<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported):
October 16, 1996
COMMODORE MEDIA, INC.
(Exact name of Registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
33-92732 13-3034720
(Commission File No.) (I.R.S. Employer
Identification No.)
500 Fifth Avenue, Suite 3000, New York, New York 10110
(Address of Principal Executive Offices) (Zip Code)
(212) 302-2727
(Registrant's telephone number, including area code)
not applicable
(Former Name of Former Address, if Changed Since Last Report)
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<PAGE> 2
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
====================================================================================
NAME STATE OR OTHER PRIMARY IRS EMPLOYER
JURISDICTION OF STANDARD IDENTIFICATION
INCORPORATION INDUSTRIAL NUMBER
CLASSIFICATION
NUMBER
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Commodore Media of Delaware 4832 51-0286804
Delaware, Inc.
- ------------------------------------------------------------------------------------
Commodore Media of Delaware 4832 61-0997863
Kentucky, Inc.
- ------------------------------------------------------------------------------------
Commodore Media of Delaware 4832 23-2207457
Pennsylvania, Inc.
- ------------------------------------------------------------------------------------
Commodore Media of Delaware 4832 06-1277523
Norwalk, Inc.
- ------------------------------------------------------------------------------------
Commodore Media of Delaware 4832 59-2813110
Florida, Inc.
- ------------------------------------------------------------------------------------
Commodore Media of Delaware 4832 13-3356485
Westchester, Inc.
- ------------------------------------------------------------------------------------
Commodore Holdings, Inc. Delaware 4832 13-3858506
- ------------------------------------------------------------------------------------
Danbury Broadcasting, Inc. Connecticut 4832 13-3653113
====================================================================================
</TABLE>
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ITEM 1. CHANGES IN CONTROL OF REGISTRANT.
(a) On October 16, 1996, CMI Acquisition Company, Inc., a wholly-owned
subsidiary of Captstar Broadcasting Partners, Inc., merged (the "Merger") with
and into Commodore Media, Inc. (the "Registrant"). As a result of the Merger,
the Registrant became a wholly-owned subsidiary of Capstar Broadcasting
Partners, Inc. ("Capstar"), an indirectly majority-owned subsidiary of Hicks,
Muse, Tate & Furst Equity Fund III, L.P. The holders of (i) Class A Common
Stock, par value $.01 per share, of the Registrant, (ii) Class B Common Stock,
par value $.01 per share, of the Registrant, (iii) Senior Exchangeable
Redeemable Preferred Stock, Series A, par value $.01 per share, of the
Registrant, (iv) employee stock options pursuant to the Registrant's 1995 Stock
Option Plan, and (v) warrants to acquire Class A Common Stock, received
consideration in the Merger totaling approximately $111 million. The terms of
the Merger were previously reported in the Registrant's Current Report on Form
8-K dated June 21, 1996 (File No. 033-92732), which is incorporated herein by
reference.
The principal sources of funds used by Capstar to acquire the
Registrant were (i) approximately $76 million of cash on hand and (ii) $35
million of cash from borrowings under the Senior Credit Agreement dated as of
October 16, 1996, among Capstar and Bankers Trust Company (the "Senior Credit
Agreement"). The Senior Credit Agreement consists of a term loan facility in the
amount of $30 million (the "Tranche A Term Loan") and a second term loan
facility in the amount of $5 million (the "Tranche B Term Loan," and
collectively with the Tranche A Term Loan, the "Term Loans"). The Tranche A Term
Loan bears interest at the London Interbank Offer Rate ("LIBOR") plus 6.50% per
annum, which spread over applicable LIBOR increases by 0.50% per annum for every
quarter the Tranche A Term Loan remains outstanding, payable at maturity or
redemption. The Tranche B Term Loan bears interest at the prime lending rate of
Bankers Trust Company plus 1% per annum, payable at maturity or redemption. The
Term Loans mature on the earlier to occur of July 16, 1997, or the consummation
of certain pending acquisitions of Capstar.
Upon the effectiveness of the Merger, Bruce A. Friedman, Daniel H.
Stern and Susan L. Burden resigned as directors of the Registrant (the
"Company") and were replaced by Eric C. Neuman, R. Steven Hicks and Thomas
Hicks.
As a result of the Merger, on October 25, 1996 the Registrant commenced
an offer to purchase (the "Purchase Offer") the outstanding 13.25% Senior
Subordinated Notes due 2003 at a purchase price equal to 101% of their accreted
value, plus any
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accrued and unpaid interest. Funds for the Purchase Offer are expected to be
provided by an equity contribution from Capstar. The source of funds for
Capstar's equity contribution is expected to be a bank loan made to Capstar.
There can be no assurance that Capstar will be able to arrange such financing
or, if Capstar is able to arrange such financing, the terms will be similar to
that of the Senior Credit Agreement. The Purchase Offer expires at 5:00 p.m.,
New York City time, on November 27, 1996.
(b) The Registrant knows of no arrangements the operation of which may
at a subsequent date result in a change in control of the Registrant.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
(a) On October 16, 1996, the Registrant, through its subsidiary
Commodore Media of Kentucky, Inc. ("CMK"), acquired from (i) Adventure
Communications, Inc., a West Virginia corporation ("Adventure"), substantially
all the assets used or useful in the operation of radio stations WKEE(FM) and
WKEE(AM) in Huntington, West Virginia, WZZW(AM), Milton, West Virginia, WBVB(FM)
in Coal Grove, Ohio and WIKO(AM) in Ironton, Ohio (collectively, the "Adventure
Stations") and (ii) Simmons Broadcasting Company, a South Carolina corporation
("Simmons"), substantially all the assets used or useful in the operation of
radio stations WFXN(FM) in Milton, West Virginia and WMLV(FM) in Ironton, Ohio
(collectively, the Simmons Stations"). Also, on such date CMK entered into a
Local Marketing Agreement to operate station WHRD(AM) in Huntington, West
Virginia with Simmons and acquired an option to purchase such station from
Simmons.
The assets acquired from Adventure and the assets acquired
from Simmons consisted of, among other things, FCC licenses, transmitting
antennae, transmitters and other broadcasting and technical equipment, technical
information and data and certain real property.
The aggregate purchase price for the assets acquired from
Adventure was approximately $11,465,000 and the purchase price for the assets
acquired from Simmons was approximately $535,000. The purchase price for each of
the acquisitions was calculated upon arms length negotiations considering (i)
the estimated potential annual broadcast cash flow of the stations acquired,
(ii) the existing quality and potential quality of the stations' broadcast
signals and transmission facilities and (iii) the markets in which the stations
are located.
The principal sources of funds used to acquire the assets
described above were (i) borrowings under the $35 million senior secured credit
facility made available by AT&T Commercial Finance Corporation to Commodore
Holdings, Inc., the owner of all the issued and outstanding stock of CMK and a
wholly-owned subsidiary of the Registrant, and (ii) an equity contribution from
the Registrant which amount was contributed to the Registrant by Capstar.
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(b) The assets acquired by CMK from Adventure and the assets acquired
by CMK from Simmons were used in the radio broadcast businesses of the Adventure
Stations and the Simmons Stations, respectively. CMK intends to continue such
uses of the acquired assets.
ITEM 5. OTHER EVENTS.
On September 26, 1996, the Registrant through its subsidiary Commodore
Media of Florida, Inc., entered into an Asset Purchase Agreement to purchase
radio station WOSN-FM, Indian River Shores, Florida from Indian River Shores
Partners, L.C. for approximately $1,600,000.
ITEM 7. FINANCIAL STATEMENTS, PROFORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
It is impracticable to provide the financial information required under
Item 7(a) as of the required filing date of this Form 8-K. Such required
financial information will be filed under cover of Form 8-K/A as soon as
available and in no event later than December 31, 1996.
(b) Pro Forma Financial Information.
It is impracticable to provide the pro forma financial information
required under Item 7(b) as of the required filing date of this Form 8-K. Such
required pro forma financial information will be filed under cover of Form 8-K/A
as soon as available and in no event later than December 31, 1996.
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(c) Exhibits.
Exhibit
Number Exhibit Title
- ------- -------------
10.75 Amendment No. 1, dated as of September 3, 1996, to the
Agreement and Plan of Merger (the "Merger Agreement") by and
among CMI Acquisition Company, Inc., the Company and the
stockholders and other signatories thereto dated as of June
21, 1996.
10.76 Amendment No. 2 dated as of October 16, 1996 to the Merger
Agreement.
10.77 Amended and Restated Employment Agreement dated October 16,
1996 between the Company and James T, Shea, Jr.
10.78 Amendment No. 1, dated October 15, 1996, to the Asset Purchase
Agreement, dated as of April 8, 1996, between Simmons
Broadcasting Company ("Simmons") and Commodore Media of
Kentucky, Inc. ("Commodore-Kentucky").
10.79 Amendment No. 1, dated October 15, 1996, to the Contingent
Sale and Assignment of Options dated as of April 8, 1996
between Commodore-Kentucky and Simmons.
10.80 Irrevocable and Exclusive Option Agreement dated as of October
16, 1996 between Simmons and Commodore-Kentucky.
10.81 Local Marketing Agreement dated October 16, 1996 between
Simmons and Commodore-Kentucky regarding WHRD-AM.
99.1 Press Release issued on October 4, 1996 regarding acquisition
of WOSN-FM.
99.2 Press Release issued on October 16, 1996 regarding the Merger.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: October 31, 1996
COMMODORE MEDIA, INC.
(Registrant)
By: /s/ James T. Shea, Jr.
-----------------------------
James T. Shea, Jr.
President
By: /s/ James J. Sullivan
-----------------------------
James J. Sullivan
Chief Financial Officer
(principal financial
and accounting officer)
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<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Additional Registrants have duly caused this report to be signed on their
behalf by the undersigned hereunto duly authorized.
Dated: October 31, 1996
Commodore Media of Delaware, Inc.,
a Delaware corporation
Commodore Media of Kentucky, Inc.,
a Delaware corporation
Commodore Media of Pennsylvania, Inc.,
a Delaware corporation
Commodore Media of Norwalk, Inc.,
a Delaware corporation
Commodore Media of Florida, Inc.,
a Delaware corporation
Commodore Media of Westchester, Inc.,
a Delaware corporation
Commodore Holdings, Inc.,
a Delaware corporation
Danbury Broadcasting, Inc.,
a Connecticut corporation
By: /s/ James T. Shea, Jr.
-----------------------------
James T. Shea, Jr.
President
By: /s/ James J. Sullivan
-----------------------------
James J. Sullivan
Chief Financial Officer
(principal financial and
accounting officer)
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Exhibit Index
<TABLE>
<CAPTION>
Sequentially
Exhibit Numbered
Number Exhibit Title Page
- ------- ------------- ------------
<S> <C> <C>
10.75 Amendment No. 1, dated as of September 3,
1996, to the Agreement and Plan of Merger
(the "Merger Agreement") by and among CMI
Acquisition Company, Inc., the Company and
the stockholders and other signatories
thereto dated as of June 21, 1996.
10.76 Amendment No. 2 dated as of October 16, 1996
to the Merger Agreement.
10.77 Amended and Restated Employment Agreement
dated October 16, 1996 between the Company
and James T, Shea, Jr.
10.78 Amendment No. 1, dated October 15, 1996, to
the Asset Purchase Agreement, dated as of
April 8, 1996, between Simmons Broadcasting
Company ("Simmons") and Commodore Media of
Kentucky, Inc. ("Commodore-Kentucky").
10.79 Amendment No. 1, dated October 15, 1996, to
the Contingent Sale and Assignment of
Options dated as of April 8, 1996 between
Commodore-Kentucky and Simmons.
10.80 Irrevocable and Exclusive Option Agreement
dated as of October 16, 1996 between Simmons
and Commodore-Kentucky.
10.81 Local Marketing Agreement dated October 16,
1996 between Simmons and Commodore-Kentucky
regarding WHRD-AM.
99.1 Press Release issued on October 4, 1996
regarding acquisition of WOSN-FM.
99.2 Press Release issued on October 16, 1996
regarding the Merger.
</TABLE>
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<PAGE> 1
EXHIBIT 10.75
Amendment No. 1, dated as of September 3, 1996,
to the Agreement and Plan of Merger by and among
CMI Acquisition Company, Inc., Commodore
Media, Inc. and the stockholders and other
signatories thereto dated as of June 21, 1996.
<PAGE> 2
FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT (the "First Amendment") to the Agreement and Plan
of Merger (the "Merger Agreement") dated as of June 21, 1996, by and among CMI
Acquisition Company, Inc. ("Mergco"), Commodore Media, Inc. ("Commodore"), and
the stockholders and other signatories named therein, is entered into as of
September 3, 1996, by and among Mergeco, Commodore, Bruce A. Friedman, as the
indemnitor representative (the "Indemnitor Representative"), and Hicks, Muse,
Tate & Furst Equity Fund III, L.P. ("Fund III").
RECITALS:
WHEREAS, Mergeco, pursuant to the terms and subject to the conditions
of the Merger Agreement and in accordance with the General Corporation Law of
the State of Delaware, will merge with and into Commodore;
WHEREAS, the parties to the Merger Agreement desire to amend the
Merger Agreement as provided herein; and
WHEREAS, any capitalized term used herein, and not otherwise defined
herein, shall have the meaning set forth in the Merger Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing and the agreements
herein contained, the parties hereto covenant and agree as follows:
1. Schedule 3.1(f) to the Merger Agreement is hereby amended by
deleting the radio broadcast station WHRD (AM), Huntington, West Virginia, and
the respective description of the pending FCC application therefor, from the
section entitled "Pending Applications as of 6/1/96."
2. The defined term "Huntington Acquisition," as such term is
defined in Section 4.1(i) of the Merger Agreement, shall not include the radio
broadcast station WHRD (AM), Huntington, West Virginia.
3. Section 6.2 of the Merger Agreement is hereby amended and
restated to read as follows:
6.2 Commitment Letter. Mergeco shall deliver to Commodore
(i) on or before September 9, 1996, a binding commitment letter or
binding commitment letters from Fund III and/or one or more other
financing sources to provide financing in an amount of $70 million and
(ii) on or before September 17, 1996, a binding commitment letter or
binding commitment letters from Fund III and/or one or more other
financing sources to provide additional financing in an amount of $40
million,
<PAGE> 3
in each case to provide Mergeco a portion of the funds necessary to
enable Mergeco to consummate the transactions contemplated hereby.
Fund III shall at such time(s) have subscription commitments for
unallocated capital equal to at least its committed amount and
there shall be no restrictions on Fund III's ability to call such
capital.
4. Except as herein specifically amended, the Merger Agreement
shall continue in full force and effect in accordance with its terms.
[Remainder of page intentionally left blank]
2
<PAGE> 4
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
MERGECO:
CMI ACQUISITION COMPANY, INC.
/s/ Eric C. Neuman
---------------------------------------
By: Eric C. Neuman
Its: President
COMMODORE:
COMMODORE MEDIA, INC.
/s/ Bruce A. Friedman
---------------------------------------------
By: Bruce A. Friedman
Its: President and Chief Executive Officer
INDEMNITOR REPRESENTATIVE:
/s/ Bruce A. Friedman
-----------------------------------------------
Bruce A. Friedman, as Indemnitor Representative
FUND III:
HICKS, MUSE, TATE & FURST EQUITY FUND III, L.P.
By: HMG/GP Partners, L.P.,
its General Partner
By: Hicks, Muse GP Partners III, L.P.,
its General Partner
By: Hicks, Muse Fund III Incorporated,
its General Partner
/s/ Lawrence D. Stuart, Jr.
---------------------------------
By: Lawrence D. Stuart, Jr.
Its: Executive Vice President
3
<PAGE> 1
EXHIBIT 10.76
Amendment No. 2, dated as of October 16, 1996, to
the Agreement and Plan of Merger by and among
CMI Acquisition Company, Inc., the Commodore
Media, Inc. and the stockholders and other
signatories thereto dated as of June 21, 1996.
<PAGE> 2
SECOND AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER
THIS SECOND AMENDMENT (the "Second Amendment") to the Agreement and
Plan of Merger dated as of June 21, 1996, by and among CMI Acquisition Company,
Inc. ("Mergeco"), Commodore Media, Inc. ("Commodore"), and the stockholders and
other signatories named therein, as amended on September 3, 1996 (the "Merger
Agreement"), is entered into as of October 16, 1996, by and among Mergeco,
Commodore and Bruce A. Friedman, as the indemnitor representative (the
"Indemnitor Representative").
RECITALS:
WHEREAS, Mergeco, pursuant to the terms and subject to the conditions
of the Merger Agreement, and in accordance with the General Corporation Law of
the State of Delaware, will merge with and into Commodore;
WHEREAS, the parties to the Merger Agreement desire to amend the Merger
Agreement as provided herein pursuant to Section 11.5 of the Merger Agreement;
and
WHEREAS, any capitalized term used herein, and not otherwise defined
herein, shall have the meaning set forth in the Merger Agreement.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing and the agreements
herein contained, the parties hereto covenant and agree as follows:
1. Section 1.5 of the Merger Agreement is hereby amended and
restated to read in its entirety to read as follows:
1.5 Directors and Officers. The directors of Mergeco
immediately prior to the Effective Time shall be the directors of
the Surviving Corporation at the Effective Time, each to hold office
in accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation, and the officers of Mergeco immediately prior to
the Effective Time shall be the officers of the Surviving Corporation
at the Effective Time until their respective successors are duly elected
or appointed and qualified.
2. Subsection 1.6(i) is hereby added to the Merger Agreement to
read as follows:
(i) Notwithstanding any other provision of this Section 1.6,
the aggregate Merger Consideration and/or Option Consideration payable
to the Indemnitors (as defined in Section 1.12) shall be reduced by
$175,000 (the "Reduction Amount"). The Reduction Amount shall be
allocated among the Indemnitors as set forth in Schedule I to this
Second Amendment.
3. Subsection 1.9(a) is hereby amended by deleting the reference
to "$4,000,000" and substitution "$3,825,000" in its place.
<PAGE> 3
4. Section 1.12 of the Merger Agreement is hereby amended by
deleting the last sentence and substituting the following sentence in its
place:
The parties hereto agree that the Indemnification Deductible (as
defined in the Indemnification Escrow Agreement) shall equal $600,000.
5. Section 3.1(g) of the Merger Agreement is hereby amended by
adding the following sentence after the last sentence of Section 3.1(g):
On October 11, 1996, the FCC dismissed the Petition for Reconsideration
filed by Henry J. Bruen on October 4, 1996.
6. Subsections 5.7(a) and (b) of the Merger Agreement are hereby
amended and restated to read as follows:
(a) James T. Shea, Jr., James J. Sullivan, Scott Bacherman, Jay
Sterin, Charles DiToro, Judy Jennings, Hank Kestenbaum, Patia Gaugh,
Sharon Chambers, Rich Lewis, and Marc Berman, collectively, shall invest
at least $1.0 million in the New Parent (as hereinafter defined) by
purchase of 1,000,000 shares of common stock, par value $0.01 per share
("New Parent Common Stock"), of the New Parent, at a price equal to
$1.00 per share. The issuance of shares of New Parent Common Stock to
each of Charles DiToro, Hank Kestenbaum, Patia Gaugh, Sharon Chambers
and Jay Sterin is conditioned upon each such member of management
entering into a Subscription Agreement in substantially the form
attached hereto as Exhibit A, the satisfaction of the terms and
conditions set forth in such Subscription Agreement, and the New Parent
obtaining all approvals and making all filings that are necessary or
appropriate, in the judgment of the New Parent, under applicable federal
and state securities laws for the issuance of such shares of New Parent
Common Stock. The issuance of shares of New Parent Common Stock to each
of James T. Shea, James J. Sullivan, Judy Jennings, Rich Lewis, Scott
Bacherman and Marc Berman is conditioned upon each such member of
management entering into a Subscription Agreement in substantially the
form attached hereto as Exhibit B, the satisfaction of the terms and
conditions set forth in such Subscription Agreement, and the New Parent
obtaining all approvals and making all filings that are necessary or
appropriate, in the judgment of the New Parent, under applicable federal
and state securities laws for the issuance of such shares of New Parent
Common Stock.
(b) The New Parent shall issue an option to each of the persons
set forth on Schedule II attached hereto, either on the Closing Date or
on or before the 15th business day after the Closing Date (in the case
of the options to be issued on before the 15th business day after the
Closing Date, such issuance shall be conditioned on, among other things,
the equity investment by such person of the amount set forth in the form
of Subscription Agreement attached hereto as Exhibit B), to purchase the
number of shares of New Parent Common Stock set forth beside such
person's name at an exercise price equal to $1.00 per share pursuant to
the terms and conditions of the New Parent 1996 Stock Option Plan and
the option agreements which such person shall be obligated to enter into
as a condition to receiving such option.
2
<PAGE> 4
7. Commodore has provided written notice to Mergeco of a pending
claim (the "Coleman Claim") filed by Jeffrey Coleman on October 7, 1996, with
the Connecticut Commission on Human Rights and Opportunities against Commodore
Media of Norwalk, a subsidiary of Commodore. The parties hereto acknowledge and
agree that notice of the Coleman Claim and the consummation of the Merger
and the other transactions contemplated by the Merger Agreement does not
constitute a waiver of the Surviving Corporation's right to indemnification
for any Damages (as such term is defined in the Indemnification Escrow
Agreement) arising out of, relating to, or in connection with the Coleman
Claim pursuant to the terms and conditions of the Merger Agreement and the
Indemnification Escrow Agreement.
8. Except as herein specifically amended, the Merger Agreement
shall continue in full force and effect in accordance with its terms.
[Remainder of page intentionally left blank]
3
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
MERGECO:
CMI ACQUISITION COMPANY, INC.
-----------------------------------------
By: Eric C. Neuman
Its: President
COMMODORE:
COMMODORE MEDIA, INC.
/s/ Bruce A. Friedman
----------------------------------------------
By: Bruce A. Friedman
Its: President and Chief Executive Officer
INDEMNITOR REPRESENTATIVE:
/s/ Bruce A. Friedman
-----------------------------------------------
Bruce A. Friedman, as Indemnitor Representative
<PAGE> 6
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
MERGECO:
CMI ACQUISITION COMPANY, INC.
/s/ Eric C. Neuman
----------------------------------
By: Eric C. Neuman
Its: President
COMMODORE:
COMMODORE MEDIA, INC.
---------------------------------
By: Bruce A. Friedman
Its: President and Chief Executive Officer
INDEMNITOR REPRESENTATIVE:
---------------------------------
Bruce A. Friedman, as Indemnitor Representative
<PAGE> 1
EXHIBIT 10.77
Amended and Restated Employment Agreement
dated October 16, 1996 between Commodore Media, Inc.
and James T. Shea,Jr.
<PAGE> 2
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "Agreement"),
dated as of October 16, 1996, is made by and among Commodore Media, Inc., a
Delaware corporation, (the "Company"), Capstar Broadcasting Partners, Inc., and
Mr. James T. Shea, Jr. (the "Executive").
WHEREAS, effective as of October 16, 1996 ("Closing Date") and pursuant
to a Plan and Agreement of Merger dated as of June 21, 1996, entered into by and
among CMI Acquisition Company, Inc., the Company and certain designated
shareholders (the "Merger Agreement"), CMI Acquisition Company, Inc. has been
merged into the Company which now continues as the surviving corporation;
WHEREAS, effective as of the Closing Date and pursuant to the Merger
Agreement, Capstar Broadcasting Partners, Inc. has acquired a controlling
interest in the Company and hereby enters into this Agreement for the sole
purpose of confirming to the Executive that Capstar Broadcasting Partners, Inc.
agrees to cause the Company to abide by the terms and conditions of this
Agreement;
WHEREAS, prior to the Closing Date, the Executive has served as the
Chief Operating Officer of the Company pursuant to the terms of the Employment
Agreement dated as of March 23, 1992, as amended on May 31, 1994, and as amended
and restated April 21, 1995 ("Prior Agreement"), and the Executive has acquired
special and unique knowledge, abilities and expertise with respect to the
business of the Company;
WHEREAS, since the Company desires to continue to employ the Executive
after the Closing Date and for the Executive to serve as the President of the
Company, the parties hereto deem it necessary and desirable to amend and restate
the Prior Agreement to memorialize the terms and conditions of the Executive's
employment with the Company after the Closing Date.
NOW THEREFORE, in consideration of the promises and mutual covenants
and agreements set forth herein and for other good and valuable consideration,
the adequacy of which are hereby acknowledged, the parties agree to the
following:
1. Definitions.
"Annual Base Salary" shall mean the annual salary payable to
Executive pursuant to Section 5.1 hereof from time to time in effect during the
Term of Employment.
"Annual Incentive" shall have the meaning set forth in Section
5.2(a)
<PAGE> 3
hereof.
"Board" shall mean the Board of Directors of the Company.
"Cause" means (i) the commission by Executive of a felony,
fraud, embezzlement or an act of serious, criminal moral turpitude which, in
case of any of the foregoing, is reasonably likely to cause material harm to the
business of the Company or any Company Affiliate, (ii) the commission of an act
by Executive constituting material financial dishonesty against the Company or
any Company Affiliate, (iii) the repeated refusal by Executive to use his
reasonable and diligent efforts to follow the lawful and reasonable directives
(in light of the terms of this Agreement) of the Board with respect to a matter
or matters within the control of Executive, provided that, if such breach
described in this clause (iii) is curable, Executive will, subject to the
following proviso, be given written notice ( a "default notice") of such breach
and will be given an opportunity to cure such breach to the reasonable
satisfaction of the Board with thirty (30) days of receipt of such written
notice, and provided further that Executive will only be entitled to cure two
such defaults during the Term of Employment, or (iv) Executive's willful gross
neglect in carrying out his duties and responsibilities under this Agreement,
provided that, if such breach described in this clause (iv) is not likely to
have a material adverse effect on the Company and its Subsidiaries, taken as a
whole, Executive will, subject to the following proviso, be given a default
notice of such breach and will be given an opportunity to cure such breach to
the reasonable satisfaction of the Board within thirty (30) days of receipt of
such written notice, and provided, further, that Executive will only be entitled
to cure two such defaults during the Term of Employment.
"Code" shall mean the Internal Revenue Code of 1986, as
amended.
"Commencement Date" shall have the meaning set forth in
Section 3 hereof.
"Company Affiliate" shall mean any Person directly or
indirectly controlling, controlled by, or under common control with, the
Company.
"Confidential Information" shall have the meaning set forth in
Section 7 hereof.
"Date of Termination" shall mean the earlier of (a) the date
of termination, if any, specified in the Notice of Termination (which date shall
not be earlier than the date of receipt of such Notice of Termination ) or (b)
the date on which Executive's employment under its Agreement actually
terminates.
"Disability" shall mean Executive's inability to perform his
duties and responsibilities under this Agreement for a period of more than 180
days in any twelve month period during the Term of Employment due to physical or
mental incapacity or impairment. A determination of Disability will be made by a
physician satisfactory to
2
<PAGE> 4
both Executive (or his personal representative) and the Company; provided that
if Executive (or such representative) and the Company cannot agree as to a
physician, then each will select a physician and such physicians shall together
select a third physician, whose determination as to Disability shall be
completed within ten (10) days of the date on which the disagreement between
Executive (or such representative) and the Company arose and the decision of
such third physician will be final and binding on Executive and the Company.
Executive (or his personal representative) and the Company shall have the right
to present to such physician such information and arguments as each deems
appropriate, including the opinion of other physicians.
"Effective Date" shall mean the Closing Date.
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof and on a basis consistent with such
principles applied in the preparation of the Company's financial statements.
"Good Reason" shall be deemed to exist if, without the express
written consent of Executive, (a) Executive's rate of Annual Base Salary (as
provided in Section 5.1 of this Agreement) is reduced, (b) Executive suffers a
substantial reduction in his title, duties and responsibilities; provided,
however, that Good Reason shall not be deemed to exist if the Company employs
any person to fulfill Executive's duties hereunder during the 180-day period
referred to in the definition "Disability," (c) Executive is required to provide
services to the Company on a regular basis at a location outside the geographic
area described in Section 5.8 hereof, (d) the Company fails to pay any amount in
excess of $1,000 due to Executive hereunder within thirty (30) days of written
notice from Executive, or (e) the Company breaches in any material respect of
any of its material obligations pursuant to this Agreement (other than a payment
obligation covered by (d) above), provided that if such breach described in this
clause (e) is curable, the Company will, subject to the following proviso, be
given written notice of such breach and will be given an opportunity to cure
such breach to the reasonable satisfaction of Executive within thirty (30 ) days
of receipt of such written notice, and provided further that the Company will
only be entitled to cure two such breaches during the Term of Employment.
"Noncompete Period" shall have the meaning set forth in
Section 8(a) hereof.
"Notice of Termination" shall have the meaning set forth in
Section 6.4 hereof.
"Person" shall mean any natural or legal person including any
individual, partnership, joint venture, corporation, association, joint stock
company, limited liability company, trust, unincorporated organization or
government or any department or agency or political subdivision thereof.
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"Prior Agreement" shall have the meaning set forth in the
recitals hereof.
"Subsidiary" shall mean, with respect to any Person, a
corporation of which the securities having a majority of the voting power in
electing directors are, at the time of determination, owned by such Person,
directly or through one or more Subsidiaries.
"Term of Employment" shall have the meaning set forth in
Section 3 hereof.
2. Employment. During the Term of Employment, subject to the terms and
provisions set forth in this Agreement, the Company shall employ the Executive
as the President and Chief Executive Officer of the Company, and Executive
hereby accepts such employment.
3. Term of Employment. The term of employment under this Agreement
shall commence as of the Effective Date (the "Commencement Date") and, unless
earlier terminated by the Company or Executive under Section 6 of this
Agreement, shall continue until April 30, 1999 (the "Term of Employment").
Notwithstanding the foregoing, the Company and Executive may mutually agree to
extend the term of this Agreement, in which event all references herein to April
30, 1999 shall be replaced with such mutually agreed upon extended date.
4. Positions, Responsibilities and Duties.
4.1 Duties. During the Term of Employment, the Executive, as
President and Chief Executive Officer of the Company, shall report to Steven
Hicks and shall be responsible, subject to the direction of the Board, for the
day-to-day operations of the Company and for such other duties and functions as
may be directed from time to time by the Board; provided that such duties and
functions are reasonable and customary for a President and Chief Executive
Officer of a corporation engaged in the same industry as the Company and do not
materially extend the scope of the Executive's regular duties.
4.2 Attention to Duties and Responsibilities. During the Term
of Employment, Executive shall devote substantially all of his business time to
the business and affairs of the Company and shall use his best efforts and
ability to perform faithfully and efficiently his duties and responsibilities;
provided, however, that Executive shall be allowed, to the extent that such
activities do not interfere in any material respect with the performance by
Executive of his duties and responsibilities under this Agreement and do not
otherwise involve a material amount of his time, (i) to manage his personal
affairs and to serve on the boards of directors, advisory boards or committees
of, or otherwise participate in, civic or charitable organizations, trade
associations or not-for-profit corporations, (ii) with the prior written
approval of the Board, serve on the board of directors, advisory board or
committee of any for-profit corporation, and (iii) to write for publications or
speak publicly.
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5. Compensation and Related Matters.
5.1 Annual Base Salary. During the Term of Employment, as
compensation for the services to be provided by Executive under this Agreement,
the Company shall pay Executive an Annual Base Salary of Two Hundred Sixty Two
Thousand Five Hundred Dollars ($262,500), which shall be increased (but not
decreased) at the commencement of each calendar year by an amount which shall
not be less than (but, in the sole discretion of the Board, may be more than)
five percent (5%) of the Annual Base Salary in effect immediately prior to such
increase. The Annual Base Salary shall be payable in equal installments every
two weeks.
5.2 Annual Incentive.
(a) Calculation of Annual Incentive. Subject to
Section 6 hereof, Executive shall be entitled to receive an annual incentive
payment (the "Annual Incentive") for each year or portion thereof during the
Term of Employment. For each calendar year or portion thereof during the Term of
Employment ending after December 31, 1995, the Annual Incentive percentages,
targets, limits and other factors shall be determined in good faith by the Board
(after consultation with the Executive) to provide the Executive with a
reasonable opportunity no less favorable to the Executive to earn a reasonable
amount, no less than One Hundred Fifty Thousand Dollars ($150,000.00), the
amount that had been available as the Annual Incentive for the period ending
December 31, 1995. The Executive shall make a proposal to the Board of such
percentages, targets, limits and other factors no later than fifteen (15) days
after the commencement of the calendar year or portion thereof to which they
will relate, and the Board, in consultation with the Executive, shall determine
and adopt such percentages, targets, limits and other factors as it deems
advisable and notify Executive of the same no later than forty-five (45) days
after such commencement. If Executive and the Company are unable to agree on the
Annual Incentive percentages, targets, limits and/or other factors, the dispute
between the parties shall be submitted to arbitration in accordance with Section
10 hereof.
(b) Payment of Annual Incentive. The Annual Incentive
shall be due and payable by the Company as follows:
(i) On October 15 of each calendar year
commencing on October 15, 1996, the Company shall
make a good faith estimate of the Annual Incentive to
be paid to Executive in respect of such calendar year
(or portion thereof) and shall provide Executive with
a written copy thereof, together with such supporting
information as executive may reasonably request. The
Company shall, with fifteen (15) days thereof, pay to
Executive an amount in cash equal to one-third of
such estimate.
(ii) On January 15 of each calendar year
commencing on January 15, 1997, the Company shall
make a good faith
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estimate of the Annual Incentive to be paid to
Executive in respect of the prior calendar year (or
portion thereof) and shall provide Executive with a
written copy thereof, together with such supporting
information as Executive may reasonably request. The
Company shall, within fifteen (15) day thereof, pay
to Executive an amount in cash equal to the
difference between (a) two-thirds of such estimate
and (B) the amount previously paid to Executive
pursuant to clause (i) above.
(iii) Within fifteen (15) days after the
delivery by the Company's accountants to the Company
of the Company's audited financial statements for the
prior calendar year but in any event no later than
April 15 of such calendar year commencing with April
15, 1997, the Company shall finally determine the
total Annual Incentive to be paid to Executive for
the prior calendar year (or portion thereof) and pay
to Executive the remaining portion, if any, of such
Annual Incentive and shall provide Executive with a
written copy of such final determination, together
with such supporting information as Executive may
reasonably request.
The Annual Incentive shall be calculated by the Company's accountants
in accordance wit GAAP. In the event that the payments made under clauses (i)
and (ii) of this Section 5.2(b) are, in aggregate, in excess of the total amount
finally determined under clause (iii) of the Section 5.2(b) to be due to
Executive in respect of the Annual Incentive for a calendar year (or portion
thereof), Executive shall repay such excess to the Company within thirty (30)
days of such notice. If Executive fails to repay such excess in full within such
thirty-day period, in addition to any other remedy that may be available to the
Company by law or under this Agreement, the Company shall have the right to
withhold any payments due to Executive hereunder in an amount up to, and to
offset such withheld payments against, such excess.
5.3 Retirement and Savings Plan. During the Term of
Employment, Executive shall be entitled to participate in all pension,
retirement, savings and other employee benefit plans and programs, if any,
generally applicable to employees or available to executives of the Company in
accordance with the terms of such plans and programs.
5.4 Welfare Benefit Plans. During the Term of Employment,
Executive, Executive's spouse, if any, and the Executive's eligible dependents,
if any, shall be entitled top participate in and be covered by all welfare
benefit plans and programs, if any, generally applicable to employees or
available to executives of the Company in accordance with the terms of such
plans and programs.
5.5 Expense Reimbursement. During the Term of Employment, the
Executive shall be entitled to receive reimbursement for all reasonable expenses
incurred
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by the Executive in performing his duties and responsibilities hereunder in
accordance with the policies and procedures of the Company as in effect at the
time the expense was incurred, as the same may be changed prospectively from
time to time.
5.6 Vacation Benefits. During the Term of Employment,
Executive shall be entitled to four weeks paid vacation annually at such times
which do not materially interfere with the operations of the Company.
5.7 Car Allowance. During the Term of Employment, the Company
shall pay the lease payments with respect to an automobile leased by Executive
in amount not to exceed $600 per month and shall reimburse Executive for any and
all of his reasonable expenses in respect of such automobile including but not
limited to insurance costs.
5.8 Geographic Location. Executive's services are now rendered
and, during the Term of Employment, shall continue to be rendered hereunder
primarily in (a) New York City, (b) at any location between Manhattan and lower
Fairfield County (including lower Fairfield County), (c) Allentown,
Pennsylvania, or (d) such other location mutually agreed to by the Company and
Executive.
5.9 Life Insurance. As of the Effective Date, the Company
shall obtain or continue the life insurance policy obtained by the Company prior
to the Merger under the Prior Agreement, until the earlier to occur of (i) April
21, 2005 or (ii) the death of Executive, and the Company shall maintain and pay
all premiums payable under, a ten-year term life insurance policy on Executive's
life with a nationally recognized and reputable carrier of insurance reasonably
acceptable to Executive for the benefit of the Company which policy provides (a)
that such carrier of insurance shall provide the Company and Executive with
thirty (30) days prior written notice of any cancellation of such policy and (b)
subject to the proviso immediately below, Six Hundred Fifty Thousand Dollars
($650,000) of life insurance; provided, however, that in no event shall the
Company be required to pay annual premiums in excess of One Thousand Dollars
($1,000) for any such life insurance policy. The Company's obligation under this
Section 5.9 shall survive any termination of Executive's employment under this
Agreement and the termination of this Agreement regardless of the circumstances
of such termination.
5.10 Option Plan. On and after the Effective Date, the
Executive shall participate in the Capstar Broadcasting Partners, Inc. 1996
Stock Option Plan, in substantially the form attached hereto as Exhibit A, (the
"Option Plan") and, in connection therewith, the Executive shall be granted, as
soon as practicable after execution of this Agreement, options under the Option
Plan to purchase an aggregate of 549,500 shares of common stock, par value $.01
per share, of Capstar Broadcasting Partners, Inc. at an exercise price of $1.00
per share, with the grant of such options to be memorialized in written option
grant agreements, in substantially the forms attached hereto as Exhibit B. The
options granted to the Executive under this Section 5.10 shall be
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subject to the terms and conditions of the Option Plan and the written option
grant agreements memorializing the grant of such options to the Executive
thereunder.
6. Termination. Executive's employment hereunder shall terminate
automatically on April 30, 1999. Executive's employment hereunder may be
terminated prior to April 30, 1999 under the following circumstances:
6.1 Termination Due Death, Disability, Without Cause or for
Good Reason.
(a) Upon sixty (60) days' prior written notice to
Executive, the Company may terminate Executive's employment under this Agreement
without Cause.
(b) Upon thirty (30) days' prior written notice to
the Board, Executive may terminate his employment under this Agreement for Good
Reason and such notification shall specify the act, or acts, on the basis of
which Executive has found Good Reason. The Board shall then be provided the
opportunity, within twenty (20) days of its receipt of such notification, to
meet with Executive to discuss such act or acts. If Executive does not rescind
his termination of employment at such meeting, Executive's employment by the
Company shall be terminated for Good Reason pursuant to this Section 6.1(b),
subject to the Company's right to seek arbitration of the existence of Good
Reason as provided in Section 11 of this Agreement.
(c) In the event of Executive's death, or a
termination of Executive's employment under this Agreement by either the Company
or Executive due to Disability, or a termination by the Company of Executive's
employment under this Agreement without Cause, or a termination by Executive of
Executive's employment under this Agreement for Good Reason, the Term of
Employment shall end and, notwithstanding Section 5 hereof, Executive, his
estate or other legal representative, as the case may be, shall only be entitled
to:
(i) the continuation of the Annual Base
Salary at the rate then in effect (as provided in Section 5.1 of this
Agreement) on the Date of Termination for a period equal to (A) if the
Date of Termination occurs after the April 21, 1998 but prior to April
30, 1999, a twelve month period commencing on such Date of Termination
or (B) if the Date of Termination occurs prior to April 21, 1998, the
lesser of (x) a twenty-four month period commencing on such Date of
Termination and (y) the period commencing on such Date of Termination
and ending on April 30, 1999;
(ii) the pro rata amount of Annual Incentive
due for the calendar year (or portion thereof) in which the Date of
Termination occurs (based upon the number of days elapsed in such
calendar year or portion thereof prior to
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such Date of Termination);
(iii) any Annual Base Salary accrued to
the Date of Termination and any Annual Incentive relating to a prior
year (or portion thereof) due in accordance with this Agreement, but
not yet paid as of the Date of Termination;
(iv) reimbursement for all expenses
reimbursable under Section 5.5 and 5.7 of this Agreement incurred as of
the Date of Termination, but not yet paid as of the Date of
Termination;
(v) except to the extent inapplicable due to
Executive's death, the continuation of Executive's welfare benefits (as
described in Section 5.4 of this Agreement) at the level in effect on
the Date of Termination for a period equal to (A) if the Date of
Termination occurs after April 21, 1998 but prior to April 30, 1999, a
twelve month period commencing on such Date of Termination or (B) if
the Date of Termination occurs prior to April 21, 1998, the lesser of
(x) a twenty-four month period commencing on such Date of Termination
and (y) the period commencing on such Date of Termination and ending on
April 30, 1999 (or, to the extent that such continuation is not
permitted by applicable law or if the Board so determines, the Company
shall provide the economic equivalent in lieu thereof);
(vi) except to the extent inapplicable due
to Executive's death, any other compensation and benefits as may be
provided in accordance with the terms and provisions of any applicable
plans and programs, if any, generally applicable to employees or
available to executives of the Company;
(vii) except to the extent inapplicable due
to Executive's death, the continuation of the life insurance policy
pursuant to Section 5.9 of this Agreement; and
(viii) such rights as Executive may have
under any other written agreement between the Company and the Executive
which is currently in effect.
The amounts owed under Section 6.1(c)(i) shall be payable in equal installments
every two weeks from the Date of Termination through the end of the period with
respect to which such payments are to be made under Section 6.1(c)(i). Any
amounts owed under Section 6.1(c)(ii) shall be determined and payable in
accordance with Section 5.2. The amounts owed under Section 6.1(c)(iii) shall be
paid within fifteen (15) days of the Date of Termination, and the amounts owed
under Section 6.1(c)(iv) shall be paid in accordance with the policies and
procedures of the Company in effect at the time the applicable expenses were
incurred. Any amounts owed under Sections 6.1(c)(v) and (vi) shall be payable in
accordance with the terms of the applicable plans and programs. Any amounts owed
under Section 6.1(c)(ix) shall be payable in accordance with the respective
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terms of the written agreements referred to therein.
6.2 Termination by the Company for Cause or the Termination of
Employment by Executive without Good Reason.
(a) The Company may terminate the Executive for Cause. In each
case, the existence of Cause must be confirmed by the Board prior to any
termination therefor. In the event of such a confirmation, the Company shall
notify Executive that the Company intends to terminate Executive's employment
for Cause under this Section 6.2. Such notification shall specify the act, or
acts, on the basis of which the Board has so confirmed the existence of Cause,
and Executive shall then be provided the opportunity together at the option of
Executive with counsel selected by Executive, not less than seven(7) or more
than thirty (30) days after his receipt of such notification, to meet with the
Board to discuss such act or acts. If the Board does not rescind such
confirmation at such meeting, Executive's employment by the Company shall
immediately be terminated for Cause under this Section 6.2, subject to
Executive's right to seek arbitration of the existence of Cause as provided in
Section 11 of this Agreement, provided that if in any such arbitration
proceeding, the arbitration determines that Cause did not exist, Executives'
employment shall be deemed to be terminated without Cause as of the date the
Company attempted to terminate Executive for Cause.
(b) In the event that the Company terminates Executive's
employment under this Agreement for Cause, or Executive terminates his
employment with the Company without Good Reason, the Term of Employment shall
end and, notwithstanding Section 5 hereof, Executive shall only be entitled to:
(i) any Annual Base Salary accrued to the Date of
Termination and any Annual Incentive relating to a prior year (or
portion thereof) due in accordance with this Agreement, but not yet
paid as of the Date of Termination;
(ii) reimbursement for all expenses reimbursable
under Sections 5.5 and 5.7 of this Agreement incurred as of the Date of
Termination, but not yet paid as of the Date of Termination;
(iii) any other compensation then due and owing and
benefits under a benefit plan or program through the Date of
Termination as may be provided in accordance with terms and provisions
of any applicable plans and programs, if any, generally applicable to
employees or available to executives of the Company (including claims
for benefits arising prior to the Date of Termination that are payable
in accordance with the terms and provisions of the applicable plan or
program, regardless of whether such claims have been submitted as of
the Date of Termination);
(iv) except to the extent inapplicable due to
Executive's death, the continuation of the life insurance policy
pursuant to Section 5.9 of this
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Agreement; and
(v) such rights as Executive may have under any other written
agreement between the Company and the Executive which is currently in
effect.
The amounts owed under Section 6.2(b)(i) shall be paid within fifteen (15) days
of the Date of Termination, and the amounts owed under section 6.2(b)(ii) shall
be paid in accordance with the policies and procedures of the Company in effect
at the time the applicable expenses were incurred. Any amount owed under Section
6.2(b)(iii) shall be payable in accordance with the terms of the applicable
plans and programs. Any amounts owed under Section 6.2(b)(v) shall be payable in
accordance with the respective terms of the written agreement referred to
therein.
6.3 No Mitigation; No Offset. In the event of any termination
of employment under this Section 6, Executive shall be under no obligation to
seek other employment and there shall be no offset against any amounts due
Executive under this Agreement on account of any remuneration attributable to
any subsequent employment that Executive may obtain. Any amounts due under this
Section 6 are in the nature of severance payments, or liquidated damages, or
both, and are not in the nature of penalty.
6.4 Notice of Termination. Any termination of Executive's
employment under this Section 6 (other than a termination on April 30, 1999 or
termination was a result of Executive's death) shall be communicated by a notice
of termination (the "Notice of Termination") to the other party hereto given in
accordance with Section 12.3 of this Agreement. Such Notice of Termination shall
(a) indicate the specific termination provision in this Agreement relied upon,
(b) set froth in reasonable detail the facts and circumstances claimed to
provide basis for termination of Executive's employment under the provision so
indicated, and (c) if the termination date is other than the date of receipt of
such Notice of Termination, specify the date on which Executive's employment is
to be terminated (which date shall not be earlier than the date on which such
Notice of Termination is actually received).
7. Confidential Information. Executive acknowledges that the
confidential information obtained by him while employed by the Company
concerning the business or affairs of the Company, any Company Affiliate, or any
stockholder of the Company ("Confidential Information") is the property of the
Company, such Company Affiliate, or such stockholder, as the case may be. For
purposes of this Agreement, the term "Confidential Information" does not include
information that Executive can demonstrate (a) was in Executive's possession
prior to first being employed by the Company, provided that such information is
not known by Executive to be subject to another confidentiality agreement with,
or other obligation of secrecy to, the Company or another party, (b) is
generally available to the public and became generally available to the public
other than as a result of a disclosure by Executive in violation of this
Agreement, (c) became available to Executive on a non-confidential basis from a
third party, provided that such third party is not known by Executive to be
bound by a confidentiality
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agreement with, or other obligation of secrecy to, the Company or another party
or is otherwise prohibited from providing such information to Executive by a
contractual, legal or fiduciary obligation to the Company , or (d) Executive is
required to disclose pursuant to applicable law or regulation (as to which
information, Executive will provide the Company with prior notice of such
requirement and, if practicable, an opportunity to obtain an appropriate
protective order). Executive agrees that he will not during the Term of
Employment and for the two-year period following the Term of Employment,
willfully disclose Confidential Information to any Person (other than employees
of the Company or any Subsidiary thereof or any other person expressly
authorized by the Board to receive Confidential Information or otherwise as
required in the course of his duties during the Term of Employment) or use for
his own account any Confidential Information without the prior written consent
of the Board; provided, however, that Executive may disclose Confidential
Information in connection with the resolution of any dispute arising in
connection with the rights and obligations under this Agreement or any other
agreements entered into by the parties in connection with the transactions
contemplated by the Merger Agreement to the arbitrator in an arbitration
proceeding pursuant to Section 10 upon receipt of appropriate assurances that
the arbitrator and the other persons involved in such proceeding shall maintain
the confidentiality of all such Confidential Information. Executive shall
deliver to the Company at such time as the Board may request in writing, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) containing Confidential Information
which he may then possess or have under his control.
8. Noncompete, Non-Solicitation.
(a) Executive acknowledges that in the course of his
employment with the Company he will become familiar with Confidential
Information and that his services will be special unique and extraordinary value
to the Company. Therefore, Executive agrees that, during the Term of Employment
and, for (i) two years thereafter, or (ii) if Executive's employment is
terminated without Cause or Executive resigns for Good Reason, for one year
thereafter, provided that all amounts in excess of $1,000 required to be paid to
Executive under this Agreement are promptly paid when due in accordance with
this Agreement (in any case, the "Noncompete Period"), he shall not directly or
indirectly own, manage, control, participate in, consult with, render services
for, or in any manner engage in any broadcast radio business competing with the
businesses of the Company or any of its Subsidiaries in any geographic market
(as defined by Arbitron Metro) in which the Company or any of its Subsidiaries
(x) operates on the Date of the Termination or (y) commences operations during
the Noncompete Period and in either case continues to operate during the
Noncompete Period; provided, however, that for purposes of this clause (y)
operations in a market shall be deemed to be commenced during the Noncompete
Period only if the Company or such Subsidiary have had substantial discussions
prior to the Date of Termination concerning the commencement of such operations.
Nothing herein shall prohibit Executive from being a passive owner of not more
than seven and one-half percent (7-1/2%) of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in
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the business of such corporation.
(b) During the Noncompete Period, Executive shall not directly
or indirectly through another person (i) induce or attempt to induce any
employee of the Company or any Subsidiary of the Company to leave the employ of
such Person, or in any way interfere with the employment relationship between
the Company or any Subsidiary of the Company and any employee thereof, (ii) hire
any individual who was an executive of the Company or its Subsidiaries, a
station or regional manager of the Company or its Subsidiaries or a radio
personality employed by the Company or its Subsidiaries at any time during the
Term of Employment (other than individuals who have not been employed by the
Company or a Subsidiary of the Company for a period of at least six months prior
to employment by Executive directly or indirectly through another Person), or
(iii) induce or attempt to induce any customer, supplier, licensee or other
Person having a business relationship with the Company or any Subsidiary of the
Company to cease doing business with the Company or such Subsidiary of the
Company, or interfere materially with the relationship between any such
customer, supplier, licensee or other Person having a business relationship with
the Company or and Subsidiary of the Company.
(c) If, at the time of enforcement of this Section 8, a court
shall hold that the duration, scope or area restrictions stated herein are
unreasonable under circumstances then existing, the parties agree that the
maximum duration, scope or area reasonable under such circumstances shall be
substituted for the stated duration, scope or area held to be unreasonable and
that the court shall be allowed to revise the restrictions contained herein and
held to be unreasonable to cover the maximum period, scope and area permitted by
law.
9. Non-Exclusivity of Rights. Nothing in this Agreement shall limit or
otherwise prejudice such rights as Executive may have under any future
agreements with the Company.
10. Resolution of Disputes. Any disputes arising under or in connection
with this Agreement shall be resolved by arbitration, to be held in New York,
New York, in accordance with the Commercial Arbitration Rules and procedures of
the American Arbitration Association. Such arbitration shall be before a single
arbitrator who shall be a retired federal or New York State judge acceptable to
the Company and Executive. In the event that Executive and the Company cannot
agree upon an arbitrator within thirty (30) days of a notice demanding such
agreement from one to the other, the arbitrator shall be chosen by the American
Arbitration Association in accordance with its Commercial Arbitration Rules. The
decision of the arbitrator shall be final, conclusive and binding upon the
Company and Executive. All costs, fees and expenses, including attorney fees, of
any arbitration in connection with this Agreement, which results in any final
decision of the arbitrator requiring the Company to make a payment to Executive,
shall be borne by, and be the obligation of, the Company. In no event shall
Executive be required to reimburse the Company for any of the costs and expenses
incurred by the Company
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relating to any arbitration. The obligations of the Company and Executive under
this Section 11 shall survive the termination for any reason of the Term of
Employment (whether such termination is by the Company, by Executive, or upon
the expiration of the Term of Employment). Pending the outcome or resolution of
any arbitration in connection with this Agreement other than a dispute relating
to Executive's termination for Cause, the Company shall continue payment of all
amounts, payments and benefits which are due to Executive under this Agreement;
provided that in the event that the decision rendered by the arbitrator
indicates that Executive was not entitled to continue to receive all or any
portion of such amounts, payments and benefits, Executive shall immediately
reimburse the Company for the same; and provided further, that in the event the
decision rendered by the arbitrator indicates that Executive was wrongfully
terminated for Cause, the Company will pay Executive all amounts Executive is
entitled to receive under Section 6.1(c).
11. Successors.
11.1 Executive. This Agreement is personal to Executive and,
without the prior express written consent of the Company, shall not be
assignable by Executive, except that the Executive's rights to receive any
compensation or benefits under this Agreement may be transferred or assigned
pursuant to testamentary disposition, intestate succession or pursuant to a
qualified domestic relations order. This Agreement shall inure to the benefit of
and be enforceable by Executive's heirs, beneficiaries and/or legal
representatives.
11.2 The Company. This Agreement shall inure to the benefit of
and be binding upon the Company and its successors and assigns; provided that
the Company shall only assign this Agreement to a purchaser of substantially all
of the business of the Company, which purchaser shall agree to assume all of the
Company's obligations hereunder.
12. Miscellaneous.
12.1 Applicable Law. The construction, validity and
interpretations of this Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12.2 Amendments/Waiver. This Agreement may not be amended or
modified other than by written agreement executed by the parties hereto or their
respective successors and legal representatives. No waiver by any party to this
Agreement of any breach of any term, provision or condition of this Agreement by
the other party shall be deemed a waiver of a similar or dissimilar term,
provision or condition at the same time, or any prior or subsequent time.
12.3 Notices. All notices, waivers and other communications
hereunder shall be in writing and shall be given by hand-delivery to the other
party, by facsimile
14
<PAGE> 16
(with appropriate confirmation of transmission and with a hard copy to promptly
follow by registered or certified mail, return receipt request, postage
prepaid), by reputable overnight courier, or by registered or certified mail,
return receipt requested, postage prepaid, and shall be deemed delivered when
actually delivered by hand, upon receipt of confirmation of facsimile
transmission, three days after mailing, or one day after dispatch by overnight
courier, addressed as follows:
If to Executive:
Mr. James T. Shea, Jr.
3755 Foxrun Drive
Allentown, Pennsylvania 18103
Telephone (610) 439-4110
If to the Company:
Attn: Chairman of the Board
Commodore Media, Inc.
500 Fifth Avenue, Suite 3000
New York, New York 10110
Facsimile: (212) 302-6457
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
12.4 Withholding. Notwithstanding anything else to the
contrary herein, the Company may withhold from any amounts payable under this
Agreement such taxes as shall be required to be withheld pursuant to any
applicable law or regulation. Where amounts are payable to Executive pursuant to
this Agreement both in cash and in a form other than cash, the Company may, at
its option and upon prior notice to Executive, withhold from such cash payments,
or withhold from such payments in a form other than cash, or withhold from both.
12.5 Expenses. The Company shall promptly reimburse Executive
for the reasonable attorney's fees of and expenses payable to the law firm of
Dewey Ballantine for its representation of Executive in connection with the
negotiation and preparation of this Agreement, and the other agreements
contemplated in connection with the Merger contemplated hereby and thereby,
against delivery of an invoice for such fees and expenses.
12.6 Severability. If any provision of this Agreement is held
illegal, invalid or unenforceable under nay present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby: (a) such provision will be fully
severable; (b) this Agreement will be construed
its
15
<PAGE> 17
and enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by severance herefrom; and (d) in lieu of such
illegal, invalid or unenforceable provision, there will be added, to the extent
possible, automatically as a part of this Agreement a legal, valid and
enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as shall be agreed upon by the Company and Executive.
12.7 Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
12.8 Entire Agreement. This Agreement contains the entire
agreement between the parties concerning the subject matter hereof and
supersedes all prior agreements (including, without limitation, the Prior
Agreement), understandings, discussions, negotiations and undertakings, whether
written or oral, between the parties with respect thereto.
12.9 Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
12.10 Representation. Executive represents and warrants that
the performance of Executive's duties and obligations under this Agreement will
not violate any agreement between Executive and any other Person.
12.11 Survivorship. The respective rights and obligations of
the parties under this Agreement shall survive any termination of this Agreement
or Executive's employment hereunder for any reason to the extent necessary to
the intended preservation of such rights and obligations
[END OF PAGE]
[SIGNATURE PAGE FOLLOWS]
16
<PAGE> 18
IN WITNESS WHEREOF, Executive has hereunto set his hand, and the
Company has caused this Amended and Restated Employment Agreement to be executed
in its name and on behalf by its authorized representative, all as of the day
and year first above written.
COMMODORE MEDIA, INC.
By: /s/ JAMES J. SULLIVAN
--------------------------
Its: Treasurer
--------------------------
EXECUTIVE
/s/ JAMES T.SHEA, JR.
--------------------------
JAMES T.SHEA, JR.
FOR THE SOLE PURPOSE OF CONFIRMING TO THE EXECUTIVE THAT
CAPSTAR BROADCASTING PARTNERS, INC. AGREES TO CAUSE THE
COMPANY TO ABIDE BY THE TERMS AND CONDITIONS OF THIS
AGREEMENT AS AMENDED AND RESTATED HEREIN.
CAPSTAR BROADCASTING
PARTNERS, INC.
By: /s/ PETER BRODSKY
--------------------------
Its: Vice President
--------------------------
17
<PAGE> 1
EXHIBIT 10.78
Amendment No. 1, dated October 15, 1996, to the Asset Purchase Agreement, dated
as of April 8, 1996, between Simmons Broadcasting Company and Commodore Media Of
Kentucky, Inc.
<PAGE> 2
AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT
This AMENDMENT NO. 1 to the ASSET PURCHASE AGREEMENT, dated as of
October 15, 1996, is by and between SIMMONS BROADCASTING COMPANY, a South
Carolina corporation ("Simmons"), and COMMODORE MEDIA OF KENTUCKY, INC., a
Delaware corporation ("Buyer").
P R E M I S E S:
A. Simmons and Buyer are parties to an Asset Purchase Agreement, dated
as of April 8, 1996 (the "Purchase Agreement") pursuant to which Buyer has
agreed to purchase the operating assets of radio stations WHRD (AM), Huntington,
West Virginia, ("WHRD"); WFXN (FM), Milton, West Virginia ("WFXN") and WMLV
(FM), Ironton, Ohio ("WMLV").
B. Simmons and Buyer have agreed that Simmons will not sell WHRD to
Buyer and that Buyer will not purchase WHRD from Simmons on the Closing Date and
that the assets relating to the operation of WHRD shall be excluded from the
transaction contemplated by the Purchase Agreement.
A G R E E M E N T S:
In consideration of the above premises and the covenants and agreements
contained herein, Buyer and Seller agree as follows:
<PAGE> 3
Section 1. Exclusion of WHRD. Simmons and Buyer agree that all
references to WHRD contained in the Purchase Agreement shall be deleted
therefrom and that the defined term "Stations" in the recitals thereto shall be
amended to delete WHRD and shall only include radio stations WFXN and WMLV.
Section 2. Purchase Price. Simmons and Buyer agree that notwithstanding
the exclusion of WHRD from the Purchase Agreement, the Purchase Price for the
Assets shall remain Five Hundred Thirty- Five Thousand Dollars ($535,000), which
shall be payable to Simmons at the closing on the sale of WFXN to Buyer and
delivered to Simmons in accordance with the terms of the Purchase Agreement.
Section 3. Defined Terms. Any capitalized terms not otherwise defined
herein shall have the meaning ascribed to it in the Purchase Agreement.
Section 4. Effect. Except as specifically modified by this Amendment
No. 1, all other terms and conditions of the Purchase Agreement shall remain in
full force and effect.
Section 5. Counterparts. This Amendment No. 1 may be signed in any
number of counterparts with the same effect as if the signature on each such
counterpart were upon the same instrument.
- 2 -
<PAGE> 4
This Amendment has been executed by Buyer and Simmons as of the date
first above written.
SIMMONS BROADCASTING COMPANY
By: /s/ W. Lee Simmons
------------------------------
W. Lee Simmons
President
COMMODORE MEDIA OF KENTUCKY, INC.
By: /s/ Bruce A. Friedman
------------------------------
Bruce A. Friedman
President
- 3 -
<PAGE> 1
EXHIBIT 10.79
Amendment No. 1, dated October 15, 1996, to the Contingent Sale and
Assignment of Options dated as of April 8, 1996, between Commodore Media of
Kentucky and Simmons Broadcasting Company.
<PAGE> 2
AMENDMENT NO. 1 TO
CONTINGENT SALE AND ASSIGNMENT OF OPTIONS
This AMENDMENT NO. 1 dated October 15, 1996 to the CONTINGENT
SALE AND ASSIGNMENT OF OPTIONS, dated as of April 8, 1996 (the
"Contingent Sale Agreement"), is by and between MICHAEL R. SHOTT
("Shott") and COMMODORE MEDIA OF KENTUCKY, INC. ("Commodore").
WHEREAS, Commodore and Shott desire to amend the Contingent Sale
Agreement as provided herein.
NOW, THEREFORE, in consideration of the above premises and the
agreements and covenants set forth below, the parties, intending to be legally
bound, agree as follows:
Section 1. WHRD Option. The first sentence of Section 5 of the
Contingent Sale Agreement is amended to add at the end thereof the following:
"; provided, however, if a closing occurs for the sale of WFXN and not
WHRD, Shott agrees that both the WFXN Option and the WHRD Option shall
nevertheless be assigned to Commodore and all of Shott's rights to such
options shall be assigned to Commodore pursuant to the terms hereof,
provided that Commodore delivers to Shott the full consideration of
$2,958,00.00 in accordance with Section 3 of the Contingent Sale
Agreement at the closing on the sale of WFXN to Commodore."
Section 2. Defined Terms. Any capitalized term not otherwise defined
herein shall have the meaning ascribed to it in the Contingent Sale Agreement.
Section 3. Effect. Except as specifically modified by this Amendment
No. 1, all other terms and conditions of the Contingent Sale Agreement shall
remain in full force and effect.
<PAGE> 3
Section 4. Counterparts. This Amendment No. 1 may be signed
in any number of counterparts with the same effect as if the
signature on each such counterpart were upon the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
/s/ Michael R. Shott
-------------------------------
Michael R. Shott
COMMODORE MEDIA OF KENTUCKY, INC.
By: /s/ Bruce A. Friedman
-------------------------------
Bruce A. Friedman
President
This Amendment No. 1 is hereby
acknowledged and agreed to by:
SIMMONS BROADCASTING COMPANY
By: /s/ W. Lee Simmons
-------------------------------
W. Lee Simmons
President
- 2 -
<PAGE> 1
EXHIBIT 10.80
Irrevocable and Exclusive Option Agreement dated as of October 16, 1996, between
Simmons Broadcasting Company and Commodore Media Of Kentucky, Inc.
<PAGE> 2
IRREVOCABLE AND EXCLUSIVE OPTION AGREEMENT
For good and adequate consideration, the receipt and sufficiency of
which is hereby acknowledged, Simmons Broadcasting Company ("Simmons") hereby
grants to Commodore Media of Kentucky, Inc. a Delaware corporation
("Commodore"), and to its nominees, successors and assigns, on this 16th day of
October, 1996, an irrevocable and exclusive option (the "Option") to purchase
the operating assets of radio station WHRD(AM), Huntington, West Virginia (the
"Station").
1. Cancellation and Replacement of Original Option. Simmons and
Commodore acknowledge and agree that the Irrevocable and Exclusive Option
Agreement, dated as of February 6th, 1995 between Simmons and Michael R. Shott,
which was assigned to Commodore on the date hereof is canceled and replaced in
its entirety by this Agreement.
2. Effective Date and Option Term. The Option shall become effective on
the date on which Simmons closes on the sale of radio stations WFXN(FM) and
WMLV(FM) to Commodore (the "Effective Date") and shall remain in effect for a
period of four (4) years from the Effective Date.
3. Option Price. The option price for the purchase of the Station's
assets shall be Five Thousand Dollars ($5,000), payable in cash at the closing
on the purchase of the Station (the
<PAGE> 3
"Closing"). Upon receipt by Simmons of written notice of the exercise of the
Option, the parties shall proceed to negotiate expeditiously and in good faith a
definitive asset purchase agreement that shall contain such terms, conditions
and covenants as are (i) customary and normal in agreements for the purchase and
sale of radio broadcast station assets, and (ii) consistent with and with terms
that are no more onerous or burdensome to either party than those contained in
the Asset Purchase Agreement between Simmons and Commodore dated as of April 8,
1996.
4. Exercise of Option. Commodore shall deliver written notice of the
exercise of the Option to Simmons in accordance with the notice provisions of
Section 6.1 hereof. Notwithstanding any other provision of this Agreement, the
exercise of the Option may only be made if, at the time of the exercise,
Commodore or its successor or assign, is qualified in accordance with the rules
and regulations of the FCC then in effect to be the licensee of the Station.
5. Covenants of Simmons. Simmons covenants that it will not take any
action, including the execution of any agreement or contract, that would
preclude or impair the exercise or assignment of the Option by Commodore.
Simmons shall use its commercially best efforts to preserve the business and
operations of the Station, and to maintain the FCC licenses and authorizations
for the Station, and will not enter into any agreement or contract that is
inconsistent with the provisions of
- 2 -
<PAGE> 4
this Agreement and the rights granted to Commodore hereunder. On the Effective
Date, Simmons shall enter into a Local Marketing Agreement with Buyer in
accordance with the parties' negotiations concerning such agreement.
6.1 Notices. Any notice required under this Agreement shall be in
writing and shall be deemed to have been duly delivered on the date of personal
delivery, or on the date of receipt if mailed by registered or certified mail,
postage prepaid and return receipt requested, or on the date of receipt if sent
by established overnight courier service, to the following addresses:
To Commodore: Mr. James J. Sullivan
Chief Financial Officer
Commodore Media of Kentucky, Inc.
c/o Commodore Media, Inc.
500 Fifth Avenue, Suite 3000
New York, NY 10110
To Simmons: Mr. W. Lee Simmons, President
Simmons Broadcasting Company
44 Bow Circle, Suite B
Hilton Head Island, SC 29928
or to any other additional persons and addresses as the parties may from time to
time designate in a writing delivered in accordance with this Section 6.1.
6.2 Governing Law. This Agreement shall be governed, construed, and
enforced in accordance with the laws of, and the forum for the judicial
resolution of any dispute arising under this Agreement shall be the State of
West Virginia.
- 3 -
<PAGE> 5
6.3 Headings. The headings herein are included for ease of reference
only and shall not control or affect the meaning or construction of the
provisions of this Agreement.
6.4 Entire Agreement. This Agreement, the Local Marketing Agreement
between the parties dated as of the date hereof relating to the Station and all
Schedules and Exhibits hereto or thereto, and all documents and certificates to
be delivered by the parties pursuant hereto or thereto, collectively represent
the entire understanding and agreement of the parties with respect to the
subject matter hereof. This Agreement supersedes and replaces the Irrevocable
and Exclusive Option Agreement dated as of February __, 1995 between Simmons and
Michael R. Shott which was assigned to Commodore on the date hereof and all
prior negotiations between the parties concerning the subject matter hereof and
cannot be amended, supplemented or modified except by an agreement in writing
which makes specific reference to this Agreement or an agreement delivered
pursuant hereto, as the case may be, and which is signed by the party against
whom enforcement of any such amendment, supplement or modification is sought.
6.5 Assignment. This Agreement is binding upon the successors and
assigns of the parties. Simmons may not assign this Agreement. Commodore may
assign the Agreement without the consent of Simmons.
6.6 Severability. If any provision of this Agreement is declared
unlawful by any competent governmental authority, the
- 4 -
<PAGE> 6
remainder of this Agreement shall remain in effect with the offending
provision(s) deleted; provided, however, that this Agreement shall terminate if
deletion of this unlawful provision would preclude fulfillment of the basic
intent of the parties.
6.7 Remedies. In the event of a breach of or default under this
Agreement by Simmons, Commodore shall have the right to seek specific
performance in a court of competent jurisdiction to enforce its rights
hereunder. Simmons agrees that the rights granted Commodore hereunder are
unique, and that an adequate remedy for damages is not available.
6.8 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.
[signatures on the following page]
- 5 -
<PAGE> 7
IN WITNESS WHEREOF, this Agreement has been executed by Commodore and
Simmons as of the date first above written.
COMMODORE MEDIA OF KENTUCKY, INC.
By: /s/ James J. Sullivan
--------------------------------
James J. Sullivan,
Chief Financial Officer
SIMMONS BROADCASTING COMPANY
By: /s/ W. Lee Simmons, President
--------------------------------
W. Lee Simmons, President
- 6 -
<PAGE> 1
EXHIBIT 10.81
Local Marketing Agreement dated October 16, 1996
between Simmons Broadcasting Company and
Commodore Media of Kentucky, Inc.
<PAGE> 2
LOCAL MARKETING AGREEMENT
This LOCAL MARKETING AGREEMENT (the "Agreement") dated as of October
16, 1996, is made and entered into by and between COMMODORE MEDIA OF KENTUCKY,
INC., a Delaware corporation ("Time Broker"), and SIMMONS BROADCASTING COMPANY,
a South Carolina corporation ("Licensee"), the owner and operator of radio
station WHRD (AM) Huntington, West Virginia (the "Station").
W I T N E S S E T H:
WHEREAS, Time Broker and Licensee, are parties to an Irrevocable and
Exclusive Option Agreement dated as of the date hereof (the "Option Agreement"),
pursuant to which Licensee has granted to Time Broker an option to purchase
substantially all of the operating assets of the Station; and
WHEREAS, Licensee desires to make available to Time Broker substantial
broadcasting time on the Station until the closing of the transactions
contemplated by the Option Agreement (the "Closing Date"); and
WHEREAS, Time Broker is engaged in the business of radio broadcasting
and desires to avail itself of the Station's available broadcast time through
the date of Closing.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein contained, the parties hereto have agreed and do agree as
follows:
<PAGE> 3
Section 1. Effective Date and Facilities. Commencing at 12:01 a.m. on
October 16, 1996 (the "Effective Date"), Licensee shall broadcast or cause to be
broadcast on the Station programs which are presented to it by Time Broker.
These programs shall be in compliance with the provisions of Section 4 of this
Agreement. Time Broker shall maintain the ability to deliver its programming to
Licensee's transmitter site by means acceptable to Licensee. To facilitate
delivery of programming by Time Broker to Licensee hereunder, Licensee hereby
grants to Time Broker the non-exclusive right for the term of this Agreement to
use substantially all of the equipment located in the studio for the Station and
currently used by Licensee for broadcasting programs on the Station (the
"Broadcast Equipment"). In addition, Time Broker shall have, and Licensee hereby
grants to Time Broker, a nonexclusive license to enter on the premises currently
occupied by the Station for purposes of producing its programming hereunder.
Time Broker shall maintain the Broadcast Equipment free and clear of liens,
claims or encumbrances of any third party claiming by, through or under Time
Broker.
Section 2. Payments by Time Broker. Time Broker hereby agrees to pay
Licensee for broadcast of the programs and use of the Broadcast Equipment
hereunder the sum of $250 each month in advance for each month after the
Effective Date through November 30, 1998 and $500 for each month thereafter
("Fee") plus the sum of the actual expenses each month for documented and agreed
upon items of operating expenses to be incurred consistent
-2-
<PAGE> 4
with past practices of the Station under the provisions of that certain Local
Management Agreement dated April 8, 1996, by and between Time Broker and
Licensee ("Monthly Expenses"). The Monthly Expenses shall be payable in arrears
on or before the fifteenth day of each calendar month commencing November 15,
1996 (the "Monthly Payment Date"), for the period commencing on the Effective
Date and on the fifteenth day of each calendar month thereafter during the
remainder of the term of this Agreement; provided, however, that the revenue and
expenses of the Station shall be adjusted for October as if the Effective Date
of this Agreement was October 1, 1996. Amounts payable pursuant to this Section
2 for any partial calendar month other than October, 1996 shall be prorated on a
per diem basis. During this Agreement, Time Broker shall be entitled to all
advertising and other revenues (including all profits and cash flow) of the
Station and all accounts receivable which arise on and after the Effective Date.
If on the Closing Date or the date this Agreement is terminated, the aggregate
amount of payments received by Licensee from Time Broker for Monthly Expenses
under this Section exceeds the actual amount of Licensee's expenses for the
items (which expenses shall be incurred in accordance with the usual and
customary past practices of the Station for the items of Monthly Expenses prior
to the Effective Date) incurred by Time Broker in performing its obligations
hereunder, from the Effective Date to the Closing Date or the date this
Agreement is terminated, then Licensee shall pay to Time Broker the excess
Monthly Expenses on
-3-
<PAGE> 5
the Closing Date or within ten (10) days after this Agreement is terminated.
Similarly, if Licensee has aggregate Monthly Expenses from the Effective Date to
the Closing Date or termination date in excess of its submitted operating
expenses, then the Time Broker shall pay Licensee such excess on the Closing
Date or within ten (10) days after this Agreement is terminated. If a dispute
arises between Licensee and Time Broker regarding the determination of the
Licensee's or Time Broker's excess Monthly Expenses, if any, the disagreement
shall be referred to Price Waterhouse, whose determination shall be final and
binding, and whose fees shall be paid one-half each by Licensee and the Time
Broker. The amount of any excess Monthly Expenses, if any, payable to either
party shall be determined annually as of October 1 of each year for the
preceding twelve (12) months. The failure of either party to claim that it is
entitled to any excess Monthly Expenses by November 1 of each year shall
terminate such party's claim. Notwithstanding any other provision of this
Agreement or the Option Agreement, in the event the parties fail to close on the
sale of the Station to Time Broker, Licensee shall not be obligated to repay
Time Broker any Fee amounts advanced by Time Broker pursuant to this Section 2,
except for appropriate pro rata portions of such Fee if this Agreement is
terminated during a month. The previous sentence shall in no way limit or effect
either Licensee or Time Broker's rights under the Option Agreement in the event
the failure to close is due to a breach or termination of the Option Agreement.
-4-
<PAGE> 6
Section 3. Term. The term of this Agreement shall commence on the
Effective Date and shall end on the earlier of (i) the Closing Date, or (ii) the
date of termination of the Option Agreement, unless sooner cancelled or
terminated as hereinafter provided.
Section 4. Program.
(a) Time Broker shall furnish or cause to be
furnished (i) the artistic personnel and material in broadcasting form for
programs to be broadcast on the Station pursuant to this Agreement at all times
other than times of the Licensee program broadcasts referred to in Section 4(b)
below and (ii) any additional equipment in addition to the Broadcast Equipment
that may be required to enable the Station to broadcast Time Broker's
programming during the term of this Agreement. All such Time Broker programs,
including all advertising messages and promotional material or announcements,
shall be in good taste and in accordance with the Communications Act of 1934, as
amended (the "Act"), all other applicable statutes and Federal Communications
Commission ("FCC") and other governmental entities rules, regulations, policies
and requirements ("Rules and Regulations"), and Licensee's programming
standards. Time Broker also agrees to broadcast a reasonable number of public
service announcements suggested from time to time by Licensee. All programs
shall be prepared and presented in conformity with the standards set forth in
Attachment I. Time Broker further agrees that if, in the reasonable judgment of
Licensee, Time Broker does
-5-
<PAGE> 7
not comply with these standards, Licensee may suspend or cancel any specific
program not in compliance; if possible, Licensee is to provide Time Broker with
seventy-two (72) hours prior notice of such suspension or cancellation. Time
Broker shall not change the programming format or make any other material or
substantial programming changes without the prior written consent of Licensee,
which will not be unreasonably withheld or delayed. Licensee shall make the
Station available to Time Broker for operation for at least one hundred and
sixty-four (164) hours per week, Sunday through Saturday, except for downtime
occasioned by routine maintenance. Any routine maintenance work affecting the
operation of the Station at full power shall be scheduled at a time that is
least disruptive to the Station's operations.
(b) Licensee shall have the right during the Term of this
Agreement to furnish or cause to be furnished programming in broadcast-ready
form for four (4) hours per week of programs to be broadcast on the Station
("Licensee's Reserved Time"). Licensee's public affairs programs shall respond
to the needs and interests of the Station's service area and shall be presented
at times deemed by Licensee to best meet the needs of the applicable service
area. Licensee initially reserves the periods reserved prior to the Effective
Date on the Station for public affairs programming to present its public affairs
programming.
Section 5. Handling of Mail and Public File. To the extent either party
hereto receives or handles mail, cables, telegraphs,
-6-
<PAGE> 8
telecopies, or telephone calls in connection with any programs broadcast on the
Station, each party shall promptly advise the other of any public or FCC
complaint or inquiry concerning such programming and shall give the other party
copies of any letters from the public or the FCC, including complaints,
concerning such programming. The Licensee in consultation with Time Broker will
handle listener complaints and inquiries with respect to the operation of the
Station. Time Broker shall also give Licensee copies of all operating and
programming information, including, without limitation, the Station's operating
logs, necessary to maintain the public file and other records required to be
kept by FCC regulations, rules or policies. During the term of this Agreement,
Time Broker shall also maintain and deliver to the Station and Licensee such
records and information required by the FCC to be placed in the public
inspection file of the Station pertaining (i) to the broadcast of political
programming and advertisements, in accordance with the provisions of Sections
73.1940 and 73.3526 of the FCC's rules, and (ii) to the broadcast of sponsored
programming addressing political issues or controversial subjects of public
importance, in accordance with the provisions of Section 73.1212(d) of the FCC's
rules. Time Broker shall also consult with the Licensee and comply with the Act
and all other applicable statutes and the rules, regulations and policies of the
FCC, as announced from time to time, with respect to the carriage of political
advertisements and programming (including, without limitation, the rights of
candidates and, as
-7-
<PAGE> 9
appropriate, others to "equal opportunities" and the carriage of contrasting
points of view as mandated by any "fairness" rules with respect to such
"issue-oriented" advertising or programming as may be broadcast) and the charges
permitted therefor. Time Broker shall provide to the Station such documentation
relating to such programming as Licensee shall reasonably request. Licensee
shall be responsible for providing the personnel necessary to maintain a
complete public file (as required by the FCC) and compile and file all required
quarterly issues/programs lists.
Section 6. Maintenance of Equipment.
6.1. The transmitter equipment and antennas currently
used for the Station's broadcasts (the "Transmission Equipment") shall be
maintained by Licensee in a condition consistent with good engineering
practices, in compliance in all material respects with the Act and all other
applicable rules, regulations and technical standards of the FCC and in
accordance with the Asset Purchase Agreement. Licensee does not currently know
of any material defects in the Transmission Equipment used by the Station.
Licensee shall maintain power and modulation of the Station's broadcasts in a
manner consistent with Licensee's past practices. All capital expenditures
reasonably required to maintain the technical quality of the Station's
Transmission Equipment and its compliance with applicable laws and regulations
shall be made at the sole expense and in the discretion of Licensee in a timely
fashion after consulting with Time Broker,
-8-
<PAGE> 10
subject to timely reimbursement by Time Broker as a Monthly Expense pursuant to
Section 2 above.
6.2 All Broadcast Equipment and other equipment necessary for
the transmission of programming to the Station's Transmission Equipment shall be
maintained by Time Broker in good repair and condition, reasonable wear and tear
excepted. All capital expenditures reasonably required to maintain the technical
quality of the Broadcast Equipment and its compliance with applicable laws and
regulations shall be made at the sole expense and in the sole discretion of
Licensee in a timely fashion after consulting with Time Broker, subject to
timely reimbursement by Time Broker as a Monthly Expense pursuant to Section 2
above. Time Broker shall, at all times during the term of this Agreement, at
Time Broker's sole expense, maintain insurance with respect to the Broadcast
Equipment covering such risks as are customarily covered with respect to damage
thereto, and such policies of insurance shall name Licensee and such other
parties as Time Broker may designate as loss payee(s) and additional insured(s),
as their respective interests may appear. Licensee covenants that in the event
it receives insurance proceeds as loss payee it will apply such proceeds to
repair or replace the damaged Broadcast Equipment to the satisfaction of Time
Broker.
Section 7. Collection of Time Broker's Accounts Receivable. For a
period of one hundred and eighty (180) days (the "Collection Period") following
the termination of this Agreement
-9-
<PAGE> 11
without a closing on the Option Agreement, Licensee shall collect as agent for
Time Broker the accounts receivable of the Station. On the termination date,
Time Broker shall provide Licensee with a list of all accounts receivable to be
collected by Licensee. In collecting such accounts receivable, Licensee shall
use reasonable diligence, but shall not be required to institute legal
proceedings to collect any account receivable, or to defend any claim or
counterclaim by any account debtor. Unless directed otherwise by the account
debtor, all amounts received from an account debtor which also becomes an
account debtor of Licensee after the termination date shall be applied first to
the payment of the accounts receivable of Time Broker. Within fifteen (15) days
of the end of each calendar month of the Collection Period, Licensee shall
deliver to Time Broker the net amount, after deducting any sales commissions,
agency fees and similar direct expenses attributable to such accounts
receivable, of all amounts collected and credited to the accounts receivable of
Time Broker during the period calendar month in accordance with this Section 7.
Within ten (10) days of the end of the Collection Period, Licensee shall deliver
to Time Broker all records of uncollected accounts receivable of Time Broker and
any amounts not previously remitted to Time Broker at which time Licensee's
obligation for the collection of Time Broker's accounts receivable shall cease.
During the Collection Period, Time Broker shall not attempt to collect any of
the accounts receivable assigned to Licensee for collection.
-10-
<PAGE> 12
Section 8. Responsibility for Employees and Expenses.
(a) Time Broker shall employ and be responsible for
the salaries, taxes, insurance and related costs for all personnel used in the
production of its programming or necessary to fulfill Time Broker's other
obligations hereunder. Licensee shall employ and be responsible for the
salaries, taxes, insurance and related costs for all personnel used in the
production of its programming or necessary to fulfill Licensee's other
obligations hereunder, subject to timely reimbursement by Time Broker in
accordance with Section 2 above. Time Broker shall pay for all costs associated
with its program production, all fees to ASCAP, BMI and SESAC attributable to
its programs and any other copyright fees attributable to its programming
broadcast on the Station. Without limiting the generality of Time Broker's
obligations under Section 26 hereof, Time Broker shall also pay for all costs
associated with Arbitron or any other rating service to which it or the Station
subscribe.
(b) If Time Broker should employ Licensee's employees under
this Agreement and there is a termination of this Agreement without a closing
under the Option Agreement then Time Broker will terminate such employees hired
if Licensee is desirous of rehiring them and the employees desire to return to
Licensee's employ.
Section 9. Control of Station. During the period of this Agreement,
Licensee shall maintain ultimate control over the facilities of the Station,
including, specifically, control over
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<PAGE> 13
Station finances, personnel and programming, and Time Broker agrees that it will
permit Licensee to take any and all steps necessary to faithfully and
continuously do so throughout the term of this Agreement. Licensee and Time
Broker acknowledge and agree that this responsibility to retain control is an
essential element of the continuing validity and legality of this Agreement.
Licensee shall provide and pay for: (a) its General Manager for the Station, who
shall report solely to, and be accountable solely to, Licensee and who shall
direct the day-to-day operations of the Station; and (b) such other personnel as
are necessary to fulfill its obligations under this Agreement. Licensee shall
retain control, said control to be reasonably exercised, over the policies,
programming and operations of the Station, including, without limitation, the
right to decide whether to accept or reject any programming or advertisements,
the right to preempt any programs in order to broadcast a program deemed by
Licensee to be of greater national, regional or local interest, and the right to
take any other actions necessary to comply with the Rules and Regulations.
Licensee shall be responsible for meeting all of its requirements with respect
to its local service obligations including, but not limited to, compliance with
the Station's identification requirements, maintaining its main studio within
the Station's principal community contour and broadcasting its own issue
responsive programming, and Time Broker shall take such actions as Licensee may
reasonably request to ensure such requirements are met. Time
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<PAGE> 14
Broker shall not represent, warrant or hold itself out as the Station's licensee
and shall sell all its advertising time and enter into all agreements in its own
name. Licensee reserves the right to refuse to broadcast any program or programs
containing matter which is, or in the reasonable opinion of Licensee may be,
violative of any Rules and Regulations, or the policies of the Licensee.
Section 10. Special Events. Licensee has the right, in its sole
discretion and without liability, to preempt any Time Broker programs, and to
use part or all of the time contracted for by Time Broker to broadcast events of
special importance. In all such cases Licensee will use its best efforts to give
Time Broker reasonable notice of its intention to preempt such broadcast or
broadcasts, and, in the event of such preemption, Time Broker shall receive a
payment credit in an amount to be negotiated in good faith by Time Broker and
Licensee for the Time Broker broadcast(s) that were preempted.
Section 11. Force Majeure. Any failure or impairment (i.e., failure to
broadcast at Station's full authorized power) of facilities or any delay or
interruption in broadcast programs, or failure at any time to furnish
facilities, in whole or in part, for broadcasting, because of any acts of God,
strikes or threats thereof or force majeure or due to any other causes beyond
the reasonable control of Licensee shall not constitute a breach of this
Agreement and Licensee will not be liable to Time Broker therefor.
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<PAGE> 15
Section 12. Right to Use Station IDs. Licensee hereby grants to Time
Broker a non-exclusive license to use such slogans, call letters and other
identifiers as are currently used by the Station (the "Station Licensed
Identifiers") in connection with the broadcast of Time Broker's programs on the
Station, but for no other purpose. The license granted herein shall expire on
the expiration or earlier termination or cancellation of this Agreement. Time
Broker shall use the Station Licensed Identifiers in Time Broker's programming
in a manner consistent with the use thereof by Licensee in broadcasts of the
Station immediately prior to the Effective Date of this Agreement during the
entire term of this Agreement and as may be required by the Act or the rules,
regulations and policies of the FCC. During the term of this Agreement, Licensee
shall not assign any of its rights to use the current call sign of the Station
or the other Station Licensed Identifiers to any third party. Time Broker
expressly agrees that, except with respect to Station Licensed Identifiers
referred to herein, the use of which is licensed by Licensee to Time Broker
pursuant hereto, the right to use Licensee's programs and to authorize their use
in any manner and in any media whatsoever shall be and remain vested solely in
Licensee.
Section 13. Payola. Time Broker shall provide Licensee with Payola
Affidavits, substantially in the form attached hereto as Attachment II, signed
by such of Time Broker's employees and at such times as Licensee may reasonably
request, and shall noti-
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<PAGE> 16
fy Licensee promptly of any violations it learns of relating to the Act,
including Sections 317 and 508 thereof.
Section 14. Compliance with Law. Time Broker and Licensee shall,
throughout the term of this Agreement, comply with the Rules and Regulations
applicable to the conduct of its business.
Section 15. Indemnification; Warranty. Each party (as the case may be,
the "Indemnitor") shall indemnify and hold harmless the other party (as the case
may be, the "Indemnitee"), its directors, officers, employees, agents and
affiliates, from and against any and all liability, including without limitation
all consequential damages and attorneys fees, arising out of or incident to the
programming furnished by the Indemnitor, any breach of this Agreement by the
Indemnitor or the conduct of the Indemnitor, its directors, officers, employees,
contractors, agents or affiliates. Without limiting the generality of the
foregoing, Indemnitor shall indemnify and hold and save the Indemnitee, its
directors, officers, employees, agents and affiliates, harmless against
liability for libel, slander, infringement of trademarks, trade names, or
program titles, violation of rights of privacy, and infringement of copyrights
and proprietary rights resulting from the programming furnished by the
Indemnitor. Time Broker will maintain customary amounts of libel and slander
insurance, name Licensee as an additional insured party, and provide evidence of
such insurance to Licensee. Each party's obligation to hold the other harmless
against the liabilities specified above shall survive any
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<PAGE> 17
termination of this Agreement.
Section 16. Events of Default. Each of the following shall constitute
an "Event of Default" under this Agreement:
(a) Non-Payment. Time Broker's failure to pay the consideration
provided for in Section 2 hereof when the same is due and payable hereunder;
provided, Time Broker shall have four (4) business days from the date such
payment is due to make payment if oral telephonic or written notice is received
by Time Broker from Licensee that such payment was not received on the due date;
or
(b) Default in Covenants. Time Broker's or Licensee's default in
the observance or performance of any material covenant, warranty, condition or
agreement contained herein; provided, however, any such default shall not
constitute an Event of Default hereunder if such default is cured within twenty
(20) days after notice thereof by the non-breaching party; or
(c) Breach of Representation. Time Broker's or Licensee's
material breach of any representation or warranty herein, or in any certificate
or document furnished pursuant to the provisions hereof, which shall prove to
have been false or misleading in any material respect as of the time made or
furnished; or
(d) Insolvency. The voluntary filing by Time Broker or Licensee
(or involuntary filing with respect to Time Broker or Licensee not vacated
within sixty (60) days after such filing) of a petition for reorganization or
dissolution under federal
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<PAGE> 18
bankruptcy laws or under substantially equivalent state laws.
(e) Licensee Preemption. If the Licensee shall preempt or
substitute other programming for that supplied by the Time Broker during fifteen
percent (15%) or more of the total hours of Time Broker programming on the
Station for any one calendar week during the term of this Agreement, then Time
Broker within ten (10) days from the end of such week can terminate this
Agreement by notice to Licensee.
Section 17. Remedies Upon Default. In addition to, and not in
limitation of, all other rights and remedies available under this Agreement, in
equity or under applicable law, all of which rights and remedies are expressly
reserved, the parties shall have the following rights and remedies upon the
occurrence of an Event of Default:
(a) Termination Upon Default. If there is an Event of Default by
Time Broker, Licensee may, at its sole option, by written notice to Time Broker,
terminate this Agreement, and upon such termination Licensee shall be under no
further obligation to make available to Time Broker any further broadcast time
or broadcast transmission facilities and all amounts accrued or payable to
Licensee up to the date of termination which have not been paid shall
immediately become due and payable by Time Broker to Licensee. If there is an
Event of Default by Licensee, Time Broker may, at its sole option, by written
notice to Licensee, terminate this Agreement, and upon such termination Time
Broker shall be under no further obligation to provide any further
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<PAGE> 19
programs to be broadcast on the Station and all amounts due to Licensee with
respect to the period subsequent to such termination which have been prepaid by
Time Broker shall immediately become due and payable by Licensee to Time Broker.
(b) Liabilities Upon Termination. Time Broker shall be
responsible for debts and obligations of Time Broker resulting from the use of
air time and transmission facilities including, without limitation, accounts
payable and net barter balances. If this Agreement is canceled or terminated for
any reason, Licensee agrees that it will assume, perform in good faith and be
responsible for all obligations of Time Broker relating to the period after the
date of such cancellation or termination under unfulfilled advertising contracts
cancelable within thirty (30) days of the type entered into in the ordinary
course of the business of the Station and at usual and customary rates and with
respect to which the receivables or prepayments relating thereto have been
assigned or paid to Licensee ("Ordinary Course Contracts"), as well as all
obligations of Time Broker relating to the period after the date of such
cancellation or termination under any unfulfilled advertising contracts other
than Ordinary Course Contracts which Licensee has approved in writing during the
course of this Agreement and with respect to which the receivables or
prepayments relating thereto have been assigned or paid to Licensee. In this
connection, Time Broker warrants to Licensee that it shall, and hereby does,
assign to Licensee all amounts due under unfulfilled advertising contracts
assumed by
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<PAGE> 20
Licensee upon cancellation or termination of this Agreement, and Time Broker
shall pay over to Licensee all amounts received by Time Broker for advertising
run or to be run by Licensee subsequent to such cancellation or termination.
Except for obligations under the unfulfilled advertising contracts specified in
this Section 17(b), Licensee shall not assume or otherwise be responsible for
any other obligations, expenses, contracts or other liabilities entered into or
incurred by Time Broker, regardless of whether such obligations, contracts,
expenses and liabilities relate to the Station or the broadcast of programming
thereon.
Section 18. Representations.
(a) Both Licensee and Time Broker represent that they are legally
qualified, empowered, and able to enter into this Agreement, and that it has
been reviewed and approved by their respective counsel, including counsel
specializing in FCC matters. Time Broker further represents and certifies that
this Agreement complies with Sections 73.3555(a) (1) and (e)(1) of the FCC's
rules. Licensee represents and certifies that it will maintain ultimate control
over the Station's facilities, including control over the finances, personnel
and programming of the Station.
(b) Licensee further represents to Time Broker that, as of the
date hereof, except as disclosed in that certain Asset Purchase Agreement dated
April 8, 1996, by and between Licensee and Time Broker, which was amended on
October 15, 1996, to
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<PAGE> 21
exclude the Station:
(i) The FCC licenses and authorizations relating to the
Station (the "Station Licenses") are free and clear of legal
disqualifications or other restrictions of such a nature as would
materially limit the full operation of the Station as presently
authorized and conducted;
(ii) The Station Licenses are in good standing and have
been regularly renewed with the normal expiration dates;
(iii) To the best of Licensee's knowledge, the operation of
the Station is in compliance in all material respects with the Station
Licenses;
(iv) Licensee has no knowledge of any matter that might
result in the suspension or revocation of the Station Licenses;
(v) There are no FCC citations outstanding with respect to
the Station or its operation; and
(vi) There are no petitions to deny, material complaints or
proceedings known by Seller to be pending before the FCC and relating
to the business and operation of any Station.
Section 19. Modification and Waiver. No modification or waiver of any
provision of this Agreement shall in any event be effective unless the same
shall be in writing signed by the party against whom the waiver is sought to be
enforced, and then such waiver and consent shall be effective only in the
specific
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<PAGE> 22
instance and for the purpose for which given.
Section 20. Delay in Exercise of Remedies; Remedies Cumulative. Except
in the case of actions that must be taken within a specific time period in
accordance with this Agreement, no failure or delay on the part of Licensee or
Time Broker in exercising any right or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of Licensee and Time Broker herein
provided are cumulative and are not exclusive of any right or remedies which
they may otherwise have.
Section 21. Construction. This Agreement shall be construed in
accordance with the internal substantive (that is, without reference to conflict
of) laws of the State of West Virginia and the obligations of the parties hereto
are subject to all federal, state or municipal laws or regulations now or
hereafter in force and to the regulations and policies of the FCC and all other
governmental bodies or authorities presently or hereafter duly constituted. The
parties believe that the terms of this Agreement meet all of the requirements of
current FCC policy for brokerage agreements and agree that they shall negotiate
in good faith to meet any FCC concern with respect to this Agreement if they are
incorrectly interpreting current FCC policy or if FCC policy as hereafter
modified so requires. If
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<PAGE> 23
the parties cannot agree to a modification or modifications deemed necessary by
either party to meet FCC requirements, the termination provisions of Section 22
below shall apply. The parties further agree that they will make all required
filings with the FCC with respect to this Agreement.
Section 22. Termination. Either party may terminate this Agreement
effective immediately if it has been ordered by the FCC to terminate this
Agreement or to suspend (either permanently or temporarily) the rights and
obligations of the parties hereunder in order to comply with (or while a
determination is being made with respect to compliance with) the Act or FCC
rules or policies, and such termination shall be the parties' sole remedy for
any such finding by the FCC. Upon termination or cancellation of this Agreement
for any reason Licensee shall, in addition to its other legal and equitable
rights and remedies under this Agreement or under applicable law, be entitled
immediately to cease making available to Time Broker any further broadcast time
or broadcast transmission facilities, and all amounts accrued or payable to
Licensee up to the date of termination, cancellation or expiration which have
not been paid shall be immediately due and payable. Except as provided in
Section 17(b), Licensee shall not be required to assume any obligations,
contracts, expenses or other liabilities of Time Broker in connection with such
termination, cancellation or expiration.
Section 23. Headings. The headings contained in this Agreement are
included for convenience only and no such heading
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<PAGE> 24
shall in any way alter the meaning of any provision.
Section 24. Successors and Assigns. Subject to Section 29, this
Agreement shall be binding upon and inure to the benefit of the parties and
their respective permitted successors and assigns, including, without
limitation, any permitted transferees or assignees of any kind of the FCC
licenses for the Station.
Section 25. Counterpart Signatures. This Agreement may be signed in one
or more counterparts, each of which shall be deemed a duplicate original,
binding on the parties hereto notwithstanding that the parties are not signatory
to the same original or the same counterpart.
Section 26. Notices. Any notice required hereunder (other than pursuant
to Section 16(a) hereof) shall be in writing and any payment, notice or other
communications shall be deemed given (i) upon delivery when delivered personally
or by facsimile with a copy by mail, (ii) three (3) days after mailing if mailed
by certified mail, postage prepaid, with return receipt requested, or, (iii) one
(1) day after delivery to Federal Express or another recognized overnight
carrier for overnight delivery, and addressed as follows:
To Licensee:
W. Lee Simmons, President
Simmons Broadcasting Company
44 Bow Circle, Suite B
Hilton Head Island, South Carolina 29928
Telecopier: 803-842-3371
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<PAGE> 25
With a copy to:
Alan C. Campbell, Esq.
Irwin, Campbell & Tannenwald, P.C.
1730 Rhode Island Avenue, N.W.
Suite 200
Washington, D.C. 20036
To Time Broker:
James J. Sullivan, CFO
Commodore Media of Kentucky, Inc.
500 Fifth Avenue, Suite 3000
New York, New York 10110
With a copy to:
Ira J. Goldstein, Esq.
Pryor, Cashman, Sherman & Flynn
410 Park Avenue
New York, New York 10022
Section 27. Entire Agreement. This Agreement (together with the
Attachments hereto) and any other agreements between the parties relating to the
Station embody the entire agreement between the parties and there are no other
agreements, representations, warranties, or understandings, oral or written,
between them with respect to the subject matter hereof. No alteration,
modification or change of this Agreement shall be valid unless it is embodied in
a written instrument signed by the parties.
Section 28. Severability and Assignment. Except as set forth in
Sections 21 and 22 hereof, if any provision or provisions contained in this
Agreement is held to be invalid, illegal or unenforceable, this shall not affect
any other provision hereof, and this Agreement shall be construed as if such
invalid,
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<PAGE> 26
illegal or unenforceable provision or provisions had not been contained herein.
Time Broker may assign this Agreement without the prior consent of Licensee,
provided that such assignee is qualified to act as the Time Broker in accordance
with the rules and regulations of the FCC.
Section 29. No Joint Venture. The parties agree that nothing herein
shall constitute a joint venture between them. The parties acknowledge that call
letters, trademarks and other intellectual property shall at all times remain
the property of the respective parties and that neither party shall obtain any
ownership interest in the other party's intellectual property by virtue of this
Agreement.
Section 30. Access to Records. Time Broker shall permit Licensee and
its agents and representatives access to all books and records relating to the
Station.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
COMMODORE MEDIA OF KENTUCKY, INC.
By: /s/ James J. Sullivan
------------------------------
James J. Sullivan
Chief Financial Officer
SIMMONS BROADCASTING COMPANY
By: /s/ W. Lee Simmons
------------------------------
W. Lee Simmons
President
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<PAGE> 27
LOCAL MARKETING AGREEMENT
Attachment I
Page 1 of 5
PROGRAMMING STANDARDS
Licensee and Time Broker shall cooperate in the broadcasting of
programs of the highest possible standard of excellence. Without limiting the
generality of the foregoing, they will observe the following policies in the
preparation, writing and production of their own (nonsyndicated or network)
programs:
I. Respectful of Faiths. The subject of religion and references
to particular faiths and tenets shall be treated with respect
at all times.
II. Controversial Issues. Any discussion of controversial issues
of public importance shall be reasonably balanced with the
presentation of contrasting viewpoints in the course of
overall programming; no attacks on the honesty, integrity, or
like personal qualities of any person or group of persons
shall be made during the discussion of controversial issues of
public importance; and during the course of political
campaigns, Station programs (other than public forum or talk
features) are not to be used as a forum for editorializing
about individual candidates. If such events occur, Licensee
may require that responsive programming be aired. In the event
that a statute, regulation or policy is adopted that requires
the airing of responsive programming, Time Broker agrees to
comply with such statute, regulation or policy and will
prepare such responsive programming.
III. Donation Solicitation. Requests for donations in the form of a
specific amount shall not be made if there is any suggestions
that such donations will result in miracles, physical cures or
life-long prosperity. However, statements generally requesting
donations to support the broadcast or church are permitted.
IV. Treatment of Parapsychology. The advertising or promotion of
fortune-telling, occultism, astrology, phrenology, palm
reading, numerology, mind-reading, character readings, or
subjects of the like nature will not be broadcast.
<PAGE> 28
LOCAL MARKETING AGREEMENT
Attachment I
Page 2 of 5
V. No Ministerial Solicitations. No invitations by a minister or
other individual appearing on the program to have listeners
come and visit him or her for consultation or the like shall
be made if such invitation implies that the listeners will
receive consideration, monetary gain, or total physical cures
for illness.
VI. No Vending of Miracles. Any exhortation to listeners to bring
money to a church affair or service is prohibited if the
exhortation, affair, or service contains any suggestion that
miracles, total physical cures, or life-long prosperity will
result.
VII. Sale of Religious Artifacts. The offering for sale of
religious artifacts or other items for which listeners would
send money is prohibited unless such items are normally
available in ordinary commerce or are clearly being sold for
proper fund-raising purposes.
VIII. No Miracle Solicitation. Any invitation to listeners to meet
at places other than the church and/or to attend other than
regular services of the church is prohibited if the
invitation, meeting, or service contains any claim that
miracles, total physical cures, or life-long prosperity will
result.
IX. No Plugola or Payola. The mention for any business activity or
"plug" for any commercial, professional, or other related
endeavor, except where contained in an actual commercial
message of a sponsor, or if otherwise lawful, is prohibited.
X. No Lotteries. Announcements giving any information about
lotteries or games prohibited by federal or state law or
regulation are prohibited.
XI. No "Dream Books". References to "dream books," the "straight
line, " or other direct or indirect descriptions or
solicitations relative to the "numbers game," or the "policy
game," or any other form of gambling are prohibited.
<PAGE> 29
LOCAL MARKETING AGREEMENT
Attachment I
Page 3 of 5
XII. No Numbers Games. References to chapter and verse paragraphs,
paragraph numbers, or song numbers, which involve three digits
should be avoided and, when used, must reasonably relate to a
non-gambling activity.
XIII. Election Procedures. At least sixty (60) days before any
primary or seventy-five (75) days before any regular election
campaign, Time Broker will clear with Licensee's Station
Manager the rate Licensee will charge for the time to be sold
to candidates for public office and/or their supporters to
make certain that the rate charged is in conformance with
applicable law and Station policy.
XIV. Commercial Limitations. With respect to any given segment of
air time hereunder, the amount of commercial matter shall not
normally exceed sixteen (16) minutes during any sixty (60)
minute segment, except during political broadcast periods when
eighteen (18) minutes shall not normally be exceeded. Time
Broker will make available to the Station a list of all
commercial announcements during its programming.
XV. Required Announcements. Time Broker shall broadcast (i) an
announcement in form satisfactory to Licensee at the beginning
of each hour to identify the Station, (ii) an announcement at
the beginning of each broadcast day or Time Broker broadcast
period to indicate that program time has been purchased by
Time Broker, and (iii) any other announcement that may be
required by law, regulation, or Station policy.
XVI. Commercial Record Keeping. No commercial messages or "plugs"
or undue references shall be made in programming presented
over the Station to any business venture, profit-making
activity, or other interest (other than non-commercial
announcements for bona fide charities, church activities, or
other public service activities) in which Time Broker or its
employees is or are directly or indirectly interested without
the same having been approved in advance by Licensee's Station
Manager or such broadcast being announced and logged as
sponsored.
<PAGE> 30
LOCAL MARKETING AGREEMENT
Attachment I
Page 4 of 5
XVII. No Illegal Announcements. No announcement or promotion
prohibited by federal or state law or regulation of any
lottery or game shall be made over the Station.
XVIII. License Discretion Paramount. In accordance with the
licensee's responsibility under the Communications Act of
1934, as amended, and the Rules and Regulations of the Federal
Communications Commission, Licensee reserves the right to
reject or terminate any advertising or programming being
presented over the Station which is in conflict with Station
policy or which in Licensee's sole but reasonable judgment
would not serve the public interest.
XIX. Programming Prohibitions. Broker shall not knowingly broadcast
any of the following programs or announcements.
A. False Claims. False or unwarranted claims for any product
or service.
B. Unfair Imitation. Infringements of another advertiser's
rights through plagiarism or unfair imitation of either
program idea or copy, or any other unfair competition.
C. Commercial Disparagement. Any unfair disparagement of
competitors or competitive goods.
D. Profanity. Any programs or announcements that are
slanderous, obscene, indecent, profane, vulgar, repulsive
or offensive, either in theme or treatment.
E. Unauthenticated Testimonials. Any testimonials which
cannot be authenticated.
F. Descriptions of Bodily Functions. Any material which
describes in a repellent manner bodily functions.
<PAGE> 31
LOCAL MARKETING AGREEMENT
Attachment I
Page 5 of 5
G. Advertising. Any advertising matter or announcement which
may, in the opinion of Licensee, be injurious or
prejudicial to the interests of the public or the Station,
or to honest advertising and reputable business in
general.
H. Contests. Any contests or promotions which are in any way
misleading or constitute a public nuisance or are likely
to lead to injury to persons or property.
I. Telephone Conversations. Any programming in violation of
any statute, regulation or policy, including without
limitation to, Section 73.1206 of the FCC's Rules, or any
successor regulation, dealing with the taping and/or
broadcast of telephone conversations.
The parties may jointly waive any of the foregoing policies in specific
instances if, in their opinion, good broadcasting in the public interest is
served. In any case where obvious questions of policy or interpretation arise,
Time Broker will attempt in good faith to submit the same to Licensee for
decision before making any commitments in connection therewith.
<PAGE> 32
LOCAL MARKETING AGREEMENT
Attachment II
Page 1 of 2
ANTI-PAYOLA/PLUGOLA AFFIDAVIT
City of _____________
County of ___________
State of ____________
________________, being first duly sworn, deposes and
says as follows:
1. He is _______________ of Commodore Media of Kentucky, Inc.
("Broker"), which provides programming to station WHRD (AM),
Huntington, West Virginia (the "Station").
2. He has acted in the above capacity since ____.
3. No matter has been broadcast by the Station for which service,
money or other valuable consideration has been directly or
indirectly paid, or promised to, or charged, or accepted, by him
from any person, which matter at the time of broadcast has not
been announced or otherwise indicated as paid for or furnished by
such person.
4. So far as he is aware, no matter has been broadcast by the
Station for which service, money, or other valuable consideration
has been directly or indirectly paid, or promised to, or charged,
or accepted by the Station in furnishing programs from any
persons, which matter at the time so broadcast has not been
announced or otherwise indicated as paid for or furnished by such
person.
5. In the future, he will not pay or promise to pay to any third
party, request or receive any service, money, or any other
valuable consideration, directly or indirectly, from a third
party, in exchange for the influencing of, or the attempt to
influence, the preparation or presentation of broadcast matter on
the Station.
<PAGE> 33
LOCAL MARKETING AGREEMENT
Attachment II
Page 2 of 2
6. Neither the affiant nor any family member has any present direct
or indirect ownership in (other than an investment in a
corporation whose stock is publicly traded and held), serves as
an officer or director of (with or without compensation), or
serves as an employee of, any person, firm or corporation engaged
in:
a. The publishing of music;
b. The production, distribution (including wholesale and
retail sales outlets), manufacture or exploitation of
music, films, tapes, recordings, or electrical
transcriptions of any program material intended for radio
broadcast use;
c. The exploitation, promotion, or management of persons
rendering artistic, production and/or other services in the
entertainment field;
d. The wholesale or retail sale of records intended for public
purchase; or
e. Advertising on the Station.
7. The facts and circumstances relating to any such interest or
interest are as follows:
_______________________________________
_______________________________________
_______________________________________
__________________________
Affiant
Subscribed and sworn to before me this ____ day of ____________, 199_ :
________________________________
Notary Public
My Commission Expires: __________________
<PAGE> 1
EXHIBIT 99.1
Press Release issued on October 4, 1996 regarding
acquisition of WOSN-FM.
<PAGE> 2
[COMMODORE MEDIA, INC. LOGO]
_______________________________________
PRESS RELEASE
_______________________________________
Commodore Media, Inc.
500 Fifth Avenue - Suite 3000, New York, NY 10110
Contact: Sandra Nacinovich
Phone: 212-302-5580
FAX: 212-302-6457
FOR IMMEDIATE RELEASE
COMMODORE MEDIA TO ACQUIRE RADIO STATION FROM INDIAN RIVER SHORES PARTNERS
FRIDAY, OCTOBER 4, 1996 - NEW YORK, NEW YORK
Commodore Media, Inc.'s, Bruce Friedman, President and CEO announces that it
has signed an agreement to purchase WOSN-FM in Indian River Shores, FL from
Indian River Shores Partners. WOSN-FM operates on 97.1 Mhz and programs Adult
Standards. The acquisition was handled by Randall Jeffery, Jr. of Media Venture
Partners.
Commodore Media will increase its owned and operated radio stations (through
LMA's or JSA's) to 34 (20 FM's 14 AM's): WEFX-FM, WRKI-FM, WNLK-AM, WINE-AM,
WKHL-FM and WSTC-AM in Fairfield County, Connecticut; WAEB-FM, WZZO-FM, WAEB-AM
and WKAP-AM in Allentown, Pennsylvania; WJBR-AM/FM in Wilmington, Delaware;
WZZR-FM, WQOL-FM, WPAW-FM, WAVW-FM, WAXE-AM, and WBBE-FM in the Treasure Coast
of Florida; WFAS-AM/FM, WAXB-FM, WZZN-FM and WPUT-AM in Westchester/Putnam
Counties, New York; WTCR AM/FM, WKEE-AM/FM, WHRD-AM in Huntington, West
Virginia; WZZW-AM, WFXN-FM, Milton, WV; WBVB-FM Coal Grove, OH; and WIRO-AM,
WMLV-FM Ironton, OH.
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EXHIBIT 99.2
Press Release issued on October 16, 1996 regarding
the Merger.
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[HICKS, MUSE, TATE & FURST LETTERHEAD]
Contacts: Hick Muse
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Roy Winnick
Kekst and Company
212-593-2655
Commodore Media
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Sandra Nacinovich
212-302-5580
HICKS, MUSE, TATE & FURST AND CAPSTAR BROADCASTING PARTNERS
COMPLETE ACQUISITION OF COMMODORE MEDIA, INC.
-- Assets Include 34 Radio Broadcasting Stations
In Six Mid-Sized Markets --
AUSTIN and DALLAS, Oct. 16, 1996 -- Capstar Broadcasting Partners, of Austin, a
new radio group formed earlier this year by Hicks, Muse, Tate & Furst
Incorporated, of Dallas, a leading private investment firm, and R. Steven
Hicks, Capstar's chairman and chief executive officer, today completed the
previously announced acquisition of Commodore Media, Inc., in a transaction
valued at approximately $200 million. Commodore, a privately held company based
in New York City, owns and operates, or has agreed to acquire, 34 radio
broadcasting stations in six medium-sized markets.
Commodore Media is the leading radio group in five of its six markets based on
radio advertising revenue and the leading radio group in each of its markets
based on audience share. The company currently operates 19 FM and 14 AM radio
broadcasting stations, and has agreed to acquire an additional FM station, in
the following markets: Fairfield County, Connecticut; Allentown, Pennsylvania;
Wilmington, Delaware; Westchester and Putnam Counties, New York; Ft.
Pierce-Stuart-Vero Beach, Florida (the "Treasure Coast"); and Huntington, West
Virginia/Ashland, Kentucky.
The acquisition of Commodore Media represents the first transaction for Hicks
Muse under its initiative, which was announced in May 1996, to acquire, in
leveraged transactions, up to $1 billion of middle-market radio station
properties. Hicks Muse has agreed to commit in excess of $100 million of
capital to this effort.
(more)
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2
As previously indicated, Commodore Media will maintain its corporate identity
as an autonomous subsidiary, and will continue to operate under the direction
of the current management, who will maintain a substantial equity stake in the
company. Bruce A. Friedman, currently President and Chief Executive Officer of
Commodore Media, will work with both Hicks Muse and Capstar Broadcasting in a
capacity yet to be determined. Also as previously indicated, James T. Shea,
previously Chief Operating Officer of Commodore Media, has succeeded Mr.
Friedman as its President.
Thomas O. Hicks, chairman and chief executive officer of Hicks Muse, said:
"Commodore Media provides an extremely solid foundation on which to build an
outstanding group of middle-market radio broadcasting properties. Along with
Capstar's Steve Hicks, we at Hicks Muse look forward to working closely with
Commodore management, who will continue to operate their radio stations and
will function as our partners as we seek to take maximum advantage of the new
Telecommunications Act by investing in attractive middle markets up to the
limits the Act now makes possible, and to build the value of the group for the
benefit of our investors and business partners."
R. Steven Hicks of Capstar Broadcasting said: "This is the first of what we
expect will be a number of radio industry transactions we plan to pursue in the
months and years ahead. We are currently working on several other acquisitions,
which we expect to announce shortly and which are consistent with our strategy
of being a leading consolidator of middle-market radio properties. There has
never been a better time to be a radio industry investor and operator. With the
support of Hicks Muse, Capstar Broadcasting is uniquely positioned to take
advantage of the many attractive investment opportunities, and to build value
for our business partners, employees and fellow investors."
BT Securities acted as advisors to Hicks, Muse, Tate & Furst for the proposed
transaction. Commodore Media was advised by Randall Jeffery of Media Venture
Partners, who initiated the transaction, and CIBC Wood Gundy.
Hicks, Muse, Tate & Furst Incorporated is a leading private investment firm.
Over the past six years, Hicks Muse has completed, or currently has pending,
more than 55 transactions with an aggregate value in excess of $9 billion.
Headquartered in Dallas, the firm also has offices in New York, St. Louis and
Mexico City.
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