SECOND AMENDMENT
TO
EQUITY INTEREST PURCHASE AGREEMENT
This First Amendment to Equity Interest Purchase Agreement (this
"Amendment") is entered into as of the 31st day of January, 2001, by and among
Xxxxxx Xxxxx, an individual, Xxxxx Xxxx, an individual, Xxxxxx Xxxx, Jr., an
individual, Xxxxxx Xxxx 1956 Living Trust, f/b/o Xxxxxx Xxxx, Jr., a North
Carolina trust (the "Xxxxxx Xxxx Trust"), Centennial Broadcasting Nevada, Inc.,
a North Carolina corporation ("Centennial Nevada"), Centennial Broadcasting,
LLC, a North Carolina limited liability company ("Centennial Broadcasting"),
Centennial Broadcasting License, LLC, a North Carolina limited liability company
("Centennial License") (Centennial Nevada, Centennial Broadcasting and
Centennial License, collectively, the "Centennial Entities"), and Xxxxxxx
Mezzanine Holdings, LLC, a Delaware limited liability company ("Buyer")
(assignee of Xxxxxxx XX Acquisition Corp., a Delaware corporation).
BACKGROUND
The parties hereto are parties to that certain Equity Interest Purchase
Agreement dated as of June 2, 2000, as amended December 13, 2000 (the "Purchase
Agreement"); and
The parties have agreed to amend certain terms and conditions of the
Purchase Agreement; and
Accordingly, in consideration of the foregoing and of the mutual promises,
covenants and conditions set forth below, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
ARTICLE I
AMENDMENT TO AGREEMENT
The Purchase Agreement is hereby amended as follows:
1. Correction of Allocation of Purchase Price. In order to account for
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the reduction in the Base Price accomplished by the First Amendment to the
Purchase Agreement, the parties agree that Section 1.9 of the Purchase Agreement
is amended to read as follows:
"Allocation. Twenty-Four Million Seven Hundred Thousand Dollars
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($24,700,000) of the Purchase Price shall be allocated to the Shares,
and the remainder of the Purchase Price shall be allocated to the
Purchased Membership Interests. Each of the Sellers, the Centennial
Entities and Buyer agree that none of them will take a position on any
income, transfer or gains tax return that is in any manner inconsistent
with the terms of the allocation in the preceding sentence without the
written consent of all of them."
2. Correction of Net Working Capital Adjustment. In order to account for
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the extension of the Upset Date accomplished by the First Amendment to the
Purchase Agreement, the parties agree that Sections 1.8.1(a) and 1.8.1(b) of the
Purchase Agreement are amended to read as follows:
"(a) Estimated Net Working Capital Amount. Not later than five (5)
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business days prior to the Closing Date, Sellers and the Centennial
Entities shall deliver to Buyer their good faith estimate of the Net
Working Capital of the Centennial Entities as of 11:59 p.m. on the
Closing Date, which may be positive or negative (the "Estimated Net
Working Capital Amount"), together with a reasonably detailed
explanation of the calculation thereof. The "Net Working Capital
Amount" shall mean current assets minus current liabilities. For
purposes of this Agreement, in calculating Net Working Capital Amount,
(i) the estimated costs required to complete capital expenditure
projects classified on the accounting records of the Centennial
Entities as construction in progress, as defined by the United States
generally accepted accounting principles ("GAAP") as of the date of
determination, shall be included as a current liability; (ii) the
current assets shall be reduced by adequate reserves in accordance
with GAAP (which, in the case of the accounts receivable arising from
the operation of the Stations (the "Accounts Receivable"), shall
include a reserve for doubtful accounts equal to Five Percent (5%) of
the aggregate amount of the Accounts Receivable that were invoiced
within ninety (90) days prior to the Closing Date and Thirty Percent
(30%) of the aggregate amount of the Accounts Receivable that were
invoiced more than ninety (90) days prior to the Closing Date); (iii)
if the Trade Balance is negative, the current liabilities shall not
include the first Fifty Thousand Dollars ($50,000) of such negative
amount; and (iv) if the Trade Balance is positive, the current assets
shall not include any portion of such positive amount. The "Trade
Balance" equals the aggregate value of consideration to be received by
the Stations under contracts for the sale of time on the Stations in
exchange for merchandise or services ("Trade Agreements"), minus the
aggregate value of the unfulfilled obligations related to such Trade
Agreements, all as of 11:59 p.m. on the Closing Date. As set forth in
Section 1.7.5, the Estimated Net Working Capital Amount shall be used
to calculate the amount of the Purchase Price payable at Closing.
"(b) Closing Balance Sheet. As soon as reasonably practicable
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following the Closing Date, and in any event within ninety (90) days
thereafter, Buyer shall prepare and deliver to Sellers (i) a
consolidated balance sheet of the Centennial Entities as of 11:59 p.m.
on the Closing Date (the "Closing Balance Sheet") and (ii) a
calculation of the Net Working Capital Amount from the items reflected
on the Closing Balance Sheet (the "Final Net Working Capital Amount").
The Closing Balance
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Sheet shall be prepared in accordance with GAAP on a consistent basis
and shall fairly present the consolidated financial position of the
Centennial Entities as of 11:59 p.m. on the Closing Date."
3. Correction Regarding Par Value. The first sentence of Section 2.2.1 of
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the Purchase Agreement is amended by changing all references therein to "par
value $1.00 per share" to "no par value."
4. Provision for Disclosure. The fifth sentence of Section 2.15 is
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amended by adding the following introductory clause: "Except as disclosed on
Schedule 2.15,".
5. Indemnification. The following sentence is added to Section 6.1.1
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before the penultimate sentence thereof: "Sellers shall jointly and severally
indemnify, defend by counsel reasonably acceptable to Buyer, and hold harmless
Buyer Indemnitees without regard to the Threshold Amount from and against and in
respect of any and all Losses arising out of or in connection with the failure
to timely file with the appropriate governmental authorities any IRS Form 5500
for any of the Centennial Entities."
ARTICLE II
OTHER AGREEMENTS
1. Capitalized terms used in this Amendment and not otherwise defined
shall have the meanings given to them in the Purchase Agreement.
2. Except as specifically provided herein, the Purchase Agreement shall
remain in full force and effect, and the provisions thereof are ratified and
confirmed.
3. This Amendment may be signed in any number of counterparts with the
same effect as if the signatures on each counterpart were on the same
instrument.
4. This Amendment shall be governed by and construed in accordance with
the laws of the State of New York, without regarding to the choice of law rules
utilized in that jurisdiction.
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IN WITNESS WHEREOF, each of the parties has caused this Second Amendment to
be executed by a respective duly authorized officer or representative as of the
date first above written.
BUYER:
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XXXXXXX MEZZANINE HOLDINGS, LLC
By: /s/ Xxxxxxxx Xxxxxxx
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Name: Xxxxxxxx Xxxxxxx
Title: Secretary
SELLERS:
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/s/ Xxxxxx Xxxxx
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XXXXXX XXXXX
/s/ Xxxxx Xxxx
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XXXXX XXXX
/s/ Xxxxxx Xxxx, Jr.
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XXXXXX XXXX, JR.
XXXXXX XXXX 1956 LIVING TRUST f/b/o
XXXXXX XXXX, JR.
By: /s/ Xxxxxx Xxxx, Jr.
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Xxxxxx Xxxx, Jr.
Individual Trustee
CENTENNIAL BROADCASTING NEVADA, INC.
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
President and CEO
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CENTENNIAL BROADCASTING, LLC
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Member
CENTENNIAL BROADCASTING LICENSE, LLC
By: Centennial Broadcasting, LLC
Its Member
By: /s/ Xxxxx Xxxx
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Xxxxx Xxxx
Member
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