ASSET EXCHANGE AGREEMENT
By and Among
AMERICAN RADIO SYSTEMS CORPORATION
AMERICAN RADIO SYSTEMS LICENSE CORP.
and
CITICASTERS CO.
Dated as of
December 23, 1996
TABLE OF CONTENTS
ARTICLE 1 DEFINED TERMS...................................................................................2
ARTICLE 2 EXCHANGE OF LICENSES AND STATIONS...............................................................2
2.1 Agreement to Exchange Licenses and Stations.....................................................2
2.2 Appraisals; Tax Reporting.......................................................................2
2.3 Assumption of Liabilities and Obligations. .....................................................3
2.4 Closing Date....................................................................................6
2.5 Accounts Receivable. ..........................................................................6
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF CITICASTERS.................................................. 7
3.1 Organization and Business; Power and Authority; Effect of Transaction..........................8
3.2 Financial and Other Information. ............................................................. 8
3.3 Material Statements and Omissions; Absence of Events............................................9
3.4 Changes in Condition............................................................................9
3.5 Title to Properties; Leases.....................................................................9
3.6 Compliance with Private Authorizations.........................................................10
3.7 Compliance with Governmental Authorizations and Applicable Law.................................10
3.8 Intangible Assets..............................................................................11
3.9 Related Transactions.......................................................................... 11
3.10 Tax Matters....................................................................................12
3.11 Employee Benefit Plans; Citicasters Station Employees..........................................12
3.12 Material Agreements............................................................................13
3.13 Ordinary Course of Business....................................................................13
3.14 Broker or Finder...............................................................................14
3.15 Environmental Matters..........................................................................14
3.16 Trade or Barter................................................................................15
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE AMERICAN.................................................15
4.1 Organization and Business; Power and Authority; Effect of Transaction.........................15
4.2 Financial and Other Information. .............................................................16
4.3 Material Statements and Omissions; Absence of Events...........................................16
4.4 Changes in Condition...........................................................................17
4.5 Title to Properties; Leases....................................................................17
4.6 Compliance with Private Authorizations.........................................................18
4.7 Compliance with Governmental Authorizations and Applicable Law.................................19
4.8 Intangible Assets..............................................................................20
4.9 Related Transactions...........................................................................20
4.10 Tax Matters....................................................................................21
4.11 Employee Benefit Plans; American Station Employees.............................................21
4.12 Material Agreements............................................................................22
4.13 Ordinary Course of Business....................................................................22
4.14 Broker or Finder...............................................................................23
4.15 Environmental Matters..........................................................................23
4.16 Trade or Barter................................................................................24
ARTICLE 5 COVENANTS......................................................................................24
5.1 Access to Information; Confidentiality.........................................................24
5.2 Agreement to Cooperate.........................................................................25
5.3 Public Announcements...........................................................................30
5.4 Notification of Certain Matters................................................................30
5.5 No Solicitation................................................................................30
5.6 Conduct of Business by Citicasters Pending the Closing.........................................30
5.7 Conduct of Business by American Pending the Closing............................................32
5.8 Risk of Loss...................................................................................33
ARTICLE 6 CLOSING CONDITIONS.............................................................................34
6.1 Conditions to Obligations of Each Party to Effect the Exchange.................................34
6.2 Conditions to Obligations of the American Parties..............................................35
6.3 Conditions to Obligations of Citicasters.......................................................37
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..............................................................38
7.1 Termination....................................................................................38
7.2 Effect of Termination..........................................................................39
ARTICLE 8 INDEMNIFICATION................................................................................40
8.1 Survival. .....................................................................................40
8.2 Indemnification................................................................................40
8.3 Limitation of Liability........................................................................41
8.4 Notice of Claims...............................................................................41
8.5 Defense of Third Party Claims..................................................................41
8.6 Exclusive Remedy...............................................................................42
ARTICLE 9 GENERAL PROVISIONS.............................................................................42
9.1 Amendment......................................................................................42
9.2 Waiver.........................................................................................42
9.3 Fees, Expenses and Other Payments..............................................................42
9.4 Notices........................................................................................42
9.5 Specific Performance; Other Rights and Remedies................................................43
9.6 Severability...................................................................................44
9.7 Counterparts...................................................................................44
9.8 Section Headings...............................................................................44
9.9 Governing Law..................................................................................44
9.10 Further Acts...................................................................................44
9.11 Entire Agreement...............................................................................45
9.12 Assignment.....................................................................................45
9.13 Parties in Interest............................................................................45
9.14 Mutual Drafting................................................................................45
9.15 American Agent for American License............................................................45
APPENDIX A: Definitions
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ASSET EXCHANGE AGREEMENT
This ASSET EXCHANGE AGREEMENT (this "Agreement") is dated as of
December 23, 1996, by and among American Radio Systems Corporation, a Delaware
corporation ("American"), American Radio Systems License Corp, a Delaware
corporation ("American License" and, collectively with American, the "American
Parties") and Citicasters Co., an Ohio corporation ("Citicasters").
WHEREAS, Citicasters is the licensee of and operates radio station
WKRQ(FM), Cincinnati, Ohio (the "Citicasters Station") pursuant to licenses
issued by the FCC (the "Citicasters FCC Licenses");
WHEREAS, upon the consummation of the transactions contemplated by the
Asset Purchase Agreement (the "Lincoln Agreement"), dated as of February 23,
1996, as heretofore amended, by and between American and The Lincoln Group, L.
P. ("Lincoln"), American and American License, respectively, will own and
operate, and become the licensee of, radio stations WVOR(FM), WHAM(AM) and
WHTK(AM), Rochester New York (the "American Stations") pursuant to licenses
issued by the FCC (the "American FCC Licenses");
WHEREAS, American has consented to the entry of a Final Judgment with
the United States Department of Justice, dated October 24, 1996, with respect to
the disposition of the American Stations (the "American Consent Decree") and an
Affiliate of Citicasters has consented to the entry of a Final Judgment with the
United States Department of Justice, dated September 11, 1996, with respect to
the disposition of the Citicasters Station (the "Citicasters Consent Decree");
WHEREAS, American License and Citicasters desire to exchange the
American FCC Licenses for the Citicasters FCC Licenses and American and
Citicasters desire to exchange the American Assets (other than the American FCC
Licenses) for the Citicasters Assets (other than the Citicasters FCC Licenses)
on the terms and conditions hereinafter set forth (collectively, the
"Exchange"); and
WHEREAS, the parties hereto intend the Exchange to qualify as a
Like-Kind Exchange;
NOW, THEREFORE, in consideration of the above premises and the
covenants and agreements contained herein, American and Citicasters, intending
to be legally bound, do hereby covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, the terms defined in Appendix A shall have the
respective meanings set forth therein. Terms defined in the singular shall have
a comparable meaning when used in the plural, and vice versa, and the reference
to any gender shall be deemed to include all genders. Unless otherwise defined
or the context otherwise clearly requires, terms for which meanings are provided
in this Agreement shall have such meanings when used in either Disclosure
Schedule and each Collateral Document executed or required to be executed
pursuant hereto or thereto or otherwise delivered, from time to time, pursuant
hereto or thereto. References to "hereof", "herein" or similar terms are
intended to refer to this Agreement as a whole and not a particular section, and
references to "this Section" are intended to refer to the entire section and not
a particular subsection thereof. The term "either party" shall refer to
Citicasters and the American Parties.
ARTICLE 2
EXCHANGE OF LICENSES AND STATIONS
2.1 Agreement to Exchange Licenses and Stations. Subject to the terms
and conditions set forth in this Agreement, Citicasters and American hereby
agree to exchange, transfer and deliver to each other, as applicable, on the
Closing Date, the Citicasters Assets (other than the Citicasters Licenses) and
the American Assets (other than the American Licenses) and Citicasters and
American License hereby agree to exchange, transfer and deliver to each other,
as applicable, the Citicasters FCC Licenses and the American FCC Licenses, in
each case, free and clear of any Liens of any nature whatsoever except Permitted
Liens, on the terms and conditions of this Agreement.
2.2 Appraisals; Tax Reporting.
(a) Citicasters and American and American License agree that the fair
market value of each asset included in the Citicasters Assets and the American
Assets will be determined on the basis of the appraisals (the "Appraisals"),
prepared by the firm of Bond & Xxxxxx, whose fee and expenses shall be equally
borne by Citicasters and American. The parties shall direct Bond & Xxxxxx to
deliver Appraisals within sixty (60) days from the date hereof and to set forth
in the Appraisals the fair market value of each asset included in the
Citicasters Assets and the American Assets.
(b) Promptly after delivery of the Appraisals, and in any event prior
to the Closing Date, the parties shall prepare and agree upon the appraised
value of each asset included in the Citicasters Assets and the American Assets
(which values shall be based upon the Appraisals) and shall set forth those
values on a schedule (the "Valuation Schedule"). The parties shall not take any
position inconsistent with the valuations set forth on the Valuation Schedule
and will prepare and file all Tax Returns and reports related to the Exchange,
including without limitation those required under Section 1060 of the Code and
all original and amended federal, state and local income Tax Returns, on a basis
consistent with such valuations. Each asset included in the Citicasters Assets
and each
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asset included in the American Assets shall be set forth in the appropriate
"exchange group" and "residual group" (each within the meaning of Treas. Reg.
section 1.1031(j)-1) on the basis set forth in the Valuation Schedule.
(c) Each of Citicasters and American intend to report the transactions
contemplated hereby as a "like-kind exchange" to the maximum extent permissible
under Section 1031 of the Code, consistent with the Appraisals and the Valuation
Schedule. Each of Citicasters and American shall cooperate with the other in any
and all respects necessary to achieve like-kind exchange treatment to the
maximum extent permissible under Section 1031 of the Code and shall endeavor to
give the other notice of any disallowance of or challenge to such reporting by
any Taxing Authority; provided, however, that the failure to give such notice
shall not result in any liability of the party failing to give the notice.
Without limiting the generality of the foregoing, in order to effectuate the
transactions contemplated hereby as a like-kind exchange to the maximum extent
possible under Section 1031 of the Code, Citicasters may at any time at or prior
to Closing assign its rights, in whole or in part, under this Agreement (but
such assignment shall not relieve it of its obligations under this Agreement) to
a "qualified intermediary" (as defined in Treas. Reg. ss.1.1031(k)-1(g)(4)),
subject to all rights and obligations hereunder of American and (B) shall
promptly provide written notice of such assignment to American and American
License. If Citicasters shall have given notice of such assignment to a
qualified intermediary, American and American License shall (i) promptly provide
Citicasters with written acknowledgment of such notice and (ii) at the Closing,
convey the American Assets (or such portion of them as shall have been
designated in writing by Citicasters) to the "qualified intermediary" rather
than to Citicasters (which conveyance shall, to such extent, discharge the
obligation of American and American License to deliver the American Assets and
the American Stations hereunder).
(d) Notwithstanding the provisions of this Section 2.2, the parties to
this Agreement will rely solely on their own advisors in determining the tax
consequences of the transactions contemplated by this Agreement and each party
is not relying, and will not rely, on any representations or assurances of any
other party regarding such consequences other than the representations,
warranties, covenants and agreements set forth in writing in this Agreement or
furnished pursuant to the provisions hereof. Notwithstanding anything in this
Agreement to the contrary, the obligations of the parties set forth in this
Section 2.2 shall survive the Closing.
2.3 Assumption of Liabilities and Obligations.
(a) The American Parties agree to assume the Citicasters Assumable
Agreements at the Closing or, to the extent provided in the Citicasters Station
TBA, upon the TBA Date of the Citicasters Station TBA. Except as expressly
provided in this Agreement, including without limitation Section 2.3(d), or in
the Citicasters Station TBA, the American Parties shall not assume or become
obligated to perform any debt, liability or obligation of Citicasters or
relating to the ownership or operation of the Citicasters Assets or the conduct
of the business of the Citicasters Station prior to the Closing whatsoever,
other than to the extent set forth in the assumption of the Citicasters
Assumable Agreements. The parties acknowledge and agree that the assumption of
the Citicasters Assumable Agreements shall not, except to the extent of any
proration pursuant to the provisions of Section 2.3(d), entail the assumption by
the American Parties of any obligation or liability of Citicasters with respect
to (i) any obligations or liabilities under the Citicasters
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Assumable Agreements relating to the period prior to the Cut-off Date; (ii) any
Claims to which Citicasters is a party or to which any of the Citicasters Assets
or the Citicasters Station is subject relating to the ownership or operation of
the Citicasters Assets or the conduct of the business of the Citicasters Station
prior to the Closing (other than as provided in the Citicasters Station TBA); or
(iii) any liability for any Taxes attributable to the ownership or operation of
the Citicasters Assets or the Citicasters Station on or prior to the Closing
Date. All such obligations and liabilities (the "Citicasters Nonassumed
Liabilities") shall remain and be the obligations and liabilities solely of
Citicasters.
(b) Citicasters agrees to assume the American Assumable Agreements at
the Closing or, to the extent provided in the American Station TBA, upon the TBA
Date of the American Stations TBA. Except as expressly provided in this
Agreement, including without limitation Section 2.3(e), or in the American
Stations TBA, Citicasters shall not assume or become obligated to perform any
debt, liability or obligation of either American Party or relating to the
ownership or operation of the American Assets or the conduct of the business of
the American Stations prior to the Closing whatsoever, other than to the extent
set forth in the assumption of the American Assumable Agreements. The parties
acknowledge and agree that the assumption of the American Assumable Agreements
shall not, except to the extent of any proration pursuant to the provisions of
Section 2.3(e), entail the assumption by Citicasters of any obligation or
liability of either American Party with respect to (i) any obligations or
liabilities under the American Assumable Agreements relating to the period prior
to the Cut-off Date; (ii) any Claims to which either American Party is a party
or to which any of the American Assets or any of the American Stations is
subject relating to the ownership or operation of the American Assets or the
conduct of the business of the American Stations prior to the Closing (other
than as provided in the American Stations TBA); or (iii) any liability for any
Taxes attributable to the ownership or operation of the American Assets or the
American Stations on or prior to the Closing Date. All such obligations and
liabilities (the "American Nonassumed Liabilities") shall remain and be the
obligations and liabilities solely of the American Parties.
(c) Notwithstanding anything contained in this Agreement to the
contrary and except as otherwise provided in the Citicasters Station TBA or the
American Stations TBA, as the case may be, all items of income and expense
(including without limitation with respect to rent, utilities, Pro Ratable Taxes
and wages, salaries and accrued but unused vacation for employees) arising from
the conduct of the business of the Citicasters Station and American Stations
shall be prorated between American and Citicasters as of 12:01 a.m., Eastern
time, on the Cut-Off Date, with the transferring party responsible for any such
items prior to the Cut-off Date and the transferee party responsible for any
such items subsequent to the Cut-off Date.
(d) Within sixty (60) days after the Cut-Off Date, American shall
deliver to Citicasters a schedule of its proposed prorations with respect to the
American Assets and the American Stations which shall set forth in reasonable
detail the basis for those determinations, and which shall account for any
amount owed by American to Citicasters pursuant to the provisions of Section
2.3(g) (the "Rochester Proration Schedule"). The Rochester Proration Schedule
shall be conclusive and binding upon Citicasters unless Citicasters provides
American with written notice of objection (the "Notice of Disagreement") within
thirty (30) days after Citicasters' receipt of the Rochester Proration Schedule,
which notice shall state the prorations proposed by Citicasters (the
"Citicasters Proration
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Schedule"). American shall have fifteen (15) days from receipt of a Notice of
Disagreement to accept or reject the Citicasters Proration Schedule. If American
rejects the Citicasters Proration Schedule, and the amount in dispute exceeds
Five Thousand Dollars ($5,000), the dispute shall be submitted within ten (10)
days of such rejection to the Chicago, Illinois office of Xxxxxx Xxxxxxxx & Co.,
LLP (the "Referee") for resolution, such resolution to be made within thirty
(30) days after submission to the Referee and to be final, conclusive and
binding on American and Citicasters. American and Citicasters agree to share
equally the cost and expenses of the Referee, but each party shall bear its own
legal and other expenses, if any. If the amount in dispute is equal to or less
than Five Thousand Dollars ($5,000), such amount shall be divided equally
between Citicasters and American. Payment by Citicasters or American, as the
case may be, of the proration amounts determined pursuant to this Section 2.3(d)
shall be due fifteen (15) days after the last to occur of (i) Citicasters'
acceptance of the Rochester Proration Schedule or failure to give American a
timely Notice of Disagreement; (ii) American's acceptance of the Citicasters
Proration Schedule or failure to reject the Citicasters Proration Schedule
within fifteen (15) days of receipt of a timely Notice of Disagreement; (iii)
American's rejection of the Citicasters Proration Schedule in the event the
amount in dispute equals or is less than Five Thousand Dollars ($5,000); and
(iv) notice to American and Citicasters of the resolution of the disputed amount
by the Referee in the event that the amount in dispute exceeds Five Thousand
Dollars ($5,000).
(e) Within sixty (60) days after the Cut-Off Date, Citicasters shall
deliver to American a schedule of its proposed prorations with respect to the
Citicasters Assets and the Citicasters Station which shall set forth in
reasonable detail the basis for those determinations, and which shall account
for any amount owed by Citicasters to American pursuant to the provisions of
Section 2.3(g) (the "Cincinnati Proration Schedule"). The Cincinnati Proration
Schedule shall be conclusive and binding upon American unless American provides
Citicasters with a Notice of Disagreement within thirty (30) days after
American's receipt of the Cincinnati Proration Schedule, which notice shall
state the prorations proposed by American (the "American Proration Schedule").
Citicasters shall have fifteen (15) days from receipt of a Notice of
Disagreement to accept or reject the American Proration Schedule. If Citicasters
rejects the American Proration Schedule and the amount in dispute exceeds Five
Thousand Dollars ($5,000), the dispute shall be submitted within ten (10) days
of such rejection to the Referee for resolution, such resolution to be made
within thirty (30) days after submission to the Referee and to be final,
conclusive and binding on Citicasters and American. American and Citicasters
agree to share equally the cost and expenses of the Referee, but each party
shall bear its own legal and other expenses, if any. If the amount in dispute is
equal to or less than Five Thousand Dollars ($5,000), such amount shall be
divided equally between American and Citicasters. Payment by American or
Citicasters, as the case may be, of the proration amounts determined pursuant to
this Section 2.3(e) shall be due fifteen (15) days after the last to occur of
(i) American's acceptance of the Cincinnati Proration Schedule or failure to
give Citicasters a timely Notice of Disagreement; (ii) Citicasters' acceptance
of the American Proration Schedule or failure to reject the American Proration
Schedule within fifteen (15) days of receipt of a timely Notice of Disagreement;
(iii) Citicasters' rejection of the American Proration Schedule in the event the
amount in dispute equals or is less than Five Thousand Dollars ($5,000); and
(iv) notice to Citicasters and American of the resolution of the disputed amount
by the Referee in the event that the amount in dispute exceeds Five Thousand
Dollars ($5,000).
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(f) Any payment required by American to Citicasters or by Citicasters
to American, as the case may be, under Section 2.3(d) or 2.3(e) shall be paid by
wire transfer of immediately available funds to the account of the payee with a
financial institution in the United States as designated by such party in the
Cincinnati Proration Schedule or the Rochester Proration Schedule, as the case
may be, or the Notice of Disagreement (or by separate notice in the event a
Notice of Disagreement is not sent). If either American or Citicasters fails to
pay when due any amount under Section 2.3(d) or 2.3(e), interest on such amount
will accrue from the date payment was due to the date such payment is made at a
per annum rate equal to the "prime rate" as published daily in the Money Rates
column of the Wall Street Journal (or the average of such rates if more than one
rate indicated) plus two percent (2%), and such interest shall be payable upon
demand.
(g) With respect to Trade Agreements the assigning party shall be
required to pay to the party assuming the same an amount, if any, by which the
aggregate obligations and liabilities (determined in accordance with GAAP) for
unperformed air time under all such Trade Agreements as of 12:01 a.m. on the
applicable Cut-off Date exceeds by $20,000, the fair market value of the
services or property (determined in accordance with GAAP) to be received by the
assuming party under such Trade Agreements after 12:01 a.m. on the applicable
Cut-off Date under all such Trade Agreements. There shall be no payment required
by the assuming party to the assigning party with respect to the Trade
Agreements, notwithstanding that the excess, if any, of the obligations and
liabilities under the Trade Agreements over the fair market value of the
services and property to be received under such Trade Agreements after 12:01
a.m. on the applicable Cut-off Date is less than the amount specified in the
first sentence of this paragraph.
(h) Nothing contained in this Section 2.3 is intended or shall be
deemed to amend or modify the indemnification provisions of Article 8 nor to
reallocate responsibility for the matters set forth therein.
2.4 Closing Date. The closing of the Exchange (the "Closing") shall
take place at a mutually convenient location to be agreed upon by the parties,
at 10:00 a.m., local time, within ten (10) business days after the satisfaction
or waiver of each of the conditions specified in Article 6 (other than those to
be satisfied at the Closing) or such other date, prior to the Termination Date,
as the parties may agree (the "Closing Date"). At the Closing, (a) each of the
parties shall deliver such deeds (in recordable form and warrantying against
matters not covered by title insurance other than Permitted Liens and Permitted
Title Exceptions), bills of sale, assignments, assumptions of liabilities and
other instruments and documents as are described in this Agreement or as may be
otherwise reasonably requested by the parties and their respective counsel and
the legal opinions described in Sections 6.2(b) and 6.3(b), and (b) as part of
the American Assets, American shall pay to Citicasters Sixteen Million Dollars
($16,000,000) by wire transfer of immediately available funds to such account as
is designated by Citicasters in written instructions to American not later than
two (2) business days prior to the Closing.
2.5 Accounts Receivable. Effective, if at all, upon the earlier to
occur of Closing or the commencement of the effectiveness of the applicable TBA,
Citicasters hereby appoints American its agent and American hereby appoints
Citicasters its agent for the purpose of collecting all Accounts Receivable
relating to the Citicasters Station and the American Stations, respectively.
Each party shall deliver to the other on or as soon as practicable after the
earlier to occur of the
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applicable TBA Date or the Closing Date (but, in any event, within ten (10) days
after such earlier date) a complete and detailed statement showing the name,
amount and age of each Account Receivable of its Stations. Subject to and
limited by the following, revenues relating to the Citicasters Accounts
Receivable and the American Accounts Receivable will be for the account of
Citicasters and American, respectively. Each agent shall use the same collection
procedures as it uses with respect to its own accounts receivable to collect the
Accounts Receivable with respect to which it is acting as agent for a period of
ninety (90) days after the applicable Cut-off Date (the "Collection Period").
Any payment received by either party during the Collection Period from any
customer with an account which is an Account Receivable with respect to which it
is acting as agent shall first be applied in reduction of such Account
Receivable, unless the customer indicates otherwise in writing. During the
Collection Period, each agent shall furnish the other with a list of, and pay
over to the other, the amounts collected with respect to the Accounts Receivable
with respect to which it is acting as agent within five (5) days after the end
of each month during the Collection Period. Each agent shall provide the other
with a final accounting on or before the fifteenth (15th) day following the end
of the Collection Period. Upon the request of either agent at and after such
time, the parties shall meet to mutually and in good faith analyze any
uncollected Accounts Receivable to determine if the same, in their reasonable
business judgment, are deemed to be collectable and if the party which acted as
agent with respect thereto desires to retain such Accounts Receivable in the
interest of maintaining an advertising relationship. As to each such Accounts
Receivable, the parties shall in good faith attempt to negotiate the value of
such Accounts Receivable, which the purchasing party shall pay to the other if
the purchasing party, in its sole discretion, chooses to retain such Accounts
Receivable. Each party shall retain the right to collect any of its Accounts
Receivable as to which the parties are unable to reach agreement as to such
value, and each party agrees to turn over to the other any payments received
against any such Accounts Receivable. Neither agent shall be obligated to use
any extraordinary efforts to collect any of the Accounts Receivable assigned to
it for collection hereunder or to refer any of such Accounts Receivable to a
collection agency or to any attorney for collection, and neither party shall
make any such referral or compromise, nor settle or adjust the amount of any
such Accounts Receivable, except with the approval of the other party. Neither
agent shall incur any liability to any other party for any uncollected Accounts
Receivable unless such agent shall have engaged in willful misconduct or gross
negligence in the performance of its obligations set forth in this Section.
During and after the Collection Period, without specific agreement with the
agent with respect thereto to the contrary, none of the assigning parties nor
its agents shall make any direct solicitation of the Accounts Receivable for
collection purposes, except for Accounts Receivable retained by the assigning
party after the Collection Period.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CITICASTERS
Citicasters hereby represents and warrants to American and American
License as follows:
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3.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of Citicasters and Jacor is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite corporate power and authority to own or hold
under lease its properties and to conduct its business as now conducted.
(b) Each of Citicasters and Jacor has all requisite corporate power and
authority necessary to enable it to execute and deliver, and to perform its
obligations under, this Agreement and/or each Collateral Document executed or
required to be executed by it pursuant hereto or thereto or to consummate the
Exchange and the other Transactions; and the execution, delivery and performance
of this Agreement and each Collateral Document executed or required to be
executed pursuant hereto or thereto have been duly authorized by all requisite
corporate or other action on the part of Citicasters or Jacor, as the case may
be. This Agreement has been duly executed and delivered by Citicasters and
constitutes, and each Collateral Document executed or required to be executed
pursuant hereto or thereto or to consummate the Exchange and the other
Transactions when executed and delivered by Citicasters or Jacor will
constitute, legal, valid and binding obligations of Citicasters or Jacor, as the
case may be, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and the obligations
of debtors generally and by general principles of equity.
(c) Except as set forth in Section 3.1(c) of the Citicasters Disclosure
Schedule, neither the execution and delivery by Citicasters of this Agreement or
any Collateral Document executed or required to be executed by it or Jacor
pursuant hereto or thereto, nor the consummation by Citicasters of the Exchange
and the other Transactions, nor compliance with the terms, conditions and
provisions hereof or thereof by Citicasters or Jacor:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of Citicasters or
Jacor or any Applicable Law on the part of Citicasters or Jacor, or,
subject to obtaining any required consents, will conflict with, or
result in a breach or violation of, or constitute a default under, or
permit the acceleration of any obligation or liability in, or but for
any requirement of giving of notice or passage of time or both would
constitute such a conflict with, breach or violation of, or default
under, or permit any such acceleration in, any Citicasters Material
Agreement; or
(ii) will require Citicasters or Jacor to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization, except for the FCC Consents, filings, if required, under
the Xxxx-Xxxxx-Xxxxxx Act and Private Authorizations, the failure of
which to be obtained or maintained would not, individually or in the
aggregate, have an adverse effect on Citicasters.
(d) Citicasters does not have any direct or indirect Subsidiaries or
other Affiliates which own or have any interest in the Citicasters Station or
any of the Citicasters Assets.
3.2 Financial and Other Information.
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(a) Citicasters has heretofore furnished to American copies of the
unaudited financial statements of the Citicasters Station for the year ended
December 31, 1995 and the nine months ended September 30, 1996 (the "Citicasters
Financial Statements"). The Citicasters Financial Statements have been prepared
on a consistent basis throughout the periods covered thereby, and fairly present
the financial condition, results of operations and cash flow of the Citicasters
Station, as of the respective dates thereof and for the respective periods
covered thereby.
(b) Except solely for the obligations and liabilities to be assumed by
the American Parties pursuant to the Citicasters Assumable Agreements, there
will, at the time of Closing, be no obligations or liabilities of any nature,
whether accrued, absolute, contingent or otherwise, relating to Citicasters, the
Citicasters Assets or the Citicasters Station which could, after the Closing,
result in any form of transferee liability against either American Party or
subject any of the Citicasters Assets or the Citicasters Station to any Lien or
otherwise affect the full, free and unencumbered use of the Citicasters Assets
and the ownership and operation of the Citicasters Station by the American
Parties.
3.3 Material Statements and Omissions; Absence of Events. No
representation or warranty made by Citicasters contained in this Agreement, the
Citicasters Disclosure Schedule or any certificate, document or other instrument
furnished or to be furnished by Citicasters pursuant to the provisions hereof
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to make any statement contained
herein or therein not misleading. Citicasters is not aware of any impending or
contemplated Event that would cause any of the representations and warranties
made by it in this Article not to be true, correct and complete on the date of
such Event as if made on that date.
3.4 Changes in Condition. Since September 30, 1996, except to the
extent specifically described in Section 3.4 of the Citicasters Disclosure
Schedule, there has been no adverse change in the Citicasters Assets or the
Citicasters Station. There is no Event known to Citicasters which adversely
affects, or (so far as Citicasters can now reasonably foresee) is likely to
adversely affect, the Citicasters Assets or the Citicasters Station, except (a)
to the extent specifically described in Section 3.4 of the Citicasters
Disclosure Schedule and (b) for general business and economic conditions and
matters affecting the radio broadcasting industry generally.
3.5 Title to Properties; Leases.
(a) Citicasters does not own any Real Property which is part of the
Citicasters Assets or used in the operations of the Citicasters Station, other
than the Real Property that will be leased by Citicasters to American pursuant
to the Studio Lease and the Tower Lease (the "Citicasters Real Property").
Citicasters has good and marketable title in fee simple to the Citicaster Real
Property.
(b) Section 3.5(b) of the Citicasters Disclosure Schedule contains a
true, accurate and complete description of all material items of Citicasters
Personal Property. Citicasters owns and has good and merchantable title to all
of the Citicasters Personal Property, free and clear of all Liens, except (i)
Permitted Liens and (ii) Liens set forth on Section 3.5(b) of the Citicasters
Disclosure Schedule (which Liens shall be released prior to Closing). Except as
set forth in Section 3.5(b) of the Citicasters Disclosure Schedule, all of the
Citicasters Personal Property is in a state of good
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repair and maintenance and is in good operating condition, normal wear and tear
excepted, has been maintained in a manner consistent with generally accepted
standards of good engineering practice and currently permits the Citicasters
Station to be operated in accordance with the terms and conditions of the
Citicasters FCC Licenses and all Applicable Laws.
3.6 Compliance with Private Authorizations. Section 3.6 of the
Citicasters Disclosure Schedule sets forth a true, accurate and complete list
and description of each Citicasters Private Authorization which, individually or
when taken together with other substantially similar Citicasters Private
Authorizations, is material to the Citicasters Assets or the Citicasters
Station, all of which are in full force and effect. Citicasters is not in breach
or violation of, or in default in the performance, observance or fulfillment of,
any Citicasters Private Authorization, and no Event exists or has occurred,
which constitutes, or but for any requirement of giving of notice or passage of
time or both would constitute, such a breach, violation or default, under any
Citicasters Private Authorization, except for as set forth in Section 3.6 of the
Citicasters Disclosure Schedule. No such Private Authorization is the subject of
any pending or, to Citicasters' knowledge, threatened attack, revocation or
termination.
3.7 Compliance with Governmental Authorizations and Applicable Law.
(a) Section 3.7(a) of the Citicasters Disclosure Schedule contains a
description of:
(i) all Claims pending or, to Citicasters' knowledge,
threatened against Citicasters with respect to the business, operation
or ownership of any of the Citicasters Assets or the Citicasters
Station, including without limitation all Claims which, individually or
in the aggregate, are reasonably likely to result in the revocation or
termination of any of the Citicasters FCC Licenses or the imposition of
any restriction of such a nature as would adversely affect the
ownership or operations of the Citicasters Station; in particular, but
without limiting the generality of the foregoing, there are no Claims
pending or, to Citicasters' knowledge, threatened (x) before the FCC
relating to the business or operations of the Citicasters Station other
than Claims which affect the radio broadcasting industry generally, or
(y) before any Authority involving charges of illegal discrimination by
the Citicasters Station under any federal or state employment Laws; and
(ii) each Governmental Authorization (including without
limitation all FCC Licenses) required under Applicable Laws to own and
operate the Citicasters Station, as currently conducted or proposed to
be conducted on or prior to the Closing Date, all of which are in full
force and effect (the "Citicasters Governmental Authorizations").
Attached to the Citicasters Disclosure Schedule are true, correct and complete
copies of the Citicasters Governmental Authorizations (including without
limitation any and all amendments and other modifications thereto).
(b) Citicasters is the authorized legal holder of the FCC Licenses
listed in Section 3.7(a) of the Citicasters Disclosure Schedule, none of which
is subject to any restriction or condition which would limit in any respect the
operations of the Citicasters Station as currently conducted. The Citicasters
FCC Licenses are valid and in good standing, are in full force and effect and
are not
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impaired in any respect by any act or omission of Citicasters or its officers,
directors, employees or agents. The Citicasters Station is operating in
accordance with the Citicasters FCC Licenses, all underlying construction
permits and the FCA. Except as disclosed in Section 3.7(b) of the Citicasters
Disclosure Schedule, no application, action or proceeding is pending for the
renewal or modification of any Citicasters FCC Licenses and, to Citicasters'
knowledge, there is not as of the date of this Agreement issued or outstanding
any investigation or complaint against Citicasters at the FCC relating to the
Citicasters Station. Except as disclosed in Section 3.7(b) of the Citicasters
Disclosure Schedule, as of the date of this Agreement, there is no proceeding
pending at, or outstanding notice of violation from, the FCC relating to the
Citicasters Station. All fees payable to Authorities pursuant to the Citicasters
FCC Licenses, including FCC annual regulatory fees, have been paid and no event
has occurred which, individually or in the aggregate, and without the giving of
notice or the lapse of time or both, would constitute grounds for revocation
thereof or would have an adverse effect on Citicasters. Except (i) as set forth
in Section 3.7(b) of the Citicasters Disclosure Schedule and (ii) for such
reports, forms and statements the failure of which to file would not,
individually or in the aggregate, have an adverse effect on the Citicasters
Station, all reports, forms and statements required to be filed by Citicasters
with the FCC with respect to the Citicasters Station have been filed and are
true, complete and accurate in all respects. To Citicasters' knowledge, under
the FCA, there are no facts that would disqualify it as the transferee of the
control of the American Stations.
The Citicasters Governmental Authorizations comprise all Governmental
Authorizations which are necessary for the lawful ownership or operation of the
Citicasters Assets or the lawful conduct of the business of the Citicasters
Station as now conducted, except for Governmental Authorizations, the failure of
which to obtain and maintain, would not, individually or in the aggregate, have
any adverse effect on the Citicasters Assets or Citicasters Station. No
Citicasters Governmental Authorization is the subject of any pending or, to
Citicasters' knowledge, threatened challenge or proceeding to revoke or
terminate any Citicasters Governmental Authorization. To Citicasters' knowledge,
except as set forth in Section 3.7(b) of the Citicasters Disclosure Schedule,
Citicasters has no reason to believe that, except for the consummation of the
Exchange, any Citicasters Governmental Authorization would not be renewed in the
name of Citicasters by the granting Authority in the ordinary course.
3.8 Intangible Assets. Section 3.8 of the Citicasters Disclosure
Schedule sets forth a true, accurate and complete description of all material
Intangible Assets held or used by Citicasters (other than the Citicasters
Governmental Authorizations and the Citicasters Private Authorizations) relating
to the ownership and operation of the Citicasters Assets or the conduct of the
business of the Citicasters Station (the "Citicasters Intangible Assets"),
including without limitation the nature of Citicasters' interest in each and the
extent to which the same have been duly registered in the offices as indicated
therein. Citicasters owns or possesses or otherwise has the right to use the
Citicasters Intangible Assets.
3.9 Related Transactions. Citicasters is not a party or subject to any
Contractual Obligation relating to the ownership and operation of the
Citicasters Assets or the conduct of the business of the Citicasters Station
between Citicasters and any of its officers, directors, stockholders or
employees or, to the knowledge, of Citicasters, any Affiliate of any thereof,
including without limitation any Contractual Obligation providing for the
furnishing of services to or by, providing
-11-
for rental of property, real, personal or mixed, to or from, or providing for
the lending or borrowing of money to or from or otherwise requiring payments to
or from, any such Person, other than (i) the Citicasters Employee Plans or
Citicasters Material Agreements constituting employment agreements and (ii)
Contracts between Citicasters and its officers which constitute Citicasters
Excluded Assets and Citicasters Nonassumed Obligations.
3.10 Tax Matters. Citicasters has in respect of the Citicasters Assets
and the Citicasters Station filed all material Tax Returns which are required to
be filed, and has paid, or made adequate provision for the payment of, all Taxes
which have or may become due and payable pursuant to said Tax Returns and all
other governmental charges and assessments received to date other than those
Taxes being contested in good faith. There are no unpaid Taxes which are due and
payable, or alleged to be due and payable by any Taxing Authority, the
non-payment of which is or could become a Lien on any of the Citicasters Assets
or the Citicasters Station or result in any transferee liability against either
of the American Parties. All Taxes in respect of the Citicasters Assets and the
Citicasters Station which Citicasters is required by law to withhold and collect
have, to Citicasters' knowledge, been duly withheld and collected, and have been
paid over, in a timely manner, to the proper Authorities to the extent due and
payable.
3.11 Employee Benefit Plans; Citicasters Station Employees..
(a) Section 3.11(a) of the Citicasters Disclosure Schedule contains a
true, accurate and complete list (and brief description) as of the date of this
Agreement of all employee benefit plans applicable to the Citicasters Station
Employees ("Citicasters Employee Plans"). Neither Citicasters nor its Affiliates
maintains any other employee benefit plan, as that term is defined in Section 3
of ERISA, applicable to the Citicasters Station Employees.
(b) Section 3.11(b) of the Citicasters Disclosure Schedule contains a
true, accurate and complete list of all persons employed in the ownership or
operation of any of the Citicasters Assets or the conduct of the business of the
Citicasters Station (the "Citicasters Station Employees"), together with each
such employee's date of hire, the title or capacity in which such person is
employed, and a description of material compensation arrangements (other than
any Citicasters Employee Plans).
(c) Citicasters has received no notice that, and Citicasters is not
aware of, any Citicasters Station Employee who shall or is likely to terminate
his or her employment relationship with the Citicasters Station upon the
execution of this Agreement or after the Closing, except as set forth in Section
3.11(c) of the Citicasters Disclosure Schedule.
(d) Except as described in Section 3.11(d) of the Citicasters
Disclosure Schedule, with respect to the Citicasters Station, (i) none of the
Citicasters Station Employees is now or, to Citicasters' knowledge, has been
represented by any labor union or other employee collective bargaining
organization, and Citicasters is not and never has been a party to any labor or
other collective bargaining agreement with respect to any Citicasters Station
Employee, (ii) there are no pending grievances, disputes or controversies with
any union or any other employee or collective bargaining organization of such
employees, or threats of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any such union or other organization, and
(iii)
-12-
neither Citicasters nor any of such employees is now or, to Citicasters'
knowledge, has been subject to, involved in or threatened with, any union
elections, petitions therefore or other organizational or recruiting activities,
in each case with respect to any Citicasters Station Employee.
3.12 Material Agreements. Listed on Section 3.12 of the Citicasters
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the Citicasters Assets or the conduct of the business of the
Citicasters Station or to which Citicasters is a party or to which it is bound
or to which any of the Citicasters Assets is subject (the "Citicasters Material
Agreements"). True, accurate and complete copies of each of such Material
Agreements have been made available by Citicasters to American and Citicasters
has provided American with photocopies of all such Material Agreements requested
by American (or true, accurate and complete descriptions thereof have been set
forth in Section 3.12 of the Citicasters Disclosure Schedule, if any such
Material Agreements are oral). All of the Citicasters Material Agreements are
valid, binding and legally enforceable obligations of Citicasters and, to
Citicasters' knowledge, all other parties thereto, and Citicasters is validly
and lawfully conducting the business of the Citicasters Station and owning and
operating the Citicasters Assets under each of the Citicasters Material
Agreements. Citicasters has duly complied with all of the terms and conditions
of each Material Agreement and has not done or performed, or failed to do or
perform (and, to Citicasters' knowledge, there is no pending or threatened Claim
that Citicasters has not so complied, done and performed or failed to do and
perform) any act which would invalidate or provide grounds for the other party
thereto to terminate (with or without notice, passage of time or both) any of
the Citicasters Material Agreements or impair the rights or benefits, or
increase the costs, of Citicasters under any of Citicasters Material Agreement.
Citicasters has not expressly granted any waivers or forbearance under any
Citicasters Material Agreement and, to Citicasters' knowledge, no third party is
in material default in the performance of any of its obligations under any
Citicasters Material Agreement. Except for those consents or approvals listed in
Section 3.12 of the Citicasters Disclosure Schedule, no consents or approvals of
any third party are necessary to permit the assignment by the Citicasters
Parties of the Citicasters Material Agreements to American and such assignment
will not affect the validity or enforceability of any Citicasters Material
Agreement or cause any material change in the substantive terms of any of them.
3.13 Ordinary Course of Business. Citicasters, from September 30, 1996
to the date hereof, except (i) as may be described on Section 3.13 of the
Citicasters Disclosure Schedule, or (ii) as may be required or expressly
contemplated by the terms of this Agreement, with respect to the Citicasters
Assets and the Citicasters Station, has operated its business in the normal,
usual and customary manner in the ordinary and regular course of business,
consistent with prior practice and
(a) has not sold or otherwise disposed of or contracted to
sell or otherwise dispose of any of the Citicasters Assets;
(b) other than in the ordinary course of business, consistent
with prior practice:
(i) has not made or committed to make any additions
to its property or any purchases of equipment, except for
normal maintenance and replacements; and
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(ii) has not increased the compensation payable or to
become payable to any of its employees other than in the
ordinary course of business or otherwise altered, modified or
changed the terms of their employment;
(c) has not suffered any material damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of
property by any Authority; and
(d) has not experienced any work stoppage.
3.14 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement, the Exchange or the subject matter of any other
Transaction in the capacity of broker, agent or finder or in any similar
capacity on behalf of Citicasters.
3.15 Environmental Matters. Except as set forth in Section 3.15 of the
Citicasters Disclosure Schedule, solely with respect to the Citicasters Assets
and the Citicasters Real Property, Citicasters:
(a) to Citicasters' knowledge, has not been notified in
writing that it is potentially liable under, has not received any
written request for information or other correspondence concerning its
potential liability with respect to any site or facility under, and is
not a "potentially responsible party" under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation Recovery Act, as amended, or any
similar state law;
(b) has not entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law;
(c) is not a party in interest or in default under any
judgment, order, writ, injunction or decree of any final order issued
pursuant to any Environmental Law;
(d) is, to Citicasters' knowledge, in substantial compliance
with all Environmental Laws, has, to Citicasters' knowledge, obtained
all Environmental Permits required under Environmental Laws, and is not
the subject of or, to Citicasters' knowledge, threatened with any Legal
Action involving a demand for damages or other potential liability
including any Lien with respect to violations or breaches of any
Environmental Law;
(e) has no knowledge of any past or present Event which,
individually or in the aggregate, will interfere with or prevent
continued compliance with all Environmental Laws, or which,
individually or in the aggregate, will form the basis of any Claim for
the release or threatened release into the environment, of any
Hazardous Material; and
(f) has no knowledge that any Hazardous Material is or has
been located at, on, in or under, or has been released or transported
from, the Citicasters Assets or the Citicasters Real Property in such
manner so as to require remediation, removal or cleanup or other
liability under, any Environmental Laws.
-14-
Notwithstanding anything to the contrary contained in this Agreement,
Citicasters makes no representation or warranty with respect to its compliance
with Environmental Laws or environmental matters generally, except as
specifically set forth in this Section, the Studio Lease or the Tower Lease
3.16 Trade or Barter. Section 3.16 of the Citicasters Disclosure
Schedule sets forth a true, complete and accurate description (including
obligations and liabilities remaining thereunder) of all Citicasters Trade
Agreements that individually involve or may involve, valued in accordance with
GAAP, more than $500 in obligations remaining thereunder as of the date of this
Agreement in money, property or services or a remaining term in excess of two
months.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE AMERICAN PARTIES
The American Parties, jointly and severally, represent and warrant to
Citicasters as follows:
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of the American Parties is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, has all requisite corporate power and authority to own or hold
under lease its properties and to conduct its business as now conducted.
(b) Each of the American Parties has all requisite corporate power and
authority necessary to enable it to execute and deliver, and to perform its
obligations under, this Agreement and each Collateral Document executed or
required to be executed by it pursuant hereto or thereto or to consummate the
Exchange and the other Transactions; and the execution, delivery and performance
of this Agreement and each Collateral Document executed or required to be
executed pursuant hereto or thereto have been duly authorized by all requisite
corporate or other action on the part of the American Parties. This Agreement
has been duly executed and delivered by the American Parties and constitutes,
and each Collateral Document executed or required to be executed pursuant hereto
or thereto or to consummate the Exchange and the other Transactions when
executed and delivered by an American Party will constitute, legal, valid and
binding obligations of such American Parties, enforceable in accordance with
their respective terms, except as such enforceability may be limited by
bankruptcy, moratorium, insolvency and similar laws affecting the rights and
remedies of creditors and obligations of debtors generally and by general
principles of equity.
(c) Except as set forth in Section 4.1(c) of the American Disclosure
Schedule, neither the execution and delivery by the American Parties of this
Agreement or any Collateral Document executed or required to be executed by
either of them pursuant hereto or thereto, nor the consummation by the American
Parties of the Exchange and the other Transactions, nor compliance with the
terms, conditions and provisions hereof or thereof by the American Parties:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of the American
Parties or any Applicable Law on the part
-15-
of the American Parties, or subject to obtaining any required consents,
will conflict with, or result in a breach or violation of, or
constitute a default under, or permit the acceleration of any
obligation or liability in, or but for any requirement of giving of
notice or passage of time or both would constitute such a conflict
with, breach or violation of, or default under, or permit any such
acceleration in, any American Material Agreement; or
(ii) will require American to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization, except for
the FCC Consents, filings, if required, under the Xxxx-Xxxxx-Xxxxxx Act
and Private Authorizations, the failure of which to be obtained or
maintained would not, individually or in the aggregate, have an adverse
effect on American.
(d) Neither of the American Parties has any direct or indirect
Subsidiaries or other Affiliates which own or have any interest in the American
Stations or any of the American Assets. American owns all of the outstanding
capital stock of American License, all of which stock is duly authorized,
validly issued, fully paid and nonassessable.
4.2 Financial and Other Information.
(a) American has heretofore furnished to Citicasters copies of the
unaudited financial statements of the American Stations for the year ended
December 31, 1995 and the nine months ended September 30, 1996 (the "American
Financial Statements"). The American Financial Statements have been prepared on
a consistent basis throughout the periods covered thereby, and fairly present
the financial condition, results of operations and cash flow of the American
Stations, as of the respective dates thereof and for the respective periods
covered thereby.
(b) Except solely for the obligations and liabilities to be assumed by
the Citicasters Parties pursuant to the American Assumable Agreements, there
will, at the time of Closing, be no obligations or liabilities of any nature,
whether accrued, absolute, contingent or otherwise, relating to the American
Parties, the American Assets or the American Stations which could, after the
Closing, result in any form of transferee liability against either Citicasters
Party or subject any of the American Assets or the American Stations to any Lien
or otherwise affect the full, free and unencumbered use of the American Assets
and the ownership and operation of the American Stations by Citicasters.
4.3 Material Statements and Omissions; Absence of Events. No
representation or warranty made by the American Parties contained in this
Agreement, the American Disclosure Schedule or any certificate, document or
other instrument furnished or to be furnished by the American Parties pursuant
to the provisions hereof contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact required to make
any statement contained herein or therein not misleading. Neither American nor
American License is aware of any impending or contemplated Event that would
cause any of the representations and warranties made by it in this Article not
to be true, correct and complete on the date of such Event as if made on that
date.
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4.4 Changes in Condition. Since September 30, 1996, except to the
extent specifically described in Section 4.4 of the American Disclosure
Schedule, there has been no adverse change in the American Assets or the
American Stations. There is no Event known to the American Parties which
adversely affects, or (so far as the American Parties can now reasonably
foresee) is likely to adversely affect, the American Assets or the American
Stations, except (a) to the extent specifically described in Section 4.4 of the
American Disclosure Schedule and (b) for general business and economic
conditions and matters affecting the radio broadcasting industry generally.
4.5 Title to Properties; Leases.
(a) Section 4.5(a) of the American Disclosure Schedule lists all Real
Property owned by Lincoln or the American Parties (the "American Owned Real
Property") and describes all Leases of Real Property (the "American Leases")
which is used or held for use in the operation of the American Stations (the
American Owned Real Property and the real property subject to the American
Leases, being hereinafter collectively referred to as the "American Real
Property"). American will, as of the time of the consummation of the
transactions contemplated by the Lincoln Agreement, have (and Citicasters will
upon Closing obtain) good and marketable title to the Owned Real Property and
valid and subsisting leasehold interests in the American Leases (as shown on
Section 4.5(a) of the American Disclosure Schedule), in each case free and clear
of all Liens, except (i) Permitted Liens and (ii) Liens set forth on Section
4.5(a) of the American Disclosure Schedule (which Liens shall be released prior
to Closing). Lincoln has and, as of the time of the consummation of the
transactions contemplated by the Lincoln Agreement, American will have, full
legal and practical access to all of the American Real Property, and all
easements, rights of way, and real property licenses relating thereto have been
properly recorded in the appropriate public recording offices, except to the
extent, if any, set forth in Section 4.5(a) of the American Disclosure Schedule.
The American Owned Real Property, together with the real property that is
subject to the American Leases, includes all the real property, easements,
rights of way, and other real property interests necessary to conduct the
business and operations of the American Stations as they are now conducted. None
of the buildings, structures, improvements or fixtures constructed on any
American Owned Real Property and real property that is subject to the American
Leases, including without limitation all towers, guy wires and guy anchors and
ground radials, encroach upon adjoining real property, and all such buildings,
structures, improvements and fixtures, are constructed and are operated and used
in conformance in all material respects with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes, except to the extent, if any, set forth in Section 4.5(a)
of the American Disclosure Schedule. No utility lines serving such real property
pass over the lands of a third party except where appropriate easements have
been obtained or except as set forth in Section 4.5(a) of the American
Disclosure Schedule. All buildings, structures, towers, antennae, improvements
and fixtures comprising the American Owned Real Property or real property that
is subject to the American Leases are in good and technically sound operating
condition, have no latent structural mechanical or other defects of material
significance, are reasonably suited for the purposes for which they are being
used and each has adequate rights of ingress and egress, utility service for
water and sewer, telephone, electric and/or gas, and sanitary service for the
conduct of the business and operations of the American Stations as presently
conducted, except to the extent, if any, set forth in Section 4.5(a) of the
American Disclosure Schedule. There is no pending or, to American's
-17-
knowledge, threatened condemnation or other legal proceeding or action of any
kind relating to such real property and/or title thereto.
Except as otherwise set forth in Schedule 4.5(a) of the American
Disclosure Schedule, each American Lease included in the American Real Property
has been duly authorized, executed and delivered by Lincoln and, to American's
knowledge, each of the other parties thereto, and, as of the time of the
consummation of the transactions contemplated by the Lincoln Agreement and the
concurrent assignment of the American Leases by Lincoln to American, will be a
legally valid and binding obligation of American, and, to American's knowledge,
each of the other parties thereto, enforceable in accordance with its terms.
American will, as of the time of the consummation of the transactions
contemplated by the Lincoln Agreement, enjoy peaceful and undisturbed possession
under all American Leases pursuant to which it will hold any American Real
Property. All of the American Leases are valid and subsisting and in full force
and effect; neither Lincoln is (nor American, as of the time of the consummation
of the transactions contemplated by the Lincoln Agreement and the concurrent
assignment of the American Leases by Lincoln to American, will be) nor, to
American's knowledge, any other party thereto, is in default in the performance,
observance or fulfillment of any obligation, covenant or condition contained in
any American Lease.
(b) Section 4.5(b) of the American Disclosure Schedule contains a true,
accurate and complete description of all material items of American Personal
Property. American, as of the time of the consummation of the transactions
contemplated by the Lincoln Agreement, will own and have good and merchantable
title to all of the American Personal Property, free and clear of all Liens,
except (i) Permitted Liens and (ii) Liens set forth on Section 4.5(b) of the
American Disclosure Schedule (which Liens shall be released prior to Closing).
Except as set forth in Section 4.5(b) of the American Disclosure Schedule, all
of the American Personal Property is in a state of good repair and maintenance
and in good operating condition, normal wear and tear excepted, has been
maintained in a manner consistent with generally accepted standards of good
engineering practice and currently permits the American Stations to be operated
in accordance with the terms and conditions of the American FCC Licenses and all
Applicable Laws.
4.6 Compliance with Private Authorizations. Section 4.6 of the American
Disclosure Schedule sets forth a true, accurate and complete list and
description of each American Private Authorization which, individually or when
taken together with other substantially similar American Private Authorizations,
is material to the American Assets or the American Stations, all of which are in
full force and effect. There does not exist any breach or violation of, or in
default in the performance, observance or fulfillment of, any American Private
Authorization, and no Event exists or has occurred, which constitutes, or but
for any requirement of giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any American Private
Authorization, except for as set forth in Section 4.6 of the American Disclosure
Schedule. No such Private Authorization is the subject of any pending or, to
American's knowledge, threatened attack, revocation or termination.
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4.7 Compliance with Governmental Authorizations and Applicable Law.
(a) Section 4.7(a) of the American Disclosure Schedule contains a
description of:
(i) all Claims pending or, to American's knowledge,,
threatened against either of the American Parties or Lincoln with
respect to the business, operation or ownership of any of the American
Assets or any of the American Stations, including without limitation
all Claims which, individually or in the aggregate, are reasonably
likely to result in the revocation or termination of any of the
American FCC Licenses or the imposition of any restriction of such a
nature as would adversely affect the ownership or operations of the
American Stations; in particular, but without limiting the generality
of the foregoing, there are no Claims pending or, to American's
knowledge, threatened (x) before the FCC relating to the business or
operations of the American Stations other than Claims which affect the
radio broadcasting industry generally, or (y) before any Authority
involving charges of illegal discrimination by the American Stations
under any federal or state employment Laws; and
(ii) each Governmental Authorization (including without
limitation all FCC Licenses) required under Applicable Laws to own and
operate the American Stations, as currently conducted or proposed to be
conducted on or prior to the Closing Date, all of which are (except
such, if any, that are conditioned on consummation of the transactions
contemplated by the Lincoln Agreement which will, upon such
consummation, be) in full force and effect (the "American Governmental
Authorizations").
Attached to the American Disclosure Schedule are true and complete copies of the
American Governmental Authorizations (including without limitation any and all
amendments and other modifications thereto).
(b) American License will, as of the time of the consummation of the
transactions contemplated by the Lincoln Agreement, be the authorized legal
holder of the FCC Licenses listed in Section 4.7(a) of the American Disclosure
Schedule, none of which will, at such time, be subject to any restriction or
condition which would limit in any respect the operations of the American
Stations as proposed to be conducted by American on or prior to the Closing
Date. The American FCC Licenses are valid and in good standing, in full force
and effect and are not impaired in any respect by any act or omission of the
American Parties, Lincoln or their respective officers, directors, employees or
agents. The American Stations are operating in accordance with the American FCC
Licenses, all underlying construction permits and the FCA. Except (i) as
disclosed in Section 4.7(b) of the American Disclosure Schedule and (ii) for
those relating to the transfer of the American FCC Licenses from Lincoln to
American License, no application, action or proceeding is pending for the
renewal or modification of any American FCC Licenses and, to American's
knowledge, there is not as of the date of this Agreement issued or outstanding
any investigation or complaint against either American Party or Lincoln at the
FCC relating to any of the American Stations. Except as disclosed in Section
4.7(b) of the American Disclosure Schedule, as of the date of this Agreement,
there is no proceeding pending at, or outstanding notice of violation from, the
FCC relating to any of the American Stations. All fees payable to Authorities
pursuant to the American FCC Licenses, including FCC annual regulatory fees have
been paid and no event has occurred which, individually or in the aggregate, and
without the giving of notice or the lapse of
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time or both, would constitute grounds for revocation thereof or would have an
adverse effect on American. Except (i) as set forth in Section 4.7(b) of the
American Disclosure Schedule and (ii) for such reports, forms and statements the
failure of which to file would not, individually or in the aggregate, have an
adverse effect on the American Stations, all reports, forms and statements
required to be filed by the American Parties or Lincoln with the FCC with
respect to the American Stations have been filed and are true, complete and
accurate in all respects. To American's knowledge, under the FCA, there are no
facts that would disqualify it as the transferee of the control of the
Citicasters Station.
The American Governmental Authorizations comprise all Governmental
Authorizations which are necessary for the lawful ownership or operation of the
American Assets or the lawful conduct of the business of the American Stations
as presently conducted or as proposed to be conducted by the American Parties
prior to the Closing Date, except for Governmental Authorizations, the failure
of which to obtain and maintain, would not, individually or in the aggregate,
have any adverse effect on the American Assets or the American Stations. No
American Governmental Authorization is the subject of any pending or, to
American's knowledge, threatened challenge or proceeding to revoke or terminate
any American Governmental Authorization. To American's knowledge, except as set
forth in Section 4.7(b) of the American Disclosure Schedule, American has no
reason to believe that, except for the consummation of the transactions
contemplated by the Lincoln Agreement or the Exchange, any American Governmental
Authorization would not be renewed by the granting Authority in the ordinary
course.
4.8 Intangible Assets. Section 4.8 of the American Disclosure Schedule
sets forth a true, accurate and complete description of all material Intangible
Assets held or used by Lincoln (other than the American Governmental
Authorizations and the American Private Authorizations) relating to the
ownership and operation of the American Assets or the conduct of the business of
the American Stations (the "American Intangible Assets"), including without
limitation the nature of Lincoln's interest in each and the extent to which the
same have been duly registered in the offices as indicated therein. American
will, as of the time of the consummation of the transactions contemplated by the
Lincoln Agreement, own or possess or otherwise have the right to use the
American Intangible Assets.
4.9 Related Transactions. Neither of the American Parties nor Lincoln
is a party or subject to any Contractual Obligation relating to the ownership
and operation of the American Assets or the conduct of the business of the
American Stations between Lincoln or either of the American Parties and any of
their respective officers, directors, stockholders or employees or, to
American's knowledge, any Affiliate of any thereof, including without limitation
any Contractual Obligation providing for the furnishing of services to or by,
providing for rental of property, real, personal or mixed, to or from, or
providing for the lending or borrowing of money to or from or otherwise
requiring payments to or from, any such Person, other than (i) the American
Employee Plans and American Material Agreements constituting employment
agreements, (ii) Contracts between American and its officers which constitute
American Excluded Assets and American Nonassumed Obligations, (iii) Contracts
between Lincoln and any of its Affiliates or any of their officers, directors,
partners, stockholders or employees which will not be part of the American
Assets and will constitute American Excluded Assets and American Nonassumed
Obligations, and (iv) a management agreement between American and American
License.
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4.10 Tax Matters. Lincoln has, and as of the consummation of the
transactions contemplated by the Lincoln Agreement American will have, in
respect of the American Assets and the American Stations filed all material Tax
Returns which are required to be filed, and has paid, or made adequate provision
for the payment of, all Taxes which have or may become due and payable pursuant
to said Tax Returns and all other governmental charges and assessments received
to date other than those Taxes being contested in good faith. There are no
unpaid Taxes which are due and payable, or alleged to be due and payable by any
Taxing Authority, the non-payment of which is or could become a Lien on any of
the American Assets or the American Stations or result in any transferee
liability against Citicasters. All Taxes in respect of the American Assets and
the American Stations which Lincoln is required by law to withhold and collect
have, to American's knowledge, been duly withheld and collected, and have been
paid over, in a timely manner, to the proper Authorities to the extent due and
payable.
4.11 Employee Benefit Plans; American Station Employees.
(a) Section 4.11(a) of the American Disclosure Schedule contains a
true, accurate and complete list (and brief description) as of the date of this
Agreement of all employee benefit plans which will be applicable to the American
Station Employees ("American Employee Plans"). Neither American nor its
Affiliates maintains any other employee benefit plan, as that term is defined in
Section 3 or ERISA, applicable to the American Station Employees.
(b) Section 4.11(b) of the American Disclosure Schedule contains a
true, accurate and complete list, to American's knowledge, of all persons
employed by Lincoln in the ownership or operation of any of the American Assets
or the conduct of the business of the American Stations (the "American Station
Employees"), together with each such employee's date of hire, the title or
capacity in which such person is employed, and a description of material
compensation arrangements (other than any American Employee Plans).
(c) American has received no notice that, and American is not aware of,
any American Station Employee who shall or is likely to terminate his or her
employment relationship with the American Stations upon the consummation of the
transactions contemplated by the Lincoln Agreement, the execution of this
Agreement or after the Closing, except as set forth in Schedule 4.11(c) of the
American Disclosure Schedule.
(d) Except as described in Section 4.11(d) of the American Disclosure
Schedule, with respect to the American Stations, (i) none of the American
Station Employees is now or, to American's knowledge, has been represented by
any labor union or other employee collective bargaining organization, and
neither Lincoln nor the American Parties is or has been a party to any labor or
other collective bargaining agreement with respect to any American Station
Employee, (ii) there are no pending grievances, disputes or controversies with
any union or any other employee or collective bargaining organization of such
employees, or threats of strikes, work stoppages or slowdowns or any pending
demands for collective bargaining by any such union or other organization, and
(iii) neither Lincoln nor the American Parties nor any of such employees is now
or, to American's knowledge, has been subject to, involved in or threatened
with, any union elections, petitions therefore or other organizational or
recruiting activities, in each case with respect to any American Station
Employee.
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4.12 Material Agreements. Listed on Section 4.12 of the American
Disclosure Schedule are all Material Agreements relating to the ownership or
operation of the American Assets or the conduct of the business of the American
Stations or to which American will, as of the time of the consummation of the
transactions contemplated by the Lincoln Agreement, be a party or to which any
of the American Assets will, at such time, be subject (the "American Material
Agreements"). True, accurate and complete copies of each of such Material
Agreements have been made available by American to Citicasters and American has
provided Citicasters with photocopies of all such Material Agreements requested
by Citicasters (or true, accurate and complete descriptions thereof have been
set forth in Section 4.12 of the American Disclosure Schedule, if any such
Material Agreements are oral). As of the time of the consummation of the
transactions contemplated by the Lincoln Agreement and the concurrent assignment
of the American Material Agreements by Lincoln to American, all of the American
Material Agreements will be valid, binding and legally enforceable obligations
of American and, to American's knowledge, all other parties thereto, and as of
such time American will be lawfully conducting the business of the American
Stations and owning and operating the American Assets under each of the American
Material Agreements. Lincoln has, and as of the time of the consummation of the
transactions contemplated by the Lincoln Agreement each of the American Parties
will have, duly complied with all of the terms and conditions of each Material
Agreement and Lincoln has not, and as of such time the American Parties will not
have, done or performed, or failed to do or perform (and, to American's
knowledge, there is no pending or threatened Claim that Lincoln has not so
complied, done and performed or failed to do and perform) any act which would
invalidate or provide grounds for the other party thereto to terminate (with or
without notice, passage of time or both) any of the American Material Agreements
or impair the rights or benefits, or increase the costs, American under any of
American Material Agreement. Neither Lincoln nor either of the American Parties
has expressly granted any waivers or forbearance under any American Material
Agreement and, to American's knowledge, no third party is in material default in
the performance of any of its obligations under any American Material Agreement.
Except for those consents or approvals listed in Section 4.12 of the American
Disclosure Schedule, no consents or approvals of any third party are necessary
to permit the assignment by American of the American Material Agreements to
Citicasters and such assignment will not affect the validity or enforceability
of any American Material Agreement or cause any material change in the
substantive terms of any of them. American has delivered to Citicasters a true,
complete and correct copy of the Lincoln Agreement, including all schedules,
exhibits and disclosure schedules thereto.
The Lincoln Agreement is in full force and effect.
4.13 Ordinary Course of Business. Lincoln, from September 30, 1996 to
the date hereof, except (i) as may be described on Section 4.13 of the American
Disclosure Schedule, or (ii) as may be required or expressly contemplated by the
terms of this Agreement or the Lincoln Agreement, with respect to the American
Assets and the American Stations, has operated its business in the normal, usual
and customary manner in the ordinary and regular course of business, consistent
with prior practice and
(a) has not sold or otherwise disposed of or contracted to
sell or otherwise dispose of any of the American Assets;
(b) other than in the ordinary course of business, consistent
with prior practice:
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(i) has not made or committed to make any additions
to its property or any purchases of equipment, except for
normal maintenance and replacements; and
(ii) has not increased the compensation payable or to
become payable to any of its employees other than in the
ordinary course of business or otherwise altered, modified or
changed the terms of their employment;
(c) has not suffered any material damage, destruction or loss
(whether or not covered by insurance) or any acquisition or taking of
property by any Authority; and
(d) has not experienced any work stoppage.
4.14 Broker or Finder. No Person assisted in or brought about the
negotiation of this Agreement, the Exchange or the subject matter of any other
Transaction in the capacity of broker, agent or finder or in any similar
capacity on behalf of the American Parties, other than Xxxxxxxxx & Company,
Inc., whose fees and expenses shall be the sole responsibility of the American
Parties.
4.15 Environmental Matters. Except as set forth in Section 4.15 of the
American Disclosure Schedule, solely with respect to the American Assets,
neither the American Parties nor Lincoln:
(a) to American's knowledge, has been notified in writing that
any of them is potentially liable under, has received any written
request for information or other correspondence concerning its
potential liability with respect to any site or facility under, and is
not a "potentially responsible party" under, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Resource Conservation Recovery Act, as amended, or any
similar state law;
(b) has entered into or received any consent decree,
compliance order or administrative order issued pursuant to any
Environmental Law;
(c) is a party in interest or in default under any judgment,
order, writ, injunction or decree of any final order issued pursuant to
any Environmental Law;
(d) is not, to American's knowledge, in substantial compliance
with all Environmental Laws, has not, to American's knowledge, obtained
all Environmental Permits required under Environmental Laws, or is the
subject of or, to American's knowledge, threatened with any Legal
Action involving a demand for damages or other potential liability
including any Lien with respect to violations or breaches of any
Environmental Law;
(e) has knowledge of any past or present Event which,
individually or in the aggregate, will interfere with or prevent
continued compliance with all Environmental Laws, or which,
individually or in the aggregate, will form the basis of any Claim for
the release or threatened release into the environment, of any
Hazardous Material; and
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(f) has no knowledge that any Hazardous Material is or has
been located at, on, in or under, or has been released or transported
from, the American Assets or the American Real Property in such manner
so as to require remediation, removal or cleanup or other liability
under, any Environmental Laws.
Notwithstanding anything to the contrary contained in this Agreement,
the American Parties make no representation or warranty with respect to their
compliance with Environmental Laws or environmental matters generally, except as
specifically set forth in this Section.
4.16 Trade or Barter. Section 4.16 of the American Disclosure Schedule
sets forth a true, complete and accurate description (including obligations and
liabilities remaining thereunder) of all American Trade Agreements that
individually involve or may involve, valued in accordance with GAAP, more than
$500 in obligations remaining thereunder as of the date of this Agreement in
money, property or services or a remaining term in excess of two months.
ARTICLE 5
COVENANTS
5.1 Access to Information; Confidentiality.
(a) Each party shall afford, and prior to the consummation of the
transactions contemplated by the Lincoln Agreement American will use its
reasonable business efforts to cause Lincoln to afford, to the other party and
its accountants, counsel, financial advisors and other representatives (the
"Representatives") full access during normal business hours throughout the
period prior to the Closing Date to all of its (and its Subsidiaries')
properties, books, contracts, commitments and records (including without
limitation Tax Returns) relating to the Assets and the Stations and, during such
period, shall furnish promptly upon request (i) a copy of each report, schedule
and other document filed or received by any of them pursuant to the requirements
of any Applicable Law (including without limitation the FCA) or filed by it or
any of its Subsidiaries with any Authority in connection with the Exchange and
other Transactions or any other report, schedule or documents which may have a
material effect on the businesses, operations, properties, prospects, personnel,
condition, (financial or other), or results of operations of their respective
Assets or Stations, (ii) to the extent not provided for pursuant to the
preceding clause, all financial records, ledgers, work papers and other sources
of financial information possessed or controlled by (x) Citicasters or its
accountants deemed by American or its Representatives necessary or useful for
the purpose of performing an audit of the business of the Citicasters Station
and certifying financial statements and financial information pursuant to the
provisions of Section 6.2(d), and (y) American or its accountants deemed by
Citicasters or its Representatives necessary or useful for the purpose of
performing an audit of the business of the American Stations and certifying
financial statements and financial information pursuant to the provisions of
Section 6.3(d), and (iii) such other information concerning any of the foregoing
as American or Citicasters shall reasonably request. All non-public information
furnished pursuant to the provisions of this Agreement, including without
limitation this Section, will be kept confidential and shall not, without the
prior written consent of the party disclosing such information, be disclosed by
the other party in any manner
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whatsoever, in whole or in part, and, except as required by Applicable Law
(including without limitation in connection with any registration statement or
similar document filed pursuant to any federal or state securities Law) shall
not be used for any purposes, other than in connection with the Exchange and the
other Transactions. Except as otherwise herein provided, each party agrees to
reveal such information only to those of its Representatives or other Persons
who need to know such the information for the purpose of evaluating and
consummating the Exchange and the other Transactions who are informed of the
confidential nature of such information. From and after the Closing, each of the
parties shall not, without the prior written consent of the other party,
disclose any information remaining in its possession with respect to the Assets
and Stations conveyed by it pursuant to the Exchange and no such information
shall be used for any purposes, other than in connection with the Exchange and
the other Transactions or to the extent required by Applicable Law.
(b) Notwithstanding the provisions of Section 5.1(a), each party may
disclose such information as it may reasonably determine to be necessary in
connection with seeking all Governmental and Private Authorizations or that is
required by Applicable Law to be disclosed, including without limitation in any
registration statement or other document required to be filed under any federal
or state securities Law. In the event that this Agreement is terminated in
accordance with its terms, each party shall promptly redeliver all non-public
written material provided pursuant to this Section or any other provision of
this Agreement or otherwise in connection with the Exchange and the other
Transactions and shall not retain any copies, extracts or other reproductions in
whole or in part of such written material other than one copy thereof which
shall be delivered to independent counsel for such party.
(c) No investigation pursuant to this Section or otherwise shall affect
any representation or warranty in this Agreement of either party or any
condition to the obligations of the parties hereto.
5.2 Agreement to Cooperate.
(a) Each of the parties hereto shall use reasonable business efforts
(x) to take, or cause to be taken, all actions and to do, or cause to be done,
all things necessary, proper or advisable under Applicable Law to consummate the
Exchange and make effective the other Transactions, and (y) to refrain from
taking, or cause to be taken, any action and to refrain from doing or causing to
be done, any thing which could impede or impair the consummation of the Exchange
or the making effective of the other Transactions, including, in all cases,
without limitation using its reasonable business efforts (i) to prepare and file
with the applicable Authorities as promptly as practicable after the execution
of this Agreement all requisite applications and amendments thereto, together
with related information, data and exhibits, necessary to request issuance of
orders approving the Exchange and the other Transactions by all such applicable
Authorities, each of which must be obtained or become Final Orders in order to
satisfy the condition applicable to it set forth in Section 6.1(c), (ii) to
obtain all necessary or appropriate waivers, consents and approvals, (iii) to
effect all necessary registrations, filings and submissions (including without
limitation, if required, filings within ten (10) business days of the date of
this Agreement under the Xxxx-Xxxxx-Xxxxxx Act and all filings necessary for
American and Citicasters to own and operate the Citicasters Station and the
American Stations, respectively), (iv) to lift any injunction or other legal bar
to the Exchange or any of the other Transactions (and, in such case, to proceed
with the Exchange and the other
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Transactions as expeditiously as possible), and (v) to obtain the satisfaction
of the conditions specified in Article 6, including without limitation the truth
and correctness as of the Closing Date as if made on and as of the Closing Date
of the representations and warranties of such party and the performance and
satisfaction as of the Closing Date of all agreements and conditions to be
performed or satisfied by such party. Without limiting the generality of the
foregoing, the parties acknowledge and agree that the assignment of the FCC
Licenses as contemplated by this Agreement is subject to the prior consent and
approval of the FCC. Within ten (10) business days following the execution of
this Agreement, Citicasters and American shall file with the FCC appropriate
applications for FCC Consents. The parties shall prosecute said applications
with all reasonable diligence and otherwise use reasonable business efforts to
obtain the grant of FCC Consents to such applications as expeditiously as
practicable. If the FCC Consents, or any of them, imposes any condition on
either party hereto, such party shall use reasonable business efforts to comply
with such condition unless compliance would have a material adverse effect upon
it. If reconsideration or judicial review is sought with respect to any FCC
Consent, Citicasters and American shall oppose such efforts to obtain
reconsideration or judicial review (but nothing herein shall be construed to
limit any party's right to terminate this Agreement pursuant to the provisions
of Section 7.1). Notwithstanding anything in this Agreement to the contrary, the
Exchange is expressly conditioned upon the grant of the Final Order as to the
FCC Consents for the assignment of the FCC Licenses for the Stations without any
condition which would have a materially adverse effect upon the party acquiring
such Stations.
(b) The parties shall cooperate with one another in the preparation of
all Returns, questionnaires, applications or other documents regarding any Taxes
or transfer, recording, registration or other fees which become payable in
connection with the Exchange and the other Transactions that are required to be
filed on or before the Closing Date.
(c) Citicasters shall cooperate and use its reasonable business efforts
to cause its independent accountants to reasonably cooperate with American, and
at American's expense, in order to enable American to have Citicasters and
Citicasters' or American's independent accountants prepare audited financial
statements for the Citicasters Station described in Section 6.2(d). Citicasters
represents and warrants that such financial statements will have been prepared
in accordance with GAAP applied on a basis consistent with past practices and
will present fairly the financial condition and results of operation of the
Citicasters Station. Without limiting the generality of the foregoing,
Citicasters agrees that it will (i) consent to the use of such audited financial
statements in any registration statement or other document filed by American or
any of its Affiliates under the Securities Act or the Exchange Act and (ii)
execute and deliver, and cause its officers to execute and deliver, such
"representation" letters as are customarily delivered in connection with audits
and as American's or Citicasters' independent accountants may reasonably request
under the circumstances. American shall cooperate and use its reasonable
business efforts to cause its independent accountants to reasonably cooperate
with Citicasters, and at Citicasters' expense, in order to enable Citicasters to
have American and American's or Citicasters' independent accountants prepare
audited and unaudited financial statements for the American Stations described
in Section 6.3(d). American represents and warrants that such financial
statements will have been prepared in accordance with GAAP applied on a basis
consistent with past practices and will present fairly the financial condition
and results of operation of the American Stations. Without limiting the
generality of the foregoing, American agrees that it will (i) consent to the use
of such financial
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statements in any registration statement or other document filed by Citicasters
(or any of its Affiliates) under the Securities Act or the Exchange Act and (ii)
execute and deliver, and cause its officers to execute and deliver, such
"representation" letters as are customarily delivered in connection with audits
and as Citicasters' or American's independent accountants may reasonably request
under the circumstances.
(d) The parties acknowledge and agree that they will in good faith
continue discussions with regard to the negotiation, execution and delivery of a
time brokerage agreement pursuant to which American would time broker the
Citicasters Station (the "Citicasters Station TBA"), and a time brokerage
agreement pursuant to which Citicasters would time broker each of the American
Stations (the "American Stations TBA"). Anything in this Agreement to the
contrary notwithstanding, including without limitation any provision of Articles
3 and 4 and Sections 6.2 and 6.3, (i) Citicasters shall not be liable in any
respect to the extent any of its representations and warranties contained in
Article 3, and American shall not be liable in any respect to the extent any of
its representations and warranties contained in Article 4, are not true and
correct in any material respect on and as of the Closing Date due solely to the
operation of the other party under the Citicasters Station TBA and the American
Stations TBA, respectively, (ii) Citicasters and American shall not be liable in
any respect to the extent any of its covenants contained in Article 5 are
breached in any material respect on and as of the Closing Date due solely to the
operation of the other party under the Citicasters Station TBA and the American
Stations TBA, respectively, (iii) the conditions set forth in Sections 6.2(f)
and 6.3(f) shall not be deemed to be not satisfied as a result of any action or
failure to act of American pursuant to the provisions of the Citicasters Station
TBA and of Citicasters pursuant to the provisions of the American Stations TBA,
respectively, and (iv) the certificates to be delivered to American and
Citicasters pursuant to the provisions of Section 6.2(c) and 6.3(c),
respectively, shall not be required to address any of such representations and
warranties that are not true and correct in any material respect or any of such
covenants that are breached in any material respect on and as of the Closing
Date due to the operation of the other party under the TBA Agreements.
(e) Within thirty (30) days after the execution of this Agreement,
American shall, at its expense, (i) commission a qualified title company to
prepare and provide to Citicasters a preliminary title report with respect to
the American Real Property (the "Preliminary Title Report"), and promptly
provide a copy of the Preliminary Title Report to Citicasters, together with
complete copies of all documents relating to the title exceptions referred to in
the Preliminary Title Report and (ii) commission a qualified surveyor (licensed
in New York) to prepare and provide to Citicasters hereto a survey ("Survey") of
the American Real Property depicting the location of all title exceptions.
Citicasters shall have the right to disapprove of any title exceptions or survey
exceptions (whether nor not disclosed on the Preliminary Title Report) which in
its reasonable business judgment have a material adverse impact on the title to
the American Real Property or its intended use and shall notify American of any
such disapproval within ten (10) business days after its receipt of both the
Preliminary Title Report and the Survey. All title exceptions set forth in the
Preliminary Title Report and any supplemental reports or updates to the
Preliminary Title Report and not disapproved within the time periods provided
herein shall constitute "Permitted Title Exceptions". Prior to the Closing,
American shall, at its expense, remove or cause to be removed all disapproved
exceptions relating to the American Real Property (the "Disapproved Matters")
or, in the alternative, obtain title insurance in a form reasonably satisfactory
to Citicasters insuring against the effect of
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such Disapproved Matters; provided, however, that American shall not be
obligated to spend more than $150,000 in its attempt to remove or insure over
any such Disapproved Matters (other than monetary Liens which shall be required
to be removed regardless of the amount thereof). American shall notify
Citicasters within ten (10) days after receipt of the notice of Disapproved
Matters whether it intends to remove the same. If American is unable to remove
or endorse over any such Disapproved Matters, or if American exercises its right
not to remove one or more Disapproved Matters, Citicasters may elect (i) to
terminate this Agreement or (ii) to waive such Disapproved Matters (such
Disapproved Matters shall then be deemed to be Permitted Title Exceptions), in
which event Citicasters shall receive a credit at the Closing in the amount (up
to the positive difference, if any, between (x) $150,000 and (y) the amount
theretofore expended by American pursuant to the provisions of this Section
5.2(e) ) reasonably necessary to remove or endorse over the Disapproved Matters
or, if the Disapproved Matters cannot be removed or endorsed over, to compensate
it for the reduction in value of such American Real Property resulting from such
Disapproved Matters.
(f) Within thirty (30) days after the execution of this Agreement, each
of American and Citicasters may, at its sole expense, commission a qualified
engineering firm to conduct a Phase I environmental study of the Citicasters
Real Property or the American Real Property, respectively (the study done by
American on such Citicasters Real Property is hereinafter called the "American
Study"; and the study done by Citicasters on the American Real Property is
hereinafter called the "Citicasters Study"). If American promptly notifies
Citicasters in writing that the American Study discloses a material
environmental liability constituting a breach of the representations and
warranties of Citicasters contained in Section 3.15 without regard to any
knowledge qualifiers contained therein, Citicasters shall promptly commence
remedial action at its expense to cure the condition giving rise to such
liability and shall use its reasonable business efforts to cure such condition
prior to the Closing. If Citicasters promptly notifies American in writing that
the Citicasters Study discloses a material environmental liability constituting
a breach of the representations and warranties of American contained in Section
4.15 without regard to any knowledge qualifiers contained therein, American
shall promptly commence remedial action at its expense to cure the condition
giving rise to such liability and shall use its reasonable business efforts to
cure such condition prior to the Closing. Notwithstanding the foregoing, neither
American nor Citicasters shall not obligated to spend more than $150,000 in its
attempt to cure such condition. If, notwithstanding the use of its reasonable
business efforts, American or Citicasters is unable prior to the Closing to cure
any such condition, the party to whom the Real Property with such material
environmental liability is to be conveyed may elect (i) to terminate this
Agreement or (ii) to waive such environmental liability, in which event the
waiving party shall receive a credit at the Closing in the amount (up to the
positive difference, if any, between (x) $150,000 and (y) the amount theretofore
expended by the other party pursuant to the provisions of this Section 5.2(f) )
reasonably necessary to cure such environmental liability or, if such
environmental liability cannot be cured, to compensate it for the reduction in
value of such Real Property resulting from such environmental liability.
(g) Within thirty (30) days after the execution of this Agreement, each
of American and Citicasters may, at its sole expense, do a study to determine,
to such party's reasonable satisfaction, that services for utilities including,
without limitation, water and sewer service, telephone service, electric and/or
gas service and sanitary services are sufficient to service the Citicasters Real
Property or the American Real Property, as the case may be, and any Real
Property subject to the American
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Leases. If either party notifies the other within such thirty-day period that
the utility service is not sufficient for its reasonable needs, then the party
receiving such notice shall promptly commence remedial action at its expense to
cure such insufficiency and shall use its reasonable business efforts to cure
such insufficiency prior to the Closing. Notwithstanding the foregoing, neither
American nor Citicasters shall not obligated to spend more than $150,000 in its
attempt to cure such insufficiency. If, notwithstanding the use of its
reasonable business efforts, American or Citicasters is unable prior to the
Closing to cure any such insufficiency, the party to whom the Real Property with
such insufficiency is to be conveyed may elect to waive such insufficiency in
which event the waiving party shall receive a credit at the Closing in the
amount (up to the positive difference, if any, between (x) $150,000 and (y) the
amount theretofore expended by the other party pursuant to the provisions of
this Section 5.2(g)) reasonably necessary to cure such insufficiency or, if such
insufficiency cannot be cured, to compensate it for the reduction in value of
such Real Property resulting from such insufficiency.
(h) Within thirty (30) days after the execution of this Agreement, each
of American and Citicasters may, at its sole expense, commission a reputable
engineer to conduct an inspection of the Citicasters Assets and or the American
Assets, as the case may be (the inspection done by American on the Citicasters
Assets is hereinafter called the "American Inspection"; and the inspection done
by Citicasters on the American Assets is hereinafter called the "Citicasters
Inspection"). If American notifies Citicasters in writing within such thirty-day
period that the American Inspection discloses a condition that constitutes a
breach of the representations of Citicasters contained in Section 3.5(b) or 3.7,
Citicasters shall promptly commence remedial action at its expense to cure the
condition and shall use its reasonable business efforts to cure such condition
prior to the Closing. If Citicasters notifies American in writing within such
thirty-day period that the Citicasters inspection discloses a condition that
constitutes a breach of the representations of American contained in Section
4.5(b) or 4.7, American shall promptly commence remedial action at its expense
to cure the condition and, use its reasonable business efforts to cure such
condition prior to the Closing. Notwithstanding the foregoing, neither American
nor Citicasters shall not obligated to spend more than $150,000 in its attempt
to cure such condition. If, notwithstanding the use of its reasonable business
efforts, American or Citicasters is unable prior to the Closing to cure any such
condition, the party to whom the Assets with such condition are to be conveyed
may elect (i) to terminate this Agreement or (ii) to waive such condition, in
which event the waiving party shall receive a credit at the Closing in the
amount (up to the positive difference, if any, between (x) $150,000 and (y) the
amount theretofore expended by the other party pursuant to the provisions of
this Section 5.2(h) ) reasonably necessary to cure such condition or, if such
condition cannot be cured, to compensate it for the reduction in value of such
Real Property resulting from such condition.
(i) Anything in Sections 5.2(e) through (h) to the contrary
notwithstanding, in the event (a) the amount required to remove or insure over
any Disapproved Matters or cure any condition or insufficiency referred to in
those sections would be more than $150,000, (b) the party required to remove or
insure over any such Disapproved Matters or cure any such condition or
insufficiency is not willing to spend the additional amounts required to do so,
and (c) the other party is not willing to waive such matters, the parties shall
negotiate in good faith in an effort to resolve the issues prior to terminating
this Agreement.
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5.3 Public Announcements. Each party shall consult with the other
before issuing any press release or otherwise making any public statements with
respect to this Agreement, the Exchange or any other Transaction and shall not
issue any such press release or make any such public statement without the prior
consent of the other, which consent shall not be unreasonably withheld, or
delayed or conditioned. Notwithstanding the foregoing, each party acknowledges
and agrees that the other party may, without the prior consent of the other,
issue such press releases or make such public statements as may be required by
Applicable Law, in which case, to the extent practicable, the party proposing to
make such press release or public statement will consult in advance with the
other regarding the nature, extent and form of such press release or public
statement.
5.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be likely to cause (i) any
representation or warranty made by it contained in this Agreement (and, in
addition in the case of American, of Lincoln in the Lincoln Agreement) to be
untrue or inaccurate in any respect such that one or more of the conditions of
Closing might not be satisfied, or (ii) any covenant, condition or agreement
made by it contained in this Agreement (and, in addition in the case of
American, of Lincoln in the Lincoln Agreement) not to be complied with or
satisfied, or (iii) any change to be made in the Citicasters Disclosure Schedule
or the American Disclosure Schedule, as the case may be, in any respect such
that one or more of the conditions of Closing might not be satisfied, and any
failure made by it (and, in addition in the case of American, of Lincoln in the
Lincoln Agreement) to comply with or satisfy, or be able to comply with or
satisfy, any covenant, condition or agreement to be complied with or satisfied
by it hereunder (or thereunder) in any respect such that one or more of the
conditions of Closing might not be satisfied; provided, however, that the
delivery of any notice pursuant to this Section shall not limit or otherwise
affect the remedies available hereunder to the party receiving such notice.
5.5 No Solicitation. Neither party shall, nor shall it permit any
Affiliate or any of its Representatives (including, without limitation, any
investment banker, broker, finder, attorney or accountant retained by it) to,
initiate, solicit or facilitate, directly or indirectly, any inquiries or the
making of any proposal with respect to any Alternative Transaction, engage in
any discussions or negotiations concerning, or provide to any other Person any
information or data relating to, it or any Affiliate for the purposes of, or
otherwise cooperate in any way with or assist or participate in, or facilitate
any inquiries or the making of any proposal which constitutes, or may reasonably
be expected to lead to, a proposal to seek or effect any Alternative
Transaction, or agree to or endorse any Alternative Transaction. The provisions
of this Section shall apply to each of American's Subsidiaries and Citicasters'
Subsidiaries.
5.6 Conduct of Business by Citicasters Pending the Closing. Except as
otherwise contemplated by this Agreement, and subject to American's time
brokering of the Citicasters Station pursuant to the provisions of the
Citicasters Station TBA, after the date hereof and prior to the Closing Date or
earlier termination of this Agreement, unless American shall otherwise agree in
writing, Citicasters shall, and shall cause its Subsidiaries, to the extent
relating to the Citicasters Station or the Citicasters Assets, to:
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(a) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice;
(b) use all reasonable business efforts to preserve intact
their respective business organizations and goodwill, keep available
the services of their respective present general managers, on-air
personalities and other key employees, and preserve the goodwill and
business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement;
(c) maintain with financially responsible insurance companies
insurance on their respective tangible assets and their respective
businesses in such amounts and against such risks and losses as are
consistent with past practice;
(d) maintain levels of advertising, marketing and promotion
efforts and expenditures consistent with past practices;
(e) (i) operate the Citicasters Station in conformity with the
Citicasters FCC Licenses on a basis consistent with past practice and
any special temporary authority or program test authority issued
thereunder, the FCA and the rules and regulations of any other
Authority with jurisdiction over the Citicasters Station, and (ii) take
all actions necessary to maintain the Citicasters FCC Licenses;
(f) refrain from changing the frequency or format of the
Citicasters Station or making any material changes in the Citicasters
Station's studio or other structures, except to the extent required by
the FCA or the rules and regulation of the FCC;
(g) not make any material changes in the broadcast hours or in
the percentage or types of programming broadcast by the Citicasters
Station, or make any other material changes in the Citicasters
Station's programming policies, except such changes as in the good
faith judgment of Citicasters are required by the public interest;
(h) not (i) dispose of any of the Citicasters Assets owned by
Citicasters or used in the operation of the Citicasters Station (other
than for the disposition in the ordinary course of business of
immaterial assets that are of no further use to the Citicasters Station
or assets that are replaced with assets of like kind and quality); (ii)
modify, change in any material respect or enter into any Material
Agreement relating to the business of the Citicasters Station; or (iii)
fail to maintain the Citicasters Personal Property in a manner
consistent with generally accepted standards of good engineering
practice and in a state of good repair and maintenance and operating
condition;
(i) notify American promptly if the Citicasters Station's
normal broadcast transmissions are interrupted or impaired for (i)
thirty (30) minutes or more daily for a period of five (5) consecutive
days or during any seven (7) days within any period of thirty (30)
consecutive days (except for normal maintenance) or (ii) a period of
six (6) continuous hours or more and promptly take any actions
reasonably requested to remedy promptly the same;
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(j) not create, assume or permit to exist any Lien upon any of
the Citicasters Assets or the Citicasters Station, except for (i)
Permitted Liens and (ii) other Liens, if any, set forth on Section
3.5(b) of the Citicasters Disclosure Schedule (which Liens shall be
released prior to Closing); and
(k) not waive any material right relating to the Citicasters
Station.
5.7 Conduct of Business by American Pending the Closing. Except as
otherwise contemplated by this Agreement, and subject to Citicasters' time
brokering of the American Stations pursuant to the American Stations TBA, unless
Citicasters shall otherwise agree in writing, (i) after the date hereof and
prior to the consummation of the transactions contemplated by the Lincoln
Agreement or the earlier termination of this Agreement, American shall, to the
extent permitted by the Lincoln Agreement, cause Lincoln, and (ii) from and
after the date American acquires the American Stations and prior to the Closing
Date or earlier termination of this Agreement, American shall, and shall cause
its Subsidiaries, to the extent relating to any of the American Stations or the
American Assets, to:
(a) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice;
(b) use all reasonable business efforts to preserve intact
their respective business organizations and goodwill, keep available
the services of their respective present general managers, on-air
personalities and other key employees, and preserve the goodwill and
business relationships with customers and others having business
relationships with them and not engage in any action, directly or
indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement;
(c) maintain with financially responsible insurance companies
insurance on their respective tangible assets and their respective
businesses in such amounts and against such risks and losses as are
consistent with past practice;
(d) maintain levels of advertising, marketing and promotion
efforts and expenditures consistent with past practices;
(e) (i) operate each of the American Stations in conformity
with the American FCC Licenses on a basis consistent with past practice
and any special temporary authority or program test authority issued
thereunder, the FCA and the rules and regulations of any other
Authority with jurisdiction over any of the American Stations and (ii)
take all actions necessary to maintain the American FCC Licenses;
(f) refrain from changing the frequency or format of any
American Station or making any material changes in any American
Station's studio or other structures, except to the extent required by
the FCA or the rules and regulation of the FCC;
(g) not make any material changes in the broadcast hours or in
the percentage or types of programming broadcast by the American
Stations, or make any other material
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changes in any of the American Stations's programming policies, except
such changes as in the good faith judgment of American are required by
the public interest;
(h) not (i) dispose of any of the American Assets owned by
American or used in the operation of any of the American Stations
(other than for the disposition in the ordinary course of business of
immaterial assets that are of no further use to such Station or assets
that are replaced with assets of like kind and quality); (ii) modify,
change in any material respect or enter into any Material Agreement
relating to the business of any of the American Stations; or (iii) fail
to maintain the American Personal Property in a manner consistent with
generally accepted standards of good engineering practice and in a
state of good repair and maintenance and operating condition;
(i) notify Citicasters promptly if any American Station's
normal broadcast transmissions are interrupted or impaired for (i)
thirty (30) minutes or more daily for a period of five (5) consecutive
days or during any seven (7) days within any period of thirty (30)
consecutive days (except for normal maintenance) or (ii) a period of
six (6) continuous hours or more and promptly take any actions
reasonably requested to remedy promptly the same;
(j) not create, assume or permit to exist any Lien upon any of
the American Assets or any of the American Stations, except for (i)
Permitted Liens and (ii) other Liens, if any, set forth on Section
4.5(a) or 4.5(b) of the American Disclosure Schedule (which Liens shall
be released prior to Closing); and
(k) not waive any material rights relating to the American
Stations.
5.8 Risk of Loss. The risk of loss or damage to any of the Assets prior
to the Closing Date, which is not the responsibility at the time of such loss or
damage of the acquiring party under the express terms of the applicable TBA,
shall be upon the transferring party. In the event of any such loss or damage
for which a transferring party is responsible, it shall repair, replace and
restore any such damaged or lost Asset substantially to its prior condition as
soon as possible and in no event later than forty-five (45) days (or such longer
period as is reasonable under the circumstances) following the loss or damage;
provided, however, that in the event any such loss or damage of the Assets
exists on the Closing Date, then, notwithstanding any other provision of this
Agreement, the acquiring party at is option may extend the Closing Date for a
period of up to sixty (60) days until such time as the transferring party shall
have repaired, replaced and restored any such damaged or lost Asset
substantially to its prior condition; alternatively, at the request of the
acquiring party, the parties shall negotiate in good faith to determine an
equitable adjustment in the terms of the Exchange (including the payment of cash
by the transferring party) to cover any such loss or damage and consummate the
Exchange on the Closing Date.
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ARTICLE 6
CLOSING CONDITIONS
6.1 Conditions to Obligations of Each Party to Effect the Exchange. The
respective obligations of each party to effect the Exchange shall, except as
hereinafter provided in this Section, be subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
waived by written agreement of the parties hereto, in whole or in part, to the
extent permitted by Applicable Law:
(a) The acquisition of the American Stations, pursuant to the
consummation of the transactions contemplated by the Lincoln Agreement,
shall have occurred without the waiver by American of any material
condition to such consummation which could have a material adverse
effect on the American Stations or the American Assets, unless either
(i) American shall have agreed to indemnify and hold harmless
Citicasters with respect to the consequences of such waiver on terms
reasonably satisfactory to American and Citicasters, or (ii) in the
event the subject matter of such waiver is such that indemnification is
not capable of providing Citicasters with substantially comparable
benefits it would have received had such waiver not been required, the
parties shall have agreed to an adjustment in the terms of the
Exchange, which they agree to negotiate in good faith;
(b) As of the Closing Date, no Legal Action shall be pending
before or threatened in writing by any Authority seeking to enjoin,
restrain, prohibit or make illegal or to impose any materially adverse
conditions in connection with, the consummation of the Exchange and the
other Transactions, or which might, in the reasonable business judgment
of American or Citicasters, have a material adverse effect on the
Assets and Stations to be acquired by it, it being understood and
agreed that a written request by any Authority for information with
respect to the Exchange or any other Transaction, which information
could be used in connection with such Legal Action, shall not in itself
be deemed to be a threat of any such Legal Action; and
(c) All authorizations, consents, waivers, orders or approvals
required to be obtained from all Authorities, and all Governmental
Filings required to be made by American and Citicasters with any
Authority, prior to the consummation of the Exchange and the other
Transactions, shall have been obtained from, and made with, the FCC and
all other required Authorities, except for such authorizations,
consents, waivers, orders, approvals, filings, registrations, notices
or declarations the failure to obtain or make would not, in the
reasonable business judgment of each of the parties, have a material
adverse effect on the Assets and Stations being acquired by such party.
Without limiting the generality of the foregoing, (i) the FCC shall
have issued all necessary consents and approvals in connection with the
transactions contemplated by this Agreement, the same shall have become
Final Orders, and any conditions precedent to the effectiveness of such
Final Orders which are specified therein shall have been satisfied
without any materially adverse effect upon the party acquiring such
Stations, and (ii) (A) Final Judgments shall have been entered with
respect to each of the American Consent Decree and the Citicasters
Consent Decree and
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(B) the U.S. Department of Justice shall have approved the Exchange
pursuant to such Final Judgments.
Anything in this Section or elsewhere in this Agreement to the contrary
notwithstanding,
(i) In the event American is unwilling to consummate the
acquisition of the American Stations pursuant to the Lincoln Agreement
because of a breach of warranty or misrepresentation on the part of
Lincoln or the failure of Lincoln to perform any of its obligations or
agreements thereunder or to satisfy one or more of the conditions to
American's obligations to consummate such acquisition (any such breach,
misrepresentation or failure being herein referred to as a "Lincoln
Breach"), and Citicasters desires American to waive such Lincoln
Breach, whether or not the same could have a material adverse effect on
American, American shall be obligated to waive such Lincoln Breach and
to consummate such acquisition in the event Citicasters shall have
agreed (x) to waive the comparable provisions of this Agreement
(without any adjustment in the amount or form of consideration to be
exchanged hereunder), and (y) (i) to indemnify and hold harmless
American with respect to the consequences of such waiver on terms
reasonably satisfactory to American and Citicasters or (ii) in the
event the subject matter of such waiver is such that indemnification is
not capable of providing American with substantially comparable
benefits it would have received had such waiver not been required, the
parties shall have agreed to a monetary or other payment by Citicasters
to American, which they agree to negotiate in good faith.; and
(ii) American shall not consent to the termination of the
Lincoln Agreement without the prior written consent of Citicasters
which consent shall not unreasonably be withheld, delayed or
conditioned.
6.2 Conditions to Obligations of the American Parties. The obligation
of the American Parties to effect the Exchange shall be subject to the
satisfaction of the following conditions, any or all of which may be waived by
American in writing, in whole or in part, to the extent permitted by Applicable
Law:
(a) Citicasters shall have delivered or cause to be delivered
to American all of the Collateral Documents required to be delivered by
Citicasters to the American Parties at or prior to the Closing pursuant
to the terms of this Agreement; such Collateral Documents shall be
reasonably satisfactory in form, scope and substance to American and
its counsel; and American and its counsel shall have received all
information and copies of all documents, including without limitation
lien searches and records of corporate proceedings, which they may
reasonably request in connection therewith, such documents where
appropriate to be certified by proper corporate officers;
(b) Citicasters shall have furnished American and, at
American's request, any bank or other financial institution providing
credit to American, with favorable opinions, dated the Closing Date of
Xxxxxxx, Head & Xxxxxxx, counsel for Citicasters, and of Xxxxx &
Xxxxxxx, L.L.P., FCC counsel for Citicasters, in each case, in form,
scope and substance reasonably satisfactory to the parties;
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(c) The representations and warranties of Citicasters
contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect
as though made on and as of such date except those which speak as of a
certain date which shall continue to be true and correct as of such
date on the Closing Date; each and all of the covenants, agreements and
conditions to be performed or satisfied by Citicasters hereunder at or
prior to the Closing Date shall have been duly performed or satisfied
in all material respects; and Citicasters shall have furnished American
with such certificates and other documents evidencing the truth of such
representations and warranties and the performance or satisfaction of
the covenants, agreements and conditions as American or its counsel
shall have reasonably requested;
(d) To the extent required of American by Rule 3-05 of
Regulation S-X under the Securities Act, American shall have received
(i) from its or Citicasters' independent accountants a report (which
shall be unqualified as to the scope of the audit, access to the books
and records and the cooperation of management) on the financial
statements (consisting of balance sheets for each of the fiscal years
ended December 31, 1995 and 1996 and statements of operations and cash
flow for each of the three years in the period ended December 31, 1996)
of the Citicasters Station, which financial statements shall have been
prepared in conformity with GAAP and Regulation S-X under the
Securities Act, or (ii) from Citicasters such documentation as shall
enable American's independent accountants to advise American in writing
that they could issue such an unqualified report;
(e) All authorizations, consents, waivers, orders or approvals
required to be obtained pursuant to the provisions of this Agreement
from all Persons (other than Authorities) prior to the consummation of
the Exchange and the other Transactions, including without limitation
those required in order to vest fully in American all right, title and
interest in and to all of the Citicasters Assets and the Citicasters
Station and the full enjoyment thereof shall have been obtained,
without the imposition, individually or in the aggregate of any
condition or requirement which could materially adversely affect the
Citicasters Assets or the Citicasters Station; provided, however, that
with respect to Citicasters Assumable Agreements the parties agree that
they will in good faith discuss and determine which of the Citicasters
Assumable Agreements are so material to the operation of the
Citicasters Station and therefore with respect to which a third party
consent to the assignment thereof will be required as a condition to
Closing, and the same shall be identified on Schedule 6.2(e) of the
Citicasters Disclosure Schedule (with respect to any Citicasters
Assumable Agreement not so identified on Schedule 6.2(e) of the
Citicasters Disclosure Schedule, Citicasters shall use reasonable
efforts to obtain any required third party consents to the assignment
thereof as requested by American, but obtaining such consent shall not
be a condition to Closing);
(f) Between the date of this Agreement and the Closing Date,
there shall not have occurred and be continuing any material adverse
change in the Citicasters Assets or the Citicasters Station; as of the
Closing Date, the FCC Licenses with respect to the Citicasters Station
shall not have been materially and adversely affected by any act, or
failure to act, of Citicasters; and
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(g) Citicasters and American shall have entered into (i) a
real estate lease with respect to the Citicasters Station current
studio site at 0000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx (the "Studio
Lease"), and (ii) a real estate lease with respect to space on the
Citicasters tower site (the "Tower Lease"), and Jacor and American
shall have entered into a right of first refusal agreement with respect
to certain real property located on XxXxxxxxx Avenue, Cincinnati, Ohio
(the "First Refusal Agreement"), in each case, in form, scope and
substance reasonably satisfactory to the parties, including without
limitation embodying the terms and conditions set forth in the Letter
of Intent with respect thereto.
6.3 Conditions to Obligations of Citicasters. The obligation of
Citicasters to effect the Exchange shall be subject to the satisfaction of the
following conditions, any or all of which may be waived by Citicasters in
writing, in whole or in part, to the extent permitted by Applicable Law:
(a) The American Parties shall have delivered or cause to be
delivered to Citicasters all of the Collateral Documents required to be
delivered by the American Parties to Citicasters at or prior to the
Closing pursuant to the terms of this Agreement; such Collateral
Documents shall be reasonably satisfactory in form, scope and substance
to Citicasters and its counsel; and Citicasters and its counsel shall
have received all information and copies of all documents, including
without limitation lien searches and records of corporate proceedings,
which they may reasonably request in connection therewith, such
documents where appropriate to be certified by proper corporate
officers;
(b) The American Parties shall have furnished Citicasters and,
at Citicasters' request, any bank of other financial institution
providing credit to Citicasters or any Subsidiary, with favorable
opinions, dated the Closing Date of Xxxxxxxx & Worcester LLP, counsel
for the American Parties, and of Dow, Xxxxxx & Xxxxxxxxx, FCC counsel
for the American Parties, in each case, in form, scope and substance
reasonably satisfactory to the parties;
(c) The representations and warranties of the American Parties
contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect
as though made on and as of such date except those which speak as of a
certain date which shall continue to be true and correct in all
material respects as of such date on the Closing Date (it being
acknowledged that any representation or warranty of the American
Parties which is qualified by or includes the phrase "as of the time of
the consummation of the transactions contemplated by the Lincoln
Agreement" or similar phrase does not speak as of a certain date, and
shall be true and correct in all material respects at and as of the
Closing Date with the same force and effect as though made on and as of
such date); each and all of the covenants, agreements and conditions to
be performed or satisfied by the American Parties hereunder at or prior
to the Closing Date shall have been duly performed or satisfied in all
material respects; and the American Parties shall have furnished
Citicasters with such certificates and other documents evidencing the
truth of such representations and warranties and the performance or
satisfaction of the covenants, agreements and conditions as Citicasters
or its counsel shall have reasonably requested;
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(d) To the extent required of American by Rule 3-05 of
Regulation S-X under the Securities Act, Citicasters shall have
received (i) from its or American's independent accountants a report
(which shall be unqualified as to the scope of the audit, access to the
books and records and the cooperation of management) on the financial
statements (consisting of balance sheets for each of the fiscal years
ended December 31, 1995 and 1996 and statements of operations and cash
flow for each of the three years in the period ended December 31, 1996)
of the American Stations, which financial statements shall have been
prepared in conformity with GAAP and Regulation S-X under the
Securities Act, or (ii) from the American Parties such documentation as
shall enable Citicasters' independent accountants to advise Citicasters
in writing that they could issue such an unqualified report;
(e) All authorizations, consents, waivers, orders or approvals
required to be obtained pursuant to the provisions of this Agreement
from all Persons (other than Authorities) prior to the consummation of
the Exchange and the other Transactions, including without limitation
those required in order to vest fully in Citicasters all right, title
and interest in and to all of the Americans Assets and the American
Stations and the full enjoyment thereof shall have been obtained,
without the imposition, individually or in the aggregate, of any
condition or requirement which could materially adversely affect the
Americans Assets and the American Stations; provided, however, that
with respect to Americans Assumable Agreements the parties agree that
they will in good faith discuss and determine which of the Americans
Assumable Agreements are so material to the operation of the Americans
Stations and therefore with respect to which a third party consent to
the assignment thereof will be required as a condition to Closing, and
the same shall be identified on Schedule 6.3(e) of the American
Disclosure Schedule (with respect to any American Assumable Agreement
not so identified on Schedule 6.3(e) of the American Disclosure
Schedule, American shall use reasonable efforts to obtain any required
third party consents to the assignment thereof as requested by
Citicasters, but obtaining such consent shall not be a condition to
Closing);
(f) Between the date of this Agreement and the Closing Date,
there shall not have occurred and be continuing any material adverse
change in the American Assets or the American Stations; as of the
Closing Date, the FCC Licenses with respect to the American Stations
shall not have been materially and adversely affected by any act, or
failure to act, of Lincoln or the American Parties.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date:
(a) by mutual consent of Citicasters and American; or
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(b) by either American or Citicasters if (i) any permanent
injunction, decree or judgment by any Authority preventing the
consummation of the Exchange shall have become final and nonappealable
or (ii) the Lincoln Agreement is terminated; or
(c) by Citicasters in the event Citicasters is not in material
breach of its agreements and covenants set forth in this Agreement and
none of its representations or warranties shall have become and
continue to be untrue in any material respect, and either (i) the
Exchange has not been consummated prior to the Termination Date or (ii)
either of the American Parties is in material breach of its agreements
or covenants set forth in this Agreement or any of its representations
or warranties shall have become and continue to be untrue in any
material respect and such breach or untruth exists and is not cured
within the cure period specified in this Section; or
(d) by American in the event neither of the American Parties
is in material breach of its agreements and covenants set forth in this
Agreement and none of their representations or warranties shall have
become and continue to be untrue in any material respect, and either
(i) the Exchange has not been consummated prior to the Termination Date
or (ii) Citicasters is in material breach of its agreements or
covenants set forth in this Agreement or any of its representations or
warranties shall have become and continue to be untrue in any material
respect and such breach or untruth exists and is not cured within the
cure period specified in this Section; or
(e) by Citicasters pursuant to the provisions of Section
5.2(e) or by American or Citicasters pursuant to the provisions of
Section 5.2(f) or (h); or
(f) by American pursuant to the provisions of Section 9.16(a)
or Citicasters pursuant to the provisions of Section 9.16(b).
Neither party shall have the right to terminate this Agreement as a result of
the other party's breach or default unless the terminating party shall have
given the defaulting party thirty (30) business days to cure the default (or
such longer period not in excess of an additional thirty (30) business days as
is, in the reasonable business judgment of the parties, reasonably necessary to
effect such cure so long as the defaulting party is proceeding with due
diligence and best efforts to effect such cure); provided, however, that such
cure period shall not extend the Termination Date.
The term "Termination Date" shall mean December 31, 1997 or such other
date as the parties may, from time to time, mutually agree.
The right of American or Citicasters to terminate this Agreement
pursuant to this Section shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of either party, any Person
controlling any such party or any of their respective Representatives whether
prior to or after the execution of this Agreement.
7.2 Effect of Termination. Except as provided in Sections 5.1 (with
respect to confidentiality), 5.3 and 9.3 and this Section, in the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void, there shall be no liability on
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the part of either party, or any of their respective Affiliates (including
stockholders, officers, directors or Representatives ), to the other and all
rights and obligations of either party shall cease; provided, however, that such
termination shall not relieve (a) either party from liability for any
misrepresentation or breach of any of its warranties, covenants or agreements
set forth in this Agreement or (b) American from liability to Citicasters in the
event the Lincoln Agreement is terminated because of any misrepresentation or
breach by American of any of its representations, warranties, covenants or
agreements set forth in the Lincoln Agreement.
ARTICLE 8
INDEMNIFICATION
8.1 Survival. Except as otherwise provided in Section 2.2(d) and the
last sentence of Section 5.1(a) to the effect that the provisions of Section 2.2
and of such sentence, respectively, shall survive the Closing without
limitation, and except with respect to obligations and liabilities assumed
pursuant to the American Assumable Agreements and the Citicasters Assumable
Agreements, the representations, warranties, covenants and agreements of the
parties contained in or made pursuant to this Agreement or any Collateral
Document shall survive the Closing and shall remain operative and in full force
and effect for a period of (a) two (2) years after the Closing Date or (b) the
applicable statute of limitations in the case of matters arising out of any
breach referred to in Sections 2.3(a), 2.3(b), 3.1(a), 3.1(b), 3.10, 3.15,
4.1(a), 4.1(b), 4.10, 4.15 and 5.2(c) (the "Indemnity Period"), regardless of
any investigation or statement as to the results thereof made by or on behalf of
any party hereto. No claim for indemnification, other than with respect to
fraud, may be asserted after the expiration of the Indemnity Period.
Notwithstanding anything herein to the contrary, any representation, warranty,
covenant and agreement which is the subject of a Claim which is asserted in
writing prior to the expiration of the Indemnity Period shall survive with
respect to such Claim or any dispute with respect thereto until the final
resolution thereof.
8.2 Indemnification. Each party (the "indemnifying party") agrees that
on and after the Closing it shall indemnify and hold harmless the other party
(the "indemnified party") from and against any and all damages, claims, losses,
expenses, costs, obligations and liabilities, including without limitation
liabilities for all reasonable attorneys', accountants' and experts' fees and
expenses including those incurred to enforce the terms of this Agreement or any
Collateral Document (collectively, "Loss and Expense"), suffered, directly or
indirectly, by the indemnified party by reason of, or arising out of:
(a) any breach of representation or warranty made by the
indemnifying party pursuant to this Agreement or any Collateral
Document or any failure by the indemnifying party to perform or fulfill
any of its respective covenants or agreements set forth in this
Agreement or any Collateral Document; or
(b) any Legal Action or other Claim by any third party
relating to the indemnifying party or the ownership or operations of
any of its Assets or the conduct of the business of its Stations to the
extent such Legal Action or other Claim has also resulted in
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a breach of representation or warranty by the indemnifying party
pursuant to this Agreement or any Collateral Document; or
(c) the American Nonassumed Liabilities (in the case of
American being the indemnifying party) and the Citicasters Nonassumed
Liabilities (in the case of Citicasters being the indemnifying party),
including without limitation any Legal Action or other Claim brought or
asserted by any third party; or
(d) the failure to comply with the Bulk Sales Law, if any, of
the State of New York (in the case of American being the indemnifying
party) or the State of Ohio (in the case of Citicasters being the
indemnifying party).
8.3 Limitation of Liability. Notwithstanding the provisions of Section
8.2, after the Closing, each indemnifying party's rights to indemnification
shall be subject to the following limitations: (i) the indemnified party shall
be entitled to recover its Loss and Expense in respect of any Claim only in the
event that the aggregate Loss and Expense for all Claims exceeds, in the
aggregate, $150,000, in which event the indemnified party shall be entitled to
recover all such Loss and Expense, and (ii) in no event shall the aggregate
amount required to be paid by each indemnifying party pursuant to the provisions
of this Section exceed $2,000,000, except for any Loss or Expense arising out of
matters of a nature referred to in Sections 3.1(b) and 4.1(b) as to which the
limitations set forth in this clause (ii) shall not apply. The provisions of the
immediately preceding sentence of this Section with respect to the limitation on
each indemnifying party's obligation to indemnify the indemnified party in
respect of Loss and Expense shall not be applicable to any claims which are
based on fraud or willful or intentional breach of representation or warranty.
8.4 Notice of Claims. If an indemnified party believes that it has
suffered or incurred any Loss and Expense, it shall notify the indemnifying
party promptly in writing, and in any event within the applicable time period
specified in Section 8.1, describing such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any Legal Action
is instituted by a third party with respect to which an indemnified party
intends to claim any liability or expense as Loss and Expense under this
Article, such indemnified party shall promptly notify the indemnifying party of
such Legal Action, but the failure to so notify the indemnifying party shall not
relieve such indemnifying party of its obligations under this Article, except to
the extent such failure to notify materially prejudices such indemnifying
party's ability to defend against such Claim.
8.5 Defense of Third Party Claims. The indemnifying party shall have
the right to conduct and control, through counsel of their own choosing,
reasonably acceptable to the indemnified party, any third party Legal Action or
other Claim, but the indemnified party may, at its election, participate in the
defense thereof at its sole cost and expense; provided, however, that if (a) the
indemnifying party shall fail to defend any such Legal Action or other Claim or
(b) the indemnified party shall have been advised by counsel that there may be
one or more legal defenses available to it which are different from or in
addition to those available to the indemnifying party, then the indemnified
party may defend, through counsel of its own choosing, reasonably acceptable to
the indemnifying party, such Legal Action or other Claim, and (so long as it
gives the indemnifying party at least fifteen (15) days' notice of the terms of
the proposed settlement thereof and permits the indemnifying party to then
undertake the defense thereof) settle such Legal Action
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or other Claim and to recover the amount of such settlement or of any judgment
and the reasonable costs and expenses of such defense. The indemnifying party
shall not compromise or settle any such Legal Action or other Claim without the
prior written consent of the indemnified party, which consent shall not be
unreasonably withheld, delayed or conditioned.
8.6 Exclusive Remedy. Except for fraud or as otherwise provided in
Section 9.5, the indemnification provided in this Article shall be the sole and
exclusive post-Closing remedy available to either party against the other party
for any Claim under this Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto.
9.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, American or Citicasters may extend the time for
the performance of any of the obligations or other acts of the other, waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto, and waive compliance by the other
with any of the agreements, covenants or conditions contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in writing
signed by the party or parties to be bound thereby.
9.3 Fees, Expenses and Other Payments. All costs and expenses, incurred
in connection with any transfer taxes, sales taxes, document stamps or other
charges levied by any Authority in connection with this Agreement, the Exchange
and the other Transactions, shall be borne by American insofar as they related
to the American Stations and the American Assets and by Citicasters insofar as
they relate to the Citicasters Station and the Citicasters Assets. All filing
and similar fees (including without limitation Xxxx-Xxxxx-Xxxxxx filings and FCC
filing fees) shall be borne equally by American and Citicasters. All other costs
and expenses incurred in connection with this Agreement, the Exchange and the
other Transactions, and in compliance with Applicable Law and Contracts as a
consequence hereof and thereof, including without limitation fees and
disbursements of counsel, financial advisors and accountants incurred by the
parties hereto shall be borne solely and entirely by the party which has
incurred such costs and expenses.
9.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, or by
recognized courier service, postage prepaid, (b) sent by telex, telegram,
telecopy or other form of rapid transmission, confirmed by mailing (by first
class or express mail, or by recognized courier service, postage prepaid)
written confirmation at substantially the same time as such rapid transmission,
or (c) personally delivered to the receiving party (which if other than an
individual shall be an officer or other responsible party of the receiving
party). All such notices and communications shall be mailed, sent or delivered
as follows:
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(a) If to American:
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx,
President and Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(b) If to Citicasters:
000 Xxxx 0xx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx, President
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxx, Head & Xxxxxxx
0000 Xxxxx Xxxxx Xxxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx Xxxxx, Esq.
Telecopier No.: (000) 000-0000
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 7, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the posting of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it pursuant to the provisions of, and
subject to the limitations contained in, this Agreement for such breach or
threatened breach.
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9.6 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative, illegal or unenforceable
provision had never been contained herein and such provision reformed so that it
would be valid, operative and enforceable to the maximum extent permitted in
such jurisdiction or in such case. Notwithstanding the foregoing, in the event
of any such determination the effect of which is to affect materially and
adversely either party, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by Applicable Law in an acceptable
manner to the end that the Exchange and the other Transactions are fulfilled and
consummated to the maximum extent possible; provided, however, that in the event
the parties are unable to reach agreement within a reasonable period of time,
under the circumstances, with respect to such modification, this Agreement shall
terminate and be of no further force and effect.
9.7 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
9.8 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.9 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the applicable laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction. Anything in this Agreement to the contrary notwithstanding,
including without limitation the provisions of Article 8, in the event of any
dispute between the parties which results in a Legal Action, the prevailing
party shall be entitled to receive from the non-prevailing party reimbursement
for reasonable legal fees and expenses incurred by such prevailing party in such
Legal Action.
9.10 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as any other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
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9.11 Entire Agreement. This Agreement (together with the Disclosure
Schedules and the other Collateral Documents delivered in connection herewith),
constitutes the entire agreement of the parties and supersedes all prior
agreements and undertakings, both written and oral, between the parties, with
respect to the subject matter hereof, including, except as otherwise provided in
Section 6.2(g), without limitation that certain letter of intent, dated November
5, 1996, between the parties (the "Letter of Intent").
9.12 Assignment. This Agreement shall not be assignable by either party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and by binding upon any successor to any party by operation of
law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it. Without limiting the generality of the immediately
preceding sentence, in the event that either party finds it necessary or is
required to provide to a third party a collateral assignment of their or its
interest in this Agreement and/or any Collateral Documents, the other party will
cooperate with either the party requesting such assignment and any third party,
including but not limited to signing a consent and acknowledgment of such
assignment.
9.13 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any Person any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement,
except as otherwise provided in Section 9.12.
9.14 Mutual Drafting. This Agreement is the result of the joint efforts
of the American Parties and Citicasters, and each provision hereof has been
subject to the mutual consultation, negotiation and agreement of the parties and
there shall be no construction against any party based on any presumption of
that party's involvement in the drafting thereof.
9.15 American Agent for American License. Anything in this Agreement to
the contrary notwithstanding, American License hereby grants American an
irrevocable power of attorney and hereby irrevocably appoints American its agent
for all purposes of this Agreement, including without limitation for the purpose
of executing and delivering extensions of the time for the performance of any of
the obligations or other acts of Citicasters, waivers, terminations or
amendments, and any action taken by American pursuant to such power of attorney
and agency, and any such extension, waiver, termination or amendment executed
and delivered by American, shall be binding upon American License whether or not
it has specifically approved such action or executed such extension, waiver,
termination or amendment.
9.16 Disclosure Schedules.
(a) Citicaster will deliver to American, on or before January 10, 1997,
the Citicasters Disclosure Schedule and all related documents required to be
delivered by Citicasters pursuant to Article 3 of this Agreement. American shall
be permitted, for a period commencing upon its receipt of the completed
Citicasters Disclosure Schedule and related documents and terminating at 11:59
p.m. on January 27, 1997, to terminate this Agreement, if (i) the Citicasters
Disclosure Schedule reveals any condition of which the American Parties are
unaware as of the date of this Agreement
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and/or any breaches of Citicasters' representations, warranties and/or covenants
hereunder (without regard to matters set forth in the Citicasters Disclosure
Schedule), which unknown conditions and/or breaches in the aggregate would have
a material adverse effect on the value of the Citicasters Assets or the
Citicasters Station or on the American Parties' ability to operate the
Citicasters Station as it is currently being operated, or (ii) the parties are
unable to agree upon which Citicasters Material Agreements with respect to which
a third-party consent to the assignment thereof will be a condition to Closing
pursuant to the provisions of Section 6.2(e).
(b) American will deliver to Citicasters on or before January 10, 1997,
the American Disclosure Schedule and all related documents required to be
delivered by American pursuant to Article 4 of this Agreement. Citicasters shall
be permitted, for a period commencing upon its receipt of the completed American
Disclosure Schedule and related documents and terminating at 11:59 p.m. on
January 27, 1997, to terminate this Agreement, if (i) the American Disclosure
Schedule reveals any condition of which Citicasters is unaware as of the date of
this Agreement and/or any breaches of the American Parties' representations,
warranties and/or covenants hereunder (without regard to matters set forth in
the American Disclosure Schedule), which unknown conditions and/or breaches in
the aggregate would have a material adverse effect on the value of the American
Assets or the American Stations or on Citicasters' ability to operate the
American Stations as they are currently being operated, or (ii) the parties are
unable to agree upon which American Material Agreements with respect to which a
third-party consent to the assignment thereof will be a condition to Closing
pursuant to the provisions of Section 6.3(e).
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IN WITNESS WHEREOF, American, American License and Citicasters have
caused this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
American Radio Systems Corporation
By:_____________________________________
Name:
Title:
American Radio Systems License Corp.
By:_____________________________________
Name:
Title:
Citicasters Co.
By:______________________________________
Name:
Title:
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APPENDIX A
DEFINITIONS
Accounts Receivable shall mean any and all rights to the payment of
money or other forms of consideration of any kind at any time now or hereafter
owing or to be owing to American or Citicasters, as the case may be,
attributable to the sale of time or talent on one of its Stations (whether
classified under the Uniform Commercial Code of any state as accounts, contract
rights, chattel paper, general intangibles or otherwise).
adverse, adversely, shall mean any Event which has, or is reasonably
likely to, (a) adversely affect the validity or enforceability of this Agreement
or the likelihood of consummation of the Exchange, or (b) adversely affect the
ownership or operation of the Citicasters Assets or the American Assets or the
conduct of the business of the Citicasters Station or the American Stations, as
the case may be, or (c) impair Citicasters' or American's, as the case may be,
ability to fulfill its obligations under the terms of this Agreement, or (d)
adversely affect the aggregate rights and remedies of American or Citicasters,
as the case may be, under this Agreement. Notwithstanding the foregoing, and
anything in this Agreement to the contrary notwithstanding, neither any general
business or economic factor nor any Event affecting the radio broadcasting
industry generally shall be deemed to constitute an adverse change, have an
adverse effect or to adversely affect or effect.
Affiliate, Affiliated shall mean, with respect to any Person, any other
Person at the time directly or indirectly controlling, controlled by or under
direct or indirect common control with such Person.
Agreement shall mean this Agreement as originally in effect, including
this Appendix A, the American Disclosure Schedule, the Citicasters Disclosure
Schedule and all exhibits hereto, and as any of the same may from time to time
be supplemented, amended, modified or restated in the manner herein or therein
provided.
Alternative Transaction shall mean a transaction or series of related
transactions (other than the Exchange and the other Transactions) resulting in
(a) any merger or consolidation of either party, regardless of whether it is the
surviving Entity unless the surviving Entity remains obligated under this
Agreement to the same extent as it was, or (b) any sale or other disposition of
all or any substantial part of the Assets owned by it or either of the Stations
owned or, in the case of American, to be owned by it.
American shall have the meaning given to it in the Preamble.
American Accounts Receivable shall mean the Accounts Receivables of
American arising in connection with the ownership or operation of any of the
American Assets or the conduct of the business of any of the American Stations
prior to the applicable Cut-off Date.
American Assets shall mean (a) all assets used or held for use in the
ownership or operation of or the conduct of the business of any of the American
Stations, including without limitation the American Real Property, the American
Personal Property, the American Private Authorizations, the
American Governmental Authorizations (including without limitation the American
FCC Licenses), the American Intangible Assets and the American Assumable
Agreements, and the logs, public files and other books, records, files and
documents relating to any of the American Stations, but excluding the American
Excluded Assets, and (b) the sum of Sixteen Million Dollars ($16,000,000).
American Assumable Agreements shall mean the American Private
Authorizations, the American Trade Agreements, the American Leases and the
American Other Contracts.
American Consent Decree shall have the meaning given to it in the third
Whereas paragraph.
American Disclosure Schedule shall mean the American Disclosure
Schedule dated as of the date of this Agreement delivered by American and
American License to Citicasters.
American Employee Plans shall have the meaning given to it in Section
4.11(a).
American Excluded Assets shall mean (i) all cash and cash equivalents
of American (ii) all American Accounts Receivable, (iii) the corporate names of
American, and its books, records and other documents relating to its corporate
existence, organization and capitalization, (iv) all books and records of
American relating to any of the American Stations and which American is required
by Applicable Law to retain, subject to the right of the other party to have
access and to copy for a period of three (3) years from the Closing Date, (v)
the American Employee Plans, (vi) all insurance policies relating to the
American Assets, (vii) software programs and other assets used to provide
certain financial and accounting services for any of the American Stations, and
(viii) any and all products, profits and proceeds of, and including without
limitation any Claims with respect to, any of the foregoing.
American FCC Licenses shall have the meaning given to it in the second
Whereas paragraph.
American Financial Statements shall have the meaning given to it in
Section 4.2(a).
American Governmental Authorizations shall have the meaning given to it
in Section 4.7(a).
American Inspection shall have the meaning given to it in Section
5.2(h).
American Intangible Assets shall have the meaning given to it in
Section 4.8.
American Leases shall have the meaning given to it in Section 4.5(a).
American License shall have the meaning given to it in the Preamble.
American Material Agreements shall have the meaning given to it in
Section 4.12.
American Nonassumed Liabilities shall have the meaning given to it in
Section 2.3(b).
American Other Contracts shall mean (a) all American Material
Agreements set forth on Section 4.12 of the American Disclosure Schedule, (b)
all Contracts of American for the sale of time
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on any American Station or on WNVE-AM (for which American sells on time pursuant
to a Joint Sales Agreement) for cash entered into in the ordinary course of
business consistent with prior practice, and (c) Contracts not required to be
listed on Section 4.12 of the American Disclosure Schedule that have been
entered into in the ordinary course of business.
American Owned Real Property shall have the meaning given to it in
Section 4.5(e).
American Parties shall have the meaning given to it in the Preamble.
American Personal Property shall mean all items of Personal Property,
used or held for use in the ownership or operation or the conduct of the
business of any of the American Stations.
American Private Authorizations shall mean all Private Authorizations
obtained or held for use in the ownership or operation or the conduct of the
business of any of the American Stations.
American Proration Schedule shall have the meaning given to it in
Section 2.3(e).
American Real Property shall have the meaning given to it in Section
4.5(a).
American Station Employees shall have the meaning given to it in
Section 4.11(b).
American Stations shall have the meaning given to it in the second
Whereas paragraph.
American Stations TBA shall have the meaning given to it in Section
5.2(d).
American Study shall have the meaning given to it in Section 5.2(f).
American Trade Agreements shall mean all Trade Agreements in effect on
the date hereof or entered into on or prior to the Cut-Off Date that relate to
the ownership or operation of or the conduct of the business of any of the
American Stations.
American's knowledge (including the term "to the knowledge, information
and belief of American") means the actual knowledge of any executive officer of
either of the American Parties or any General Manager of any American Station.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitation all federal and state securities and
Environmental Laws, to which a Person is subject or by which it or any of its
business or operations is subject or any of its property or assets is legally
bound.
Appraisals shall have the meaning given to it in Section 2.2(a).
Assets shall mean the American Assets in the case of American and the
Citicasters Assets in the case of Citicasters.
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Authority shall mean any governmental authority, whether
administrative, executive, judicial, legislative or other, or any combination
thereof, including without limitation any federal, state, territorial, county,
municipal or other government or governmental agency, arbitrator, authority,
board, body, branch, bureau, central bank or comparable agency or Entity,
commission, corporation, court, department, instrumentality, master, mediator,
panel, referee, system or other political unit or subdivision or other Entity of
any of the foregoing, whether domestic or foreign.
Citicasters shall have the meaning given to it in the Preamble.
Citicasters Accounts Receivable shall mean the Accounts Receivables of
Citicasters arising in connection with the ownership or operation of any of the
Citicasters Assets or the conduct of the business of the Citicasters Station
prior to the applicable Cut-off Date.
Citicasters Assets shall mean all assets used or held for use in the
ownership or operation of or the conduct of the business of the Citicasters
Station by Citicasters or any Entity Affiliated with Citicasters, including
without limitation the Citicasters Personal Property, the Citicasters Private
Authorizations, the Citicasters Governmental Authorizations (including without
limitation the Citicasters FCC Licenses), the Citicasters Intangible Assets and
the Citicasters Assumable Agreements, and the logs, public files and other
books, records, files and documents relating to the Citicasters Station, but
excluding the Citicasters Excluded Assets.
Citicasters Assumable Agreements shall mean the Citicasters Private
Authorizations, the Citicasters Trade Agreements, the Citicasters Leases and the
Citicasters Other Contracts.
Citicasters Consent Decree shall have the meaning given to it in the
third Whereas paragraph.
Citicasters Disclosure Schedule shall mean the Citicasters Disclosure
Schedule dated as of the date of this Agreement delivered by Citicasters to
American.
Citicasters Employee Plans shall have the meaning given to it in
Section 3.11(a).
Citicasters Excluded Assets shall mean (i) all cash and cash
equivalents of Citicasters (ii) all Citicasters Accounts Receivable, (iii) the
corporate names of Citicasters, and its books, records and other documents
relating to its corporate existence, organization and capitalization, (iv) all
books and records of Citicasters relating to the Citicasters Station and which
Citicasters is required by Applicable Law to retain, subject to the right of the
other party to have access and to copy for a period of three (3) years from the
Closing Date, (v) the Citicasters Employee Plans, (vi) all insurance policies
relating to the Citicasters Assets, (vii) assets comprising the traffic and
accounting computer systems), (viii) software programs and other assets used to
provide certain financial and accounting services for any of the Citicasters
Stations, and (ix) any and all products, profits and proceeds of, and including
without limitation any Claims with respect to, any of the foregoing.
Citicasters FCC Licenses shall have the meaning given to it in the
first Whereas paragraph.
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Citicasters Financial Statements shall have the meaning given to it in
Section 3.2(a).
Citicasters Governmental Authorizations shall have the meaning given to
it in Section 3.7(a).
Citicasters Inspection shall have the meaning given to it in Section
5.2(h).
Citicasters Intangible Assets shall have the meaning given to it in
Section 3.8.
Citicasters Material Agreements shall have the meaning given to it in
Section 3.12.
Citicasters Nonassumed Liabilities shall have the meaning given to it
in Section 2.3(a).
Citicasters Other Contracts shall mean (a) all Citicasters Material
Agreements set forth on Section 3.12 of the Citicasters Disclosure Schedule, (b)
all Contracts for the sale of time on the Citicasters Station for cash entered
into in the ordinary course of business consistent with prior practice, and (c)
Contracts not required to be listed on Section 3.12 of the Citicasters
Disclosure Schedule that have been entered into in the ordinary course of
business.
Citicasters Personal Property shall mean all items of Personal
Property, used or held for use in the ownership or operation or the conduct of
the business of the Citicasters Station.
Citicasters Private Authorizations shall mean all Private
Authorizations obtained or held for use in the ownership or operation or the
conduct of the business of the Citicasters Station.
Citicasters Proration Schedule shall have the meaning given to it in
Section 2.3(d).
Citicasters Real Property shall have the meaning given to it in Section
3.5(a).
Citicasters Station shall have the meaning given to it in the first
Whereas paragraph.
Citicasters Station Employees shall have the meaning given to it in
Section 3.11(b).
Citicasters Station TBA shall have the meaning given to it in Section
5.2(d).
Citicasters Study shall have the meaning given to it in Section 5.2(f).
Citicasters Trade Agreements shall mean all Trade Agreements in effect
on the date hereof or entered into on or prior to the Cut-Off Date that relate
to the ownership or operation of or the conduct of the business of the
Citicasters Station.
Citicasters' knowledge (including the term "to the knowledge,
information and belief of Citicasters") means the actual knowledge of any
Citicasters executive officer or any General Manager of the Citicasters Station.
Cincinnati Proration Schedule shall have the meaning given to it in
Section 2.3(e).
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Claims shall mean any and all Legal Actions and claims, pending or
threatened, and judgments of whatever kind and nature relating debts,
liabilities, obligations, losses, damages, deficiencies, assessments and
penalties, together with thereto, and all fees, costs, expenses and
disbursements (including without limitation reasonable attorneys' and other
legal fees, costs and expenses) relating to any of the foregoing.
Closing shall have the meaning given to it in Section 2.4.
Closing Date shall have the meaning given to it in Section 2.4.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean the American Stations TBA, the First
Refusal Agreement, the Citicasters Station TBA, the Studio Lease, the Tower
Lease, the conveyancing documents required to vest in the acquiring party the
Assets and Stations to be acquired by it pursuant to the Exchange (including
without limitation a General Conveyance, Xxxx of Sale, Assignment and
Assumption, assignments and assumptions of the Citicasters Assumable Agreements
and American Assumable Agreements, assignments and assumptions of Intangible
Assets), and any agreement, certificate, contract, instrument, notice, opinion
or other document required to be delivered or delivered pursuant to the
provisions of this Agreement or any of the foregoing.
Collection Period shall have the meaning given to it in Section 2.5.
Contract, Contractual Obligation shall mean any agreement, arrangement,
commitment, contract, covenant, indemnity, undertaking or other obligation or
liability which involves the ownership and operation of the American Assets or
the Citicasters Assets or the conduct of the business of any of the American
Stations or the Citicasters Station.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Cut-off Date shall mean (i) with respect to any Contract to be assigned
and the rights and obligations to be assumed pursuant to either TBA (including
all items of revenue and expense relating to such Contract), the applicable TBA
Date for such TBA and (ii) in all other cases, the Closing Date.
Disapproved Matters shall have the meaning given to it in Section
5.2(e).
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Disclosure Schedule shall mean the American Disclosure Schedule or the
Citicasters Disclosure Schedule, as the case may be.
Encumber shall mean to suffer, accept, agree to or permit the
imposition of a Lien.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law shall mean any Law relating to or otherwise imposing
liability or standards of conduct concerning pollution or protection of the
environment, including without limitation Laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata) or otherwise relating to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances, materials or wastes. Environmental
Laws shall include without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 6901 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.), the Federal Insecticide Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), and any analogous federal, state, local or foreign, Laws,
and the rules and regulations promulgated thereunder all as from time to time in
effect, and any reference to any statutory or regulatory provision shall be
deemed to be a reference to any successor statutory or regulatory provision.
Environmental Permit shall mean any Governmental Authorization required
by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange shall have the meaning given to it in the fourth Whereas
paragraph.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any
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reference to any statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
FCA shall mean the Communications Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
FCC Consents shall mean the written actions of the FCC (including
without limitation written actions of the FCC's Mass Media Bureau acting
pursuant to delegated authority) granting its consents to the assignment of the
Citicasters FCC Licenses to American License and the American FCC Licenses to
Citicasters.
FCC Licenses shall mean all Governmental Authorizations issued by the
FCC in connection with the ownership, operation and conduct of the business of
the Citicasters Station and the American Stations, as the case may be.
Final Order shall mean, with respect to any consent, order or other
action of any Authority, including without limitation the FCC, one with respect
to which no appeal, no stay, no review, no petition or application for
rehearing, reconsideration, review or stay, whether on motion of the applicable
Authority or other Person or otherwise, is in effect or pending and as to which
the time or deadline for filing or taking any such stay, review, appeal,
petition or application has expired or, if filed, has been denied, dismissed or
withdrawn, and the time or deadline for instituting any further Legal Action has
expired.
First Refusal Agreement shall have the meaning given to it in Section
6.2(g).
GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, registrations and other authorizations
of all Authorities (including without limitation the FCC Licenses) issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the ownership or operation of any of the Assets or conduct of the business
of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, submissions, registrations, notices or declarations and the
payment of all fees, assessments, interest and penalties associated with such
filings, with all Authorities.
Xxxx-Xxxxx-Xxxxxx Act shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor
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law, rules or regulations, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law, or (b) that is defined as a "hazardous
waste" "solid waste", "pollutant", "contaminant" or "hazardous substance" under
any Environmental Law; or (c) that is toxic, explosive, corrosive, etiologic,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise
hazardous and is regulated by any applicable Authority or subject to any
Environmental Law; or (d) that poses or threatens to pose a hazard to the health
of persons; or (e) that contains gasoline, diesel fuel or other petroleum
hydrocarbons, or any by-products or fractions thereof, natural gas,
polychlorinated biphenyls ("PCBs") and PCB-containing equipment or other
radioactive elements, ionizing radiation, radio frequency radiation, lead,
asbestos or asbestos-containing materials ("ACM"), or urea formaldehyde foam
insulation.
Indebtedness shall mean, with respect to any Person, (a) all items,
except items of capital stock or of surplus or of general contingency or
deferred tax reserves or any minority interest in any Subsidiary of such Person
to the extent such interest is treated as a liability with indeterminate term on
the consolidated balance sheet of such Person, which in accordance with GAAP
would be included in determining total liabilities as shown on the liability
side of a balance sheet of such Person, (b) all obligations secured by any Lien
to which any property or asset owned or held by such Person is subject, whether
or not the obligation secured thereby shall have been assumed, and (c) to the
extent not otherwise included, all Contractual Obligations of such Person
constituting capitalized leases and all obligations of such Person with respect
to Leases constituting part of a sale and leaseback arrangement.
Indebtedness for Money Borrowed shall mean, with respect to any Person,
money borrowed and Indebtedness represented by notes payable and drafts accepted
representing extensions of credit, all obligations evidenced by bonds,
debentures, notes or other similar instruments, the maximum amount currently or
at any time thereafter available to be drawn under all outstanding letters of
credit issued for the account of such Person, all Indebtedness upon which
interest charges are customarily paid by such Person, and all Indebtedness
(including capitalized lease obligations) issued or assumed as full or partial
payment for property or services, whether or not any such notes, drafts,
obligations or Indebtedness represent Indebtedness for money borrowed, but shall
not include (a) trade payables, (b) expenses accrued in the ordinary course of
business, or (c) customer advance payments and customer deposits received in the
ordinary course of business.
Intangible Assets shall mean all assets and property lacking physical
properties the evidence of ownership of which must customarily be maintained by
independent registration, documentation, certification, recordation or other
means, and shall include, without limitation, concessions, copyrights,
franchises, license, permits and all Intellectual Property.
Intellectual Property shall mean any and all research, information,
inventions, designs, procedures, developments, discoveries, improvements,
patents and applications therefor, trademarks and applications therefor, service
marks, trade names copyrights and applications therefor, logos,
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trade secrets, drawing, plans, systems, methods, specifications, computer
software programs, tapes, discs and related data processing software (including
without limitation object and source codes) owned by such Person or in which it
has an ownership interest and all other manufacturing, engineering, technical,
research and development data and know-how made, conceived, developed and/or
acquired by such Person, which relate to the manufacture, production or
processing of any products developed or sold by such Person or which are within
the scope of or usable in connection with such Person's business as it may, from
time to time, hereafter be conducted or proposed to be conducted.
Jacor shall mean Jacor Broadcasting Corporation, an Ohio corporation.
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, settlement agreement, statute, or writ of
any Authority, domestic or foreign; (b) the common law; or (c) arbitrator's,
mediator's or referee's award, decision, finding or recommendation; including,
in each such case or instance, any interpretation, directive, guideline or
request, whether or not having the force of law including, in all cases, without
limitation any particular section, part or provision thereof.
Lease shall mean any lease of property, whether real, personal or
mixed, and all amendments thereto.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims,
investigations, proceedings, requests for material information by or pursuant to
the order of any Authority or suits, at law or in arbitration or equity.
Letter of Intent shall have the meaning given to it in Section 9.11.
Lien shall mean any mortgage; lien (statutory or other); or other
security agreement, arrangement or interest; hypothecation, pledge or other
deposit arrangement; assignment; charge; levy; executory seizure; attachment;
garnishment; encumbrance (including any easement, exception, reservation or
limitation, right of way, and the like); conditional sale, title retention or
other similar agreement, arrangement, device or restriction; preemptive or
similar right; any financing or capital lease involving substantially the same
economic effect as any of the foregoing; restriction on sale, transfer,
assignment, disposition or other alienation; or any option, equity, claim or
right of or obligation to, any other Person, of whatever kind and character.
Like-Kind Exchange shall mean an exchange of assets of the nature
contemplated by the provisions of Section 1031 of the Code.
Lincoln shall have the meaning given to it in the second Whereas
paragraph.
Lincoln Agreement shall have the meaning given to it in the second
Whereas paragraph
Lincoln Breach shall have the meaning given to it in Section 6.1.
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Loss and Expense shall have the meaning given to it in Section 8.2.
material or materiality for the purposes of this Agreement, shall,
unless specifically stated to the contrary, be determined without regard to the
fact that various provisions of this Agreement set forth specific dollar
amounts.
Material Agreement shall mean, with respect to any Person, any
Contractual Obligation which is in effect on the date hereof and (a) was not
entered into in the ordinary course of business, (b) was entered into in the
ordinary course of business which (i) involved annual consideration of more than
Ten Thousand Dollars ($10,000) during any of the last three fiscal years, (ii)
extends for more than three (3) months, or (iii) is not terminable on thirty
(30) days or less notice without penalty or other continuing financial
obligation, (c) involves Indebtedness for Money Borrowed, (d) is an employment
agreement, (e) is or otherwise constitutes a written agency, broker, dealer,
license, distributorship, sales representative or similar written agreement, or
(f) accounted for more than three percent (3%) of the revenues of the American
Stations or the Citicasters Station in any of the last three fiscal years or is
likely to account for more than three percent (3%) of revenues of the American
Stations or the Citicasters Station during the current fiscal year.
Notice of Disagreement shall have the meaning given to it in Section
2.3(d).
Organic Document shall mean, with respect to a Person which is a
corporation, its certificate or articles of incorporation or organization, its
by-laws and all stockholder agreements, voting trusts and similar arrangements
applicable to any of its capital stock.
Permitted Liens shall mean (a) any mechanic's or materialmen's Lien or
similar Lien with respect to amounts not yet due and payable or which are being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, (b) Liens for taxes not yet due and payable or
which are being contested in good faith by appropriate proceeding, for which
appropriate reserves have been established, and (c) easements, licenses,
covenants, rights of way and similar Liens which, individually or in the
aggregate, would not materially and adversely affect the marketability or value
of the property encumbered thereby or materially interfere with the operations
of the Stations, it being understood that any Permitted Liens of a nature
referred to in clause (a) or (b) shall, to the extent they may involve the
payment of money, be taken into account in preparing the Cincinnati Proration
Schedule and the Rochester Proration Schedule.
Person shall mean any natural individual or any Entity.
Permitted Title Exceptions shall have the meaning given to it in
Section 5.2(e).
Personal Property shall mean all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office and studio equipment, spare
parts and other tangible personal property, plus such additions thereto and
deletions therefrom arising in the ordinary course of business between the date
hereof and the Closing Date.
Preliminary Title Report shall have the meaning given to it in Section
5.2(e).
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Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Pro Ratable Taxes shall mean real estate and other property Taxes, ad
valorem Taxes, gross receipts Taxes and similar Taxes, but shall not include
federal, state or local income Taxes, franchise Taxes or other Taxes measured by
or based upon income or gain on sale or other disposition of property or assets.
Real Property shall mean all of the fee estates and buildings and other
improvements thereon, leasehold interest, easements, licenses, rights to access,
right-of- way, and other real property interest (including without limitation
any of the foregoing relating to the towers, transmitters, studio sites and
offices of the respective Stations).
Referee shall have the meaning given to it in Section 2.3(d).
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 5.1(a).
Rochester Proration Schedule shall have the meaning given to it in
Section 2.3(d).
SEC shall mean the United States Securities and Exchange Commission, or
any successor Authority.
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the SEC thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Stations shall mean, collectively, the Citicasters Station and the
American Stations.
Studio Lease shall have the meaning given to it in Section 6.2(g).
Survey shall have the meaning given to it in Section 5.2(e).
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
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Tax and Taxes (and "Taxable", which shall mean subject to Tax), shall
mean, with respect to any Person, (a) all taxes (domestic or foreign), including
without limitation any income (net, gross or other including recapture of any
tax items such as investment tax credits), alternative or add-on minimum tax,
gross income, gross receipts, gains, sales, use, leasing, lease, user, ad
valorem, transfer, recording, franchise, profits, property (real or personal,
tangible or intangible), fuel, license, withholding on amounts paid to or by
such Person, payroll, employment, unemployment, social security, excise,
severance, stamp, occupation, premium, environmental or windfall profit tax,
custom, duty or other tax, or other like assessment or charge of any kind
whatsoever, together with any interest, levies, assessments, charges, penalties,
addition to tax or additional amount imposed by any Taxing Authority, (b) any
joint or several liability of such Person with any other Person for the payment
of any amounts of the type described in (a), and (c) any liability of such
Person for the payment of any amounts of the type described in (a) as a result
of any express or implied obligation to indemnify any other Person.
Tax Claim shall mean any Claim which relates to Taxes, including
without limitation any Claim arising out of any breach of the representations
and warranties set forth in Section 3.10 or 4.10.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
TBA Date shall mean the date when operations under the TBAs shall
become effective (or in the event such date is not the same for all of the TBAs,
the applicable date of such effectiveness).
TBAs shall mean the American Stations TBA and the Citicasters Station
TBA, or the applicable one of such agreements.
Termination Date shall have the meaning given to it in Section 7.1.
Tower Lease shall have the meaning given to it in Section 6.2(g).
Trade Agreements shall mean any Contract relating to any of the
Stations pursuant to which American or Citicasters is required to provide air
time in exchange for property or services other than cash.
Transactions shall mean the Exchange and all of the other transactions
contemplated by this Agreement to be consummated on or prior to the Closing
Date, including without limitation the execution, delivery and performance of
the Collateral Documents.
Valuation Schedule shall have the meaning given to it in Section
2.2(b).
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