SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: March 18, 1997
JACOR COMMUNICATIONS, INC.
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
50 East RiverCenter Boulevard
12th Floor
Covington, KY 41017
(606) 655-2267
Item 2. Acquisition or Disposition of Assets
On March 18, 1997, Jacor Communications Company
("JCC"), a wholly owned subsidiary of Jacor Communications,
Inc. (the "Company"), and EFM Programming, Inc. ("Buyer"), a
wholly owned subsidiary of JCC, entered into an Asset
Purchase Agreement (the "Acquisition Agreement") with EFM
Media Management, Inc., EFM Publishing, Inc., Pam Media,
Inc. (collectively, the "Sellers") and certain shareholders
of the Sellers. Pursuant to the terms of the Acquisition
Agreement, Buyer will acquire (the "Acquisition") all of the
Sellers' assets relating to Sellers' broadcast distribution
and related print and electronic media publishing businesses
(the "Acquired Assets"). The Sellers' business includes the
ownership and distribution of syndicated talk programming
for radio broadcasting, including programs such as Rush
Limbaugh and Dr. Dean Edell, whose contracts will be
assigned to Buyer.
The purchase price for the Acquired Assets is $50.0
million. In addition, Buyer will assume and perform certain
liabilities and obligations of Sellers relating to the
Acquired Assets. It is anticipated that such assumed
liabilities and obligations will not be significant.
The completion of the Acquisition remains subject to
various conditions including the expiration or termination
of the applicable waiting periods under the Hart-Scott-
Rodino Act. The Company currently anticipates that the funds
needed to consummate the Acquisition will come from cash on
hand and/or borrowings under the Company's senior credit
facilities.
A copy of the Acquisition Agreement and the press
release issued by the Company announcing the execution of
the Acquisition Agreement are attached as exhibits hereto.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
The financial statements required to be filed by the
Company as part of this Form 8-K require substantial effort
on behalf of the Company and Sellers and have not yet been
finalized on the date of this report. The Company
anticipates that such financial statements will be filed by
amendment to this Form 8-K on or around April 15, 1997 and
in no event later than 60 days hereafter.
(b) Pro Forma Financial Information.
See 7(a) above.
(c) Exhibits
2.1 Asset Purchase Agreement dated as of March 17, 1997
among Jacor Communications Company ("JCC"), EFM
Programming, Inc. ("Buyer"), and EFM Media Management,
Inc., EFM Publishing, Inc., Pam Media, Inc.
(collectively, the "Sellers") and certain shareholders
of the Sellers (omitting schedules and exhibits not
deemed material).
99.1 Press Release dated March 18, 1997.
Signatures
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
JACOR COMMUNICATIONS, INC.
March 21, 1997 By: /s/ R. Christopher Weber
R. Christopher Weber,
Senior Vice President and
Chief Financial Officer
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
Dated as of March 17, 1997
by and among
EFM PROGRAMMING, INC. ("Buyer")
and
JACOR COMMUNICATIONS COMPANY ("Parent")
and
EFM MEDIA MANAGEMENT, INC.,
EFM PUBLISHING, INC.
and
PAM MEDIA, INC. ("Sellers")
and
THE SHAREHOLDERS OF SELLERS IDENTIFIED HEREIN
(the "Shareholders")
TABLE OF CONTENTS
Page
1. Definitions. 1
2. Sale and Transfer of Assets and Assumption of
Liabilities; Closing 7
2.1 Sale and Transfer of Assets 7
2.2 Assumption of Liabilities. 8
2.3 Assignment of Contracts and Intellectual Property
Rights 9
2.4 Waiver of Bulk Sales Provisions. 9
2.5 Purchase Price 10
2.6 Distributions 10
2.7 Closing 10
2.8 Closing Obligations 11
3. Representations and Warranties of the Shareholders
With Respect to the Shareholders 12
3.1 Due Authorization of Shareholders 12
3.2 Execution and Enforceability With Respect to
Shareholders 12
4. Representations and Warranties of Sellers
and the Shareholders with Respect to Sellers 12
4.1 Organization and Good Standing 12
4.2 Due Authorization, Execution and Enforceability
With Respect to Each Seller 12
4.3 No Conflict; Consents 13
4.4 Capitalization 13
4.5 Outstanding Options and Other Rights 14
4.6 Financial Statements 14
4.7 Title to Properties; Encumbrances 14
4.8 No Undisclosed Liabilities 14
4.9 Taxes 15
4.10 Employee Benefits Plans 15
4.11 Compliance with Legal Requirements;
Governmental Authorizations. 16
4.12 Legal Proceedings 17
4.13 No Material Changes 17
4.14 Material Contracts 17
4.15 Intellectual Property 18
4.16 Brokers or Finders 18
4.17 Limbaugh Agreement 19
4.18 Environmental 19
4.19 Personnel Information 20
4.20 Full Disclosure 20
4.21 Accounts Receivable 20
5. Representations and Warranties of Buyer and Parent. 21
5.1 Organization and Good Standing 21
5.2 Due Authorization, Execution and Enforceability
With Respect to Buyer and Parent 21
5.3 No Conflict; Consents 21
5.4 Certain Proceedings 22
5.5 No Outside Reliance 22
5.6 Brokers or Finders 22
5.7 Financial Capacity to Close 22
5.8 Limbaugh Agreement 22
5.9 Full Disclosure 22
6. Covenants And Agreements 22
6.1 Access and Investigation. 22
6.2 Operation of the Business 23
6.3 Negative Covenant 23
6.4 Required Approvals 23
6.5 Notification 24
6.6 Confidentiality; Non-Competition 24
6.7 Public Disclosure or Communications 25
6.8 Affected Employees 25
6.9 Employee Benefits 25
6.10 Best Efforts 26
6.11 Net Working Capital 26
6.12 Media America 26
7. Tax Matters 27
7.1 General 27
7.2 Sales, Use and Transfer Taxes 27
7.3 Federal, State and Local Taxes 27
7.4 Cooperation and Exchange of Information 27
7.5 Purchase Price Allocation 28
7.6 FIRPTA Certificate 28
7.7 Calculations Related to Section 7.1 28
7.8 Refunds 29
7.9 Contest Provisions 29
7.10 Employee Withholding and Reporting Matters 29
8. Conditions Precedent to Buyer's Obligation to Close. 29
8.1 Accuracy of Representations. 29
8.2 Sellers' and Shareholders' Performance 30
8.3 Additional Documents 30
8.4 Consents 30
8.5 Adverse Proceedings 30
8.6 HSR Waiting Period 30
9. Conditions Precedent to Sellers' And Shareholders'
Obligations to Close. 30
9.1 Accuracy of Representations. 31
9.2 Buyer's and Parent's Performance 31
9.3 Additional Documents. 31
9.4 Adverse Proceedings 31
9.5 HSR Waiting Period 31
10. Termination. 32
10.1 Termination Events 32
10.2 Effect of Termination 32
11. Indemnification; Remedies. 32
11.1 Survival. 32
11.2 Indemnification and Payment of Damages by
Sellers and Shareholders. 33
11.3 Indemnification and Payment of Damages by Buyer
and Parent 33
11.4 Time Limitations. 33
11.5 Limitations on Amount -- Sellers and Shareholders 34
11.6 Limitations on Amount -- Buyer and Parent 34
11.7 Miscellaneous Limitations 34
11.8 Procedure for Indemnification -- Third Party
Claims 35
11.9 Procedure for Indemnification -- Other Claims 36
11.10 Tax Matters 36
12. General Provisions 36
12.1 Expenses 36
12.2 Notices 36
12.3 Service of Process 38
12.4 Further Assurances. 38
12.5 Waiver 39
12.6 Entire Agreement and Modification. 39
12.7 Disclosure Letter 39
12.8 Assignments, Successors, and No Third-party Rights 39
12.9 Severability 40
12.10 Section Headings, Construction 40
12.11 Time of Essence 40
12.12 Governing Law 40
12.13 Counterparts 40
12.14 Monetary Damages, Specific Performance and
Other Remedies 40
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT dated as of March 17, 1997, by
and among EFM Programming, Inc., a Delaware corporation
("Buyer"), Jacor Communications Company, a Florida
corporation ("Parent"), EFM Media Management, Inc., a New
York corporation ("EFM Media"), EFM Publishing, Inc., a New
York corporation ("EFM Publishing"), and PAM Media, Inc., a
New York corporation ("PAM Media", and collectively with EFM
Media and EFM Publishing, "Sellers"), and Edward F.
McLaughlin ("McLaughlin"), Patricia A. McLaughlin ("P.M."),
John Axten ("Axten") and Stuart Krane ("Krane", and
collectively with McLaughlin, P.M. and Axten, the
"Shareholders").
RECITALS
Sellers, collectively, engage in the businesses of
broadcast distribution and related print and electronic
media publishing (collectively referred to herein as the
"Business").
The Shareholders, collectively, own 87.4% of the
issued and outstanding shares of capital stock and all
outstanding options to purchase shares of capital stock (the
"Options") of each Seller.
Buyer desires to purchase and Sellers desire to
sell all of the assets of Sellers used in connection with
the Business, other than Retained Assets (as defined
herein), all upon the terms and subject to the conditions
set forth in this Agreement.
AGREEMENT
The parties, intending to be legally bound, agree as
follows:
I. Definitions.
For purposes of this Agreement, the following terms
have the meanings specified or referred to in this Section
1:
"Acquired Assets" -- as defined in Section 2.1.
"Affected Employees" -- as defined in Section 6.8.
"Affiliate" -- any Person directly or indirectly
controlling, controlled by or under direct or indirect
common control with another Person.
"Allocation Schedule" -- as defined in Section 7.5.
"Assumed Liabilities" -- as defined in Section 2.2.
"Balance Sheet" -- as defined in Section 4.6.
"Business" -- as defined in the Recitals of this
Agreement.
"Buyer" -- as defined in the first paragraph of this
Agreement.
"Buyer's Plan" -- -- as defined in Section 6.9.
"Closing" -- as defined in Section 2.7.
"Closing Date" -- the date and time as of which the
Closing actually takes place.
"Code" -- the Internal Revenue Code of 1986, as
amended, or any successor law, and rules and regulations
issued by the IRS pursuant to the Internal Revenue Code or
any successor law.
"Consent" -- any approval, consent, ratification,
waiver, or other authorization (including any Governmental
Authorization).
"Contemplated Transactions" -- all of the transactions
contemplated by this Agreement, including without
limitation:
(a) the sale of the Acquired Assets by
Sellers to Buyer, and the assumption of the Assumed
Liabilities by Buyer;
(b) the execution, delivery, and performance
of the Limbaugh Agreement; and
(c) the performance by Buyer, Parent, each
Seller and each Shareholder of its respective covenants and
obligations under this Agreement.
"Contract" -- any agreement, contract, obligation,
promise, or undertaking (whether written or oral and whether
express or implied) that is legally binding.
"Damages" -- as defined in Section 11.2.
"Disclosure Letter" -- the disclosure letter delivered
by Sellers and the Shareholders to Buyer concurrently with
the execution and delivery of this Agreement.
"Encumbrance" -- any charge, claim, community property
interest, condition, equitable interest, lien, option,
pledge, mortgage, hypothecation, attachment, conditional
sale, title retention, security interest or similar
arrangement, device, right of first refusal, or restriction
of any kind, including any restriction on use, voting,
receipt of income, or exercise of any other attribute of
ownership.
"ERISA" -- the Employee Retirement Income Security Act
of 1974 or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Excluded Liabilities" -- as defined in Section 2.2.
"Financial Statements" -- as defined in Section 4.6.
"FIRPTA Certificate" -- as defined in Section 7.6.
"GAAP" -- United States generally accepted accounting
principles applied on a consistent basis.
"Gateway" -- as defined in Section 2.1.
"Governmental Authorization" -- any approval, consent,
license, permit, waiver, or other authorization issued,
granted, given, or otherwise made available by or under the
authority of any Governmental Body or pursuant to any Legal
Requirement.
"Governmental Body" -- any:
(a) nation, state, county, city, town, village,
district, or other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or
other government;
(c) governmental or quasi-governmental authority
of any nature (including any governmental agency,
branch, department, official, or entity and any court
or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative,
police, regulatory, or taxing authority or power of any
nature.
"HSR Act" -- -- the Hart-Scott-Rodino Antitrust
Improvements Act of 1976 or any successor law, and
regulations and rules issued pursuant to that Act or any
successor law.
"Income Taxes" -- -- as defined in Section 7.3.
"Intellectual Property Rights" -- -- as defined in
Section 4.15.
"Interim Balance Sheet" -- as defined in Section 4.6.
"Interim Financial Statements" -- as defined in
Section 4.6.
"IRS" -- the United States Internal Revenue Service or
any successor agency, and, to the extent relevant, the
United States Department of the Treasury.
"Legal Requirement" -- any federal, state, local,
municipal, foreign, international, multinational, or other
administrative order, constitution, law, ordinance,
principle of common law, regulation, statute, or treaty.
"Limbaugh" -- Rush H. Limbaugh III.
"Limbaugh Newsletter Agreement" -- as defined in
Section 4.17.
"Limbaugh Newsletter Assignment" -- as defined in
Section 4.17.
"Limbaugh Radio Agreement" -- as defined in
Section 4.17.
"Limbaugh Radio Assignment" -- as defined in Section
4.17.
"Material Adverse Effect" -- a material adverse effect
on the businesses, financial condition or results of
operations of the Business taken as a whole.
"Material Contracts" -- as defined in Section 4.14.
"Media America" -- as defined in Section 2.1.
"Media America Agreement" -- as defined in Section 2.1.
"Media America Notification" -- as defined in
Section 2.8.
"Net Working Capital" -- with respect to any Seller,
current assets (other than amounts due from Affiliates) plus
security deposits, minus current liabilities (other than
amounts due to Affiliates and accrued Taxes), as such items
appear on a balance sheet of such Seller, prepared in
accordance with GAAP.
"Notes" -- as defined in Section 2.5.
"Options" -- as defined in the Recitals of this
Agreement.
"Order" -- any award, decision, injunction, judgment,
order, ruling, subpoena, verdict, or similar authoritative
ruling entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any
arbitrator.
"Ordinary Course of Business" -- an action taken by a
Person will be deemed to have been taken in the "Ordinary
Course of Business" only if:
(a) such action is consistent with the past
practices of such Person and is taken in the ordinary
course of the normal day-to-day operations of such
Person;
(b) such action is not required to be authorized
by the board of directors of such Person (or by any
Person or group of Persons exercising similar
authority) and is not required to be specifically
authorized by the parent company (if any) of such
Person; and
(c) such action is similar in nature and magnitude
to actions customarily taken, without any authorization
by the board of directors (or by any Person or group of
Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other
Persons that are in the same line of business as such
Person.
"Organizational Documents" -- (a) the articles or
certificate of incorporation and the bylaws of a
corporation; (b) the partnership agreement and any statement
of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited
partnership of a limited partnership; (d) any charter or
similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and
(e) any amendment to any of the foregoing.
"Parent" -- as defined in the first paragraph of this
Agreement.
"PBGC" -- as defined in Section 4.10.
"Permitted Encumbrances" -- as defined in Section 4.7.
"Person" -- any individual, corporation (including any
non-profit corporation), general or limited partnership,
limited liability company, joint venture, estate, trust,
association, organization, labor union, or other entity or
Governmental Body.
"Plan" -- as defined in Section 4.10.
"Proceeding" -- any action, arbitration, audit,
hearing, inquiry, investigation, litigation, or suit
(whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or
arbitrator.
"Purchase Price" -- as defined in Section 2.5.
"Retained Assets" -- as defined in Section 2.1.
"Related Person" -- with respect to a particular
individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly
controlled by such individual or one or more members of
such individual's Family;
(c) any Person in which such individual or members
of such individual's Family hold (individually or in
the aggregate) a Material Interest; and
(d) any Person with respect to which such
individual or one or more members of such individual's
Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly
controls, is directly or indirectly controlled by, or
is directly or indirectly under common control with
such specified Person;
(b) any Person that holds a Material Interest in
such specified Person;
(c) each Person that serves as a director,
officer, partner, executor, or trustee of such
specified Person (or in a similar capacity);
(d) any Person in which such specified Person
holds a Material Interest;
(e) any Person with respect to which such
specified Person serves as a general partner or a
trustee (or in a similar capacity); and
(f) any Related Person of any individual described
in clause (b) or (c).
For purposes of this definition, (a) the "Family" of an
individual includes (i) the individual, (ii) the
individual's spouse, (iii) any other natural person who is
related to the individual or the individual's spouse within
the second degree, and (iv) any other natural person who
resides with such individual, and (b) "Material Interest"
means direct or indirect beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934) of
voting securities or other voting interests representing at
least 10% of the outstanding voting power of a Person or
equity securities or other equity interests representing at
least 10% of the outstanding equity securities or equity
interests in a Person.
"Representative" -- with respect to a particular
Person, any director, officer, employee, agent, consultant,
advisor, or other representative of such Person, including
legal counsel, accountants, and financial advisors.
"Securities Act" -- the Securities Act of 1933, as
amended, or any successor law, and regulations and rules
issued pursuant to that Act or any successor law.
"Sellers" -- as defined in the first paragraph of this
Agreement.
"Shareholders" -- as defined in the first paragraph of
this Agreement.
"Tax" -- any tax (including, without limitation, any
income tax, capital gains tax, value-added tax, sales tax,
property tax, gift tax, or estate tax), levy, assessment,
tariff, duty (including customs duty), deficiency, or other
fee, and any related charge or amount (including any fine,
penalty, interest or addition to tax), imposed, assessed, or
collected by or under the authority of any Governmental Body
or payable pursuant to any tax-sharing agreement or any
other Contract relating to the sharing or payment of any
such tax, levy, assessment, tariff, duty, deficiency, or
fee.
"Tax Return" -- any return (including any information
return), report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or
required to be filed with or submitted to, any Governmental
Body in connection with the determination, assessment,
collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or
compliance with any Legal Requirement relating to any Tax.
"Transfer Taxes" -- as defined in Section 7.2.
"Welfare Plan" -- as defined in Section 6.9.
2. Sale and Transfer of Assets and Assumption of
Liabilities; ClosingSale and Transfer of Assets and
Assumption of Liabilities; Closing.
2.1 Sale and Transfer of AssetsSale and Transfer of
Assets. Subject to the terms and conditions of this
Agreement, at the Closing, Sellers will sell, convey,
assign, transfer and deliver to Buyer, Buyer will purchase,
and Parent will cause Buyer to purchase, from Sellers, all
of Sellers' right, title and interest in and to all of the
Acquired Assets. Sellers represent and warrant that the
Acquired Assets will be free and clear of any and all
Encumbrances other than Permitted Encumbrances and except as
set forth on Schedule 2.1 hereto.
As used in this Agreement, the term "Acquired Assets"
means the following personal, tangible and intangible assets
owned by Sellers and relating to the Business, wherever
located, as the same may exist on the Closing Date: (i) all
Contracts which relate to the operation of the Business to
which one or more Seller is a party, and which are set forth
in Part 4.14 of the Disclosure Letter; (ii) all machinery,
equipment, spare parts, fittings, supplies and other
tangible personal property used by any Seller in the
operation of the Business; (iii) all prepaid expenses and
deposits of the Business; (iv) all accounts receivable of
the Business or other rights to receive payment for services
provided by the Business as of the Closing Date; (v) all
inventory of supplies, raw materials, component parts, work-
in-process and finished goods of the Business on hand;
(vi) all Intellectual Property Rights and all other
intangible rights relating to the Business; (vii) all rights
under Governmental Authorizations; (viii) all causes of
action, if any, maintained by any Seller against third
parties for recovery of customer accounts receivable;
(ix) all goodwill of the Business; (x) all operating data,
books and records of Sellers with respect to the Business,
including customer lists and information relating to station
affiliates, customers and suppliers; (xi) all cash, cash
equivalents, securities and bank accounts, including any
proceeds of any of the foregoing; and (xii) all other
assets, whether tangible or intangible, that are used by
Sellers in the Business, except the Retained Assets.
Notwithstanding anything to the contrary contained in
this Agreement, the Acquired Assets shall not include the
following assets of Sellers (collectively, the "Retained
Assets"): (i) assets disposed of by Sellers in the Ordinary
Course of Business and in accordance with Section 6.2 after
the date hereof and prior to the Closing Date; (ii) all
federal, state, local or other refunds on account of any Tax
paid by any Seller at any time before or after the Closing;
(iii) all insurance policies and proceeds thereof other than
any such policies referred to in Part 4.14 of the Disclosure
Letter; (iv) the minute books, stock books and Tax Returns
of Sellers; (v) books and records of account for all periods
prior to the Closing Date, all supporting software and one
computer with which such software may be used; (vi) all
rights to receive payments from Gateway Educational Products
("Gateway") pursuant to that certain agreement (the "Media
America Agreement") dated September 19, 1991 among EFM
Media, PAM Media and Media America, Inc. ("Media America");
and (vii) rights of Sellers to the names "EFM Media
Management, Inc.", "EFM Media Management", "EFM Publishing,
Inc.", "EFM Publishing", "EFM", "PAM Media, Inc.", "PAM
Media", and "PAM", and all intangible rights and/or
Intellectual Property Rights related thereto, including,
without limitation, all rights to use such names in the
conduct of business.
2.2 Assumption of Liabilities.Assumption of
Liabilities. At the Closing, Sellers will assign to Buyer,
and Buyer will, and Parent will cause Buyer to, assume and
perform as they become due, the following liabilities and
obligations of Sellers (collectively, the "Assumed
Liabilities"):
(i) all trade accounts payable arising out of or
relating to the conduct or operation of the Business,
or which otherwise relate to the Acquired Assets;
(ii) all liabilities, obligations and duties to
perform under any and all Contracts which are Acquired
Assets;
(iii) all other liabilities of Sellers arising
out of or relating to the conduct of the Business,
incurred in the Ordinary Course of Business and either
(A) listed on the Balance Sheet or (B) of the specific
nature of those liabilities listed on the Balance Sheet
and incurred after the Balance Sheet Date; and
(iv) all liabilities arising out of or relating to
the conduct of the Business and incurred from and after
the Closing Date.
(b) Except for the Assumed Liabilities, Buyer will not
assume or have any responsibility for any liabilities or
obligations of Sellers and/or the Business (collectively,
the "Excluded Liabilities").
2.3 Assignment of Contracts and Intellectual Property
Rights.Assignment of Contracts and Intellectual Property
Rights. To the extent that the assignment hereunder of any
Contracts, Governmental Authorizations or Intellectual
Property Rights require the Consent of any other party (or
in the event that any of the same shall be non-assignable),
neither this Agreement nor any actions taken hereunder will
constitute an assignment or an agreement to assign if such
assignment or attempted assignment would constitute a breach
thereof or result in the loss or diminution thereof;
provided, however, that in each such case, Sellers, Buyer
and Parent will use commercially reasonable efforts to
obtain the Consent of such other party to an assignment to
Buyer, which efforts, if required, shall include Parent
becoming a party to any such assignment and/or guaranteeing
the obligations of Buyer under or with respect to any such
Contracts, Governmental Authorizations or Intellectual
Property Rights.
If such consent is not obtained, Sellers shall
cooperate with Buyer in a reasonable arrangement designed to
provide Buyer with the benefits and burdens of any such
Contracts, Governmental Authorizations and Intellectual
Property Rights, including appointing Buyer to act as its
agent to perform all of Sellers' obligations under such
Contracts, Governmental Authorizations and Intellectual
Property Rights and to collect and promptly remit to Buyer
all compensation received by Sellers pursuant to those
Contracts and Governmental Authorizations and to enforce for
the account and benefit of Buyer, any and all rights of
Sellers against any other Person arising out of the breach,
infringement or cancellation of such Contracts, Governmental
Authorizations and/or Intellectual Property Rights by such
other person or otherwise (any and all of which arrangements
will constitute, as between the parties hereto, a deemed
assignment or transfer); provided that, to the extent that
any Seller is required to undertake any services or take any
actions in furtherance of the performance of such Contracts,
Governmental Authorizations and/or Intellectual Property
Rights, any such services or actions will be the subject of
a separate agreement that the parties will, in good faith,
negotiate as promptly as possible and which will be mutually
acceptable to the parties, but no such agreement shall
require any Seller to incur any liability or expense.
2.4 Waiver of Bulk Sales Provisions.Waiver of Bulk
Sales Provisions. Buyer hereby waives compliance with all
provisions of the Bulk Sales Laws of New York, if applicable
to the Contemplated Transactions, and in consideration of
such waiver each Seller and each Shareholder agrees to
indemnify Buyer against and hold it harmless from any and
all Damages (as defined in Section 11) resulting from or
arising out of such noncompliance to the extent not
involving an Assumed Liability, provided that the provisions
of Section 11 shall apply to this indemnity as if it were
set forth therein.
2.5 Purchase PricePurchase Price. The purchase price
(the "Purchase Price") for the Acquired Assets is
$50,000,000, which shall be allocated among the Acquired
Assets in accordance with the Allocation Schedule.
2.6 Distributions.
(a) Immediately prior to the Closing, and subject
to Section 6.11, each Seller may make a distribution to its
shareholders in the aggregate amount of such Seller's net
profits which have not previously been distributed for all
periods ending on the date which is 30 days prior to the
Closing Date (the "Distribution Date"). The amount of such
distribution, if any, shall be calculated in a manner
consistent with past practice in connection with historical
monthly and/or quarterly distributions made by Sellers. In
connection with such distributions, EFM Publishing and PAM
Media may make payments to EFM Media in a manner consistent
with past practice.
(b) Within 75 days after the Closing Date, Sellers
and Buyer shall prepare an unaudited income statement (the
"Final Closing Income Statement") of each Seller showing
such Seller's net profits (calculated in a manner consistent
with past practice) which have not previously been
distributed for the period beginning on the Distribution
Date and ending on the Closing Date (the "Final Distribution
Period"). Each Final Closing Income Statement shall be
prepared in accordance with GAAP; provided that all accounts
receivable of Sellers identified as uncollectible shall be
included in determining Sellers' net profits for the Final
Distribution Period. In the event Sellers and Buyer are
unable to agree on any of the items to be included in any
Final Closing Income Statement, a nationally recognized
accounting firm to be agreed upon by Buyer and Sellers shall
resolve any disputed items by conducting its own review of
the books and records of Sellers. Each of Buyer and Sellers
agrees that it shall be bound by such accounting firm's
determination of any disputed items. The fees and expenses
of such accounting firm shall be paid jointly by Buyer and
Parent, on the one hand, and Sellers, on the other. The
Final Closing Income Statements shall be finalized no later
than 90 days after the Closing Date.
(c) Within 10 days after the finalization of the
Final Closing Income Statements pursuant to Section 2.6(b),
Buyer shall, and Parent shall cause Buyer to, pay to Sellers
in cash the amount of Sellers' aggregate net profits as
shown on the Final Closing Income Statements. Any such
payment shall be accompanied by interest from the Closing
Date on the amount so paid at the rate of 5% per annum,
compounded monthly.
2.7 Closing. The purchase and sale (the
"Closing") provided for in this Agreement will take place at
the offices of Kaye, Scholer, Fierman, Hays & Handler, LLP,
425 Park Avenue, New York, New York 10022, at 10:00 a.m.
(local time) on the later of (i) the date that is two
business days following the termination of the applicable
waiting period under the HSR Act and (ii) as soon as
practicable after the conditions set forth in Sections 8 and
9 are either satisfied or waived by the appropriate party,
or at such other time and place as the parties may agree.
2.8 Closing Obligations. At
the Closing:
(a) Sellers will deliver to Buyer:
(i) A bill of sale, substantially in the
form of Exhibit 2.8(a)(i) hereto;
(ii) a notice, substantially in the form
of Exhibit 2.8(a)(ii) hereto, notifying Media
America of the assignment of the Media America
Agreement and the retention by Sellers of all
rights to receive payments from Gateway pursuant
to the Media America Agreement (the "Media America
Notification");
(iii) a certificate executed by each
Seller and Shareholder to the effect that each of
Sellers' and the Shareholders' representations and
warranties in this Agreement was accurate in all
material respects as of the date of this Agreement
and is accurate in all material respects as of the
Closing Date, except to the extent that any
inaccuracy does not have a Material Adverse
Effect; and
(iv) physical possession of the tangible Acquired
Assets.
(b) Buyer will, and Parent will cause Buyer to,
deliver to Sellers:
(i) An assumption agreement,
substantially in the form of Exhibit 2.8(b)(i)
hereto, pursuant to which Buyer will assume the
Assumed Liabilities;
(ii) the following amounts by wire
transfer to accounts specified in writing not less
than two business days prior to the Closing Date
by, EFM Media, EFM Publishing and PAM Media,
respectively: $6,000,000 to EFM Media, $7,000,000
to EFM Publishing and $37,000,000 to PAM Media;
and
(iii) the Media America
Notification; and
(iv) a certificate executed by Buyer and
Parent to the effect that each of Buyer's and
Parent's material representations and warranties
in this Agreement was accurate in all material
respects as of the date of this Agreement and is
accurate in all material respects as of the
Closing Date as if made on the Closing Date.
3. Representations and Warranties of the Shareholders With
Respect to the
ShareholdersRepresentations and Warranties of the
Shareholders With Respect to the Shareholders.
Each Shareholder with respect to itself represents and
warrants to Buyer as follows:
3.1 Due Authorization of ShareholdersDue Authorization
of Shareholders. The execution, delivery and performance by
each Shareholder of this Agreement are within such
Shareholder's full legal right, power and authority, do not
contravene, permit the termination of or constitute a
default under any agreement or other instrument binding upon
such Shareholder, do not require the Consent of any Person,
and do not require any action by or in respect of any filing
with, any Governmental Body or official, or any Governmental
Authorization, except those Governmental Authorizations
which will have been obtained at or prior to the Closing,
and do not violate any provision of any applicable Legal
Requirement or any Order to which such Shareholder is
subject.
3.2 Execution and Enforceability With Respect to
ShareholdersExecution and Enforceability With Respect to
Shareholders. This Agreement constitutes the legal, valid
and binding obligation of each Shareholder, enforceable in
accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency, moratorium
or other laws affecting creditors' rights generally and
general principles of equity.
4. Representations and Warranties of Sellers and the
Shareholders with Respect to SellersRepresentations
and Warranties of Sellers and the Shareholders with Respect
to Sellers.
Each Seller and each Shareholder represents and
warrants to Buyer as follows:
4.1 Organization and Good StandingOrganization and
Good Standing. (a) Each Seller is a corporation duly
organized, validly existing, and in good standing under the
laws of its jurisdiction of incorporation, with full
corporate power and authority to conduct the Business as it
is now being conducted and to own or use the properties and
assets that it purports to own or use with respect to the
Business. Each Seller is duly qualified to do business as a
foreign corporation and is in good standing under the laws
of each state or other jurisdiction in which either the
ownership or use of the properties owned or used by it, or
the nature of the activities conducted by it, requires such
qualification.
(b) Copies of the Organizational Documents of each
Seller, as currently in effect, have been delivered or made
available to Buyer.
4.2 Due Authorization, Execution and Enforceability
With Respect to Each SellerDue Authorization, Execution and
Enforceability With Respect to Each Seller. This Agreement
has been duly and validly authorized by all necessary
corporate action on the part of each Seller and constitutes
the legal, valid, and binding obligation of such Seller,
enforceable against such Seller in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or other laws
affecting creditors' rights generally and general principles
of equity. Each Seller has the absolute and unrestricted
right, power, and authority to execute and deliver this
Agreement and to perform its obligations under this
Agreement.
4.3 No Conflict; ConsentsNo Conflict; Consents.
Except as set forth in Part 4.3 of the Disclosure Letter,
neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated
Transactions will, directly or indirectly (with or without
notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational
Documents of any Seller, or (B) any resolution adopted
by the board of directors or the shareholders of any
Seller;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other
Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to
which any Seller, the Business or any of the Acquired
Assets, is subject;
(iii) contravene, conflict with, or result in
a violation of any of the terms or requirements of, or
give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by any Seller
in connection with the Business;
(iv) contravene, conflict with, or result in a
violation or breach of any provision of, or give any
Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any
Contract;
(v) result in the imposition or creation of any
Encumbrance upon or with respect to any of the Acquired
Assets; or
(vi) require any Seller to give any notice to or
obtain any Consent from any Person.
4.4 Capitalization. The capitalization
of each Seller is as set forth in Part 4.4 of the Disclosure
Letter, and 87.4% of all issued and outstanding shares of
capital stock and the Options are owned by the
Shareholders. All of the outstanding equity securities of
each Seller have been duly authorized and validly issued and
are fully paid and nonassessable.
4.5 Outstanding Options and Other RightsOutstanding
Options and Other Rights. Other than as set forth in Part
4.5 of the Disclosure Letter and other than the Options,
(a) there are no outstanding rights, subscriptions,
warrants, calls, unsatisfied preemptive rights, options, or
other agreements or Contracts of any kind to purchase or
otherwise receive from any Seller any of the authorized but
unissued shares of the capital stock or any other security
of any Seller, and (b) there is no outstanding security of
any kind issued by any Seller convertible into capital stock
of any Seller.
4.6 Financial Statements.
Part 4.6 of the Disclosure Schedule contains (a) a balance
sheet of each Seller as at December 31, 1995 (including the
notes thereto, the "Balance Sheet"), and the related
statements of income and retained earnings (or operations
and accumulated deficit, as the case may be) and statements
of cash flow for the fiscal year then ended, including the
notes thereto, with a review opinion by Kaufman, Greenhut,
Forman LLP, independent certified public accountants (the
"Financial Statements"), and (b) a balance sheet of each
Seller as at December 31, 1996 (the "Interim Balance Sheet")
and the related profit and loss statements for the fiscal
year then ended, including the notes thereto, with a review
opinion by Kaufman, Greenhut, Forman LLP, independent
certified public accountants (the "Interim Financial
Statements"). Such Financial Statements and Interim
Financial Statements, except as indicated therein, fairly
present in all material respects the financial condition and
the results of operations and cash flow of the Business as
at the respective dates of and for the periods referred to
in such financial statements, all in accordance with GAAP,
subject, in the case of interim financial statements, to
normal recurring year-end adjustments and the absence of
notes.
4.7 Title to Properties; EncumbrancesTitle to
Properties; Encumbrances. Sellers own no real property.
Part 4.7 of the Disclosure Letter lists all personal
property owned by Sellers which is material to the Business
and treated by Sellers as depreciable property. Except as
set forth in Part 4.7 of the Disclosure Letter, Sellers have
good title to, or hold by valid lease or license, the
Acquired Assets subject to no Encumbrance except for
(a) Encumbrances reflected on the Balance Sheet or the
Interim Balance Sheet, (b) Encumbrances arising by operation
of law relating to the Assumed Liabilities, (c) Encumbrances
for current Taxes, assessments or governmental charges or
levies on property not yet due and delinquent or the
validity of which are being contested in good faith by
appropriate proceedings and (d) liens consisting of zoning
or planning restrictions, easements, permits and other
restrictions or limitations on the use of real property or
irregularities in title thereto which do not materially
detract from the value of, or impair the use of such
property by any Seller in the operation of the Businesses
(collectively, "Permitted Encumbrances").
4.8 No Undisclosed LiabilitiesNo Undisclosed
Liabilities. Except as set forth in Part 4.8 of the
Disclosure Letter or as otherwise disclosed in this
Agreement, Sellers have no liabilities or obligations
associated with the Business required to be set forth in the
Balance Sheet or the Interim Balance Sheet in accordance
with GAAP (whether known or unknown and whether absolute,
accrued, contingent, or otherwise) except for liabilities or
obligations reflected or reserved against in the Balance
Sheet or the Interim Balance Sheet and liabilities and
obligations incurred in the Ordinary Course of Business
since the respective dates thereof. Except for the Assumed
Liabilities, no liability or obligation of any nature,
whether accrued, absolute, contingent or otherwise, relating
to Sellers or the Acquired Assets exists which could, after
the Closing result in any form of transferee liability
against Buyer or subject the Acquired Assets to any lien,
encumbrance, claim, charge, security interest or imposition
whatsoever (other than Permitted Encumbrances) or otherwise
affect the full, free and unencumbered use of the Acquired
Assets by Buyer.
4.9 Taxes. (a) Each Seller has filed or caused
to be filed on or prior to the Closing Date all Tax Returns
that are or were required to be filed by or with respect to
it pursuant to applicable Legal Requirements. Each Seller
has paid, or made provision for the payment of, all Taxes
shown to be due pursuant to those filed Tax Returns.
(b) Except as described in Part 4.9 of the Disclosure
Letter, no adjustments relating to the Tax Returns referred
to in paragraph (a) hereof have been proposed by the
Internal Revenue Service or the appropriate state, local or
foreign Governmental Body, no Seller has given or been
requested to give waivers or extensions (or is or would be
subject to a waiver or extension given by any other Person)
of any statute of limitations relating to the payment of
Taxes by such Seller or for which such Seller may be liable.
(c) No Seller has, does or will in the future have any
liability, fixed or contingent, for any unpaid federal,
state or local taxes or other governmental or regulatory
charges whatsoever (including without limitation withholding
and payroll taxes) which could result in a lien on the
Acquired Assets after conveyance thereof to Buyer or in any
other form of transferee liability to Buyer.
4.10 Employee Benefits PlansEmployee Benefits Plans.
Each "employee benefit plan" (as defined in Section 3(3) of
ERISA), each specified fringe benefit plan as that term is
defined in section 6039D of the Code and any other
arrangement, agreements or expectations of similar nature,
whether or not subject to ERISA and maintained or
contributed to by Sellers (each, a "Plan" and collectively,
the "Plans") is listed in Part 4.10 of the Disclosure
Letter. Except as set forth in Part 4.10 of the Disclosure
Letter: (a) each Plan is in compliance with all material
applicable Legal Requirements and has been administered and
operated in accordance with its material terms; (b) each
Plan which is intended to be "qualified" (within the meaning
of Section 401(a) of the Code) has received a favorable
determination letter from the IRS and, to the knowledge of
each Seller and each Shareholder, no event has occurred and
no condition exists which could reasonably be expected to
result in the revocation of any such determination letter;
(c) no "reportable event" (within the meaning of Section
4043(c) of ERISA) for which the 30-day notice requirement
has not been waived by the Pension Benefit Guaranty
Corporation (the "PBGC") has occurred with respect to a
Plan; (d) full payment has been made of all amounts which
Sellers were required to have paid under the terms of any
Plan as contributions to such Plan on or prior to the date
hereof (excluding any amounts not yet due); (e) to the
knowledge of each Seller and each Shareholder, no
"disqualified person" or "party in interest" (as defined in
Section 4975(e)(2) of the Code and Section 3(14) of ERISA,
respectively) has engaged in any transaction in connection
with a Plan that could reasonably be expected to result in
the imposition of a penalty pursuant to Section 502(i) of
ERISA or a tax pursuant to Section 4975(a) of the Code; (f)
no liability, claim, action or litigation has been commenced
or, to the knowledge of each Seller and each Shareholder,
threatened with respect to any Plan (other than claims for
benefits payable submitted in the ordinary course); and (g)
Sellers do not contribute to any "multiemployer plan" (as
defined in Section 4001(a)(3) of ERISA).
4.11 Compliance with Legal Requirements; Governmental
Authorizations. Compliance with Legal Requirements;
Governmental Authorizations. Except as set forth in Part
4.11 of the Disclosure Letter:
(i) each Seller is, and at all times since January
1, 1995 has been, in compliance in all material
respects with each Legal Requirement that is or was
applicable to the conduct or operation of the Business;
(ii) no event has occurred or circumstance exists
with respect to the Business that (with or without
notice or lapse of time) (A) may constitute or result
in a violation by any Seller of, or a failure on the
part of any Seller to comply with, any Legal
Requirement that is or was applicable to the conduct or
operation of the Business, or (B) may give rise to any
obligation on the part of any Seller to undertake, or
to bear all or any portion of the cost of, any remedial
action of any nature; and
(iii) no Seller has received with respect to
the Business, at any time since January 1, 1995, any
notice or other communication (whether oral or written)
from any Governmental Body or any other Person
regarding (A) any actual, alleged, possible, or
potential violation of or failure to comply with any
Legal Requirement that is or was applicable to the
conduct or operation of the Business, or (B) any
actual, alleged, possible, or potential obligation on
the part of any Seller to undertake, or to bear all or
any portion of the cost of, any remedial action of any
nature.
(b) Each Seller possesses all Governmental
Authorizations necessary to permit it to lawfully conduct
and operate the Business in the manner currently conducted
and operated and to permit such Seller to own and use the
Acquired Assets in the manner in which it currently owns and
uses such assets. Each Governmental Authorization referred
to in this Section 4.11 is valid and in full force and
effect. Except as set forth in Part 4.11 of the Disclosure
Letter:
(i) each Seller is, and at all times since
January 1, 1996 has been, in compliance in all respects
with all of the terms and requirements of each such
Governmental Authorization;
(ii) to the knowledge of each Seller and each
Shareholder, no event has occurred or circumstance
exists that may (with or without notice or lapse of
time) (A) constitute or result directly or indirectly
in a violation of or a failure to comply with any term
or requirement of any such Governmental Authorization,
or (B) result directly or indirectly in the revocation,
withdrawal, suspension, cancellation, or termination
of, or any modification to, any such Governmental
Authorization; and
(iii) no Seller has received, at any time
since January 1, 1995, any notice or other
communication (whether oral or written) from any
Governmental Body or any other Person regarding (A) any
actual, alleged, possible, or potential violation of or
failure to comply with any term or requirement of any
such Governmental Authorization, or (B) any actual,
proposed, possible, or potential revocation,
withdrawal, suspension, cancellation, termination of,
or modification to any such Governmental Authorization.
4.12 Legal ProceedingsLegal Proceedings. Except as set
forth in Part 4.12 of the Disclosure Letter, there is no
Proceeding pending, or, to the knowledge of each Seller and
each Shareholder, threatened in writing against any Seller.
4.13 No Material ChangesNo Material Changes. Except
(i) as set forth in Part 4.13 of the Disclosure Letter or
(ii) any change resulting from general economic, financial,
regulatory or market conditions, since the date of the
Interim Balance Sheet there has been no material adverse
change in the financial condition, results of operations,
properties, assets or condition of the Business taken as a
whole.
4.14 Material ContractsMaterial Contracts.
(a) Part 4.14 of the Disclosure Letter sets forth all
the Contracts which relate to the operation of the Business,
under which any Seller has any rights, obligations or
liabilities or by which any Seller or any of the Acquired
Assets are bound and indicates which of such Contracts are
material ("Material Contracts").
(b) Except as set forth in Part 4.14 of the Disclosure
Letter, each such Contract is in full force and effect and
is valid and enforceable in accordance with its terms.
(c) Except as set forth in Part 4.14 of the Disclosure
Letter:
(i) each Seller is in compliance with all
applicable terms and requirements of each such
Contract;
(ii) each other Person that has or had any
obligation or liability under any such Contract is in
full compliance with all applicable terms and
requirements of such Contract;
(iii) no event has occurred or
circumstance exists that (with or without notice or
lapse of time) may contravene, conflict with, or result
in a violation or breach of, or give any Seller or any
other Person the right to declare a default or exercise
any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any
such Contract; and
(iv) no Seller has given to or received from
any other Person, at any time since January 1,
1995, any notice or other communication (whether
oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, or
default under, any such Contract.
(d) Part 4.14 of the Disclosure Letter contains a form
document entitled EFM Media Management Station Agreement _
The Dr. Dean Edell Show/Medical Minutes (the "Edell
Agreement") and a list of stations (the "Edell Stations")
that have executed the Edell Agreement. Except as set forth
in Part 4.14 of the Disclosure Letter, all Edell Stations
have executed the Edell Agreement without modification to
the form of such agreement.
(e) Part 4.14 of the Disclosure Letter contains a form
document entitled EFM Media Management Station Agreement _
The Rush Limbaugh Show/Morning Update (the "Limbaugh Show
Agreement") and a list of stations (the "Limbaugh Stations")
that have executed the Limbaugh Show Agreement. Except as
set forth in Part 4.14 of the Disclosure Letter, all
Limbaugh Stations have executed the Limbaugh Show Agreement
without modification to the form of such agreement.
(f) Part 4.14 of the Disclosure Letter sets forth a
list of rates paid by each of the Limbaugh Stations pursuant
to the Limbaugh Agreement.
4.15 Intellectual Property. The
Intellectual Property Rights (as hereinafter defined) are
listed in Part 4.15 of the Disclosure Letter. Except as set
forth in Part 4.15 of the Disclosure Letter, each Seller
owns or possesses adequate licenses or other valid rights to
use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, copyrights, service
marks, trade secrets, applications for trademarks and for
service marks, know-how and other proprietary rights and
information (collectively, "Intellectual Property Rights")
used or held for use in connection with the Business as
currently conducted or as contemplated to be conducted, and
to the knowledge of each Seller and each Shareholder there
is no assertion or claim challenging the validity of any of
the foregoing. Except as set forth in Part 4.15 of the
Disclosure Letter, the conduct of the Business as currently
conducted does not conflict with any Intellectual Property
Rights of any third party. To the knowledge of each Seller
and each Shareholder there are no infringements of any
Intellectual Property Rights used or held for use in
connection with the Business.
4.16 Brokers or Finders. Other than
fees and other obligations to UBS Securities LLC incurred in
connection with the Contemplated Transactions, neither any
Seller nor any of their Representatives has incurred any
obligation or liability, contingent or otherwise, for
brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement. Any
obligations to UBS Securities LLC incurred in connection
with the Contemplated Transactions shall be the sole
obligation of Sellers.
4.17 Limbaugh Agreements.
(a) Sellers, McLaughlin, Axten and Krane have entered
into an agreement with Limbaugh, which is attached hereto as
Exhibit 4.17(a)(i) (the "Limbaugh Radio Agreement"),
providing, without limitation, for effectiveness thereof
concurrently with the Limbaugh Radio Assignment (as defined
below) and simultaneously with and conditioned upon the
Closing, together with an assignment and assumption
agreement (entered into by and with Buyer) with respect
thereto which is attached hereto as Exhibit 4.17(a)(ii) (the
"Limbaugh Radio Assignment"), providing, without limitation,
for effectiveness thereof concurrently with the Limbaugh
Radio Agreement and simultaneously with and conditioned upon
the Closing.
(b) EFM Publishing, EFM Media, McLaughlin, Axten and
Krane have entered into an agreement with Limbaugh and David
Limbaugh, which is attached hereto as Exhibit 4.17(b)(i)
(the "Limbaugh Newsletter Agreement"), providing, without
limitation, for effectiveness thereof concurrently with the
Limbaugh Newsletter Assignment and simultaneously with and
conditioned upon the Closing, together with an assignment
and assumption agreement (entered into by and with Buyer)
with respect thereto which is attached hereto as Exhibit
4.17(b)(ii) (the "Limbaugh Newsletter Assignment"),
providing, without limitation, for effectiveness thereof
concurrently with the Limbaugh Newsletter Agreement and
simultaneously with and conditioned upon the Closing.
4.18 Environmental. Except as set forth
in Part 4.18 of the Disclosure Letter, each Seller has
complied with all federal, state and local environmental
laws, rules and regulations as in effect on the date hereof
applicable to the Business and each of the Acquired Assets.
No hazardous or toxic waste, substance, material or
pollutant (as those or similar terms are defined under the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended, 42 U.S.C. 9601 et
seq., Toxic Substances Control Act, 15 U.S.C. 2601 et
seq., the Resource Conservation and Recovery Act of 1976, 42
U.S.C. 6901 et seq. or any other applicable federal,
state and local environmental law, statute, ordinance,
order, judgment, rule or regulation relating to the
environment or the protection of human health
("Environmental Laws")), including but not limited to, any
asbestos or asbestos related products, oils or petroleum-
derived compounds, CFCs, PCBs, or underground storage tanks,
have been released, emitted or discharged or are currently
located in, on, under, or about the real property on which
the Acquired Assets are situated or contained in the
tangible personal property included in the Acquired Assets.
The Acquired Assets and Seller's use thereof are not in
violation of any Environmental Laws or any occupational,
safety and health or other applicable law now in effect.
Seller shall be, as of the Closing Date and thereafter,
solely responsible for all environmental liabilities, of
whatsoever kind and nature, arising out of or attributable
to the operation or ownership of the Acquired Assets prior
to the Closing Date.
4.19 Personnel Information.
(a) Part 4.19 of the Disclosure Letter contains a true
and complete list of all persons employed in the Business,
including date of hire, a description of material
compensation arrangements (other than employee benefit plans
set forth in Part 4.10 of the Disclosure Letter). No Seller
has received any written notice of any employee who shall or
is likely to terminate his or her employment relationship
with the Business upon the execution of this Agreement or
after the Closing.
(b) No Seller is a party to any contract or agreement
with any labor organization, nor has any Seller agreed to
recognize any union or other collective bargaining unit, nor
has any union or other collective bargaining unit been
certified as representing any employees of Seller. None of
Sellers or any Shareholder has any knowledge of any
organizational effort currently being made or threatened by
or on behalf of any labor union with respect to employees of
any Seller.
(c) Except as disclosed in Part 4.19 of the Disclosure
Letter, Seller has complied in all material respects with
all laws relating to the employment of labor, including,
without limitation, the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), and those laws relating
to wages, hours, collective bargaining, unemployment
insurance, workers' compensation, equal employment
opportunity and payment and withholding of taxes.
4.20 Full Disclosure. To the knowledge
of each Seller and each Shareholder, no representation or
warranty made by Seller or any Shareholder contained in this
Agreement or any certificate furnished or to be furnished by
any Seller or any Shareholder pursuant hereto contains or
will contain any untrue statement of a material fact.
4.21 Accounts Receivable. All
accounts receivable reflected on the Balance Sheet and the
Interim Balance Sheet and all accounts receivable arising
subsequent to the date of the Interim Balance Sheet, have
arisen in the Ordinary Course of Business and are
collectable. All items which are required by GAAP to be
reflected as accounts receivable on the Financial Statements
and on the Interim Financial Statements are so reflected.
********
Whenever in this Article 4 or Article 5 a warranty or
representation is qualified by a word or phrase referring to
any Seller's or any Shareholder's or Buyer's or Parent's
knowledge, it shall mean to the best of such party's actual
knowledge after having made due inquiry of the officers,
employees, representatives and agents of Sellers, Buyer or
Parent, as the case may be, who would be expected to have
knowledge of the matter, and with respect to the condition
of any Acquired Assets, records or other object, after
having inspected it.
5. Representations and Warranties of Buyer and
Parent.Representations and Warranties of Buyer and Parent.
Each of Buyer and Parent represents and warrants to
Sellers as follows:
5.1 Organization and
Good Standing. (a) Each of Buyer and Parent is a
corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to
conduct its business as it is now being conducted and to own
or use the properties and assets that it purports to own or
use. Each of Buyer and Parent is duly qualified to do
business as a foreign corporation and is in good standing
under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used
by it, or the nature of the activities conducted by it,
requires such qualification.
(b) Each of Buyer and Parent has delivered to Sellers
copies of its Organizational Documents, as currently in
effect.
5.2 Due Authorization, Execution and Enforceability
With Respect to Buyer and ParentDue Authorization, Execution
and Enforceability With Respect to Buyer and Parent. This
Agreement has been duly and validly authorized by all
necessary corporate action on the part of each of Buyer and
Parent and constitutes the legal, valid, and binding
obligation of each of Buyer and Parent, enforceable against
it in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy,
insolvency, moratorium or other laws affecting creditors'
rights generally and general principles of equity. Each of
Buyer and Parent has the absolute and unrestricted right,
power, and authority to execute and deliver this Agreement
and to perform its obligations hereunder.
5.3 No Conflict; ConsentsNo Conflict; Consents.
Except as set forth in Schedule 5.3, neither the execution
and delivery of this Agreement by Buyer or Parent nor the
consummation or performance by Buyer or Parent of any of the
Contemplated Transactions will, directly or indirectly (with
or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational
Documents of Buyer or Parent, or (B) any resolution
adopted by the board of directors or the shareholders
of Buyer or Parent;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other
Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any
relief under, any Legal Requirement or any Order to
which Buyer or Parent, or any of the assets owned or
used by Buyer or Parent, is subject;
(iii) contravene, conflict with, or result in
a violation of any of the terms or requirements of, or
give any Governmental Body the right to revoke,
withdraw, suspend, cancel, terminate, or modify, any
Governmental Authorization that is held by Buyer or
Parent or that otherwise relates to the business of, or
any of the assets owned or used by, Buyer or Parent; or
(iv) require Buyer or Parent to give any notice to
or obtain any Consent from any Person.
5.4 Certain Proceedings. There is
no Proceeding pending or, to the knowledge of Buyer or
Parent, threatened against Buyer or Parent and that
challenges, or may have the effect of preventing, delaying,
making illegal, or otherwise interfering with, any of the
Contemplated Transactions.
5.5 No Outside Reliance. Buyer and
Parent have not relied upon and are not relying upon any
statement or representation or warranty not made in this
Agreement or in the Disclosure Letter or in any certificate
or document required to be provided by Sellers and/or the
Shareholders pursuant to this Agreement.
5.6 Brokers or Finders. Buyer,
Parent and their Representatives have incurred no obligation
or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar
payment in connection with this Agreement and will indemnify
and hold Sellers harmless from any such payment alleged to
be due by or through Buyer or Parent as a result of the
action of Buyer, Parent or their officers or agents.
5.7 Financial Capacity to
Close. Buyer and Parent have the financial resources
necessary to consummate the Contemplated Transactions on the
Closing Date on the terms set forth in this Agreement.
Buyer and Parent acknowledge that there are no financing
contingencies contained herein.
5.8 Limbaugh Agreements. Buyer has
entered into (a) the Limbaugh Radio Assignment and (b) the
Limbaugh Newsletter Assignment.
5.9 Full Disclosure. To the knowledge
of each of Buyer and Parent, no representation or warranty
made by Buyer or Parent contained in this Agreement or any
certificate, document or other instrument furnished or to be
furnished by Buyer or Parent pursuant hereto contains or
will contain any untrue statement of a material fact.
6. Covenants And Agreements.
6.1 Access and Investigation.
Between the date of this Agreement and the Closing Date,
each Seller will (a) afford Buyer and its accountants
reasonable access during normal business hours and upon
reasonable notice, to such Seller's personnel, properties,
contracts, books and records, and other documents and data;
provided, however, that such investigation may not
unreasonably disrupt the personnel and operations of Sellers
or the Business, (b) furnish Buyer and Buyer's accountants
with copies of all such contracts, books and records, and
other existing documents and data as Buyer may reasonably
request, and (c) furnish Buyer and Buyer's Accountants with
such additional financial, operating, and other data and
information as Buyer may reasonably request.
6.2 Operation of the
Business. Between the date of this Agreement and the
Closing Date, each Seller will:
(a) conduct the Business only in the Ordinary
Course of Business;
(b) use its best efforts to maintain and preserve
the assets and business relationships of the Business
(including, not disposing of any material asset without
the consent of Buyer, which consent will not be
unreasonably withheld), keep available the services of
the current officers, employees, and agents of such
Seller, and maintain the relations and goodwill with
parties to Contracts, landlords, creditors, employees,
agents, and others having business relationships with
the Business;
(c) not grant or agree to grant any general
increases in the rates of salaries or compensation
payable to employees of the Business or grant or agree
to grant any specific bonus or material increase in
compensation to any executive or management employee of
the Business without the consent of Buyer, which
consent will not be unreasonably withheld;
(d) confer with Buyer concerning operational
matters of the Business of a material nature; and
(e) otherwise report periodically to Buyer
concerning the status of the business, operations and
finances of the Business.
6.3 Negative Covenant. Except as
otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, no Seller will,
without the prior consent of Buyer, take any affirmative
action, or fail to take any reasonable action within its
control, as a result of which any of the changes set forth
in Section 4.13 is likely to occur. In addition, other than
in the Ordinary Course of Business, no Seller shall
accelerate the collection of any Seller accounts receivable.
6.4 Required Approvals. As promptly
as practicable after the date of this Agreement:
(a) Each Seller will make all filings
required by Legal Requirements to be made by it in
order to consummate the Contemplated Transactions
(including all filings under the HSR Act).
Between the date of this Agreement and the Closing
Date, each Seller will (i) cooperate with Buyer
with respect to all filings that Buyer elects to
make or is required by Legal Requirements to make
in connection with the Contemplated Transactions,
and (ii) cooperate with Buyer in obtaining all
Consents identified in Schedule 5.3 (including
taking all actions requested by Buyer to cause
early termination of any applicable waiting period
under the HSR Act); and
(b) Each of Buyer and Parent will, and will
cause each of its Related Persons to, make all
filings required by Legal Requirements to be made
by it in order to consummate the Contemplated
Transactions (including all filings under the HSR
Act). Between the date of this Agreement and the
Closing Date, each of Buyer and Parent will, and
will cause each Related Person to, (i) cooperate
with Sellers with respect to all filings that
Sellers are required by Legal Requirements to make
in connection with the Contemplated Transactions,
and (ii) cooperate with Sellers in obtaining all
Consents identified in Part 4.3 of the Disclosure
Letter, which shall include, if required, Parent
becoming a party to any assignment of any
Contracts, Governmental Authorizations or
Intellectual Property Rights and/or guaranteeing
the obligations of Buyer under or with respect to
any such Contracts, Governmental Authorizations or
Intellectual Property Rights .
6.5 Notification. Between the date of
this Agreement and the Closing Date, Sellers and the
Shareholders, on the one hand, and Buyer and Parent on the
other will promptly notify the other in writing if any of
them becomes aware of any fact or condition that causes or
constitutes a breach of any of its or their representations
and warranties as of the date of this Agreement, or if such
party becomes aware of the occurrence after the date of this
Agreement of any fact or condition that would (except as
expressly contemplated by this Agreement) cause or
constitute a breach of any such representation or warranty
had such representation or warranty been made as of the time
of occurrence or discovery of such fact or condition.
During the same period, Sellers and the Shareholders, on the
one hand, and Buyer and Parent on the other will promptly
notify the other of the occurrence of any breach of any of
its or their covenants or agreements in this Section 6 or of
the occurrence of any event that may make the satisfaction
of the conditions in Section 8 or Section 9 impossible or
unlikely.
6.6 Confidentiality;
Non-Competition. (a) Between the date of this Agreement and
the Closing Date, or, in the event the Closing does not
occur, at all times from and after the date of this
Agreement, Buyer and Parent will and will cause their
Representatives and their prospective lenders to, and each
Seller and each Shareholder will and will cause their
Representatives to, maintain in confidence, and not use to
the detriment of another party any written, oral, or other
information obtained from another party and/or its or their
Representatives in connection with this Agreement or the
Contemplated Transactions, unless (x) such information is
already known to such party or to others not bound by a duty
of confidentiality or such information is or (prior to such
use) becomes publicly available through no fault of such
party, (y) the use of such information is necessary or
appropriate in making any filing or obtaining any Consent or
Governmental Authorization required for the consummation of
the Contemplated Transactions, or (z) the furnishing or use
of such information is required by or necessary or
appropriate in connection with any Proceedings.
Notwithstanding the foregoing, the use of any information
pursuant to clause (y) or clause (z) of this Section 6.6 is
subject in each instance to the provisions restricting such
use set forth in Section 6.7. If the Contemplated
Transactions are not consummated, each party will return or
destroy as much of such written information as the other
parties may reasonably request.
(b) Between the date of this Agreement and the Closing
Date, or, in the event the Closing does not occur, for a
period of thirty-six months from and after the date of this
Agreement, none of Buyer or any of its Affiliates will hire
Rush Limbaugh and none of Buyer or its Affiliates or any of
their directors, officers, employees, financial advisors,
attorneys, accountants or agents will conduct any discussion
with Mr Limbaugh concerning his employment by Buyer or any
of its Affiliates.
6.7 Public Disclosure or CommunicationsPublic
Disclosure or Communications. Except to the extent required
by applicable Legal Requirements (including the U.S. federal
securities laws and the rules, regulations or
interpretations of the U.S. Securities and Exchange
Commission and any national securities exchange on which
securities of Buyer, Parent or any Affiliate of Buyer or
Parent are listed for trading), (a) neither Buyer or Parent,
on the one hand, nor any Seller or any Shareholder, on the
other hand, will issue any press release or public
announcement of any kind concerning the Contemplated
Transactions without the written consent in each instance of
the others; and in the event any such public announcement,
release or disclosure is required by applicable Legal
Requirements or is otherwise deemed necessary to be made by
either party, the parties will consult prior to the making
thereof and use their best efforts to agree upon a mutually
satisfactory text; (b) Buyer and Parent will not, and will
not permit its Related Persons to, communicate with parties
to Contracts with any Seller or employees of any Seller with
respect to the Contemplated Transactions or the Business
without the prior written consent in each instance of
Sellers and the Shareholders; and (c) Buyer and Parent will
not communicate with any Governmental Body or official with
respect to any Seller, any Shareholder and/or the
Contemplated Transactions without the prior written consent
in each instance of Sellers and the Shareholders.
6.8 Affected Employees. Buyer will,
and Parent will cause Buyer to, at the Closing Date offer to
all employees (other than Axten and Krane who intend to
enter separate agreements with Buyer, and McLaughlin who
will not be an employee after Closing) of Sellers employed
in the Business (the "Affected Employees") employment with
Buyer and/or with the Business for a period of at least one
(1) year at substantially the same compensation levels (or
higher) that were in effect for each such Affected Employee
immediately prior to the date hereof.
6.9 Employee Benefits.
(a) After the Closing Date and for a period of at
least one (1) year, each Affected Employee will be permitted
such vacation time as is currently permitted under Sellers'
vacation practices now in effect and the Affected Employees
will be provided such pension, welfare and other employee
benefits (including, without limitation, personal days),
which Buyer or Parent provides to its employees under any
"employee benefit plan" (within the meaning of Section 3(3)
of ERISA) maintained by Buyer or Parent (a "Buyer's Plan").
For purposes of eligibility and vesting, Buyer and Parent
will cause Buyer's Plan to credit each Affected Employee
with the same number of years and months of service with
which he had been credited up to the Closing Date under a
comparable plan maintained by Sellers. Sellers shall
provide Buyer with data reflecting such service as soon as
practicable following the Closing Date.
(b) Effective as of the Closing Date, Buyer will, and
Parent will cause Buyer to, provide or cause to be provided,
for the Affected Employees, medical and dental benefits
pursuant to a Buyer's Plan which is an "employee welfare
benefit plan," as defined in Section 3(1) of ERISA (a
"Welfare Plan"), which Welfare Plan shall not have any pre-
existing condition exclusions. For purposes of computing
deductible amounts or copayments (or similar adjustments or
limitations on coverage) under any such Welfare Plan,
expenses and claims previously recognized for similar
purposes under Plans of Sellers prior to the Closing Date
will be credited or recognized under the applicable Welfare
Plan.
6.10 Best Efforts. Between the date of
this Agreement and the Closing Date, each Seller, each
Shareholder, and each of Buyer and Parent will use its best
efforts to cause the conditions in Section 8 and Section 9
to be satisfied.
6.11 Net Working Capital. The
aggregate Net Working Capital of the Sellers as at the
Closing Date shall not be less than zero.
6.12 Media America. Buyer will, and
Parent will cause Buyer to, pay any and all amounts received
by it from or on behalf of Gateway in connection with the
Media America Agreement to Sellers promptly following
Buyer's receipt thereof.
6.13 Accounts Receivable. Buyer shall use its best
efforts to collect all accounts receivable which are
Acquired Assets. In the event any such account receivable
is not collectable and the amount thereof is included as a
deduction in the computation of net profits on the final
Income Statement, Buyer shall convey such account receivable
to the appropriate Seller together with an assignment of the
right under the Media America Agreement to collect such
account receivable. Buyer shall make a determination in
accordance with GAAP as to the collectability of all
accounts receivable which are Acquired Assets by the date of
the preparation of the Final Closing Income Statement
pursuant to Section 2.6(b) and shall include in such income
statement as a deduction the amount of any such
uncollectable account receivable. The right to make such
deduction shall be in lieu of any right to indemnity under
Section 11.2 with respect to the matters in Section 4.21.
7. Tax Matters.
7.1 General. Except as otherwise provided in
Sections 7.2 and 7.3, (i) Sellers shall be responsible for
the payment of all Taxes relating to the Business and the
Acquired Assets attributable to the taxable periods that end
on or before the Closing Date; (ii) Buyer shall be
responsible for the payment of all Taxes relating to the
Business and the Acquired Assets attributable to taxable
periods that begin after the Closing Date; and (iii) for all
taxable periods which include (but do not begin or end on)
the Closing Date, Sellers shall be responsible for the
payment of Taxes relating to the Business and the Acquired
Assets which are attributable to such taxable periods up to
and including the Closing Date and Buyer shall be
responsible for the payment of Taxes relating to the
Business and the Acquired Assets attributable to the period
from the day immediately following the Closing Date to the
end of such taxable period; provided, however, that Taxes on
real property shall be prorated and apportioned in
accordance with Section 164(d) of the Code. The party that
has the primary obligation to do so under applicable law
shall file any Tax Return that is required to be filed in
respect of Taxes described in this Section 7.1, and that
party shall pay the Taxes shown on such Tax Return and the
other party shall reimburse the paying party for its share
of such Tax as determined under Section 7.7 by wire transfer
of immediately available funds to an account designated by
the paying party no later than ten days after receipt of
written notice that such Tax has been paid to the applicable
Governmental Body.
7.2 Sales, Use and Transfer TaxesSales, Use and
Transfer Taxes. Buyer shall, and Parent shall cause Buyer
to, pay, and indemnify Sellers against any liability for,
all sales, value added, use, transfer, registration, stamp
and similar Taxes ("Transfer Taxes") with respect to the
Contemplated Transactions, including the purchase and sale
of the Business and the Acquired Assets contemplated by this
Agreement.
7.3 Federal, State and Local TaxesFederal, State and
Local Taxes. For purposes of Taxes based upon or measured
by net income ("Income Taxes"), Sellers shall include the
net income attributable to the Business and the Acquired
Assets in its income through the time of Closing (including
but not limited to Income Taxes arising in connection with
the consummation of the Contemplated Transactions) and shall
file the appropriate Tax Returns, and Buyer shall thereafter
include the net income relating to the Business and the
Acquired Assets in its income.
7.4 Cooperation and Exchange of InformationCooperation
and Exchange of Information. Sellers and Buyer shall
provide each other with such cooperation and information as
either of them reasonably may request of the other in filing
any Tax Return with respect to the Business or the Acquired
Assets, amended return or claim for refund, determining a
liability for Taxes or a right to refund of Taxes or in
conducting any audit or other proceeding in respect of Taxes
with respect to the Business or the Acquired Assets. Such
cooperation and information shall include, without
limitation, providing copies of all relevant portions of Tax
Returns with respect to the Business or the Acquired Assets,
together with accompanying schedules and related work
papers, documents relating to rulings or other
determinations by taxing authorities and records concerning
the ownership and tax basis of property, which either party
may possess. Each party shall make its employees available
on a mutually convenient basis to provide explanation of any
documents or information provided hereunder. The party
requesting assistance hereunder shall reimburse the other
for any reasonable out-of-pocket costs incurred in providing
any return, document or other written information, and shall
compensate the other for any reasonable costs (excluding
wages and salaries) of making employees available, upon
receipt of reasonable documentation of such costs. Each
party shall retain all returns, schedules and work papers
and all material records or other documents relating
thereto, until the expiration of the statute of limitations
(including extensions) of the taxable years to which such
returns and other documents relate and, unless the relevant
portions of such returns and other documents are offered to
the other party, until the final determination of any
payments which may be required in respect of such years
under this Agreement. Any information obtained under this
Section 7.4 shall be kept confidential, except as may be
otherwise necessary in connection with the filing of returns
or claims for refund or in conducting any audit or other
proceeding.
7.5 Purchase Price AllocationPurchase Price
Allocation. The Purchase Price shall be allocated pursuant
to Section 1060 of the Code, in accordance with the fair
market values for the Business and the Acquired Assets as
reflected on a schedule based on an appraisal to be obtained
by Buyer and approved by Sellers, which approval shall not
be unreasonably withheld, on or promptly following the
Closing Date (the "Allocation Schedule"). Unless otherwise
agreed in writing by Buyer and Sellers, Buyer and Sellers
shall (i) reflect the Business and the Acquired Assets in
their books for tax reporting purposes in accordance with
the Allocation Schedule, and (ii) file all U.S. Tax Returns
(including Form 8594) in accordance with and based upon such
allocation.
7.6 FIRPTA Certificate. Sellers
shall deliver to Buyer on or before the Closing Date a
certification of non-foreign status of each Seller or any
Related Person who, pursuant to this Agreement, transfers
any U.S. Real Property Interests as defined in Section
897(c) of the Code (the "FIRPTA Certificate") (as provided
for in Section 1445 of the Code and the regulations
promulgated thereunder). Each Seller acknowledges and
agrees that Buyer shall, if requested, deliver copies of the
certification to the Internal Revenue Service and Buyer
shall incur no liability, and the rights and obligations of
Buyer and Sellers hereunder shall not be affected, as a
result of any such delivery.
7.7 Calculations Related to Section 7.1Calculations
Related to Section 7.1. For purposes of Section 7.1,
Buyer's accountants and Sellers' accountants shall attempt
to determine the amount, if any, of Taxes properly
attributable to the Buyer and Sellers for any taxable period
that does not in fact end on the Closing Date. If no
agreement can be reached within 45 days after the end of
such taxable period, Buyer's accountants and Sellers'
accountants shall jointly select a third independent
certified public accounting firm to resolve the dispute.
The determination of the jointly selected independent
certified public accounting firm shall be binding on both
Buyer and Sellers. Buyer and Parent, on the one hand, and
Sellers on the other shall each bear their own costs and one-
half the costs of the jointly selected independent certified
public accounting firm in determining any amount due under
Section 7.1.
7.8 Refunds. (a) Sellers shall be entitled to
any refunds or credits of Taxes attributable to the taxable
periods ending on or before the Closing Date or attributable
to such taxable periods up to and including the Closing Date
with respect to the Business or the Acquired Assets.
(b) Buyer shall be entitled to any refunds or
credits of Taxes attributable to the taxable periods
beginning after the Closing Date with respect to the
Business or the Acquired Assets.
7.9 Contest Provisions. Buyer
shall, and Parent shall cause Buyer to, promptly notify
Sellers in writing upon receipt by Buyer, of notice of any
pending or threatened audits or assessments with respect to
Taxes which may affect the liabilities for Taxes of Sellers.
Sellers shall be entitled to participate at their expense in
the defense of and, at their option, take control of the
complete defense of, Sellers' interests in any tax audit or
administrative or court proceedings relating to Taxes for
which Sellers may be liable, and to employ counsel of their
choice at their expense. Buyer may not agree to settle any
claim for Taxes for which Sellers may be liable without the
prior written consent of Sellers which may not be
unreasonably withheld.
7.10 Employee Withholding and Reporting MattersEmployee
Withholding and Reporting Matters. With respect to those
Employees who are employed by Buyer within the same calendar
year as the Closing, Buyer shall, and Parent shall cause
Buyer to, in accordance with and to the extent permitted
pursuant to Revenue Procedure 96-60, 1996-53 I.R.B. 24,
assume all responsibility for preparing and filing Form W-2,
Wage and Tax Statement, Form W-3, Transmittal of Income and
Tax Statements, Form 941, Employer's Quarterly Federal Tax
Return, Form W-4, Employee's Withholding Allowance
Certificate, and From W-5, Earned Income Credit Advance
Payment Certificate with respect to those employees of
Sellers who become employees of Buyer. Sellers and Buyer
agree, and Parent agrees to cause Buyer, to comply with the
procedures described in Section 5 of Revenue Procedure 96-
60; provided, however, that Sellers shall provide to Buyer
all information and records necessary for Buyer to so
comply.
8. Conditions Precedent to Buyer's Obligation to
Close.Conditions Precedent to Buyers Obligation to Close.
Buyer's obligation to purchase the Acquired Assets and
to assume the Assumed Liabilities and to take the other
actions required to be taken by Buyer at the Closing is
subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived
by Buyer, in whole or in part):
8.1 Accuracy of Representations.Accuracy of
Representations. All of Sellers' and the Shareholders'
representations and warranties in this Agreement must have
been accurate in all material respects as of the date of
this Agreement, and must be accurate in all material
respects as of the Closing Date as if made on the Closing
Date, except in either case to the extent that any
inaccuracy does not have a Material Adverse Effect.
8.2 Sellers' and Shareholders' PerformanceSellers and
Shareholders Performance. (a) All of the material
covenants, agreements and obligations that Sellers and the
Shareholders are required to perform or to comply with
pursuant to this Agreement at or prior to the Closing must
have been duly performed and complied with in all material
respects.
(b) Each document required to be delivered pursuant to
Section 2.8 and Section 8.3 must have been delivered.
8.3 Additional DocumentsAdditional Documents. Each of
the following documents must have been delivered to Buyer:
(a) an opinion of Kaye, Scholer, Fierman, Hays &
Handler, LLP, dated the Closing Date, in the form of
Exhibit 8.3(a); and
(b) such other documents as Buyer may reasonably
request for the purpose of (i) evidencing the accuracy
of any of Sellers' and the Shareholders'
representations and warranties, (ii) evidencing the
performance by Sellers and the Shareholders of, or the
compliance by Sellers and the Shareholders with, any
material covenant or obligation required to be
performed or complied with by them, (iii) evidencing
the satisfaction of any condition referred to in this
Section 8, or (iv) otherwise facilitating the
consummation or performance of any of the Contemplated
Transactions.
8.4 Consents. All Material Contracts shall be
in full force and effect on the Closing Date. Seller shall
have obtained and shall have delivered to Buyer all third-
party consents to the assignment of the Material Contracts.
8.5 Adverse Proceedings. No suit,
action, claim or governmental proceeding shall be pending
against, and no order, decree or judgment of any court,
agency or other governmental authority shall have been
rendered against, any party hereto which: (a) would render
it unlawful, as of the Closing Date, to effect the
transactions contemplated by this Agreement in accordance
with its terms; or (b) seeks material damages on account of
the consummation of any transaction contemplated hereby and
has a reasonable likelihood of success.
8.6 HSR Waiting Period. Any waiting
period under the HSR Act with respect to the Contemplated
Transactions shall have elapsed or been terminated.
9. Conditions Precedent to Sellers' And Shareholders'
Obligations to Close.Conditions Precedent to Sellers And
Shareholders Obligations to Close.
Sellers' and the Shareholders' obligations to sell the
Acquired Assets and to take the other actions required to be
taken by Sellers and the Shareholders at the Closing are
subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of which may be waived
by Sellers and the Shareholders, in whole or in part):
9.1 Accuracy of Representations.Accuracy of
Representations. All of Buyer's and Parent's
representations and warranties in this Agreement must have
been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects
as of the Closing Date as if made on the Closing Date.
9.2 Buyer's and Parent's PerformanceBuyers and Parents
Performance. (a) All of the material covenants and
obligations that Buyer and Parent are required to perform or
to comply with pursuant to this Agreement at or prior to the
Closing must have been performed and complied with in all
material respects.
(b) Buyer and Parent must have delivered each of the
documents required to be delivered by them pursuant to
Section 2.8 and Buyer must have made the cash payments
required to be made by Buyer pursuant to Sections
2.8(b)(ii).
9.3 Additional Documents.Additional Documents. Buyer
and Parent must have caused the following documents to be
delivered to Sellers:
(a) an opinion of Graydon, Head & Ritchey, dated
the Closing Date, in the form of Exhibit 9.3(a); and
(b) such other documents as Sellers may
reasonably request for the purpose of (i) evidencing
the accuracy of any representation or warranty of Buyer
or Parent, (ii) evidencing the performance by Buyer and
Parent of, or the compliance by Buyer and Parent with,
any material covenant or obligation required to be
performed or complied with by Buyer or Parent,
(iii) evidencing the satisfaction of any condition
referred to in this Section 9, or (iv) otherwise
facilitating the consummation of any of the
Contemplated Transactions.
9.4 Adverse Proceedings. No suit,
action, claim or governmental proceeding shall be pending
against, and no order, decree or judgment of any court,
agency or other governmental authority shall have been
rendered against, any party hereto which: (a) would render
it unlawful, as of the Closing Date, to effect the
transactions contemplated by this Agreement in accordance
with its terms; or (b) seeks material damages on account of
the consummation of any transaction contemplated hereby and
has a reasonable likelihood of success.
9.5 HSR Waiting Period. Any waiting
period under the HSR Act with respect to the Contemplated
Transactions shall have elapsed or been terminated.
10. Termination.
10.1 Termination Events. This
Agreement may, by notice given prior to or at the Closing,
be terminated only:
(a) by Buyer, on the one hand, or Sellers and the
Shareholders, on the other, if a material breach of any
provision of this Agreement has been committed by the
other and such breach has not been waived;
(b) (i) by Buyer if satisfaction of any of the
conditions in Section 8 is or becomes impossible (other
than through the failure of Buyer or Parent to comply
with its obligations under this Agreement) and Buyer
has not waived such condition; or (ii) by Sellers and
the Shareholders, if satisfaction of any of the
conditions in Section 9 is or becomes impossible (other
than through the failure of any Seller and/or any
Shareholder to comply with its obligations under this
Agreement) and Sellers and the Shareholders have not
waived such condition;
(c) by mutual consent of Buyer, Sellers and the
Shareholders; or
(d) by either Buyer, on the one hand, or Sellers
and the Shareholders, on the other hand, if the Closing
has not occurred (other than through the failure of any
party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or
before July 1, 1997, or such later date as the parties
may agree upon.
10.2 Effect of Termination. Each
party's right of termination under Section 10.1 is in
addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of
termination will not be an election of remedies. If this
Agreement is terminated pursuant to Section 10.1, all
further obligations of the parties under this Agreement will
terminate, except that the obligations in Section 6.6 and
Section 12.1 will survive; provided, however, that if this
Agreement is terminated by a party because of the breach of
the Agreement by the other party or because one or more of
the conditions to the terminating party's obligations under
this Agreement is not satisfied as a result of the other
party's failure to comply with its obligations under this
Agreement, the terminating party's right to pursue all legal
remedies will survive such termination unimpaired.
11. Indemnification; Remedies.
11.1 Survival. The representations,
warranties, covenants and agreements of Sellers, the
Shareholders, Buyer and Parent contained in this Agreement
will survive the Closing Date for the time periods specified
in Section 11.4.
11.2 Indemnification and Payment of Damages by Sellers
and Shareholders.Indemnification and Payment of Damages by
Sellers and Shareholders. Sellers and the Shareholders,
jointly and severally, will indemnify and hold harmless
Buyer and its Representatives and Affiliates (collectively,
the "Buyer Indemnified Parties") for, and will pay to the
Buyer Indemnified Parties the amount of, any loss,
liability, damage or expense (including reasonable
attorneys' fees), whether or not involving a third-party
claim (collectively, "Damages"), actually suffered or paid
by the Buyer Indemnified Parties, arising, directly or
indirectly, from or in connection with:
(a) any breach of any representation or warranty
made by Sellers and/or the Shareholders in this
Agreement, the Disclosure Letter, or any certificate or
exhibit delivered by Sellers and/or the Shareholders
pursuant to this Agreement;
(b) any breach by Sellers and/or the Shareholders
of any covenant or obligation of Sellers and/or the
Shareholders in this Agreement; and
(c) any liabilities of Sellers other than the Assumed
Liabilities.
11.3 Indemnification and Payment of Damages by Buyer
and ParentIndemnification and Payment of Damages by Buyer
and Parent. Buyer and Parent, jointly and severally, will
indemnify and hold harmless Sellers and Shareholders and
their respective Representatives and Affiliates
(collectively, the "Seller Indemnified Parties") for, and
will pay to the Seller Indemnified Parties the amount of any
Damages, actually suffered or paid by the Seller Indemnified
Parties, arising, directly or indirectly, from or in
connection with:
(a) any breach of any representation or warranty made
by Buyer or Parent in this Agreement or in any certificate
or document or exhibit delivered by Buyer or Parent pursuant
to this Agreement;
(b) any breach by Buyer or Parent of any covenant or
obligation of Buyer or Parent in this Agreement; and
(c) any of the Assumed Liabilities.
11.4 Time Limitations. If the Closing
occurs, Sellers and the Shareholders will have no liability
(for indemnification or otherwise) with respect to any
representation or warranty, or covenant or obligation to be
performed and complied with prior to the Closing Date, other
than those in Sections 4.9 and 4.16, unless on or before
April 30, 1999 the Buyer Indemnified Party notifies Sellers
and the Shareholders of a claim, specifying the factual
basis of that claim in reasonable detail to the extent then
known by the Buyer Indemnified Party; a claim with respect
to Section 4.9 may be made at any time prior to the
expiration of the applicable statute of limitations; a claim
with respect to Section 4.16 may be made at any time prior
to February 28, 2000. If the Closing occurs, Buyer and
Parent will have no liability (for indemnification or
otherwise) with respect to any representation or warranty,
or covenant or obligation to be performed and complied with
prior to the Closing Date, other than those in Section 5.6
unless on or before April 30, 1999 the Seller Indemnified
Party notifies Buyer of a claim, specifying the factual
basis of that claim in reasonable detail to the extent then
known by Seller Indemnified Party; a claim with respect to
Section 5.6 may be made at any time prior to February 28,
2000.
11.5 Limitations on Amount -- Sellers and
ShareholdersLimitations on Amount -- Sellers and
Shareholders. Sellers and the Shareholders will have no
liability (for indemnification or otherwise) with respect
to the matters described in Section 11.2(a) until the total
of all Damages with respect to such matters exceeds
$100,000, and then only for the amount by which such Damages
exceed $100,000.
11.6 Limitations on Amount -- Buyer and
ParentLimitations on Amount -- Buyer and Parent. Buyer and
Parent will have no liability (for indemnification or
otherwise) with respect to the matters described in Sec
tion 11.3(a) until the total of all Damages with respect to
such matters exceeds $100,000, and then only for the amount
by which such Damages exceed $100,000.
11.7 Miscellaneous Limitations.
(a) Notwithstanding anything to the contrary
contained in this Agreement, Sellers and the Shareholders in
the aggregate, on the one hand, or Buyer and Parent in the
aggregate, on the other, shall have no liability (for
indemnification or otherwise) with respect to the matters
described in Section 11.2(a) and Section 11.3(a) for an
amount in excess of $4,000,000; provided, however, that in
no event shall more than $3,200,000 be recovered from
McLaughlin and P.M., collectively, more than $400,000 be
recovered from Axten or more than $400,000 be recovered from
Krane. Axten and Krane will have no liability under or
arising out of this Agreement (for indemnification or
otherwise) in excess of $400,000 with respect to each such
Shareholder.
(b) In case any event occurs which would
otherwise entitle either party to assert a claim for
indemnification hereunder, no loss, damage or expense will
be deemed to have been sustained by such party to the extent
of (i) any tax savings realized by such party with respect
thereto, or (ii) any proceeds received by such party from
any insurance policies with respect thereto. The
indemnification provided for in this Section shall
constitute the sole remedy of any party to the Agreement
with respect to (i) breaches by any other party to the
Agreement of any of the representations, warranties,
covenants or agreements contained in the Agreement, (ii) any
events, circumstances or conditions which are the subject of
the representations, warranties, covenants or agreement
contained in the Agreement, (iii) any other matters related
to the Contemplated Transactions, and (iv) any other events,
circumstances or conditions relating to the ownership or
operation of the Business prior to the Closing Date.
(c) An indemnifying party will not be liable
under this Section for Damages resulting from any event
relating to a breach of any representation or warranty to
the extent the indemnified party had actual knowledge on or
before the Closing Date of such event.
11.8 Procedure for Indemnification -- Third Party
ClaimsProcedure for Indemnification -- Third Party Claims.
(a) Promptly, but in any event within 30 days, after
receipt by an indemnified party under Section 11.2 or
Section 11.3 of notice of the commencement of any Proceeding
against it, such indemnified party will, if a claim is to be
made against an indemnifying party under either such
Section, give notice to the indemnifying party of the
commencement of such claim, stating the amount of Damages,
if known, and method of computation thereof, and containing
a reference to the provisions of this Agreement in respect
of which such right of indemnification is claimed or arises,
but the failure to notify the indemnifying party will not
relieve the indemnifying party of any liability that it may
have to any indemnified party, except to the extent that the
indemnifying party is prejudiced by the indemnified party's
failure to give such notice.
(b) If any Proceeding referred to in Section 11.8(a)
is brought against an indemnified party and it gives notice
to the indemnifying party of the commencement of such
Proceeding in accordance with Section 11.8(a), the
indemnifying party will be entitled to participate in such
Proceeding and, to the extent that it wishes (unless the
indemnifying party is also a party to such Proceeding and
the indemnified party reasonably determines (upon the advice
of counsel) in good faith that joint representation would be
inappropriate, in which case the indemnified party will be
entitled to retain its own counsel, at the expense of the
indemnifying party, provided that the indemnified party and
such counsel conduct such proceeding in good faith), to
assume and control the defense of such Proceeding with
counsel of its choice and, after notice from the
indemnifying party to the indemnified party of its election
to assume the defense of such Proceeding, the indemnifying
party will not, as long as it diligently conducts such
defense, be liable to the indemnified party under this
Section 10 for any fees of other counsel or any other
expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding. In the
event the indemnifying party exercises the right to assume
the defense of a Proceeding, the indemnified party will
cooperate with the indemnifying party in such defense and
make available to the indemnifying party, at the
indemnifying party's expense, all witnesses, pertinent
records, materials and information in the indemnified
party's possession or under the indemnified party's control
relating thereto as is reasonably required by the
indemnifying party. Similarly, in the event the indemnified
party is, directly or indirectly, conducting the defense of
any such Proceeding, the indemnifying party will cooperate
with the indemnified party in such defense and make
available to the indemnified party, at the indemnifying
party's expense, all such witnesses, records, materials and
information in the indemnifying party's possession or under
the indemnifying party's control relating thereto as is
reasonably required by the indemnified party. The
indemnifying party will not, without the written consent of
the indemnified party, (i) settle or compromise any
Proceeding or consent to the entry of any judgment which
does not include as an unconditional term thereof the
delivery by the claimant or plaintiff to the indemnified
party of a written release from all liability in respect of
such Proceeding or (ii) settle or compromise any Proceeding
in any manner that may adversely affect the indemnified
party other than as a result of money damages or other money
payments. Finally, no Proceeding which is being defended in
good faith by the indemnifying party or which is being
defended by the indemnified party as provided above in this
Section 11.8(b) will be settled by the indemnified party
without the written consent of the indemnifying party. To
the extent the foregoing terms and conditions have not been
adhered to with respect to any Proceeding, the indemnifying
party will have no obligation to indemnify the indemnified
party in respect thereof.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable
probability that a Proceeding may adversely affect it or its
affiliates other than as a result of monetary damages for
which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the
indemnifying party, assume the exclusive right to defend,
compromise, or settle such Proceeding, but the indemnifying
party will not be bound by any determination of a Proceeding
so defended or any compromise or settlement effected without
its consent (which may not be unreasonably withheld).
11.9 Procedure for Indemnification -- Other
ClaimsProcedure for Indemnification -- Other Claims. A
claim for indemnification for any matter not involving a
third-party claim may be asserted by notice to the party
from whom indemnification is sought.
11.10 Tax Matters. Except for the
proviso set forth in Section 11.7(a), the rights and
obligations of the parties with respect to indemnification
for any and all matters referred to in Section 7 are
governed as set forth in such Section 7.
12. General Provisions.
12.1 Expenses. Except as otherwise expressly
provided in this Agreement, each party to this Agreement
will bear its respective expenses incurred in connection
with the preparation, execution, and performance of this
Agreement and the Contemplated Transactions, including all
fees and expenses of agents, representatives, counsel, and
accountants. Buyer will, and Parent will cause Buyer to, pay
one-half and Sellers will pay one-half of the HSR Act filing
fee. In the event of termination of this Agreement, the
obligation of each party to pay its own expenses will be
subject to any rights of such party arising from a breach of
this Agreement by another party.
12.2 Notices. All notices, consents, waivers,
and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt),
(b) sent by telecopier (with written confirmation of
receipt), provided that a copy is mailed by registered mail,
return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight
delivery service (receipt requested), in each case to the
appropriate addresses and telecopier numbers set forth below
(or to such other addresses and telecopier numbers as a
party may designate by notice to the other parties):
Sellers:
EFM Media Management, Inc.
EFM Publishing, Inc.
PAM Media, Inc.
366 Madison Avenue
7th Floor
New York, New York 10017
Attention: Edward F. McLaughlin
Facsimile No.: (212) 661-2599
with a copy to:
Kaye, Scholer, Fierman, Hays & Handler, LLP
425 Park Avenue
New York, New York 10022
Attention: Joseph D. Hansen, Esq.
Facsimile No.: (212) 836-8689
with a copy to:
John Axten
189 Cat Rock Road
Coscob, CT 06807
Facsimile No.: (203) ___________
Buyer:
EFM Programming, Inc.
50 East River Center Blvd.
12th Floor
Covington, KY 41011-1674
Attention: Randy Michaels
Facsimile No.: (606) 655-9354
with a copy to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Facsimile No.: (513) 651-3836
Parent:
Jacor Communications Company
50 East River Center Blvd.
12th Floor
Covington, KY 41011-1674
Attention: Randy Michaels
Facsimile No.: (606) 655-9354
with a copy to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Facsimile No.: (513) 651-3836
12.3 Service of Process. Process in
any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may
be served on any party anywhere in the world.
12.4 Further Assurances. The
parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each
other such other documents, and (c) to do such other acts
and things, all as the other party may reasonably request
for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
12.5 Waiver. The rights and remedies of the
parties to this Agreement are cumulative and not
alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this
Agreement or the documents referred to in this Agreement
will operate as a waiver of such right, power, or privilege,
and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of
such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted
by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can
be discharged by one party, in whole or in part, by a waiver
or renunciation of the claim or right unless in writing
signed by the other party; (b) no waiver that may be given
by a party will be applicable except in the specific
instance for which it is given; and (c) no notice to or
demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving
such notice or demand to take further action without notice
or demand as provided in this Agreement or the documents
referred to in this Agreement.
12.6 Entire Agreement and Modification.Entire Agreement
and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject
matter and constitutes (along with the documents referred to
in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect
to its subject matter. This Agreement may not be amended
except by a written agreement executed by the party to be
charged with the amendment.
12.7 Disclosure Letter. (a) The
disclosures in the Disclosure Letter, and those in any
Supplement thereto, shall be deemed disclosed with respect
to the representations and warranties in the Section of
this Agreement to which they expressly relate, and to all
other representations and warranties in this Agreement with
respect to which it is apparent that such disclosures
relate, regardless of the part of the Disclosure Letter in
which they are set forth.
(b) In the event of any inconsistency between the
statements in the body of this Agreement and those in the
Disclosure Letter (other than an exception expressly set
forth as such in the Disclosure Letter with respect to a
specifically identified representation or warranty), the
statements in the body of this Agreement will control.
12.8 Assignments, Successors, and No Third-party
RightsAssignments, Successors, and No Third-party Rights.
Neither party may assign any of its rights under this
Agreement without the prior written consent of the other
parties, which will not be unreasonably withheld. Subject to
the preceding sentence, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of
the successors and permitted assigns of the parties. Nothing
expressed or referred to in this Agreement will be construed
to give any Person other than the parties to this Agreement
any legal or equitable right, remedy, or claim under or with
respect to this Agreement or any provision of this
Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
In the event Buyer finds it necessary or is required to
provide to a third party a collateral assignment of the
Buyer's interest in this Agreement, Sellers shall cooperate
with the Buyer and any third party requesting such
assignment including but not limited to Sellers signing a
consent and acknowledgment of such assignment; provided,
however, that all costs and expenses incurred in connection
therewith shall be paid by Buyer and no such assignment
shall relieve Buyer or Parent of its obligations under this
Agreement.
12.9 Severability. If any provision of
this Agreement is held invalid or unenforceable by any court
of competent jurisdiction, the other provisions of this
Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable
only in part or degree will remain in full force and effect
to the extent not held invalid or unenforceable.
12.10 Section Headings, ConstructionSection
Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section
or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number
as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding
words or terms.
12.11 Time of Essence. With regard
to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
12.12 Governing Law. This Agreement
will be governed by the laws of the State of New York
without regard to the conflicts of law principles thereof.
12.13 Counterparts. This Agreement may
be executed in one or more counterparts, each of which will
be deemed to be an original copy of this Agreement and all
of which, when taken together, will be deemed to constitute
one and the same agreement.
12.14 Monetary Damages, Specific Performance and
Other RemediesMonetary Damages, Specific Performance and
Other Remedies. The parties recognize that if any party
refuses to perform under the provisions of this Agreement,
monetary damages alone will not be adequate to compensate
the other parties for their injury. Such other parties
shall therefore be entitled to obtain specific performance
of the terms of this Agreement in addition to any other
remedies, including but not limited to monetary damages,
that may be available to them. If any action is brought by
any party to enforce this Agreement, the other parties shall
waive the defense that there is an adequate remedy at law.
IN WITNESS WHEREOF, the parties have executed and
delivered this Agreement as of the date first written above.
EFM PROGRAMMING, INC. EFM MEDIA MANAGEMENT, INC.
By: /s/ Randy Michaels By: /s/ Edward F. McLaughlin
Name: Randy Michaels Name: Edward F. McLaughlin
Title: President Title:Chairman and President
JACOR COMMUNICATIONS
COMPANY EFM PUBLISHING, INC.
By:/s/ Randy Michaels By: /s/ Edward F. McLaughlin
Name: Randy Michaels Name: Edward F. McLaughlin
Title:President Title:Chairman and President
PAM MEDIA, INC.
By:/s/ Edward F. McLaughlin
Name: Edward F. McLaughlin
Title:Chairman and President
/s/ Edward F. McLaughlin
EDWARD F. MCLAUGHLIN
/s/ Patricia McLaughlin
PATRICIA MCLAUGHLIN
/s/ John Axten
JOHN AXTEN
/s/ Stuart Krane
STUART KRANE
Exhibit 99.1
Jacor Broadcasting Corporation
JACOR NEWS
CONTACT:Randy Michaels FOR IMMEDIATE RELEASE
Jacor Communications, Inc.
(606) 655-2267
JACOR ACQUIRES E.F.M. MEDIA, RUSH LIMBAUGH AND
DR. DEAN EDELL SHOWS
Limbaugh, The Leader in Talk Radio, Extends Contract Into
the Next Century
The Limbaugh Broadcasts Carried on More Than 600 Stations
Reaching 20 Million Listeners Weekly
Covington, KY, March 18, -- Jacor Communications, Inc.,
(NASDAQ:JCOR), the nation's largest operator of radio
stations, today announced the acquisition of E.F.M. Media
Management.
E.F.M. Media owns and distributes highly rated
syndicated talk radio programming including Rush Limbaugh,
the top-ranked radio talk show host in the United States,
and Dr. Dean Edell, the country's highest ranked health care
radio talk show host. Terms of the acquisition were not
disclosed.
Limbaugh, who is heard on more than 600 radio stations
today and reaches over 20 million Americans a week, has
agreed to extend his contract into the next century. The
Dr. Dean Edell show is heard on more than 300 radio stations
nationwide.
"I'm thrilled to join a proactive, energetic, growth-
minded company that still believes in the value of product
integrity," commented Rush Limbaugh.
"The union of Jacor with E.F.M. Media creates the most
powerful radio broadcasting franchise today," said Dr.
Edell. "I am proud to be a part of it."
Jacor Chief Executive Officer Randy Michaels, said that
the acquisition of E.F.M. Media gives Jacor a major footing
in the content side of the radio business, which will
complement Jacor's extensive distribution network.
"Our mission is to build audiences on radio stations,"
said Michaels. "In the history of talk radio, nobody has
done this better or faster than Rush Limbaugh. We want to
own this show! Limbaugh's brand of conservatism, satire,
parody and fun have resulted in talk radio's highest
national ratings ever. Jacor now has the wonderful
opportunity to be both a fan and a partner of America's
preeminent talk talent."
"The Doctor Dean Edell Show is the biggest program in
the all-important category of health and medicine. It's a
great program that we are proud to bring to Jacor," added
Michaels.
In connection with the sale, E.F.M. Chairman and Chief
Executive Officer Ed McLaughlin will continue to serve the
company in a consulting capacity.
"This is a wonderful opportunity for E.F.M. Media to
join forces with a first rate broadcasting enterprise," said
McLaughlin. "After nearly 40 years in the radio business, I
am happy to hand over the reins to Jacor - a company that I
am confident will continue a tradition of quality radio
programming."
"We're thrilled that we were able to retain E.F.M.
President John Axten and Vice President Stu Krane, who have
done a phenomenal job of optimizing the network's
performance," said Michaels.
Including announced pending acquisitions, Jacor owns,
operates, represents or provides programming for
approximately 130 radio stations in 27 U.S. broadcast areas.
The company also owns WKRC-TV in Cincinnati. Jacor plans to
pursue growth through continued acquisitions of
complementary radio stations in its existing broadcast
locations, and radio groups or individual stations with
significant presence in other attractive locations.
Additionally, Jacor will grow in other broadcast-related
businesses.
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