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EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
BY AND AMONG
ENTERCOM COMMUNICATIONS CORP.,
CBS RADIO, INC.,
AND
CBS RADIO LICENSE, INC.
DATED AS OF AUGUST 13, 1998
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TABLE OF CONTENTS
PAGE
ARTICLE I. - DEFINITIONS......................................................1
1.1 DEFINITIONS.............................................1
ARTICLE II. - PURCHASE OF ASSETS..............................................5
2.1. PURCHASE AND SALE OF ASSETS.............................5
2.2. ALLOCATION OF VALUES....................................5
2.3. NON-ASSIGNABLE CONTRACTS................................6
ARTICLE III. - LIABILITIES....................................................7
3.1. ASSUMPTION OF LIABILITIES BY CBS........................7
3.2. OTHER LIABILITIES.......................................7
ARTICLE IV. - REPRESENTATIONS AND WARRANTIES..................................8
4.1. BY ENTERCOM.............................................8
4.2. BY CBS.................................................15
ARTICLE V. - CONDITIONS......................................................16
5.1. MUTUAL CONDITIONS......................................16
5.2. CONDITIONS OF CBS......................................17
5.3. CONDITIONS OF ENTERCOM.................................17
5.4. EFFECT OF TIME BROKERAGE AGREEMENT
ON CLOSING CONDITIONS..............................17
ARTICLE VI. - COVENANTS AND OPERATIONS PRIOR TO CLOSING......................18
6.1. COVENANTS OF ENTERCOM..................................18
6.2. NEGATIVE COVENANTS OF ENTERCOM.........................20
6.3. NO CONTROL.............................................21
6.4. NO SOLICITATION OR HIRE OF EMPLOYEES...................21
6.5. COVENANT OF CBS........................................21
6.6. REAL PROPERTY SURVEYS..................................22
(i)
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ARTICLE VII. - ACTIONS PRIOR TO CLOSING......................................23
7.1. APPLICATION TO COMMISSION..............................23
7.2. XXXX-XXXXX-XXXXXX NOTIFICATION.........................23
7.3. INSPECTION.............................................23
7.4. CONFIDENTIALITY........................................24
ARTICLE VIII. - CLOSING......................................................24
8.1. CLOSING................................................24
8.2. PRORATIONS.............................................25
8.3. CLOSING DELIVERIES TO CBS..............................26
8.4. CLOSING DELIVERIES TO ENTERCOM.........................27
8.5. COVENANTS OF FURTHER ASSURANCES;
AVAILABILITY OF RECORDS............................28
8.6. RISK OF LOSS; DAMAGE TO PROPERTY.......................28
8.7. TAXES ON TRANSACTION...................................28
ARTICLE IX. - TERMINATION, DEFAULT AND INDEMNIFICATION.......................28
9.1. TERMINATION............................................28
9.2. EFFECT OF TERMINATION..................................29
9.3. REMEDIES...............................................29
9.4. INDEMNIFICATION........................................29
ARTICLE X. - ASSET EXCHANGE..................................................32
10.1. POSSIBLE ENTERCOM SECTION 1031 ASSET EXCHANGE..........32
10.2. POSSIBLE CBS SECTION 1031 ASSET EXCHANGE...............32
10.3. INDEPENDENT TRANSACTIONS...............................32
ARTICLE XI. - GENERAL PROVISIONS.............................................33
11.1. EXPENSES OF THE PARTIES................................33
11.2. BROKERS................................................33
11.3. SURVIVAL OF COVENANTS, REPRESENTATIONS,
AND WARRANTIES.....................................33
11.4. CONFIDENTIALITY........................................34
11.5. AMENDMENT AND WAIVER...................................34
11.6. EFFECT OF THIS AGREEMENT...............................34
11.7. TERMS GENERALLY........................................34
11.8. HEADINGS...............................................35
11.9. COUNTERPARTS...........................................35
(ii)
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11.10. GOVERNING LAW; JURISDICTION............................35
11.11. BULK SALES LAWS........................................35
11.12. ASSIGNMENT.............................................35
11.13. NOTICES................................................35
11.14. ATTORNEYS' FEES........................................37
(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 ENTERCOM COMMUNICATIONS CORP., A PENNSYLVANIA
CORPORATION (HEREINAFTER "ENTERCOM"), CBS RADIO, INC., A DELAWARE CORPORATION
(HEREINAFTER "CRI"), AND CBS RADIO LICENSE, INC., A DELAWARE CORPORATION
(HEREINAFTER "CRLI") (CRI AND CRLI, COLLECTIVELY, "CBS").
RECITALS
WHEREAS, pursuant to the Station Authorizations, Entercom owns
and operates (directly or indirectly through one or more subsidiaries) radio
stations WYUU(FM), Safety Harbor, Florida, and WLLD(FM), Xxxxxx Beach, Florida
(collectively, the "Stations"), and owns all of the Assets relating to the
Stations; and
WHEREAS, Entercom desires to sell the Station Assets, or at
its election relinquish such assets in a transaction qualifying in whole or in
part as a deferred like-kind exchange; and
WHEREAS, Entercom and CBS have agreed, subject to prior
approval by the Commission and certain other conditions, that Entercom shall
sell, assign, transfer and convey the Assets to CBS or one or more Affiliates
designated by CBS, in the manner and for the consideration described in this
Agreement; and
NOW, THEREFORE, in consideration of the mutual promises herein
contained and of the representations and warranties hereinafter set forth and
for other good and valuable consideration, the parties, intending to be legally
bound hereby, agree as follows:
ARTICLE I.
DEFINITIONS
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.
"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.
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"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 I AGREEMENT" shall mean that certain Asset Purchase
Agreement by and among CRI, CRLI, and Entercom for the sale and purchase of
radio stations WRKO(AM) and WEEI(AM), dated as of August 13, 1998.
"BOSTON II AGREEMENT" shall mean that certain Asset Purchase
Agreement by and among CRI, CRLI, ARS Acquisition II, Inc., and Entercom 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.
"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.
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"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.
"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 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.
"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.
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"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.
"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 CBS 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 Entercom or any of its
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 Entercom'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 Entercom under Sections 6.1.4, 6.1.5 and 6.6.3 hereof.
"STATIONS" shall collectively mean the following radio
broadcast stations: WYUU(FM), Safety Harbor, Florida and WLLD(FM), Xxxxxx Beach,
Florida or, in the singular form, any one of them.
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"STATION EMPLOYEES" shall have the meaning set forth in
Section 6.5.1.
"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 Entercom and CBS simultaneously with the
execution of this Agreement relating to the sale to CBS 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.
"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. Entercom shall sell, convey, transfer, assign, and deliver or
cause to be sold, conveyed, transferred, assigned, and delivered to CBS the
Assets free and clear of all liens and encumbrances other than Permitted
Encumbrances, and CBS shall acquire and receive same from Entercom.
2.1.2. CBS shall deliver to Entercom cash in the amount of Seventy-Five
Million Dollars ($75,000,000.00) (the "Purchase Price") and Entercom shall
receive same from CBS. The Purchase Price shall be paid by wire transfer at
Closing to the account designated by Entercom 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 Entercom and CBS. The parties shall use
their reasonable best efforts to cause Bond & Xxxxxx to deliver
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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.
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, Entercom 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 Entercom 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 CBS the economic benefits of the
Contracts and Leases for which consents, approvals, and waivers are being sought
after Closing, and to have CBS assume and discharge the obligations under the
Contracts and Leases from and after the Closing Date.
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ARTICLE III.
LIABILITIES
3.1. ASSUMPTION OF LIABILITIES BY CBS.
Except as otherwise provided in the Time Brokerage Agreement,
from and after the Closing Date, CBS 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 CBS, and such additional Leases as are
permitted to be entered into by Entercom 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 CBS, (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 Entercom and its Affiliates
pursuant to Article VI hereof;
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 CBS; and
3.1.4. All taxes and assessments (other than income and franchise taxes
of Entercom and its Affiliates) that accrue on or with respect to the Assets or
the operation of the Stations after the Adjustment Time.
3.2. OTHER LIABILITIES.
3.2.1. Except as expressly set forth in this Agreement, Entercom 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 CBS
shall be responsible and for which it will receive a proration credit under
Section 8.2.1. CBS 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. CBS 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 CBS pursuant to
this Agreement.
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3.2.2. Except as specifically assumed by CBS pursuant to Section 3.1
and Section 3.2.1 hereof or pursuant to the Time Brokerage Agreement, neither
CBS nor any of its Affiliates shall assume or undertake to pay, satisfy, or
discharge any liabilities, obligations, commitments, or responsibilities of
Entercom or any of its Affiliates.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
4.1. BY ENTERCOM.
Entercom hereby represents and warrants to CBS that:
4.1.1. CORPORATE STANDING.
Entercom is a corporation, duly organized, validly existing
and in good standing under the laws of the State of Pennsylvania and is
qualified to do business in the State of Florida. 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.
4.1.2. AUTHORIZATION OF AGREEMENT; NO BREACH.
Entercom 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 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 By-Laws of Entercom or its
Affiliates or any judgment, order, injunction, decree, regulation, or ruling of
any court or any other governmental authority to which Entercom or any of its
Affiliates is subject or any material agreement or contract to which Entercom or
any of its Affiliates is a party or to which it is subject, or constitute a
material default thereunder.
4.1.3. QUALIFICATION.
An Affiliate of Entercom to be designated as assignor on the
Assignment Applications is qualified as a licensee of the Commission and is, or
at the time of filing the Assignment Applications will be, qualified as the
assignor of the Authorizations to receive a grant of the Assignment Applications
by the Commission. Entercom knows of no facts which
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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. ENTERCOM ASSETS.
The Assets, taken as a whole, constitute all of the material
property, whether real, personal, or mixed, tangible or intangible, used by
Entercom 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."
4.1.5. ENTERCOM LEASES.
Except as set forth in Schedule 4.1.5, Entercom has delivered
to CBS 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. ENTERCOM 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 as 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, Entercom has delivered to CBS 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 Entercom'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, Entercom has good ownership, right, title, and interest to the
Property including the right to transfer such assets. Entercom has a valid
leasehold interest in all Property leased and used or held for use in
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connection with the operation of the Stations. Entercom 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.
Entercom 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 Entercom in accordance with their
respective terms, except as such enforcement may be limited by applicable
bankruptcy and similar laws affecting the enforcement of creditors' rights and
general equitable principles affecting the enforcement of equitable remedies
(including within said equitable remedies without limitation the remedy of
specific performance). No event has occurred which with the passage of time or
the giving of notice or both would constitute a material default by Entercom or
any of its Affiliates thereunder. To the knowledge of Entercom, 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 Entercom and are listed on Schedule 4.1.10 attached hereto
and are now in full force and effect. There are no applications of Entercom or
any of its Affiliates relating to the Stations pending with the Commission
except as listed on such Schedule 4.1.10. Entercom 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 Entercom 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 Entercom 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
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documents required to be filed by Entercom 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, Entercom 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 been complied with in all
material respects and none of Entercom or any of its Affiliates is in default of
any of same.
4.1.12. COMPLIANCE WITH LAWS.
Entercom and its Affiliates have complied in all material
respects with all orders (to which Entercom 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 Entercom or any of its
Affiliates is in default with respect to or in violation of: (a) any judgment,
order, injunction or decree to which Entercom 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 Entercom 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 Entercom or any of its Affiliates, threatened against Entercom or any
of its Affiliates, which might materially and adversely affect any material
portion of the Assets, Entercom'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 CBS or any assignee
thereof and there is no basis known to Entercom or any of its Affiliates for any
such litigation, proceeding, controversy or claim. No claim has been made or
asserted against Entercom or any of its Affiliates material to this transaction.
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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 Entercom and its Affiliates employed at the Stations
as of August 1, 1998 and whether each such employee is full-time or part-time.
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 Entercom 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 Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), which Entercom 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 Entercom 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 CBS, 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. Entercom 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, Entercom 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 Entercom 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 Entercom or any of
its Affiliates at the Stations. In addition, except as disclosed on Schedule
4.1.16, none of Entercom 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 Entercom or any of its
Affiliates at the Stations.
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4.1.17. INSURANCE.
Entercom 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. Entercom 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 CBS, whether or not the
Stations have received consideration therefor, shall not be in excess of Five
Hundred Thousand Dollars ($500,000.00) 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 One Hundred Thousand Dollars ($100,000.00), CBS 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.
4.1.20. FINANCIAL AND OTHER INFORMATION.
Entercom has furnished CBS 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 CBS 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 CBS to the extent this Agreement requires the disclosure thereof.
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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 Entercom 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 Entercom and its Affiliates, threatened, and, within three years
prior to the date hereof, none of Entercom or any of its Affiliates has made an
assignment for the benefit of creditors, nor has Entercom 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.
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 Entercom and its Affiliates, (i) the improvements of Entercom and
its Affiliates upon such real property and the current use and operation on such
premises by Entercom 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 Entercom 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);
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(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.
The improvements of Entercom 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 Entercom 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.
Entercom 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 CBS'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 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 Entercom 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 Entercom 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.
4.2. BY CBS.
CBS hereby represents and warrants that:
4.2.1. CORPORATE STANDING.
CRI and CRLI are corporations, duly organized, validly
existing and in good standing under the laws of the State of Delaware. CRLI is
or will be at Closing, qualified to do business in the State of Florida. 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.
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4.2.2. AUTHORIZATION OF AGREEMENT; NO BREACH.
CBS 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 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 Bylaws of CBS, or
any judgment, order, injunction, decree, regulation, or ruling of any court or
any other governmental authority to which CBS is subject or any material
agreement or contract to which CBS is a party or to which it is subject, or
constitute a material default thereunder.
4.2.3. QUALIFICATION.
CRLI is qualified as a licensee of the Federal Communications
Commission and is qualified as the assignee of the Authorizations to receive
Commission approval of the Assignment Applications. CBS knows of no facts
relating to CBS or any of its Affiliates that 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.
4.2.4. 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
CBS, threatened, which might affect the ability of CBS to perform its
obligations hereunder, and there is no basis known to CBS for any such
litigation, proceeding, controversy, or claim. No claim has been made or
asserted against CBS 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
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writing to the assignment to CBS 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; and (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.
5.2. 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:
5.2.1. 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 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.
5.3. 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:
5.3.1. 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 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.
5.4. 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,
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pursuant to this Agreement or the Time Brokerage Agreement, such condition to
Closing shall be deemed waived.
ARTICLE VI.
COVENANTS AND OPERATIONS PRIOR TO CLOSING.
6.1. COVENANTS OF ENTERCOM.
Except as otherwise provided in the Time Brokerage Agreement,
during the period from the date of this Agreement to the Closing Date, Entercom
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 CBS 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, Entercom agrees to promptly notify the other
parties of any unusual problems or developments of which Entercom becomes aware
with respect to the Assets or the business of the Stations.
6.1.3. Consult with CBS 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 CBS to insure a smooth transfer of ownership
and continuity of operations at Closing.
6.1.4. Obtain and deliver to CBS within ten (10) days hereof at its
expense and permit CBS to obtain within twenty (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 CBS 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 CBS 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, Entercom 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 such remedial action 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 does cost in the aggregate in excess of One Million Dollars
($1,000,000.00)
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(subject to the last sentence of Section 11.1), Entercom may elect not to take
such remedial action.. In such event, CBS may require Entercom to proceed to
Closing and CBS 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, CBS may terminate this Agreement and Entercom shall have no
liability to CBS as a result of such termination. Entercom has furnished to CBS
copies of any environmental reports, title reports, and title insurance policies
in its possession previously prepared for any of the Property which Entercom has
been able to locate through the date hereof, and from the date hereof through
Closing, Entercom shall forward to CBS any additional such reports or policies
it receives or locates. Notwithstanding any other provision of this Agreement,
Entercom shall have no further liability to CBS 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 set forth in this Section 6.1.4.
6.1.5. Obtain within 10 days hereof at its expense and deliver to CBS,
commitments from a reputable title insurance company to issue extended coverage
policies of title insurance (ATLA Form 1970 or other form reasonably acceptable
to CBS) 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 CBS notifies Entercom 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, Entercom 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 does cost in the aggregate in excess of One
Million Dollars ($1,000,000.00), Entercom may elect not to take such remedial
action, and, notwithstanding any other provision of this Agreement, Entercom
shall have no further liability to CBS for any title defect. In such event, CBS
may require Entercom to proceed to Closing and CBS 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, CBS may terminate this Agreement
and Entercom shall have no liability to CBS as a result of such termination.
6.1.6. Cooperate with CBS, 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 Entercom and its Affiliates who are employed at the
Stations (the "Station Employees"), including without limitation, allowing CBS
to meet privately with the Station Employees other than Non-Continuing Employees
(as defined in Section 6.5). Entercom and its Affiliates will not interfere with
or attempt to undermine in any way the efforts of CBS to employ such employees.
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 Station
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Assets; provided, that any such tax may be contested by Entercom in good faith
by appropriate proceedings; provided further that Entercom shall pay any such
taxes found to be due and owing upon completion of such proceedings.
6.2. NEGATIVE COVENANTS OF ENTERCOM.
Unless CBS has given its consent in writing, which consent
shall not be unreasonably withheld, Entercom 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 Entercom shall notify CBS 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 either of the Stations and that are not in
use) are replaced with assets of comparable or better functionality.
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. 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.
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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 CBS any right to control the operations of the Stations
prior to the Closing Date.
6.4. NO SOLICITATION OR HIRE OF EMPLOYEES.
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 of any transaction requiring the prior
consent of the Commission on FCC Form 314 or 315, Entercom shall be prohibited
from 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 CBS and subsequently terminated by CBS without cause.
6.5. COVENANT OF CBS.
6.5.1. Prior to the earlier of the TBA Commencement Date, or the
Closing Date, CBS 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 Entercom 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 Entercom not in excess of 6
months, and CBS 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 CBS under the terms hereof, the terms and conditions of CBS'
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
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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 CBS'
benefit and vacation plans, CBS will take into account and credit such
Transferred Employee under CBS' benefit and vacation plans with the credit for
service the Transferred Employee received from Entercom 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 CBS for the
benefit of Transferred Employees, CBS shall cause all Transferred Employees who
actively participated in similar plans of Entercom to become a participant in
such welfare benefit plan of CBS 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 Entercom in respect of continued employment
(or resumed employment) with Entercom or CBS or in respect of any other matter.
6.5.2 Without the prior written consent of Entercom, which shall not be
withheld unreasonably, from and after the date hereof, neither CBS 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.
6.6.1. Within 30 days of the date hereof, CBS may procure, at its
expense, with respect to each parcel of real property owned by Entercom 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 ATLA 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").
6.6.2. Within ten (10) business days of receipt of the Surveys, CBS
shall give Entercom copies of the Surveys and notice of any exceptions to
matters revealed by the Surveys that would materially and adversely affect the
Stations as currently operated (the "Objectionable Exceptions"). If CBS fails to
give such notice in a timely manner, CBS shall be deemed to have accepted
matters revealed by the Surveys other than the Objectionable Exceptions
expressly set forth in the notice.
6.6.3. Entercom shall cure or remove any Objectionable Exception within
thirty (30) days from the date of CBS' notice; provided, however, that if
Entercom reasonably determines
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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
Entercom 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 Entercom shall notify
CBS within three (3) business days after such determination, whereupon CBS shall
have the right, exercisable by written notice given to Entercom within three (3)
business days after receipt of Entercom'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 CBS fails to elect option (i) or (ii) above, then
CBS shall be deemed to have elected option (i).
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. 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 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.
7.3. INSPECTION.
During the period from the date of this Agreement to the
Closing Date, Entercom shall, upon reasonable request, afford, or cause to be
afforded, engineers, attorneys, accountants,
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and other consultants and/or representatives of CBS 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 CBS with all information
concerning the Stations' affairs as CBS 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.
7.4. 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, Entercom and CBS confirm that each will adhere to the
terms and conditions set forth in paragraph 5 of the Confidentiality Agreement,
dated June 9, 1998, between Entercom and CBS. 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.
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. The Closing
Date shall be the date selected by CBS on at least five (5) business days'
notice to Entercom, which date shall be within six (6) months after
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the satisfaction of the conditions to Closing set forth in Section 5.1, Section
5.2.2 and Section 5.3.1 hereof (the "Outside Closing Date"); provided that once
such conditions are satisfied, if Closing has not occurred prior to the date of
closing under the Boston I Agreement, then Closing will occur on the earlier of
five (5) business days after the closing under the Boston I Agreement or the
Outside Closing Date.
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 CBS up to the Adjustment
Time shall, except as otherwise expressly provided herein or in the Time
Brokerage Agreement, be adjusted and allocated between Entercom and CBS 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 Entercom,
and all expenses and income arising from the operation of the Station or portion
thereof acquired by CBS after the Adjustment Time shall be for the account of
CBS. 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, CBS shall deliver to Entercom CBS'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. CBS shall provide Entercom or its representatives access to
copies of such portions of books and records Entercom may reasonably request
solely for purposes of verifying such adjustments. CBS's certificate shall be
final and conclusive unless objected to by Entercom in writing within thirty
(30) days after delivery. CBS and Entercom 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.
8.2.3. In the event of a disagreement between CBS and Entercom with
respect to the accounting to be made hereunder, the parties agree that a public
accounting firm chosen jointly by CBS and Entercom shall be the final arbiter of
such disagreement.
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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 CBS.
At or before the Closing, Entercom shall deliver or cause to
be delivered to CBS 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:
8.3.1. Entercom shall deliver to CBS such Bills of Sale and assignments
and other instruments of transfer and conveyance, transferring to CBS the
Property to be sold, transferred or assigned hereunder and the rights and
interests under the Leases and Contracts being assigned to CBS hereunder, to the
extent such rights and interests under such leases and contracts have not
previously been assigned to and assumed by CBS under the Time Brokerage
Agreement.
8.3.2. Entercom shall deliver to CBS one or more Special Warranty Deeds
in recordable form transferring to CBS a fee simple interest in each parcel of
owned real property being conveyed to CBS hereunder.
8.3.3. Entercom shall deliver to CBS an assignment of all right, title
and interest of Entercom in and to the Authorizations.
8.3.4. Entercom shall deliver to CBS 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.
8.3.5. Entercom shall deliver to CBS certified copies of resolutions of
the Board of Directors of each Entercom entity, 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.
8.3.6. Entercom shall deliver to CBS certificates signed by an
authorized officer to the effect (a) that no act or omission of Entercom 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 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 CBS's continued operation of the Stations as currently operated and (b) that
all covenants and agreements contained herein of Entercom have been complied
with in all material respects.
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8.3.7. Entercom shall deliver to CBS the Required Consents relating to
the Leases and Contracts, to the extent not previously delivered under the Time
Brokerage Agreement.
8.3.8. Entercom shall deliver to CBS evidence of the release of all
liens and encumbrances on the Assets to be released at Closing.
8.3.9. 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.
8.4. CLOSING DELIVERIES TO ENTERCOM.
At or before the Closing, CBS or an Affiliate of CBS, as
appropriate, shall deliver to Entercom or cause to be delivered 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:
8.4.1. CBS shall pay to Entercom the Purchase Price by wire transfer of
immediately available funds.
8.4.2. 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 such CBS entity at the Closing and thereafter.
8.4.3. CBS shall deliver to Entercom certificates signed by an
authorized officer of each CBS entity to the effect that no act or omission of
such CBS entity or state of facts contrary to the agreements, representations,
and warranties of CBS contained herein has been taken or has occurred and that
said representations and warranties of CBS 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 CBS have been complied with.
8.4.4. CBS shall deliver to Entercom one or more agreements whereby CBS
assumes and agrees to pay when due any liabilities of Entercom relating to the
Stations specifically assumed by CBS hereunder, including without limitation
those liabilities accruing after the Adjustment Time with respect to those
Leases and Contracts being assumed by CBS hereunder, to the extent such rights
and interests under such liabilities have not previously been and assumed by CBS
under the Time Brokerage Agreement.
8.4.5. CBS shall deliver to Entercom one or more opinions of counsel to
CBS dated the Closing Date, in form and substance reasonably satisfactory to
Entercom.
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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, Entercom shall provide CBS copies of or access
to records relating to the Stations that are needed by CBS 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 Entercom to any of the Assets prior to Closing shall
be upon Entercom. 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 Entercom shall not have repaired, replaced, or restored same
with property of like kind, quality, and value, CBS 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 Entercom, 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
Entercom or CBS, either by payment thereof or by reimbursement to the other
party.
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
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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 CBS
as provided in Section 6.1.4, Section 6.1.5 and Section 6.6.3, provided CBS 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.
Entercom recognizes that, in the event of a Default by
Entercom, monetary damages alone will not be adequate. Therefore, in the event
of a Default by Entercom, unless CBS is in Default, CBS 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, Entercom
shall waive the defense that there is another adequate remedy at law or equity
and agrees that CBS shall have the right to obtain specific performance of
Entercom'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 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 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 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 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;
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(c) any and all obligations of Entercom, except for
obligations assumed or required to be assumed by CBS 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 Entercom and its Affiliates, except for obligations and
liabilities assumed by CBS under the Time Brokerage Agreement; or
(e) Closing by CBS 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 Entercom or any of its Affiliates. In addition to
the foregoing, in the event that Section 1031(a)(3) of the Code does not apply
to the relinquishment of the Assets (as defined in the Boston I Agreement) and
the acquisition of the Assets, solely due to the fact that Closing does not
occur for reasons unrelated to CBS or its Affiliates by a date that is no more
than 180 days after the date of closing under the Boston I Agreement, then
provided CBS is not in breach hereof, Entercom shall make CBS whole for the loss
sustained from the inapplicability of Section 1031(a)(3) of the Code to the
relinquishment of the Assets (as defined in the Boston Agreement) and the
acquisition of the Assets.
9.4.2. 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 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 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; or
(c) CBS's operation or ownership of the Station Assets after
the Adjustment Time; or
(d) any obligations under any Contracts or Leases assumed by
CBS under Section 3.1 hereof.
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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 CBS 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.
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
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amount of its claims for indemnification exceeds One Hundred Thousand Dollars
($100,000) 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.
ASSET EXCHANGE
10.1. POSSIBLE ENTERCOM SECTION 1031 ASSET EXCHANGE.
Entercom may elect to effect the transfer and conveyance of
the Assets as part of a deferred like-kind exchange under Section 1031(a)(3) of
the Code in which the Assets are relinquished and other like-kind assets are
identified and acquired with the Purchase Price subsequent to the Closing.
Entercom may at any time at or prior to Closing notify CBS of its election to
effect a deferred like-kind exchange and 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 CBS's rights and obligations
hereunder, and shall promptly provide written notice of such assignment to all
parties hereto. In the event Entercom assigns its rights hereunder to a
"qualified intermediary," CBS shall acknowledge in writing the notification by
Entercom of the assignment to the "qualified intermediary" of its rights
hereunder, and CBS shall pay the Purchase Price at Closing to the "qualified
intermediary" rather than to Entercom, which payment shall discharge the
obligation of CBS to make payment for the Assets hereunder.
10.2. POSSIBLE CBS SECTION 1031 ASSET EXCHANGE.
CBS may elect to effect the acquisition of the Assets as part
of a deferred like-kind exchange under Section 1031(a)(3) of the Code, in lieu
of buying such assets hereunder. If CBS so elects, it shall provide notice to
Entercom of its election, and thereafter (i) may at any time at or prior to
Closing assign its rights under this Agreement to a "qualified intermediary" as
defined in Treas. Reg. Section 1.1031(k)-1(g)(4), subject to all of Entercom's
rights and obligations hereunder and (ii) shall promptly provide written notice
of such assignment to all parties hereto. If CBS has given notice of its
intention to effect the acquisition of the Assets as part of an exchange under
Section 1031 of the Code, Entercom shall (i) promptly provide CBS with written
acknowledgment of such notice and (ii) at Closing, accept payment for the Assets
from the "qualified intermediary" rather than from CBS, which payment shall
discharge the obligation of CBS to make payment for the Assets hereunder and
transfer, assign and convey the Assets to CBS or its designated Affiliates.
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 Boston I 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 Boston I Agreement or the Boston II Agreement, and
that neither the closing of the Boston I 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 Entercom and CBS. 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.
CBS and its Affiliates waive compliance by Entercom and its
Affiliates with the provisions of the "bulk sales" or similar laws of any state.
Entercom agrees to indemnify CBS 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 its rights
hereunder for the benefit of its 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 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
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
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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
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.
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.
ENTERCOM COMMUNICATIONS CORP.
By:_______________________________________
Title:____________________________________
CBS RADIO, INC.
By:_______________________________________
Title:____________________________________
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CBS RADIO LICENSE, INC.
By:_______________________________________
Title:____________________________________
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