UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------------
FORM 8-K
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Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934
April 22, 1999 0-14871
- ------------------------- ------------------------------------
(Date of earliest report) (Commission File Number)
ML MEDIA PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
Delaware 13-3221085
- --------------------------------- ----------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
World Financial Center, South Tower, New York, New York 10080-6114
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(Address of Principal Executive Offices) (Zip Code)
(212) 236-6577
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report.)
<PAGE>
Item 5. Other Events
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On April 22, 1999, ML Media Partners, L.P. (the "Partnership") entered
into an agreement (the "Asset Purchase Agreement") with Shadow Communications,
LLC ("Shadow") pursuant to which, among other things, the Partnership agreed to
sell and Shadow agreed to buy substantially all of the assets used in the
Partnership's radio stations WICC-AM and WEBE-FM (the "Stations") serving,
respectively, Bridgeport, Connecticut and Westport, Connecticut. The base
purchase price specified in the Asset Purchase Agreement for the Stations is $66
million, subject to certain adjustments for the apportionment of certain items
of income and expense, as provided in the Asset Purchase Agreement. Consummation
of the purchase and sale of the Stations (the "Closing") is subject to the
satisfaction of certain enumerated conditions precedent set forth in the Asset
Purchase Agreement, including obtaining the approval of the Federal
Communications Commission and the expiration of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. Under the terms of the
Asset Purchase Agreement, at the Closing an escrow account in the amount of
$3,300,000 will be established from which Shadow may make indemnification claims
until December 31, 2000.
Item 7. Financial Statements and Exhibits
- ------- ---------------------------------
Exhibit 1 - Asset Purchase Agreement dated April 22, 1999, between
ML Media Partners, L.P. and Shadow Communications, LLC.
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ML MEDIA PARTNERS, L.P.
By: Media Management Partners, its
general partner
By: RP Media Management,
General Partner
By: IMP Media Management,
Inc.
By: s/ Elizabeth McNey Yates
-------------------------
Elizabeth McNey Yates
Vice President
Dated: April 27, 1999
================================================================================
ASSET PURCHASE AGREEMENT
Between
ML MEDIA PARTNERS, L.P.
and
SHADOW COMMUNICATIONS, LLC
Dated: April 22, 1999
================================================================================
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Table of Contents
Page
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1. Sale and Purchase of Assets...............................................1
1.1 Sale of Assets to Buyer...........................................1
1.2 Excluded Assets...................................................3
2. Purchase Price ...........................................................4
2.1 Amount and Payment of Consideration; Adjustment...................4
2.2 Payment of Purchase Price.........................................4
2.3 Letter of Credit..................................................5
2.4 Limitation on Assumption of Liabilities...........................5
2.5 Apportionment.....................................................6
2.6 Determination of Apportionments...................................7
3. Closing ..................................................................7
3.1 Date of Closing...................................................8
3.2 Outside Date for Closing..........................................8
4. Representations and Warranties by the Seller..............................8
4.1 The Seller's Organization and Authority...........................8
4.2 Authorization of Agreement........................................8
4.3 Consents of Third Parties.........................................9
4.4 Title to Assets...................................................9
4.5 Licenses..........................................................9
4.6 Call Letters.....................................................10
4.7 Operation of the Stations........................................10
4.8 Financial Statements.............................................11
4.9 Absence of Certain Changes.......................................11
4.10 Tangible Property................................................12
4.11 Intangible Assets................................................13
4.12 Litigation; Compliance with Laws.................................13
4.13 List of Agreements, etc..........................................13
4.14 Employee Benefit Plans...........................................14
4.15 Personnel Information; Labor Contracts...........................15
4.16 Insurance........................................................15
4.17 Undisclosed Liabilities..........................................16
4.18 Environmental Matters............................................16
4.19 Real Property....................................................17
4.20 Taxes............................................................18
4.22 Finders and Brokers..............................................18
(i)
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Page
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5. Representations and Warranties by the Buyer..............................18
5.1 The Buyer's Organization and Authority...........................18
5.2 Authorization of Agreement.......................................19
5.3 Consents of Third Parties........................................19
5.4 Litigation.......................................................19
5.5 Buyer's Qualification............................................19
6. Further Agreements of the Parties........................................19
6.1 Filings..........................................................19
6.2 Operations of the Stations.......................................20
6.3 No Control.......................................................22
6.4 Access to Information............................................23
6.5 Consents; Assignment of Agreements; Estoppel Certificates........24
6.6 Sales Taxes; Transfer Taxes......................................25
6.7 Employees; ERISA.................................................25
6.9 Expenses.........................................................27
6.10 Buyer's Audit; Right of Termination..............................28
6.11 Notification of Developments.....................................28
6.12 Negotiations with Third Parties..................................28
6.13 Performance......................................................28
6.14 Conditions.......................................................28
6.15 Environmental Matters............................................29
6.16 Bulk Sales Laws..................................................29
6.17 Further Assurances...............................................29
7. Conditions Precedent to Closing..........................................29
7.1 Conditions Precedent to the Obligations of the Buyer.............29
7.2 Conditions Precedent to the Obligations of the Seller............31
8. Transactions at the Closing..............................................32
8.1 Documents to be Delivered by the Seller..........................32
8.2 Documents to be Delivered by the Buyer...........................32
9. Survival of Representations and Warranties; Indemnification..............33
9.1 Survival.........................................................33
9.2 Indemnification..................................................33
9.3 Limitation on Liability..........................................34
10. Termination..............................................................34
10.1 Termination......................................................34
10.2 Liability........................................................35
(ii)
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Page
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11. Risk of Loss.............................................................35
12. Interruption of Broadcast Transmissions..................................36
13. Miscellaneous............................................................36
13.1 Notices .........................................................36
13.2 Brokers .........................................................37
13.3 Entire Agreement ................................................37
13.4 Headings ........................................................37
13.5 Governing Law ...................................................38
13.6 Separability ....................................................38
13.7 Assignment ......................................................38
13.8 Publicity .......................................................38
13.9 Jurisdiction ....................................................38
13.11 Counterparts ....................................................39
(iii)
<PAGE>
ASSET PURCHASE AGREEMENT
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April 22, 1999
--------------
The parties to this agreement are ML Media Partners, L.P., a Delaware
limited partnership (the "Seller"), and Shadow Communications, LLC, a Delaware
limited liability company (the "Buyer").
The Seller owns and operates radio stations WICC-AM, Bridgeport,
Connecticut, and WEBE-FM, Westport, Connecticut (the "Stations"). The Seller
desires to sell to the Buyer substantially all of the assets used in the
operations of the Stations and the Buyer desires to purchase those assets, on
the terms and conditions contained in this agreement. The FCC Licenses (as
defined below) for the Stations are held by WEBE Associates and WICC Associates,
general partnerships in which the Seller has a 99.99% interest and the general
partner of the Seller has a .01% interest.
Accordingly, it is agreed as follows:
1. Sale and Purchase of Assets.
---------------------------
1.1 Sale of Assets to Buyer. At the closing referred to in
section 3.1, Seller shall sell and assign to the Buyer (and shall cause WEBE
Associates and WICC Associates to assign to the Buyer), and the Buyer shall
purchase and acquire, all of the business of the Seller, WEBE Associates and
WICC Associates relating to the Stations and all of the assets of the Seller,
WEBE Associates and WICC Associates used in the operations of the Stations
(excluding only the assets referred to in section 1.2) as those assets exist on
the Closing Date (as defined in section 3.1). Except as otherwise provided in
section 1.2, the assets of the Stations to be sold and assigned (collectively,
the "Assets") include, but are not limited to, the following:
(a) all broadcast licenses (the "FCC Licenses") for the
Stations issued by the Federal Communications Commission (the "Commission") and
any other permits and authorizations (and applications for any of them) relating
to the operation of the Stations, including, but not limited to, those listed on
schedule 1.1(a), together with any renewals, extensions or modifications thereof
and additions thereto made between the date of this agreement and the Closing
Date (together with the FCC Licenses, the "Licenses");
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(b) all equipment (including computers and office
equipment), transmitting towers, transmitters, supplies, vehicles, inventory,
furniture, fixtures and leasehold improvements, any computer software, broadcast
programs, tapes and compact discs owned by the Seller, WEBE Associates and WICC
Associates for use by the Stations, and all other tangible personal property,
wherever located, that is owned by the Seller, WEBE Associates and WICC
Associates and used in the operation of the Stations, including, but not limited
to, the items listed on schedule 1.1(b), together with all additions,
modifications or replacements thereto made in the ordinary course of business
between the date of this agreement and the Closing Date;
(c) all rights of the Seller under leases,
commitments and other agreements relating to the business and operations of the
Stations, to the extent that those rights relate to the period after the close
of business on the Closing Date, including, but not limited to (i) all
commitments and other agreements relating to the sale of broadcast and
advertising time, (ii) the leases, commitments and other agreements listed on
schedules 4.13 and 4.14, including, without limitation, all agreements relating
to the tower(s), transmitter(s), studio site(s) and offices of the Stations
(including all security or other deposits made with respect to any such
agreements, which shall be subject to apportionment pursuant to section 2.5),
and (iii) any other leases, commitments and other agreements relating to the
business and operations of the Stations that are entered into consistent with
the provisions of section 6.2 between the date of this agreement and the Closing
Date;
(d) all promotional materials, trademarks, trade
names, logos, jingles, slogans and other tangible and intangible personal
property relating to the Stations (including, but not limited to, the
trademarks, trade names and logos listed on schedule 1.1(d)), and all of the
Seller's, WEBE Associates' and WICC Associates' rights to use the call letters
"WICC-AM" and "WEBE-FM"), together with the good will of the business associated
with those trademarks, trade names and logos;
(e) all of the Seller's rights in connection with any
"barter" transactions and "trade" agreements relating to the Stations;
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(f) all of the Seller's rights under manufacturers' and
vendors' warranties relating to items included in the Assets and all similar
rights against third parties relating to items included in the Assets;
(g) subject to section 1.2(c), all files, logs and business
records of every kind relating to the operations of the Stations (which shall
include all such records or files required to be kept and maintained under the
rules of the Commission), including, but not limited to, programming information
and studies, technical information and engineering data, news and advertising
studies or consulting reports, sales correspondence, lists of advertisers,
promotional materials, and credit and sales records; and
(h) any and all other franchises, materials, supplies,
easements, rights-of-way, licenses, and other rights and privileges of Seller
relating to and used in the operation of the Stations.
1.2 Excluded Assets. The following assets shall be retained by
the Seller and shall not be sold or assigned to the Buyer:
(a) all cash, bank accounts, certificates of deposit,
commercial paper, treasury bills and notes and all other marketable securities
as of the close of business on the Closing Date;
(b) all accounts receivable (the "Accounts Receivable") of
the Stations for broadcast time and services provided prior to the close of
business on the Closing Date;
(c) any lease, commitment or other agreement as to which
consent to assignment is required but cannot be obtained;
(d) the account books of original entry and general ledgers
and all partnership records of the Seller, including, but not limited to, tax
returns and transfer books;
(e) any employee benefits plans or programs, except as may
be specifically assumed by the Buyer; and
(f) any other assets of the Seller identified in schedule
1.2(e) (which shall not include any asset used exclusively in connection with
the operation of the Stations).
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2. Purchase Price.
--------------
2.1 Amount and Payment of Consideration; Adjustment. As full
consideration for the Assets, at the closing the Buyer shall (a) pay to the
Seller, in accordance with section 2.2, a purchase price of $66,000,000; and (b)
assume, and agree to pay, perform and discharge (subject to the apportionment
provisions of section 2.5) all of the obligations of the Seller relating to the
operations of the Stations that arise after the close of business on the Closing
Date under those leases, commitments and other agreements relating to the
operations of the Stations assigned to the Buyer pursuant to sections 1.1(c) and
1.1(e).
2.2 Payment of Purchase Price. The aggregate purchase price for
the Assets shall be paid as follows:
(a) At the closing, the Buyer shall deliver to The Chase
Manhattan Bank, N.A. (the "Escrow Agent") an amount equal to $3,300,000 (the
"Indemnity Escrow Amount"), to be held by the Escrow Agent in an interest
bearing account pursuant to the terms of an escrow agreement in the form of
exhibit 2.2(a) (the "Indemnity Escrow Agreement"), which shall be executed on
the Closing Date. The Indemnity Escrow Amount shall be paid in accordance with
the terms of such escrow agreement to (i) the Buyer if it is determined that the
Buyer is entitled to indemnification payments under section 9.2 of this
agreement, or (ii) the Seller to the extent the Buyer is not determined to be
entitled to any such payments.
(b) At the closing, the Buyer shall deliver to the Seller,
by wire transfer of immediately available funds or by delivery of a bank or
certified check in immediately available funds, an amount equal to $62,700,000
plus (or minus) the estimated apportionments pursuant to section 2.5 (each
determined as provided in section 2.6).
(c) Payment shall be made pursuant to section 2.6 upon the
final determination of the apportionments.
2.3 Letter of Credit.
----------------
(a) Concurrently with the execution of this agreement,
Buyer is delivering to Seller an irrevocable letter of credit (the "Letter of
Credit") issued by Heller Financial, Inc. in the amount of $3,300,000.
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(b) The Letter of Credit shall be held by the Seller in
accordance with the terms of this section 2.3.
(i) If the purchase of the Assets under this agreement
is not consummated as a result of a material breach by the Buyer of any of its
material obligations under this agreement (and the Seller has not breached any
of its material obligations under this agreement), the Seller shall be entitled
to draw upon the Letter of Credit as liquidated damages resulting to the Seller
from such breach.
(ii) If the purchase of the Assets under this agreement
is not consummated due to the nonfulfillment of any of the conditions in section
7.1 or for any other reason except the Buyer's default in the performance of any
of its material obligations under this agreement, the Seller shall not be
entitled to draw upon the Letter of Credit and, promptly after the termination
of this agreement, the Letter of Credit shall be returned by the Seller to the
Buyer.
(c) The Letter of Credit will expire on September 1, 1999.
On or before August 24, 1999, the Buyer shall deliver to the Seller a
replacement of the Letter of Credit (the "Replacement LOC") in the same form as
the Letter of Credit and with an expiration date of December 31, 1999. If the
Buyer fails to deliver the Replacement LOC by such date, the Seller shall be
entitled to draw upon the Letter of Credit and shall hold the proceeds in escrow
pursuant to the terms of an escrow agreement which shall be negotiated in good
faith by the Seller and the Buyer and contain terms providing for the
distribution of the escrow amount consistent with this section 2.3.
2.4 Limitation on Assumption of Liabilities. Except as provided
in section 2.1, the Buyer shall not assume, and shall not pay, perform or
discharge, any other liabilities or obligations of the Seller ("Excluded
Liabilities"), including without limitation liabilities or obligations : (i)
relating to the Stations through the close of business on the Closing Date, (ii)
relating to any of the Excluded Assets described in section 1.2 hereof, or (iii)
arising pursuant to the Environmental Laws (as defined in section 4.18) or
principles of common law relating to pollution, protection of the environment or
health and safety which arose on or before
5
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the Closing Date. The Seller shall pay and perform the Excluded Liabilities and
shall indemnify, defend and hold Buyer harmless against any claims relating to
any such Excluded Liabilities.
2.5 Apportionment. (a) The Seller shall be entitled to all
income earned or accrued and shall be responsible for all liabilities and
obligations incurred or payable in connection with the operations of the
Stations through the close of business on the day immediately preceding the
Closing Date and the Buyer shall be entitled to all income earned or accrued and
shall be responsible for all liabilities and obligations incurred or payable in
connection with the operations of the Stations after the close of business on
the day immediately preceding the Closing Date. Subject to section 2.5(b), all
overlapping items of income or expense shall be apportioned between the Seller
and the Buyer, as of the close of business on the day immediately preceding the
Closing Date, in accordance with generally accepted accounting principles. Items
to be apportioned include, but are not limited to, the following:
(i) advance payments received from advertisers prior
to the Closing Date for services to be rendered in whole or in part after the
close of business on the day immediately preceding the Closing Date;
(ii) prepaid expenses arising from payments made for
services and merchandise prior to the close of business on the day immediately
preceding the Closing Date if all or part of the services and merchandise have
not been received or used prior to the close of business on the day immediately
preceding the Closing Date (for example, rents paid in advance for a rental
period extending beyond the Closing Date);
(iii) liabilities, customarily accrued, arising from
expenses incurred but unpaid as of the close of business on the Closing Date
(excluding severance pay, vacation pay, sick pay or similar items); frequency
discounts; rent; sales commissions; various business and professional services;
and licensing fees, including prior years' adjustments; and
(iv) personal property taxes and utility charges
related to the Stations.
(b) In calculating the foregoing apportionment, if as of
the Closing Date the aggregate rate card value of the unused broadcast time on
the Stations to be provided pursuant to trade or barter agreements for
advertising or commercial time (as distinct from barter
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programming agreements) entered into prior to the Closing Date exceeds the fair
market value of the products to be received or services to be used by the
Stations after the close of business on the day immediately preceding the
Closing Date (and the undepreciated value as of the Closing Date of any capital
assets received prior to the close of business on the day immediately preceding
the Closing Date) pursuant to such trade or barter agreements, then only the
excess above $50,000 shall be included as a liability and credit to the Purchase
Price.
2.6 Determination of Apportionments. At least five days prior to
the closing, the Seller shall estimate all apportionments pursuant to section
2.5 and the payment at the closing pursuant to section 2.1 shall be based on
those estimates. Within 90 days after the Closing Date, the Seller shall
determine all apportionments pursuant to section 2.5 and shall deliver a
statement of its determinations to the Buyer (which statement shall set forth in
reasonable detail the basis for those determinations), and within 10 days after
receipt of the statement, the Buyer shall pay to the Seller, or the Seller shall
pay to the Buyer, as the case may be, the net amount due as a result of the
final determination of the apportionments (or, if there is any dispute, the
undisputed amount). If the Buyer disputes the Seller's determinations, the
parties shall confer with regard to the matter and an appropriate adjustment and
payment shall be made as agreed upon by the parties (or, if they are unable to
resolve the matter, a firm of independent certified public accountants shall be
designated by the parties, which firm's decision on the matter shall be binding
and whose fees and expenses shall be borne 50% by the Seller and 50% by the
Buyer). If the parties fail to agree on the accountants, the accountants shall
be KPMG Peat Marwick LLP.
2.7 Allocation of Purchase Price. Buyer and Seller agree that
the purchase price shall be allocated among the assets to be acquired by the
Buyer hereunder in a manner to be determined by Buyer based on the advice or
recommendation of a nationally recognized appraisal firm and subject to Seller's
approval which shall not be unreasonably withheld. Buyer and Seller agree to use
such allocation in completing and filing Internal Revenue Service Form 8594 for
federal income tax purposes. Buyer and Seller further agree that they shall not
take any position inconsistent with such allocation upon examination of any
return, in any refund claim, in any litigation, or otherwise.
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3. Closing.
-------
3.1 Date of Closing. The closing under this agreement shall take
place at the New York offices of Proskauer Rose LLP (or at such other place as
may be mutually agreeable to the Buyer and the Seller) on the fifth business day
after the conditions specified in sections 7.1(c) and (d) and 7.2(c) and (d)
have been fulfilled (or waived), or such other date as the parties may mutually
agree upon. The date on which the closing is held is referred to in this
agreement as the "Closing Date." At the closing, the parties shall execute and
deliver the docu ments referred to in section 8.
3.2 Outside Date for Closing. If the closing has not occurred by
December 31, 1999, either the Seller or the Buyer may terminate this agreement
by notice to the other; provided, however, that the party seeking termination
under this section 3.2 shall not, as a result of a default by such party under
this agreement, have prevented the closing from occurring. Upon such
termination, neither of the parties shall have any liability of any kind arising
out of this agreement other than for any liability resulting from its breach of
this agreement prior to termination. If the closing is postponed pursuant to
section 11 of this agreement, the date referred to in the previous sentence
shall be extended by the period of the postponement.
4. Representations and Warranties by the Seller. The Seller
represents and warrants to the Buyer as follows:
4.1 The Seller's Organization and Authority. The Seller is a
limited partnership duly organized and validly existing under the law of
Delaware and has the full power and authority under Delaware law and its
partnership agreement to enter into and to perform this agreement and to own and
operate the Stations.
4.2 Authorization of Agreement. The execution, delivery and
performance of this agreement and the Indemnity Escrow Agreement by the Seller
have been duly authorized by all necessary partnership action of the Seller and
this agreement and the Indemnity Escrow Agreement constitute valid and binding
obligations of the Seller enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in
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general and subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
4.3 Consents of Third Parties. Subject to receipt of the
consents and approvals referred to in schedule 4.3, the execution, delivery and
performance of this agreement and the Indemnity Escrow Agreement by the Seller
will not (i) conflict with the partnership agreement of the Seller, WEBE
Associates or WICC Associates and will not conflict with, or result in a breach
or termination of, or constitute a default under, any lease, agreement,
commitment or other instrument, or any order, judgment or decree, to which the
Seller, WEBE Associates or WICC Associates is a party or by which the Seller,
WEBE Associates or WICC Associates is bound or to which any of the Assets is
subject; (ii) constitute a violation by the Seller, WEBE Associates or WICC
Associates of any law applicable to the Seller, WEBE Associates or WICC
Associates; or (iii) result in the creation of any lien, pledge, mortgage, deed
of trust, security interest, option, easement, servitude, reservation,
limitation, right of first refusal, lease, survey or title defect, encroachment,
restrictive covenant, claim, charge or encumbrance ("Lien") upon any of the
Assets, other than Liens that do not in the aggregate materially detract from
the value of any such Assets, or materially interfere with the operations of the
Stations. No consent, approval or authorization of, or designation, declaration
or filing with, any governmental authority is required on the part of the
Seller, WEBE Associates or WICC Associates in connection with the execution,
delivery and performance of this agreement and the Indemnity Escrow Agreement,
except for the filings referred to in section 6.1.
4.4 Title to Assets. Except as set forth on schedule 4.4 and
property leased pursuant to leases and agreements listed on schedule 4.13, the
Seller has, and at the closing the Buyer will receive, valid title to all of the
personal property and intangible property included in the Assets, free and clear
of any Lien (except for the lien, if any, of current taxes not yet due and
payable). Except as set forth on schedule 4.19, neither the Seller nor any
affiliate of the Seller owns any real property used in the operations of the
Stations.
4.5 Licenses. WEBE Associates and WICC Associates hold the FCC
Licenses and the Seller holds all other Licenses necessary for or used in the
operations of the Stations. Schedule 1.1(a) contains a true and complete list of
the FCC Licenses currently in
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effect and all other Licenses (showing, in each case, the expiration date). None
of the Licenses (including, without limitation, the FCC Licenses) is subject to
any restriction or condition which would limit in any material respect the full
operation of the Stations as now operated. Seller has delivered to Buyer true
and complete copies of the Licenses. The Licenses are in good standing, are in
full force and effect and are unimpaired by any act or omission of Seller or its
officers, directors or employees; and the operation of each of the Stations is
in accordance with the Licenses. Seller has no notice of, and to the best of the
knowledge of Seller, no proceedings are pending or threatened which may result
in the revocation, modification, non-renewal or suspension of any of the
Licenses, the denial of any pending applications, the issuance of any cease and
desist order, the imposition of any administrative actions by the Commission
with respect to the Licenses or which may affect Buyer's ability to continue to
operate either of the Stations as it is currently operated. Seller has taken no
action which, to the best of Seller's knowledge, could lead to revocation or
non-renewal of the Licenses, nor to the best of Seller's knowledge has it
omitted to take any action which, by reason of its omission, could lead to
revocation of the Licenses. To the best of Seller's knowledge, there are no
applications, complaints or proceedings pending or threatened before the
Commission or any other governmental authority relating to the business or
operations of either of the Stations, other than applications, complaints or
proceedings which generally affect the broadcasting industry as a whole. All
material reports, forms and statements required to be filed with the Commission
with respect to the Stations since the grant of the last renewal of the Licenses
have been filed and are complete and accurate in all material respects. To the
best of the knowledge of Seller, there are no facts which, under the
Communications Act of 1934, as amended, or the existing rules and regulations of
the Commission, would disqualify Seller as assignor in connection with the
assignment of the FCC Licenses to the Buyer.
4.6 Call Letters. The Seller has the right to the use of the
call letters "WICC-AM," and "WEBE-FM," pursuant to the rules and regulations of
the Commission.
4.7 Operation of the Stations. The operation of each of the
Stations is in compliance in all material respects with (i) all applicable
engineering standards required to be met under Commission rules, and (ii) all
other applicable rules, regulations, requirements and
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policies of the Commission and all other applicable governmental authorities,
including, but not limited to, ANSI Radiation Standards, to the extent required
to be met under applicable Commission rules and regulations, and there are no
existing claims known to Seller to the contrary.
4.8 Financial Statements. The Seller has previously delivered to
the Buyer the unaudited balance sheets of the Stations as of December 31, 1997
and 1998 and the related statements of operations for the years then ended.
Except as set forth on schedule 4.8, all of those financial statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, are in accordance with Seller's books and records, and
fairly present in all material respects the financial position and the results
of operations of the Stations as of the dates and for the periods indicated.
4.9 Absence of Certain Changes. Since December 31, 1998, the
Seller has operated the business of the Stations in the usual and ordinary
course and substantially consistent with its past practice with respect to the
Stations, and, except as set forth on schedule 4.9:
(a) The Seller has not, with respect to the Stations,
entered into any transaction or incurred any liability or obligation that is
material to the business or operation of the Stations except in the ordinary
course of its business consistent with past practice;
(b) The Seller has not sold or transferred any of the
assets of the Stations other than in the ordinary course of business consistent
with past practice;
(c) The Seller has not incurred any indebtedness with
respect to the Stations other than indebtedness to trade creditors incurred in
the ordinary course of business;
(d) The Seller has not granted or agreed to grant any
increase in any rate or rates of salaries, draws, commissions, bonuses or
compensation or other benefits payable to employees of the Stations, except for
increases in accordance with the Seller's past employment practices, and has not
granted or agreed to effect any changes in the Seller's management personnel,
policies or employee benefits;
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(e) There has not been any material adverse change in the
financial condition, business, results of operations, assets or liabilities of
the Stations taken as a whole other than any adverse change resulting
principally from general economic conditions or conditions (regulatory or
otherwise) applicable to the radio broadcast industry in general;
(f) No contract or commitment to which Seller is a party
which relates to the Stations has been entered into, modified or terminated,
except in the ordinary course of business or as required under the terms of this
agreement;
(g) There has been no write-off or determination to write
off as uncollectible any accounts receivable or portion thereof, except for
write-offs in the ordinary course of business consistent with past practice at a
rate no greater than during the twelve months period ended December 31, 1998;
(h) There has been no cancellation of any material debts or
claims, or waiver of any material rights, relating to the Stations or any of the
Assets to be purchased by Buyer hereunder; and
(i) There has not been any change in any method of
accounting or accounting practice used by Seller.
4.10 Tangible Property. Except as set forth on schedule 4.10, all
equipment and other tangible assets to be sold to Buyer pursuant to this
agreement is in all material respects in good operating condition, ordinary wear
and tear excepted, and is available for immediate use in the conduct of the
business and operation of the Stations. To the best of Seller's knowledge, the
technical equipment, including, without limitation, all transmitters and studio
equipment, constituting part of the assets to be sold to Buyer pursuant to this
agreement, has been maintained in accordance with industry practice and is in
reasonably good operating condition, ordinary wear and tear excepted, and
complies in all material respects with all applicable rules and regulations of
the Commission and the terms of the Licenses. The equipment and other tangible
assets to be sold to Buyer pursuant to this agreement includes all such
equipment and assets necessary to conduct in all material respects the business
and operations of the Stations as now conducted.
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4.11 Intangible Assets. Schedule 1.1(d) contains a complete list
of the trademarks, trade names, logos, jingles and slogans used by the Seller in
the operation of the Stations. Except as set forth on schedule 4.11, the Seller
owns, free and clear of any Liens, each of the trademarks, trade names, logos,
jingles and slogans listed on schedule 1.1(d). The Seller is not operating the
Stations in a manner that infringes in any material respect any patent,
copyright or trademark of any third party or otherwise violates in any material
respect the rights of any third party, and no claim has been made or threatened
against the Seller alleging any such violation. To the best of the Seller's
knowledge, there has been no material violation by others of any right of the
Seller in any trademark, trade name, logo, jingle or slogan used in the
operation of the Stations.
4.12 Litigation; Compliance with Laws. Except as set forth on
schedule 4.12, there is no claim, litigation, proceeding or governmental
investigation pending or, to the best of the Seller's knowledge, threatened, or
any order, injunction or decree outstanding, against the Seller, WEBE Associates
or WICC Associates relating to the Stations or the Assets, which if adversely
determined might (i) have a material adverse effect on the operations of the
Stations taken as a whole, (ii) materially delay approval by the Commission of
the transactions contem plated by this agreement, or (iii) prevent the
consummation of the transactions contemplated by this agreement. Except as set
forth on schedule 4.12, the Seller is not in violation of any law, regulation or
ordinance (including, without limitation, zoning and land use rules) or any
other requirement of any governmental body or court with respect to the
operation of the Stations, which violation would have a material adverse effect
upon the operations or business of the Sta tions taken as a whole, and no notice
has been received by the Seller alleging any such violation. Seller is not in
default with respect to any judgment, order, injunction or decree of any court,
administrative agency or other governmental authority or of any other tribunal
duly authorized to resolve disputes in any respect material to the transactions
contemplated hereby.
4.13 List of Agreements, etc. Schedules 4.13, 4.14 and 4.15
together contain, with respect to the Stations, a complete list of: (a) all
future commitments and other agreements for the purchase of materials, supplies
or equipment, other than commitments and other agreements that were entered into
in the ordinary course of business and involve an
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expenditure by the Seller of less than $25,000 for any one commitment or two or
more related commitments; (b) all notes and agreements relating to any
indebtedness of the Seller that is secured by any of the Assets (other than the
Credit Agreement with The Chase Manhattan Bank); (c) all leases, subleases,
licenses or other rental agreements and all amendments and modifications thereto
under which the Seller is either lessor or lessee related to the operations or
business of the Stations (collectively the "Leases"); (d) all "barter" and
"trade" agreements; (e) all collective bargaining agreements; and (f) all other
agreements, commitments and understandings (written or oral) that require
payment by the Seller of more than $25,000 individually or cannot be terminated
by the Seller on less than 60 days notice without liability. True and complete
copies of all written leases, commitments and other agreements referred to on
schedules 4.13, 4.15 and 4.19 (together, the "Contracts") have been delivered or
made available to the Buyer. To the best of Seller's knowledge, all such
Contracts are valid, binding and enforceable by Seller in accordance with their
respective terms, except as limited by laws affecting creditors' rights or
equitable principles generally. Seller has, and to the best of Seller's
knowledge each other party to any such Contract has, complied in all material
respects with all such Contracts, and Seller is not, and to the best of Seller's
knowledge no other party to any such Contract is, in default in any material
respect beyond any applicable grace periods under any of same. Subject to
obtaining the consents set forth on schedule 4.3, Seller has full legal power
and authority to assign its respective rights under such Contracts to Buyer in
accordance with this agreement on terms and conditions no less favorable than
those in effect on the date hereof, and such assignment will not materially
affect the validity, enforceability and continuity of any such Contracts.
4.14 Employee Benefit Plans. Schedule 4.14 lists each "employee
benefit plan," as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") applicable to the employees of the
Stations. Each of Seller's employee benefit plans has been operated and
administered in all material respects in accordance with its terms and
applicable law, including, without limitation, ERISA and the Internal Revenue
Code. Except as set forth on schedule 4.14, the Seller does not have any
severance policy with respect to employees of the Stations, and the consummation
of the transaction contemplated by
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this agreement shall not result in any accelerated payments to or vesting of
rights of any employee of the Stations.
4.15 Personnel Information; Labor Contracts
--------------------------------------
(a) Schedule 4.15 contains a true and complete list of all
persons employed at the Stations, including the date of hire, a description of
material compensation arrangements (other than employee benefit plans set forth
in schedule 4.14) and a list of other terms of any and all material agreements
affecting such persons.
(b) Seller is not a party to any contract with any labor
organization with respect to employees of the Stations, nor has Seller agreed to
recognize any union or other collective bargaining unit with respect to
employees of the Stations, nor has any union or other collective bargaining unit
been certified as representing any of Stations' employees. Seller has no
knowledge of any organizational effort currently being made or threatened by or
on behalf of any labor union with respect to employees of either of the
Stations. During the past five years, the Stations have not experienced any
strikes, work stoppages, grievance proceedings, claims of unfair labor practices
filed, or other significant labor difficulties of any nature.
(c) Seller and each of the Stations has complied in all
material respects with all laws relating to the employment of labor, including,
without limitation, ERISA and those laws relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, equal employment
opportunity and the payment and withholding of taxes.
(d) There is no unfair labor charge or complaint against
the Stations pending before the National Labor Relations Board, any state labor
relations board or any court or tribunal and, to the best of Seller's knowledge,
none has been threatened.
4.16 Insurance. Schedule 4.16 contains a complete list of all of
the Seller's insurance policies relating to the operation of the Stations or the
Assets to be sold to Buyer pursuant hereto, specifying the policy limit, type of
coverage, location of the property covered, annual premium, premium payment date
and expiration date of each of the policies. To
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the best of Seller's knowledge, all such policies are in full force and effect
and Seller has received no notice of cancellation with respect thereto.
4.17 Undisclosed Liabilities. Except as to, and to the extent of,
the amounts specifically reflected or reserved against in balance sheets of the
Stations as of December 31, 1998 (the "Balance Sheet Date"), and except for
liabilities and obligations incurred since the Balance Sheet Date in the
ordinary and usual course of business, Seller has no material liabilities or
obligations relating to the Stations, whether accrued, absolute, contingent or
otherwise and whether due or to become due, of a nature required to be reflected
on a balance sheet (or the notes thereto) prepared in accordance with generally
accepted accounting principles.
4.18 Environmental Matters. Except as set forth on Schedule 4.18:
(a) Seller's ownership and operation of the Stations is and
has been in compliance in all material respects with all currently existing
federal, state and local laws relating to pollution, the protection of human
health and safety or the environment (collectively, "Environmental Laws").
(b) To the best of the Seller's knowledge, there are no
past or present actions, activities, circumstances, conditions, events or
incidents, including, but not limited to, the release, emission, discharge or
disposal of any Material of Environmental Concern, that could form the basis of
any material claim against, or any material violation by, Seller or either
Station (or, after the closing, the Buyer) pursuant to the Environmental Laws or
principles of common law relating to pollution, protection of the environment or
health and safety. "Materials of Environmental Concern" means chemicals,
pollutants, contaminants, wastes, toxic substances, petroleum and petroleum
products and any other substances or wastes regulated or defined pursuant to
Environmental Laws.
(c) Except as set forth on schedule 4.18, to the best of
the Seller's knowledge, (1) there are no underground storage tanks located on
the real property leased by Seller, (2) there is no friable asbestos contained
in or forming part of any building, building component, structure or office
space leased by Seller, (3) no polychlorinated biphenyls (PCBs) are used or
stored at any real property leased by Seller, (4) none of the electrical
equipment located at the real property leased by Seller contains any PCBs, and
(5) there are no
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on-site or off-site locations where Seller has stored, disposed or arranged for
the disposal of Materials of Environmental Concern.
4.19 Real Property. Except as set forth on schedule 4.19:
(a) Seller does not own or have any options to own any real
property. Each Lease is valid, binding and in full force and effect, all rent
and other sums and charges payable by the Seller as tenant thereunder are
current, no notice of default or termination under any Lease is outstanding, and
no termination event or condition or uncured default on the part of the Seller
or, to the best of the knowledge of Seller, the landlord, exists with respect to
any Lease. Except as set forth on schedule 4.19, the Company holds the leasehold
estate and interest in the Leases free and clear of all Liens. Seller has no
ownership or financial interest in the landlord under the Leases. All of the
land, buildings, or other improvements used by Seller in connection with the
operations and business of the Stations is included in the Leases.
(b) To the best of Seller's knowledge, all water,
electrical, steam and storm sewage lines and systems and other similar systems
serving the Leased Real Property are installed and operating and are sufficient
to enable the same to continue to be used and operated in the manner currently
being used and operated. To the best of Seller's knowledge, each such utility or
other service is provided by a public or private utility or service company and
enters the Leased Real Property from an adjacent public street or valid private
easement for the benefit of the supplier of such utility or other service or the
applicable Leased Real Property. To the best of Seller's knowledge, each
improvement located upon the Leased Real Property has direct access to a public
street adjoining the Leased Real Property, and no existing accessway crosses or
encroaches upon any property or property interest not leased by the Company.
(c) The Seller does not owe any money to any architect,
contractor, subcontractor or materialman for labor or materials performed,
rendered or supplied to the Seller for or in connection with any Leased Real
Property within the past six months. There is no work being done for the Seller
at or materials being supplied to the Seller for or in connection with any
parcel of the Leased Real Property at the date hereof other than routine
maintenance projects having an aggregate cost through completion of not more
than $[5,000].
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4.20 Taxes. Seller has timely filed all federal, state, local and
foreign income, franchise, sales, use, property, excise, payroll and other tax
returns required by law relating to the Stations and has paid in full all taxes,
estimated taxes, interest, assessments, and penalties due and payable as shown
thereon. All such returns and forms which have been filed have been true and
correct in all material respects and no tax or other payment in a material
amount other than as shown on such returns and forms are required to be paid or
have been paid by Seller with the respect to the Stations. There are no present
disputes as to taxes of any nature payable by Seller which in any event could
materially adversely affect the Assets or the operation of the Stations.
4.21 Insolvency Proceedings. No insolvency proceedings of any
character including, without limitation, bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or
involuntary, affecting Seller or the Assets to be acquired by the Buyer
hereunder are pending or, to the best of Seller's knowledge, threatened, and
Seller has made no assignment for the benefit of creditors, nor taken any action
with a view to, or which would constitute the basis for, the institution of any
such insolvency proceedings.
4.22 Finders and Brokers. Other than with respect to
Communications Equities Associates ("CEA"), neither the Seller nor any person
acting for or on behalf of the Seller has entered into any contract, agreement
or understanding with any person which will result in the obligation of Buyer or
Seller to pay any finder's fees, brokerage or agents commission or other like
payments in connection with the negotiations leading to this agreement or the
consummation of the transactions contemplated by this agreement. The brokerage
fee payable to CEA shall be borne by Seller.
5. Representations and Warranties by the Buyer. The Buyer represents
and warrants to the Seller as follows:
5.1 The Buyer's Organization and Authority. The Buyer is a
limited liability company duly organized and validly existing under the law of
the state of Delaware and has the full company power and authority to enter into
and perform this agreement and to own and operate the Stations.
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5.2 Authorization of Agreement. The execution, delivery and
performance of this agreement and the Indemnity Escrow Agreement by the Buyer
have been duly authorized by all necessary company action of the Buyer and this
agreement and the Indemnity Escrow Agreement constitute valid and binding
obligations of the Buyer enforceable against it in accordance with their
respective terms, except as such enforceability may be limited by bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
in general and subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law).
5.3 Consents of Third Parties. The execution, delivery and
performance of this agreement by the Buyer will not (a) conflict with the
Buyer's certificate of formation or limited liability company agreement and will
not conflict with or result in the breach or termination of, or constitute a
default under, any lease, agreement, commitment or other instrument, or any
order, judgment or decree, to which the Buyer is a party or by which the Buyer
is bound or (b) constitute a violation by the Buyer of any law applicable to it.
No consent, approval or authorization of, or designation, declaration or filing
with, any governmental authority is required on the part of the Buyer in
connection with the execution, delivery and performance of this agreement,
except for the filings and consents referred to in sections 6.1 and 13.7.
5.4 Litigation. There is no claim, litigation, proceeding or
governmental investigation pending or, to the best of the Buyer's knowledge,
threatened, or any order, injunction or decree outstanding, against the Buyer or
any of its affiliates that would prevent the consummation of the transactions
contemplated by this agreement.
5.5 Buyer's Qualification. At the closing, the Buyer will be
legally, financially and otherwise qualified under the rules and regulations of
the Commission and the Communications Act of 1934, as amended, to become the
owner, operator and licensee of the Stations.
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6. Further Agreements of the Parties.
---------------------------------
6.1 Filings.
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(a) As soon as practicable, but in no event later than 10
days after the date of this agreement, the parties shall file with the
Commission applications requesting consent to the transactions contemplated by
this agreement; the parties shall with due diligence take all steps necessary to
expedite the processing of the applications and to secure such consent or
approval. Each party shall bear its own costs and expenses (including the fees
and disbursements of its counsel) in connection with the preparation of the
portion of the applications to be prepared by it and in connection with the
processing of those applications. All filing and grant fees, if any, paid to the
Commission, shall be split equally between the Buyer and the Seller.
(b) Within 10 days after the execution of this agreement,
the Seller and the Buyer shall, in cooperation with the other, file in
connection with the transactions contemplated by this agreement any reports or
notifications that may be required to be filed by them under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), with each of the Department of Justice ("DOJ") and the Federal Trade
Commission ("FTC"). The parties shall with due diligence take all steps
necessary to obtain all approvals from the DOJ and the FTC. The Seller and the
Buyer shall comply promptly with all requests for further documents and
information made by the DOJ or the FTC, and shall furnish to the other all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
6.2 Operations of the Stations. From the date of this agreement
through the Closing Date:
(a) The Seller shall operate the business of the Stations
in the usual and ordinary course and substantially consistent with past
practices and in conformity in all material respects with (i) the Licenses, (ii)
the Communications Act of 1934, and the rules and regulations of the Commission,
and (iii) all other material laws, ordinances, regulations, rules or orders
relating to the operations of the Stations;
(b) The Seller shall use reasonable efforts, consistent
with its past practices, (i) to preserve the business organization of the
Stations intact and to preserve the
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goodwill and business of the advertisers, suppliers and others having business
relations with the Stations, (ii) to retain the services of the employees of the
Stations, and (iii) to preserve all trademarks and trade names, and related
registrations, of the Stations, and all slogans and logos, owned by them or in
which they have any rights;
(c) The Seller shall not, except in the ordinary course and
substantially consistent with past practice, (i) enter into any transaction or
incur any liability or obligation that is material to the business or operations
of the Stations or (ii) sell or transfer any of the assets relating to the
Stations, other than assets that have worn out or been replaced with other
assets of equal or greater value or assets that are no longer needed in the
operation of the Stations;
(d) The Seller shall not, except with the Buyer's prior
approval, (i) enter into or renew any lease, commitment or other agreement
relating to the Stations that, if entered into prior to the date of this
agreement, would have been required to be included on schedule 4.13 or 4.15 (or
that would require receipt of a consent or approval required to be included on
schedule 4.3), (ii) enter into any new time sale agreement for the Stations for
cash, barter or trade except in the ordinary course of business and consistent
with past practices, (iii) cause or take any action to allow any material lease,
commitment or other agreement relating to the Stations to lapse (other than in
accordance with its terms), to be modified in any adverse respect, or otherwise
to become impaired in any material manner, except in the ordinary course of
business, (iv) provide for any new pension, retirement or other employment
benefits for employees of the Stations or any increase in any existing benefits,
establish any new employee benefit plan or amend or modify any existing employee
benefit plan (except as may be required by applicable law) or otherwise incur
any obligation or liability under any employee benefit plan materially different
in nature or amount from obligations or liabilities incurred during similar
periods in prior years, or (v) take any other action which, if taken subsequent
to December 31, 1998 but prior to the date of this agreement, would have been
required to have been set forth on schedule 4.9;
(e) The Seller shall (i) maintain all of its assets
relating to the Stations in reasonably good operating condition, repair and
order, except to the extent of normal
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wear and tear, and repair or replace, consistently with past practice and
subject to the provisions of section 11, any asset that may be damaged or
destroyed, and (ii) maintain or cause to be maintained insurance on the assets
and business of the Stations as described in section 4.16;
(f) The Seller shall use its best efforts to continue to
conduct the financial operations of the Stations, including its credit and
collection policies, in the ordinary course of business with the same effort, to
the same extent, and in the same manner, as in the prior conduct of the business
of the Stations; and shall continue to pay and satisfy all expenses, liabilities
and obligations arising in the ordinary course of business in accordance with
past accounting practices. Seller shall not enter into or amend any contracts or
commitments relating to the Stations involving expenditures by Seller in an
aggregate amount in excess of $25,000 without the prior written consent of
Buyer;
(g) The Seller shall pay or cause to be paid when due all
property and all other taxes relating to the Stations and the assets and
employees of the Stations required to be paid to city, county, state, federal
and other governmental units through the Closing Date; provided, however, Seller
may appeal or contest any such tax, it being understood that Seller shall
indemnify and hold harmless Buyer, its successors and assigns, from any and all
liabilities relating to or in respect of taxes (including any interest or
penalties assessed in connection therewith) relating to operation of the
Stations prior to the Closing Date;
(h) Except as otherwise permitted in this agreement, the
Seller shall not knowingly or willingly suffer or permit the creation of any
mortgage, conditional sales agreement, security interest, lease, lien,
hypothecation, deed of trust or pledge, encumbrance, restriction, liability,
charge, or imperfection of title with respect to any of the assets to be sold to
the Buyer pursuant hereto;
(i) The Seller shall use its best efforts to not, by any
act or omission, surrender, modify adversely, forfeit or fail to renew under
regular terms the Licenses, cause the Commission or any other governmental
authority to institute any proceeding for the revocation, suspension or
modification of any such License, or fail to prosecute with due diligence any
pending applications with respect to the Licenses at the Commission or any other
applicable governmental authority; and
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(j) The Seller shall not fail to repair, maintain or
replace the technical equipment transferred hereunder in accordance with the
normal standards of maintenance applicable in the broadcast industry.
6.3 No Control. Between the date of this agreement and the
Closing Date, the Buyer shall not, directly or indirectly, control, supervise or
direct, or attempt to control, supervise or direct, the operations of the
Stations, but such operations shall be solely the responsibility of the Seller
and, subject to the provisions of section 6.2, shall be in its complete
discretion.
6.4 Access to Information. Prior to the closing, the Buyer and
its representatives may make such investigation of the property, assets and
businesses of the Stations as it may desire, and the Seller shall give to the
Buyer and to its counsel, accountants and other representatives, upon reasonable
notice, full access during normal business hours throughout the period prior to
the closing to all of the assets, books, commitments, agreements, records and
files of the Seller relating to the Stations, including reasonable access to
undertake environmental assessment; provided, however, that such access for the
purposes of conducting an environmental assessment or investigation of the
properties shall be limited to the performance of a Phase I environmental
assessment by an environmental consultant retained by Buyer, at its sole cost
and expense, and acceptable to Seller, in accordance with a Phase I scope of
work generally followed by nationally recognized environmental consulting firms
or in accordance with the protocol established by the American Society for
Testing and Materials ("ASTM"), Standard Practice for Environmental Site
Assessments: Phase I Environmental Site Assessment Process, E 1527-93, and in no
event shall the Phase I environmental assessment involve any intrusive testing
or sampling of the soil, groundwater or other environmental media. The Phase I
environmental report shall be completed within 30 days of the date of this
agreement and a copy of the Phase I environmental report shall be provided to
Seller as soon as it is completed, but in no event later than 40 days after the
date hereof. The Seller shall furnish to the Buyer during the period prior to
the closing all documents and copies of documents and information concerning the
businesses and affairs of the Stations as the Buyer reasonably may request. The
Buyer shall hold, and shall cause its representatives to hold, all such
information and documents and all other
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information and documents delivered pursuant to this agreement confidential and,
if the purchase and sale contemplated by this agreement is not consummated for
any reason, shall return to the Seller all such information and documents and
any copies as soon as practicable, and shall not disclose any such information
(that has not previously been disclosed other than by the Buyer) to any third
party unless required to do so pursuant to a request or order under applicable
laws and regulations or pursuant to a subpoena or other legal process. The
Buyer's obligations under this section shall survive the termination of this
agreement.
6.5 Consents; Assignment of Agreements; Estoppel Certificates.
(a) The Seller shall use reasonable efforts (but shall not
be re quired to make any payment) to obtain at the earliest practicable date all
consents and approvals referred to in section 4.3. If, with respect to any
lease, commitment or agreement to be assigned to the Buyer, a required consent
to the assignment is not obtained (and, accordingly, pursuant to section 1.2(c),
the lease, commitment or agreement is excluded from the sale to the Buyer), the
Seller shall use reasonable efforts to keep it in effect and give the Buyer the
benefit of it to the same extent as if it had been assigned, and the Buyer shall
perform Seller's obligations under the agreement relating to the benefit
obtained by the Buyer. Nothing in this agreement shall be construed as an
attempt to assign any agreement or other instrument that is by its terms
nonassignable without the consent of the other party.
(b) The Seller shall use reasonable efforts to obtain a
current estoppel certificate from the landlord under each Lease stating (1) that
the Lease is in full force and effect and has not been amended, modified or
supplemented other than as set forth on schedules 4.13 and 4.19; (2) that all
rent and other sums and charges payable under such Lease are current, and
setting forth the date through which such payments have been made; (3) the
amount of any tenant security or other similar deposit held by or on behalf of
such landlord under such Lease; (4) that no notice of default on the part of the
Seller or termination notice has been served under such Lease which remains
outstanding; and (5) that, to the knowledge of such landlord, no uncured default
or termination event or condition exists under such Lease, and that no event has
occurred or condition exists which, with the giving of notice or the lapse of
time or both, would constitute such a default or termination event or condition;
and (6) that upon receipt
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of any required consent from the landlord as listed on schedules 4.3 and 7.1(e),
the consummation of the transactions contemplated in this agreement will not
constitute a default under such Lease or grounds for the termination thereof or
for the exercise of any other right or remedy adverse to the interests of the
tenant thereunder.
6.6 Sales Taxes; Transfer Taxes. The Buyer and the Seller shall
each pay 50% of any sales taxes and any stamp or transfer taxes payable in
connection with the sale of the Assets.
6.7 Employees; ERISA.
----------------
(a) Employment. The Buyer shall offer employment to all
employees of the Stations, including Vincent Cremona, the general manager of the
Stations, and the Seller shall not compete with or otherwise interfere with the
offers of employment made by the Buyer. The Buyer shall pay to any employees of
the Stations that the Buyer terminates (without cause) within one year after the
Closing Date severance in accordance with the Seller's policies described on
schedule 4.14, if applicable.
(b) Employee Benefits Generally. The Buyer shall provide
all employees of the Stations that become employees of the Buyer ("Covered
Employees") job responsibilities, compensation and employee benefits that in the
aggregate are substantially similar to the benefits provided by the Seller, and
the Buyer shall give each of those Covered Employees past service credit for
purposes of eligibility and vesting under all employee benefit plans for
employees of the Buyer at or after the closing and past service credit for all
purposes, including the amount of benefits, under the severance, vacation, sick
pay and similar policies of the Buyer (but not for the purposes of any employee
benefit pension plans, as defined in ERISA Section 3.2).
(c) Medical Benefits. As of the Closing Date, the Buyer
shall provide all Covered Employees (and their dependents) with medical benefit
coverage under plan(s) maintained or established by the Buyer. The Buyer shall
cause its plan(s) to waive any pre-existing condition exclusions and waiting
periods (except to the extent that such exclusions would have then applied or
waiting periods were not satisfied under Seller's medical plan) and to credit or
otherwise consider any monies paid (or accrued) under Seller's medical plan by
Covered
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Employees (or their dependents) prior to the Closing Date toward any
deductibles, co-pays or other maximums under its plan(s) during the first plan
year after the Closing Date. The Buyer shall be responsible for satisfying its
obligations under Section 601 et seq. of ERISA and Section 4980B of the Internal
Revenue Code of 1986, as amended (the "Code") to provide continuation coverage
("COBRA") to any Covered Employee in accordance with law. The Buyer shall
provide COBRA coverage to any employees of the Stations not employed by the
Buyer on the Closing Date (and to any former employees of the Station being
provided COBRA coverage by the Seller on the Closing Date) to the extent
required by COBRA.
(d) 401(k) Plan. The employees of the Station participate
in the Seller's 401(k) Plan for radio employees (the "401(k) Plan"). If an
employee of the Station who participates in the 401(k) Plan and becomes an
employee of the Buyer as of the Closing Date (a "401(k) Employee") is entitled
to and receives a Code ss.401(k)(10) distribution that is an "eligible rollover
distribution" (as defined under Section 402(c)(4) of the Code and the
regulations promulgated thereunder), whether as a result of a plan termination
or other distribution event, from the 401(k) Plan at any time on or after the
Closing Date, the Buyer shall permit any such 401(k) Employee to rollover
(whether by direct or indirect rollover, as selected by such employee) his or
her eligible rollover distribution from the 401(k) Plan to a retirement plan
maintained by the Buyer that is qualified under Section 401(a) of the Code
("Buyer's Plan"), if the Buyer or any of its affiliates maintains such a plan.
Buyer acknowledges that a termination of the 401(k) Plan is a Code ss.401(k)(10)
event and that Buyer's Plan will accept rollovers of amounts distributed upon a
termination of the 401(k) Plan. Buyer's Plan shall not impose any waiting
periods, service requirements or other limitations that would prohibit any
401(k) Employee from rolling over an eligible rollover distribution from the
401(k) Plan into Buyer's Plan at any time following the Closing Date. Any 401(k)
Plan loan to an employee who transfers his or her account balance under the
401(k) Plan to Buyer's Plan shall be assumed and continued by Buyer's Plan in a
manner identical to the 401(k) Plan. The Buyer shall amend Buyer's Plan to the
extent necessary in order to effectuate the transactions contemplated under this
section 6.7(d). The Seller and the Buyer shall cooperate with each other (and
cause the trustees of the 401(k)
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Plan and Buyer's Plan to cooperate with each other) with respect to the rollover
of the distributions to the 401(k) Employees.
(e) Payroll Tax. For purposes of payroll taxes with respect
to Covered Employees, Seller and Buyer shall treat the transactions contemplated
herein as a transaction described in Treas. Reg. Sections 31.3121(a)(1)-1(b)(2)
and 31.3306(b)(1)-1(b)(2).
6.8 Accounts Receivable. (a) Promptly after the closing, Seller
shall furnish to Buyer a list of the Accounts Receivable that arose out of the
operations of the Stations as of the close of business on the Closing Date but
are due and payable thereafter. For a period of six months after the closing,
Buyer, as Seller's agent, shall, without compensation, collect the Accounts
Receivable for Seller. Within 10 days after the last day of each month during
the six-month period, Buyer shall remit to Seller the amount collected by Buyer
during that month with respect to the Accounts Receivable and Buyer shall
provide Seller with a report setting forth the Accounts Receivable collected by
Buyer that month. Buyer shall furnish Seller with such records and other
information as Seller may reasonably require to verify the amounts collected by
Buyer with respect to the Account Receivable.
(b) For the purpose of determining amounts collected by
Buyer with respect to the Accounts Receivable, (i) in the absence of a dispute
between an account debtor and Seller, all payments by an account debtor shall
first be applied to Accounts Receivable due from the account debtor, and (ii)
any amount received by Buyer which is from an account debtor who claims to have
a dispute with Seller shall be applied as follows: first to any Accounts
Receivable (or portion thereof) that is not disputed; then to any accounts
receivable due Buyer; and finally to any disputed Accounts Receivable.
(c) Buyer shall not be required to retain a collection
agency, bring any suit, or take any other action out of the ordinary course of
business to collect any of the Accounts Receivable. Buyer shall not compromise,
settle or adjust the amount of any of the Accounts Receivable without the
written consent of Seller.
(d) Seller shall promptly remit to Buyer any Account
Receivable or account receivable paid by any third party to Seller on or
following the Closing Date which, in accordance with (a) and (b) of this
section, is payable to Buyer.
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6.9 Expenses. Each party shall bear its own expenses incurred in
connection with the negotiation and preparation of this agreement and in
connection with all obligations required to be performed by it under this
agreement, except where specific expenses have been otherwise allocated by this
agreement.
6.10 Buyer's Audit; Right of Termination. Between the date hereof
and May 15, 1999, Buyer's accountants shall have the right to audit the
financial statements for the year ended December 31, 1998 previously delivered
to the Buyer from Seller pursuant to section 4.8, and to review the accountants
work papers in connection with the preparation of such financial statements. If
such audit discloses that such financial statements materially misstated the
financial condition or results of operations of the Stations as of and for the
year ending December 31,1998, Buyer shall have the right to terminate this
agreement by written notice to the Seller (which notice shall include a
reasonably detailed explanation of any such material misstatement), given no
later than 5:00 p.m. on May 17, 1999.
6.11 Notification of Developments. Seller shall notify Buyer of
any materially adverse developments with respect to any of the Assets to be sold
to Buyer hereunder or the operations of the Stations and shall provide Buyer
with prompt written notice of any material change in any of the information
contained in the representations and warranties made herein or in the schedules
hereto or in any other documents delivered in connection with this agreement.
6.12 Negotiations with Third Parties. Seller shall not, before
either the Closing Date or the termination of this agreement, enter into
discussions with respect to any sale or offer of any of the Stations, any Assets
to be sold to Buyer hereunder, nor shall Seller offer the Stations or any such
Assets to any third party.
6.13 Performance. Buyer and Seller shall perform all acts
required of them under this agreement and refrain from knowingly taking or
omitting to take any action that would violate their representations and
warranties hereunder or render same inaccurate as of the Closing Date.
6.14 Conditions. If any event should occur, either within or
without the control of any party hereto, which would prevent fulfillment of the
conditions placed upon the
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obligations of any party hereto to consummate the transactions contemplated by
this agreement, the parties hereto shall use their reasonable best efforts to
cure the event as expeditiously as possible.
6.15 Environmental Matters. If Seller discloses in Schedule 4.18
any instances of material noncompliance with or current material liability
pursuant to Environmental Laws or any principles of common law relating to
pollution, protection of the environment or health and safety, or if Seller
learns of any such material noncompliance or material liability between the date
of this agreement and the Closing Date, Seller shall promptly begin action to
correct such noncompliance or satisfy such liability and shall use its
reasonable best efforts to complete such action to the satisfaction of the Buyer
before the Closing Date.
6.16 Bulk Sales Laws. Buyer hereby waives compliance by Seller
with the provisions of the "bulk sales" or similar laws of any state. Seller
agrees to indemnify Buyer and hold it harmless against any and all claims,
losses, damages, liabilities, costs and expenses incurred by Buyer or any
affiliate as a result of any failure to comply with any "bulk sales" or similar
laws.
6.17 Further Assurances. At any time and from time to time after
the closing, each of the parties shall, without further consideration, execute
and deliver to the other such additional instruments and shall take such other
action as the other may request to carry out the transactions contemplated by
this agreement. For a period of six years after the closing, each party shall
grant the other reasonable access during normal business hours upon reasonable
prior notice to the books and records of that party for the purpose of complying
with any applicable law or governmental rule or request relating to the period
during which the other party operated the Stations or as otherwise reasonably
required.
7. Conditions Precedent to Closing.
-------------------------------
7.1 Conditions Precedent to the Obligations of the Buyer. The
Buyer's obligation to consummate the purchase under this agreement is subject to
the fulfillment, at or prior to the closing, of each of the following conditions
(any of which may be waived in writing by the Buyer):
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(a) all representations and warranties of the Seller under
this agreement shall be true at and as of the time of the closing with the same
effect as though those representations and warranties had been made again at and
as of that time, with such exceptions as do not in the aggregate have a material
adverse effect on the operations or business of the Stations taken as a whole;
(b) the Seller shall have performed and complied in all
material respects with all obligations, covenants and conditions required by
this agreement to be per formed or complied with by it prior to or at the
closing;
(c) the Commission shall have given all requisite approvals
and consents, without any condition or qualification materially adverse to the
Buyer or the opera tions of the Stations, to the assignment of the FCC Licenses
to the Buyer and the acquisition of control of the Stations by the Buyer as
provided in this agreement and such approvals shall have become a Final Order
(as defined below);
(d) all applicable waiting periods under the HSR Act with
respect to the transactions contemplated by this agreement shall have expired or
been terminated;
(e) the Seller shall have duly received, without any
condition materially adverse to the Buyer, all consents and approvals referred
to in schedule 7.1(e);
(f) there shall not be in effect an injunction or
restraining order issued by a court of competent jurisdiction in an action or
proceeding against the consummation of the transactions contemplated by this
agreement;
(g) the Buyer shall have been furnished with a certificate
of an officer of the Seller, dated the Closing Date, in form and substance
satisfactory to the Buyer, certifying to the fulfillment of the conditions set
forth in sections 7.1(a) and (b);
(h) no litigation, proceeding, or investigation of any kind
shall have been instituted against the Seller or the Stations which would
materially adversely affect the ability of Seller to comply with the provisions
of this agreement or would materially adversely affect the operation of the
Stations taken as a whole;
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(i) Seller shall have obtained, executed, where necessary,
and delivered, to Buyer where applicable, all of the documents, reports, orders
and statements required herein to be delivered by it prior to the closing;
(j) Buyer shall have received an affidavit of an officer of
Seller sworn to under penalty of perjury, setting forth Seller's name, address
and Federal tax identification number and stating that such Seller is not a
"foreign person" within the meaning of Section 1445 of the Internal Revenue Code
of 1986, as amended; and
(k) the Letter of Credit shall have been returned to Buyer.
For the purpose of this agreement, "Final Order" means action by
the Commission (a) which has not been vacated, reversed, stayed, set aside,
annulled or suspended, (b) with respect to which no appeal, request for stay, or
petition for rehearing, reconsideration or review by any party or by the
Commission on its motion, is pending, and (c) as to which the time for filing
any such appeal, request, petition, or similar document for the reconsideration
or review by the Commission on its own motion under the express provisions of
the Communications Act of 1934 and the rules and regulations of the Commission,
has expired (or if any such appeal, request, petition or similar document has
been filed, a Commission order has been upheld in a proceeding pursuant thereto
and no additional review or reconsideration may be sought).
7.2 Conditions Precedent to the Obligations of the Seller. The
Seller's obligation to consummate the sale under this agreement is subject to
the fulfillment, at or prior to the closing, of each of the following conditions
(any of which may be waived in writing by the Seller):
(a) all representations and warranties of the Buyer under
this agreement shall be true at and as of the time of the closing with the same
effect as though those representations and warranties had been made at and as of
that time, with such exceptions as do not in the aggregate have a material
adverse effect on the ability of the Buyer to consummate the transactions
contemplated by this agreement;
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(b) the Buyer shall have performed and complied in all
material respects with all obligations, covenants and conditions required by
this agreement to be performed or complied with by it prior to or at the
closing;
(c) the Commission shall have given all requisite approvals
and consents, without any condition or qualification materially adverse to the
Seller, to the assignment of the FCC Licenses to the Buyer and the acquisition
or control of the Stations by the Buyer as provided in this agreement and such
approvals shall have become a Final Order;
(d) all applicable waiting periods under the HSR Act with
respect to the transactions contemplated by this agreement shall have expired or
been terminated;
(e) there shall not be in effect an injunction or
restraining order issued by a court of competent jurisdiction in an action or
proceeding against the consummation of the transactions contemplated by this
agreement; and
(f) the Seller shall have been furnished with a certificate
of an officer of the Buyer, dated the Closing Date, in form and substance
satisfactory to the Seller, certifying to the fulfillment of the conditions set
forth in sections 7.2(a) and (b).
8. Transactions at the Closing.
---------------------------
8.1 Documents to be Delivered by the Seller. At the closing, the
Seller shall deliver to the Buyer the following:
(a) such bills of sale, assignments or other instruments of
transfer and assignment, all in form and substance reasonably satisfactory to
Buyer and its counsel, as shall be effective to vest in Buyer title to the
Assets in accordance with section 4.4;
(b) an opinion of Proskauer Rose LLP, counsel to the
Seller, dated the Closing Date, in substantially the form of exhibit 8.1(b);
(c) an opinion of Wiley, Rein & Fielding, Commission
counsel to the Seller, dated the Closing Date, in substantially the form of
exhibit 8.1(c);
(d) the certificate referred to in section 7.1(g); and
(e) copies of all consents and approvals received pursuant
to section 6.5.
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8.2 Documents to be Delivered by the Buyer. At the closing, the
Buyer shall deliver to the Seller the following:
(a) wire transfer of funds in the amount provided in
section 2.2(b);
(b) instruments, in form and substance reasonably
satisfactory to the Seller and its counsel, pursuant to which the Buyer shall
assume the obligations of the Seller to be assumed by the Buyer pursuant to
section 2.1(b);
(c) an opinion of Paul, Weiss, Rifkin, Wharton & Garrison
LLP, counsel to the Buyer, dated the Closing Date, in substantially the form of
exhibit 8.2(c); and
(d) the certificate referred to in section 7.2(f).
9. Survival of Representations and Warranties; Indemnification.
-----------------------------------------------------------
9.1 Survival. All representations, warranties, covenants and
agreements of the Seller and the Buyer contained in this agreement shall survive
the Closing Date. Neither party shall, however, have any liability for
misrepresentation or breach of warranty, covenant or agreement hereunder except
to the extent that notice of a claim is asserted in writing and delivered to the
other party not later than December 31, 2000. Any notice of a claim for
misrepresentation or breach of warranty, covenant or agreement shall state
specifically the representation or warranty, covenant or agreement with respect
to which the claim is made, the facts giving rise to an alleged basis for the
claim, and the amount of liability asserted against the other party by reason of
the claim.
9.2 Indemnification.
---------------
(a) Subject to sections 9.1 and 9.3, the Seller shall
indemnify and hold harmless the Buyer against all loss, liability, damage or
expense (including reasonable fees and expenses of counsel) (together,
"Losses"), that the Buyer may suffer, sustain or become subject to as a result
of (i) any misrepresentation by the Seller or any breach by the Seller of any
warranty, (ii) any breach of any covenant or other agreement contained in this
agreement, (iii) the failure by the Seller to pay, perform or discharge when due
any Excluded Liability or any other
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obligations, liabilities, agreements or commitments of the Seller not assumed by
the Buyer pursuant to this agreement and (iv) any matters identified on schedule
4.18.
(b) Subject to section 9.1, the Buyer shall indemnify and
hold harmless the Seller against all Losses that the Seller may suffer, sustain
or become subject to as a result of (i) any misrepresentation by the Buyer or
any breach by the Buyer of any warranty, covenant or other agreement contained
in this agreement, and (ii) the failure by Buyer to pay, perform or discharge
any of the obligations assumed by Buyer under section 2.1(b).
(c) If any claim is made against the Buyer that, if
sustained, would give rise to a liability of the Seller under this agreement, or
otherwise, the Buyer promptly shall cause notice of the claim to be delivered to
the Seller and shall afford the Seller and its counsel, at the Seller's expense,
the opportunity to defend or settle the claim. If such notice and opportunity
are not given, or if the claim is settled without the Seller's consent, the
Seller shall not have any liability to the Buyer with respect to the claim. The
Buyer shall cooperate with the Seller in the defense of the claim and may, at
its own expense, participate in the defense, but complete control of the defense
shall remain with the Seller.
9.3 Limitation on Liability. Notwithstanding anything to the
contrary in this agreement;
(a) the Seller shall not be liable under section 9.2(a)(i)
to the Buyer for misrepresentation or breach of warranty except to the extent
that the aggregate amount of loss, liability, damage and expense incurred as a
result of all such misrepresentations and breaches of warranty exceeds the sum
of $250,000;
(b) the aggregate liability of the Seller to the Buyer for
indemnification or otherwise under this agreement shall be limited solely to the
Indemnity Escrow Amount. No such limitation under this section 9.3 or otherwise
in this agreement shall be applicable to liability of the Seller for breach of
its obligations under sections 2.4, 4.1, 4.2, and 4.22 hereof, it being
understood that Buyer may at its option proceed directly against Seller (without
recourse to the Indemnity Escrow Agreement) for any breach by Seller of such
representations and covenants; and
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(c) the Buyer shall have no other recourse against the
Seller or its partners with respect to such indemnity obligations or otherwise
arising under this agreement.
10. Termination.
-----------
10.1 Termination. Except with respect to provisions that
expressly survive termination, this agreement may be terminated:
(a) by written agreement of the Buyer and the Seller;
(b) by the Buyer or the Seller, by notice to the other, if
at any time prior to the Closing Date any event shall have occurred or any state
of facts shall exist that renders any of the conditions to its obligations as
provided in this agreement incapable of fulfillment;
(c) by the Buyer as provided in sections 6.10, 11 or 12; or
(d) by the Buyer or the Seller, by notice to the other, if
the Commission designates for a hearing the application for Commission consent
contemplated by this agreement.
10.2 Liability. The termination of this agreement under section
10.1(b), (c) or (d) shall not relieve any party of any liability for breach of
this agreement prior to the date of termination.
11. Risk of Loss. The risk of loss or damage to any of the Assets
shall be on the Seller prior to the closing and thereafter shall be on the
Buyer. If any Asset is damaged or destroyed prior to the Closing Date (any such
event being referred to as an "Event of Loss"), the Seller shall immediately
notify Buyer in writing of the Event of Loss. The notice shall specify with
particularity the loss or damage incurred, the cause of the Event of Loss, if
known or reasonably ascertainable, and the applicable insurance coverage. If the
Seller elects to repair, replace or restore the Asset and the Asset so damaged
or destroyed cannot be completely repaired, replaced or restored by the
scheduled date of the closing but can be accomplished within 45 days after that
date, the date of the closing shall be postponed for up to that 45-day period to
allow the Seller an opportunity to repair, replace or restore the Asset. If the
Seller does not elect to repair, replace or restore the Asset or if the repair,
replacement or restoration cannot be accomplished within that 45-day period, the
Buyer may elect, by written notice to the Seller
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<PAGE>
within 20 days after the Buyer has received notice that an Event of Loss has
occurred or that the repair, replacement or restoration cannot be so completed:
(a) to close the transaction on the scheduled date of the
closing and accept the damaged Asset as is (in which event Seller shall assign
to Buyer all rights under any insurance claim covering the loss and pay over to
the Buyer any proceeds under any such insurance policy theretofore received by
Seller with respect thereto to the extent not applied to replace or repair the
damaged Asset); or
(b) to terminate this agreement without liability, in which
event the Escrow Agent shall return Seller's Deposit Amount to the Buyer.
If the date of the closing is postponed beyond the time specified
in section 3.2, the parties shall seek the consent of the Commission as
necessary to permit the transaction contemplated by this agreement to close.
12. Interruption of Broadcast Transmissions. Notwithstanding any
other provision hereof, if prior to the closing any event occurs which prevents
the broadcast transmission by either Station with substantially full licensed
power and antenna height as described in the application FCC Licenses and in the
manner it has heretofore been operating for periods of time in excess of eight
(8) hours, the Seller will give prompt written notice thereof to Buyer. If such
facilities are not restored so that the operation is resumed with substantially
full licensed power within five (5) days of such event, or, in the case of more
than one event, the aggregate number of days preceding such restorations from
all such events is more than eight (8) days, or if either Station is off the air
more than five (5) times for a period in each case exceeding eight (8) hours,
Buyer shall have the right, by giving written notice to Seller of its election
to do so, to terminate this agreement.
13. Miscellaneous.
-------------
13.1 Notices. Any notice or other communication under this
agreement shall be in writing and shall be considered given when delivered
personally or when mailed by registered mail, return receipt requested, to the
parties at the addresses set forth below (or at such other address as a party
may specify by notice to the other):
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to the Buyer, to it at:
c/o Frank D. Osborn
64 Hemlock Hill Road
New Canaan, CT 06840
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, NY 10019
Attention: Robert M. Hirsh, Esq.
if to Seller, to it at:
350 Park Avenue
16th Floor
New York, New York 10022
Attention: Elizabeth McNeyYates
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: Lawrence H. Budish, Esq.
13.2 Brokers. Each of the Buyer and the Seller represents and
warrants to the other that it has not retained or dealt with any broker or
finder in connection with the transactions contemplated by this agreement,
except that the Seller has retained and shall pay the fees payable to
Communications Equity Associates pursuant to a separate agreement between the
Seller and Communications Equity Associates.
13.3 Entire Agreement. This agreement, including the schedules
and exhibits, contains a complete statement of all the arrangements between the
parties with respect to its subject matter, supersedes any previous agreement
between them relating to that subject matter, and cannot be changed or
terminated orally. Except as specifically set forth in this agreement, there are
no representations or warranties by either party in connection with the
transactions contemplated by this agreement.
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13.4 Headings. The section headings of this agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this agree ment.
13.5 Governing Law. This agreement shall be governed by and
construed in accordance with the law of the State of New York applicable to
agreements made and to be performed in New York.
13.6 Separability. If any provision of this agreement is invalid
or unenforceable, the balance of this agreement shall remain in effect.
13.7 Termination of Agreement. If after the date of this
agreement the Buyer (or an affiliate of the Buyer) enters into an agreement for
the acquisition of any other radio station and if either (x) approval of the
sale of the Stations pursuant to this agreement has not been received from the
Commission prior to October 31, 1999 for any reason unrelated to the Seller or
the Seller's operations of the Stations, or (y) all applicable waiting periods
under the HSR Act shall not have expired or been terminated on or before 120
days following the date of the filings under the HSR Act contemplated by the
first sentence of section 6.1(b), then, in either such case, unless the failure
of such event to have occurred is the result of a breach by Seller of its
obligations under section 6.1 of this agreement, the Buyer shall promptly
terminate (or cause its affiliate to terminate) its agreement to acquire any
such other radio station located in Connecticut or which Seller reasonably
determines is delaying FCC or FTC or DOJ approval. If the Buyer closed the
acquisition of any such station, Buyer shall agree to take any actions that the
Commission or the DOJ and FTC may require to approve the sale of the Stations
pursuant to this agreement, including, but not limited to, holding any such
station in trust, divesting of any such station or operating any such station in
any manner that the Commission or the DOJ and FTC may require.
13.8 Assignment. No party may assign any of its rights or
delegate any of its duties under this agreement without the consent of the
other, except that Buyer may assign Buyer's right hereunder to have the FCC
Licenses assigned to Buyer to an affiliate of Buyer that is a wholly owned
entity or entity otherwise controlled by Buyer; provided however that such
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<PAGE>
assignment shall not delay the Commission consent to the assignment of the FCC
Licenses or the closing.
13.9 Publicity. Except as required by applicable law, no party
shall issue any press release or other public statement regarding the
transactions contemplated by this agreement without consulting with the other.
13.10 Jurisdiction. The courts of the State of New York in New
York County and the United States District Court for the Southern District of
New York shall have jurisdiction over the parties with respect to any dispute or
controversy between them arising under or in connection with this agreement and,
by execution and delivery of this agreement, each of the parties to this
agreement submits to the jurisdiction of those courts, including, but not
limited to, the in personam and subject matter jurisdiction of those courts,
waives any objection to such jurisdiction on the grounds of venue or forum non
conveniens, the absence of in personam or subject matter jurisdiction and any
similar grounds, consents to service of process by mail (in accordance with
section 13.1) or any other manner permitted by law, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this agreement. These
consents to jurisdiction shall not be deemed to confer rights on any person
other than the parties to this agreement.
13.11 Specific Performance. Seller acknowledges that the Assets
being transferred hereunder are of a special, unique and extraordinary
character, and that any breach of this agreement by Seller could not be
compensated for by damages, and Seller therefore confirms and agrees that
Buyer's right to specific performance is essential to protect the rights of
Buyer hereunder. Accordingly, if Seller breaches its obligations under this
agreement, the Buyer shall be entitled, in addition to any other remedies that
it may have, subject to obtaining any necessary approval of the Commission, to
enforcement of this agreement by a decree of specific performance requiring
Seller to fulfill its obligations under this agreement.
13.12 Counterparts. This agreement may be executed in any number
of counterparts, which together shall constitute one and the same instrument.
[END OF TEXT- SIGNATURE PAGES FOLLOW]
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SHADOW COMMUNICATIONS, LLC
By: /s/ Frank D. Osborn
---------------------------------------------
Name: Frank D. Osborn
Title: Authorized Person
ML MEDIA PARTNERS. L.P.
By: Media Management Partners, its general partner
By: RP Media Management, its general partner
By: IMP Media Management, Inc., its general partner
By: /s/ Elizabeth McNey Yates
---------------------------------------------
Elizabeth McNey Yates
Vice President
40
