Exhibit 2.2
FIRST AMENDMENT
TO
EQUITY INTEREST PURCHASE AGREEMENT
This First Amendment to Equity Interest Purchase Agreement (this
"Amendment") is entered into as of the 13th day of December, 2000, by and among
Xxxxxx Xxxxx, an individual, Xxxxx Xxxx, an individual, Xxxxxx Xxxx, Jr., an
individual, Xxxxxx Xxxx 1956 Living Trust, f/b/o Xxxxxx Xxxx, Jr., a North
Carolina trust (the "Xxxxxx Xxxx Trust"), Centennial Broadcasting Nevada, Inc.,
a North Carolina corporation ("Centennial Nevada"), Centennial Broadcasting,
LLC, a North Carolina limited liability company ("Centennial Broadcasting"),
Centennial Broadcasting License, LLC, a North Carolina limited liability company
("Centennial License") (Centennial Nevada, Centennial Broadcasting and
Centennial License, collectively, the "Centennial Entities"), and Xxxxxxx
Mezzanine Holdings, LLC, a Delaware limited liability company ("Buyer")
(assignee of Xxxxxxx XX Acquisition Corp., a Delaware corporation).
BACKGROUND
The parties hereto are parties to that certain Equity Interest Purchase
Agreement dated as of June 2, 2000 (the "Purchase Agreement"); and
The parties have agreed to amend certain terms and conditions of the
Purchase Agreement; and
Accordingly, in consideration of the foregoing and of the mutual promises,
covenants and conditions set forth below, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
AMENDMENT TO AGREEMENT
The Purchase Agreement is hereby amended as follows:
1. Reduction of Purchase Price. The parties have agreed to a reduction of
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the Purchase Price. Accordingly, clause (i) of Section 1.6 of the Purchase
Agreement is amended to read as follows:
"(i) One Hundred Nine Million Seven Hundred Fifty Thousand
Dollars ($109,750,000) (the "Base Price"), plus"
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2. Extension of Upset Date. The parties have agreed to an extension of
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time for Closing. Accordingly, the last clause of the first sentence of Section
1.7.1 of the Purchase Agreement is amended to read as follows:
"provided, however, that the Closing shall occur no later than January
31, 2001 (the "Upset Date") to be effective as of 12:01 a.m. on
February 1, 2001."
3. Waiver of Condition. Buyer has agreed to accept certain adverse
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developments with respect to the cash flows of the Stations. Accordingly,
Section 5.2.3 of the Purchase Agreement is amended to add the following proviso
at the end of the Section:
"; provided, however, that no decline in cash flows of any one or more
of the Stations shall constitute a material adverse development for
purposes of this Section."
4. Xxxxxxx Property. As a result of potential environmental concerns, the
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parties have agreed that the ground lease with the Xxxxxxx Trust (the "Xxxxxxx
Lease") will be an Excluded Asset and a Retained Liability. Accordingly, the
Purchase Agreement is amended as follows:
Schedule 1.2.3 is amended to delete the reference to the Xxxxxxx Lease
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(item No. 38 under the heading "New Orleans").
Schedule 1.2.4 is amended to delete the reference to the Xxxxxxx Lease
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(item No. 9 under the heading "Leased Real Property").
A new Section 1.3.8 is added as follows: "The rights arising under
that certain Ground Lease relating to property situated in Xxxxxxxxx
Xxxxxx, Louisiana, made effective as of November 24, 2000, by and
between Louis and Xxxxxxx Xxxxxxx and Centennial Broadcasting, LLC
(the "Xxxxxxx Lease")."
A new Section 1.5.15 is added as follows: "The obligations arising
under the Xxxxxxx Lease."
5. Environmental Matters. The parties have completed their environmental
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due diligence. Accordingly, the Purchase Agreement is amended as follows:
Section 4.6 is amended to read as follows: "Buyer has obtained
Environmental Assessments for each of the parcels of the Real Property
other than a potential new tower site for KSTJ on Black Mountain (the
"Environmental Assessments"). Buyer has noted a potential
environmental issue with respect to an above ground storage tank at
the KJUL transmitter site. The parties agree that resolution of such
environmental issue at the KJUL transmitter site shall not be a
condition to Closing. Centennial Broadcasting has retained
Environmental Resources Management to perform, for the benefit of
Centennial Broadcasting, Buyer and Buyer's senior lenders, a Phase I
Environmental Assessment for the property
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proposed to be leased under the "New KSTJ Lease" (as defined in
Section 4.19) (the "KSTJ Environmental Assessment"). In the event the
KSTJ Environmental Assessment discloses any recognized environmental
conditions on the site subject to the New KSTJ Lease (the "KSTJ
Site"), or any potential that such conditions may exist, then Buyer
may conduct or have conducted at its expense additional testing to
confirm or negate the existence of any such conditions. If the KSTJ
Environmental Assessment or additional testing reflects the existence
of any Hazardous Substances on the KSTJ Site which are required to be
addressed by any Environmental Statute, or the presence of any other
conditions on the KSTJ Site which are required to be addressed by any
Environmental Statute (either case referred to as an "Environmental
Condition"), then the following rights and obligations shall apply:
(a) if the Environmental Condition is one which can be brought into
compliance with applicable laws at a cost of less than $100,000, then
Buyer shall be required to proceed to Closing and shall cause
Centennial Broadcasting to address such Environmental Condition
following the Closing Date, and Sellers shall reimburse Buyer for all
reasonable out-of-pocket costs incurred in addressing such
Environmental Condition so as to bring it into compliance with
applicable laws, up to $99,999; and (b) if the Environmental Condition
is one which cannot be brought into compliance with applicable laws at
a cost of less than $100,000 (a "Material Environmental Condition"),
then Buyer may, at its option, either (i) terminate this Agreement by
giving notice of termination to Sellers no later than 5:00 p.m. EST on
January 15, 2001, or (ii) proceed to Closing, in which latter event
Buyer shall cause Centennial Broadcasting to assume the obligation to
address such Environmental Condition following the Closing Date, and
Sellers shall reimburse Buyer for all reasonable out-of-pocket costs
incurred in addressing such Environmental Condition so as to bring it
into compliance with applicable laws, up to $99,999. If Buyer has not
given notice of termination to Sellers by the date and time specified
in clause (i) above, Buyer shall be deemed to have exercised option
(ii). In either event, the obligation of Seller to reimburse Buyer
following the Closing Date for remediation costs shall be satisfied
from the funds held under the Indemnification Escrow Agreement. The
performance of the Environmental Assessments by Buyer and of the KSTJ
Environmental Assessment for the benefit of Buyer shall not relieve
Sellers or the Centennial Entities of any obligation with respect to
any representation, warranty or covenant of Sellers or the Centennial
Entities in this Agreement."
Section 5.2.9 of the Purchase Agreement is deleted and replaced with
the following text: "To the extent that the KSTJ Environmental
Assessment or additional testing conducted pursuant to Section 4.6
hereof reflects the existence of a Material Environmental Condition
and Buyer shall fail to provide notice to Sellers prior to 5:00 p.m.
EST on January 15, 2001 of
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Buyer's election to terminate this Agreement, then the Closing will
occur as scheduled, but Buyer shall have the option not to assume the
New KSTJ Lease (as defined herein) if Buyer gives written notice to
Sellers on or before 5:00 p.m. EST on January 15, 2001 ("KSTJ Lease
Notice"). If Buyer provides Sellers a KSTJ Lease Notice within the
time specified above, then the rights and obligations under the New
KSTJ Lease shall be an Excluded Asset and a Retained Liability,
respectively, and the characterization of the New KSTJ Lease as an
Excluded Asset shall not be deemed to cause the breach of any
representation or warranty of Sellers or the Centennial Entities under
the Purchase Agreement."
Section 6.1.1(j) of the Purchase Agreement is amended to read as
follows: "(j) the conditions disclosed in the Phase I, Phase II and
other reports referenced on Schedules 2.30.1 and 2.30.2;"
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Schedule 2.30.2 is amended by substituting new Schedule 2.30.2 in the
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form attached to this Amendment.
6. WBYU(AM). The parties have agreed that the Xxxxxxx Lease for the site
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from which WBYU(AM) is presently transmitting will be an Excluded Asset and a
Retained Liability, and have agreed to the following arrangement with respect to
WBYU(AM). Accordingly, the Purchase Agreement is amended as follows:
A new Section 1.8.4 is added to the Purchase Agreement reading as
follows: "1.8.4 WBYU(AM). The parties acknowledge and agree that
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Centennial Broadcasting intends to vacate the premises leased under
the Xxxxxxx Lease and that Centennial Broadcasting will not be
transmitting a signal from WBYU(AM) at Closing. Because of the
uncertainties surrounding WBYU(AM), the parties have agreed that (a)
the Base Price shall be reduced by an additional $1,500,000 at
Closing; and (b) Buyer will be solely responsible for all actions
required to re-commence transmission of such signal following the
Closing, including without limitation securing a lease for a
transmitter site, erecting a tower and securing all required
governmental consents and approvals. Sellers shall not have any
liability whatsoever to Buyer or its affiliates with respect to
Buyer's inability to reinstate transmission of the WBYU(AM) signal
following the Closing Date, except to the extent that such inability
is caused by the actions of Sellers, their employees, independent
contractors or agents (excluding, however, actions of Xxxxx Xxxx
taken in his capacity as an agent or employee of Buyer or its
affiliates). In addition, the parties agree that Centennial
Broadcasting may take all actions it deems necessary or appropriate to
vacate the premises leased under the Xxxxxxx Lease and to cease
transmission of the WBYU(AM) signal in conformance with applicable FCC
requirements, which actions are expressly agreed to and shall not be
deemed to violate Section 4.11 of the Purchase Agreement or
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to cause the breach of any representation nor warranty of Sellers or
the Centennial Entities under the Purchase Agreement; provided that
all liabilities arising out of or in connection with the Centennial
Entities' actions or omissions or those of its employees, independent
contractors and agents, on or affecting the premises under the Xxxxxxx
Lease shall be Retained Liabilities."
Section 5.2.11 of the Purchase Agreement is deleted and replaced with
the following text: "Centennial Broadcasting and Centennial License
shall have vacated the Xxxxxxx Property, terminated the Xxxxxxx Lease,
obtained Special Temporary Authority to cease transmissions of station
WBYU(AM) and ceased such transmissions."
Section 6.1.1(1) is deleted and replaced with the following text:
"(1) or in connection with the Centennial Entities' operation of
WBYU(AM) on the property that is the subject of the Xxxxxxx Lease and
the actions or omissions of its employees, independent contractors and
agents on or affecting such property, including any liability arising
under the Xxxxxxx Lease or its termination and any liability of any
kind related to the environmental condition of the Xxxxxxx Property."
Section 7.4.2 is amended to read as follows: "Sellers and the
Centennial Entities shall give prompt written notice to Buyer if
either of the following (a "Specified Event") shall occur at any of
the Stations except for WBYU(AM): (a) the regular broadcast
transmission of any of the Stations in the normal and usual manner are
interrupted or discontinued; or (b) any of the Stations that are FM
broadcasting stations are operated at less than their respective
licensed antenna height above average terrain or at less than ninety
percent (90%) of their respective licensed effective radiated power.
If any Specified Event at a Station except for WBYU(AM) persists for
more than seventy-two (72) hours (or, in the event of force majeure or
utility failure affecting generally the markets served such Station,
ninety-six (96) hours), whether or not consecutive, during any period
of thirty (30) consecutive days, then Buyer may, at its option: (x)
terminate this Agreement by written notice given to Sellers not more
than ten (10) days after the expiration of such thirty (30) day
period, or (y) proceed in the manner set forth in Section 7.4.1. The
Centennial Entities promptly shall provide Buyer with any
correspondence between the Centennial Entities and the FCC relating to
the discontinuance of operations at WBYU(AM). In the event of
termination of this Agreement by Buyer pursuant to this Section, the
parties shall be released and discharged from any further obligation
hereunder. Notwithstanding anything in this Agreement to the
contrary, no interruption or discontinuation of regular broadcast
transmission at WBYU(AM) shall constitute a Specified Event."
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7. Approval of Operating Items. Attached hereto as Exhibit II is a letter
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from Xxxxx Xxxx to Xxxxx Xxxxxxx dated September 15, 2000. Buyer hereby approves
all items described in the memorandum, with the exception of the WBYU format
change and the assumption of the contract for the KSTJ consultant, to the extent
that such approval is required under Section 4.11.6 of the Purchase Agreement.
8. KSTJ Tower Lease. The parties have agreed that Buyer will negotiate
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directly with Boulder City, Nevada, to enter into a new lease agreement for
tower space for Station KSTJ-FM at Red Mountain Communication Site, and that
Centennial Broadcasting will not assign to Xxxxxxx its Joint Use Space Lease
Agreement for such tower space dated September 1, 0000 (xxx "XXXX Tower Lease").
Accordingly, the Purchase Agreement is amended as follows:
Schedule 1.2.3 is amended to delete the reference to the KSTJ Tower
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Lease (item No. 2 under the heading "Las Vegas").
Schedule 1.2.4 is amended to delete the reference to the KSTJ Tower
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Lease (item No. 5 under the heading "Leased Real Property").
In addition, to the extent that the base lease payments for the period from the
Closing Date through August 31, 2001 under the new KSTJ Tower Lease for the Red
Mountain site are greater than they would have been under the existing Red
Mountain site tower lease, such overage shall be a proration item in favor of
Buyer.
9. Conforming Changes. To reflect the deletion of the Xxxxxxx Lease and
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the KSTJ Tower Lease from Schedules 1.2.3 and 1.2.4, the following conforming
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changes are made to the Purchase Agreement:
The first sentence of Section 2.12.1 is amended to read as follows:
"The KSTJ Tower Lease, a lease for a transmitter site for WBYU and the
Real Property listed on Schedule 1.2.4 together constitute all the
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real property owned ("Owned Real Property") or leased ("Leased Real
Property") by the Centennial entities or others in connection with the
operation of the Stations as they are now operated."
Section 2.25 is amended to read as follows: "The Assets are
sufficient to operate the Stations as they are now operated, with the
exception of the KSTJ Tower Lease and a lease for a transmitter site
for WBYU."
New Section 5.2.12 is added to the Purchase Agreement as follows:
"KSTJ Tower Site. Either (a) Buyer shall be in possession of a final,
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fully-executed tower lease with Boulder City, Nevada in respect of a
tower site at the Red Mountain Communications Site or (b) Centennial
Broadcasting shall have procured consent of the landlord under the
KSTJ Lease at such site for Centennial Broadcasting to continue to
occupy the premises for the remaining term of said lease (and in the
event of the occurrence of clause
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(b), the amendments to Schedules 1.2.3 and 1.2.4 which would otherwise
have been made under Paragraph 8 of this Amendment shall not be
made)."
10. Bylaw Amendment. Section 4.11.8(b) is amended by adding a new clause
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to the end thereof, reading as follows:
"; and provided further that the Bylaws of Centennial Nevada may be
amended to clarify the point that only holders of Class A stock vote
for Directors, and to rename the categories of Directors as "Class I"
and "Class II." "
11. KSTJ Upgrade. The Spectrum Scan Agreement has been amended subsequent
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to the date of the Purchase Agreement, and the parties have agreed to the
allocation of responsibilities among themselves with respect to the Technical
Facility Upgrades. Accordingly, that certain letter dated June 2, 2000 from
Sellers to Xxxxxxxx Xxxxxxx regarding the Spectrum Scan Agreement is terminated
and is of no further force and effect, and the Purchase Agreement is amended as
follows:
Section 1.5.14 of the Purchase Agreement is amended to read as
follows: "Any liability in excess of $13,000 under the Settlement
Agreement between Tele-Media Company of Southern California, LLC and
Centennial Broadcasting executed on June 1, 2000 and June 2, 2000."
The first clause of Section 1.8.3, which defines the Spectrum Scan
Agreement, shall be amended to read as follows: "Centennial
Broadcasting has entered into that certain Agreement dated as of
November 24, 1998, as amended as of December 18, 1998, as further
amended as of September 1, 2000, between Centennial Broadcasting and
Spectrum Scan, LLC ("Spectrum Scan") and Xxxxxx Xxxxxxxxx (the
"Spectrum Scan Agreement"),"
Section 1.8.3(a) is amended to read as follows: "The KSTJ Upgrade
Adjustment Amount shall be equal to the amount that Centennial
Broadcasting has paid prior to the Closing Date to Spectrum Scan
contemplated by the Spectrum Scan Agreement and up to $40,000 of the
amount paid to Tele-Media Company of Southern California ("Tele-
Media"). The parties acknowledge and agree that, as of the date of
this Amendment, the amount paid by Centennial Broadcasting to Spectrum
Scan is $450,000 and to Tele-Media is $27,000, and the amount of the
Technical Facility Expenses incurred is zero. Centennial Broadcasting
agrees to consult in good faith with Buyer before making any further
payments to Spectrum Scan in accordance with the Spectrum Scan
Agreement. Centennial Broadcasting shall provide Buyer, within five
(5) days prior to the Closing, with a listing of payments to Spectrum
Scan in accordance with the Spectrum Scan Agreement and payments to
Tele-
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Media made, or to be made, by Centennial Broadcasting prior to
Closing, and shall provide Buyer, at or prior to Closing, with
reasonable proof of those payments in excess of the $477,000 described
above having been made to Spectrum Scan and Tele-Media."
Section 4.19 is amended by deleting the third sentence, and
substituting the following: "Attached to this Agreement as Schedule
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4.19 is a detailed proposed budget for the KSTJ Signal Upgrade,
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including all payments required to be made under the Spectrum Scan
Agreement and estimated to be made as Technical Facility Expenses, but
excluding the cost of the transmitter site lease, which proposed
budget is hereby approved by the parties." The new Schedule 4.19
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shall be in the form attached to this Amendment.
Section 4.19 is further amended by deleting the seventh and eight
sentences thereof in their entirety.
There shall be added the following new sentences at the end of Section
4.19: "The parties acknowledge and agree that in order to consummate
the KSTJ Signal Upgrade a new lease will be required for a new
transmitter site. Centennial Broadcasting has commenced negotiations
with Tower Management, Inc. for such a new lease, and has previously
provided a draft of the proposed lease agreement (the "New KSTJ
Lease") to Buyer. Centennial Broadcasting shall continue to negotiate
the New KSTJ Lease prior to the Closing Date. If Buyer has comments
on the New KSTJ Lease, it shall provide them to Centennial
Broadcasting no later than 4:00 p.m. EST on December 14, 2000, and
Centennial Broadcasting shall use its commercially reasonable efforts
to incorporate such comments and to keep Buyer apprised of the status
of its negotiations on the KSTJ Lease. Centennial Broadcasting will
not execute the new KSTJ Lease prior to January 16, 2001. If the New
KSTJ Lease is finalized and executed prior to the Closing Date, it
shall be included among the Contracts, and the obligations and
liabilities thereunder arising after the Closing Date shall be Assumed
Liabilities, unless Buyer has given to Sellers a KSTJ Lease Notice
prior to 5:00 p.m. EST on January 15, 2001. The requirements of
Section 4.11.6 shall apply to the New KSTJ Lease; provided, however,
that for purposes of Section 4.11.6(f) of the Purchase Agreement, the
New KSTJ Lease shall not be included in calculation of the $150,000
aggregate figure."
Section 6.1.1 is amended to add clause (m) and (n) after clause (l) as
follows: "(m) the claims of any FCC licensees or owners arising out
of or in connection with the rulemaking that is the subject of the
Spectrum Scan Agreement and any related rulemakings; and (n) any claim
by Spectrum Scan that it is not obliged to refund to Centennial
Broadcasting amounts
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paid to Spectrum Scan under the Spectrum Scan Agreement despite the
failure to complete the Upgrade (as therein defined), if that claim is
based upon the earlier termination of the Spectrum Scan Agreement
under Section 6(b) thereof. In the event that any Seller makes an
indemnification payment under clause (m) or (n) above, then Buyer will
cause Centennial Broadcasting (or its successors or assigns) to assign
its claim(s) against Spectrum Scan for which indemnity payments have
been made to Buyer, to the extent of such indemnity payments, to
Sellers and will fully cooperate with Sellers in their prosecution of
such claims. If Buyer elects to cause Centennial Broadcasting (or its
successors or assigns) to pursue first any claim(s) against Spectrum
Scan, then Buyer will not settle such claims without the consent of
Sellers, which consent will not be unreasonably withheld."
The fourth sentence of Section 6.1.5 is amended to read as follows:
"The threshold provisions of this Section 6.1.5 shall not apply to any
breach, misrepresentation or other violation by the representations
and warranties of Sellers or the Centennial Entities contained in
Sections 2.2, 2.3, 2.4, 2.5, 2.17, 2.23, 2.24 and 2.27 or to Buyer's
right to indemnification for Losses arising under Sections 6.1.1(h),
(i), (j), (k), (l), (m) and (n)."
12. Amended Schedule. The reduction in the Purchase Price will
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necessitate changes in certain third party payments. Accordingly, Schedule
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1.5.11 is amended by substituting a new Schedule 1.5.11 in the form attached to
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this Amendment.
13. Inadvertently Omitted Lease Agreement. Buyer and Sellers
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inadvertently omitted from the schedules to the Purchase Agreement reference to
the ground lease for the WRNO-FM transmitter site. Thus, the schedules to the
Purchase Agreement are amended as follows:
Schedule 1.2.3 is amended to add the following item #42 on page 4:
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"Roman Catholic Church WRNO transmitter ground lease 12/31/2081 Not
Required X"
Schedule 1.2.4 is amended to add the following item #10 on page 2:
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"Sublease Agreement dated November 7, 1983 between The Roman Catholic
Church of the Archdiocese of New Orleans, Educational Broadcasting
Foundation, Inc. Xxxxxx X. Xxxxxxxx (predecessor in interest to
Centennial Broadcasting), and Xxxxxx Xxxxx."
ARTICLE II
OTHER AGREEMENTS
1. Capitalized terms used in this Amendment and not otherwise defined
shall have the meanings given to them in the Purchase Agreement.
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2. Except as specifically provided herein, the Purchase Agreement shall
remain in full force and effect, and the provisions thereof are ratified and
confirmed.
3. This Amendment may be signed in any number of counterparts with the
same effect as if the signatures on each counterpart were on the same
instrument.
4. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York, without regarding to the choice of law rules
utilized in that jurisdiction.
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IN WITNESS WHEREOF, each of the parties has caused this Amendment to be
executed by a respective duly authorized officer or representative as of the
date first above written.
BUYER:
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XXXXXXX MEZZANINE HOLDINGS, LLC
By: /s/ Xxxxxxxx Xxxxxxx
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Xxxxxxxx Xxxxxxx
Secretary
SELLERS:
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/s/ Xxxxxx Xxxxx
----------------------------------------
XXXXXX XXXXX
/s/ Xxxxx Xxxx
----------------------------------------
XXXXX XXXX
/s/ Xxxxxx Xxxx, Jr.
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XXXXXX XXXX, JR.
XXXXXX XXXX 1956 LIVING TRUST f/b/o
XXXXXX XXXX, JR.
By: /s/ Xxxxxx Xxxx, Jr.
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Xxxxxx Xxxx, Jr.
Individual Trustee
CENTENNIAL BROADCASTING NEVADA, INC.
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
President and CEO
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CENTENNIAL BROADCASTING, LLC
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Member
CENTENNIAL BROADCASTING LICENSE, LLC
By: Centennial Broadcasting, LLC
Its Member
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Member
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