<PAGE>
EXHIBIT 2.1
PURCHASE AND EXCHANGE AGREEMENT
by and among
NASSAU BROADCASTING PARTNERS, L.P.,
THE SELLERS LISTED ON THE
SIGNATURE PAGES HEREOF,
SELLERS' AGENT
and
NASSAU BROADCASTING PARTNERS, INC.
Dated as of March 24, 2000
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TABLE OF CONTENTS
Page
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ARTICLE I
Definitions
Section 1.1 Certain Definitions ....................................... 2
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Section 1.2 Cross References .......................................... 8
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Section 1.3 Singular and Plural ....................................... 10
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ARTICLE II
Purchase and Exchange of Subject Interests; Closing
Section 2.1 Purchase and Exchange ..................................... 10
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Section 2.2 Cash Consideration and Payment; Deposit for Purchase;
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Contribution and Exchange ................................. 10
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Section 2.3 Time and Place of Closing ................................. 11
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Section 2.4 The Closing ............................................... 11
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Section 2.5 Purchase and Sale of Shares of NBP ........................ 14
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Section 2.6 Net Working Capital Adjustments ........................... 14
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ARTICLE III
Representations and Warranties of Sellers as to the Companies
Section 3.1 Organization; Authorization; etc .......................... 16
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Section 3.2 Capitalization ............................................ 17
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Section 3.3 Financial Statements ...................................... 18
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Section 3.4 Licenses .................................................. 19
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Section 3.5 Operation of Radio Stations; FCC Reports .................. 19
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Section 3.6 Consents .................................................. 19
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Section 3.7 Contracts, Leases, Options and Commitments ................ 20
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Section 3.8 Assets .................................................... 20
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Section 3.9 Trade Rights, etc ......................................... 20
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Section 3.10 Changes since December 31, 1999 ........................... 21
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Section 3.11 Significant Customers ..................................... 22
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Section 3.12 Litigation, etc ........................................... 22
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Section 3.13 Employees and Employee Benefit Plans ...................... 23
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Section 3.14 Insurance ................................................. 24
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Section 3.15 Taxes ..................................................... 24
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ii
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Section 3.16 Authorized Signatories .................................... 25
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Section 3.17 Brokers, Finders, etc ..................................... 25
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Section 3.18 Real Property ............................................. 25
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Section 3.19 Holding Companies ......................................... 26
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Section 3.20 Subsidiaries .............................................. 26
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Section 3.21 Environmental Matters ..................................... 26
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Section 3.22 Accounts Receivable ....................................... 26
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Section 3.23 Acquisition Agreements .................................... 26
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Section 3.24 Affiliate Transactions .................................... 27
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Section 3.25 No Misrepresentation ...................................... 27
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ARTICLE IIIA
Representations and Warranties of Sellers as to Organization, Authorization,
etc.
Section 3A.1. Organization; Authorization; etc .......................... 27
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Section 3A.2. Investment by Continuing Sellers 28
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ARTICLE IV
Representations and Warranties of Buyer and NBP
Section 4.1 Organization; Authorization; etc .......................... 29
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Section 4.2 Capitalization ............................................ 30
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Section 4.3 Financial Statements ...................................... 30
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Section 4.4 Licenses .................................................. 31
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Section 4.5 Operation of Radio Stations FCC Reports ................... 31
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Section 4.6 Consents .................................................. 31
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Section 4.7 Assets .................................................... 32
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Section 4.8 Trade Rights, etc ......................................... 32
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Section 4.9 Changes Since December 31, 1999 ........................... 32
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Section 4.10 Litigation, etc ........................................... 33
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Section 4.11 Taxes ..................................................... 33
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Section 4.12 Brokers, Finders, etc ..................................... 34
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Section 4.13 Real Property ............................................. 34
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Section 4.14 Subsidiaries .............................................. 34
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Section 4.15 Reserved .................................................. 34
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Section 4.16 Insurance ................................................. 34
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Section 4.17 Investment by Buyer ....................................... 34
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Section 4.18 Accounts Receivable ....................................... 35
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Section 4.19 Environmental Matters ..................................... 35
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Section 4.20 No Misrepresentation ...................................... 35
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ARTICLE V
Covenants of the Parties
Section 5.1 Covenants of Sellers ...................................... 36
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Section 5.2 Covenant of Buyer Regarding Aurora Communications Lease ... 40
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Section 5.3 Additional Covenants of Buyer ............................. 40
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Section 5.4 Covenants of Sellers and Buyer ............................ 42
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ARTICLE VI
Conditions to the Closing
Section 6.1 Conditions of the Parties ................................. 44
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Section 6.2 Conditions of Buyer ....................................... 45
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Section 6.3 Conditions of Sellers ..................................... 46
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ARTICLE VII
Indemnity
Section 7.1 Indemnity and Indemnification Procedure ................... 47
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Section 7.2 Limitation of Indemnification Liability ................... 49
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Section 7.3 Definition of Damages or Damages .......................... 51
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Section 7.4 Survival .................................................. 51
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ARTICLE VIII
Termination
Section 8.1 Termination ............................................... 51
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Section 8.2 Effect of Termination ..................................... 53
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ARTICLE IX
Miscellaneous
Section 9.1 Control of the Radio Stations ............................. 54
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Section 9.2 Benefitting Sellers ....................................... 54
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Section 9.3 Buyer Incorporation ....................................... 54
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Section 9.4 Assignment of Rights; Successors and Assigns .............. 55
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Section 9.5 Notices ................................................... 55
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Section 9.6 Expenses .................................................. 56
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Section 9.7 Appointment of Sellers' Agent ............................. 56
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Section 9.8 Remedies .................................................. 57
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Section 9.9 Publicity and Disclosures ................................. 58
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Section 9.10 Interpretation ............................................ 58
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Section 9.11 Counterparts .............................................. 58
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Section 9.12 No Implied Waiver ......................................... 58
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Section 9.13 Entire Agreement .......................................... 58
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Section 9.14 Governing Law ............................................. 58
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Section 9.15 Amendment ................................................. 58
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EXHIBITS AND SCHEDULES
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Exhibit A Schedule of Subject Interests, Purchase and Exchange
Consideration, etc.
Exhibit B Form of Escrow Agreement
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Employment Termination and Non-Competition
Agreement
Exhibit E Form of Second Restated Securityholders' Agreement
Exhibit F Form of Amendment to Restated Investment Agreement
Exhibit G Fourth Restated Agreement of Limited Partnership
Schedule 1.1(a) Aurora Permitted Encumbrances
Schedule 1.1(b) Nassau Permitted Encumbrances
Schedule 1.1(c) Radio Stations
Schedule 1.1(d) Reduction Liabilities
Schedule 3.1(c) Consents and Approvals
Schedule 3.1(e) Certain Information about the Companies
Schedule 3.2 Capitalization
Schedule 3.3 Financial and Operating Statements Delivered
Schedule 3.4(a) FCC Licenses
Schedule 3.4(b) Pending Applications
Schedule 3.6(a) Consents and Approvals of Government Authorities
Schedule 3.7 Contracts, Leases, etc.
Schedule 3.9 Trade Rights, etc.
Schedule 3.10 Adverse Changes
Schedule 3.12 Litigation, etc.
Schedule 3.13 Employees and Employee Benefit Plans
Schedule 3.14 Insurance
Schedule 3.16 Authorized Signatories
Schedule 3.18 Real Property
Schedule 3.19 Holding Company Matters
Schedule 3.21 Environmental Matters
Schedule 3.22 Accounts Receivable
Schedule 3.24 Affiliate Transactions
Schedule 3A.1(c) Consents and Approvals
Schedule 4.1 Consents and Approvals
Schedule 4.1(d) Certain Information about the Nassau Companies
Schedule 4.2 Capitalization
Schedule 4.3 Financial and Operating Statements Delivered
Schedule 4.4(a) FCC Licenses
Schedule 4.4(b) Pending Applications
Schedule 4.6 Consents and Approvals of Governmental Authorities
Schedule 4.8 Trade Rights, Etc.
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Schedule 4.9 Adverse Changes
Schedule 4.10 Litigation, etc.
Schedule 4.13 Real Property
Schedule 4.18 Accounts Receivable
Schedule 4.19 Environmental Matters
Schedule 5.1(a) Severance and Termination Payments
Schedule 5.3(a) Conduct of Business
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EXHIBIT 2.1
PURCHASE AND EXCHANGE AGREEMENT
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PURCHASE AND EXCHANGE AGREEMENT dated as of March 24, 2000 (this
"Agreement") among Nassau Broadcasting Partners, L.P., a Delaware limited
partnership ("Buyer"); the parties hereto listed as "Sellers" on the signature
pages hereof (collectively, "Sellers"); BancAmerica Capital Investors SBIC I,
L.P., as agent for the Sellers ("Sellers' Agent"); and Nassau Broadcasting
Partners, Inc., a Delaware corporation and the managing general partner of Buyer
("NBP").
WITNESSETH:
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WHEREAS, the AMI Sellers (as defined in Article I below) own all of the
capital stock (the "AMI Shares") of Aurora Management, Inc., a Delaware
corporation ("AMI"); the AMI Shares are more fully described in Exhibit A;
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WHEREAS, the Allied Sellers (as defined in Article I below) own all of the
capital stock (the "AAA" Shares") of Allied Aurora Acquisition Corp., a Maryland
corporation ("AAA," together with AMI, the "Corporate Holders"); and the AMI
Sellers and the Allied Sellers are referred to herein as the "Corporation
Sellers"); the AAA Shares are more fully described in Exhibit A.
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WHEREAS, the LLC Sellers (as defined in Article I below), together with the
Corporate Holders, own all of the membership and other limited liability company
ownership interests of Aurora Communications, LLC, a Delaware limited liability
company("Aurora Communications") (such ownership interests owned by the LLC
Sellers being referred to herein as the "LLC Interests"; the LLC Interests,
together with the AMI Shares and the AAA Shares, being referred to herein as the
"Subject Interests"); the LLC Interests are more fully described in Exhibit A;
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WHEREAS, Aurora Communications owns all of the membership and other limited
liability company ownership interests of Aurora Holding, LLC, a Delaware LLC
("Aurora Holding");
WHEREAS, Aurora Holding owns all of the membership and other limited
liability company ownership interests of each of Aurora of Bridgeport, LLC, a
Delaware limited liability company ("Aurora Bridgeport"), Aurora of Bridgeport
License Company, LLC, a Delaware limited liability company ("ABLC"), Aurora of
Westchester, LLC, a Delaware limited liability company ("Aurora Westchester"),
Aurora of Westchester License Company, LLC, a Delaware limited liability company
("AWLC"), Aurora of Danbury, LLC, a Delaware limited liability company ("Aurora
Danbury"), and Aurora of Danbury License Company, LLC, a Delaware limited
liability company ("ADLC," and together with Aurora Bridgeport, ABLC, Aurora
Westchester, AWLC and Aurora Danbury, the "Radio Station Companies"; the Radio
Station
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Companies, together with AMI, AAA, Aurora Communications and Aurora Holding, the
"Companies"); and
WHEREAS, subject to the terms and conditions set forth herein, certain of
the Sellers as indicated in Exhibit A ("Exiting Sellers"), desire to sell all of
their Subject Interests to Buyer for cash, and the other Sellers as indicated in
Exhibit A ("Continuing Sellers"), desire to sell a portion of their Subject
Interests to Buyer for cash and to contribute the remaining portion of their
Subject Interests to Buyer in exchange for equity interests in Buyer, and Buyer
desires to effect such purchases and such contribution and exchange (the
foregoing transactions being referred to herein as the "Purchase and Exchange").
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
Definitions
Section 1.1 Certain Definitions. As used in this Agreement, the following
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terms shall have the following meanings:
"Acquisition Indebtedness" means (i) all borrowings under the New Nassau
Credit Facility, (ii) the Nassau Mezzanine Notes and (iii) any other
indebtedness for borrowed money incurred by any Nassau Company or NBP in
connection with the consummation of the Purchase and Exchange, the Allentown
Acquisition or the acquisition of any other Person or the equity or assets of
any other Person.
"Affiliate" means an "affiliate" as defined in Rule 12b-2 promulgated
pursuant to the Securities Exchange Act of 1934, as amended.
"Allentown Acquisition" means the transactions contemplated by the Asset
Purchase Agreement, dated as of February 29, 2000, among Buyer, Clear Channel
Broadcasting, Inc. and Clear Channel Broadcasting Licenses, Inc.
"Allied Sellers" means Allied Capital Corporation and Allied Investment
Corporation, each a Maryland corporation.
"AMI Sellers" means BancAmerica Capital Investors SBIC I, L.P., a Delaware
limited partnership, Osborn and Washington.
"Aurora Material Adverse Effect" means any change or effect that is or
would be materially adverse to the Condition of the Companies taken as a whole,
excluding any changes
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or effects caused by changes in general economic conditions or changes generally
affecting the radio broadcasting industry.
"Aurora Permitted Encumbrances" means: (a) Encumbrances for taxes,
assessments and other levies, fees or charges imposed by any Governmental
Authority which are not due and payable as of the Closing Date or, if due and
payable as of the Closing Date, are accrued on the Closing Balance Sheet; (b)
mechanic's and similar statutory liens for labor, materials or supplies provided
in the ordinary course of business for amounts which are not delinquent and
which could not reasonably be expected to have an Aurora Material Adverse
Effect; (c) zoning, building and other land use laws imposed by any Governmental
Authority; (d) any minor Encumbrances affecting title which do not materially
interfere with the use of the Companies' assets or the operation of their
businesses and which do not materially adversely affect the value of such assets
or businesses; (e) Encumbrances securing Reduction Liabilities; (f) Encumbrances
securing any indebtedness of the Companies under the Existing Aurora Credit
Facilities; and (g) any Encumbrances described in Schedule 1.1(a).
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"Business Day" means any day other than a Saturday, Sunday or legal holiday
in the State of Delaware.
"Buyer Incorporation" means a change in the form of organization of Buyer
from a limited partnership to a corporation, including the transfer of all
assets and liabilities of Buyer to its corporate successor and all other
transactions consummated in connection therewith.
"Cash Percentage" means, with respect to any Seller, that percentage set
forth for such Seller on Exhibit A.
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"Closing" means the consummation of the Purchase and Exchange.
"Closing Date" means (a) the later of(i) the date five Business Days after
the date on which the grant of FCC consent to all of the FCC Applications have
become Final Orders, or (ii) if such grants have become Final Orders with a
condition materially adverse to Buyer, any Company or any Seller, the date five
Business Days after the date the party hereto to which such condition applies
elects to comply with such condition (or, if such condition applies to any
Company, the date five Business Days after Buyer elects to cause such Company to
comply with such condition), or (b) such other date upon which the parties may
agree to close the Purchase and Exchange.
"Code" means the Internal Revenue Code of 1986, as amended.
"Condition," with respect to any Person, means the business, operations,
condition (financial or otherwise) or results of operations of such Person or,
with respect to more than one Person, of the Persons taken as a whole.
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"Cremona" means Vincent M. Cremona.
"Encumbrances" means all liens, encumbrances, mortgages, pledges, security
interests, conditional sales agreements, charges, options, rights of first
refusal, reservations, restrictions or other encumbrances or defects in title.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchanged Subject Interests" means the Subject Interests described in
Exhibit A to be exchanged for Nassau Equity Interests hereunder.
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"Existing Aurora Credit Facilities" means (i) the Credit Agreement, dated
as of August 31, 1999, among Aurora Holding, Heller Financial, Inc. and the
other agents and lenders party thereto and (ii) the Subordinated Loan Agreement,
dated as of September 10, 1999, among the Radio Station Companies, Aurora
Communications, Aurora Holding, Allied Capital Corporation and Allied Investment
Corporation.
"Existing Nassau Credit Facility" means the Loan Agreement, dated as of
August 28, 1998, among Buyer, AMERESCO Commercial Finance, Inc. and the other
lender parties thereto.
"FCC" means the Federal Communications Commission.
"FCC Application," with respect to a Radio Station, means the application
for an FCC order granting approval of the transfer of control of the Radio
Station Company holding the FCC License of such Radio Station to Buyer as
contemplated by this Agreement.
"FCC License," with respect to a Radio Station, means the licenses, permits
and authorizations, together with any renewals, extensions or modifications
thereof as may occur between the date hereof and the Closing Date, held by the
Radio Station Company which is the licensee of such Radio Station or by any of
the Companies or any of the Sellers with respect to such Radio Station.
"Final Order" means any action of the FCC which has not been reversed,
stayed, enjoined, set aside, annulled or suspended and with respect to which no
requests are pending for administrative or judicial review, reconsideration,
appeal or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion shall have expired.
"Fully Diluted Basis" means, with respect to the Nassau Equity Interests,
as of a particular time, the total outstanding Nassau Equity Interests as of
such time, determined by treating all outstanding options (including options
under the Option Agreement (as defined in the Master Agreement)), warrants
(including warrants issued in connection with the Nassau Mezzanine Notes) and
other rights for the purchase or other acquisition of Nassau Equity
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Interests (whether or not then vested or exercisable) as having been exercised
and by treating all outstanding securities directly or indirectly convertible
into or exchangeable for Nassau Equity Interests (whether or not then
exercisable or convertible) as having been so converted or exchanged.
"Generally Accepted Accounting Principles" means generally accepted
accounting principles in the United States of America as set forth in
pronouncements of the Financial Accounting Standards Board and the American
Institute of Certified Public Accountants, as such principles are from time to
time supplemented and amended.
"Governmental Authority" means any foreign, federal, state or local
government, political subdivision or governmental or regulatory authority,
agency, board, bureau, commission, instrumentality or court or
quasi-governmental authority.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended.
"Indemnified Party" means any party or parties making an Indemnity Claim
against an Indemnifying Party under Article VII.
"Indemnifying Party" means any party or parties against whom an Indemnity
Claim is made under Article VII.
"Individual Sellers" means Osborn, Washington and Cremona.
"IPO" means an initial public offering of Nassau Common Stock.
"LLC Sellers" means Heller Financial, Inc., a Delaware corporation,
UnionBanCal Venture Corporation, a Delaware corporation, Osborn, Washington,
Cremona and Aurora Management Group, LLC.
"Master Agreement" means the Third Master Amendment and Agreement dated as
of December 30, 1997 among Buyer, certain affiliates of Buyer and certain other
Persons.
"New Nassau Credit Facility" means the credit agreement that Buyer or a
current or future subsidiary of Buyer intends to enter into with Merrill Lynch
Capital Corporation and other syndicate lenders providing for borrowings of up
to $144,000,000, as described and agreed upon between Buyer and Merrill Lynch
Capital Corporation in a Commitment Letter dated February 24, 2000 and executed
by each party.
"Nassau Common Stock" means common stock of the corporate successor to
Buyer pursuant to the Buyer Incorporation.
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"Nassau Companies" means Buyer and all of its subsidiaries.
"Nassau Equity Interests" means (i) if the Buyer Incorporation shall have
occurred before or simultaneously with the Closing, the Nassau Common Stock or
(ii) if the Buyer Incorporation shall not have occurred before or simultaneously
with the Closing, the Nassau Partnership Interests.
"Nassau Material Adverse Effect" means any change or effect that is or
would be materially adverse to the Condition of the Nassau Companies taken as a
whole, excluding any changes or effects caused by changes in general economic
conditions or changes generally affecting the radio broadcasting industry.
"Nassau Mezzanine Notes" means approximately $60,000,000 of Senior Discount
Notes of Buyer and warrants to purchase equity securities of Buyer, which Buyer
intends to issue to several institutions, as described in Buyer's February 2000
Offering Memorandum.
"Nassau Partnership Interests" means the partnership interests of Buyer
described in Exhibit A, including the capital accounts, rights to allocation of
---------
income, losses, deductions, credits and distributions of cash flow and capital
items of Buyer and all rights to vote or otherwise exercise any right, title or
interest, in each case associated with such partnership interests.
"Nassau Permitted Encumbrances" means: (a) Encumbrances for taxes,
assessments and other levies, fees or charges imposed by any Governmental
Authority which are not due and payable as of the Closing Date; (b) mechanics
and similar statutory liens for labor, materials or supplies provided in the
ordinary course of business for amounts which are not delinquent and which could
not reasonably be expected to have a Nassau Material Adverse Effect; (c) zoning,
building and other land use laws imposed by any Governmental Authority; (d) any
minor Encumbrances affecting title which do not materially interfere with the
use of the Nassau Companies' assets or operation of their businesses and which
do not materially adversely affect the value of such assets or businesses; (e)
Encumbrances securing any indebtedness of any of the Nassau Companies under the
Existing Nassau Credit Facility, (f) Encumbrances securing any Acquisition
Indebtedness and (g) any Encumbrances described in Schedule 1.1(b).
---------------
"Net Working Capital" means the current assets of the Companies (including
cash and cash equivalents) minus the current liabilities of the Companies, in
each case determined in accordance with Generally Accepted Accounting
Principles. For purposes hereof, (i) the current assets of the Companies shall
exclude receivables arising under the Barter Agreements and (ii) the current
liabilities of the Companies (A) shall include (1) outstanding payables not
satisfied in the ordinary course and (2) all transaction expenses, bonus
payments and severance payments incurred by the Companies in connection with the
Purchase and Exchange (specifically excluding, however, any payments to Osborn
under the Employment Termination and Non-
6
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Competition Agreement and any payments contemplated by Section 5.2), and (B)
shall exclude (1) the current portion of any long-term indebtedness of the
Companies (which shall include the obligations of any Company as lessee under
any capital lease) and (2) payables arising under Barter Agreements and (C) all
other non-cash items.
"Net Working Capital Adjustments" mean the adjustments to the Cash
Consideration in respect of the Net Working Capital of the Companies as provided
in Section 2.6.
"Osborn" means Frank D. Osborn, Allison Waite Osborn, Caroline Ladner
Osborn, Elizabeth Andrew Osborn, Frank William Osborn and Katherine Nelson
Osborn.
"Pass-through Entity" means a partnership, within the meaning of Treasury
Regulation Section 301.7701-2(c)(1), or a wholly owned entity described in
Treasury Regulation 301.7701-2(c)(2).
"Person" means an individual, corporation, partnership, limited liability
company, trust, association or other entity, including any Governmental
Authority.
"Purchased Subject Interests" means the Subject Interests described on
Exhibit A to be sold for the Cash Consideration hereunder.
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"Radio Station" means any of the radio stations listed on Schedule 1.1(c)
---------------
and any other radio station owned and operated by any Company.
"Reduction Liabilities" means (i) all liabilities of the Companies as of
the Closing Date other than current liabilities and (ii) the current portion of
any long-term indebtedness of the Companies (which shall include the obligations
of any Company as lessee under any capital lease), in each case, as required by
Generally Accepted Accounting Principles to be accrued on the Closing Balance
Sheet. The Reduction Liabilities shall include (i) all indebtedness of Aurora
Holding outstanding immediately prior to the Closing under the Existing Aurora
Credit Facilities, including all principal, interest, fees and other amounts
then owing thereunder or payable upon the prepayment of any such indebtedness
upon the Closing, and (ii) the liabilities described on Schedule 1.1(d).
---------------
"Subject Interest Percentage" means, with respect to any Seller, that
percentage set forth for such Seller on Exhibit A.
"Treasury Regulation" means the permanent and temporary regulations of the
U.S. Department of the Treasury promulgated under the Code, as such regulations
may be lawfully changed from time to time (including corresponding provisions of
succeeding regulations).
"Washington" means Frank G. Washington.
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Section 1.2 Cross References. The following terms defined elsewhere in this
----------------
Agreement in the Sections set forth below shall have the respective meanings
therein defined:
AAA Preamble
AAA Financial Statements Section 3.3(b)
AAA Sellers Preamble
ABLC Preamble
ADLC Preamble
Agreement Preamble
Allied Sellers Preamble
AMI Preamble
AMI Financial Statements Section 3.3(b)
AMI Sellers Preamble
AMI Shares Preamble
Auditor Section 2.6(c)
Aurora Bridgeport Preamble
Aurora Communications Preamble
Aurora Danbury Preamble
Aurora Equity Interests Section 3.2
Aurora Holding Preamble
Aurora Westchester Preamble
AWLC Preamble
Barter Agreement Section 5.1(e)
Buyer Preamble
Buyer Indemnified Parties Section 7.1
Buyer Repairs Section 8.1(d)
Buyer/NBP Equity Interests Section 4.2
Cash Consideration Section 2.2(a)
Closing Balance Sheet Section 2.6(b)
Closing Net Working Capital Section 2.6(b)
Closing NWC Payment Amount Section 2.6(d)
Companies Preamble
Continuing Sellers Preamble
Corporate Holders Preamble
Corporate Holders Financial
Statements Section 3.3(b)
Corporation Sellers Preamble
Damage or Damages Section 7.3
Disputed Claim Section 7.1(f)
Employee Plans Section 3.13
Employment Termination and Non-
Competition Agreement Section 2.4(d)
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Environmental Matters Section 7.1(a)
ERISA Affiliate Section 3.13
Escrow Agent Section 2.2(b)
Escrow Agreement Section 2.2(b)
Escrow Deposit Section 2.2(b)
Estimated Closing Net Working
Capital Section 2.6(a)
Estimated NWC Payment Amount Section 2.6(a)
Exchange Interests Section 3A.2(a)
Exiting Sellers Preamble
Expiration Date Section 7.4
FCC Consent Section 3.6(a)
GT Section 2.6(b)
Indemnity Claim Section 7.1(d)
Interim Financial Statements Section 3.3(a)
Leased Real Property Section 3.18
LLC Interests Preamble
LLC Sellers Preamble
Nassau Leased Real Property Section 4.13
Nassau Owned Real Property Section 4.13
Nassau Real Property Section 4.13
NBP Preamble
NBP Common Stock Section 2.5
Notice of Claim Section 7.1(d)
Owned Real Property Section 3.18
Partnership Rights Agreements Section 2.4(f)
Payment Event Section 2.2(b)
Proprietary Information Section 5.4(c)
Purchase and Exchange Preamble
Radio Station Companies Preamble
Real Property Section 3.18
Securities Act Section 3A.2(b)
Seller Indemnified Parties Section 7.1(c)
Sellers Preamble
Sellers Repairs Section 8.1(c)
Sellers' Agent Preamble
Subject Interests Preamble
Tax/Taxes Section 3.15(b)
Tax Return Section 3.15(c)
Third Party Claim Section 7.1(e)
Transaction Agreements Section 9.7
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Section 1.3 Singular and Plural. Terms defined in the singular shall have
-------------------
comparable meanings when used in the plural, and vice versa.
ARTICLE II
Purchase and Exchange of Subject Interests; Closing
Section 2.1 Purchase and Exchange. On the basis of the representations,
---------------------
warranties, covenants and agreements and subject to the terms and conditions
hereof and the satisfaction or waiver of the conditions set forth herein,
Exiting Sellers agree to sell for cash and Continuing Sellers agree to sell for
cash and exchange for Nassau Equity Interests, and Buyer agrees to so purchase
and exchange, at the Closing, all of the Subject Interests as provided in this
Article II.
Section 2.2 Cash Consideration and Payment; Deposit for Purchase;
-----------------------------------------------------
Contribution and Exchange
-------------------------
(a) Buyer shall purchase the Purchased Subject Interests for cash
consideration (the "Cash Consideration") equal to One Hundred Fifty Million
Dollars ($150,000,000), (i) minus the amount of the Reduction Liabilities and
(ii) subject to the Net Working Capital Adjustments. Except as provided in
Section 2.6, the Cash Consideration shall be payable to Sellers at the Closing
according to their respective Cash Percentages. Buyer shall make all payments of
the Cash Consideration by wire transfer of immediately available funds according
to the wire instructions for Sellers set forth in Exhibit A.
(b) On the date of this Agreement, Buyer shall deposit with Chase
Manhattan Trust Company, National Association (the "Escrow Agent") by wire
transfer of immediately available funds the amount of $7,000,000 (the "Escrow
Deposit") as a deposit to secure Buyer's performance hereunder, to be held by
the Escrow Agent pursuant to the terms of the Escrow Agreement being executed
simultaneously herewith among Buyer, Sellers and the Escrow Agent, a copy of
which Escrow Agreement is attached hereto as Exhibit B (the "Escrow Agreement").
If the Closing takes place as herein provided, then the Escrow Deposit (or, in
the event that the amount of the Escrow Deposit as of the Closing Date is less
than $7,000,000, such amount) shall be credited against the Cash Consideration
as set forth in Section 2.2(a) and paid to Sellers according to their respective
Cash Percentages, and the earnings thereon shall be paid to Buyer, all as
provided in the Escrow Agreement. If the Closing does not take place because of
a Payment Event (defined below) then, pursuant to the Escrow Agreement, the
Escrow Deposit and the earnings thereon shall be paid to Aurora Communications
as liquidated damages. Payment of such liquidated damages shall be Sellers' sole
remedy against Buyer and, upon payment thereof, neither Buyer nor any Seller
shall thereafter have any recourse against the other under or on account of this
Agreement. In any other case if the Closing does not occur, then, pursuant to
the Escrow Agreement, the Escrow Deposit and the earnings thereon shall be paid
to Buyer. Delivery of the Escrow Deposit and the earnings thereon by the Escrow
Agent shall be
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made, in accordance with the procedures and other provisions set forth in the
Escrow Agreement. For purposes of this Section 2.2(b), a "Payment Event" shall
mean (i) the failure of the Closing to occur as a result of Buyer's failure to
meet the closing conditions set forth in Sections 6.1(a), 6.1(b), 6.1(d),
6.3(d), 6.3(f) or 6.3(g), (ii) the failure of the Closing to occur as a result
of the failure of any party (other than any Seller or any Company) to execute
the agreements contemplated by Section 2.4(e) and the Partnership Rights
Agreements, as applicable, as described in Section 6.1(c) and (iii) the
termination of this Agreement by Sellers pursuant to Section 8.1(b)(ii).
(c) Continuing Sellers shall contribute the Exchanged Subject
Interests to Buyer in exchange for (i) if the Buyer Incorporation shall have
occurred before or simultaneously with the Closing, shares of Nassau Common
Stock as provided in Section 2.4(e), or (ii) if the Buyer Incorporation shall
not have occurred before or simultaneously with the Closing, Nassau Partnership
Interests as provided in the Partnership Rights Agreements and as provided in
Section 2.4(f).
Section 2.3 Time and Place of Closing. The Closing shall take place at
-------------------------
10:00 A.M. on the Closing Date at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, New York, New York, or at such other place as Sellers' Agent and Buyer
agree.
Section 2.4 The Closing. At the Closing:
-----------
(a) Sellers shall convey, transfer, and assign to Buyer, and shall
deliver to Buyer such instruments of conveyance, transfer, and assignment as
shall be sufficient to convey, transfer, and assign to Buyer, sole and exclusive
right, title and interest in and to all the Subject Interests free and clear of
all Encumbrances. The Corporate Holders shall deliver to Buyer certificates
representing the AMI Shares or the AAA Shares, as applicable, with stock
transfer tax stamps affixed, if required, duly endorsed for transfer or with
stock powers duly executed in blank attached, in good form for delivery.
(b) Buyer shall deliver to Sellers the Cash Consideration as set
forth in Section 2.2(a) and shall issue to Continuing Sellers, according to the
percentages set forth in Exhibit A, the Nassau Equity Interests as provided in
Section 2.2(c) and this Section 2.4.
(c) Buyer and Continuing Sellers shall execute and deliver a
Registration Rights Agreement substantially in the form of Exhibit C providing
for the registration rights to Continuing Sellers with respect to Buyer
described therein.
(d) Buyer and Osborn shall execute and deliver, and Sellers shall
cause Aurora Communications to execute and deliver, an Employment Termination
and Non-Competition Agreement substantially in the form of Exhibit D (the
"Employment Termination and Non-Competition Agreement").
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(e) If the Buyer Incorporation shall have occurred before or
simultaneously with the Closing, Buyer and, to the extent applicable as provided
in clause (ii) below, Continuing Sellers shall execute and deliver, as
applicable, each of the following.
(i) Buyer shall deliver to Continuing Sellers shares of Nassau
Common Stock representing, in the aggregate, at least 21.07% of the aggregate
Nassau Equity Interests determined on a Fully Diluted Basis, but without giving
effect to the IPO or any other issuance and sale of Nassau Equity Interests for
a consideration per Nassau Equity Interest greater than or equal to the
valuation per Nassau Equity Interest agreed upon by Buyer and the Continuing
Sellers in connection with the transfer of Nassau Equity Interests to the
Continuing Seller hereunder, with each Continuing Seller to receive shares of
Nassau Common Stock representing the percentage of the aggregate Nassau Equity
Interests set forth in Exhibit A for such Continuing Seller; provided, that if
--------
at any time Buyer shall issue or sell any additional Nassau Equity Interests for
a consideration per share or unit of Nassau Equity Interests less than the
valuation per share or unit of Nassau Equity Interests agreed upon by Buyer and
the Continuing Sellers in connection with the transfer of Nassau Equity
Interests to the Continuing Sellers hereunder, such equity interest of the
Continuing Sellers shall be adjusted by multiplying (A) the current equity
interest (as previously adjusted hereunder) by (B) a fraction, (1) the numerator
of which shall be the number of outstanding Nassau Equity Interests determined
on a Fully Diluted Basis immediately prior to the issuance of such additional
Nassau Equity Interests plus the number of additional Nassau Equity Interests so
issued and (2) the denominator of which shall be the number of outstanding
Nassau Equity Interests immediately prior to the issuance of such additional
Nassau Equity Interests plus the number of Nassau Equity Interests which the
aggregate consideration for the total number of such additional Nassau Equity
Interests so issued would purchase at the valuation per share or unit of Nassau
Equity Interests agreed upon by Buyer and the Continuing Sellers in connection
with the transfer of Nassau Equity Interests to the Continuing Sellers
hereunder; and
(ii) (A) Buyer shall deliver to each Continuing Seller one or
more stock certificates representing such number of shares of Nassau Common
Stock to be received by such Continuing Seller (and upon such delivery, such
shares of Nassau Common Stock shall be fully paid and non-assessable); and (B)
Buyer shall execute and deliver documents or instruments which terminate (1) the
Master Agreement (but only after it shall have become effective for purposes of
consummating the transactions contemplated by Sections 2 through 5 thereof), (2)
the Amended Investment Agreement (as defined in the Master Agreement) (but only
after payment of the amounts provided by Section 1 thereof) and (3) the Amended
Securityholders' Agreement (as defined in the Master Agreement).
(f) If the Buyer Incorporation shall not have occurred before or
simultaneously with the Closing, Buyer and, in the case of the agreements
referred to in clauses (i) and
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(iv) below, Continuing Sellers shall execute and deliver the following
agreements (collectively, the "Partnership Rights Agreements"):
(i) Continuing Sellers shall contribute a portion of their
Subject Interests, as set forth in Exhibit A hereto, in exchange for Nassau
Partnership Interests representing, in the aggregate, at least 20.906% of the
aggregated Nassau Partnership Interests determined on a Fully Diluted Basis, but
without giving effect to the IPO or any other issuance and sale of Nassau Equity
Interests for a consideration per Nassau Equity Interest greater than or equal
to the valuation per Nassau Partnership Interest agreed upon by Buyer and the
Continuing Sellers in connection with the transfer of Nassau Partnership
Interests to the Continuing Seller hereunder, with each Continuing Seller to
receive Nassau Partnership Interests representing the percentage of the
aggregate Nassau Equity Interests set forth in Exhibit A for such Continuing
Seller; provided, that if at any time Buyer shall issue or sell any additional
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Nassau Equity Interests for a consideration per share or unit of Nassau Equity
Interests less than the valuation per share or unit of Nassau Equity Interests
agreed upon by Buyer and the Continuing Sellers in connection with the transfer
of Nassau Equity Interests to the Continuing Sellers hereunder, such equity
interest of the Continuing Sellers shall be adjusted by multiplying (A) the
current equity interest (as previously adjusted hereunder) by (B) a fraction,
(1) the numerator of which shall be the number of outstanding Nassau Equity
Interests determined on a Fully Diluted Basis immediately prior to the issuance
of such additional Nassau Equity Interests plus the number of additional Nassau
Equity Interests so issued and (2) the denominator of which shall be the number
of outstanding Nassau Equity Interests immediately prior to the issuance of such
additional Nassau Equity Interests plus the number of Nassau Equity Interests
which the aggregate consideration for the total number of such additional Nassau
Equity Interests so issued would purchase at the valuation per share or unit of
Nassau Equity Interests agreed upon by Buyer and the Continuing Sellers in
connection with the transfer of Nassau Equity Interests to the Continuing
Sellers hereunder;
(ii) a Second Restated Securityholders' Agreement
substantially, in the form of Exhibit E;
(iii) an Amendment to Restated Investment Agreement
substantially in the form of Exhibit F;
(iv) a document or instrument terminating the Master
Agreement (but only after it shall have become effective for purposes of
consummating the transactions contemplated by Sections 2 through 5 thereof); and
(v) a Fourth Restated Agreement of Limited Partnership of
Buyer substantially in the form of Exhibit G.
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Buyer shall cause each of the Partnership Rights Agreements to be executed
and delivered at or prior to the Closing by all other parties whose execution
and delivery thereof is necessary to give effect thereto upon the Closing.
Section 2.5 Purchase and Sale of Shares of NBP. On the basis of the
----------------------------------
representations, warranties, covenants and agreements and subject to the
satisfaction or waiver of the conditions set forth herein, but only in the event
that the Buyer Incorporation shall not have occurred before or simultaneously
with the Closing, Buyer agrees to sell to the Continuing Sellers and each
Continuing Seller agrees to purchase, at the Closing, shares of the Common
Stock, $0.01 par value per share, of NBP (the "NBP Common Stock"), representing,
in the aggregate, at least 21.07% of the aggregate equity interest in NBP
determined on a Fully Diluted Basis, but without giving effect to any sale of
NBP Common Stock for a consideration per share of NBP Common Stock greater than
or equal to the valuation per share of NBP Common Stock of agreed upon by Buyer
and the Continuing Sellers in connection with the transfer of NBP Common Stock
to the Continuing Seller hereunder, as set forth on Exhibit A for each
Continuing Seller; provided, that if at any time NBP shall issue or sell any
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additional equity interests for a consideration per share less than the
valuation per share of NBP Common Stock agreed upon by NBP and the Continuing
Sellers in connection with the transfer of NBP Common Stock to the Continuing
Sellers hereunder, such equity interest of the Continuing Sellers shall be
adjusted by multiplying (A) the current equity interest of the Continuing
Sellers (as previously adjusted hereunder) by (B) a fraction, (1) the numerator
of which shall be the number of outstanding equity interests of NBP determined
on a fully diluted basis immediately prior to the issuance of such additional
equity interests plus the number of additional equity interests so issued and
(2) the denominator of which shall be the number of outstanding equity interests
immediately prior to the issuance of such additional equity interests plus the
number of equity interests which the aggregate consideration for the total
number of such additional equity interests so issued would purchase at the
valuation per share or unit of equity interests agreed upon by NBP and the
Continuing Sellers in connection with the transfer of NBP Common Stock to the
Continuing Sellers hereunder. At the Closing, (i) each Continuing Seller shall
pay the aggregate purchase price to be paid by such Continuing Seller for such
purchase to Buyer in immediately available funds and (ii) Buyer shall deliver to
such Continuing Seller one or more stock certificates representing the shares of
NBP Common Stock so purchased by such Continuing Seller against receipt of the
purchase price to be paid by such Continuing Seller (and upon such delivery
against such receipt, such shares of NBP Common Stock shall be fully paid and
non-assessable).
Section 2.6 Net Working Capital Adjustments
--------------------------------
(a) At the Closing, Sellers shall cause Aurora Communications to
deliver to Buyer its good faith estimate of the Net Working Capital of the
Companies as of the Closing Date (which may be positive or negative) (the
"Estimated Closing Net Working Capital"), together with a reasonably detailed
explanation of the calculation thereof. If the Estimated Closing Net Working
Capital is less than zero, then the difference between zero and the
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Estimated Closing Net Working Capital shall be deducted from the Cash
Consideration payable to Sellers at the Closing according to their respective
Cash Percentages. If the Estimated Closing Net Working Capital is greater than
zero, Buyer shall pay the difference between the Estimated Net Working Capital
and zero (the "Estimated NWC Payment Amount") to Sellers at the Closing
according to their respective Cash Percentages.
(b) As soon as reasonably practicable following the Closing Date, and
in any event within sixty (60) calendar days thereafter, Buyer shall (i) cause
the Companies to prepare (x) a consolidated pro forma balance sheet of the
Companies as of the Closing Date (the "Closing Balance Sheet") and (y) a
calculation of the Net Working Capital as reflected on the Closing Balance Sheet
(the "Closing Net Working Capital"), (ii) cause the Closing Balance Sheet and
the calculation of Closing Net Working Capital to be audited by Grant Thornton
LLP ("GT"), and (iii) deliver the Closing Balance Sheet and the calculation of
Closing Net Working Capital, together with the audit letter of GT, to the
Sellers' Agent. The Closing Balance Sheet shall be prepared in accordance with
Generally Accepted Accounting Principles and on a basis consistent with the
preparation of the historical consolidated financial statements of the Companies
and shall fairly present the consolidated financial position of the Companies as
of the Closing.
(c) Upon delivery of the Closing Balance Sheet, Buyer shall cause the
Companies to provide Sellers' Agent full access to the books and records of the
Companies to the extent reasonably related to its evaluations of the Closing
Balance Sheet and the calculation of the Closing Net Working Capital. If
Sellers' Agent shall disagree with the calculation of the Closing Net Working
Capital, it shall notify Buyer of such disagreement in writing, in reasonable
detail (in light of the information then available to Sellers' Agent), within
thirty (30) days after its receipt of the Closing Balance Sheet. In the event
Sellers' Agent does not provide such a notice of disagreement within such thirty
(30) day period, Sellers' Agent and Sellers shall be deemed to have accepted the
Closing Balance Sheet and the calculation of the Closing Net Working Capital
delivered by Buyer, which shall be final, binding and conclusive for all
purposes hereunder. In the event any such notice of disagreement is timely
provided by Sellers' Agent, Buyer and Sellers' Agent shall use their reasonable
best efforts for a period of thirty (30) days (or such longer period as they may
mutually agree) to resolve any disagreements with respect to the calculation of
the Closing Net Working Capital. If, at the end of such period, they are unable
to resolve such disagreements, then Ernst & Young LLP or such other independent
accounting firm among the "Big Five" as may be mutually selected by Sellers'
Agent and Buyer (the "Auditor") shall resolve any remaining disagreements. The
Auditor shall advise the parties in writing as promptly as practicable, but in
any event within thirty (30) days of the date on which such dispute is referred
to the Auditor, based solely on written submissions forwarded by Buyer and
Sellers' Agent to the Auditor within ten (10) Business Days following the
Auditor's selection, whether the Closing Balance Sheet was prepared in
accordance with the standards set forth in this Section 2.6 and (only with
respect to the remaining disagreements submitted to the Auditor) whether and to
what extent, if any, the Closing Net Working Capital determination
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requires adjustment. The fees and expenses of the Auditor shall be paid one-half
by Buyer and one-half by Sellers' Agent on behalf of Sellers. The determination
of the Auditor shall be final, conclusive and binding on the parties.
(d) In the event that the Closing Net Working Capital as finally
determined pursuant to Section 2.6(c) is:
(i) At least $50,000 greater than the Estimated Closing Net
Working Capital, Buyer shall promptly pay the difference between the Closing Net
Working Capital and the Estimated Closing Net Working Capital (the "Closing NWC
Payment Amount") to Sellers according to their respective Cash Percentages; or
(ii) At least $50,000 less than the Estimated Closing Net
Working Capital, Sellers (or Sellers' Agent on Sellers' behalf) shall promptly
pay the difference between the Estimated Net Working Capital and the Closing Net
Working Capital to Buyer, with each Seller to pay such Seller's Cash Percentage
of such difference.
(e) Any amount payable by Buyer or Sellers pursuant to this Section
2.6 shall be paid by wire transfer of immediately available funds according to
the wire instructions of the payee or payees set forth in Exhibit A, with each
Seller to pay or be paid, as the case may be, such Seller's Cash Percentage of
such amount.
ARTICLE III
Representations and Warranties of Sellers as to the Companies
Sellers severally (and not jointly and severally), according to their
respective Subject Interest Percentages, represent and warrant as to each of the
following, except that (i) only the AMI Sellers severally (and not jointly and
severally), according to their respective Subject Interest Percentages, make the
representations and warranties relating to AMI and (ii) only the Allied Sellers
severally (and not jointly and severally), according to their respective Subject
Interest Percentages, make the representations and warranties relating to AAA.
Section 3.1 Organization; Authorization; etc.
---------------------------------
(a) Each of the Companies is a corporation or limited liability
company duly organized or formed, validly existing and in good standing under
the laws of its jurisdiction of incorporation, organization or formation.
(b) Each Company (i) has full corporate or limited liability
company power to own all of its properties and assets and to carry on its
business as it is now being conducted and (ii) is duly qualified to do business
and is in good standing in each jurisdiction in which the
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conduct of its business requires it to be so qualified, except where failure to
be so qualified or in good standing would not have an Aurora Material Adverse
Effect.
(c) Neither the execution and delivery of this Agreement nor
performance by any Seller of its obligations hereunder does or will (i) conflict
with any Company's certificate of incorporation or by-laws, limited liability
company agreement or other constitutive documents or (ii) except as listed in
Schedule 3.1(c), (x) conflict with or result in a breach of (or give rise to any
right of termination or acceleration of) any term of, or require any consent
under, any lease, contract or other agreement or instrument by which any Company
is bound or with respect to which any Company is an obligor or guarantor or to
which any property or asset of any Company is subject, (y) give rise to any
Encumbrance upon any assets or property of any Company, or (z) violate any
judgment or order of any Governmental Authority to which any Company is subject,
except where such conflict, breach, Encumbrance or violation would not have an
Aurora Material Adverse Effect.
(d) Sellers have delivered to Buyer true and complete copies of the
certificate of incorporation and by-laws, limited liability company agreement or
other constitutive documents of each of the Companies.
(e) Schedule 3.1(e) sets forth as to each Company its jurisdiction
of incorporation or formation and the jurisdictions in which it is qualified to
do business as a foreign corporation or foreign limited liability company.
Section 3.2 Capitalization. Schedule 3.2 sets forth (i) as to each of AMI
--------------
and AAA, its authorized capital stock, the number of shares of each class
thereof outstanding, the record and beneficial owners of such outstanding shares
of capital stock and the numbers and classes of such outstanding shares owned by
such owners and (ii) as to each other Company, its authorized membership and
other limited liability company ownership interests, the number of units or
other ownership interests of each class thereof outstanding, the record and,
with respect to Aurora Holding and each Radio Station Company, the beneficial
owners of such outstanding units or other ownership interests and the numbers
and classes of such outstanding units or other ownership interests owned by such
owners (such outstanding shares and limited liability company ownership
interests together being referred to herein as the "Aurora Equity Interests").
The Aurora Equity Interests, as set forth in Schedule 3.2, are all of the issued
and outstanding shares of capital stock or membership or other limited liability
company ownership interests of the respective Companies and the owners of the
Aurora Equity Interests, as set forth in Schedule 3.2, are all of the record
owners of the Aurora Equity Interests. All of the Aurora Equity Interests are
duly authorized and validly issued and, in the case of shares of capital stock,
fully paid and non-assessable, and, except for the Subject Interests, are owned
by the Companies as set forth in Schedule 3.2 free and clear of any Encumbrances
except restrictions imposed by federal and state securities law, the Third
Amended and Restated Limited Liability Company Agreement of Aurora
Communications and that certain Investor Rights Agreement, dated as of
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May 3, 1999, among AMI and its shareholders. Except as set forth on Schedule
3.2, there are no outstanding warrants, options or other rights to acquire
capital stock or membership or other limited liability company ownership
interests, or securities convertible into capital stock or membership or other
limited liability company ownership interests, of any of the Companies.
Section 3.3 Financial Statements
--------------------
(a) Sellers have previously delivered to Buyer true and complete
copies of (i) the unaudited consolidated and consolidating balance sheets of the
Companies (other than AMI and AAA) as of December 31, 1999 and the consolidated
and consolidating statements of income and cash flows of the Companies for the
period beginning January 20, 1999 through December 31, 1999 and (ii) the monthly
operating statements of the Companies (other than AMI and AAA) for the month
ended January 31, 2000. Except as set forth on Schedule 3.3, such financial
statements and operating statements were prepared (and the financial statements
to be delivered to Buyer pursuant to Section 5.1 (a)(iv) (the "Interim Financial
Statements") will be prepared) in accordance with Generally Accepted Accounting
Principles consistently applied and present (or, in the case of the Interim
Financial Statements, will present) fairly in all material respects the
financial position, results of operations and other information included therein
as of the dates or for the periods specified therein, subject, in the case of
such monthly statements (and the Interim Financial Statements), only to normal
year-end adjustment consisting of normal recurring items which do not, in the
aggregate, materially and adversely affect the financial position, results of
operations and other information from that presented.
(b) The AMI Sellers have previously delivered to Buyer true and
complete copies of the consolidated and consolidating balance sheet of AMI as of
December 31, 1999 and the consolidated and consolidating statement of income of
AMI for the period April 30, 1999 through December 31, 1999 (the "AMI Financial
Statements"). The AMI Financial Statements were prepared in accordance with
Generally Accepted Accounting Principles consistently applied, and present
fairly in all material respects the financial position, results of operations
and other information included therein as of the dates or for the periods
specified therein, subject only to normal year-end adjustment consisting of
normal recurring items which do not, in the aggregate, materially and adversely
affect the financial position, results of operations and other information from
that presented.
(c) Except as set forth on Schedule 3.3, all accounting ledgers and
other books and records of the Companies are located at (i) in the case of AMI,
the principal office of Aurora Communications in Stamford, Connecticut, (ii) in
the case of AAA, 1919 Pennsylvania Avenue NW, 3rd Floor, Washington, DC 20006,
and (iii) in the case of each of the other Companies, the principal office of
Aurora Communications in Stamford, Connecticut.
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Section 3.4 Licenses
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(a) Sellers have furnished to Buyer true copies of all the FCC
Licenses (which are identified on Schedule 3.4(a)), which constitute all
required licenses, permits and authorizations for the day and night operation of
the Radio Stations and associated auxiliary facilities of the respective Radio
Station Companies indicated on such Schedule. Each Radio Station has the right
to use the call letters it presently uses (as listed on Schedule 3.9), pursuant
to the rules and regulations of the FCC. Each Company has complied in all
material respects with the terms and conditions of the respective FCC Licenses
applicable to it and with the FCC's other requirements. The FCC's most recent
renewals of the FCC Licenses were not challenged by any petition to deny or by
any competing application.
(b) Each Company possesses all material governmental licenses,
permits, approvals and other authorizations required by such Company in the
conduct of its business. Except as identified in Schedule 3.4(b), no
application, action or proceeding is pending for the renewal or modification of
any FCC License or any of such licenses, permits, approvals or authorizations,
and no application, action or proceeding is pending or, to each Seller's
knowledge, threatened that may result in the denial of the application for
renewal, the revocation, modification, nonrenewal or suspension of any of the
FCC Licenses or any of such licenses, permits, approvals or authorizations, the
issuance of a cease-and-desist order, or the imposition of any administrative or
judicial sanction and, to each Seller's knowledge, there is no basis for any
such denial, revocation, modification, non-renewal or suspension or any such
order or sanction.
Section 3.5 Operation of Radio Stations: FCC Reports
----------------------------------------
(a) Each of the Radio Stations is being operated in all material
respects in accordance with the FCC Licenses, the Communications Act of 1934, as
amended, the rules and regulations thereunder, and all other material legal
requirements, federal, state and local, applicable to the Radio Stations.
(b) To the knowledge of each Seller, all applications, reports,
notices and other documents required to be filed by the Companies with the FCC
or any other Governmental Authority have been filed and complied with in all
material respects and are complete and correct as filed and the licensee Company
of each Radio Station has timely placed in its public inspection file all
documentation required by the FCC to be placed in such file by it.
Section 3.6 Consents.
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(a) Except for the consent of the FCC to the transfer of the
Subject Interests and control of the Companies holding the FCC Licenses to Buyer
hereunder (the "FCC Consent"), the filing of necessary reports and notifications
and the receipt of necessary governmental
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approvals under the HSR Act and as set forth in Schedule 3.6(a), no consent or
approval by, or filing with, any Governmental Authority is required by any
Seller or any Company in connection with the execution or delivery of this
Agreement by Sellers or the consummation of the Purchase and Exchange.
(b) None of the Sellers knows of any facts that would cause the FCC
to deny the FCC Consent.
Section 3.7 Contracts, Leases, Options and Commitments. Sellers have
------------------------------------------
delivered to Buyer true copies of the material contracts, leases, options,
commitments and agreements (other than Barter Agreements) listed in Schedule
3.7. Schedule 3.7 identifies: (i) all Barter Agreements (as defined in Section
5.1(e)) to which any Radio Station Company is a party, including the dollar
amount of the broadcasting time or number of spot announcements owed by the
Radio Stations under the Barter Agreements; (ii) all agreements relating to any
indebtedness for borrowed money of the Companies; (iii) all commitments and
other agreements for the purchase of any materials, supplies or equipment, other
than commitments and other agreements that were entered into in the ordinary
course of business and that involve an expenditure by any Company of less than
$100,000 for any one commitment or two or more related commitments; (iv) all
capital leases providing for annual payments in excess of $20,000 and all leases
or other rental agreements for real estate under which any Company is either
lessor or lessee; (v) all employment and consulting agreements to which any
Company is a party that provide for compensation in excess of $50,000 a year;
(vi) all collective bargaining agreements to which any Company is a party and
(vii) all contracts, leases, options, commitments and agreements (written or
oral) requiring such Company to make or entitling such Company to receive annual
payments in excess of $25,000 (other than sales of advertising time). Except as
set forth in Schedule 3.7, each Company (and, to each Seller's knowledge, each
other party to the contracts, leases, options, commitments and agreements listed
in Schedule 3.7) has complied in all material respects with and is not in
material default under any of the contracts, leases, options, commitments and
agreements listed on Schedule 3.7. Except as set forth in Schedule 3.7, all of
such contracts, leases, options, commitments and agreements are valid, binding
and in full force and effect and will continue in full force and effect without
change following the Purchase and Exchange without obtaining the consent of any
other party thereto, except as such enforceability may be limited by applicable
bankruptcy, insolvency or other laws affecting creditors' rights generally or by
general principles of equity.
Section 3.8 Assets. Each Company has good and marketable title to all
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assets and properties owned by it, free and clear of all Encumbrances, other
than Aurora Permitted Encumbrances.
Section 3.9 Trade Rights, etc. Schedule 3.9 lists the call letters,
-----------------
trademarks, tradenames and other trade rights and marks used by the Radio
Station Companies in the operation of their Radio Stations. Except as listed on
Schedule 3.9, no Company has licensed,
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consented to or waived, or has any knowledge of, any other Person's use of any
such call letters, trademarks, tradenames and other trade rights and marks. None
of the Sellers knows of any challenge or claim with respect to the use of any
such call letters, trademarks, tradenames or other trade rights or marks by the
appropriate Radio Station Company. To each Seller's knowledge, the Radio Station
Companies collectively possess adequate and enforceable common law rights to use
(without payment) the call signs, trademarks, tradenames and other trade rights
and marks used in the operation of the Radio Station Companies' business within
the respective jurisdictions where such call signs, trademarks, tradenames, and
other rights and marks are currently used. None of the Radio Station Companies
has received any notice of conflict which asserts any rights of others with
respect to any of such call signs, trademarks, tradenames or other trade rights
or marks, and Sellers do not know of any basis for the assertion of any such
rights. To the knowledge of each Seller, none of the Companies is infringing any
patent, copyright or trademark of any third party and no claim has been made or
threatened against any Company alleging any such violation. None of the
Companies is a party to or bound by any license or other agreement requiring the
payment by it of any royalty or similar payment other than music license
agreements with ASCAP, BMI and SESAC and other agreements referred to in
Schedule 3.7.
Section 3.10 Changes since December 31, 1999. Except as set forth in
-------------------------------
Schedule 3.10 or in any other Schedule to this Agreement, since December 31,
1999 there has not been:
(a) any Aurora Material Adverse Effect, and each Radio Station
Company has operated its business, including its Radio Stations, in the ordinary
course of business;
(b) any change in any of the licenses, permits or franchises of any
Radio Station Company which has had or would have an Aurora Material Adverse
Effect, or any change in the methods of accounting or accounting practice, which
have had or may reasonably be expected to have an Aurora Material Adverse Effect
or a material adverse effect on the licenses, permits or franchises of the Radio
Station Companies as a whole;
(c) any damage, destruction or other casualty loss which
constitutes an Aurora Material Adverse Effect;
(d) any amendment, modification or termination of any existing, or
entering into any new, contract, agreement, lease, or other commitment
(including any borrowing or commitment to borrow, any capital lease or any
commitment to enter into a capital lease or any sale of assets or commitment to
sell assets), which is material to the Condition of the Radio Station Companies
as a whole, except for this Agreement and as contemplated by this Agreement;
21
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(e) any disposition by any Radio Station Company of any asset which
had a net book value at the time of disposition of $100,000 or more, but not
more than $300,000 for all such dispositions;
(f) any direct or indirect redemption, purchase or other
acquisition of any capital stock, membership interest or other limited liability
company ownership interest of any Company or any declaration, setting aside or
payment of any dividend or other distribution on or in respect of any capital
stock, membership interest or other limited liability ownership interest of any
Company;
(g) any transaction between any Company and any Seller or any
Affiliate of any Seller (other than another Company), except for transactions
relating to provision of corporate services, insurance and "overhead" by Sellers
in the ordinary course consistent with past practice;
(h) any change in or commitment to change the compensation payable
to any of any Company's officers, directors, managers, employees or agents, or
any bonus payment or similar arrangements made to or with any of such officers,
directors, employees or agents other than in the ordinary course of business and
consistent with past practice;
(i) any capital expenditure by any Company in excess of $100,000;
(j) any action by any Company to amend its articles of
incorporation or bylaws, limited liability company agreement or other
constitutive documents; or
(k) any issuance or retirement of any equity or debt securities by
any Company or any grant by any Company of any option or issuance of any warrant
or securities convertible into such securities.
Section 3.11 Significant Customers. No advertising customer of any Radio
---------------------
Station Company represented more than 5% of such Radio Station Company's
revenues in the fiscal year ended December 31, 1999.
Section 3.12 Litigation, etc. Except as set forth in Schedule 3.12:
---------------
(a) No action, litigation, arbitration or other proceeding (and, to
the knowledge of each Seller, no investigation) is pending by or against or, to
the knowledge of each Seller, threatened against any Company or Radio Station
which, if adversely determined, would reasonably be expected to have an Aurora
Material Adverse Effect.
(b) No Company is subject or party to any judgment or order of or
stipulation with any court or other Governmental Authority, or in violation of
any provision of any law,
22
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license, permit, approval or authorization (including applicable wage and hour,
equal employment, safety and other provisions of law relating to such Company's
employees), which judgment, order, stipulation or violation has had or would
reasonably be expected to have an Aurora Material Adverse Effect.
Section 3.13 Employees and Employee Benefit Plans. Schedule 3.13 lists all
------------------------------------
full and part-time employees of each Company and their base compensation rates
as of December 31, 1999 and all pension, retirement, profit-sharing, stock
option, bonus, group insurance, equity and other benefit or incentive plans,
arrangements or agreements and all material employment, termination or severance
arrangements or agreements sponsored by, maintained by, contributed to or
required to be contributed to by any Company or by any trade or business,
whether or not incorporated (an "ERISA Affiliate"), that together with any
Company would be deemed a "single employer" within the meaning of section
4001(b) of ERISA, whether written or oral, for the benefit of any employees or
former employee of any Company or any Company Subsidiary (collectively, the
"Employee Plans"). Sellers have delivered true and complete copies of all
Employee Plans to Buyer. No Company either contributes or is required to
contribute to any multiemployer plan, as defined in Section 414(f) of the Code
and Section 400l(a)(3) of ERISA. No Employee Plan is subject to Title IV of
ERISA and no Company has at any time during the seven year period ending on the
date of this Agreement maintained or contributed to, any defined benefit plan
covered by Title IV of ERISA, or incurred any liability during such period under
Title IV of ERISA, and the transactions contemplated by this Agreement will not
subject any Company to liability under Title IV of ERISA. Each Employee Plan
which is intended to be qualified under Section 401(a) of the Code is so
qualified, and each related trust is exempt from taxation under Section 501(a)
of the Code. There is no plan or commitment to create any Employee Plan or to
modify or change any Employee Plan. Each of the Employee Plans has been operated
and administered in all material respects in accordance with its terms and
applicable law. There is no material liability under ERISA or otherwise with
respect to any Employee Plan other than for the payment or provision of the
benefits due thereunder in accordance with its terms, which has been incurred
or, based upon such facts as exist on the date hereof, may reasonably be
expected to be incurred. All accrued obligations of each Company with respect to
the Employee Plans have been fully satisfied in their entirety. No amounts
payable under the Employee Plans will fail to be deductible for federal income
tax purposes by virtue of section 280G of the Code. The consummation of the
transactions contemplated by this Agreement will not, either alone or in
combination with another event, (i) entitle any current or former employee or
officer of any Company or any ERISA Affiliate to severance pay, unemployment
compensation or any other payment, except as expressly provided in this
Agreement, or (ii) accelerate the time of payment or vesting, or increase the
amount of compensation due any such employee or officer. No Employee Plan
provides medical, surgical, hospitalization, death or similar benefits (whether
or not insured) for employees or former employees of any of the Companies or any
of their subsidiaries for periods extending beyond their retirement or other
termination of service, other than (i) coverage mandated by applicable law, (ii)
survivor benefits under any "pension plan," or (iii) benefits the full cost of
which is
23
<PAGE>
borne by the current or former employee (or his beneficiary). There are no
pending, threatened or anticipated claims by or on behalf of any Employee Plan,
by an employee or beneficiary covered under such Employee Plan, or otherwise
involving any such Employee Plan (other than routine claims for benefits). No
Seller or Company knows of any efforts to organize any employees of any Radio
Station, and no strike or labor dispute involving any Radio Station has occurred
or, to each Seller's knowledge, is threatened. None of the employees of any
Company is represented by any labor union nor are there any collective
bargaining agreements otherwise in effect with respect to such employees.
Section 3.14 Insurance. Schedule 3.14 lists all insurance policies
---------
maintained by or on behalf of each Company, all of which policies are in full
force and effect and shall be maintained in full force and effect through the
Closing.
Section 3.15 Taxes. (a) Each of the Companies has timely filed all federal,
-----
state, local and foreign Tax Returns that it was required to file, and such Tax
Returns are correct and complete in all material respects. There are no Tax
sharing or similar agreements in effect between or among any Sellers and any of
the Companies. Neither AAA nor AMI is or has ever been, a member of an
affiliated group (within the meaning of Section 1504(a) of the Code or any
similar group defined under a similar provision of state, local or foreign law)
filing a consolidated federal income tax return. Each Company has paid, or has
set up an adequate reserve on its balance sheet dated as of December 31, 1999
for the payment of, all Taxes with respect to any period ending on or before
December 31, 1999. For the purposes of the preceding sentence, December 31, 1999
shall be treated as the last day of a taxable period whether or not it is in
fact the last day of a taxable period. Since December 31, 1999, no Company has
incurred any material liability for Taxes except in the ordinary course of
business. No election under Section 341(f) of the Code has been made to treat
any Company as a "consenting corporation" (as defined in Section 341(f) of the
Code). There are no liens for Taxes upon any property or assets of the
Companies, except for liens for Taxes that are not yet due and payable. There
are no matters under discussion between any Company and any taxing authority in
respect of any Tax relating to any Company. Each of the Companies (except for
AMI and AAA) has been a Pass-Through Entity for federal, state and local income
tax purposes from the date of its formation, and no election has been made under
Treasury Regulation Section 301.7701-3 by or with respect to any Company (except
for AMI and AAA) for such entity to be treated as an entity other than a
Pass-Through Entity. If an election or deemed election under Section 338 of the
Code is made, or if any assets of any Company are sold to Buyer or any of its
Affiliates after the Closing, Buyer shall be liable for and shall indemnify
Sellers for all resulting income tax liabilities of Sellers and the Companies;
such indemnification obligation shall survive until the expiration of the
statute of limitations, plus any extensions under applicable law, with respect
to the tax returns of Sellers and the Companies affected by any such election,
deemed election or asset sale, plus thirty days.
24
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(b) For purposes of this Agreement, the term "Tax" or "Taxes" shall mean
all taxes, charges, fees, levies or other like assessments imposed by the United
States, or any state, local or foreign government or subdivision or agency
thereof whether computed on a separate, consolidated, unitary, combined or any
other basis (including, without limitation, net or gross income, gross receipts,
alternative or add-on minimum, profits, stamps, premium, environmental stamp,
duty, property, value-added, excise, sales, withholding, social security,
occupation, use, service, service use, license, payroll, franchise, transfer and
recording taxes, fees and charges, windfall profits, severance, customs, import,
export, employment or similar taxes) and such terms shall include any interest,
fines, penalties and additional amounts imposed or with respect to any such
taxes, charges, fees, levies or other like assessments, and (ii) any liability
for the payment of any amounts of the type described in (i) as a result of being
a transferee of or a successor to any person, or as a result of any express or
implied obligation to indemnify any other person.
(c) For purposes of this Agreement, the term "Tax Return" shall mean any
----------
return, statement, report, form (including, without limitation, any estimated,
withholding, or information tax returns or reports) or other document or
information required to be supplied or actually provided to a governmental
authority in connection with Taxes.
Section 3.16 Authorized Signatories. Schedule 3.16 lists the names of all
----------------------
authorized signatories on bank accounts and safe deposit boxes maintained by
each Company, of all employees holding credit cards issued in the name of any
Company and of all Persons holding powers of attorney for any Company or, with
respect to his position as an officer, any officer of any Company.
Section 3.17 Brokers, Finders, etc. None of the Sellers or the Companies
---------------------
has employed, or is subject to any claim of, any broker, finder, consultant or
intermediary in connection with the Purchase and Exchange who might be entitled
to a fee or commission from Buyer upon consummation of the Purchase and
Exchange.
Section 3.18 Real Property. Schedule 3.18 contains a list and brief
-------------
description of all real properties owned (the "Owned Real Property") or leased
(the "Leased Real Property") by the Radio Station Companies, including all
structures located on those real properties (the Owned Real Property and the
Leased Real Property being collectively referred to herein as the "Real
Property"). Except as set forth on that Schedule and except for any Aurora
Permitted Encumbrance, the Radio Station Companies have good and marketable
title to the Owned Real Property, free and clear of any Encumbrance. All
improvements on the Owned Real Property are in accordance with all applicable
laws, ordinances, regulations and orders, including, those applicable to zoning,
environment and the establishment and maintenance of working conditions for
labor. None of the Sellers knows of any law, ordinance, regulation, order,
restriction or agreement, including any zoning law, that would restrict the
present operations of the Radio Station Companies or the presently planned
expansion or alteration of or addition to the
25
<PAGE>
structures located on any of the Real Property. Except as disclosed on Schedule
3.18, the Purchase and Exchange will not adversely affect the Radio Station
Companies' right to use the Real Property for the same purpose and to the same
extent as they were being used by the Radio Station Companies prior to the date
of this Agreement.
Section 3.19 Holding Companies. Except as set forth in Schedule 3.19 or as
-----------------
contemplated by or provided in this Agreement, none of the Companies (other than
the Radio Station Companies) (i) owns or holds any property or assets or
conducts any business (other than the ownership of the membership or other
limited liability company ownership interests in any other Company as set forth
in Schedule 3.2), (ii) has any liabilities (other than any indebtedness or other
liability under the Existing Aurora Credit Facilities), (iii) has entered into
any contractual obligation on behalf of itself or (iv) holds or is subject to
any FCC License or any other license, permit, authorization or approval of any
Governmental Authority.
Section 3.20 Subsidiaries. None of the Companies has any direct or indirect
------------
subsidiaries, except for another Company. Other than as reflected in Schedule
3.2, none of the Companies owns, directly or indirectly, any shares or other
equity interest or securities in any business organization, entity or
enterprise.
Section 3.21 Environmental Matters. Except as set forth in any
---------------------
environmental report delivered by Sellers to Buyer prior to the date of this
Agreement and except as otherwise set forth on Schedule 3.21, no hazardous or
toxic substance or waste regulated under any applicable environmental, health or
safety law has been generated, stored, transported or released on, in, from or
to the Real Property. Except as set forth in any environmental report delivered
by Sellers to Buyer prior to the date of this Agreement and except as set forth
on Schedule 3.21, the Companies have complied in all material respects with all
environmental, health and safety laws applicable to the Radio Stations.
Section 3.22 Accounts Receivable. Except as set forth on Schedule 3.22, the
-------------------
accounts receivable of the Companies have arisen in the ordinary course of
business and are valid, subject, however, to the reserves for bad or
questionable accounts provided for on the latest dated balance sheet included in
the financial statements described in Section 3.3. Schedule 3.22 sets forth the
aging of accounts receivable of the Companies as of December 31, 1999. Except as
set forth on Schedule 3.22, each account receivable of the Companies described
on Schedule 3.22 represents the bona fide sale and delivery of goods or services
to, or as directed by, the account debtors set forth on such Schedule. None of
such accounts receivable is represented by a note or chattel paper. Except as
set forth on Schedule 3.22, there has been no change in policy or practice of
any of the Companies relating to the collection of accounts receivable of any of
the Companies or the establishment of reserves with respect thereto since
December 31, 1999.
Section 3.23 Acquisition Agreements. None of the Sellers or the Companies
----------------------
has made any claim (or knows of any reasonable basis for any claim) for
indemnification under any
26
<PAGE>
acquisition agreement pursuant to which any of the Sellers or their Affiliates
acquired ownership of any of the Companies or any assets of any of the
Companies. All of Sellers' rights to indemnification and other rights and
remedies under all such acquisition agreements (if any) are assignable to Buyer
hereunder (and Sellers agree to so assign, at Buyer's request at or after the
Closing, any or all of such rights and remedies to Buyer).
Section 3.24 Affiliate Transactions. Except for Sellers' acquisition of
----------------------
ownership of the Companies and as set forth on Schedule 3.24, there has not been
any transaction between any Company and any Seller or any Affiliate of any
Seller (other than another Company).
Section 3.25 No Misrepresentation. None of this Agreement, Exhibit A
--------------------
hereto, any Schedule or any certificate furnished or to be furnished by or on
behalf of any Seller or any Company pursuant to this Agreement contains, or will
contain, any untrue statement of a material fact or omits, or will omit, to
state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE IIIA
Representations and Warranties of Sellers as to Organization,
Authorization, etc.
Each Seller severally (and not jointly and severally) represents and
warrants, with respect to such Seller, that:
Section 3A.1. Organization: Authorization: etc.
--------------------------------
(a) Such Seller (if such Seller is not an Individual Seller) is a
corporation, limited partnership or limited liability company duly organized or
formed, validly existing and in good standing under the laws of its jurisdiction
of incorporation, organization or formation.
(b) Such Seller (if such Seller is not an Individual Seller) has
all requisite corporate, partnership or limited liability company power to
execute and deliver this Agreement and to perform its obligations hereunder. If
such Seller is an Individual Seller, such Seller has all requisite power to
execute and deliver this Agreement and to perform its obligations hereunder.
Such execution, delivery and performance by such Seller (if such Seller is not
an Individual Seller) have been duly authorized by all necessary corporate,
partnership or limited liability company action. This Agreement is the legal,
valid and binding obligation of such Seller, enforceable in accordance with its
terms.
(c) Neither the execution and delivery of this Agreement nor
performance by such Seller of its obligations hereunder does or will (i)
conflict with such Seller's certificate or incorporation or by-laws, partnership
agreement, limited liability company agreement or other
27
<PAGE>
constitutive documents or (ii) except as listed in Schedule 3A.1(c), (x)
conflict with or result in a breach of any term of, or require any consent
under, any contract, or other agreement or instrument by which such Seller is
bound, (y) give rise to any Encumbrance upon any of such Seller's Subject
Interests, or (z) violate any judgment or order of any Governmental Authority to
which such Seller is subject, except where such conflict, breach, Encumbrance or
violation would not have an Aurora Material Adverse Effect.
(d) Such Seller owns the Subject Interests described on Schedule
3.2 free and clear of any Encumbrances, except for restrictions imposed by
federal and state securities laws and the Third Amended and Restated Limited
Liability Company Agreement of Aurora Communications.
Section 3A.2. Investment by Continuing Sellers.
--------------------------------
(a) Such Continuing Seller is acquiring the Nassau Equity
Interests and shares of common stock of NBP to be acquired by such Continuing
Seller pursuant hereto (such Continuing Seller's "Exchange Interests") for its
own account for investment and not with a view to, or for sale in connection
with, any distribution thereof, nor with any present intention of distributing
or selling the same; and, except as contemplated or permitted by this Agreement,
such Continuing Seller has no present or contemplated agreement, undertaking,
arrangement, obligation, indebtedness or commitment providing for the
disposition thereof.
(b) Such Continuing Seller understands that such Continuing
Seller's Exchange Interests have not been registered under the Securities Act of
1933, as amended (the "Securities Act"), or any state securities law, by reason
of their issuance in a transaction exempt from the registration requirements of
the Securities Act and such laws, and that they must be held indefinitely unless
they are subsequently registered under the Securities Act and such laws or a
subsequent disposition thereof is exempt from registration. The certificates for
such Continuing Seller's Exchange Interests shall bear a legend to such effect,
and appropriate stop transfer instructions shall be issued.
(c) Such Continuing Seller has not been formed for the specific
purpose of acquiring Exchange Interests pursuant to this Agreement. Such
Continuing Seller understands the term "accredited investor" as used in
Regulation D promulgated under the Securities Act and represents and warrants to
Buyer and NBP that such Continuing Seller is an "accredited investor" for
purposes of acquiring Exchange Interests.
(d) Such Continuing Seller has sufficient knowledge and
experience in business and financial matters and with respect to investment in
securities of privately held companies so as to enable it to analyze and
evaluate the merits and risks of the investment contemplated hereby and is able
to bear the economic risk of such investment. Such Continuing Seller has
carefully reviewed the representations concerning Buyer and NBP contained in
this
28
<PAGE>
Agreement and has made detailed inquiry concerning Buyer and NBP, their
respective businesses and personnel; Buyer has made available to such Continuing
Seller any and all written information that such Continuing Seller has requested
and have answered, to such Continuing Seller's satisfaction, all inquiries made
by such Continuing Seller. Such Continuing Seller has adequate assets and means
of providing for its needs and contingencies to sustain a complete loss of such
Continuing Seller's investment in Buyer and NBP. Such Continuing Seller's
overall commitment to investments that are not readily marketable is not
disproportionate to such Continuing Seller's assets; and such Continuing
Seller's investment in such Continuing Seller's Exchange Interests will not
cause such overall commitment to become excessive.
ARTICLE IV
Representations and Warranties of Buyer and NBP
Subject to Sections 9.2 and 9.3, Buyer and, solely for purposes of Sections
4.1, 4.2, 4.3 and 4.15, NBP represent and warrant that:
Section 4.1 Organization: Authorization: etc.
--------------------------------
(a) Each of the Nassau Companies and NBP is a corporation, limited
partnership or limited liability company duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation or formation.
Each of Buyer and NBP has all requisite corporate, partnership or limited
liability company power to execute and deliver this Agreement and to perform its
obligations hereunder. Such execution, delivery and performance by each of Buyer
and NBP have been duly authorized by all necessary corporate, partnership or
limited liability company action. This Agreement is the legal, valid and binding
obligation of Buyer and NBP, enforceable in accordance with its terms. Each of
the Nassau Companies and NBP (i) now has and, after consummation of the Purchase
and Exchange, will have full corporate, partnership or limited liability company
power to own all of its properties and assets and to carry on its business and
(ii) is now and, after consummation of the Purchase and Exchange, will be duly
qualified to do business and in good standing in each jurisdiction in which the
conduct of its business requires it or will require it to be so qualified,
except where failure to be so qualified or in good standing would not have a
Nassau Material Adverse Effect.
(b) Neither the execution and delivery of this Agreement nor
performance by Buyer or NBP of its obligations hereunder does or will (i)
conflict with Buyer's or NBP's partnership agreement, articles of incorporation
or by-laws or other constitutive documents or (ii) (x) except as set forth in
Schedule 4.1, conflict with or result in a breach of (or give rise to any right
of termination or acceleration of) any term of, or require any consent under,
any lease, contract or other agreement or instrument by which Buyer or NBP is
bound or (y) violate any judgment or order of any court or other governmental
authority to which Buyer or NBP is
29
<PAGE>
subject, except where such conflict, breach or violation would not have a Nassau
Material Adverse Effect.
(c) Buyer has delivered to Sellers' Agent true and complete copies
of the certificate of incorporate and by-laws, partnership agreement, limited
liability company agreement or other constitutive documents of each of the
Nassau Companies. NBP has delivered to Sellers' Agent time and complete copies
of its certificate of incorporation and by-laws.
(d) Schedule 4.1(d) sets forth as to each of the Nassau Companies
and NBP its jurisdiction of incorporation or formation and the jurisdictions in
which it is qualified to do business as a foreign limited partnership, foreign
corporation or foreign limited liability company.
Section 4.2 Capitalization. Schedule 4.2 sets forth (i) as to each Nassau
--------------
Company, its equityholders and number, type and class of equity interests of
such Nassau Company owned by such equityholders and (ii) as to NBP, its
authorized capital stock, the number of shares of each class thereof
outstanding, the record owners of such outstanding shares of capital stock and
the numbers and classes of such outstanding shares owned by such owners (such
outstanding partnership interests and capital stock being referred to herein as
the "Buyer/NBP Equity Interests"). The Buyer/NBP Equity Interests, as set forth
in Schedule 4.2, are all of the issued and outstanding equity interests of the
Nassau Companies and all of the issued and outstanding capital stock of NBP. All
of the Buyer/NBP Equity Interests are duly authorized and validly issued and, in
the case of outstanding capital stock, fully paid and non-assessable. Except as
set forth on Schedule 4.2, there are no options or other rights to acquire
equity interests, or securities convertible into equity interests, of the Nassau
Companies or NBP.
Section 4.3 Financial Statements.
--------------------
(a) Buyer has previously delivered to Sellers true and complete
copies of the unaudited consolidated balance sheet of the Nassau Companies as of
December 31, 1999 and the consolidated statements of income and cash flows of
the Nassau Companies for the year then ended. NBP has previously delivered to
Sellers true and complete copies of the unaudited balance sheet of NBP as of
December 31, 1999 and the statements of income and cash flows of NBP for the
December 31, 1999 then ended. Such financial statements were prepared in
accordance with Generally Accepted Accounting Principles consistently applied
(except for the omission of footnotes), and present fairly in all material
respects the financial position, results of operations and other information
included therein as of the date and for the period specified therein.
(b) Except as set forth on Schedule 4.3, all accounting ledgers and
other books and records of the Nassau Companies and NBP are located at the
principal office of Buyer in Princeton, New Jersey.
30
<PAGE>
Section 4.4 Licenses.
--------
(a) Buyer has furnished to Sellers true copies of all FCC licenses
(which are identified on Schedule 4.4(a)), which constitute all required
licenses and permits and authorizations for the day and night operation of the
radio stations and associated auxiliary facilities of such radio stations
operated by the radio stations indicated on such Schedule. Each such radio
station has the right to use the call letters it presently uses (as listed on
Schedule 4.8), pursuant to the rules and regulations of the FCC. Each Nassau
Company has complied in all material respects with the terms and conditions of
the respective FCC licenses applicable to it and with the FCC's other
requirements. The FCC's most recent renewals of such FCC licenses were not
challenged by any petition to deny or by any competing application.
(b) Each Nassau Company possesses all material governmental
licenses, permits, approvals and other authorizations required by such Nassau
Company in the conduct of its business. Except as identified in Schedule 4.4(b),
no application, action or proceeding is pending for the renewal or modification
of any of such licenses, permits, approvals or authorizations, and no
application, action or proceeding is pending or, to Buyer's knowledge,
threatened that may result in the denial of the application for renewal, the
revocation, modification, nonrenewal or suspension of any of such licenses,
permits, approvals or authorizations, the issuance of a cease-and-desist order,
or the imposition of any administrative or judicial sanction and, to Buyer's
knowledge, there is no basis for any such denial, revocation, modification, non-
renewal or suspension or any such order or sanction.
Section 4.5 Operation of Radio Stations FCC Reports.
---------------------------------------
(a) Each of the radio stations owned by a Nassau Company is being
operated in all material respects in accordance with the FCC licenses applicable
thereto, the Communications Act of 1934, as amended, the rules and regulations
thereunder, and all other material legal requirements, federal, state and local,
applicable to such radio stations.
(b) To Buyer's knowledge, all applications, reports, notices and
other documents required to be filed by the Nassau Companies with the FCC or any
other Governmental Authority have been filed and complied with in all material
respects and are complete and correct as filed and the licensee company of each
radio station owned by the Nassau Companies has timely placed in its public
inspection file all documentation required by the FCC.
Section 4.6 Consents.
--------
(a) Except for the FCC Consent, the filing of necessary reports and
notifications and the receipt of necessary governmental approvals under the HSR
Act, any filings
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<PAGE>
with any Governmental Authority required to be made in connection with the Buyer
Incorporation and as set forth in Schedule 4.6, no consent or approval by, or
filing with, any Governmental Authority or other third party is required in
connection with the execution or delivery of this Agreement by Buyer or NBP or
the consummation of the Purchase and Exchange.
(b) Neither Buyer nor NBP knows of any facts that would cause the
FCC to deny the FCC Consent.
Section 4.7 Assets. Each Nassau Company has good and marketable title to
------
the assets and properties owned by it, free and clear of all Encumbrances, other
than Nassau Permitted Encumbrances.
Section 4.8 Trade Rights. etc. Schedule 4.8 lists the call letters,
-----------------
trademarks, tradenames and other trade rights and marks used by the Nassau
Companies in the operation of their radio stations. Except as listed on Schedule
4.8, no Nassau Company has licensed, consented to or waived, and Buyer has no
knowledge of, any other Person's use of any such call letters, trademarks,
tradenames and other trade rights and marks. Buyer does not know of any
challenge or claim with respect to the use by any of the Nassau Companies any of
the call letters, trademarks, tradenames or other trade rights or marks used by
the Nassau Companies in the operation of the radio stations owned by them. To
Buyer's knowledge, the Nassau Companies collectively possess adequate and
enforceable common law rights to use the call signs, trademarks, tradenames and
other trade rights and marks so used by them within the respective jurisdictions
where such call signs, trademarks, tradenames, and other rights and marks are
currently used. None of the Nassau Companies has received any notice of conflict
which asserts any rights of others with respect to any of such call signs,
trademarks, tradenames or other trade rights or marks, and Buyer does not know
of any basis for the assertion of any such rights. To Buyer's knowledge, none of
the Nassau Companies is infringing any patent, copyright or trademark of any
third party and no claim has been made or threatened against any Nassau Company
alleging any such violation.
Section 4.9 Changes Since December 31. 1999. Except as set forth in
-------------------------------
Schedule 4.9 or in any other Schedule to this Agreement, since December 31, 1999
there has not been:
(a) any Nassau Material Adverse Effect, and each Nassau Company has
operated its business, including its radio stations, in the ordinary course of
business;
(b) any change in any of the licenses, permits or franchises of any
Nassau Company which has had or would have a Nassau Material Adverse Effect, or
any change in the methods of accounting or accounting practice, which have had
or may reasonably be expected to have an Nassau Material Adverse Effect or a
material adverse effect on the licenses, permits or franchises of the Nassau
Companies as a whole;
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(c) any damage, destruction or other casualty loss which
constitutes a Nassau Material Adverse Effect;
(d) any direct or indirect redemption, purchase or other
acquisition of any partnership interest, capital stock, membership interest or
other limited liability company ownership interest of any Nassau Company or any
declaration setting aside or payment of any dividend or other distribution on or
in respect of any partnership interest, capital stock, membership interest or
other limited liability ownership interest of any Nassau Company;
(e) any action by any Nassau Company to amend it articles or
incorporation or by-laws, limited liability company agreement or other
constitutive documents; or
(f) any issuance or retirement of any equity or debt securities by
any Nassau Company or any grant by any Nassau Company of any option or issuance
of any warrant or securities convertible into such securities.
Section 4.10 Litigation. etc. Except as set forth in Schedule 4.10:
---------------
(a) No action, litigation, arbitration or other proceeding (and to
the knowledge of Buyer, no investigation) is pending by or against or, to the
knowledge of Buyer, threatened against any Nassau Company which, if adversely
determined, would reasonably be expected to have a Nassau Material Adverse
Effect.
(b) No Nassau Company is subject or party to any judgment or order
of or stipulation with any court or other Governmental Authority, or in
violation of any provision of any law, license, permit, approval or
authorization, which judgment, order, stipulation or violation has had or would
reasonably be expected to have a Nassau Material Adverse Effect.
Section 4.11 Taxes. Each of the Nassau Companies has timely filed all
-----
federal, state, local and foreign Tax Returns that it was required to file, and
such Tax Returns are correct and complete in all material respects. Each Nassau
Company has paid, or has set up an adequate reserve on its balance sheet dated
as of December 31, 1999 for the payment of, all federal, state, local and
foreign Taxes with respect to any period ending on or before December 31, 1999.
For the purposes of the preceding sentence, December 31, 1999 shall be treated
as the last day of a taxable period whether or not it is in fact the last day of
a taxable period. Since December 31, 1999, no Nassau Company has incurred any
material liability for federal, state, local and foreign Taxes except in the
ordinary course of business. There are no matters under discussion between any
Nassau Company and any taxing authority in respect of any Tax assessment
relating to any Nassau Company. Each of the Nassau Companies has been a
Pass-Through Entity for federal, state and local income tax purposes from the
date of its formation, and no election has been
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made under Treasury Regulation Section 301.7701-3 by or with respect to any
Nassau Company for such entity to be treated as an entity other than a
Pass-Through Entity.
Section 4.12 Brokers, Finders, etc. No Nassau Company has employed, and is
---------------------
subject to any claim of, any broker, finder, consultant or intermediary in
connection with the Purchase and Exchange who might be entitled to a fee or
commission from any Seller upon consummation of the Purchase and Exchange.
Section 4.13 Real Property. Schedule 4.13 contains a list and brief
-------------
description of all real properties owned (the "Nassau Owned Real Property") or
leased (the "Nassau Leased Real Property") by the Nassau Companies, including
all structures located on those real properties (the Nassau Owned Real property
and the Nassau Leased Real Property being collectively referred to herein as the
"Nassau Real Property"). Except as set forth on that Schedule and except for any
Nassau Permitted Encumbrance, the Nassau Companies have good and marketable
title to the Nassau Owned Real Property, free and clear of any Encumbrances,
except for any Nassau Permitted Encumbrances. All improvements on the Nassau
Owned Real Property are in accordance with all applicable laws, ordinances
regulations and orders including those applicable to zoning, environment and the
establishment and maintenance of working conditions for labor. Buyer knows of no
law, ordinance, regulation, order, restriction or agreement, including any
zoning law that would restrict the present operations of the Nassau Companies.
The Purchase and Exchange will not adversely affect the Nassau Companies' right
to use the Nassau Real Property for the same purpose and to the same extent as
they were being used by the Nassau Companies prior to the date of this
Agreement.
Section 4.14 Subsidiaries. None of the Nassau Companies has any direct or
------------
indirect subsidiaries, except for another Nassau Company. Other than as
reflected in Schedule 4.2, none of the Nassau Companies owns, directly or
indirectly, any shares or other equity interest or securities in any business
organization, entity or enterprise.
Section 4.15 Reserved.
--------
Section 4.16 Insurance. The insurance policies maintained by Buyer and its
---------
subsidiaries are adequate in scope, coverage (including for fire, casualty,
liability and extended coverage) and amount for the business conducted by them,
in light of policies maintained by other companies similarly situated in the
industry.
Section 4.17 Investment by Buyer.
-------------------
(a) Buyer is acquiring the Subject Interests for its own account
for investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the same; and Buyer has no present or contemplated
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agreement, undertaking, arrangement, obligation, indebtedness or commitment
providing for the disposition thereof.
(b) Buyer understands that the Subject Interests have not been
registered under the Securities Act, or any state securities law, by reason of
their issuance in a transaction exempt from the registration requirements of the
Securities Act and such laws, and that they must be held indefinitely unless
they are subsequently registered under the Securities Act and such laws or a
subsequent disposition thereof is exempt from registration.
(c) Buyer has sufficient knowledge and experience in business and
financial matters and with respect to investment in securities of privately held
companies so as to enable it to analyze and evaluate the merits and risks of the
investment contemplated hereby and is able to bear the economic risk of such
investment. Buyer has carefully reviewed the representations concerning the
Companies contained in this Agreement and has made detailed inquiry concerning
the Companies, their respective business and personnel; Sellers have made
available to Buyer any and all written information that Buyer has requested and
have answered to, to Buyer's satisfaction, all inquiries made by Buyer.
Section 4.18 Accounts Receivable. Except as set forth on Schedule 4.18, the
-------------------
accounts receivable of the Nassau Companies have arisen in the ordinary course
of business and are valid, subject, however, to the reserved for bad or
questionable accounts provided for on the latest dated balance sheet included in
the financial statements described in Section 4.3. Except as set forth on
Schedule 4.18, each account receivable of the Nassau Companies described on
Schedule 4.18 represents the bona fide sale and delivery of goods or services
to, or as directed by, the account debtors set forth on such Schedule. None of
such accounts receivable is represented by a note or chattel paper. Except as
set forth on Schedule 4.18, there has been no change in policy or practice of
any of the Nassau Companies relating to the collection of accounts receivable of
any of the Companies or the establishment of reserves with respect thereto since
December 31, 1999.
Section 4.19 Environmental Matters. Except as set forth in any
---------------------
environmental report delivered by Buyer to Sellers prior to the date of this
Agreement and except as otherwise set forth on Schedule 4.19, to Buyer's
knowledge no hazardous or toxic substance or waste regulated under any
applicable environmental, health or safety law has been generated, stored,
transported or released on, in, from or to any Nassau Real Property. Except as
set forth in any environmental report delivered by Buyer to Sellers prior to the
date of this Agreement and except as set forth on Schedule 4.19, to Buyer's
knowledge the Nassau Companies have complied in all material respects with all
environmental, health and safety laws applicable to radio stations owned by the
Nassau Companies.
Section 4.20 No Misrepresentation. None of this Agreement, any Exhibit, any
--------------------
Schedule or any certificate furnished or to be furnished by or on behalf of
Buyer or NBP
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pursuant to this Agreement contains, or will contain, any untrue statement of a
material fact or omits, or will omit, to state a material fact necessary to make
the statements contained herein or therein not misleading.
ARTICLE V
Covenants of the Parties
Section 5.1 Covenants of Sellers. Sellers, severally (and not jointly and
--------------------
severally) covenant that between the date hereof and the Closing Date:
(a) Conduct of Business. Except as set forth in Schedule 5.1(a):
-------------------
(i) The business of each Radio Station Company and the
operations of each Radio Station will be conducted only in the ordinary course
of business as heretofore conducted; each Radio Station Company will use
reasonable efforts to maintain the character, quality and content of its Radio
Stations' programming and will maintain advertising and other promotional
expenditures substantially consistent with past practices; and each Radio
Station Company will use all reasonable efforts to preserve and maintain its
business and properties intact, keep available the services of its employees,
and preserve each Radio Station Company's relationships with its suppliers,
customers, sales representatives and others having business relations with it,
and generally to maintain the reputation of its Radio Stations in its
broadcasting area; each Company will pay its debts and taxes when due (other
than any debts or taxes the amount or validity of which are currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with Generally Accepted Accounting Principles have been
provided on the books of such Company) and pay or perform its other material
obligations when due; and the representation and warranty in Section 3.19 shall
be true and correct at all times;
(ii) No Company will sell, or otherwise dispose of or
encumber (other than Aurora Permitted Encumbrances), or obligate itself to sell,
lease or otherwise dispose of or encumber (except for Aurora Permitted
Encumbrances), any of its assets other than in the ordinary course of business,
or acquire or merge or consolidate with or into any other Person, or enter into
any agreements relating to any of the foregoing; provided, however, that this
provision shall not prevent any disposition by a Company of any assets required
to be so disposed by the FCC or any Governmental Authority;
(iii) Except in accordance with such Company's normal
compensation practices, no Company will, except as may be required by existing
contracts listed in Schedule 3.7, increase, or obligate itself to increase, the
compensation payable or to become payable by such Company to any of its
employees, or incur any material additional obligations with respect to any such
employees;
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(iv) As soon as practicable after they are prepared (but in
any event no later than April 15, 2000 in the case of the financial statements
referred to in clause (A) below), Sellers shall furnish to Buyer (A) the
consolidated and consolidating balance sheets and statements of income and cash
flows of the Companies, as audited by Ernst & Young LLP, for the period
beginning January 20, 1999 and ending December 31, 1999, and (B) all financial
reports and statements relating to the operation of each Company that are
prepared in the ordinary course of business, including monthly reports of sales
and revenue, monthly operating statements, quarterly balance sheets, and any
other similar documents prepared by Sellers or such Company relating to such
Company (and all such monthly, quarterly or other periodic reports and
statements referred to in this clause (B) shall be furnished to Buyer within
thirty (30) days of the end of the relevant month, quarter or period);
(v) Sellers shall promptly notify Buyer in writing of, and
furnish any information Buyer may request with respect to, (i) any claim,
litigation, proceeding or governmental investigation threatened or asserted by
or against any of the Companies, (ii) any event or condition relating to any
Seller or any of its Affiliates that would cause any of the conditions to
Buyer's obligation to consummate the Purchase and Exchange not to be fulfilled
and (iii) any occurrence of any kind that would have an Aurora Material Adverse
Effect;
(vi) None of Sellers or their Affiliates (other than a
Company) will enter into any transaction with any Company, except (x)
transactions relating to the provision of corporate services, insurance and
"overhead" in the ordinary course consistent with past practice, (y) the
Purchase and Exchange and (z) transactions required in order for the
representations and warranties of Sellers contained in this Agreement to be true
and correct at the Closing;
(vii) No Radio Station Company will enter into any broadcast
time sales agreement, or other material contract, commitment or understanding
except those that are in the ordinary course of business and are consistent with
the Radio Station Company's past business practices;
(viii) None of Sellers or the Companies shall, without Buyer's
prior written consent, by any act or omission within the reasonable control of
any Seller or any Company or its agents, surrender, modify, forfeit or fail to
seek renewal on regular terms of, any of the FCC Licenses held by or applicable
to any Radio Station Company or its Radio Stations or cause the FCC to institute
any proceedings for the cancellation or modification thereof (and Sellers
represent and warrant severally (and not jointly and severally) that no such
proceeding is now pending or, to Each Seller's knowledge, threatened), or fail
to prosecute with due diligence any pending application to the FCC except that
nothing contained herein shall prevent any Company from making any transfer of
an FCC License to any other Company;
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(ix) No Company will grant any severance or termination pay
(i) to any executive officer or (ii) to any other employee except payments made
in connection with the termination of employees who are not executive officers
in amounts consistent with such Company's policies and past practices or
pursuant to written agreements outstanding and identified in Schedule 3.7;
(x) No Company will commence any litigation other than (x)
for the routine collection of bills or (y) in such cases where such Company in
good faith determines that failure to commence suit would result in the material
impairment of such Company's business, provided that such Company notifies Buyer
prior to the filing of such a suit;
(xi) No Company will declare or pay any dividends on or make
any other distributions (whether in cash, stock or property) in respect of any
of its equity securities, or split, combine or reclassify any of its equity
securities; provided, that any Radio Station Company may pay such dividends or
make such distributions to another Radio Station Company;
(xii) No Company will repurchase or otherwise acquire,
directly or indirectly, any of its equity securities except from non-executive
officers or other similar personnel in accordance with agreements existing as of
the date hereof and identified in Schedule 3.7 that require the repurchase of
securities in connection with any termination of service to such Company;
(xiii) No Company will issue, deliver or sell or authorize or
propose the issuance, delivery or sale of, any securities of any class, type or
kind, or subscriptions, rights, warrants or options to acquire, or enter into
other agreements or commitments of any character obligating it to issue any such
securities;
(xiv) No Company will cause, permit or propose any amendments
to its articles of incorporation or by-laws, limited liability company agreement
or other constitutive documents;
(xv) No Company will incur any indebtedness for borrowed
money (other than ordinary course trade payables or pursuant to existing credit
facilities in the ordinary course of business), enter into any capital lease or
guarantee any indebtedness of others; and
(xvi) If any of the contracts on Schedule 3.7 are subject to
expiration or termination before the Closing, the Company which is a party to
such contract shall use reasonable efforts to extend such contracts on
reasonable terms in accordance with its past practice unless such Company shall
determine that such expiration or termination is in the best interest (financial
and otherwise) of such Company.
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(b) Access to Companies.
-------------------
(i) Sellers shall permit, and shall cause the Companies to
permit, upon reasonable notice and during regular business hours, any
individuals designated by Buyer to observe any aspect of the business of any
Company or the operations of any Radio Station as shall be reasonably necessary
for Buyer to assume management duties after the Closing. Nothing herein shall
limit any Seller's or any Company's right and obligation to manage, control,
direct and supervise the employees and operations of such Company or any Radio
Station.
(ii) Sellers shall give, and shall cause the Companies to
give, to Buyer and to Buyer's attorneys, accountants, engineers and other agents
or representatives, and to Buyer's lenders, underwriters, financial advisors or
potential lenders and their attorneys, agents and representatives, reasonable
access, during normal business hours, to all of any Company's properties, books,
contracts, commitments and records, and will furnish Buyer and such lenders or
potential lenders during such period with copies thereof and any other
information relating to any such Company as Buyer or such underwriters,
financial advisors or lenders or potential lenders may reasonably request.
Sellers and Buyer and such banks, firms or lending institutions shall cooperate
to minimize the disruption to operations that may be caused by such access.
(c) Cooperation with respect to Financing. Sellers shall cooperate,
-------------------------------------
and shall cause the Companies to cooperate, with Buyer, Buyer's lenders and
potential lenders and their attorneys, agents and representatives in Buyer's
obtaining the financing required to consummate the Purchase and Exchange.
(d) No Solicitation. From the date hereof to the Closing or the
---------------
termination of this Agreement, none of the Sellers or any Company shall,
directly or indirectly, through any of their officers, directors, employees,
representatives or agents, encourage, solicit or initiate discussions or
negotiations with, or knowingly provide any information to, any Person or group
(other than Buyer, its lenders and potential lenders and their respective agents
and representatives) concerning any merger, sale of substantial assets, sale of
shares of equity securities or similar transaction involving any Company.
(e) Barter Agreements. From the date hereof to the Closing Date,
-----------------
Sellers shall not permit any Radio Station Company to enter into a barter,
trade, or similar agreement (a "Barter Agreement") for the sale of more than
$50,000 of air time without Buyer's written consent (which consent shall not be
unreasonably withheld or delayed).
(f) Reduction Liabilities. During the period from the delivery of
---------------------
the certificate of the Chief Financial Officer of Aurora Communications required
to be delivered pursuant to Section 6.2(c) to the Closing, none of the Reduction
Liabilities shall be increased
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(whether through the incurrence of any additional indebtedness or otherwise)
from the amounts thereof stated in such certificate.
Section 5.2 Covenant of Buyer Regarding Aurora Communications Lease. Buyer
-------------------------------------------------------
agrees that, for a period of one year from and after the Closing, it will (i)
cause Aurora Communications to continue the Lease Agreement dated July 1999
between Three Stamford Landing Associates LLC and Aurora Communications and (ii)
permit Osborn to continue to occupy the lease premises (with telephone and
utility services to be provided to the lease premises as they are currently
provided) at no cost to Osborn. During such one year period, Buyer will make, or
cause Aurora Communications to make, monthly payments of $13,000 to or as
directed by Osborn solely for the purposes of paying rent and occupancy costs
under such lease and other administrative expenses. Unless Osborn (or his
designee) shall have assumed (subject to landlord approval) Aurora
Communication's obligations under such lease at the end of such one year period
and shall have given Buyer notice of his intent to do so at least 90 days prior
to the end of such period, Osborn shall vacate the lease premises at the end of
such period. At the Closing, Buyer shall cause the Companies to convey to Osborn
or to any Person designated by Osborn, without charge, all of the office
furniture and equipment located on the leased premises (other than any such
furniture and equipment constituting fixtures or owned by any Person other than
Osborn or any Company).
Section 5.3 Additional Covenants of Buyer. Subject to Section 9.2, Buyer
-----------------------------
covenants that, between the date hereof and the Closing Date:
(a) Conduct of Business. Except (other than with respect to clauses
-------------------
(iii) and (iv) below) as contemplated by the Buyer Incorporation or the IPO or
as set forth in Schedule 5.3(a):
(i) The business of each Nassau Company and the operations
of each radio station will be conducted only in the ordinary course of business
as heretofore conducted; each Nassau Company will use reasonable efforts to
maintain the character, quality and content of its radio station's programming
and will maintain advertising and other promotional expenditures substantially
consistent with past practices; and each Nassau Company will use all reasonable
efforts to preserve and maintain its business and properties intact, keep
available the services of its employees, and preserve each Nassau Company's
relations with its suppliers, customers, sales representatives and others having
business relations with it, and generally to maintain the reputation of its
radio stations in its broadcasting area; each Nassau Company will pay its debts
and taxes when due (other than any debts or taxes the amount or validity of
which are currently being contested in good faith and appropriate proceedings
and with respect to which reserved in conformity with Generally Accepted
Accounting Principles have been provided on the books of such Nassau Company),
and pay or perform its other material obligations when due;
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(ii) No Nassau Company will sell, or otherwise dispose of or
encumber (other than Nassau Permitted Encumbrances), or obligate itself to sell,
lease or otherwise dispose of or encumber (except for Nassau Permitted
Encumbrances), any of its assets other than in the ordinary course of business,
or acquire or merge or consolidate with or into any other Person, or enter into
any agreements relating to any of the foregoing; provided, however, that this
provision shall not prevent any disposition by any Nassau Company of any assets
required to be so disposed by the FCC or any Governmental Authority;
(iii) As soon as practicable after they are prepared (but in
any event no later than March 31, 2000 in the case of the financial statement
referred to in clause (A) below), Buyer shall furnish to Sellers' Agent (A) the
consolidated balance sheets and statements of income and cash flows of the
Nassau Companies, as audited by Grant Thornton LLP, for the period beginning
January 1, 1999 and ending December 31, 1999, and (B) all consolidated financial
reports and statements relating to the operation of the Nassau Companies that
are prepared in the ordinary course of business, including monthly reports of
sale and revenue, monthly operating systems quarterly balance sheets, and any
other similar documents prepared by the Nassau Companies relating to the Nassau
Companies (and all such monthly, quarterly or other periodic reports and
statements referred to in this clause (B) shall be furnished to Sellers' Agent
within thirty (30) days of the end of the relevant month, quarter or period);
(iv) Buyer shall promptly notify Sellers' Agent in writing
of, and furnish any information Sellers' Agent may request with respect to, (i)
any claim, litigation, proceeding or governmental investigation threatened or
asserted by or against any of the Nassau Companies, (ii) any event or condition
relating to Buyer or any of its Affiliates that would cause any of the
conditions to Sellers' obligation to consummate the Purchase and Exchange not to
be fulfilled and (iii) any occurrence of any kind that would have a Nassau
Material Adverse Effect;
(v) No Nassau Company shall, without Sellers' Agent's prior
written consent, by any act or omission within the reasonable control of such
Nassau Company or its agents, surrender, forfeit or fail to seek renewal on
regular terms of, any FCC license held by or applicable to it or cause the FCC
to institute any proceedings for the cancellation or modification thereof (no
such proceeding being now pending or, to Buyer's knowledge, threatened), or fail
to prosecute with due diligence any pending application to the FCC, except that
nothing contained herein shall prevent any Nassau Company from making any
transfer of an FCC license to any company wholly owned (directly or indirectly)
by Buyer;
(vi) No Nassau Company will commence any litigation other
than (x) for the routine collection of bills or (y) in such cases where such
Nassau Company in good faith determines that failure to commence suit would
result in the material impairment of such Nassau Company's business, provided
that such Nassau Company notifies Sellers' Agent prior to the filing of such a
suit;
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(vii) Buyer will not declare or pay any dividends on or make
any other distributions (whether in cash, stock or property) in respect of any
of its equity securities, or split, combine or reclassify any of its equity
securities; provided, that any Nassau Company may pay such dividends or make
such distributions to another Nassau Company;
(viii) No Nassau Company (other than Buyer pursuant to the
Master Agreement, the Amended and Restated Option Agreement referred to in the
Master Agreement and the July 31, 1995 Letter referred to in the Master
Agreement) will repurchase or otherwise acquire, directly or indirectly, any of
its equity securities, except from non-executive officers or other similar
personnel in accordance with agreements existing as of the date hereof and
delivered to Sellers prior to the date hereof that require the repurchase of
securities in connection with any termination of service to such Nassau Company,
and except that up to $8 million of equity securities of Buyer may be
repurchased or otherwise acquired by the Nassau Companies;
(ix) No Nassau Company (other than Buyer pursuant to the
Master Agreement, the Amended and Restated Option Agreement referred to in the
Master Agreement and the July 31, 1995 Letter referred to in the Master
Agreement) will issue, deliver or sell or authorize or propose the issuance,
delivery or sale of, any securities of any class, type or kind, or
subscriptions, rights, warrants or options to acquire, or enter into other
agreements or commitments of any character obligating it to issue any such
securities, except pursuant to or in connection with (1) the Existing Nassau
Credit Facility, (2) any Acquisition Indebtedness or (3) an IPO; and
(x) No Nassau Company will cause, permit or propose any
amendments to its partnership agreements, articles or incorporation or by-laws,
limited liability company agreement or other constitutive documents, other than
pursuant to the Master Agreement or the Buyer Incorporation and other than any
amendments that would not adversely affect the Nassau Equity Interests to be
received by Continuing Sellers at the Closing.
(b) Access to Nassau Companies. Buyer shall give, and shall cause
--------------------------
the Nassau Companies to give, to Sellers' Agent and to its attorneys,
accountants, engineers and other agents or representatives, reasonable access,
during normal business hours, to all of any Nassau Company's properties, books
contracts, commitments and records, and will furnish Sellers' Agent during such
period with copies thereof and any other information relating to any such Nassau
Company as Sellers' Agent may reasonably request. Sellers' Agent and Buyer shall
cooperate to minimize the disruption to operations that may be caused by such
access.
Section 5.4 Covenants of Sellers and Buyer. Sellers, jointly and severally,
------------------------------
and Buyer covenant that:
(a) FCC Application. Sellers and Buyer shall cooperate in the
---------------
preparation and filing, within ten days after the date hereof, of FCC
Applications for each of the Radio
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Stations. The parties shall cooperate in the diligent submission of any
additional information requested by the FCC with respect to such FCC
Applications, and shall take all reasonable steps that are necessary and proper
to the expeditious prosecution of such FCC Applications to a favorable
conclusion.
(b) HSR Act. Sellers and Buyer shall cooperate in the preparation
-------
and filing, within ten days after the date hereof, of any reports or
notifications that may be required to be filed under the HSR Act in connection
with the Purchase and Exchange with each of the Department of Justice and the
Federal Trade Commission, and Sellers and Buyer promptly shall comply with all
requests for further documents and information made by the Department of Justice
or the Federal Trade Commission, and shall furnish to the other all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
(c) Confidentiality. Except as required by law, or unless otherwise
---------------
agreed to in writing by the other party, Buyer and each Seller agrees that for a
period of five years following the date hereof, it (i) will keep all Proprietary
Information (as defined below) of the disclosing party confidential (other than
disclosures to the receiving party's equity holders, board of directors, senior
management, personnel and legal and accounting and financial advisors on a "need
to know" basis) and (ii) will not use Proprietary Information of the disclosing
party for any purpose other than for purposes of evaluating or effecting the
Purchase and Exchange. For purposes of this Section 5.4(c), "Proprietary
Information" means information about the disclosing party regardless of the form
in which it is communicated that contains or otherwise reflects information
about the disclosing party, other than for information that (i) becomes
generally available to the public other than as a result of disclosure by the
receiving party or any of its representatives, (ii) was available to the
receiving party on a non-confidential basis prior to the disclosure of such
information to the receiving party, provided that the source of such information
was not known to the receiving party to be bound by a confidentiality agreement
with, or other contractual, legal or fiduciary obligation of confidentiality to,
the disclosing party with respect to such information, or (iii) becomes
available on a non-confidential basis from a source other than the disclosing
party or its representatives, provided that the source of such information was
not known by the receiving party to be bound by a confidentiality agreement
with, or other contractual, legal or fiduciary obligation of confidentiality to,
the disclosing party with respect to such information. If this Agreement is
terminated as provided in Article VIII, each receiving party, at its own expense
shall return to the disclosing party all books, records and other documents and
papers obtained from the disclosing party, and all copies, that contain or
consist of Proprietary Information
(d) Reasonable Commercial Efforts. Except as otherwise provided
-----------------------------
herein, the parties hereto agree to cooperate and use their reasonable
commercial efforts to consummate the Purchase and Exchange.
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(e) Further Assurances. Each party shall cooperate and take such actions,
------------------
and execute such other documents, at the Closing or subsequently, as may be
reasonably requested by another party in order to more effectively transfer the
Subject Interests from Sellers to Buyer and to issue the Nassau Equity Interests
to Continuing Sellers and to otherwise carry out the other provisions and
purposes of this Agreement.
ARTICLE VI
Conditions to the Closing
The obligations of the parties identified in the respective sections below
to consummate the Purchase and Exchange are subject to the satisfaction or
waiver in writing, at or prior to the Closing, of the conditions set forth in
such respective sections:
Section 6.1 Conditions of the Parties. The obligations of Sellers, on the
-------------------------
one hand, and Buyer and NBP, on the other hand (considering Sellers to be one
party and Buyer and NBP to be one party for this Section 6.1):
(a) The other party's representations and warranties in this
Agreement shall be true and correct in all material respects (or, in the case of
any representation or warranty that expressly contains a materiality or similar
qualification, in all respects) at and as of the Closing as though made at and
as of such time, except for changes contemplated by the this Agreement, and
except to the extent that a different time is specifically stated in any such
representation and warranty; and the other party's covenants and agreements in
this Agreement shall have been performed or complied with in all material
respects at or prior to the Closing;
(b) Buyer and NBP, on the one hand, or each Seller, on the other
hand, shall have delivered a certificate executed by (i) if such party is a
corporation, such party's President and Secretary, (ii) if such party is a
partnership or limited liability company, a general partner or authorized member
or manager of such party or (iii) if such party is an individual, such
individual, in each case, dated the Closing Date, certifying the fulfillment of
the condition in Section 6.1(a) and, in the case of each Seller, the conditions
in Section 6.2(d) and (e);
(c) Each party (other than Buyer, NBP, Sellers, Sellers' Agent or
Aurora Communications) whose execution and delivery is necessary for
effectiveness thereof shall have executed and delivered the agreements
contemplated by Section 2.4(e) and the Partnership Rights Agreements, as
applicable, and the Employment Termination and Non-Competition Agreement as
contemplated by Section 2.4;
(d) The other party shall have delivered an opinion of counsel,
dated the Closing Date, as agreed to by each party hereto;
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(e) Final Orders granting the FCC's consent and approval to the
transfer of control of the FCC Licenses for all of the Radio Stations to Buyer
as contemplated by the Agreement shall have been obtained as contemplated by the
definition of "Closing Date" in Section 1.1; and
(f) All applicable waiting periods shall have expired and all
necessary approvals shall have been obtained under the HSR Act with respect to
the Purchase and Exchange.
Section 6.2 Conditions of Buyer. The obligations of Buyer and NBP:
-------------------
(a) The consents approvals and other actions of any Governmental
Authority listed in Schedules 3.1(c), 3.4(b), 3.6(a), 3.7 and 3A.1(c) shall have
been obtained, in form and substance reasonably satisfactory to Buyer and its
counsel.
(b) No action or proceeding shall have been instituted or
threatened by any governmental authority which seeks to restrain or prohibit the
Purchase and Exchange, or which seeks to subject Buyer to any liability, penalty
or restriction in connection with this Agreement or the Purchase and Exchange;
and no injunction or order prohibiting the Purchase and Exchange shall be in
effect.
(c) Not later than three days prior to the Closing, Sellers shall
have delivered to Buyer, each in form satisfactory to Buyer, (i) a certificate
signed by the Chief Financial Officer of Aurora Communications, setting forth,
in reasonable detail, the Reduction Liabilities, as of the Closing Date, and the
individual and aggregate amounts thereof and (ii) letters from the Companies'
lenders (A) setting forth the Reduction Liabilities owed or payable to such
lenders in reasonable detail (including as to principal, interest, prepayment
fees and all other amounts then owing or that would be payable upon the payment
of all principal on the Closing Date) and (B) identifying all Encumbrances held
by such lenders and all related UCC and other lien filings then on file. All
such Reduction Liabilities shall be prepayable in accordance with their terms
upon or in connection with the Closing.
(d) All intercompany accounts between any of the Companies and any
of the Sellers shall have been paid in full.
(e) None of the FCC Licenses shall have been revoked or suspended;
and there shall not have been any adverse change in the terms and conditions of
any FCC License with respect to any Radio Station, except to the extent that any
such revocation, suspension or change has not resulted in and would not result
in an Aurora Material Adverse Effect; and no proceeding for any such revocation,
suspension or change shall be in effect or shall have been threatened.
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(f) All proceedings taken in accordance with the Purchase and
Exchange and all documents incident to such proceedings shall be reasonably
satisfactory to counsel to Buyer.
(g) Sellers shall have provided to Buyer a report of the
appropriate filing officers in the jurisdictions in which the Radio Stations or
other assets of the Companies are located indicating the absence of filings of
financing statements and other liens of record (other than those reflecting the
liens and security interests identified in Schedule 3.8) with their respective
offices under the Uniform Commercial Code with respect to any of the Radio
Stations or other assets of the Companies and dated not more than five (5)
Business Days prior to the Closing Date.
(h) Buyer shall have received the written resignation of (i) all
officers and members of the Boards of Directors of the Corporate Holders and
(ii) all managers, officers, directors or similar representatives of each other
Company (in each case effective at or prior to the Closing).
Section 6.3 Conditions of Sellers. The obligations of Sellers (or, in the
---------------------
case of Section 6.3(c), solely the Continuing Sellers):
(a) No action or proceeding shall have been instituted or
threatened by any governmental authority which seeks to restrain or prohibit the
Purchase and Exchange, or which seeks to subject any Seller to any liability,
penalty or restriction in connection with this Agreement or the Purchase and
Exchange; and no injunction or order prohibiting the Purchase and Exchange shall
be in effect.
(b) The consents, approvals and other actions of any Governmental
Authority listed in Schedules 4.1, 4.4(a) and 4.4(b) shall have been obtained,
in form and substance reasonably satisfactory to Sellers and their counsel.
(c) None of the Nassau Companies' FCC licenses shall have been
revoked or suspended, and there shall not have been any adverse change in the
terms and conditions of any such FCC license with respect to any radio station
owned by the Nassau Companies, except to the extent that any such revocation,
suspension or change has not resulted in and would not result in a Nassau
Material Adverse Effect; and no proceeding for any such revocation, suspension
or change shall be in effect or shall have been threatened.
(d) All proceedings taken in accordance with the Purchase and
Exchange and all documents incident to such proceedings shall be reasonably
satisfactory to counsel to Sellers.
(e) The FCC shall have granted its consent to the transactions
contemplated by the Master Agreement and such grant shall have become a Final
Order.
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(f) In the event that the Buyer Incorporation has occurred prior to
or will occur simultaneously with the Closing, the IPO shall have occurred or
shall occur simultaneously with the Closing.
(g) Buyer shall have executed and delivered to BACI, upon the
request of BACI, all forms and information required by the rules and regulations
of the United States Small Business Administration.
ARTICLE VII
Indemnity
Section 7.1 Indemnity and Indemnification Procedure.
---------------------------------------
(a) Subject to the limitations set forth in Section 7.2 and to
Sections 7.4 and 9.2, from and after the Closing Date, Sellers, severally (and
not jointly and severally), according to their respective Subject Interests
Percentages, shall indemnify and hold harmless Buyer and NBP and their
respective officers, directors, partners, employees, Affiliates, agents,
representatives, successors and assigns (collectively, the "Buyer Indemnified
Parties") from and against and in respect of any and all Damages resulting from
any breach of any representation, warranty, covenant or agreement of Sellers in
this Agreement, except for the representations, warranties, covenants and
agreements described in Section 7.1(b).
(b) Subject to the limitations set forth in Section 7.2 and to
Sections 7.4 and 9.2, from and after the Closing each Seller shall severally
(and not jointly and severally) indemnify and hold harmless the Buyer
Indemnified Parties from and against any and all Damages resulting from (1) the
breach of any representation or warranty made by such Seller in Article IIIA, or
(2) any breach of any covenant or agreement to be performed by such Seller under
Sections 2.4(a), 2.4(c), 2.5, 2.6(d)(ii), 5.1(d), 5.4(c), 5.4(d) or 5.4(e).
(c) Subject to Sections 7.1(h), 7.4, 9.2 and 9.3 and to the
limitations set forth in Section 7.2, from and after the Closing Date, Buyer
shall indemnify Sellers and their respective officers, directors, partners,
members, employees, Affiliates, agents, representatives, successors and assigns
(collectively, the "Seller Indemnified Parties") from and against and in respect
of any and all Damages resulting from any breach of any representation,
warranty, covenant or agreement of Buyer or NBP in this Agreement.
(d) Subject to Section 7.1(h), if any matter shall arise which, in
the opinion of an Indemnified Party, constitutes or may give rise to Damages
subject to indemnification by the Indemnifying Party as provided in this Article
VII (an "Indemnity Claim"), such Indemnified Party shall give prompt written
notice (a "Notice of Claim") of such Indemnity Claim to the Indemnifying Party
setting forth the relevant facts and circumstances of such Indemnity Claim in
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reasonable detail and the amount of indemnity (to the extent the Indemnified
Party can reasonably determine such amount) sought from the Indemnifying Party
with respect thereto. A failure to give such notice or delay in giving such
notice shall not affect the Indemnified Party's right to indemnification or the
Indemnifying Party's obligation to indemnify as set forth in this Agreement,
except to the extent the Indemnifying Party is actually prejudiced by such
failure or delay.
(e) If any Indemnity Claim is based on any demand, suit, claim or
assertion of liability by one or more third parties against any of the Buyer
Indemnified Parties that could give rise to an indemnification obligation under
Section 7.1(a) against Sellers (a "Third Party Claim"), the obligations and
liabilities of the parties with respect to any Third Party Claim shall be
subject to the following additional terms and conditions:
(i) Sellers' Agent (on behalf of Sellers) shall have the
right to undertake, by counsel or other representatives of its own choosing, the
defense or opposition to such Third Party Claim by written notice to Buyer.
(ii) In the event that Sellers' Agent shall elect not to
undertake such defense or opposition, or, within twenty (20) days after written
notice to Sellers' Agent of any such Third Party Claim from Buyer, Sellers'
Agent shall fail to undertake to defend or oppose, Buyer (upon further written
notice to Sellers' Agent) shall undertake the defense, opposition, compromise or
settlement of such Third Party Claim, by counsel of its own choosing on behalf
of and for the account and risk of Sellers.
(A) Buyer shall conduct the defense of or opposition to such
Third Party Claim as would a reasonable and prudent Person to whom no
indemnity is available.
(B) Buyer and Sellers' Agent and their respective counsel or
other representatives shall cooperate in good faith with respect to such
Third Party Claim.
(C) Buyer shall not compromise or settle such Third Party
Claim or consent to entry of any judgment, without the written consent of
Sellers' Agent, which consent shall not be unreasonably withheld or
delayed.
(f) Anything herein to the contrary notwithstanding: (i) Sellers'
Agent (on behalf of Sellers) shall have the right, at Sellers' own cost and
expense, to participate in the defense, opposition, compromise or settlement of
any Third Party Claim; (ii) Sellers' Agent shall not, without Buyer's written
consent, settle or compromise any Third Party Claim or consent to entry of any
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to Buyer of a release from all liability in
respect of such Third Party Claim or which includes any non-monetary relief; and
(iii) in the event that Sellers' Agent
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undertakes defense of or opposition to any Third Party Claim, Buyer, by counsel
of its own choosing and at its sole cost and expense, shall have the right to
consult with Sellers' Agent and its counsel or other representatives concerning
such Third Party Claim; and (iv) Sellers' Agent and Buyer and their respective
counsel or other representatives shall cooperate in good faith with respect to
any Third Party Claim.
(g) Any Third Party Claim not disputed shall be paid by Sellers
within thirty (30) days after receiving notice of the Third Party Claim. A
"Disputed Claim" shall mean a Third Party Claim which Sellers' Agent objects to
in writing within thirty (30) days after receiving notice of the Third Party
Claim. In the event there is a Disputed Claim, Sellers shall be required to pay
Buyer the amount of all Damages for which Sellers have been found liable, such
payment to be made within ten (10) days after there is a final determination
with respect to such Disputed Claim. A final determination of a Disputed Claim
shall be (i) a judgment of any court determining the validity of such Disputed
Claim, if no appeal is pending from such judgment and if the time to appeal
therefrom has elapsed; (ii) an award of any arbitration determining the validity
of such Disputed Claim, if there is not pending any motion to set aside such
award and if the time within which to move to set aside such award has elapsed;
(iii) a written determination of the dispute with respect to such Disputed Claim
signed by the parties thereto (specifically including Sellers' Agent if Sellers'
Agent has elected to participate in such determination as provided in this
Section 7.1) or their attorneys; (iv) a written acknowledgment of Sellers or
Sellers' Agent that Sellers no longer dispute the validity of such claim or (v)
such other evidence of final determination of a Disputed Claim as shall be
acceptable to the parties thereto (specifically including Sellers' Agent if
Sellers' Agent has elected to participate in such determination as provided in
this Section 7.1). No undertaking of defense or opposition to a Third Party
Claim by Sellers' Agent or Sellers shall be construed as an acknowledgment by
Sellers that they are liable to Buyer with respect to the Third Party Claim at
issue or other similar Third Party Claims.
Section 7.2 Limitation of Indemnification Liability. Except to the extent
---------------------------------------
expressly provided in Section 7.2(g), the liability of any Indemnifying Party
for indemnification under Section 7.1 and for all other claims under this
Agreement or with respect to the Purchase and Exchange shall be limited as
follows:
(a) Except as provided in Section 2.2(b), the indemnification
provisions contained in this Article VII set forth the exclusive remedies for
money damages owing from Sellers to the Buyer Indemnified Parties and from Buyer
to the Seller Indemnified Parties that arise under this Agreement. Buyer shall
have no indemnification obligations under this Article VII in the event that the
Escrow Deposit and all earnings thereon are payable to Sellers pursuant to the
third sentence of Section 2.2(b).
(b) Except with respect to Damages otherwise indemnifiable
hereunder arising out of (i) the breach of the representations and warranties
contained in Section 3.1, 3.2,
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3A.1, 3.6, 4.1, 4.2 or 4.6, (ii) Buyer's failure to satisfy its obligations to
pay the Cash Consideration as provided in Section 2.2 or (iii) the failure of
Buyer or Sellers' Agent's and Sellers to satisfy their respective payment
obligations in respect of the Net Working Capital Adjustments as provided in
Section 2.6, no Indemnifying Party shall have any liability for any Damages
otherwise indemnifiable by such Indemnifying Party hereunder unless the
aggregate amount of Damages exceeds $1,000,000, in which event the Indemnifying
Party shall have liability for such Indemnifiable Damages only to the extent
that the aggregate amount of such Damages exceeds $250,000.
(c) No Indemnifying Party shall have any liability for any Damages
with respect to which a Notice of Claim has not been given to the Sellers' Agent
or Buyer (as applicable) prior to the applicable Expiration Date. The
Indemnifying Party shall continue to be liable for any Indemnity Claim for which
a Notice of Claim has been given prior to the applicable Expiration Date until
such Indemnity Claim has been satisfied or otherwise resolved as provided in
this Article VII.
(d) Except with respect to Damages otherwise indemnifiable
hereunder arising out of the breach of the representations and warranties
contained in Section 3.1, 3.2, 3A.1, 3.6, 4.1, 4.2 or 4.6, no Indemnifying Party
shall have any liability for any Damages otherwise indemnifiable by such
Indemnifying Party hereunder to the extent that the aggregate amount of such
Damages exceeds $7,000,000.
(e) Except as otherwise set forth in Section 7.1(a), no
Indemnifying Party shall have liability for any Damages otherwise indemnifiable
hereunder arising out of (i) any matter disclosed in all material respects in
this Agreement (including the Exhibits hereto and Schedules) or in any
agreement, certificate, document or other instrument delivered by or on behalf
of any Indemnifying Party pursuant to this Agreement or (ii) any matter known to
Buyer or Sellers, as applicable, as of the Closing Date.
(f) Sellers shall not have liability for any Damages to the extent
that the matter forming the basis for such Damages was taken into account in the
calculation of Closing Net Working Capital.
(g) Notwithstanding anything to the contrary contained herein, the
limitations on the Indemnifying Parties' indemnification liability in this
Section 7.2 shall not apply to (i) common law fraud or any right of recission or
(ii) equitable relief in the nature of specific performance or injunctive relief
with respect to this Agreement prior to the Closing Date. In addition, no
indemnification under this Article VII shall apply to any breaches by any party
under the Escrow Agreement, the Partnership Rights Agreements or the Employment
Termination and Non-Competition Agreement and each party to such agreements
shall have good remedies as may be available at law or in equity with respect to
any such breaches.
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Section 7.3 Definition of Damages or Damages. For purposes of this
--------------------------------
Agreement, "Damage" or "Damages" shall mean any and all liabilities, losses,
damages, actions, suits, proceedings, claims, demands, judgments, costs and
expenses (including reasonable accountants' and attorneys' fees) of every nature
and character (but specifically excluding indirect costs or special or
consequential damages) arising out of the matters or circumstances referred to
in Section 7.1. The amount of any indemnifiable Damages hereunder shall be
reduced by the amount of (a) insurance proceeds actually received net of
deductibles, incidental expenses and costs of collection, (b) proceeds (other
than insurance proceeds) or amounts from third parties (regardless of when
received but only if actually received), and (c) any tax benefits which are
reasonably anticipated to be realized by the Buyer Indemnified Parties or the
Seller Indemnified Parties, as applicable, in each case of clauses (a), (b) or
(c), in connection with or as a result of such Damages.
Section 7.4 Survival.
--------
(a) The representations, warranties, covenants and agreements shall
survive the Closing for the applicable Expiration Date. For this purpose, the
Expiration Date shall mean:
(i) With respect to the representations and warranties
contained in Sections 3.15 and 4.11, the Expiration Date shall be that date that
is 30 days after the expiration of the applicable statute of limitations (as it
may be extended under applicable law).
(ii) With respect to all other representations and warranties
contained in this Agreement, the Expiration Date shall be the first anniversary
of the Closing Date.
(iii) With respect to the covenants and agreements contained
in this Agreement, the Expiration Date shall be that date on which the
applicable statute of limitations expires.
ARTICLE VIII
Termination
Section 8.1 Termination. This Agreement (other than with respect to
-----------
Sections 5.2(a) and 8.2) may be terminated at any time prior to the Closing:
(a) by mutual consent of all the parties hereto;
(b) by Buyer, on the one hand, or by Sellers, on the other hand
(considering Buyer to be one party, and Sellers to be one party, for the
purposes of this Section 8.1(b)), if
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(i) the Closing shall not have occurred prior to the first
anniversary of the date hereof;
(ii) if all of the conditions to the other party's
obligations to consummate the Purchase and Exchange and the Closing provided in
Article VI shall have been satisfied and the other party fails to close the
Purchase and Exchange on the Closing Date; or
(iii) if the Mass Media Bureau or the FCC en banc by written
order refuses to approve without a hearing the FCC Applications for all the
Radio Stations owned by all the Radio Station Companies, or if the FCC issues
its order granting approval of any such FCC Application but with a condition
materially adverse to Buyer or any Seller and the party to which the condition
applies does not elect (or with a condition materially adverse to any Company
and Buyer does not elect to cause such Company) to comply with such condition
within fifteen (15) days after the date the FCC's order becomes a Final Order;
provided, that neither party may terminate this Agreement pursuant to this
Section 8.1(b) if it is at that time in material breach of this Agreement;
(c) by Buyer if any loss, damage or other occurrence prevents
broadcast transmissions by WICC AM, WEBE FM, WRKI FM, WFAS AM or WFAS FM for
more than three continuous days, provided that if Buyer does not terminate this
Agreement pursuant to this Section 8.1(c) within ten days of notice by Sellers'
Agent (which notice Sellers' Agent shall give as soon as practicable after it
becomes aware of any loss, damage or other occurrence which is reasonably likely
to prevent broadcast transmissions by any Radio Station for more than three
continuous days), Sellers shall, jointly and severally, at Sellers' expense,
cause the Radio Station Company that owns and operates such Radio Station
promptly to restore transmissions and replace the damaged property in a manner
substantially similar to that previously conducted or existing (the "Sellers
Repairs") and, in such event, Buyer shall not be entitled to terminate this
Agreement by reason of such failure to broadcast. If the Sellers Repairs have
not been completed at the time the Closing would otherwise be held, then the
Closing shall be deferred until a date within fifteen days after Sellers' Agent
has notified Buyer of the completion of the Sellers Repairs, the Closing Date to
be selected by Sellers upon not less than five days' prior notice to Buyer. If
the Sellers Repairs have not been completed and Buyer so notified by the close
of business on the tenth day following date on which the Closing would otherwise
have occurred, Buyer may terminate this Agreement. If the Closing Date would be
after the period permitted by the FCC's Final Orders, Sellers and Buyer shall
file an appropriate application with the FCC for an extension of time within
which to complete the Closing. Notwithstanding anything in this Section 8.1(c)
to the contrary, if the Sellers Repairs would cost in the aggregate more than
$1,000,000 in excess of amounts covered by insurance, Sellers may terminate this
Agreement unless Buyer agrees to bear the cost in excess of $1,000,000. The need
for any Sellers Repairs shall not constitute a breach by Sellers of any
covenant, representation or warranty hereunder, if Sellers fulfill their
obligations under this Section 8.1(c);
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(d) by Sellers if any loss, damage or other occurrence prevents
broadcast transmissions by WPST FM, WJLK FM or WOBM FM for more than three
continuous days, provided that if Sellers do not terminate this Agreement
pursuant to this Section 8.1(d) within ten days of notice by Buyer (which notice
Buyer shall give as soon as practicable after it becomes aware of any loss,
damage or other occurrence which is reasonably likely to prevent broadcast
transmissions by any such radio station for more than three continuous days),
Buyer shall, at Buyer's expense, cause the Nassau Company that owns and operates
such radio station promptly to restore transmissions and replace the damaged
property in a manner substantially similar to that previously conducted or
existing (the "Buyer Repairs") and, in such event, Seller shall not be entitled
to terminate this Agreement by reason of such failure to broadcast. If the Buyer
Repairs have not been completed at the time the Closing would otherwise be held,
then the Closing shall be deferred until a date within fifteen days after Buyer
has notified Sellers' Agent of the completion of the Buyer Repairs, the Closing
Date to be selected by Buyer upon not less than five days' prior notice to
Sellers' Agent. If the Buyer Repairs have not been completed and Sellers' Agent
so notified by the close of business on the tenth day following date on which
the Closing would otherwise have occurred Seller may terminate this Agreement.
If the Closing Date would be after the period permitted by the FCC's Final
Orders, Sellers and Buyer shall file an appropriate application with the FCC for
an extension of time within which to complete the Closing. Notwithstanding
anything in this Section 8.1(d) to the contrary, if the Buyer Repairs would cost
in the aggregate more than $1,000,000 in excess of amounts covered by insurance,
Buyer may terminate this Agreement unless Sellers agree to bear the cost in
excess of $1,000,000. The need for any Buyer Repairs shall not constitute a
breach by Buyer of any covenant, representation or warranty hereunder, if Buyer
fulfills its obligations under this Section 8.1(d);
(e) by Sellers if the FCC shall not have granted its consent to the
transactions contemplated by the Master Agreement and such grant shall not have
become a Final Order by the earlier of the Closing Date or June 30, 2000.
Section 8.2 Effect of Termination. Upon termination of this Agreement
---------------------
pursuant to any provision of this Article VIII, this Agreement shall be void and
of no other effect, and there shall be no liability by reason of this Agreement
or the termination hereof on the part of any party hereto or on the part of the
respective directors, officers, employees, agents or shareholder of any of them,
in each case except for the willful breach of any representations, warranties,
covenant or agreements contained herein, provided, that in the event of such
--------
termination, no Seller shall have any liability by reason of the breach by any
Seller of any representation, warranty, covenant or agreement contained herein
and any such liability under this Section 8.2 shall be born by Aurora
Communications, and provided further, that in the event that such termination
----------------
occurs in connection with a Payment Event, Sellers' sole and exclusive remedy
with respect thereto shall be the payment of the Escrow Deposit and the earnings
thereon pursuant to Section 2.2(b) and the Escrow Agreement.
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ARTICLE IX
Miscellaneous
Section 9.1 Control of the Radio Stations. Between the date hereof and the
-----------------------------
Closing Date, Buyer shall not directly or indirectly control, supervise or
direct or attempt to control, supervise or direct the operation of any of the
Radio Stations, but such operation shall be the sole responsibility of and in
the complete discretion of Sellers and the Companies, subject only to the
provisions of this Agreement.
Section 9.2 Benefitting Sellers. The representations, warranties, covenants
-------------------
and agreements of Buyer in this Agreement are made for the benefit of all of the
Sellers, except that (x) the representations and warranties of Buyer in Article
IV (other than in Section 4.1, 4.6, 4.12 and 4.17), and (y) the covenants of
Buyer in Section 5.3 (other than in clause (a)(iv)(i) thereof), are made solely
for the benefit of the Continuing Sellers, and no Exiting Seller or any officer,
director, partner, member, employee, Affiliate, agent, representative, successor
or assign of any Exiting Seller shall be entitled to any indemnification under
Article VII on the basis of any such provision of this Agreement so stated to be
solely for the benefit of the Continuing Sellers.
Section 9.3 Buyer Incorporation. In the event that the Buyer Incorporation
-------------------
occurs before or simultaneously with the Closing:
(a) All provisions of this Agreement relating to NBP (but solely as
such provisions relate to NBP) shall be deemed to have no effect, provided that
the rights and obligations of NBP under the indemnification provisions of
Article VII (and any provision of this Agreement that would form the basis of an
Indemnity Claim thereunder) shall continue to be effective to the extent that
either (i) NBP shall have suffered any Damages otherwise indemnifiable under
such Article or (ii) any Seller shall have suffered any Damages otherwise
indemnifiable under such Article based on the breach of any representation or
warranty of NBP made on the date of the execution of this Agreement or the
breach of any covenant or agreement of NBP in this Agreement which constitutes
an obligation of NBP to be satisfied before the earlier of the Buyer
Incorporation or the Closing.
(b) All references to "Buyer" in this Agreement shall be deemed to
be references to (i) Nassau Broadcasting Partners, L.P. before the occurrence of
the Buyer Incorporation or (ii) the corporate successor of Buyer from and after
the occurrence of the Buyer Incorporation.
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(c) Buyer shall have the right to amend any disclosure Schedule
(including Schedules 4.1(d) and 4.2) before or at the time of the Closing solely
to reflect the occurrence of the Buyer Incorporation, provided that such
amendment is not materially adverse to Sellers.
Section 9.4 Assignment of Rights; Successors and Assigns.
--------------------------------------------
(a) Sellers acknowledge that Buyer may assign its rights under this
Agreement to (i) the corporate successor of Buyer pursuant to the Buyer
Incorporation and (ii) the institutional lender or lenders which provide Buyer
with financing for the Purchase and Exchange (as security for such financing),
provided that such assignment shall not be effective unless Buyer shall have
defaulted on its obligations to such institutional lender or lenders under the
agreements governing such financing.
(b) This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and permitted assigns;
provided, that, except as provided in Section 9.4(a), this Agreement cannot be
assigned in whole or in part by any party without the express written consent of
each of the other parties and no provision of this Agreement shall be
enforceable by, or create or evidence any right of, any third party.
Section 9.5 Notices. All notices, requests, demands or other communications
-------
in connection with this Agreement shall be in writing and shall be deemed to
have been duly given when delivered by hand; or when sent by facsimile
transmission, receipt confirmed; or when mailed by first class, certified mail,
postage prepaid; in each case as follows:
(A) If to any Sellers or Sellers' Agent:
BancAmerica Capital Investors SBIC I, L.P.
100 North Tryon Street, 25th Floor
Charlotte, North Carolina 28255
Attention: Robert H. Sheridan, III
Attention: Craig A. Elson
Facsimile: 704-386-6432
with a copy to:
Kennedy Covington Lobdell & Hickman, L.L.P.
Bank of America Corporate Center
100 North Tryon Street, Suite 4200
Charlotte, North Carolina 28202
Attention: Eugene C. Pridgen, Esq.
Facsimile: 704-331-7598
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(B) If to Buyer:
Nassau Broadcasting Partners, L.P.
c/o Nassau Broadcasting Partners, Inc.
619 Alexander Road, Third Floor
Princeton, New Jersey 08540
Attention: Michael S. Libretti
Facsimile: 609-452-6017
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Phyllis G. Korff, Esq.
Facsimile: 917-777-2694
Section 9.6 Expenses. Each party shall bear the expenses incurred by it in
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connection with the preparation and consummation of this Agreement and its
portion of the FCC Applications and all reports, notifications and other
documents or filings under the HSR Act contemplated hereby. Buyer, on the one
hand, and the Companies, on the other hand, shall share equally all FCC filing
fees in connection with the FCC Applications and all Department of Justice and
Federal Trade Commission filing fees in connection with such agencies' review of
the transactions contemplated by this Agreement under the HSR Act. All expenses
of the Companies under this Section 9.6 shall be accrued as current liabilities
on the Closing Balance Sheet. The Corporation Sellers shall pay any stock
transfer taxes incurred in connection with the transfer of the AMI Shares or the
AAA Shares, as applicable.
Section 9.7 Appointment of Sellers' Agent. Each Seller appoints the
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Sellers' Agent (with full power of substitution) as his or its agent and
attorney-in-fact to act for him or it and in his or its name in connection with
all matters related to this Agreement and the other agreements contemplated
hereby (collectively the "Transaction Agreements") and the transactions
contemplated by the Transaction Agreements, and each of them gives the Sellers'
Agent full power and authority to deliver certificates or other evidence of
ownership for his or its Subject Interests, to take all action contemplated to
be taken by the Sellers' Agent under the Transaction Agreements, to receive on
his or its behalf the purchase price for his Equity Interests payable pursuant
to Article II, to execute amendments to the Transaction Agreements (so long as
such amendment has been properly authorized by Sellers pursuant to Section
9.15), to give and receive all notices and other communications relating to the
Transaction Agreements, and to execute any instruments and documents that the
Sellers' Agent may determine necessary in the exercise of his authority pursuant
to this power of attorney, all without notice to any of them and with the same
effect as if they had themselves taken such action; and each of the Sellers
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acknowledges and agrees that they shall be bound by, and Buyer and NBP may rely
and act upon, any action taken by Sellers' Agent on behalf of the Sellers and
upon any instruments and documents signed by him with the same force and effect
as if they had themselves so acted. By his execution hereof, Sellers' Agent
hereby accepts such appointment and agrees to act as Sellers' Agent under the
Transaction Agreements and in connection therewith.
Sellers' Agent shall not be liable to Sellers for any action taken or
omitted by Sellers' Agent in good faith, and in no event shall Sellers' Agent be
liable or responsible except for his own gross negligence or willful misconduct.
Sellers shall be liable, jointly and severally, to hold Sellers' Agent (acting
in such capacity, but not in his capacity as a Seller) harmless from, and to
indemnify and reimburse Sellers' Agent for, all amounts paid by Sellers' Agent
pursuant to the Transaction Documents and all claims, liabilities, losses, and
expenses (including out-of-pocket and incidental expenses reasonably incurred
and reasonable legal fees) arising in connection with any action, suit or claim
arising under the Transaction Agreements, provided that Sellers' Agent has not
acted with gross negligence, bad faith or willful misconduct with respect to any
of the events relating to such claims, liabilities, losses or expenses.
Section 9.8 Remedies. (a) Sellers acknowledge that the Subject Interests to
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be sold and exchanged pursuant to this Agreement are unique and that Buyer has
no adequate remedy at law if Sellers and the Companies shall fail to perform any
of their obligations hereunder, and Sellers therefore confirm and agree that
Buyer's right to specific performance is essential to protect the rights and
interests of Buyer. Accordingly, in addition to any other remedies that Buyer
may have hereunder or at law or in equity or otherwise, Sellers hereby agree
that Buyer shall have the right to have all obligations, undertakings,
agreements and other provisions of this Agreement specifically performed by
Sellers and the Companies, and that Buyer shall have the right to obtain an
order or decree of such specific performance, or other equitable relief, in any
court of competent jurisdiction.
(b) Except as otherwise set forth in Sections 2.2(b) and 8.2, Buyer
acknowledges that the NBP Common Stock and the Nassau Equity Interests to be
sold and exchanged pursuant to this Agreement are unique and that Sellers have
no adequate remedy at law if Buyer and NBP shall fail to perform any of their
obligations hereunder, and Buyer and NBP therefore confirm and agree that,
subject to Sections 2.2(b) and 8.2, Sellers' right to specific performance is
essential to protect the rights and interests of Sellers. Accordingly, except as
otherwise set forth in Sections 2.2(b) and 8.2, in addition to any other
remedies that Sellers may have hereunder or at law or in equity or otherwise,
Buyer hereby agrees that Sellers shall have the right to have all obligations,
undertakings, agreements and other provisions of this Agreement specifically
performed by Buyer and NBP, and that Sellers shall have the right to obtain an
order or decree of such specific performance, or other equitable relief, in any
court of competent jurisdiction.
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Section 9.9 Publicity and Disclosures. No press release or other public
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disclosure, either written or oral, of the Purchase and Exchange or any of the
other transactions contemplated hereby shall be made by any of the parties
without the prior knowledge and consent of the other parties.
Section 9.10 Interpretation. When a reference is made in this Agreement to
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an Article, Section, Schedule or Exhibit, such reference shall be to an Article
or Section of, or Schedule or an Exhibit to, this Agreement unless otherwise
indicated. The words "include," "includes" and "including" when used herein
shall be deemed in each case to be followed by the words "without limitation."
The table of contents and headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. When reference is made herein to "the business of" a Person,
such reference shall be deemed to include the business of all direct and
indirect subsidiaries of such Person. Reference to the subsidiaries of a Person
shall be deemed to include all direct and indirect subsidiaries of such Person.
Section 9.11 Counterparts. This Agreement may be executed in two or more
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counterparts, each of which shall be deemed an original and which together
constitute the same agreement.
Section 9.12 No Implied Waiver. No failure or delay on the part of a party
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hereto to exercise any right, power or privilege shall be deemed a waiver of any
rights and remedies to which such party may be entitled.
Section 9.13 Entire Agreement. This Agreement (which includes the Schedules
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and Exhibits hereto) sets forth the entire understanding of the parties with
respect to the subject matter hereof and, incorporates and merges any and all
previous communications, understandings and agreements, oral or written.
Section 9.14 Governing Law. This Agreement shall be governed by and
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construed and enforced in accordance with the laws of the State of Delaware
(without reference to such State's conflicts of law rules) except with respect
to matters governed by federal law relating to radio communications.
Section 9.15 Amendment. Subject to applicable law, this Agreement may be
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amended or supplemented only by a writing signed by Buyer, Sellers (subject to
the last sentence of this Section 9.15) and each other party hereto whose rights
or obligations are affected by such amendment or supplement. No waiver of
compliance with any provision or condition of this Agreement shall be effective
unless evidenced by a writing signed by the party against whom enforcement of
such waiver is sought. Notwithstanding the foregoing, any amendment, supplement
or waiver of any provision or condition of this Agreement shall be binding on
all of the Sellers (and Sellers' Agent) if evidenced by a writing signed by
Sellers entitled to receive a
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majority of the consideration to be received by Sellers hereunder or by Sellers'
Agent; provided that any amendment, supplement or waiver that would change the
amount, form or timing of receipt of the consideration to be provided to Sellers
by Buyer hereunder or would otherwise materially adversely affect the rights of
the Exiting Sellers relative to Continuing Sellers shall not be effective unless
signed by each Seller.
[signatures on following pages]
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
BUYER:
NASSAU BROADCASTING PARTNERS, L.P.
By: Nassau Broadcasting Partners, Inc., as
Managing General Partner
By: /s/ Louis F. Mercatanti, Jr.
----------------------------------------
Name: Louis F. Mercatanti, Jr.
Title: President
SELLERS:
BANCAMERICA CAPITAL INVESTORS SBIC I,
L.P., AS A SELLER AND AS SELLERS' AGENT
By: BANCAMERICA CAPITAL
MANAGEMENT SBIC I, LLC, its general partner
By: BANCAMERICA CAPITAL
MANAGEMENT I, L.P., its sole member
By: BACM I GP, LLC, its general partner
By: /s/ Robert H. Sheridan III
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Name: Robert H. Sheridan III
Title: Managing Director
<PAGE>
FRANK D. OSBORN
ALLISON WAITE OSBORN
CAROLINE LADNER OSBORN
ELIZABETH ANDREW OSBORN
FRANK WILLIAM OSBORN
KATHERINE NELSON OSBORN
/s/ Frank D. Osborn
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Frank D. Osborn, on behalf of himself and
as Attorney-in-Fact
/s/ Frank G. Washington
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Frank G. Washington
/s/ Vincent M. Cremona
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Vincent M. Cremona
HELLER FINANCIAL, INC.
By: /s/ Matthew Kirst
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Name: Matthew Kirst
Title: Vice President
<PAGE>
ALLIED CAPITAL CORPORATION
By: /s/ Thomas H. Westbrook
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Name: Thomas H. Westbrook
Title: Principal
ALLIED INVESTMENT CORPORATION
By: /s/ Thomas H. Westbrook
----------------------------------------
Name: Thomas H. Westbrook
Title: Principal
UNIONBANCAL VENTURE CORPORATION
By: /s/ Terri S Lang
----------------------------------------
Name: Terri S Lang
Title: VP
By: /s/ J. Kevin Sampson
----------------------------------------
Name: J. Kevin Sampson
Title: VP
<PAGE>
AURORA MANAGEMENT GROUP, LLC
By: /s/ Frank D. Osborn
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Frank D. Osborn
Authorized Person
NASSAU BROADCASTING PARTNERS, INC.
By: /s/ Louis F. Mercatanti, Jr.
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Name: Louis F. Mercatanti, Jr.
Title: President
AURORA COMMUNICATIONS, LLC,
solely with respect to its rights, duties,
obligations and with agreements set forth
in Section 8.2 hereof
By: AURORA MANAGEMENT, INC.,
its sole Manager
By: /s/ Frank D. Osborn
----------------------------------------
Name:
Title:
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