of time
on the Stations in exchange for programming.
"BOSTON II AGREEMENT" shall mean that certain Asset Purchase
Agreement by and among Entercom and CBS and ARS Acquisition II, Inc. for the
sale and purchase of radio stations WAAF(FM), WWTM(AM), and WEGQ(FM), dated as
of August 13, 1998.
"CBS" shall mean the corporations identified as such in the
Preamble of this Agreement.
"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 that the Closing occurs.
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"CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the applicable regulations issued thereunder.
"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, except that
"Contaminant" shall not include small quantities of maintenance, cleaning and
emergency generator fuel supplies customary for the operation of radio stations
and maintained in compliance with all Environmental Laws in the Ordinary Course
of Business.
"CONTRACTS" shall mean all agreements, arrangements,
commitments, and undertakings, written or oral, expressed or implied, relating
to the present or future operation of the Stations except for any Leases,
including without limitation, Time Sales Agreements, Trade Agreements, Barter
Agreements and Miscellaneous Contracts.
"CONTRACT REIMBURSEMENT" shall mean cash in the amount of Five
Million Dollars ($5,000,000.00) as reimbursement paid to Entercom by CBS for
assumption of certain Contracts specified in Schedule 8.3.1.
"DEFAULT" shall mean the material default by a party hereto in
the performance of its obligations under this Agreement.
"ENTERCOM" shall mean the corporation identified as such in
the Preamble of this Agreement.
"ENVIRONMENTAL LAWS" shall mean any applicable federal, state
or local law, statute, charter, ordinance, rule, or regulation or any
governmental agency interpretation or policy, including, without limitation,
applicable safety/environmental/health laws such as, but not limited to, 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 Toxic
Substance Control Act, and the Occupational Safety and Health 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 relating to the Station in question
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: (i) the emission, discharge, release, spilling, or dumping of any
Contaminant into the air, surface water, ground water, soil, or
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substrata; or (ii) the use, generation, processing, sale, recycling, treatment,
handling, storage, disposal, transportation, labeling, or any other management
of any Contaminant.
"FINAL ORDER" shall mean an order or action of the Commission
that, by reason of expiration of time or exhaustion of remedies, is no longer
subject to administrative or judicial reconsideration or review.
"IBEW CONTRACT" shall have the meaning set forth in Section
3.1.5.
"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 used in the operation of the
Stations.
"LOSS" shall have the meaning set forth in Section 9.4.1
hereof.
"MISCELLANEOUS CONTRACTS" shall mean Contracts and Leases
entered into in the Ordinary Course of Business, which involve less than Twenty
Five Thousand Dollars ($25,000.00) individually and less than One Hundred Fifty
Thousand Dollars ($150,000.00) for all of the Stations in the aggregate, and
which are not included in Schedule 4.1.6.
"NON-CONTINUING EMPLOYEES" shall have the meaning set forth in
Section 6.5.1.
"ORDINARY COURSE OF BUSINESS" shall mean the routine conduct
of the business of the Station in question (excluding extraordinary, irregular,
or abnormal transactions) on a basis consistent with the regular practice of
such Station since January 1, 1998; provided that any conflict between what is
required of CBS by the definition set forth in the immediately preceding clause
as applied herein and the CBS Final Judgment shall be resolved in favor of the
latter.
"PERMITTED ENCUMBRANCES" shall mean: (i) encumbrances for
taxes, assessments, or governmental charges or levies which are not yet due and
payable, or that, subject to adequate security for payment, are being contested;
(ii) easements, rights of way, or other encumbrances disclosed in this
Agreement; (iii) easements, rights of way or other encumbrances that do not have
a material adverse effect on the Assets or the operation of the Stations as
currently operated; (iv) encumbrances imposed by law, such as materialmen's,
mechanic's, carrier's, workmen's, or repairmen's liens or other similar
encumbrances arising in the Ordinary Course of Business, securing obligations
that are not overdue; (v) encumbrances securing indebtedness, which will be
removed prior to or at the Closing; (vi) encumbrances pursuant to Contracts and
Leases to be assumed by Entercom pursuant to Section 3.1; and (vii) encumbrances
listed on Schedule 4.1.8.
"PROPERTY" shall mean all of the tangible and intangible
property (other than the Authorizations) located at the Stations (including at
the transmitter sites of the Stations), whether real, personal, or mixed, and
all rights and interests which are used or held by CBS or any of its
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Affiliates and necessary for use primarily in the operation of the Stations as
presently conducted, including: (i) all of the rights, titles, and interests
under the Leases and the Contracts relating to the Stations; (ii) the call
letters, copyrights, trademarks, and other intellectual property associated with
the Stations; (iii) originals or, if unavailable, photocopies, of all files,
records, studies, data, lists, filings, general accounting records, books of
account, computer programs and software, and logs, of every kind, relating to
the operations or business of the Stations; and (iv) all of CBS's or any of its
Affiliates' rights under manufacturers' and vendors' warranties relating to
items included in the Assets of the Stations; but excluding therefrom those
assets listed on Schedules attached hereto respectively as "Excluded Property."
"PURCHASE PRICE" shall have the meaning set forth in Section
2.1.2.
"REQUIRED CONSENTS" shall mean the consents of third parties
to the Leases and Contracts that are required for the assignment thereof and
that are identified on the Schedules hereto as "Material Leases (or
Contracts)-Consent to Assign Required."
"REQUIRED CURE EXPENSE" Shall mean the sum of the amounts
required to be spent by CBS under Sections 6.1.4, 6.1.5 and 6.6.3 of this
Agreement and the Boston II Agreement.
"STATIONS" shall collectively mean the following radio
broadcast stations: WEEI(AM), and WRKO(AM), Boston, Massachusetts, or, in the
singular form, any one of them.
"STATION EMPLOYEES" shall have the meaning set forth in
Section 6.5.1.
"TAMPA AGREEMENT" shall mean that certain Asset Purchase
Agreement by and among Entercom and CBS for the sale and purchase of radio
stations WYUU (FM) and WLLD (FM), dated as of August 13, 1998.
"TBA COMMENCEMENT DATE" shall mean the date that the Time
Brokerage Agreement shall become effective.
"TIME BROKERAGE AGREEMENT" shall mean the Time Brokerage
Agreement entered into between CBS and Entercom simultaneously with the
execution of this Agreement relating to the sale to Entercom of substantially
all of the broadcast time on the Stations.
"TIME SALES AGREEMENTS" shall mean contracts for the sale of
time on the Stations for cash.
"TRADE AGREEMENTS" shall mean contracts for the sale of time
on the Stations in exchange for merchandise or services used or useful for the
benefit of the Stations, excluding Barter Agreements.
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"TRANSFERRED EMPLOYEES" shall have the meaning set forth in
Section 6.5.
"UPSET DATE" shall have the meaning set forth in Section
9.1.1.
ARTICLE II.
PURCHASE OF ASSETS
2.1. PURCHASE AND SALE OF ASSETS.
Subject to the terms and conditions set forth in this
Agreement, at the Closing:
2.1.1. CBS shall sell, convey, transfer, assign, and deliver or cause
to be sold, conveyed, transferred, assigned, and delivered to Entercom, or to
such Affiliates as Entercom shall designate, the Assets free and clear of all
liens and encumbrances other than Permitted Encumbrances, and Entercom or such
designated Affiliates shall acquire and receive same from CBS.
2.1.2. Entercom shall deliver to CBS cash in the amount of Eighty-Two
Million Dollars ($82,000,000.00) (the "Purchase Price") and CBS shall receive
same from Entercom. The Purchase Price shall be paid by wire transfer at Closing
to the account designated by CBS in writing at least two (2) days prior to the
Closing.
2.2. ALLOCATION OF VALUES.
2.2.1. The fair market value of the Assets shall be determined and
allocated on the basis of an appraisal (the "Appraisal") prepared by Bond &
Xxxxxx, or another firm reasonably acceptable to CBS and Entercom, whose fees
and expenses shall be borne equally by CBS and Entercom. The parties shall use
their reasonable best efforts to cause Bond & Xxxxxx to deliver the Appraisal 10
days before the Closing Date, or failing compliance with such deadline, as soon
thereafter as is practicable, but in all events no later than 30 days after the
Closing Date. The Appraisal shall set forth the fair market value of each
material asset included in the Assets.
2.2.2. Each party, as necessary, shall prepare such IRS Forms as are
required by law to be filed with the Internal Revenue Service reflecting the
fair market value of the Assets as determined in accordance with the values set
forth in the Appraisal and the above provisions and shall forward such forms to
the other parties within thirty (30) days after the Closing. Each party, as
necessary, shall file with their respective federal income tax returns for the
tax year in which the Closing occurs such IRS Forms as prepared in accordance
with the foregoing. Each party shall deliver to the other parties hereto a copy
of such IRS Forms as filed with their respective federal income tax return
within thirty (30) days of the filing of such return. The parties hereto hereby
covenant and agree with each other that they will not take a position on any
income tax return that is in any way inconsistent with the terms of this Section
2.2.
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2.3. NON-ASSIGNABLE CONTRACTS.
2.3.1. Without limiting or otherwise affecting the rights of any party
hereto, to the extent that any Contract or Lease to be assigned pursuant to this
Agreement is not capable of being assigned without the consent, approval, or
waiver of a third person or entity, nothing in this Agreement will constitute an
assignment or require the assignment thereof except to the extent provided in
this Section 2.3.
2.3.2. With respect to all consents, approvals, and waivers referenced
in Section 2.3.1, CBS shall use its reasonable best efforts to obtain all such
consents, approvals, and waivers prior to and, if the Closing occurs, as
promptly as practicable after the Closing Date; provided that CBS shall not be
obligated to pay money to any other contracting party to obtain any such
consent, approval or waiver, other than reasonable expenses of the party for any
legal documentation related to the assignment of the Contract or Lease in
question. If the consents, approvals, and waivers are not obtained prior to
Closing, the parties shall use their reasonable best efforts in good faith to
cooperate, and to cause each of their respective Affiliates to cooperate, in
effecting any lawful arrangement to provide to Entercom or its designated
Affiliates the economic benefits of the Contracts and Leases for which consents,
approvals, and waivers are being sought after Closing, and to have Entercom or
its designated Affiliates assume and discharge the obligations under the
Contracts and Leases from and after the Closing Date.
ARTICLE III.
LIABILITIES
3.1. ASSUMPTION OF LIABILITIES BY ENTERCOM.
Except as otherwise provided in the Time Brokerage Agreement,
from and after the Closing Date, Entercom shall assume and pay, perform, and
discharge the following liabilities and obligations relating to the Stations:
3.1.1. The liabilities and obligations arising with respect to events
occurring after the Adjustment Time or accruing after the Adjustment Time with
respect to any Leases included in the Assets that are specifically identified on
Schedule 4.1.5 as being assumed by Entercom, and such additional Leases as are
permitted to be entered into by CBS and its Affiliates pursuant to Article VI
hereof.
3.1.2. The liabilities and obligations arising with respect to events
occurring after the Adjustment Time or accruing after the Adjustment Time with
respect to any (a) Contracts included in the Assets that are specifically
identified on Schedule 4.1.6 as being assumed by Entercom; (b) Miscellaneous
Contracts; (c) Time Sales Agreements, Trade Agreements, and Barter Agreements
entered into in the Ordinary Course of Business; and (d) such additional
contracts as are permitted to be entered into by CBS and its Affiliates pursuant
to Article VI hereof;
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3.1.3. The liabilities and obligations which arise with respect to
events occurring after the Adjustment Time or which accrue after the Adjustment
Time with respect to the Assets and to the operation of the Stations by Entercom
and/or its designated Affiliates;
3.1.4. All taxes and assessments (other than income and franchise taxes
of CBS and its Affiliates) that accrue on or with respect to the Assets or the
operation of the Stations after the Adjustment Time;
3.1.5. The liabilities and obligations of CBS with respect to the
Stations under (a) the Agreement for Radio Announcers and Artists, June 15, 1996
- June 14, 1999, between the American Federation of Radio and Television Artists
and American Radio Systems, Inc. (the "AFTRA Contract") from and after the TBA
Commencement Date; and (b) the Agreement, as of May 1, 1997, between American
Radio Systems Corporation and Local 1228 of the International Brotherhood of
Electrical Workers (the "IBEW Contract"). Neither Entercom nor any of its
Affiliates shall assume any obligations under any collective bargaining
agreements other than the AFTRA Contract and the IBEW Contract.
3.2. OTHER LIABILITIES.
3.2.1. Except as expressly set forth in this Agreement, CBS shall be
solely responsible for all salaries, benefits and other compensation which will
or may become payable to any Station Employee in respect of any period of
employment prior to the earlier of the TBA Commencement Date or the Adjustment
Time, other than accrued vacation time for Transferred Employees, for which
Entercom shall be responsible and for which it will receive a proration credit
under Section 8.2.1. Entercom shall be solely responsible for any salaries and
other compensation which will or may become payable to any Transferred Employee
in respect of any period thereafter. Entercom will not assume any obligations
under existing leave or severance policies or otherwise have any liability or
obligation for severance pay or other termination benefits of Station Employees,
except for obligations set forth in Contracts to be assumed by Entercom pursuant
to this Agreement.
3.2.2. Except as specifically assumed by Entercom pursuant to Section
3.1 and Section 3.2.1 hereof or pursuant to the Time Brokerage Agreement,
neither Entercom nor any of its Affiliates shall assume or undertake to pay,
satisfy, or discharge any liabilities, obligations, commitments, or
responsibilities of CBS or any of its Affiliates.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
4.1. BY CBS.
CBS hereby represents and warrants to Entercom that:
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4.1.1. CORPORATE STANDING.
CRI and CRLI 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 Commonwealth of Massachusetts. CRI and CRLI have full
power and authority to engage in the businesses in which they are presently
engaged and to make and perform this Agreement according to its terms.
4.1.2. AUTHORIZATION OF AGREEMENT; NO BREACH.
CBS has the necessary corporate power and authority to
execute, deliver and perform this Agreement, the Time Brokerage Agreement, and
such other agreements as are necessary to consummate the transactions
contemplated hereby, and, subject to the receipt of the consents and approvals
required elsewhere herein, this Agreement and the Time Brokerage Agreement
constitute the valid and binding obligation of CBS enforceable against it in
accordance with their terms, except as limited by bankruptcy and insolvency laws
and by laws affecting the enforcement of creditors' rights generally or
equitable principles. Assuming said consents and approvals are obtained, neither
such execution, delivery, and performance nor compliance by CBS with the terms
and provisions of this Agreement and the Time Brokerage Agreement will conflict
with or result in a breach of any of the terms, conditions, or provisions of the
Articles of Incorporation or By-Laws of CBS or its Affiliates or any judgment,
order, injunction, decree, regulation, or ruling of any court or any other
governmental authority to which CBS or any of its Affiliates is subject or any
material agreement or contract to which CBS or any of its Affiliates is a party
or to which it is subject, or constitute a material default thereunder.
4.1.3. QUALIFICATION.
CRLI is qualified as a licensee of the Commission and is
qualified as the assignor of the Authorizations to receive a grant of the
Assignment Applications by the Commission. CBS knows of no facts which could
reasonably be expected to cause Commission approval of the Assignment
Applications to be denied or materially delayed or which could reasonably be
expected to lead to the filing of a material objection to such Applications.
4.1.4. CBS ASSETS.
The Assets, taken as a whole, constitute all of the material
property, whether real, personal, or mixed, tangible or intangible, used by CBS
or its Affiliates in the operation of the Stations except for (i) property
replaced in the Ordinary Course of Business and (ii) those assets specifically
listed on Schedule 4.1.4 under the heading "Excluded Property." To the knowledge
of CBS, none of the assets listed on Schedule 4.1.4 as pertaining to radio
station WBMX(FM) is used primarily in the operation of any or all of the
Stations.
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4.1.5. CBS LEASES.
Except as set forth in Schedule 4.1.5, CBS has delivered to
Entercom true and correct copies of all Leases listed on Schedule 4.1.5 hereto.
There are no other material leases for any items or interests for the use of
real or personal property associated with the Assets or the present operation of
the Stations other than those disclosed on Schedule 4.1.5 hereto.
4.1.6. CBS CONTRACTS.
Schedule 4.1.6 contains a list of all Contracts now in effect,
written or oral, express or implied, relating to the Assets or the present or
future operation of the Stations, other than those disclosed on Schedule 4.1.5
hereto or other Schedules attached to this Agreement, except for Time Sales
Agreements, Barter Agreements, Trade Agreements, Miscellaneous Agreements and
Contracts that relate solely to Excluded Property. Except as indicated on
Schedule 4.1.6 hereto, CBS has delivered to Entercom true and correct copies of
all Contracts listed on Schedule 4.1.6 hereto,
4.1.7. INTELLECTUAL PROPERTY.
Schedule 4.1.7 hereto lists all material trademarks and
copyrights relating to the operation of the Stations which have been registered
with Federal or State governmental agencies. To CBS's knowledge, the operation
of the Stations as now conducted does not conflict with any valid patents,
trademarks, trade names, service marks, or copyrights of others in any way that
is reasonably likely to have a material adverse effect on the operation of the
Stations.
4.1.8. TITLE TO PROPERTY.
Except for (i) Permitted Encumbrances, (ii) as disclosed on
Schedule 4.1.8 hereto and (iii) as provided in the immediately succeeding two
sentences, CBS has good ownership, right, title, and interest to the Property
including the right to transfer such assets. CBS has a valid leasehold interest
in all Property leased and used or held for use in connection with the operation
of the Stations. CBS has good and marketable title to the owned real property to
be conveyed hereunder, except for Permitted Encumbrances. Except for Permitted
Encumbrances and items disclosed on Schedule 4.1.8 (which Schedule reflects,
where appropriate, the Station to which the disclosed item relates), none of the
Property or any of the income or revenue therefrom is subject to any mortgage,
conditional sale agreement, security interest, lease, lien, hypothecation,
pledge, encumbrance, restriction, liability, charge, claim, or imperfection of
title that would materially adversely affect the continued use of the Property
as currently used.
4.1.9. NO DEFAULTS.
CBS and its Affiliates have complied in all material respects
with all of the terms of the Contracts and the Leases and such Contracts and
Leases are enforceable by CBS in
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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). No event has occurred which with the
passage of time or the giving of notice or both would constitute a material
default by CBS or any of its Affiliates thereunder. To the knowledge of CBS, all
other parties to the Contracts and Leases have complied in all material respects
with the provisions thereof and no event has occurred which with the passage of
time or the giving of notice or both would constitute a material default by any
such other party thereunder.
4.1.10. AUTHORIZATIONS AND APPLICATIONS.
Except as disclosed on Schedule 4.1.10, all Authorizations
necessary to the lawful operations of the Stations have been granted and issued
by the Commission to CBS and are listed on Schedule 4.1.10 attached hereto and
are now in full force and effect. There are no applications of CBS or any of its
Affiliates relating to the Stations pending with the Commission except as listed
on such Schedule 4.1.10. CBS and its Affiliates have performed and complied in
all material respects with all of the terms and conditions of said
Authorizations, the Communications Act of 1934, as amended (the "Communications
Act") and all applicable rules, regulations, requirements, and policies of the
Commission relating to the operation of the Stations. Except as listed on
Schedule 4.1.10, no proceedings are pending or, to the knowledge of any officer
of CBS or any of its Affiliates, threatened, which may result in the revocation,
modification, non-renewal, or suspension of any of said Authorizations, the
denial of any pending applications, the issuance of a cease and desist order, or
the imposition of any other sanction by the Commission to which the Stations or
the Assets are or may be subject. None of CBS or any of its Affiliates has
reason to believe that the Commission will not renew the Authorizations of any
of the Stations in the ordinary course for a full term without material
qualifications. No renewal of the Authorizations of the Stations would
constitute a major environmental action under the rules of the Commission in
effect as of the date of this Agreement. All ownership reports, renewal
applications, and other material reports and documents required to be filed by
CBS and its Affiliates with the Commission relating to the operation of the
Stations have been filed, and all such reports, applications and documents are
true and correct in all material respects. The Stations are identified by their
presently assigned call letters and, unless otherwise validly authorized by the
Commission and disclosed on Schedule 4.1.10, are operated on their assigned
frequencies at the powers and heights authorized by the Commission. The public
inspection files for the Stations are in substantial compliance with the
regulations of the Commission relating thereto.
4.1.11. PERMITS AND LICENSES.
In addition to the Authorizations, CBS has obtained and/or
holds, or at Closing will hold, all other governmental permits and licenses
necessary for the lawful operation of the respective Stations. All terms,
restrictions, and requirements of such permits and licenses have
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been complied with in all material respects and none of CBS or any of its
Affiliates is in default of any of same.
4.1.12. COMPLIANCE WITH LAWS.
CBS and its Affiliates have complied in all material respects
with all orders (to which CBS or any of its Affiliates is a party or is subject)
and applicable laws, rules, and regulations of all federal, state and local
authorities with respect to the Assets and operation of the Stations. With
respect to the operations of the Stations, none of CBS or any of its Affiliates
is in default with respect to or in violation of: (a) any judgment, order,
injunction or decree to which CBS or any of its Affiliates is a party or is
subject; or (b) any 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 which relate in
any way to the Assets and which were filed by CBS or any of its Affiliates with
any administrative agency or governmental authority are true, correct and
complete in all material respects.
4.1.13. LITIGATION AND CLAIMS.
Except as disclosed in Schedule 4.1.13 hereto and except for
rulemaking proceedings applicable to radio broadcast stations generally, no
litigation, proceeding or controversy is pending or, to the knowledge of any
officer of CBS or any of its Affiliates, threatened against CBS or any of its
Affiliates, which might materially and adversely affect any material portion of
the Assets, CBS's or any of its Affiliates' right or power to transfer the same,
the ownership, possession, use or resale of any material portion of the Assets,
or the operation of the Stations by Entercom or any assignee thereof and there
is no basis known to CBS or any of its Affiliates for any such litigation,
proceeding, controversy or claim. No claim has been made or asserted against CBS
or any of its Affiliates material to this transaction.
4.1.14. EMPLOYEES.
Set forth on Schedule 4.1.14 is a listing, by department, of
the name, salary or compensation, all other compensation arrangements, and job
title of all employees of CBS and its Affiliates employed at the Stations as of
August 1, 1998, and whether each such employee is (i) full-time or part-time,
(ii) union or non-union, and (iii) whether such employee's services are shared
between any of the Stations and any other station to be retained by CBS. Except
as disclosed on Schedule 4.1.14, there are no written contracts for the
employment of any personnel at the Stations. Except as disclosed on Schedule
4.1.14, all employees of CBS and its Affiliates employed at the Stations are
employed on an "at will" basis.
4.1.15. EMPLOYEE BENEFIT AND RETIREMENT PLANS.
Listed on Schedule 4.1.15 are the material "employee pension
benefit plans" and "employee welfare benefit plans" (as defined respectively in
Sections 3(2) and 3(l) of the
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Employee Retirement Income Security Act of 1974, as amended ("ERISA")), which
CBS and its Affiliates maintain on behalf of their employees at the Stations. In
all respects material to this transaction, all "employee pension benefit plans"
and "employee welfare benefit plans" listed on Schedule 4.1.15 hereto comply in
all material respects with all applicable requirements of law and regulation.
None of CBS or any of its Affiliates has incurred or reasonably expects to incur
(either directly or indirectly, including as a result of any of the transactions
contemplated hereby or any indemnification obligation) any liability (including,
without limitation, withdrawal liability) that could become a liability of
Entercom, under or pursuant to Title I or IV of ERISA or the penalty, excise tax
or joint and several liability provisions of the Code relating to employee
benefit plans and no event, transaction or condition has occurred or exists
which could result in any such liability. CBS and its Affiliates have made all
required contributions to all multi-employer plans within the meaning of Section
3(37) of ERISA.
4.1.16. LABOR RELATIONS.
In all respects material to this transaction, CBS and its
Affiliates 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 with respect to
the operations of the Stations, and CBS and its Affiliates have withheld all
amounts required by law or agreement to be withheld from the wages or salaries
of their employees and are not liable for any arrears of wages or any tax or
withholding or any penalties or interest for failure to comply with any of the
foregoing. Except as disclosed on Schedule 4.1.16, there are no collective
bargaining agreements relating to any employee of CBS or any of its Affiliates
at the Stations. In addition, except as disclosed on Schedule 4.1.16, none of
CBS or any of its Affiliates has knowledge of any union organizing activities in
the one year period preceding the date of this Agreement involving or targeting
any employees of CBS or any of its Affiliates at the Stations not already
covered by a collective bargaining agreement.
4.1.17. INSURANCE.
CBS has in force adequate fire and other risk insurance
covering the full replacement value of tangible personal property that is part
of the Property and shall cause such insurance to be maintained in full force
until the Closing Date. CBS also shall maintain in full force until the Closing
Date, adequate workers compensation and general public liability insurance for
the respective Stations in amounts consistent with broadcasting industry
standards for similar stations. As of the date of this Agreement, none of the
Property currently suffers in any way as a result of fire, explosion,
earthquake, accident, fraud, rain, storm, drought, Act of God or public enemy or
any other casualty, whether or not covered by insurance.
4.1.18. BROADCASTING CONTRACTS.
The total value of all unfulfilled obligations in respect of
Trade Agreements and Barter Agreements to be assumed by Entercom, whether or not
the Stations have received
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consideration therefor, shall not be in excess of One Million Four Hundred
Thousand Dollars ($1,400,000.00) as of the Closing Date. To the extent that, as
of the Closing Date, the excess of the value of unfulfilled obligations under
Trade or Barter Agreements, including any "time bank" provision thereof, over
the value of consideration to be received by the Stations (determined as of the
Closing Date) exceeds Fifty Thousand Dollars ($50,000.00), Entercom shall be
entitled to a positive cash adjustment pursuant to Section 8.2 hereof.
4.1.19. ENVIRONMENTAL COMPLIANCE, POLYCHLORINATED
BIPHENYLS, ASBESTOS AND OTHER TOXIC OR HAZARDOUS SUBSTANCES.
Except as disclosed on Schedule 4.1.19, none of the Property
contains: (i) any asbestos, polychlorinated biphenyls ("PCBs") or any PCB
contaminated oil; (ii) any Contaminants; or (iii) any underground storage tanks.
All of the Property is in substantial compliance with all applicable
Environmental Laws, except as disclosed on Schedule 4.1.19.
4.1.20. FINANCIAL AND OTHER INFORMATION.
CBS has furnished Entercom with profit and loss statements for
calendar year 1997 and the months January through June of 1998 (the "Financial
Statements"). All Financial Statements provided to Entercom are true and correct
in all material respects and such Financial Statements fairly present the
results of operation of the Stations for the respective period then ended. There
are no material liabilities, whether known or unknown, contingent or fixed, or
otherwise, associated with the Stations that have not been otherwise disclosed
to Entercom to the extent this Agreement requires the disclosure thereof.
4.1.21. NO INSOLVENCY.
No insolvency proceedings of any character, including without
limitation, bankruptcy, receivership, reorganization, composition, or
arrangement with creditors, voluntary or involuntary, affecting CBS or any of
its Affiliates or any of their assets or properties are, or within three years
prior to the date hereof have been, pending or, to the best of the knowledge of
CBS and its Affiliates, threatened, and, within three years prior to the date
hereof, none of CBS or any of its Affiliates has made an assignment for the
benefit of creditors, nor has CBS or any of its Affiliates taken any action with
a view to, or which would constitute the basis for, the institution of any such
insolvency proceedings.
4.1.22. CONDITION OF EQUIPMENT.
Except as disclosed on Schedule 4.1.22, the transmission and
studio equipment and other equipment (mechanical and electrical) included within
the Property is, and will be as of the Closing Date, in good repair and working
condition, ordinary wear and tear excepted, and is in material compliance with
all current FCC requirements.
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4.1.23. REAL PROPERTY.
Schedule 4.1.23 contains a true and complete list of all real
property used in the operation of the Stations, setting forth the nature of the
interest, the address, and legal description for each parcel of real property
(other than leased real property), and whether such parcel is owned or leased.
Except as set forth on Schedule 4.1.23, there are no outstanding options or
rights of first refusal to purchase or lease the owned real property or any
portion thereof or interest therein, there are no outstanding options or rights
of first refusal to sublease the leased real property or any portion thereof or
interest therein, and no other parties are in possession of any such real
property. The real property identified on Schedule 4.1.23 has vehicular access
to a road and is supplied with utilities and other services necessary for the
operation of that portion of the operation of the Stations conducted there. No
real property other than that listed on Schedule 4.1.23 or listed on such
schedule as Excluded Property is used in, held for use in connection with or
necessary for the conduct of, the business or operations of the Stations. To the
knowledge of CBS and its Affiliates, (i) the improvements of CBS and its
Affiliates upon such real property and the current use and operation on such
premises by CBS and its Affiliates 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 none of CBS or any of its Affiliates has 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 condition of the Stations, provided that any lawfully grandfathered
condition shall not be deemed to be a material adverse effect for purposes of
this subsection (i); (ii) 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 or financial condition of the Stations; and (iii)
there are no latent defects in the real property that could reasonably be
expected to have a material adverse effect on the Assets or financial condition
of the Stations. Except as disclosed on Schedule 4.1.23, the improvements of CBS
and its Affiliates upon the real property identified on Schedule 4.1.23 are in
good operating condition and repair, normal wear and tear excluded. None of CBS
or any of its Affiliates has knowledge or received 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.
4.1.24. PAYMENT OF TAXES.
CBS and its Affiliates have, and as of the Closing Date, will
have, paid and discharged all taxes, assessments, excises and other levies which
are due, including but not limited to any such taxes, assessments, excises, and
levies which, if due and not paid, would interfere with Entercom's enjoyment or
use of the Assets or result in a lien, charge, or encumbrance thereon, excepting
such taxes, assessments, and other levies which will not be due
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until or after the Closing Date, and which are either to be prorated between the
parties pursuant to the provisions of Section 8.2 hereof or paid or contested by
CBS pursuant to Section 6.1.6.
4.1.25. REQUIRED CONSENTS.
The only material approvals or consents of persons or entities
not a party to this Agreement that are legally or contractually required to be
obtained by CBS in connection with the consummation of the transactions
contemplated by this Agreement are those that are (i) set forth on Schedules
4.1.5 and 4.1.6 hereto and (ii) those contemplated by Section 5.1.
4.1.26. EVIDENCE OF FINANCIAL CAPABILITY OF ENTERCOM.
CBS acknowledges that Entercom has delivered to it
satisfactory proof of its financial capability to consummate the transactions
contemplated hereby.
4.2. BY ENTERCOM.
Entercom hereby represents and warrants 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.
Entercom or one or more Affiliates to which Entercom's rights hereunder are
assigned pursuant to Section 11.13 is, or will be at Closing, qualified to do
business in the Commonwealth of Massachusetts. Entercom has full power and
authority to engage in the business in which it is presently engaged and to make
and perform this Agreement according to its terms.
4.2.2. AUTHORIZATION OF AGREEMENT; NO BREACH.
Entercom has the necessary corporate power and authority, on
behalf of itself, to execute, deliver and perform this Agreement, the Time
Brokerage Agreement and such other agreements as are necessary to consummate the
transactions contemplated hereby, and, subject to the receipt of the consents
and approvals required elsewhere herein, this Agreement and the Time Brokerage
Agreement constitute the valid and binding obligation of Entercom, enforceable
against it in accordance with their terms, except as limited by bankruptcy and
insolvency laws and by laws affecting the enforcement of creditors rights
generally or equitable principles. Assuming said consents and approvals are
obtained, neither such execution, delivery, and performance nor compliance by
Entercom with the terms and provisions of this Agreement and the Time Brokerage
Agreement will conflict with or result in a breach of any of the terms,
conditions, or provisions of the Articles of Incorporation or Bylaws of
Entercom, or any judgment, order, injunction, decree, regulation, or ruling of
any court or any other governmental
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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.
Entercom's Affiliate which will be designated as the assignee
of the Authorizations in the Assignment Applications is or upon the filing of
the Assignment Applications will be qualified as a licensee of the Federal
Communications Commission and is or at the time of filing of the Assignment
Applications will be qualified as the assignee of the Authorizations to receive
Commission approval of the Assignment Applications. Entercom knows of no facts
relating to Entercom or any of its Affiliates that could reasonably be expected
to cause Commission approval of the Assignment Application to be denied or
materially delayed or which could reasonably be expected to lead to the filing
of a material objection to such Applications.
4.2.4. LITIGATION AND CLAIMS.
Except as disclosed in Schedule 4.2.4 hereto, no litigation,
proceeding, or controversy is pending or, to the knowledge of any officer of
Entercom, threatened, which might affect the ability of Entercom to perform its
obligations hereunder, and there is no basis known to Entercom for any such
litigation, proceeding, controversy, or claim. No claim has been made or
asserted against Entercom material to this transaction.
ARTICLE V.
CONDITIONS
5.1. MUTUAL CONDITIONS.
Performance of the obligations of the parties with respect to
the Stations under this Agreement and the Closing, are and shall be subject to
the occurrence and concurrence of the express conditions precedent that (i) the
Commission has granted its consent and approval in writing to the assignment to
a designated Affiliate of Entercom of the Authorizations issued by the
Commission as contemplated hereby without any materially adverse condition and
any condition as to the timing of consummation of the transactions contemplated
hereby set forth in such consent shall have been satisfied; (ii) the waiting
periods (as they may be extended) applicable to the transfer of the Assets under
the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act") shall have expired or been earlier terminated; and (iii) any approval
required under the CBS Final Judgment to consummate the transactions
contemplated hereby shall have been received.
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5.2. CONDITIONS OF ENTERCOM.
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 and concurrence of the express conditions
precedent, any of which may be waived by Entercom, that:
5.2.1. All Required Consents have been obtained from the other parties
to the Leases and the Contracts identified on Schedules 4.1.5 and 4.1.6
respectively as "Material Leases (or Contracts)-Consent to Assign Required."
5.2.2. No order, decree or judgment of any court, agency or other
governmental authority shall have been issued based on or arising out of the
conduct, action, inaction, qualifications or status of CBS or any of its
Affiliates, which would render it unlawful as of the Closing Date to effect the
transactions contemplated by this Agreement in accordance with its terms.
5.3. CONDITIONS OF CBS.
Performance of the obligations of CBS under this Agreement and
the Closing of the transactions provided for herein are and shall be subject to
the occurrence and concurrence of the express conditions precedent, any of which
may be waived by CBS, that:
5.3.1. No order, decree or judgment of any court, agency or other
governmental authority shall have been issued based on or arising out of the
conduct, action, inaction, qualifications or status of Entercom or any of its
Affiliates, which would render it unlawful as of the Closing Date to effect the
transactions contemplated by this Agreement in accordance with its terms.
5.4. EFFECT OF TIME BROKERAGE AGREEMENT ON CLOSING CONDITIONS.
To the extent that any party hereto is unable to fulfill any
condition to Closing under this Agreement that could have been fulfilled solely
but for (i) an action taken by another party either pursuant to this Agreement
or the Time Brokerage Agreement or in breach of this Agreement or the Time
Brokerage Agreement or (ii) a failure to take any action that another party was
obligated to take, or, in the exercise of commercial reasonableness, should have
taken, pursuant to this Agreement or the Time Brokerage Agreement, such
condition to Closing shall be deemed waived.
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ARTICLE VI.
COVENANTS AND OPERATIONS PRIOR TO CLOSING.
6.1. COVENANTS OF CBS.
Except as otherwise provided in the Time Brokerage Agreement
and in the CBS Final Judgment, during the period from the date of this Agreement
to the Closing Date, CBS and/or one or more of its Affiliates shall:
6.1.1. Conduct the business and operations of the Stations in the
Ordinary Course of Business and in accordance with all requirements of law and
regulation and, to 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 Stations.
6.1.2. Cooperate with Entercom in connection with its review, analysis,
and monitoring of the Assets and the operation of the Stations to the end that
an efficient transfer of the Assets may be made at Closing, and the business of
the Stations and the operation of the Assets may continue on an uninterrupted
basis. In addition to providing information required hereunder or reasonably
requested by the other parties hereto, CBS agrees to promptly notify the other
parties of any unusual problems or developments of which CBS becomes aware with
respect to the Assets or the business of the Stations.
6.1.3. Consult with Entercom regarding any proposed material changes to
the operation of the Stations to insure continued operation of the Stations as
they are now operated and cooperate with Entercom to insure a smooth transfer of
ownership and continuity of operations at Closing.
6.1.4. Obtain and deliver to Entercom within 10 days hereof at its
expense, and permit Entercom to obtain within 20 days hereof at its expense,
Phase I Environmental Assessments of all or any of the Property to be conveyed
hereunder and any real property used by the Stations in their operations or for
which Entercom could be held responsible under any Environmental Laws. In the
event such Phase I Environmental Assessments disclose any conditions contrary to
the representations and warranties contained in Section 4.1.19, or any potential
that such conditions may exist, then Entercom may conduct or have conducted at
its expense additional testing to confirm or negate the existence of any such
conditions. If any such Phase I Environmental Assessment or additional testing
confirms the existence of any such conditions without reference to matters
disclosed on Schedule 4.1.19, CBS will cause the conditions to be remedied as
quickly as is reasonably possible to the extent required to comply with
applicable Environmental Laws; provided, however, that CBS shall have no
obligation for remedial action with respect to PCB-containing electrical
components at the WRKO transmitter site or to obtain site closure certification
for the underground fuel storage tank removed from the WRKO transmitter site;
and provided further that such remedial action(s) does not cost in the aggregate
in excess of One Million Dollars ($1,000,000.00) (subject to the last sentence
of Section 11.1).
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In the event that such remedial action(s) does cost in the aggregate in excess
of One Million Dollars ($1,000,000.00) (subject to the last sentence of Section
11.1), CBS may elect not to take such remedial action. In such event, Entercom
may require CBS to proceed to Closing and Entercom shall receive a proration at
Closing, in the amount of One Million Dollars ($1,000,000.00) (subject to the
last sentence of Section 11.1). Alternatively, Entercom may terminate this
Agreement and CBS shall have no liability to Entercom as a result of such
termination. CBS has furnished to Entercom copies of any environmental reports,
title reports, and title insurance policies in its possession previously
prepared for any of the Property which CBS has been able to locate through the
date hereof, and from the date hereof through Closing, CBS shall forward to
Entercom any additional such reports or policies it receives or locates.
Notwithstanding any other provision of this Agreement, CBS shall have no further
liability to Entercom for any environmental condition to the extent such
condition is disclosed on Schedule 4.1.19 or any Phase I Environmental
Assessment or other testing conducted pursuant to this Section 6.1.4, except as
provided in this Section 6.1.4.
6.1.5. Obtain within 10 days hereof at its expense and deliver to
Entercom, commitments from a reputable title insurance company to issue extended
coverage policies of title insurance (ALTA Form 1970 or other form reasonably
acceptable to Entercom) with respect to each parcel of real property to be
conveyed hereunder, insuring good and marketable title to such real property
(the "Title Commitments"). In the event Entercom notifies CBS within 10 business
days of receipt of the Title Commitments that the Title Commitments disclose any
rights of way, easements, exceptions or other matters which do not constitute
Permitted Encumbrances and which materially and adversely interfere with the
continued use of such real property as currently used, CBS will cause the
conditions to be remedied as quickly as is reasonably possible; provided,
however, that such remedial action(s) does not cost in the aggregate in excess
of One Million Dollars ($1,000,000.00) (subject to the last sentence of Section
11.1). In the event that such remedial action(s) does cost in the aggregate in
excess of One Million Dollars ($1,000,000.00), CBS may elect not to take such
remedial action, and, notwithstanding any other provision of this Agreement, CBS
shall have no further liability to Entercom for any title defect. In such event,
Entercom may require CBS to proceed to Closing and Entercom shall receive a
proration at Closing, in the amount of One Million Dollars ($1,000,000.00)
(subject to the last sentence of Section 11.1). Alternatively, Entercom may
terminate this Agreement and CBS shall have no liability to Entercom as a result
of such termination.
6.1.6. Cooperate with Entercom, with respect to the Stations, in its
efforts to employ after the Closing, or TBA Commencement Date, as the case may
be, any of the current employees of CBS and its Affiliates who are employed at
the Stations (the "Station Employees"), including without limitation, allowing
Entercom to meet privately with the Station Employees, other than Non-Continuing
Employees (as defined in Section 6.5). CBS and its Affiliates will not interfere
with or attempt to undermine in any way the efforts of Entercom to employ such
employees.
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6.1.7. Pay and discharge when due all taxes due after Closing accrued
or accruing with respect to periods ending on or before the Closing Date, to the
extent such taxes could reasonably be expected to result in a lien or otherwise
interfere with the use or enjoyment of the Assets; provided, that any such tax
may be contested by CBS in good faith by appropriate proceedings; provided
further that CBS shall pay any such taxes found to be due and owing upon
completion of such proceedings.
6.1.8. Prosecute any renewal application filed by it with the
Commission with respect to any of the Stations that are the subject of this
Agreement; (ii) diligently defend against any petition to deny or other filing
seeking denial of such application or against any matter raised sua sponte by
the Commission, and (iii) diligently defend against any petition for
reconsideration, application for review, or other post-grant objection to such
renewal application, in each case with respect to events occurring or accruing
prior to the Closing Date, during the period when the Station in question was
owned by CBS or any of its Affiliates.
6.1.9. Use its reasonable best efforts to determine in cooperation with
Entercom whether any of the assets listed on Schedule 4.1.4 as pertaining to
WBMX(FM) are used or intended for use primarily in the operation of any or all
of the Stations. Upon determining that any such assets are so used or so
intended for use, such assets will become part of the Property to be conveyed
hereunder.
6.2. NEGATIVE COVENANTS OF CBS.
Unless Entercom has given its consent in writing, which
consent shall not be unreasonably withheld, CBS and it Affiliates shall not,
directly or indirectly, during the period from the date hereof to the Closing
Date:
6.2.1. Except as specifically provided in this Agreement, cancel,
amend, modify adversely, assign, encumber, or in any way discharge or terminate
any of the Leases or Contracts other than in the Ordinary Course of Business
(provided, however, that CBS shall notify Entercom in writing of any such
actions involving a contract that would need to be identified on Schedule
4.1.6).
6.2.2. By any act or omission, surrender, modify adversely, forfeit, or
fail to renew on regular terms any Authorizations for the Stations or take or
omit any action which might result in the Commission instituting any proceedings
for the revocation, suspension or modification of any such Authorizations.
6.2.3. Except in the 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 (other than Assets that are obsolete, worn beyond repair, or
otherwise not suitable for use in any of the Stations and that are not in use)
are replaced with assets of comparable or better functionality
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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 and those
identified on Schedule 4.1.8 hereto;
6.2.5. Enter into, renew, or modify any Contract relating to the
Stations with an individual value of over Fifty Thousand Dollars ($50,000.00) or
in the aggregate over Two Hundred and Fifty Thousand Dollars ($250,000.00);
other than for Time Sales Agreements, Trade Agreements or Barter Agreements,
provided, however, that this restriction shall not apply to renewal or
modification of any collective bargaining agreement governing employees at any
of the Stations, to the extent that such action would constitute a breach of the
terms of such agreement or a violation of applicable law. The amounts set forth
in the preceding sentence shall have no bearing on any determination as to what
constitutes "material" for purposes of this Agreement.
6.2.6. Fail to take any reasonable actions necessary to maintain the
Stations' continuous broadcast operations from their respective main antennae.
6.2.7. Fail to take any reasonable actions necessary to avoid the
happening of or to cure the existence of any material damage to or impairment of
any of the Assets.
6.2.8. Fail to operate the Stations in conformity in all material
respects with all of the applicable requirements of law and regulation.
6.2.9. Take any action which is materially inconsistent with its
obligations under this Agreement, or that could hinder or delay the consummation
of the transactions contemplated hereby.
Any notification or consent given under this Article VI will not mitigate,
detract from, or otherwise affect the representations, warranties, or
obligations under this Agreement and the consequences of the other party's
acting on any such notification or consent will be solely such other party's
responsibility, except to the extent inherent in the nature of any notification
or consent, or otherwise set forth in the terms thereof.
6.3. NO CONTROL.
Nothing contained in this Agreement or in the Time Brokerage
Agreement shall give Entercom any right to control the operations of the
Stations prior to the Closing Date.
6.4. NO SOLICITATION OR HIRE OF EMPLOYEES AND PROGRAMMING.
During the period beginning the date of this Agreement and
ending the earlier of eighteen (18) months after the Closing Date or, as to any
particular Station, upon consummation
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of any transaction requiring the prior consent of the Commission on FCC Form 314
or 315, CBS shall be prohibited from: (i) soliciting or hiring any Transferred
Employee (as defined in Section 6.5); provided, however, that this prohibition
shall not apply to any Transferred Employee hired by Entercom and subsequently
terminated by Entercom without cause; (ii) contracting for, negotiating for, or
soliciting any of the rights relating to the programming content on or
promotional materials related to the Stations listed on Schedule 6.4.
6.5. COVENANTS OF ENTERCOM.
6.5.1. Prior to the earlier of the TBA Commencement Date or the Closing
Date, Entercom or its designated Affiliate shall offer employment commencing on
the earlier of the TBA Commencement Date or the Closing Date to each of the
employees employed by CBS or its Affiliates at the Stations on such date (the
"Station Employees"), other than those employees specified on Schedule 6.5 (the
"Non-Continuing Employees"). The Station Employees accepting such offers shall
be referred to as the "Transferred Employees." "Station Employees" shall also
include any employee of the Station who is on a short-term disability or other
authorized temporary leave from employment by CBS not in excess of 6 months, and
Entercom or its designated Affiliate shall offer employment to such person at
such time the person is capable and ready to return to active status, provided
that such person actually returns to active status within such six (6) month
period. Except for any Transferred Employees whose employment contracts are
assumed by Entercom under the terms hereof, the terms and conditions of
Entercom's employment of the Transferred Employees shall be at-will employment
in at least the same positions, for at least the same direct cash compensation,
with medical insurance effective as of the earlier of the TBA Commencement Date
or the Closing Date and including coverage for any preexisting health conditions
that would have been covered by the health plan in which the employee was a
participant immediately prior to the earlier of the TBA Commencement Date or the
Closing Date and give effect, in determining any periodic deductible and maximum
out-of-pocket limitations, to claims incurred and paid by, and amounts
reimbursed to, such Transferred Employees prior to the earlier of the TBA
Commencement Date or the Closing Date. For purposes of determining the amount of
any entitlement of any Transferred Employee under Entercom's benefit and
vacation plans, Entercom will take into account and credit such Transferred
Employee under Entercom's benefit and vacation plans with the credit for service
the Transferred Employee received from CBS immediately prior to the earlier of
the TBA Commencement Date or the Closing Date. With respect to any welfare
benefit plan (as defined in Section 3(1) of ERISA) of Entercom for the benefit
of Transferred Employees, Entercom shall cause all Transferred Employees who
actively participated in similar plans of CBS to become a participant in such
welfare benefit plan of Entercom as of the earlier of the TBA Commencement Date
or the Closing Date. 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 CBS in respect of continued employment (or
resumed employment) with CBS or Entercom or in respect of any other matter.
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6.5.2. Without the prior written consent of CBS, which shall not be
withheld unreasonably, from and after the date hereof, neither Entercom nor any
of its Affiliates shall take any action inconsistent with its obligations under
this Agreement, or that could hinder or delay the consummation of the
transactions contemplated hereby.
6.6. REAL PROPERTY SURVEYS.
6.6.2. Within 30 days of the date hereof, Entercom may procure, at its
expense, with respect to each parcel of real property owned by CBS and used in
connection with the operation of the Stations, a current survey of each such
parcel of real property, prepared by a licensed surveyor, and conforming to
current ALTA Minimum Detail Requirements for Land Title Surveys, disclosing the
location of all improvements, easements, party walls, sidewalks, roadways,
utility lines, transmitting towers, tower guy anchors and other matters
customarily shown on such surveys, and showing vehicular access affirmatively to
public streets and roads (the "Survey").
6.6.3. Within 10 business days of receipt of the Surveys, Entercom
shall give CBS copies of the Surveys and notice of any exceptions to matters
revealed by the Survey that would materially and adversely affect the Stations
as currently operated (the "Objectionable Exceptions"). If Entercom fails to
give such notice in a timely manner, Entercom shall be deemed to have accepted
matters revealed by the Surveys other than the Objectionable Exceptions
expressly set forth in the notice.
6.6.4. CBS shall cure or remove any Objectionable Exception within 30
days from the date of Entercom's notice; provided, however, that if CBS
reasonably determines that the cost of removing such Objectionable Exception
would exceed One Million Dollars ($1,000,000.00) (subject to the last sentence
of Section 11.1) or that CBS through the expenditure of up to One Million
Dollars ($1,000,000.00) (subject to the last sentence of Section 11.1) will be
unable to cure or remove an Objectionable Exception within such 30-day period,
then CBS shall notify Entercom within 3 business days after such determination,
whereupon Entercom shall have the right, exercisable by written notice given to
CBS within 3 business days after receipt of CBS's notice, to elect (i) to agree
to accept the real property covered by such Survey, subject to such of the
Objectionable Exceptions, together with a payment of such sum as is necessary to
remove the Objectionable Exception not to exceed One Million Dollars
($1,000,000.00) (subject to the last sentence of Section 11.1) or (ii) to
terminate this Agreement. If Entercom fails to elect option (i) or (ii) above,
then Entercom shall be deemed to have elected option (i).
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ARTICLE VII.
ACTIONS PRIOR TO CLOSING.
7.1. APPLICATION TO COMMISSION.
The parties hereby bind themselves to use their best 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 Stations as herein provided; diligently and promptly to
prepare, sign, and file with the Commission within five (5) business days from
the date of this Agreement any and all applications requisite or desirable to
procure such consents and approvals (the "Assignment 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 Assignment Applications; and
diligently to pursue the grant of a Final Order approving such Assignment
Applications.
7.2. COMPLIANCE WITH CBS FINAL JUDGMENT.
Entercom acknowledges that CBS has provided it with a copy of
the CBS Final Judgment. Within two (2) business days of the date of this
Agreement, CBS shall comply with the notification provisions of Section VII of
the CBS Final Judgment, and both parties shall thereafter comply in all material
respects with all requests for additional information by the DOJ under the CBS
Final Judgment. The parties will attempt in good faith to persuade the DOJ to
provide written notice of no objection to this Agreement. If the DOJ does not
provide written notice of no objection under the CBS Final Judgment, then CBS
may, but shall be under no obligation to, seek the Court's approval of this
Agreement pursuant to Section VII of the CBS Final Judgment. If CBS decides not
to seek Court approval, or if DOJ has not provided written notice of no
objection or the Court's approval has not been obtained by the Upset Date (as
defined in Section 9.1.1.), then either party shall be permitted to terminate
this Agreement as provided in Section 9.1.
7.3. XXXX-XXXXX-XXXXXX NOTIFICATION.
As promptly as practicable and no later than ten (10) 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 paid by one-third by CBS and
two-thirds by Entercom. The parties agree to diligently 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 early
termination of the waiting period under the HSR Act.
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7.4. INSPECTION.
During the period from the date of this Agreement to the
Closing Date, CBS shall, upon reasonable request, afford, or cause to be
afforded, engineers, attorneys, accountants, and other consultants and/or
representatives of Entercom free access in a reasonable manner during normal
business hours to the employees, offices, studios, transmitter sites, equipment,
records, and other documents pertaining to the Stations and furnish or cause to
be furnished Entercom with all information concerning the Stations' affairs as
Entercom may reasonably request, including but not limited to applications and
other documents filed with the Commission. For purposes of the foregoing,
records shall include, without limitation, any sales, research, consulting, and
ratings reports relating to the Stations.
7.5. CONFIDENTIALITY.
Each party hereby covenants and agrees that in the event the
transactions contemplated by this Agreement are not consummated for any reason
whatsoever, they will, upon request, return to the other party within ten (10)
days from the date of such request, all versions, including copies, of all
information furnished to that party by another party hereto or its
representatives or Affiliates, regardless of whether the same is marked
"confidential" or "proprietary," together with any and all notes, memoranda,
analyses, compilations, studies, or other documents (whether in hard copy or
electronic media) prepared by the receiving party, its directors, officers,
partners, employees, agents, or other representatives (including advisors,
attorneys, accountants, financial advisors, and potential financing sources)
which contain or otherwise reflect such information (the "Confidential
Information"). Each party hereby covenants and agrees to use reasonable efforts
to hold all Confidential Information in confidence and not to disclose, or cause
any representative, agent, or employee to disclose to any third party any
portion of the Confidential Information except as may be required by law or
judicial process, and not to use any portion of the Confidential Information for
its own benefit without the written consent of the providing party. Should a
party receive a request or be required by applicable law to disclose to a court
or other tribunal all or any part of the Confidential Information received from
another party hereto, CBS and Entercom confirm that each will adhere to the
terms and conditions set forth in paragraph 5 of the Confidentiality Agreement,
dated June 9, 1998, between CBS and Entercom. Nothing shall be deemed to be
Confidential Information that: (a) is or becomes generally available to the
public other than as a result of a disclosure by the receiving party or its
representatives; or (b) is or becomes available to the receiving party on a non-
confidential basis from a source rightfully in possession of the information and
which is under no legal, contractual or fiduciary obligation to keep it
confidential.
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ARTICLE VIII.
CLOSING
8.1. CLOSING.
Unless otherwise agreed by the parties, the Closing shall take
place at the offices of Xxxxxx & Xxxxxxx, 0000 Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxx
0000, Xxxxxxxxxx, X.X. 00000 at 10:00 a.m., on the Closing Date, which shall be
the date five business days after the satisfaction of the conditions to Closing
set forth in Section 5.1, Section 5.2.2 and Section 5.3.1 hereof.
8.2. PRORATIONS.
Within ninety (90) days after Closing, an accounting for each
Station shall be made as follows:
8.2.1. All prepaid income, prepaid expenses, prepayments on any
Contracts and Leases assumed, accrued income, property taxes, and accrued
expenses, including without limitation any accrued expenses for Transferred
Employees (such as accrued vacation time) assumed by Entercom up to the
Adjustment Time shall, except as otherwise expressly provided herein or in the
Time Brokerage Agreement, be adjusted and allocated between CBS and Entercom to
reflect the principle that all expenses and income arising from the operation of
the Station up through the Adjustment Time shall be for the account of CBS, and
all expenses and income arising from the operation of the Station or portion
thereof acquired by Entercom after the Adjustment Time shall be for the account
of Entercom. Trade and Barter Agreements shall be subject to adjustment or
proration only to the extent provided in Section 4.1.18. Any appropriate
proration required to be made (i) pursuant to Leases referred to in Section
4.1.5, (ii) pursuant to Contracts referred to in Section 4.1.6, (iii) pursuant
to Section 6.1.4, and (iv) pursuant to Section 4.1.18 shall also be reflected in
such accounting. Any amount not paid when due shall bear interest at the rate of
ten percent (10%) per annum.
8.2.2. As soon as practicable following the Closing Date, and in any
event within ninety (90) days thereafter, or at such other time as the parties
agree, Entercom shall deliver to CBS Entercom's certificate, setting forth as of
the Adjustment Time, all adjustments to be made as provided in Section 8.2.1
above as to each Station. Entercom shall provide CBS or its representatives
access to copies of such portions of books and records CBS may reasonably
request solely for purposes of verifying such adjustments. Entercom's
certificate shall be final and conclusive unless objected to by CBS in writing
within thirty (30) days after delivery. Entercom and CBS shall attempt jointly
to reach agreement as to the amount of the adjustments to be made hereunder
within sixty (60) days after receipt of such written objection, which agreement,
if achieved, shall be binding upon all parties to this Agreement and not subject
to dispute or review.
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8.2.3. In the event of a disagreement between Entercom and CBS with
respect to the accounting to be made hereunder, the parties agree that a public
accounting firm chosen jointly by Entercom and CBS shall be the final arbiter of
such disagreement.
8.2.4. Any amounts due for the adjustments provided for herein shall be
paid within ten (10) business days after final determination.
8.3. CLOSING DELIVERIES TO ENTERCOM.
At or before the Closing, CBS shall deliver or cause to be
delivered to Entercom the following items and documents in form reasonably
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. CBS shall pay to Entercom or its designee by wire transfer of
immediately available funds the CBS Contract Reimbursement.
8.3.2. CBS shall deliver to Entercom such 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,
to the extent such rights and interests under such leases and contracts have not
previously been assigned to and assumed by Entercom under the Time Brokerage
Agreement.
8.3.3. CBS shall deliver to Entercom one or more Special Warranty Deeds
in recordable form transferring to Entercom a fee simple interest in each parcel
of owned real property being conveyed to Entercom hereunder.
8.3.4. CBS shall deliver to Entercom an assignment of all right, title
and interest of CBS in and to the Authorizations.
8.3.5. CBS shall deliver to Entercom all keys to and actual possession
of all of the Assets, in the same condition as the same now are, except for
ordinary wear and tear thereof and except as permitted under the Agreement.
8.3.6. CBS shall deliver to Entercom certified copies of resolutions of
the Board of Directors of each CBS entity, duly authorizing the execution,
delivery, and performance of this Agreement and all documents to be executed and
delivered by CBS at the Closing, and thereafter.
8.3.7. CBS shall deliver to Entercom certificates signed by an
authorized officer to the effect (a) that no act or omission of CBS or any of
its Affiliates, or state of facts contrary to the agreements, representations,
and warranties of such party contained herein has been taken or has
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occurred and that said representations and warranties of such party, to the
extent they do not speak as of a specific time, are true and correct as of the
Closing Date, with the same effect as if made as of the time of Closing, except
to the extent otherwise permitted hereunder or to the extent such act, omission,
state of facts, untruth or inaccuracy would not have a material adverse effect
on Entercom's continued operation of the Stations as currently operated and (b)
that all covenants and agreements contained herein of CBS have been complied
with in all material respects.
8.3.8. CBS shall deliver to Entercom the Required Consents relating to
the Leases and Contracts, to the extent not previously delivered under the Time
Brokerage Agreement.
8.3.9. CBS shall deliver to Entercom evidence of the release of all
liens and encumbrances on the Assets to be released at Closing.
8.3.10. CBS shall deliver to Entercom one or more opinions of counsel
to CBS, dated he Closing Date, in form and substance reasonably satisfactory to
Entercom.
8.4. CLOSING DELIVERIES TO CBS.
At or before the Closing, Entercom or an Affiliate of
Entercom, as appropriate, shall deliver to CBS or cause to be delivered the
following items and documents in form reasonably satisfactory to counsel for CBS
and properly executed, unless CBS shall waive in whole or in part in writing
such delivery and then only to the extent of such waiver:
8.4.1. Entercom shall pay to CBS the Purchase Price by wire transfer of
immediately available funds.
8.4.2. Entercom shall deliver to CBS certified copies of resolutions of
the Board of Directors of Entercom duly authorizing the execution, delivery, and
performance of this Agreement and all documents to be executed and delivered by
Entercom at the Closing, and thereafter.
8.4.3. Entercom shall deliver to CBS certificates signed by an
authorized officer to the effect that no act or omission of Entercom or state of
facts contrary to the agreements, representations, and warranties of Entercom
contained herein has been taken or has occurred and that said representations
and warranties of Entercom to the extent they do not speak as of a specific time
are true and correct as of the Closing Date, with the same effect as if made as
of the time of Closing, and that all covenants and agreements contained herein
of Entercom have been complied with.
8.4.4. Entercom shall deliver to CBS one or more agreements whereby
Entercom assumes and agrees to pay when due any liabilities of CBS relating to
the Stations specifically assumed by Entercom hereunder, including without
limitation those liabilities accruing after the
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Adjustment Time with respect to those Leases and Contracts being assumed by
Entercom hereunder, to the extent such rights and interests under such
liabilities have not previously been and assumed by Entercom under the Time
Brokerage Agreement.
8.4.5. Entercom shall deliver to CBS one or more opinions of counsel to
Entercom dated the Closing Date, in form and substance reasonably satisfactory
to CBS.
8.5. COVENANTS OF FURTHER ASSURANCES; AVAILABILITY OF RECORDS.
At and after the time of Closing, upon request, each party
shall take such action and deliver to the other party such further instruments
of assignment, conveyance, or transfer or other documents of further assurance
as may be reasonably necessary to evidence the full and effective transfer,
conveyance, and assignment of the Assets and possession thereof to the
respective parties, their successors and assigns, and to assure complete
performance of this Agreement in all respects. After the Closing, for a period
of three (3) years, upon request, CBS shall provide Entercom copies of or access
to records relating to the Stations that are needed by Entercom for accounting,
tax, or other purposes.
8.6. RISK OF LOSS; DAMAGE TO PROPERTY.
The risk of loss or damage from fire, theft, storm or other
act beyond the control of CBS to any of the Assets prior to Closing, shall be
upon CBS. If, at the time of Closing, the tangible property to be sold hereunder
shall have suffered such loss or damage to an extent that affects the value
thereof and CBS shall not have repaired, replaced, or restored same with
property of like kind, quality, and value, Entercom shall complete the purchase
and Closing, in which event it shall be entitled to a payment equal to the
greater of (a) the amount necessary to repair, replace, or restore such damaged
property with property of like kind, quality, and value or (b) the amount of any
and all insurance proceeds available to CBS, if any, collectible by reason of
such loss or damage.
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 hereunder,
whether or not imposed on a particular party, shall be paid and borne equally by
CBS or Entercom, either by payment thereof or by reimbursement to the other
party.
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ARTICLE IX.
TERMINATION, DEFAULT AND INDEMNIFICATION
9.1. TERMINATION.
This Agreement may be terminated by a party hereto not then in
default hereunder upon written notice to the other parties upon occurrence of
any of the following: (i) the Closing has not occurred by the date that is one
year after the date of this Agreement (the "Upset Date"); (ii) the Commission
denies by Final Order or designates for hearing any of the Assignment
Applications or any portion thereof; (iii) by either party as provided in
Section 7.2; or (iv) any of the conditions set forth in Article V of this
Agreement are not waived by such party and such conditions shall not have been
satisfied on or before the Upset Date, or shall have become incapable of
satisfaction. This Agreement may be terminated by Entercom as provided in
Section 6.1.4, Section 6.1.5 and Section 6.6.3, provided Entercom is not then in
default hereunder.
9.2. EFFECT OF TERMINATION.
The termination of this Agreement under Section 9.1 shall not
relieve any party of any liability for breach of this Agreement prior to the
date of termination.
9.3. REMEDIES.
CBS recognizes that, in the event of a Default by CBS,
monetary damages alone will not be adequate. Therefore, in the event of a
Default by CBS, unless Entercom is in Default, Entercom shall be entitled, in
addition to indemnification pursuant to Section 9.4, to obtain specific
performance of the terms of this Agreement. In any action to enforce
specifically the performance of this Agreement under this Section 9.3, CBS shall
waive the defense that there is another adequate remedy at law or equity and
agrees that Entercom shall have the right to obtain specific performance of
CBS's obligations under the terms of this Agreement without being required to
prove actual damages, post bond, or furnish other security.
9.4. INDEMNIFICATION.
9.4.1. BY CBS.
CBS shall indemnify, defend, and hold Entercom and its
officers, directors, partners, 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
attorneys' 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") (including without
limitation the loss of any of the Authorizations resulting from any failure by
the Commission to renew such Authorizations as a result of events occurring
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prior to the Closing Date) 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 covenants, representations or
warranties made by CBS in or pursuant to this Agreement, or in any agreement,
document, or instrument executed and delivered pursuant hereto;
(b) any failure by CBS to perform or observe, or to have
performed or observed, in full, any covenant, agreement, or condition 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 pursuant
hereto;
(c) any and all obligations of CBS, except for obligations
assumed or required to be assumed by Entercom under the terms of this Agreement
or in the Time Brokerage Agreement;
(d) the operation or ownership of the Assets prior to the
Adjustment Time by CBS and its Affiliates, except for obligations and
liabilities assumed by Entercom under the Time Brokerage Agreement; or
(e) Closing by Entercom and/or any of its Affiliates prior to
the grants of the Assignment Applications becoming Final Orders, if the failure
of the grants of the Assignment Applications to become Final Orders is
attributable to any issue raised regarding CBS or any of its Affiliates.
9.4.2. BY ENTERCOM.
Entercom shall indemnify, defend, and hold CBS and its
officers, directors, partners, employees, and Affiliates harmless from, against
and with respect to any and all items of 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 covenants, representations, or
warranties made by Entercom in or pursuant to this Agreement, or in any
agreement, document, or instrument executed and delivered pursuant hereto;
(b) any failure by Entercom to perform or observe, or to have
performed or observed, in full, any covenant, agreement, or condition 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 pursuant
hereto;
(c) Entercom's operation or ownership of the Assets after the
Adjustment Time; or
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(d) any obligations under any Contracts or Leases assumed by
Entercom under Section 3.1 hereof. For purposes of Section 9.4.2(b), Entercom
acknowledges that if it wrongfully fails to close the transactions contemplated
hereby, CBS may not be able to dispose of the Stations in a transaction
qualifying under Section 1031 of the Code, and that Entercom shall indemnify and
hold harmless CBS for damages sustained by CBS if CBS disposes of the Stations
within one year from the date Closing should have occurred and CBS is unable to
do so in a manner that qualifies for tax-deferred treatment under Section 1031
of the Code.
9.4.3. NOTICE AND PROCEDURE IN CONNECTION WITH THIRD PARTY
CLAIMS.
If any party has a claim for indemnification hereunder (such
party, an "Indemnitee") arising out of any claim or liability which is asserted
or threatened against it, or any action, suit or proceeding is commenced by any
third party against any Indemnitee which might result in any indemnification
obligations hereunder on behalf of any other party (such other party, an
"Indemnitor"), such Indemnitee shall, within twenty (20) business days from the
receipt of same, give written notice thereof to each such Indemnitor together
with a brief statement of the basis of the claim and a copy of any complaint or
other documents relating to such claim, provided, however, that failure to give
such notice within such twenty (20) business day period shall not affect the
liability of Indemnitor hereunder unless the failure to give such notice within
such period materially and adversely affects Indemnitor's ability to defend
against the claim giving rise to Indemnitee's claim for indemnification or to
cure the default giving rise to such claim. Within twenty (20) days from receipt
of such notice, the Indemnitor shall give the Indemnitee written notice as to
whether the Indemnitor elects to contest any such claim or liability; provided,
however, that during the interim, the Indemnitee shall be entitled to take
reasonable action (which shall not include settlement) with respect to such
claim which it deems necessary to protect against further damage or default with
respect thereto. If an Indemnitor elects to contest any such claim or liability,
it shall be at the cost and expense of the Indemnitor and using professionals
chosen by the Indemnitor. The Indemnitee may participate in the defense of any
claim or liability that an Indemnitor has elected to contest, but such
participation shall be at its own expense. If the Indemnitor does not elect to
assume control or otherwise participate in the defense of any third party claim,
it shall be bound by the results obtained by the Indemnitee with respect to such
claim, including any settlement, subject to the Indemnitor's right to contest
the underlying obligation to indemnify the Indemnitee.
9.4.4. EXCLUSIVITY.
Except as provided in Section 9.1 concerning termination of
this Agreement and Section 9.3 concerning the rights of Entercom to specific
performance, subsequent to Closing the right to indemnification hereunder shall
be the exclusive remedy for all claims of damages of any party in connection
with any breach by any other party of its representations, warranties, or
covenants. Subsequent to Closing, the parties hereto agree that no party will be
entitled to consequential or punitive damages as a result of a breach hereof by
any party hereto.
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9.4.5. LIMITATIONS.
Except as otherwise provided in this Article IX, any claim
asserted for damages or indemnification hereunder must be submitted to the
Indemnitor in writing within the time periods set forth in Section 11.3 of this
Agreement and any such claim not so asserted shall be waived and barred. No
party shall be entitled to indemnification hereunder unless the aggregate amount
of its claims for indemnification exceeds One Hundred Thousand Dollars
($100,000.00) per Station, in which event such party shall be indemnified for
the entire amount owed. This amount shall have no bearing on any determination
as to what constitutes "material" for purposes of this Agreement. No party shall
be entitled to indemnification hereunder for amount in the aggregate greater
than the Purchase Price.
ARTICLE X.
INTENTIONS OF THE PARTIES AS TO FORM OF TRANSACTION
10.1. CBS' INTENTION.
CBS may elect to transfer and convey the Assets to Entercom in
such a fashion as would permit CBS to effect a deferred like-kind exchange of
the Assets for other like-kind assets to be acquired by CBS after the Closing
with Purchase Price. If CBS so elects, it shall give written notice to Entercom
of its intention to effect such a deferred like-kind exchange, and thereafter
may at any time at or prior to Closing assign its rights under this Agreement to
a "qualified intermediary" as defined in Treas. Reg. Section 1.1031(k)-1(g)(4),
subject to all of Entercom's rights and obligations hereunder, and shall
promptly provide written notice of such assignment to all parties hereto. In the
event CBS assigns its rights hereunder to a "qualified intermediary," Entercom
shall acknowledge in writing the notification by CBS of the assignment to the
"qualified intermediary" of its rights hereunder, and Entercom shall pay the
Purchase Price to the "qualified intermediary" at Closing rather than to CBS,
which payment shall discharge the obligation of Entercom to make payment for the
Assets hereunder.
10.2. ENTERCOM'S INTENTION.
CBS acknowledges that Entercom is purchasing the Assets for
cash and that Entercom does not intend its acquisition of the Assets to be part
of a like-kind exchange by Entercom. Accordingly, without limiting Entercom's
obligation to perform for the benefit of CBS as specifically set forth in
Section 10.1, Entercom shall not be obligated to take any other action at the
request of CBS or the "qualified intermediary" at Closing or otherwise that
would be inconsistent with Entercom's intention to effect a purchase of the
Assets for cash.
10.3. INDEPENDENT TRANSACTIONS.
The parties acknowledge and agree that the transactions
contemplated by this Agreement are not contractually interdependent or otherwise
mutually dependent in any way on
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or with the transactions contemplated by either the Tampa Agreement or the
Boston II Agreement. The parties further acknowledge that neither the Closing
nor any of the rights or obligations of the parties set forth herein are
dependent or conditional on the closing or failure to close the transactions
contemplated by either the Tampa Agreement or the Boston II Agreement, and that
neither the closing of the Tampa Agreement or the Boston II Agreement nor any of
the rights or obligations of the parties to such agreements are dependent or
conditional on the occurrence of the Closing or the failure of occurrence of the
Closing.
ARTICLE XI.
GENERAL PROVISIONS
11.1. EXPENSES OF THE PARTIES.
Except as otherwise specifically 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 that any
filing fees of the Commission relating to the filing of the Assignment
Applications shall be divided equally between CBS and Entercom. The parties
agree that the Required Cure Expense shall not exceed One Million Dollars
($1,000,000.00).
11.2. BROKERS.
Each party hereto represents and warrants to the other parties
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 parties will have any liability, and each party
hereto agrees to indemnify and hold the other parties hereto harmless against
and in respect of 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.
11.3. SURVIVAL OF 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 the parties herein contained, shall
survive the Closing Date hereunder for a period of eighteen (18) months and
shall remain effective and unaltered or unimpaired for such period by any
investigation that may have been or may be made at any time prior to Closing by
or on behalf of any party, except that the representations concerning title,
ERISA, environmental matters, and taxes contained in Sections 4.1.8, 4.1.15,
4.1.19 (other than as provided in Section 6.1.4), and 4.1.24 shall survive until
ninety (90) days after the expiration of the applicable statutes of
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limitation, and the provisions of Sections 2.2 and Article X shall survive the
Closing without limitation.
11.4. CONFIDENTIALITY.
Each party agrees, except as otherwise required by law or the
rules of the New York Stock Exchange (the "NYSE"), until such time as this
Agreement is made public by filing with the Commission, that it will not
disclose to any third party the fact of or content of this agreement or the
possible exchange of the radio stations involved without the express prior
consent of the other parties. Should a party be required to disclose information
regarding the agreement prior to filing with the Commission because of a
requirement of law or a rule of the NYSE, it will advise the other parties with
reasonable advance notice in writing prior to disclosure.
11.5. 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.
11.6. EFFECT OF THIS AGREEMENT.
This Agreement and the Time Brokerage Agreement set 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 or inducement 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.
11.7. TERMS GENERALLY.
(a) Words in the singular shall be held to include the plural
and vice versa and words of one gender shall be held to include the other
genders as the context requires; (b) the terms "hereof," "herein," and
"herewith" or words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all Schedules hereto)
and not to any particular provision of this Agreement, and Article, Section,
Paragraph, and Schedule references are to be Articles, Sections, Paragraphs, and
Schedules to this Agreement unless
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otherwise specified; and (c) the word "or" shall not be exclusive, except where
the context otherwise requires.
11.8. 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.
11.9. COUNTERPARTS.
This Agreement may be executed in one or more counterparts and
all such counterparts shall be construed as one and the same instrument.
Executed documents transmitted by telecopier shall be valid and binding.
11.10. GOVERNING LAW; JURISDICTION.
The construction and performance of this Agreement shall be
governed by the laws of the State of New York without reference to its conflict
of law rules. The parties hereto expressly waive and agree to waive any right to
a jury trial in any controversy or claim arising out of or relating to this
Agreement.
11.11. BULK SALES LAWS.
Entercom and its Affiliates waive compliance by CBS and its
Affiliates with the provisions of the "bulk sales" or similar laws of any state.
CBS agrees to indemnify Entercom and its Affiliates and hold them harmless from
any and all loss, cost, damages, and expenses (including but not limited to
reasonable attorney's fees) sustained by the indemnified parties as a result of
any failure of the indemnifying party to comply with any "bulk sales" or similar
laws.
11.12. ASSIGNMENT.
This Agreement and the rights and obligations hereunder may
not be assigned by any party hereto without the prior written consent of the
other parties hereto, which consent shall not be unreasonably withheld; provided
however, that (x) Entercom may make a collateral assignment of their rights
hereunder for the benefit of their senior lenders and (y) any party may assign
all or any part of this Agreement or the rights and obligations hereunder to an
Affiliate, provided that such assignment shall not relieve such party of its
obligations hereunder.
11.13. 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,
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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 CBS: CBS Radio
00 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Mr. Xxx Xxxxxxxx
Telecopier Number: 000-000-0000
with copies to: General Counsel
CBS Corporation
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000-0000
Telecopier Number: 000-000-0000
and
Xxxxxxxxx Xxxxxx & Xxxxxx, P.L.L.C.
0000 X Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier Number: 202-293-7783
If to Entercom: Entercom Communications Corp.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Field, President
Telecopier Number: 000-000-0000
with copies to: Xxxx X. Xxxxxxxx, Esq., Executive Vice President and
General Counsel
Entercom Communications Corp.
000 Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Telecopier Number: 000-000-0000
and
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier Number: 000-000-0000
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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. Any party may change its address for the
purpose of notice by giving notice of such change in accordance with the
provisions of this Section.
11.14. ATTORNEYS' FEES.
In the event of a dispute between or among the parties hereto
arising out of or related to this Agreement or the interpretation or enforcement
of this Agreement, the prevailing party shall be entitled to recover reasonable
attorneys' fees, costs and expenses from the other party.
11.15. TEMPORARY SUBLEASE FOR WBMX.
In the event that as of Closing Date, CBS has been unable to
move Station WBMX(FM) to its new office space, Entercom shall permit CBS to
continue to occupy that portion of the leased premises under the Lease dated
September 30, 1993, as amended October 31, 1997, as amended January 1, 1995,
between JMB Urban Huntington Limited Partnership and Atlantic Radio, L.P. for
office space at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx (the "Office
Lease"), which is currently occupied by WBMX(FM) until a date not later than
April 31, 1999; provided that CBS shall make reasonable commercial efforts to
vacate the premises as soon as possible. CBS shall pay Entercom rent monthly on
the first of each month based on the number of square feet of the premises
occupied by CBS, divided by the total number of square feet under the Office
Lease.
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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 date first written
above.
CBS RADIO, INC.
By:_______________________________________
Title:_____________________________________
CBS RADIO LICENSE, INC.
By:_______________________________________
Title:_____________________________________
ENTERCOM COMMUNICATIONS CORP.
By:_______________________________________
Title:_____________________________________
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