E X C H A N G E A G R E E M E N T
BETWEEN
CHANCELLOR RADIO BROADCASTING COMPANY
WAPE-FM JACKSONVILLE, FLORIDA
WFYV-FM ATLANTIC BEACH, FLORIDA
AND
SFX BROADCASTING, INC.
WBLI, INC.
WBLI-FM, INC.
WBLI-FM PATCHOGUE, NEW YORK
WHFM, INC.
WHFM-FM SOUTHAMPTON, NEW YORK
WBAB, INC.
WBAB-FM BABYLON, NEW YORK
WGBB, INC.
WGBB-AM FREEPORT, NEW YORK
July 1, 1996
EXCHANGE AGREEMENT
TABLE OF CONTENTS
Section 1. Asset Purchase Agreements............................-2-
1.1 Florida Agreement....................................-2-
Section 2. Exchange of Assets...................................-2-
2.1 Tax Free Exchange....................................-2-
2.2 Transfer of Assets to SFX............................-2-
2.2.1 FCC Licenses...................................-2-
2.2.2 Other Governmental Authorizations..............-3-
2.2.3 Tangible Personal Property.....................-3-
2.2.4 Contracts......................................-3-
2.2.5 Intellectual Property..........................-3-
2.2.6 Station Records................................-3-
2.2.7 Manufacturer/Vendor Warranties.................-3-
2.2.8 Real Estate....................................-4-
2.2.9 All Other Jacksonville Station Assets..........-4-
2.3 Excluded Jacksonville Assets.........................-4-
2.3.1 Cash...........................................-4-
2.3.2 Receivables....................................-4-
2.3.3 Consumed Property..............................-4-
2.3.4 Terminated Contracts...........................-4-
2.3.5 Corporate Records..............................-4-
2.3.6 Insurance......................................-4-
2.3.7 Employee Plans.................................-4-
2.3.8 Corporate Name.................................-5-
2.3.9 Excluded Assets. .............................-5-
2.3.1 Rights.........................................-5-
2.3.11 Tax Refunds...................................-5-
2.3.12...............................................-5-
2.4 Transfer of Assets to Chancellor.....................-5-
2.4.1 FCC Licenses...................................-5-
2.4.2 Other Governmental Authorizations..............-5-
2.4.3 Tangible Personal Property.....................-5-
2.4.4 Contracts......................................-5-
2.4.5 Intellectual Property..........................-6-
2.4.6 Station Records................................-6-
2.4.7 Manufacturer/Vendor Warranties.................-6-
i
2.4.8 Real Estate....................................-6-
2.4.9 All Other Long Island Stations Assets..........-6-
2.5 Excluded Long Island Assets..........................-6-
2.5.1 Cash...........................................-6-
2.5.2 Receivables....................................-7-
2.5.3 Consumed Property..............................-7-
2.5.4 Terminated Contracts...........................-7-
2.5.5 Corporate Records..............................-7-
2.5.6 Insurance......................................-7-
2.5.7 Employee Plans.................................-7-
2.5.8................................................-7-
2.5.9................................................-7-
2.5.10...............................................-7-
2.5.11...............................................-7-
2.5.12...............................................-7-
2.6 Permitted Liens......................................-7-
2.6.1 Jacksonville Stations..........................-7-
2.6.2 Long Island Stations...........................-8-
Section 3 . Consideration........................................-8-
3.1 Consideration From Chancellor........................-8-
3.1.1 Florida Agreement..............................-8-
3.2 Consideration From SFX...............................-8-
3.2.1 Long Island Transaction Approved...............-8-
3.3 Adjustments to Cash Payments.........................-8-
3.3.1 Adjustments for Long Island Stations Operations-8-
3.3.2 Adjustments for Jacksonville Station Operations-8-
3.3.3 Definition of Buyer and Seller.................-9-
3.3.4 Items Subject to Adjustment....................-9-
3.3.5 Ad Valorem of Real Estate Taxes................-9-
3.3.6 Dispute Procedure for Allocations..............-9-
3.4 Allocation of Consideration. .......................-10-
3.4.1 Long Island Stations' Barter and Trade........-10-
3.4.2 Jacksonville Stations' Barter and Trade.......-10-
Section 4. Assumption of Obligations...........................-10-
4.1 Long Island Assumed Liabilities.....................-10-
4.2 Long Island Retained Liabilities. ..................-10-
4.3 Jacksonville Assumed Liabilities....................-11-
4.4 Florida Retained Liabilities........................-11-
Section 5. Sole Remedies.......................................-11-
5.1 Omni's Failure to Close.............................-11-
ii
5.1.1...............................................-12-
5.1.2...............................................-12-
5.2 Chancellor's Failure to Transfer Jacksonville
Assets.............................................-12-
5.2.1...............................................-12-
5.2.2...............................................-13-
5.3 ....................................................-13-
5.3.1...............................................-13-
5.4 ....................................................-13-
Section 6. Government Consents.................................-13-
6.1 FCC Consent.........................................-13-
6.2 FCC Applications....................................-14-
6.3 Filings.............................................-14-
Section 7. Local Marketing Agreements..........................-14-
7.1 Long Island Local Marketing Agreement...............-14-
7.2 Jacksonville Local Marketing Agreement..............-15-
Section 8. Collection of Accounts Receivable...................-15-
8.1 Long Island Accounts Receivable.....................-15-
8.2 Jacksonville Accounts Receivable....................-16-
Section 9. Third Party Consents................................-17-
9.1 Long Island Consents................................-17-
9.2 Florida Consents....................................-17-
9.3 Failure to Obtain Consents..........................-17-
Section 10. Representations and Warranties of Chancellor........-18-
10.1 Organization and Standing...........................-18-
10.2 Authorization and Binding Obligation................-18-
10.3 Qualification.......................................-18-
10.4 Absence of Conflicting Agreements or
Required Consents..................................-18-
10.5 Litigation: Compliance with Law....................-18-
10.6 Broker/Finder Fees..................................-18-
10.7 Representations and Warranties as to the
Jacksonville Stations..............................-19-
Section 11. Representation and Warranties of SFX................-19-
11.1 Organization and Standing...........................-19-
11.2 Authorization and Binding Obligation................-19-
11.3 Qualification.......................................-19-
11.4 Absence of Conflicting Agreements or
Required Consents..................................-19-
11.5 Litigation: Compliance with Law....................-20-
11.6 Broker/Finder Fees..................................-20-
iii
11.7 Representations and Warranties as to the Long
Island Stations....................................-20-
Section 12 Covenants of Chancellor.............................-20-
12.1 Conduct of Station:.................................-20-
12.2 ....................................................-22-
12.3 No Inconsistent Action..............................-22-
12.4 Updating of Schedules...............................-22-
12.5 Enforcement of Agreements...........................-23-
12.6 FCC Reports.........................................-23-
12.7 Notification........................................-23-
12.8 Post-Closing Access.................................-23-
12.9 ....................................................-23-
Section 13. Covenants of SFX....................................-23-
13.1 Conduct of Station..................................-24-
13.2 ....................................................-25-
13.3 No Inconsistent Action..............................-25-
13.4 Updating of Schedules...............................-25-
13.5 Enforcement of Agreements. .........................-26-
13.6 FCC Reports.........................................-26-
13.7 Notification........................................-26-
13.8 Post-Closing Access.................................-26-
13.9 ....................................................-26-
Section 14. Joint Covenants.....................................-26-
14.1 Confidentiality.....................................-27-
14.2 Cooperation.........................................-27-
14.3 Control of Stations.................................-27-
14.4 Bulk Sales Laws.....................................-27-
14.5 Public Announcements................................-27-
14.6 Hart-Scott-Rodino...................................-28-
14.7 Employee Matters....................................-28-
Section 15. Conditions of Closing by Chancellor.................-28-
15.1 Representations, Warranties and Covenants...........-28-
15.2 Compliance with Agreement...........................-29-
15.3 Third Party Consents and Approvals;
Estoppel Certificates..............................-29-
15.4 Closing Certificates................................-29-
15.5 Governmental Consents...............................-29-
15.6 Adverse Proceedings.................................-29-
15.7 Closing Documents...................................-29-
15.8 Environmental Condition.............................-30-
iv
Section 16. Conditions of Closing by SFX........................-30-
16.1 Representations, Warranties and Covenants...........-30-
16.2 Compliance with Agreement...........................-30-
16.3 Third Party Consents and Approvals;
Estoppel Certificates..............................-30-
16.4 Closing Certificates................................-30-
16.5 Governmental Approval...............................-30-
16.6 Adverse Proceedings.................................-31-
16.7 Closing Documents...................................-31-
16.8 Environmental Condition.............................-31-
Section 17. Closing.............................................-31-
17.1 Time and Place......................................-31-
17.2 Deliveries By Chancellor............................-31-
17.3 Delivery By SFX.....................................-32-
Section 18. Survival of Representations and Warranties..........-32-
18.1 Survival of Representations and Warranties..........-32-
Section 19. Indemnification.....................................-32-
19.1 Indemnification by Chancellor.......................-33-
19.2 Indemnification by SFX..............................-33-
19.3 Limitation on Reimbursement.........................-33-
19.4 Procedure for Indemnification.......................-34-
Section 20. Termination.........................................-35-
20.1 Right to Terminate..................................-35-
Section 21. Expenses, Transfer Taxes, and Fees..................-36-
21.1 Expenses............................................-36-
21.2 Transfer Taxes and Similar Charges..................-36-
21.3 Governmental Filing or Grant Fees...................-36-
Section 22. Miscellaneous.......................................-36-
22.1 Risk of Loss........................................-36-
22.2 Assignment..........................................-36-
22.3 Amendments. ........................................-37-
22.4 Headings............................................-37-
22.5 Governing Law. .....................................-37-
22.6 Notices.............................................-37-
22.7 Schedules...........................................-38-
22.8 Entire Agreement....................................-38-
22.9 Severability........................................-38-
22.10 Counterparts.......................................-38-
v
22.11 Binding Agreement..................................-39-
22.12 Governing Law. ....................................-39-
Signature Pages..................................................-40-
vi
EXCHANGE AGREEMENT
This Exchange Agreement is made effective as of July 1, 1996 by and
among WBLI, Inc., a New York corporation, WBLI-FM, Inc, a Delaware
corporation, WHFM, Inc., a New York corporation, WBAB, Inc., a New York
corporation, and WGBB, Inc., a New York corporation, each subsidiaries of SFX
Broadcasting, Inc., a Delaware corporation (collectively, "SFX"), and
Chancellor Radio Broadcasting Company, a Delaware corporation ("Chancellor").
RECITALS
WHEREAS, SFX owns substantially all of the assets used or useful in the
operation of WBAB-FM, Babylon, New York; WBLI-FM, Patchogue, New York;
WGBB-AM, Freeport, New York; and WHFM-FM, Southampton, New York (the "Long
Island Stations"), including the related broadcast licenses and authorizations
issued by the Federal Communications Commission ("FCC");
WHEREAS, Chancellor is a party to a certain Asset Purchase Agreement
("Florida Agreement"), dated May 14, 1996 among Chancellor and Chancellor
Broadcasting Company and OmniAmerica Group, WAPE-FM License Partnership,
WFYV-FM License Partnership, WEAT-AM License Partnership, WEAT-FM License
Partnership, WXXL License Partnership, WOLL License Partnership and WJHM-FM
License Partnership (collectively, "Omni") contemplating, inter alia, the
purchase by Chancellor of substantially all of Omni's assets used or useful in
the operation of Station WAPE-FM, Jacksonville, Florida and Station WFYV-FM,
Atlantic Beach, Florida (collectively, the "Jacksonville Stations"), including
the related FCC broadcast licenses and authorizations;
WHEREAS, Chancellor and SFX desire to exchange the assets of the
Jacksonville Stations for the assets of the Long Island Stations plus a cash
payment by Chancellor as provided herein;
WHEREAS, the parties intend the exchange of the Jacksonville Stations
and the Long Island Stations to qualify as a tax free exchange of like-kind
assets pursuant to Section 1031 of the Internal Revenue Code of 1986, as
amended (the "Code");
WHEREAS, effective August 1, 1996, (the "Jacksonville LMA Commencement
Date"), (i) Chancellor and SFX shall enter into Local Marketing Agreements
("LMAs") with respect to the Jacksonville Stations ("Jacksonville Stations
LMA"); and (ii) effective July 1, 1996, (the "Long Island LMA Commencement
Date") Chancellor and SFX shall enter into an LMA with respect to the Long
Island Stations ("Long Island Stations LMA").
NOW THEREFORE, in contemplation of the recitals set out above and in
consideration of the mutual covenants and agreements contained herein, the
parties, intending to be contractually bound, agree as follows:
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SECTION 1. ASSET PURCHASE AGREEMENTS
1.1 Florida Agreement. Chancellor shall comply in a timely fashion
with all material requirements of the Florida Agreement and shall use its
reasonable best efforts to acquire the assets of the Jacksonville Stations
from Omni at the earliest practicable time and in the manner contemplated in
the Florida Agreement. Insofar as the Florida Agreement relates to the
Jacksonville Stations, Chancellor shall not amend in any material respect the
Florida Agreement or waive any right thereunder without the prior written
consent of SFX. This prior written consent shall not be unreasonably withheld
by SFX. Chancellor shall enforce any and all of its material rights under the
Florida Agreement and shall have the capacity and ability at all times to
perform its obligations under the Florida Agreement.
SECTION 2. EXCHANGE OF ASSETS
2.1 Tax Free Exchange. The parties intend for this transaction to
qualify as a tax-free exchange under Section 1031 of the Code. In order to
attain this goal, the parties will, to the extent possible, exchange (i)
depreciable personal property in the same General Asset Class or Product
Class, as those terms are used in Treas. Regulation 1.1031(a)-2(b); and (ii)
non-depreciable personal property and intangible personal property for other
property of a like kind. Additionally, at SFX's sole option, SFX may prior to
Closing elect to receive in lieu of the Long Island Cash Purchase Price (as
hereinafter defined), a conveyance of other investment or like-kind property
in order to qualify as a tax-deferred exchange under the non-recognition of
gain provisions of Internal Revenue Code Section 1031 and regulations
promulgated thereunder; provided, however, that the consummation of this
Agreement is not predicated or conditioned on such exchange. Further, in the
event SFX has not by Closing selected suitable like-kind property for such
exchange, SFX may elect to have Chancellor pay the Long Island Cash Purchase
Price to a third party independent escrow agent to retain such funds in
accordance with a suitable escrow agreement to be executed at such time.
Chancellor agrees to cooperate in such exchange procedures and to execute and
deliver such documents as may be reasonably requested by SFX or required to
effect any such exchange, including any assignments by SFX, of any of its
interest under this Agreement, provided that Chancellor shall incur no
additional costs, expenses, delays or liabilities in this transaction as a
result of or connected with the exchange; and provided further that SFX shall
reimburse and hold harmless Chancellor for all reasonable costs and expenses
attributable to their cooperation.
2.2 Transfer of Assets to SFX. Subject to the terms, conditions and
limitations contained herein, on the Closing Date as defined in Section 17.1,
Chancellor shall convey to SFX and SFX shall acquire from Chancellor (to the
extent Chancellor acquires the same from Omni) all of the following assets,
properties, interests and rights (the "Jacksonville Assets") free and clear of
liens and encumbrances except the Jacksonville Permitted Liens allowed under
Section 2.6.1.
2.2.1 FCC Licenses. All licenses, permits, special temporary
authority,
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program test authority and authorizations of any type whatsoever issued by the
FCC and used in connection with the Jacksonville Stations (the "Jacksonville
Licenses"), including those authorizations for the Jacksonville Stations
identified in the pertinent portions of Schedule 2.2.1 of this Agreement and
any renewals or modifications thereof;
2.2.2 Other Governmental Authorizations. All licenses, permits,
and other authorizations of any nature whatsoever issued by a governmental
authority and used in the operation of the Jacksonville Stations;
2.2.3 Tangible Personal Property. All equipment, office
furniture and fixtures, office materials and supplies, inventory, spare parts
and all other tangible personal property of every kind and description, and
Chancellor's rights therein, owned, leased or held by Chancellor and used in
connection with the operations of the Jacksonville Stations, including but not
limited to those items described or listed in Schedule 2.2.3, together with
any replacements thereof and additions thereto made before the Closing Date,
and less any retirements or dispositions thereof made before the Closing Date
in the ordinary course of business;
2.2.4 Contracts. All contracts, agreements, leases and legally
binding contractual rights of any kind, written or oral, relating to the
operation of the Jacksonville Stations ("Jacksonville Contracts"), listed in
Schedule 2.2.4 or entered into before the Closing Date in the ordinary course
of business of the Jacksonville Stations and in accordance with this
Agreement;
2.2.5 Intellectual Property. All trademarks, trade names,
service marks (including the Call Signs WAPE-FM and WFYV-FM), franchises,
copyrights, Internet domain names and addresses, including registrations and
applications for registration of any of them, computer software programs and
programming material of whatever form or nature, jingles, slogans, the
Jacksonville Stations' logos and all other logos or licenses to use same and
all other intangible property rights of Chancellor, which are used exclusively
in connection with the operation of the Jacksonville Stations, including but
not limited to those listed in Schedule 2.2.5 (collectively, the "Jacksonville
Intellectual Property") together with any associated good will and any
additions thereto before the Closing Date;
2.2.6 Station Records. All of the files, documents, records,
and books of account relating to the operation of the Jacksonville Stations or
to the Jacksonville Assets, including without limitation the Jacksonville
Stations' public files, programming information and studies, technical
information and engineering data, news and advertising studies or consulting
reports, marketing studies, demographic data, sales correspondence, lists of
advertisers, promotional materials, credit and sales reports and filings with
the FCC, copies of all written Contracts to be assigned hereunder, logs,
software programs and books and records relating to employees, financial,
accounting and operation matters; but excluding records relating solely to any
Excluded Asset (as hereinafter defined);
2.2.7 Manufacturer/Vendor Warranties. All manufacturers' and
vendors'
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warranties relating to items included in the Jacksonville Assets and all
similar rights against third parties relating to items included in the
Jacksonville Assets;
2.2.8 Real EstatAll real property used in operating the
Jacksonville Stations together with all appurtenant easements thereunto and
all structures, fixtures and improvements located thereon as more fully
described in Schedule 2.2.8, together with any additions thereto before the
Closing Date ("the Jacksonville Real Estate"); and
2.2.9 All Other Jacksonville Station Assets. Except for
Excluded Jacksonville Assets, such other assets, properties, interests and
rights that are used exclusively in connection with the operation of the
Jacksonville Stations or that are located as of the Closing Date on the
Jacksonville Real Estate.
2.3 Excluded Jacksonville Assets. Notwithstanding anything to the
contrary contained herein, it is expressly understood and agreed that the
Jacksonville Assets shall not include the following assets along with all
rights, title and interest therein (the "Excluded Jacksonville Assets"):
2.3.1 Cash. All cash, marketable securities and cash
equivalents of Chancellor on hand and/or in banks;
2.3.2 Receivables. All accounts receivable or notes receivable
of Chancellor;
2.3.3 Consumed Property. All tangible and intangible personal
property related to the Jacksonville Stations disposed of or consumed in the
ordinary course of business of Chancellor or Omni before the Closing Date, or
as permitted hereunder;
2.3.4 Terminated Contracts. All non-assumed Contracts or
Contracts that have terminated or expired prior to the Closing Date in the
ordinary course of business of Chancellor or Omni as permitted hereunder;
2.3.5 Corporate Records. Chancellor's corporate seal, minute
books, charter documents, corporate stock record book and such other books and
records as pertain to the organization, existence or share capitalization of
Chancellor and duplicate copies of all books and records transferred to SFX
hereunder as are necessary to enable Chancellor to file its tax returns and
reports, as well as any other contracts, records or materials relating to
Chancellor or its business and not involving or relating to the Jacksonville
Assets or the operation or operations of the Jacksonville Stations;
2.3.6 Insurance. Contracts of insurance and all insurance
proceeds or claims made by Chancellor;
-4-
2.3.7 Employee Plans. All pension, profit sharing or cash or
deferred (Section 401(k)) plans and trusts and the assets thereof and any
other employee benefit plan or arrangement and the assets thereof, if any,
maintained by Chancellor;
2.3.8 Corporate Name. Any right to use the names "Chancellor,"
"Chancellor Broadcasting Company," or "Chancellor Radio Broadcasting Company"
and any variations thereof;
2.3.9 Excluded Assets. Those specific assets identified on the
Excluded Assets Schedule attached to this Agreement as Schedule 2.3.9;
2.3.10 Rights. All of Chancellor's rights in and to all causes
of action;
2.3.11 Tax Refunds. All tax refunds relating to the period
prior to the Closing; and
2.3.12 Other Assets. All other assets or Contracts, including
but not limited to those assets or Contracts associated with the Florida
Agreement, that are not specifically listed in this Agreement as the
Jacksonville Assets or used or useful, as determined by Chancellor, in the
operation or operations of the Jacksonville Stations.
2.4 Transfer of Assets to Chancellor. Subject to the terms, conditions
and limitations contained herein, on the Closing Date, SFX shall convey to
Chancellor and Chancellor shall acquire from SFX all of the following assets,
properties, interests and rights (the "Long Island Assets") free and clear of
liens and encumbrances except the Long Island Permitted Liens under
Section 2.6.2:
2.4.1 FCC Licenses. All licenses, permits, special temporary
authority, program test authority and authorizations of any type whatsoever
issued by the FCC and used in connection with the Long Island Stations (the
"Long Island Licenses"), including those authorizations for the Long Island
Stations identified in Schedule 2.4.1 to this Agreement and any renewals or
modifications thereof.
2.4.2 Other Governmental Authorizations. All licenses,
permits, and other authorizations of any nature whatsoever issued by a
governmental authority and used in the operation of the Long Island Stations.
2.4.3 Tangible Personal Property. All equipment, office
furniture and fixtures, office materials and supplies, inventory, spare parts
and all other tangible personal property of every kind and description, and
SFX's rights therein, owned, leased or held by SFX and used in connection with
the operations of the Long Island Stations, including but not limited to those
items described or listed in Schedule 2.4.3, together with any replacements
thereof and additions thereto, made before the Closing Date, and less any
retirements or dispositions thereof made before the
-5-
Closing Date in the ordinary course of business.
2.4.4 Contracts. All contracts, agreements, leases and legally
binding contractual rights of any kind, written or oral, relating to the
operation of the Long Island Stations ("Long Island Contracts"), listed in
Schedule 2.4.4 or entered into before the Closing Date in the ordinary course
of business of the Long Island Stations, and in accordance with this
Agreement.
2.4.5 Intellectual Property. All trademarks, trade names,
service marks (including the Call Signs WBAB-FM, WBLI-FM, WGBB-FM and
WHFM-FM), franchises, copyrights, including registrations and applications for
registration of any of them, computer software programs and programming
material of whatever form or nature, jingles, slogans, the Long Island
Stations' logos and all other logos or licenses to use same and all other
intangible property rights of SFX, which are used exclusively in connection
with the operation of the Long Island Stations, including but not limited to
those listed Schedule 2.4.5 (collectively, the "Long Island Intellectual
Property") together with any associated good will and any additions thereto
before the Closing Date;
2.4.6 Station Records. All of the files, documents, records,
and books of account relating to the operation of the Long Island Stations or
to the Long Island Assets, including without limitation the Long Island
Stations' public files, programming information and studies, technical
information and engineering data, news and advertising studies or consulting
reports, marketing studies, demographic data, sales correspondence, lists of
advertisers, promotional materials, credit and sales reports and filings with
the FCC, copies of all written Contracts to be assigned hereunder, logs,
software programs and books and records relating to employees, financial,
accounting and operation matters; but excluding records relating solely to any
Excluded Long Island Assets;
2.4.7 Manufacturer/Vendor Warranties. All manufacturers' and
vendors' warranties relating to items included in the Long Island Assets and
all similar rights against third parties relating to items included in the
Long Island Assets;
2.4.8 Real EstatAll real property used in operating the Long
Island Stations together with all appurtenant easements thereunto and all
structures, fixtures and improvements located thereon as more fully described
in Schedule 2.4.8, together with any additions thereto before the Closing Date
(the "Long Island Real Estate"); and
2.4.9 All Other Long Island Stations Assets. Except for
Excluded Long Island Assets, such other assets, properties, interests and
rights that are used exclusively in connection with the operation of the Long
Island Stations or that are located as of the Closing Date on the Long Island
Real Estate.
2.5 Excluded Long Island Assets. Notwithstanding anything to the
contrary contained herein, it is expressly understood and agreed that the
Long Island Assets shall not include
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the following assets along with all rights, title and interest therein (the
"Excluded Long Island Assets"):
2.5.1 Cash. All cash, marketable securities and cash
equivalents of SFX on hand and/or in banks;
2.5.2 Receivables. All accounts receivable or notes receivable
of SFX;
2.5.3 Consumed Property. All tangible and intangible personal
property related to the Long Island Stations disposed of or consumed in the
ordinary course of business of SFX before the Closing Date, or as permitted
under the terms hereof;
2.5.4 Terminated Contracts. All non-assumed Contracts or
Contracts that have terminated or expired prior to the Closing Date in the
ordinary course of business of SFX and as permitted hereunder;
2.5.5 Corporate Records. SFX's corporate seal, minute books,
charter documents, corporate stock record book and such other books and
records as pertain to the organization, existence or share capitalization of
SFX and duplicate copies of all books and records transferred to Chancellor
hereunder as are necessary to enable SFX to file its tax returns and reports
as well as any other records or materials relating to SFX or its business and
not involving or relating to the Long Island Assets or the operation or
operations of the Long Island Stations;
2.5.6 Insurance. Contracts of insurance and all insurance
proceeds or claims made by SFX;
2.5.7 Employee Plans. All pension, profit sharing or cash or
deferred (Section 401(k)) plans and trusts and the assets thereof and any
other employee benefit plan or arrangement and the assets thereof, if any,
maintained by SFX; and
2.5.8 Any right, to use the name "SFX" or "SFX Broadcasting,
Inc." and any variations thereof;
2.5.9 Those specific assets identified on the Excluded Assets
Schedule attached to this Agreement as Schedule 2.5.9;
2.5.10 All of SFX's rights in and to all causes of action;
2.5.11 All tax refunds relating to the period prior to the
Closing; and
2.5.12 All other assets or Contracts, including but not limited
to those assets or Contracts associated with the Long Island Agreement that
are not specifically listed in this Agreement as the Long Island Assets or
used or useful, as determined by SFX, in the operation or
-7-
operations of the Long Island Stations.
2.6 Permitted Liens.
2.6.1 Jacksonville Stations. The Jacksonville Assets shall be
conveyed to SFX free and clear of all liens and encumbrances except the liens
and encumbrances listed in Schedule 2.6.1 (the "Jacksonville Permitted
Liens").
2.6.2 Long Island Stations. The Long Island Assets shall be
conveyed to Chancellor free and clear of all liens and encumbrances except the
liens and encumbrances listed in Schedule 2.6.2 (the "Long Island Permitted
Liens").
SECTION 3. CONSIDERATION.
3.1 Consideration From Chancellor.
3.1.1 Florida Agreement. If the Florida Agreement closes and
Chancellor acquires the Jacksonville Assets and the FCC approves SFX's
acquisition of the Jacksonville Stations, then the consideration delivered by
Chancellor to SFX shall consist of (a) the Jacksonville Assets described in
Section 2.2; and (b) the sum of Eleven Million Dollars ($11,000,000), subject
to any adjustments provided herein (the "Long Island Cash Purchase Price").
This Long Island Cash Purchase Price shall be paid to SFX or its designee at
Closing by wire transfer of immediately available funds. Further and subject
to the limitations contained in Section 4.1, Chancellor shall assume the Long
Island Assumed Liabilities
3.2 Consideration From SFX.
3.2.1 Long Island Transaction Approved. If the FCC approves
Chancellor's acquisition of the Long Island Stations, the consideration
delivered by SFX to Chancellor shall consist of the Long Island Assets
described in Section 2.4 less any Excluded Long Island Assets described in
Section 2.5. Further and subject to the limitations contained in Section 4.3,
SFX shall assume the Jacksonville Assumed Liabilities.
3.3 Adjustments to Cash Payments. The cash payment(s) contemplated
in Sections 3.1 and 3.2 shall be adjusted as follows:
3.3.1 Adjustments for Long Island Stations Operations. Subject
to the Long Island Stations LMA to be entered into pursuant to Section 7.1
herein, income and expenses from the operation of the Long Island Stations
shall be allocated to the parties on the principle that (i) SFX shall be
entitled to all income attributable to, and shall be responsible for all
expenses arising out of, the operation of the Long Island Stations up to 11:59
PM on the Closing Date (the "Effective Time") and (ii) Chancellor shall be
entitled to all income attributable to, and shall be responsible for all
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expenses arising out of, the operation of the Long Island Stations after the
Effective Time. Overlapping items of income and expense shall be prorated as
of the Effective Time.
3.3.2 Adjustments for Jacksonville Station Operations. Subject
to the Jacksonville Stations LMA to be entered into pursuant to Section 7.2,
herein, income and expenses from the operation of the Jacksonville Stations
shall be allocated to the parties on the principle that (i) Chancellor shall
be entitled to all income attributable to, and shall be responsible for all
expenses arising out of, the operation of the Jacksonville Stations up to the
Effective Time and (ii) SFX shall be entitled to all income attributable to,
and shall be responsible for all expenses arising out of, the operation of the
Jacksonville Stations after the Effective Time. Overlapping items of income
and expense shall be prorated as of the Effective Time.
3.3.3 Definition of Buyer and Seller.
(a) For purposes of Section 3.3.3 - 3.3.6, only, Buyer
means (i) Chancellor with respect to the Long Island Stations and (ii) SFX with
respect to the Jacksonville Stations.
(b) For purposes of Section 3.3.3 - 3.3.6, only, Seller
means (i) SFX with respect to the Long Island Stations and (ii) Chancellor
with respect to the Jacksonville Stations.
3.3.4 Items Subject to Adjustment. Items subject to adjustment
pursuant to Sections 3.3.1 and 3.3.2 include, but are not limited to, expenses
for goods and services received both before and after the Effective Time,
utilities charges, ad valorem, real estate, property and other taxes (other
than income taxes, which shall be Seller's sole responsibility for all taxable
periods ending prior to and including the Closing Date, and those taxes
arising from the sale and transfer of any of the Jacksonville Assets or the
Long Island Assets, which shall be paid as set forth in Section 21.2), income
and expenses under the various assumed contracts (other than Trade
Agreements), prepaid expenses, music and other license fees (including any
retroactive adjustments thereof), wages, salaries, and other employee benefit
expenses (whether such wages, salaries or benefits are current or deferred
expenses) (including, without limitation, liabilities accrued up to the
Effective Time for bonuses, commissions, vacation pay, payroll taxes, workers'
compensation and social security taxes) and rents and similar prepaid and
deferred items.
3.3.5 Ad Valorem of Real Estate Taxes. Ad valorem and other
real estate taxes shall be apportioned on the basis of the taxes assessed for
the most recently-completed calendar year, with a reapportionment as promptly
as practicable after the tax rates and real property valuations for the
calendar year in which the Closing occurs can be ascertained. In addition,
Buyers shall be entitled to a credit in this proration process for the amount
of any taxes (or other governmental charges) that are due and payable by
Sellers, but are being contested in good faith in appropriate proceedings and
are secured by liens on the Long Island Assets or Jacksonville Assets that
have not been removed as of or before the Closing (but once such amounts are
finally
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determined, Buyers shall use such credit to remove such liens and return to
Sellers the excess of (i) the amount of such credit minus (ii) the amount of
such taxes or other governmental charges as finally determined, or Sellers
shall pay to Buyers the deficiency, as appropriate).
3.3.6 Dispute Procedure for Allocations. Allocation and
proration of the items set forth in Subsection 3.3.4 above to the extent
practicable shall be made by Buyers and Sellers on the Closing Date, but in no
event shall the allocation and proration of the items set forth in Subsection
3.3.4 above be made more than thirty (30) days after the Closing Date. If the
parties cannot reach agreement within thirty (30) days after the Closing Date
on the final allocation and proration, the matter shall be referred to Arthur
Andersen, L.L.P. (the "Independent Auditor") to resolve the matter, whose
decision will be final and binding on the parties, and whose fees and expenses
shall be borne by Buyers and Sellers in accordance with the following: each
party shall pay an amount equal to the sum of all fees and expenses of the
Independent Auditor on a proportional basis taking into account the amount of
the net allocation and proration proposed by each of Buyers and Sellers and
the amount of the final allocation and proration determined by the Independent
Auditor (for example, if Buyers proposed a payment of $10 to Sellers, Sellers
proposed a payment of $100, and the Independent Auditor proposed a payment of
$30, Buyers would pay 20/90ths of the Independent Auditor's fees and Sellers
would pay 70/90ths of those fees based on the $90 in dispute between the
parties).
3.4 Allocation of Consideration. The value of the consideration
(including cash) that each party is exchanging under this Exchange Agreement
is Fifty-four Million Dollars ($54,000,000). Forty-three Million Dollars
($43,000,000) of the consideration exchanged shall be allocated to the
Jacksonville Assets. The allocation of consideration among each item included
in the Long Island Assets and the Jacksonville Assets shall be made by Arthur
Andersen, L.L.P. on the basis of its independent appraisal of the Long Island
Assets and the Jacksonville Assets. This independent appraisal shall be paid
for equally by the parties and shall be considered binding by the parties. The
parties shall use such appraisal for all purposes, including for purposes of
the federal and state income tax returns.
3.4.1 Long Island Stations' Barter and Trade. If the value of
trade, barter and similar arrangements for the sale of advertising time for
other than cash that are assumed by Chancellor under this Agreement is $50,000
(or more) greater than the value of the consideration to be received by
Chancellor on or after the Long Island LMA Commencement Date with respect to
the Long Island Stations, SFX shall pay Chancellor the excess (other than the
first $50,000) within 30 days after the Long Island LMA Commencement Date.
3.4.2 Jacksonville Stations' Barter and Trade. If the value of
trade, barter and similar arrangements for the sale of advertising time for
other than cash that are assumed by SFX under this Agreement is $50,000 (or
more) greater than the value of the consideration to be received by SFX on or
after the Jacksonville LMA Commencement Date with respect to the Jacksonville
Stations, Chancellor shall pay SFX the excess (other than the first $50,000)
within 30 days after the Jacksonville LMA Commencement Date.
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SECTION 4. ASSUMPTION OF OBLIGATIONS
4.1 Long Island Assumed Liabilities. Subject to the provisions of
this Section 4, and subject to the Long Island Stations LMA as set forth in
Section 7.1, hereof, Chancellor shall assume the obligations of SFX arising or
to be performed under such of the Long Island Contracts as are listed in
Schedule 2.4.4 hereto and all liabilities and obligations from the ownership
or operation of the Stations Assets (the "Long Island Assumed Liabilities")
after the Closing Date.
4.2 Long Island Retained Liabilities. Notwithstanding anything
contained in this Agreement to the contrary, Chancellor expressly does not,
and shall not, assume or agree to pay, satisfy, discharge or perform and will
not be deemed by virtue of the execution and delivery of this Agreement to
have assumed or to have agreed to pay, satisfy, discharge or perform, any
liabilities, obligations or commitments of SFX of any nature whatsoever
whether accrued, absolute, contingent or otherwise and whether or not
disclosed to Chancellor, other than the Long Island Assumed Liabilities. All
of such liabilities and obligations shall be referred to herein collectively
as the "Long Island Retained Liabilities".
4.3 Jacksonville Assumed Liabilities. Subject to the provisions of
this Section 4, and subject to the Jacksonville Stations LMA, SFX shall assume
the obligations of Chancellor arising or to be performed on or after the
Closing Date under such of the Jacksonville Contracts as are listed in
Schedule 2.2.4 hereto and all liabilities and obligations from the ownership
or operation of the Stations Assets (the "Jacksonville Assumed Liabilities")
after the Closing Date. In addition, SFX shall assume Chancellor's
post-closing obligations under Article 11 of the Florida Agreement, however,
such obligations shall be limited to providing assistance to Chancellor and
the selling party, and SFX shall have no obligation to provide any payments
which Chancellor may be obligated to make under the Florida Agreement.
4.4 Florida Retained Liabilities. Notwithstanding anything
contained in this Agreement to the contrary, SFX expressly does not, and shall
not, assume or agree to pay, satisfy, discharge or perform and will not be
deemed by virtue of the execution and delivery of this Agreement to have
assumed or to have agreed to pay, satisfy, discharge or perform, any
liabilities, obligations or commitments of Chancellor of any nature whatsoever
whether accrued, absolute, contingent or otherwise and whether or not
disclosed to SFX, other than the Jacksonville Assumed Liabilities. All such
liabilities and obligations shall be referred to herein collectively as the
"Florida Retained Liabilities."
SECTION 5. SOLE REMEDIES
5.1 Omni's Failure to Close. In the event the Florida Agreement
between Chancellor and Omni fails to close and SFX is not in material breach
of this Agreement:
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(a) SFX has the right to compel Chancellor to use its
reasonable best efforts to close the Florida Agreement in the event all
conditions of Closing the Florida Agreement have been met. However, Chancellor
shall not have any obligation to waive any closing conditions or breaches of
Omni under the Florida Agreement.
(b) SFX has twelve (12) months to designate an alternative
radio broadcast station or stations to exchange under the terms similar to
this Agreement in substitution for the Jacksonville Stations and the parties
will delay closing on the Long Island Stations for this period of time. The
parties agree to extend the Long Island Stations LMA for this same period of
time. Further, SFX, has the right to extend this twelve month designation
period and the corresponding time periods under this Subsection for a period
not to exceed twelve additional months. During this time period, or extended
time period, SFX may increase the Long Island Stations LMA monthly payment fee
to Five Hundred Thousand Dollars ($500,000). In the event SFX fails to
designate an alternative radio broadcast station(s) as referred above, and/or
fails to close on said station(s) within the twenty-four (24) month period set
forth above, SFX agrees to transfer the Long Island Stations to Chancellor for
the cash consideration of Fifty-four Million Dollars ($54,000,000) subject to
any adjustments provided herein, to be paid by wire transfer of immediately
available funds at Closing;
5.1.1 The above remedies set forth in Subsections 5.1(a) and (b)
are independent and mutually exclusive.
5.1.2 In the event Chancellor fails to cooperate with SFX
pursuant to Subsections 5.1 (a) or (b), then SFX has the right to bring suit
against Chancellor to seek direct compensatory damages up to an amount not to
exceed Twenty-five Million Dollars ($25,000,000) as a Break-up Fee.
5.2 Chancellor's Failure to Transfer Jacksonville Assets. Assuming
Chancellor has closed on the Florida Agreement, if all conditions of closing
this Agreement have been met (Chancellor shall not have any obligation to
waive any closing conditions or breaches of SFX under this Agreement), and
Chancellor fails to transfer the Jacksonville Assets under the terms and
conditions of this Agreement, for any reason other than the failure of the FCC
to grant its consent to the assignment of the licenses, or the time period for
all applicable notifications and waiting period requirements under the HSR Act
have not been satisfied, and SFX is not in material breach of this Agreement;
(a) SFX may bring suit against Chancellor to compel specific
performance by Chancellor of the terms of this Agreement; or
(b) SFX may bring suit against Chancellor to seek direct
compensatory damages in an amount not to exceed Twenty-five Million Dollars
($25,000,000) as a Break-up Fee; or
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(c) SFX may require Chancellor to sell to it the assets of
WALK AM/FM, Patchogue, New York, under terms similar to the terms herein but
for cash consideration of Seventy- Five Million Six Hundred Thousand Dollars
($75,600,000). In addition, the parties shall enter into an LMA which provides
that SFX will program WALK AM/FM under terms similar to the Long Island
Stations LMA with a Fair Market Value (FMV) monthly LMA fee. In the event the
parties cannot agree on an LMA fee, Arthur Andersen shall be retained to
determine said fee and the costs shall be borne equally by the parties.
(d) The Jacksonville Stations LMA and the Long Island Stations
LMA shall terminate upon SFX exercising its rights under subsection (a), (b)
or (c) above.
5.2.1 The above remedies set forth in Subsections 5.2(a), (b)
and (c) are independent and mutually exclusive.
5.2.2In the event SFX elects any of the above remedies set
forth in Section 5.2, the parties agree to extend the Long Island LMA until
such time as SFX closes on the Jacksonville Station or WALK AM/FM, and SFX may
increase the Long Island Stations LMA monthly payment fee to Five Hundred
Thousand Dollars ($500,000).
5.3 SFX's Failure to Transfer the Long Island Assets. If all
conditions of closing of this Agreement have been met (SFX shall not have any
obligation to waive any closing conditions or breaches of Chancellor under
this Agreement), and SFX fails to transfer the Long Island Assets under the
terms and conditions of this Agreement, for any reason other than the failure
of the FCC not granting consent to the assignment of licenses, or the time
period for all applicable notification and waiting period requirements under
the HSR Act have not been satisfied, and Chancellor is not in material breach
of this Agreement;
(a) Chancellor may bring suit against SFX to compel specific
performance by SFX of the terms of this Agreement; or
(b) Chancellor may bring suit against SFX to seek direct
compensatory damages in an amount not to exceed Twenty-five Million Dollars
($25,000,000) as a break-up fee; or
(c) Chancellor may require SFX to sell to it the assets of
radio stations WIVY-FM, WOKV-AM, WPDQ-AM and WKQL-FM, Jacksonville, Florida
(collectively referred to as the "Substitute Jacksonville Stations") under
terms similar to the terms herein for consideration of Eleven Million One
Hundred Thousand Dollars ($11,100,000). In addition, the parties shall enter
into an LMA which provides that Chancellor will program the Substitute
Jacksonville Stations under terms similar to the Jacksonville Stations LMA
with a FMV monthly LMA fee. In the event the parties cannot agree on an LMA
fee, Arthur Andersen shall be retained to determine said fee and the costs
shall be borne equally by the parties.
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(d) The Jacksonville Stations LMA and the Long Island Stations
LMA shall terminate upon Chancellor exercising its rights under subsection
(a), (b) or (c) above.
5.3.1The above remedies set forth in Subsections 5.3(a), (b)
and (c) are independent and mutually exclusive.
5.4 The remedies listed in this Section 5 are the sole and
exclusive remedies of the parties for failure to transfer either the
Jacksonville or the Long Island Stations' Assets. These remedies are
independent of the remedies available to the parties for breach of the
representations and warranties set forth in Section 19 herein.
SECTION 6. GOVERNMENT CONSENTS
6.1 FCC Consent. The closing on the purchase and sale of the Long
Island Assets and the Jacksonville Assets is subject to and conditioned upon
(a) the parties obtaining the prior consent of the FCC to the transaction
contemplated in this Agreement ("FCC Consent") and (b) the FCC action granting
its consent becoming a "Final Order," in essence, an action unappealable by
virtue of (x) the expiration of the period within which a timely request for
appeal, review or reconsideration could be filed and (y) the expiration of the
period within which the FCC or a Court could review the action on its own
motion, such periods having expired without the filing of any request for
appeal, review or reconsideration and without the review of the action on the
FCC's or Court's own motion.
6.2 FCC Applications. Within thirty (30) days after the execution
of this Agreement or such earlier time as shall be agreed to by all of the
parties hereto, Chancellor and SFX shall file the applications with the FCC
for FCC Consent ("FCC Applications") to assign the Long Island Stations'
Licenses to Chancellor and the Jacksonville Stations' Licenses to SFX.
Chancellor and SFX shall prosecute the FCC Applications with all reasonable
diligence and otherwise use their best efforts to obtain the FCC Consents as
expeditiously as practicable (but neither Chancellor nor SFX shall have any
obligation to satisfy complainants or the FCC by taking any steps which would
have a material adverse effect upon Chancellor or SFX, or upon any of their
Affiliates). If the FCC Consents impose any condition on Chancellor or SFX
such party shall use its reasonable efforts to comply with such condition;
provided, however, that neither Chancellor nor SFX shall be required hereunder
to comply with any condition that would have a material adverse effect upon it
or any of its Affiliates. If reconsideration or judicial review is sought with
respect to the FCC Consents, the party affected shall vigorously oppose such
efforts for reconsideration or judicial review; provided, however, that
nothing herein shall be construed to limit either party's right to terminate
this Agreement pursuant to Section 20 hereof.
6.3 Filings. As promptly as practicable after the execution of
this Agreement, Chancellor and SFX shall use their reasonable efforts to
obtain, and to cooperate with each other in
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obtaining, all authorizations, consents, orders and approvals of any
governmental authority that may be or become necessary in connection with the
consummation of the transactions contemplated by this Agreement, and to take
all reasonable actions to avoid the entry of any order or decree by any
governmental authority prohibiting the consummation of the transactions
contemplated hereby. These efforts shall include, without limitation, filing
any reports or notifications that may be required to be filed by Chancellor
and SFX under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the
"HSR Act") with the Federal Trade Commission and the Antitrust Division of the
Department of Justice. Each party shall furnish to one another all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
SECTION 7. LOCAL MARKETING AGREEMENTS
7.1 Long Island Local Marketing Agreement. On or before July 1,
1996, the parties shall enter into a Long Island Local Marketing Agreement
(the "Long Island Stations LMA") substantially in the form of the LMA appended
hereto as Exhibit 7.1. Chancellor shall not have any claim or right,
including, without limitation, any right to terminate this Agreement or any
claim for damages to the extent that Chancellor's operation of the Long Island
Stations under or in accordance with the Long Island Stations LMA (i) causes
any representation or warranty of the SFX to be rendered inaccurate or (ii)
conflicts with any covenant to be complied with by SFX on or prior to the
Closing Date.
7.2 Jacksonville Local Marketing Agreement. On or before August 1,
1996, the parties shall enter into a Jacksonville Local Marketing Agreement
(the "Jacksonville Stations LMA") substantially in the form of the LMA
appended hereto as Exhibit 7.2. To the extent that Omni is required to be a
party to the Jacksonville Stations LMA to effectuate its purposes, Chancellor
shall use its commercially reasonable efforts to obtain Omni's execution and
performance of the Jacksonville Stations LMA and to assign or provide on terms
reasonably satisfactory to SFX, as soon as practicable after the execution of
the Agreement, but no sooner than August 1, 1996, the rights of Chancellor
under the Local Marketing Agreement, if executed, currently being negotiated
by Chancellor and Omni with respect to the Florida Stations. SFX shall not
have any claim or right, including, without limitation, any right to terminate
this Agreement or any claim for damages, to the extent that SFX's operation of
the Jacksonville Stations under or in accordance with the Jacksonville
Stations LMA (i) causes any representation or warranty of Chancellor to be
rendered inaccurate or (ii) conflicts with any covenant to be complied with by
Chancellor on or prior to the Closing Date.
SECTION 8. COLLECTION OF ACCOUNTS RECEIVABLE
8.1 Long Island Accounts Receivable.
(a) Within five (5) business days after the Long Island LMA
Commencement Date, SFX shall deliver to Chancellor a full and detailed list of
the accounts
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receivable relating to the Long Island Stations and its operations prior to
the Long Island LMA Commencement Date ("Long Island Accounts Receivable"),
designating with respect to each account receivable any portion thereof
attributable to services to be rendered by Chancellor after the Long Island
LMA Commencement Date. The Long Island Accounts Receivable shall not be
purchased by Chancellor and Chancellor agrees, however, that for a period of
one hundred twenty (120) days following the Commencement Date (the "Collection
Period"), it shall act as SFX's agent for purposes of the collection of the
Long Island Accounts Receivable and shall use reasonable efforts to collect
the Long Island Accounts Receivable for the benefit of SFX. Chancellor shall
remit to SFX all amounts collected by Chancellor for SFX's benefit within
fifteen (15) days after the end of each month. The collection responsibilities
imposed on Chancellor hereunder shall not require the institution of suit or
referral to a collection or similar agency, or the institution of any
proceeding against an account debtor under any bankruptcy, insolvency, or
similar law affecting the rights of creditors generally. Any of the Long
Island Accounts Receivable which shall remain uncollected by Chancellor at the
conclusion of the Collection Period shall remain SFX's assets and Chancellor's
obligations under this Section 8.1 shall terminate. Chancellor shall have no
liability to SFX for the uncollectability of any of the Long Island Accounts
Receivable.
(b) Chancellor agrees that it may not settle, discount payment
of, extend the terms of, or otherwise compromise any of the Long Island
Accounts Receivable, except as consented to in writing by SFX. If at the Long
Island LMA Commencement Date or at any time during the Collection Period an
account debtor is in bankruptcy, reorganization or similar proceeding, SFX
will assume the full collection responsibility as to such account and such
account will no longer be deemed a Long Island Account Receivable for purposes
of this Agreement. Following the Long Island LMA Commencement Date, Chancellor
will give prompt notice to SFX of any such bankruptcy, reorganization or other
proceeding affecting any debtor of the Long Island Accounts Receivable after
receiving notice thereof.
(c) During the Collection Period, any and all amounts paid to
Chancellor by an account debtor with respect to an account receivable shall be
applied first to payment of the Long Island Account Receivable, unless the
account debtor disputes such Long Island Account Receivable, appropriately
documents such dispute in writing, and prompt notice (including all written
documentation) of such dispute is given by Chancellor to SFX. After the end of
the Collection Period, Chancellor shall forward to SFX all payments received
that are reasonably identifiable (by invoice number, date of service or other
unambiguous reference) with the Long Island Accounts Receivable, within twenty
(20) days of receipt.
(d) Chancellor does not guarantee the collection of the whole
or any part of the Long Island Accounts Receivable.
8.2 Jacksonville Accounts Receivable.
(a) Within five (5) business days of the Jacksonville LMA
Commencement Date, Chancellor shall deliver to SFX a full and detailed list of
the accounts
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receivable relating to the Jacksonville Stations and its operations prior to
the Jacksonville LMA Commencement Date ("Jacksonville Accounts Receivable"),
designating with respect to each account receivable any portion thereof
attributable to services to be rendered by SFX after the Jacksonville LMA
Commencement Date. The Jacksonville Accounts Receivable shall not be purchased
by SFX and SFX agrees, however, that for a period of 120 days following the
Jacksonville LMA Commencement Date (the "Collection Period"), it shall act as
Chancellor's agent for purposes of the collection of the Jacksonville Accounts
Receivable and shall use reasonable efforts to collect the Jacksonville
Accounts Receivable for the benefit of the Chancellor. SFX shall remit to
Chancellor all amounts collected by SFX for Chancellor's benefit within
fifteen (15) days after the end of the month. The collection responsibilities
imposed on SFX hereunder shall not require the institution of suit or referral
to a collection or similar agency, or the institution of any proceeding
against an account debtor under any bankruptcy, insolvency, or similar law
affecting the rights of creditors generally. Any of the Jacksonville Accounts
Receivable which shall remain uncollected by SFX at the conclusion of the
Collection Period shall remain Chancellor's assets and SFX's obligations under
this Section 8.2 shall terminate. SFX shall have no liability to Chancellor
for the uncollectability of any of the Jacksonville Accounts Receivable.
(b) SFX agrees that it may not settle, discount payment of,
extend the terms of, or otherwise compromise any of the Jacksonville Accounts
Receivable, except as consented to in writing by Chancellor. If at the
Jacksonville LMA Commencement Date or at any time during the Collection Period
an account debtor is in bankruptcy, reorganization or similar proceeding,
Chancellor will assume the full collection responsibility as to such account
and such account will no longer be deemed a Jacksonville Account Receivable
for purposes of this Agreement. Following the Jacksonville LMA Commencement
Date, SFX will give prompt notice to Chancellor of any such bankruptcy,
reorganization or other proceeding affecting any debtor of the Jacksonville
Accounts Receivable after receiving notice thereof.
(c) During the Collection Period, any and all amounts paid to
SFX by an account debtor with respect to an account receivable shall be
applied first payment to the Jacksonville Accounts Receivable, unless the
account debtor disputes such Florida Account Receivable, appropriately
documents such dispute in writing, and prompt notice (including all written
documentation) of such dispute is given by SFX to Chancellor. After the end of
the Collection Period, SFX shall forward to Chancellor all payments received
that are reasonably identifiable (by invoice number, date of service or other
unambiguous reference) with the Jacksonville Accounts Receivable, within
twenty (20) days.
(d) SFX does not guarantee the collection of the whole or any
part of the Jacksonville Accounts Receivable.
SECTION 9. THIRD PARTY CONSENTS
9.1 Long Island Consents. SFX shall use its reasonable best
efforts to obtain all
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third party consents necessary for the conveyance of the Long Island Assets to
Chancellor without the imposition of any conditions that would be adverse to
Chancellor.
9.2 Florida Consents. Chancellor shall use its reasonable best
efforts to obtain all third party consents necessary for the conveyance of the
Jacksonville Assets to SFX without the imposition of any conditions that would
be adverse to SFX.
9.3 Failure to Obtain Consents.
(a) If Chancellor fails to obtain any of the Consents
referenced in Section 9.2, Chancellor shall use its reasonable best efforts
(i) to provide SFX the financial and business benefits SFX would have enjoyed
had the consent been given and (ii), upon the request of SFX, to enforce in
its name for the account of SFX any rights that would otherwise have been
available to SFX had the consent been granted.
(b) If SFX fails to obtain any of the Consents referenced in
Section 9.1, SFX shall use its reasonable best efforts (i) to provide
Chancellor the financial and business benefits Chancellor would have enjoyed
had the consent been given and (ii), upon the request of Chancellor, to
enforce in its name for the account of Chancellor any rights that would
otherwise have been available to Chancellor had the consent been granted.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF CHANCELLOR
10.1 Organization and Standing. Chancellor is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
10.2 Authorization and Binding Obligation. Chancellor has all
necessary corporate power and authority to enter into and perform this
Agreement and the transactions contemplated hereby. At the Closing,
Chancellor's execution, delivery and performance of this Agreement and the
transactions contemplated hereby will be duly and validly authorized by all
necessary corporate action on behalf of Chancellor and this Agreement will
constitute a valid and binding obligation of Chancellor, enforceable in
accordance with its terms.
10.3 Qualification. To Chancellor's knowledge (as used in this
Section 10 or Section 11, "knowledge" means to the best knowledge of the
Officers, Directors, and senior management of either party to this Agreement,
including Station Managers), there is no fact, allegation, condition, or
circumstance that could reasonably be expected to prevent the prompt grant of
the FCC Consent. Chancellor knows of no fact that would, under the
Communications Act of 1934, as amended, or the rules, regulations and policies
of the FCC, disqualify Chancellor from becoming the licensee of either the
Jacksonville Stations or the Long Island Stations. There are no proceedings,
complaints, notices of forfeiture, claims, or investigations pending or, to
the knowledge of Chancellor threatened against any or in respect of any of the
broadcast stations licensed to
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Chancellor or its affiliates that would materially impair the qualifications
of Chancellor to become a licensee of the Jacksonville Stations or the Long
Island Stations or that would delay the FCC's processing of the FCC
Applications.
10.4 Absence of Conflicting Agreements or Required Consents. Except
as set forth in Schedule 10.4 hereof, the execution, delivery and performance
of this Agreement by Chancellor: (a) do not violate or conflict with any of
the terms, conditions or provisions of the Certificate of Incorporation or
By-Laws of Chancellor; (b) do not require the consent of any third party not
affiliated with Chancellor; (c) will not violate any applicable law, judgment,
order, injunction, decree, rule, regulation or ruling of any governmental
authority to which Chancellor is a party; and (d) will not either alone or
with the giving of notice or the passage of time, violate the terms,
conditions or provisions of, or constitute a default under, any agreement,
instrument, license or permit to which Chancellor is now subject.
10.5 Litigation: Compliance with Law. Except as disclosed in
Schedule 10.5, there is no litigation, administrative action, arbitration or
other proceeding, or petition, complaint or investigation before any court or
governmental body, pending against Chancellor that would adversely affect
Chancellor's ability to perform its obligations pursuant to this Agreement or
the agreements to be executed by Chancellor in connection herewith. Chancellor
has committed no violation of any applicable law, regulation or ordinance or
any other requirement of any governmental body or court which would have a
material adverse effect on Chancellor or its ability to perform their
respective obligations pursuant to this Agreement or the agreements to be
executed in connection herewith.
10.6 Broker/Finder Fees. Star Media Group is the sole and exclusive
broker in this transaction. Chancellor has not incurred any obligation or
liability, contingent or otherwise, for brokerage or finders fees or agents'
commissions or other like payment in connection with this Agreement or the
transactions contemplated hereby for which SFX has any liability. Chancellor
is solely responsible for Star Media Group's fee.
10.7 Representations and Warranties as to the Jacksonville
Stations. Chancellor previously has delivered to SFX true, correct and
complete copies of the executed Florida Agreement together will all disclosure
schedules, exhibits, and annexes thereto. With respect to the Jacksonville
Stations, Chancellor to the best of its knowledge, hereby makes (as of the
date or dates on which those representations and warranties were made to
Chancellor by Omni) to SFX each and every of the representations and
warranties of Omni each of which is incorporated herein by reference as though
contained herein. Chancellor makes no additional representations or warranties
with respect to the Jacksonville Stations.
SECTION 11. REPRESENTATION AND WARRANTIES OF SFX
11.1 Organization and Standing. WBLI-FM, Inc. is a corporation duly
organized,
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validly existing and in good standing under the laws of the State of Delaware.
WBLI, Inc., WHFM, Inc., WBAB, Inc., and WGBB, Inc. are corporations duly
organized, validly existing and in good standing under the laws of the State
of New York.
11.2 Authorization and Binding Obligation. SFX has all necessary
corporate power and authority to enter into and perform this Agreement and the
transactions contemplated hereby. SFX's execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action on behalf of SFX and this
Agreement constitutes a valid and binding obligation of SFX, enforceable in
accordance with its terms.
11.3 Qualification. To SFX's knowledge, there is no fact,
allegation, condition, or circumstance that could reasonably be expected to
prevent the prompt grant of the FCC Consent. SFX knows of no fact that would,
under the Communications Act of 1934, as amended, or the rules, regulations
and policies of the FCC, disqualify SFX from becoming the licensee of the
Jacksonville Stations. There are no proceedings, complaints, notices of
forfeiture, claims, or investigations pending or, to the knowledge of SFX
threatened against any or in respect of any of the broadcast stations licensed
to SFX or its affiliates that would materially impair the qualifications of
SFX to become the licensee of the Jacksonville Stations or that would delay
the FCC's processing of the FCC Applications.
11.4 Absence of Conflicting Agreements or Required Consents. Except
as set forth in Schedule 11.4 hereof, the execution, delivery and performance
of this Agreement by SFX: (a) do not violate or conflict with any of the
terms, conditions or provisions of the Certificate of Incorporation or By-Laws
of SFX or any of its affiliates, WBLI, Inc., WBLI-FM, Inc., WHFM, Inc., WBAB,
Inc. and WGBB, Inc.; (b) do not require the consent of any third party not
affiliated with SFX; (c) will not violate any applicable law, judgment, order,
injunction, decree, rule, regulation or ruling of any governmental authority
to which SFX is a party; and (d) will not either alone or with the giving of
notice or the passage of time, violate the terms, conditions or provisions of,
or constitute a default under, any agreement, instrument, license or permit to
which SFX is now subject.
11.5 Litigation: Compliance with Law. Except as disclosed in
Schedule 11.5, there is no litigation, administrative action, arbitration or
other proceeding, or petition, complaint or investigation before any court or
governmental body, pending against SFX that would adversely affect SFX's
ability to perform its obligations pursuant to this Agreement or the
agreements to be executed by SFX in connection herewith. SFX has committed no
violation of any applicable law, regulation or ordinance or any other
requirement of any governmental body or court which would have a material
adverse effect on SFX or its ability to perform its respective obligations
pursuant to this Agreement or the agreements to be executed in connection
herewith.
11.6 Broker/Finder Fees. Star Media Group is the sole and exclusive
broker in this transaction. SFX has not incurred any obligation or liability,
contingent or otherwise, for brokerage or finders fees or agents' commissions
or other like payment in connection with this Agreement or
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the transactions contemplated hereby for which Chancellor has any liability.
Chancellor is solely responsible for Star Media Group's fee.
11.7 Representations and Warranties as to the Long Island Stations.
SFX previously has delivered to Chancellor true, correct and complete copies
of the executed agreements associated with the Long Island Stations together
will all disclosure schedules, exhibits, and annexes thereto. With respect to
the Long Island Stations, SFX to the best of its knowledge, hereby makes to
Chancellor each and every of the representations and warranties contained in
the Liberty Stock Purchase Agreement among Liberty Broadcasting, Incorporated,
et. al. and SFX Broadcasting, Inc., dated November 15, 1995 (the "Liberty
Agreement") which are incorporated herein by reference as though contained
herein. In addition, SFX makes each and every of the representations and
warranties contained in the Liberty Agreement to Chancellor for the period
after the Liberty Closing when SFX acquires the Long Island Stations and the
Closing Date hereunder, subject to the Long Island Stations LMA.
SECTION 12. COVENANTS OF CHANCELLOR
12.1 Conduct of Station:
12.1.Subject to the Jacksonville Stations LMA, Chancellor
covenants and agrees with SFX that between the date hereof and the
Jacksonville LMA Commencement Date (except as otherwise noted below),
Chancellor with respect to the Jacksonville Stations (to the extent that it is
programming the Jacksonville Stations pursuant to a local marketing agreement
with Omni and is authorized under that said local marketing agreement to do
so) shall:
(i) use commercially reasonable efforts to maintain the
Jacksonville Stations' present business organization, keep available the
services of the Jacksonville Stations' employees and independent contractors,
preserve the Jacksonville Stations' relationships with the Jacksonville
Stations' customers and others having business relationships with the
Jacksonville Stations, and refrain from materially and adversely changing any
of the Jacksonville Stations' business policies including but not limited to
advertising (including substantially the same amount of cash expenditure),
marketing, pricing, purchasing, personnel, sales, and budget policies);
(ii) maintain the Jacksonville Stations' books of account
and records in the usual and ordinary manner and in accordance with generally
accepted accounting principles;
(iii)operate the Jacksonville Stations in the usual and
ordinary course of business in accordance with past practice and conduct the
Jacksonville Stations' business in all material respects in compliance with
the terms of the Jacksonville Licenses and all applicable laws, rules, and
regulations, including, without limitation, the applicable rules and
regulations of the FCC through the Closing Date;
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(iv) use, repair, and, if necessary, replace any of
WAPE-FM's or WFYV-FM's studios and the Jacksonville Stations' transmission
assets in a reasonable manner consistent with historical practice and maintain
its assets in substantially their current condition, ordinary wear and tear
excepted;
(v) maintain appropriate insurance for the Jacksonville
Stations through the Closing Date;
(vi) not incur any debts or obligations to be performed
by SFX that exceeds Ten Thousand Dollars ($10,000) individually or Twenty-five
Thousand Dollars ($25,000) in the aggregate through the Closing Date;
(vii) not lease, mortgage, pledge, or subject to a lien,
claim, or encumbrance (other than Permitted Liens ) any of the Jacksonville
Assets or sell or transfer any of the Jacksonville Assets without replacing
such Jacksonville Assets with an asset of substantially the same value and
utility;
(viii) without the prior consent of SFX, which consent
shall not be unreasonably withheld or delayed, (x) not modify or extend any
Jacksonville Stations' Contracts or (y) enter into any new Jacksonville
Stations' Contract the payments under which exceeds Ten Thousand Dollars
($10,000) individually or Twenty-five Thousand Dollars ($25,000) in the
aggregate through the Commencement Date;
(ix) not make or grant any general wage or salary
increase or generally materially modify the Jacksonville Stations' employees'
terms and conditions of employment;
(x) not make any change in the Jacksonville Stations'
accounting principles, methods, or practices followed by it or depreciation or
amortization policies or rates;
(xi) not make any loans or make any dividends or
distributions other than of Excluded Assets of the Jacksonville Stations;
(xii) other than in the ordinary course of business, not
cancel or compromise any debt or claim, or waive or release any right, of
material value;
(xiii) enforce, in its own name and for the benefit of
SFX, all representations, warranties and covenants of Omni under the Florida
Agreement insofar as such representations, warranties and covenants affect or
relate to the Jacksonville Assets. The quantity, identity, character, quality
of and title to the Jacksonville Assets conveyed by Chancellor to SFX
hereunder shall be substantially the same as the quantity, identity, character
and quality of and title to the assets of the Jacksonville Stations received
by Chancellor from Omni pursuant to the Florida
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Agreement.
12.1.2 For purposes of compliance with Section 12.1, any
violation of the above-referenced covenants resulting in liabilities to SFX,
in the aggregate, less than the Indemnification Basket as defined in Section
19.3 below, shall not be deemed material. Such liabilities shall nevertheless
constitute Damages for purposes of the indemnification agreement contained in
the Section 19 hereof.
12.2 Chancellor shall give or cause the Jacksonville Stations to
(i) give SFX and SFX's counsel, accountants, engineers and other
representatives, including environmental consultants, reasonable access during
normal business hours to all of Chancellor's properties, books, Contracts,
Trade Agreements, reports and records including financial information and tax
returns relating to the Jacksonville Stations, and to all real estate,
buildings and equipment relating to the Jacksonville Stations, in order that
SFX may have full opportunity to make such investigation at the sole expense
of SFX, including but not limited to, environmental assessments, as it desires
of the affairs of the Jacksonville Stations and (ii) furnish SFX with
information, and copies of all documents and agreements including but not
limited to financial and operating data and other information concerning the
financial condition, results of operations and business of the Jacksonville
Stations, that SFX may reasonably request. The rights of SFX under this
Section shall not be exercised in such a manner as to interfere unreasonably
with the business of the Jacksonville Stations.
12.3 No Inconsistent Action. Chancellor shall not take any action
that is materially inconsistent with its obligations under this Agreement.
12.4 Updating of Schedules. From time to time prior to the Closing,
Chancellor will supplement or amend the Schedules delivered in connection
herewith with respect to any matter which exists or occurs after the date of
this Agreement and which, if existing or occurring at or prior to the date of
this Agreement, would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
which has been rendered inaccurate thereby. No matter so disclosed shall
affect the requirements of Section 16.1, but if the Closing hereunder shall
occur, no said matter disclosed pursuant to Section 12.3 shall have the basis
for any claims for indemnification hereunder.
12.5 Enforcement of Agreements. Chancellor shall use its reasonable
best efforts to perform and carry out all their respective obligations under,
and, if necessary, Chancellor shall seek the specific performance of the
transactions contemplated by the Florida Agreement. Chancellor shall use its
reasonable best efforts to perform and carry out, and to cause the other
parties thereto to perform and carry out, all their respective obligations
under the LMA's relating to the Jacksonville Stations.
12.6 FCC ReportFrom the Time of Closing on the Florida Agreement
until the Closing Date hereunder, Chancellor shall file on a current basis
until the Closing Date all material
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reports and documents required to be filed with the FCC with respect to the
Jacksonville Stations' Licenses. Copies of each such report and document filed
between the date hereof and the Closing Date shall be furnished to SFX
promptly after its filing.
12.7 NotificatiChancellor shall promptly notify SFX in writing of
(i) any litigation, arbitration or administrative proceeding pending or, to
its knowledge, threatened against Chancellor which challenges the transactions
contemplated hereby or (ii) the failure of Chancellor, or any employee or
agent of Chancellor to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfy in any
material respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder and (iii) the occurrence of any event that would
entitle SFX to terminate this Agreement pursuant to Section 20. No matter so
disclosed shall affect the requirements of Section 16.1, but if the Closing
hereunder shall occur, no said matter disclosed pursuant to Section 12.3 shall
have the basis for any claims for indemnification hereunder.
12.8 Post-Closing AcChancellor, for a period of five (5) years
following the Closing Date, shall make available during normal business hours
for audit and inspection by SFX and its representatives, for any reasonable
purpose and upon reasonable notice, all records, files, documents and
correspondence transferred to it hereunder relating to the pre-closing period.
Chancellor shall at no time dispose of or destroy any such records, files,
documents and correspondence without giving thirty (30) days prior notice to
SFX to permit SFX, at its expense, to examine, duplicate or take possession of
and title to such records, files, documents and correspondence. All
information, records, files, documents and correspondence made available or
disclosed to SFX under this Section 12.7 shall be kept confidential by SFX.
12.9 Chancellor will use commercially reasonable efforts to obtain
all necessary consents, authorizations, or approvals, in each case, required
for the consummation of the transactions contemplated by this Agreement.
SECTION 13. COVENANTS OF SFX
13.1 Conduct of Station:
13.1.Subject to the Long Island Stations LMA, SFX covenants
and agrees with Chancellor that between the date hereof (except as otherwise
noted below), SFX with respect to the Long Island Stations shall:
(i) use commercially reasonable efforts to maintain the
Long Island Stations' present business organization, keep available the
services of the Long Island Stations' employees and independent contractors,
preserve the Long Island Stations' relationships with the Long Island
Stations' customers and others having business relationships with the Long
Island Stations, and refrain from materially and adversely changing any of the
Long Island Stations'
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business policies including but not limited to advertising (including
substantially the same amount of cash expenditure), marketing, pricing,
purchasing, personnel, sales, and budget policies);
(ii) maintain the Long Island Stations' books of account
and records in the usual and ordinary manner and in accordance with generally
accepted accounting principles;
(iii) operate in the usual and ordinary course of business
in accordance with past practice and conduct the Long Island Stations'
business in all material respects in compliance with the terms of the Long
Island Licenses and all applicable laws, rules, and regulations, including,
without limitation, the applicable rules and regulations of the FCC through
the Closing Date;
(iv) use, repair, and, if necessary, replace any Long
Island Stations studio and transmission assets in a reasonable manner
consistent with historical practice and maintain its assets in substantially
their current condition, ordinary wear and tear excepted;
(v) maintain appropriate insurance for the Long Island
Stations through the Closing Date;
(vi) not incur any debts or obligations to be performed
by Chancellor that exceeds Ten Thousand Dollars ($10,000) individually or
Twenty-five Thousand Dollars ($25,000) in the aggregate through the Closing
Date;
(vii) not lease, mortgage, pledge, or subject to a lien,
claim, or encumbrance (other than Permitted Liens ) any of the Long Island
Assets or sell or transfer any of the Long Island Assets without replacing
such Long Island Assets with an asset of substantially the same value and
utility;
(viii) without the prior consent of Chancellor, which
consent shall not be unreasonably withheld or delayed, (x) not modify or
extend any Long Island Stations Contracts or (y) enter into any new Long
Island Stations Contract the payments under which exceeds Ten Thousand Dollars
($10,000) individually or Twenty-five Thousand Dollars ($25,000) in the
aggregate through the Commencement Date;
(ix) not make or grant any general wage or salary
increase or generally materially modify the Long Island Stations' employees'
terms and conditions of employment;
(x) not make any change in the Long Island Stations'
accounting principles, methods, or practices followed by it or depreciation or
amortization policies or rates;
(xi) not make any loans or make any dividends or
distributions
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other than of Excluded Assets of the Long Island Stations;
(xii) other than in the ordinary course of business, not
cancel or compromise any debt or claim, or waive or release any right, of
material value;
(xiii) SFX shall enforce, in its own name and for the
benefit of Chancellor, all representations, warranties and covenants insofar
as such representations, warranties and covenants affect or relate to the Long
Island Assets.
13.1.For purposes of compliance with Section 13.1, any
violation of the above-referenced covenants resulting in liabilities to
Chancellor, in the aggregate, less than the Indemnification Basket as defined
in Section 19.3 below, shall not be deemed material. Such liabilities shall
nevertheless constitute Damages for purposes of the indemnification agreement
contained in Section 19 hereof.
13.2 SFX shall give or cause the Long Island Stations to (i) give
Chancellor and Chancellor's counsel, accountants, engineers and other
representatives, including environmental consultants, reasonable access during
normal business hours to all of SFX's properties, books, Contracts, Trade
Agreements, reports and records including financial information and tax
returns relating to the Long Island Stations, and to all real estate,
buildings and equipment relating to the Long Island Stations, in order that
Chancellor may have full opportunity to make such investigation, including but
not limited to, environmental assessments, as it desires of the affairs of the
Long Island Stations and (ii) furnish Chancellor with information, and copies
of all documents and agreements including but not limited to financial and
operating data and other information concerning the financial condition,
results of operations and business of the Long Island Stations, that
Chancellor may reasonably request. The rights of Chancellor under this Section
shall not be exercised in such a manner as to interfere unreasonably with the
business of the Long Island Stations.
13.3 No Inconsistent Action. SFX shall not take any action that is
materially inconsistent with its obligations under this Agreement.
13.4 Updating of Schedules. From time to time prior to the Closing,
SFX will supplement or amend the Schedules delivered in connection herewith
with respect to any matter which exists or occurs after the date of this
Agreement and which, if existing or occurring at or prior to the date of this
Agreement, would have been required to be set forth or described in such
Schedules or which is necessary to correct any information in such Schedules
which has been rendered inaccurate thereby. No matter so disclosed shall
affect the requirements of Section 16.1, but if the Closing hereunder shall
occur, no said matter disclosed pursuant to Section 12.3 shall have the basis
for any claims for indemnification hereunder.
13.5 Enforcement of Agreements. SFX shall use its reasonable best
efforts to perform and carry out all their respective obligations under this
Agreement. SFX shall use its reasonable best efforts to perform and carry out,
and to cause the other parties thereto to perform and
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carry out, all their respective obligations under the LMA's relating to the
Long Island Stations.
13.6 FCC Reports. From the Time of Closing on the Long Island
Stations until the Closing Date hereunder, SFX shall file on a current basis
until the Closing Date all material reports and documents required to be filed
with the FCC with respect to the Long Island Stations Licenses. Copies of each
such report and document filed between the date hereof and the Closing Date
shall be furnished to Chancellor promptly after its filing.
13.7 Notification. SFX shall promptly notify Chancellor in writing
of (i) any litigation, arbitration or administrative proceeding pending or, to
its knowledge, threatened against SFX which challenges the transactions
contemplated hereby or (ii) the failure of SFX, or any employee or agent of
SFX to comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
hereunder and (iii) the occurrence of any event that would entitle Chancellor
to terminate this Agreement pursuant to Section 20. No matter so disclosed
shall affect the requirements of Section 16.1, but if the Closing hereunder
shall occur, no said matter disclosed pursuant to Section 12.3 shall have the
basis for any claims for indemnification hereunder.
13.8 Post-Closing Access. SFX, for a period of five (5) years
following the Closing Date, shall make available during normal business hours
for audit and inspection by Chancellor and its representatives, for any
reasonable purpose and upon reasonable notice, all records, files, documents
and correspondence transferred to it hereunder relating to the pre-closing
period. SFX shall at no time dispose of or destroy any such records, files,
documents and correspondence without giving thirty (30) days prior notice to
Chancellor to permit Chancellor, at its expense, to examine, duplicate or take
possession of and title to such records, files, documents and correspondence.
All information, records, files, documents and correspondence made available or
disclosed under this Section 13.8 shall be kept confidential.
13.9 SFX will use commercially reasonable efforts to obtain all
necessary consents, authorizations, or approvals, in each case, required for
the consummation of the transactions contemplated by this Agreement.
SECTION 14. JOINT COVENANTS
Chancellor and SFX covenant and agree that they shall act in accordance
with the following:
14.1 Confidentiality. Each of Chancellor and SFX shall each keep
confidential all information obtained by it with respect to the other parties
hereto in connection with this Agreement and the negotiations preceding this
Agreement, and will use such information solely in connection with the
transactions contemplated by this Agreement, and if the transactions
contemplated hereby are not consummated for any reason, each shall return to
the other party hereto, without retaining a copy thereof, any schedules,
documents or other written information obtained
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from such other party in connection with this Agreement and the transactions
contemplated hereby except to the extent required or useful in connection with
any claim made with respect to the transactions contemplated by this Agreement
or the negotiation thereof. Notwithstanding the foregoing, no party shall be
required to keep confidential or return any information which (i) is known or
available through other lawful sources, not bound by a confidentiality
agreement with the disclosing party, or (ii) is or becomes publicly known
through no fault of the receiving party or its agents, or (iii) is required to
be disclosed pursuant to an order or request of a judicial or government
authority (provided the non-disclosing party is given reasonable prior notice
such that it may seek, at its expense, confidential treatment of the
information to be disclosed), (iv) is developed by the receiving party
independently of the disclosure by the disclosing party, (v) is required to be
disclosed under applicable law or rule, as determined by counsel for the
receiving party or (vi) is required to be disclosed in connection with any
sale, in whole or in party of the assets, stock or business of Chancellor or
Chancellor Broadcasting Company, provided the recipient of said information
has executed a confidentiality agreement for such a transaction.
14.2 Cooperation. Chancellor and SFX shall cooperate fully with one
another in taking any actions, including actions to obtain the required
consent of any governmental instrumentality or any third party necessary or
helpful to accomplish the transactions contemplated by this Agreement;
provided, however, that no party shall be required to take any action which
would have a material adverse effect upon it.
14.3 Control of Stations. Prior to Closing, Chancellor shall not,
directly or indirectly, control or direct the operations of the Long Island
Stations, and SFX shall not, directly or indirectly, control or direct the
operations of the Jacksonville Stations. Such operations, including complete
control over the Jacksonville Stations' or the Long Island Stations'
programming, employees and policies, shall be the sole responsibility of
current licensees.
14.4 Bulk Sales Laws. Chancellor hereby waives compliance by SFX and
SFX hereby waives compliance by Chancellor with the provisions of the "bulk
sales" or similar laws of any state. SFX agrees to indemnify Chancellor and
Chancellor agrees to indemnify SFX and each party agrees to hold the other
harmless from any and all loss, cost, damage and expense (including but not
limited to, reasonable attorney's fees) sustained by one party as a result of
any failure of the other party to comply with any "bulk sales" or similar
laws.
14.5 Public Announcements. Neither Chancellor nor SFX shall issue
any press release or make any disclosure with respect to the transaction
contemplated by this Agreement without the prior written approval of the other
party, except as may be required by applicable law or by obligations pursuant
to any listing agreement with any securities exchange or any stock exchange
regulations.
14.6 Hart-Scott-Rodino. SFX and Chancellor shall submit to the
United States Department of Justice and the United States Federal Trade
Commission not later than 15 business days after the date of this Agreement
all of the forms and information applicable to this transaction
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required under the Hart-Scott-Rodino Act (the "HSR Act") and will use
commercially reasonable efforts to respond promptly to any request by them for
additional information.
14.7 Employee Matters. Each party hereby consents to the other
making such offers of employment relating to the Jacksonville Stations and the
Long Island Stations subject to the effectiveness of the LMAs between the
parties. As of the commencement date of either the Jacksonville Stations LMA
or the Long Island Stations LMA, the current employees of those respective
stations (other than a general manager and one staff employee of each station)
will become employees of the party programming the stations. SFX shall be
responsible for all obligations or liabilities to those employees not offered
employment by Chancellor (herein referred to as "Retained Long Island
Employees"), and Chancellor shall have no obligations with respect to the
retained Long Island Employees except as specifically set forth below.
Chancellor shall be responsible for all obligations or liabilities to those
employees not offered employment by SFX (hereinafter referred to as the
"Retained Jacksonville Employees"), and SFX shall have no obligations with
respect to the Retained Jacksonville Employees except as specifically set
forth below. Chancellor agrees that SFX may terminate employees of the
Jacksonville Stations without cause thirty (30) days from this Agreement; and
SFX agrees that Chancellor may terminate employees of the Long Island Stations
without cause thirty (30) days from this Agreement, but if the number of
employees exceeds ten (10) or in the aggregate, the severance liability amount
at either the Jacksonville Stations or the Long Island Stations exceeds One
Hundred Thousand Dollars ($100,000), then Chancellor with respect to the Long
Island Stations and SFX with respect to the Jacksonville Stations shall be
responsible to pay for any severance amounts exceeding the first One Hundred
Thousand Dollars ($100,000). SFX with respect to the Long Island Stations and
Chancellor with respect to the Jacksonville Stations shall be responsible to
pay for any severance amounts associated with only the first ten (10)
terminated employees, as designated by the party programming the station, but
in no event will SFX with respect to the Long Island Stations and Chancellor
with respect to the Jacksonville Stations be liable for any severance amounts
exceeding One Hundred Thousand Dollars ($100,000). The above thirty (30) day
time period is subject to the rights of the parties pursuant to Section 22.11.
SECTION 15. CONDITIONS OF CLOSING BY CHANCELLOR
The obligations of Chancellor hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of all of the following
conditions:
15.1 Representations, Warranties and Covenants. All representations
and warranties of SFX made in this Agreement or in any Exhibit, Schedule or
document delivered pursuant hereto, shall be true and complete in all material
respects as of the date hereof and on and as of the Closing Date as if made on
and as of that date, except for changes expressly permitted or contemplated by
the terms of this Agreement and except those given as of a specified date.
15.2 Compliance with Agreement. All of the terms, covenants and
conditions to
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be complied with and performed by SFX on or prior to the Closing Date shall
have been complied with or performed in all material respects.
15.3 Third Party Consents and Approvals; Estoppel Certificates. SFX
has obtained all third-party consents and approvals, if any, required for the
transfer or continuance, as the case may be, of the Contracts on Schedule
2.4.4 (and contracts that would have been on Schedule 2.4.4 had they been in
existence on the date of this Agreement) and, if requested by Chancellor prior
to 45 days of the date of the Closing, such third parties have provided
estoppel certificates, non-disturbance agreements, and/or written
clarifications of the rights of Chancellor thereunder, all in form and
substance reasonably satisfactory to Chancellor.
15.4 Closing Certificates. Chancellor shall have received a
certificate, dated as of the Closing Date, from SFX, executed by an
appropriate officer of SFX to the effect of Sections 15.1 and 15.2.
15.5 Governmental Consents.
(a) The FCC Consents shall have been issued by the FCC without
any conditions that would otherwise permit Buyers to terminate this Agreement
pursuant to Section 20.1(e), below, and each such FCC consent shall have
become a Final Order (as defined in Section 6.1), unless finality has been
waived by mutual agreement of the parties.
(b) All applicable notification and waiting period
requirements under the HSR Act shall have been satisfied.
(c) All other material authorizations, consents, approvals,
and clearances of federal, state, or local Governmental Entities required to
permit the consummation of the transactions contemplated by this Agreement
shall have been obtained.
15.6 Adverse Proceedings. No injunction, order, decree or judgment
of any court, agency or other Governmental Entities shall have been rendered
against Chancellor or SFX which would render it unlawful, as of the Closing
Date, to effect the transactions contemplated by this Agreement in accordance
with its terms.
15.7 Closing Documents. SFX shall have delivered or caused to be
delivered to Chancellor, on the Closing Date, all deeds, bills of sale,
endorsements, assignments and other instruments of conveyance and transfer
consistent with the terms hereof and otherwise reasonably satisfactory in form
and substance to Chancellor, effecting the sale, transfer, assignment and
conveyance of the Long Island Stations' Assets to Chancellor.
15.8 Environmental Condition. Chancellor shall have been satisfied
in its sole discretion that any environmental conditions identified in the
Phase I environmental audit report with respect to the Long Island Real Estate
and operations of the Long Island Stations and the
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environmental and industrial hygiene and safety condition of the Long Island
Real Estate and operations of the Long Island Stations shall have been or is
scheduled to be satisfactorily remediated.
SECTION 16. CONDITIONS OF CLOSING BY SFX
The obligations of SFX hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of all of the following
conditions:
16.1 Representations, Warranties and Covenants. All representations
and warranties of Chancellor made in this Agreement or in any Exhibit,
Schedule or document delivered pursuant hereto, shall be true and complete in
all material respects as of the date hereof and on and as of the Closing Date
as if made on and as of that date, except for changes expressly permitted or
contemplated by the terms of this Agreement and except those given as of a
specified date.
16.2 Compliance with Agreement. All the terms, covenants, and
conditions to be complied with and performed by Chancellor on or prior to the
Closing Date shall have been complied with or performed in all material
respects.
16.3 Third Party Consents and Approvals; Estoppel Certificates.
Chancellor has obtained all third-party consents and approvals, if any,
required for the transfer or continuance, as the case may be, of the Contracts
on Schedule 2.2.4 (and contracts that would have been on Schedule 2.2.4 had
they been in existence on the date of this Agreement) and, if requested by SFX
prior to 45 days of the date of the Closing, such third parties have provided
estoppel certificates, non-disturbance agreements, and/or written
clarifications of the rights of SFX thereunder, all in form and substance
reasonably satisfactory to SFX.
16.4 Closing Certificates. SFX shall have received a certificate,
dated as of the Closing Date, from Chancellor, executed by an appropriate
officer of Chancellor to the effect of Sections 16.1 and 16.2.
16.5 Governmental Approval.
(a) The FCC Consents shall have been issued by the FCC and
each shall have become a Final Order (as defined in Section 6.1), unless
finality has been waived by mutual agreement of the parties.
(b) All applicable notification and waiting period
requirements under the HSR Act shall have been satisfied.
(c) All other material authorizations, consents, approvals,
and clearances of federal, state or local Governmental Entities required to
permit the consummation of the transactions contemplated by this Agreement
shall have been obtained.
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16.6 Adverse ProceedNo injunction, decree or judgment of any court,
agency or other governmental entities shall have been rendered against
Chancellor or SFX which would render it unlawful, as of the Closing date, to
effect the transactions contemplated by this Agreement in accordance with its
terms.
16.7 Closing DocumenChancellor shall have delivered or caused to be
delivered to SFX, on the Closing Date, all deeds, bills of sale, endorsements,
assignments and other instruments of conveyance and transfer consistent with
the terms hereof and otherwise reasonably satisfactory in form and substance
to SFX, effecting the sale, transfer, assignment and conveyance of the Florida
Station's Assets to SFX.
16.8 Environmental Condition. SFX shall have been satisfied in its
sole discretion that any environmental conditions identified in the Phase I
environmental audit report with respect to the Jacksonville Real Estate and
operations of the Jacksonville Stations and the environmental and industrial
hygiene and safety condition of the Jacksonville Real Estate and operations of
the Jacksonville Stations shall have been or is scheduled to be satisfactorily
remediated.
SECTION 17. CLOSING
17.1 Time and Place. A closing on the exchange and sale of the Long
Island Assets and the Jacksonville Assets shall take place at 12655 North
Central Expressway, Suite 405, Dallas, Texas on the date agreed on by the
parties, said date to be within ten days after the latter of (x) all necessary
FCC action(s) approving the transactions contemplated herein become Final
Orders and (y) the expiration or termination of the waiting period under the
HSR Act (the "Closing Date"). The parties acknowledge that the Florida
Agreement shall not close until after January 1, 1997, and therefore, SFX and
Chancellor agree to use their reasonable best efforts to close this Exchange
Agreement on or about the same date and time as the Florida Agreement.
17.2 Deliveries By Chancellor. At closing, Chancellor shall deliver
to SFX by wire transfer of available funds the cash payments specified in
Section 3.1. In addition, Chancellor shall deliver documents conveying title
to the Jacksonville Assets to SFX in substantially the same manner as
Chancellor received title to the Jacksonville Assets from Omni, it being the
intention of the parties to vest in SFX all of Chancellor's rights, title and
interest in the Jacksonville Assets received from Omni such that the
Jacksonville Assets conveyed to SFX are substantially the same Jacksonville
Assets (in terms of identity, quantity, quality, utility, value, nature of
title conveyed, etc.) as the Jacksonville Assets that were conveyed to
Chancellor by Omni pursuant to the Florida Agreement. The deliveries from
Chancellor to SFX shall include:
(a) An Assignment of Government Authorizations conveying the
Jacksonville Licenses and all other governmental permits, licences and
authorizations used in the operation of the Jacksonville Stations.
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(b) A Bill of Sale for all items of personal property included
in the Jacksonville Assets.
(c) Deeds conveying title to all Jacksonville Real Estate
owned in fee simple by Chancellor and used in the operation of the
Jacksonville Stations.
(d) Assignments of leases conveying all of Chancellor's right,
title and interest in all Jacksonville Real Estate leased by Chancellor.
(e) All other conveyances, assignments and documents
reasonably necessary to vest in SFX title to the Jacksonville Assets as
contemplated in this Agreement.
17.3 Delivery By SFX. At Closing, SFX shall deliver to Chancellor
documents conveying title to the Long Island Assets. The deliveries from SFX
to Chancellor shall include:
(a) An Assignment of Government Authorizations conveying the
Long Island Licenses and all other governmental permits, licences and
authorizations used in the operation of the Long Island Stations.
(b) A Bill of Sale for all items of personal property included
in the Long Island Assets.
(c) Deeds conveying title to all Long Island Real Estate owned
in fee simple by SFX and used in the operation of the Long Island Stations.
(d) Assignments of leases conveying all of SFX's right, title
and interest in all Long Island Real Estate leased by SFX.
(e) All other conveyances, assignments and documents
reasonably necessary to vest in Chancellor's title to the Long Island Assets
as contemplated in this Agreement.
SECTION 18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
18.1 Survival of Representations and Warranties. The
representations and warranties contained in this Agreement, and in any
schedule, instrument or certificate delivered pursuant hereto, shall survive
the Closing until the earlier of March 31, 1998, or one year after the closing
of the Florida Agreement.
SECTION 19. INDEMNIFICATION
19.1 Indemnification by Chancellor.
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(a) Chancellor shall indemnify and hold SFX and its
stockholders, employees, officers, directors, affiliates and agents harmless
from all damages, losses, costs, suits, actions, causes of action and
liabilities of any nature whatsoever, including costs of suit and attorneys
fees, arising out of (i) Chancellor's ownership or operation of the Long
Island Stations, (ii) the Jacksonville Retained Liabilities after the Closing
Date (which shall not be subject to Section 19.3); (iii) any inaccuracy in any
representation or warranty of Chancellor contained in this Agreement or in any
schedule, instrument or certificate delivered pursuant thereto; and (iv) any
breach of any covenant or agreement of Chancellor contained in this Agreement
and required to be performed by Chancellor with the exception of matters
specifically referred to in Section 5 hereof.
(b) Chancellor shall enforce, in its own name and for the
benefit of SFX, all indemnification provisions of the Florida Agreement
specifically pertaining to the Jacksonville Stations or Assets.
19.2 Indemnification by SFX.
(a) SFX shall indemnify and hold Chancellor and its
stockholders, employees, officers, directors, affiliates and agents harmless
from all damages, losses, costs, suits, actions, causes of action and
liabilities of any nature whatsoever, including costs of suit and attorneys
fees, arising out of (i) SFX's ownership or operation of the Jacksonville
Stations, (ii) the Long Island Retained Liabilities after the Closing Date
(which shall not be subject to Section 19.3); (iii) any inaccuracy in any
representation or warranty of SFX contained in this Agreement or in any
schedule, instrument or certificate delivered pursuant thereto; and (iv) any
breach of any covenant or agreement of SFX contained in this Agreement and
required to be performed by SFX with the exceptions of matters specifically
referred to in Section 5 hereof.
(b) SFX shall enforce, in its own name and for the benefit of
Chancellor, all indemnification provisions of the Long Island Stations and any
agreement in which the Long Island Stations have entered into prior to the
Closing Date.
19.3 Limitation on Reimbursement.
(a) Except as provided in Section 5, neither Chancellor nor
SFX shall be entitled to reimbursement for damages incurred or suffered with
respect to its respective claims until and only to the extent that the
aggregate damages with respect to its respective claims to which it is
otherwise entitled to reimbursement exceeds Three Hundred Thousand Dollars
($300,000) (the "Indemnification Basket"). The individual parties shall not be
entitled to reimbursement for damages in excess of Five Million Dollars
($5,000,000)in the aggregate.
(b) For all purposes of this Agreement, the amount of damages,
and the amount reimbursable with respect thereto, shall be reduced to the
extent of any insurance proceeds or other third party recovery received with
respect to such damages.
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19.4 Procedure for Indemnification.
(a) If any claim or proceeding covered by Section 19 to
indemnify and hold harmless shall arise, the Party who seeks indemnification
(the "Indemnified Party") shall give written notice thereof to the other Party
(the "Indemnitor") promptly but in no event more than ten (10) days after the
Indemnified Party learns of the existence of such claim or proceeding. Any
claim for indemnification hereunder shall be accompanied by evidence
demonstrating the Indemnified Party's right or possible right to
indemnification, including a copy of all supporting documents relevant
thereto. After the Indemnitor acknowledges its obligation to defend against or
settle any such claim or proceeding, the Indemnitor shall not be liable to the
Indemnified Party under this Section 19 for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof; provided, however, that the Indemnified Party shall have the right to
employ counsel to represent it (at the Indemnified Party's expense), unless
the Indemnified Party is advised by counsel that representation of the
Indemnitor and the Indemnified Party by one firm of counsel would constitute a
conflict of interest under applicable codes of professional conduct in which
event the reasonable fees and expenses of such separate counsel shall be paid
by the Indemnitor. The Parties shall fully cooperate in the defense of each
claim or proceeding and shall make available to each other all books or
records necessary or appropriate for such defense.
(b) The Indemnitor shall have the right to employ counsel
reasonably acceptable to the Indemnified Party to defend against the claim or
proceeding or to compromise, settle or otherwise dispose of the same;
provided, however, that no settlement or compromise shall be effected without
the express prior written consent of the Indemnified Party, which consent
shall not be unreasonably withheld or delayed; and, provided further, that if
the Indemnified Party does not consent to a bona fide offer of settlement made
by a third party and the settlement involves only the payment of money, then
the Indemnitor may, in lieu of payment of that amount to such third party, pay
that amount to the Indemnified Party. After such payment to the Indemnified
Party, the Indemnitor shall have no further liability with respect to that
claim or proceeding and the Indemnified Party shall assume full responsibility
for the defense, payment or settlement of such claim or proceeding.
(c) If the Indemnitor fails to acknowledge in writing its
obligation to defend against or settle any claim or proceeding within twenty
(20) days after receiving notice of the claim or proceeding from the
Indemnified Party (or such shorter time specified in the notice as the
circumstances of the matter may dictate), the Indemnified Party shall be free
to dispose of the matter, at the expense of the Indemnitor, in any way that
the Indemnified Party deems in its best interest, subject to the Indemnitor's
right subsequently to contest through appropriate proceedings its obligation
to provide indemnification.
(d) The Indemnitor shall be subrogated to all rights of the
Indemnified Party against any third party with respect to any claim for which
indemnification is paid by the Indemnitor to the extent of such payment.
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SECTION 20. TERMINATION
20.1 Right to Terminate. This Agreement may be terminated at any
time prior to closing as follows:
(a) by the mutual consent of the parties;
(b) by written notice of (i) Chancellor to SFX, if SFX
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained or in
either the Jacksonville Stations LMA or the Long Island Stations LMA
(together, the "LMA Agreements") and such breach or default shall not be cured
within thirty (30) days of the date of notice of breach or default served by
Chancellor (or such lesser period provided for under the LMA Agreements), or
(ii) SFX to Chancellor if Chancellor breaches in any material respect any of
its representations or warranties or default in any material respect in the
observance or in the due and timely performance of any of its covenants or
agreements herein contained or in either of the LMA Agreements and such breach
or default shall not be cured within thirty (30) days of the notice of breach
or default served by SFX (or such lesser period provided for under the LMA
Agreements), but such notice and cure period shall not apply in the case of
Chancellor's or SFX's failure to consummate the transactions in accordance
with the terms and times specified in Section 17 of this Agreement.
(c) by Chancellor or SFX by written notice to the other, if a
court of competent jurisdiction or other Governmental Entity shall have issued
an order, decree or ruling or taken any other action (which order, decree or
ruling the parties hereto shall use their best efforts to lift), in each case
permanently restraining, permanently enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and nonappealable;
(d) by the party whose qualifications are not at issue, if,
for any reason, the FCC denies or dismisses any of the FCC Applications and
the time for reconsideration or court review under the Communications Act with
respect to such denial or dismissal has expired and there is not pending with
respect thereto a timely filed petition for reconsideration or request for
review;
(e) by written notice of Chancellor to SFX or by SFX to
Chancellor unless extended pursuant to Section 5, if the Closing shall not
have been consummated on or before July 1, 1997 as provided in Section 17.1;
(f) pursuant to Section 22.11 of this Agreement;
(g) by Chancellor in the event it does not receive its Board
of Directors approval of the Agreement within two (2) days of the execution of
this Agreement. Said termination shall be without liability to Chancellor.
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Notwithstanding the foregoing, no party hereto may effect a termination hereof
if such party is in material default or breach of this Agreement.
SECTION 21. EXPENSES, TRANSFER TAXES, AND FEES
21.1 Expenses. Except as set forth in Sections 21.2 and, 21.3
below, each party hereto shall be solely responsible for all costs and
expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this Agreement.
21.2 Transfer Taxes and Similar Charges. All costs of transferring
the Jacksonville Assets in accordance with this Agreement, including
recordation, transfer and documentary taxes and fees, the Long Island Assets,
and any excise, sales or use taxes, shall be borne equally by SFX and
Chancellor. All costs of transferring the Long Island Stations in accordance
with this Agreement, including recordation, transfer and documentary taxes and
fees, and any excise, sales or use taxes, shall be borne by Chancellor.
Chancellor and SFX shall, in good faith, attempt to calculate all such taxes
and fees prior to Closing and to settle their respective obligations therefore
on or before the Closing Date.
21.3 Governmental Filing or Grant Fees. Any filing or grant fees
imposed by any governmental authority the consent of which is required for the
consummation of the transactions contemplated hereby, including but not
limited to, the FCC, the FTC, and the Department of Justice shall be borne
equally by Chancellor and SFX.
SECTION 22. MISCELLANEOUS
22.1 Risk of Loss. Prior to Closing, risk of loss to the
Jacksonville Stations shall be borne by Chancellor and risk of loss to the
Long Island Stations shall be borne by SFX.
22.2 Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto, whether by operation of law or otherwise; provided, however, that
without releasing the Parties from any of their obligations or liabilities
hereunder (a) nothing in this Agreement shall limit any Party's ability to
sell or transfer any or all of its respective assets (whether by sale of stock
or assets, or by merger, consolidation or otherwise) without the consent of
the other party, (b) nothing in this Agreement shall limit Chancellor's
ability to assign the Long Island Licenses (including the right to acquire the
Long Island Licenses at the Closing) to Chancellor Broadcasting Licensee
Company or any other subsidiary of Chancellor without the consent of Sellers,
(c) nothing in this Agreement shall limit SFX's ability to assign the
Jacksonville Station Licenses (including the right to acquire Jacksonville
Licenses at the Closing) to SFX Broadcasting, Inc. or any other wholly owned
subsidiary of SFX without the
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consent of Sellers, and (d) nothing in this Agreement shall limit a party's
ability to make a collateral assignment of its rights under this Agreement to
any institutional lender that provides funds to that party without the consent
of the other. Each party shall execute an acknowledgment of such assignment(s)
and collateral assignments in such forms as the other party or its
institutional lenders may from time to time reasonably request; provided,
however, that unless written notice is given to a party that any such
collateral assignment has been foreclosed upon, that party shall be entitled
to deal exclusively with the other party as to any matters arising under this
Agreement or any of the other agreements delivered pursuant hereto. In the
event of such an assignment, the provisions of this Agreement shall inure to
the benefit of and be binding on all parties' successors and assigns.
22.3 Amendments. No amendment, waiver of compliance with any
provision or condition hereof or consent pursuant to this Agreement shall be
effective unless evidenced by an instrument in writing signed by the party
against whom enforcement of any waiver, amendment, change, extension or
discharge is sought.
22.4 Headings. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
22.5 Governing Law. The construction and performance of this
Agreement shall be governed by the laws of the State of Florida without giving
effect to the choice of law provisions thereof.
22.6 Notices. Any notice, demand or request required or permitted
to be given under the provisions of this Agreement shall be in writing and
shall be deemed to have been duly delivered and received on the date of
personal delivery or on the third day after deposit in the U.S. mail if mailed
by registered or certified mail, postage prepaid and return receipt requested;
or on the day after delivery to a nationally recognized overnight courier
service if sent by an overnight delivery service for next morning delivery,
and shall be addressed to the following addresses:
(a) In the case of SFX to:
Robert F. X. Sillerman
SFX Broadcasting, Inc.
150 E. 58th Street
New York, NY 10155
Telecopier number: (212) 753-3188
With a copy to:
Richard A. Liese, Esq.
SFX Broadcasting, Inc.
150 E. 58th Street
New York, NY 10155
Telecopier number: (212) 753-3188
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(b) In the case of Chancellor, to:
Steven Dinetz
President and Chief Executive Officer
Chancellor Broadcasting Company
12655 N. Central Expressway
Suite 405
Dallas, TX 75243
With a copy to:
Matthew L. Leibowitz, Esq.
Leibowitz & Associates, P.A.
One S.E. Third Avenue, Suite 1450
Miami, Florida 33131
and
Hicks, Muse, Tate & Furst Incorporated
200 Crescent Court
Suite 1600
Dallas, TX 75201
Attention: Lawrence D. Stuart, Jr.
and
Weil, Gotshal & Manges, LLP
100 Crescent Court
Suite 1300
Dallas, Texas 75201
Attention: Jeremy W. Dickens
22.7 Schedules. The schedules and exhibits attached to this
Agreement are hereby made a part of this Agreement as if set forth in full
herein.
22.8 Entire Agreement. This Agreement contains the entire agreement
among the parties hereto with respect to its subject matter and supersedes all
negotiations, prior discussions, agreements, letters of intent, and
understandings, written or oral, relating to the subject matter of this
Agreement.
22.9 Severability. If any provision of this Agreement is held to be
unenforceable, invalid, or void to any extent for any reason, that provision
shall remain in force and effect to the maximum extent allowable, and the
enforceability and validity of the remaining provisions of this
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Agreement shall not be affected thereby.
22.10 CounterparThis Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute but one and the same instrument.
22.11 Binding AgreemeThe parties shall each have fifteen (15) days
from the execution of this Agreement to deliver all Schedules associated
herewith. The parties shall each have thirty (30) days from the execution of
this Agreement to conduct an investigation that includes, but is not limited
to, reviewing the Schedules to this Exchange Agreement, reviewing the
Stations' financial performance, real estate, contracts, environmental
compliance, equipment, studio, transmitter, engineering, litigation, licenses
and all other aspects of the Stations' assets and their ownership, performance
and operations reasonably examinable in such an investigation. If either
party's investigation reveals a material misrepresentation or a material
omission made by the Selling party, then the purchasing party shall give
notice of the defects to the selling party, who will then have fifteen (15)
days to cure the defects. If the selling party does not cure such a defect
within the allowed period, the affected purchasing party may terminate this
Agreement by giving notice to the other party within fifteen (15) days after
the allowed cure period without recourse to the selling party.
22.12 Governing Law. The obligations of Chancellor and SFX are
subject to applicable federal, state and local law, rules and regulations,
including, but not limited to the Communications Act and the rules and
regulations of the Federal Communications Commission. The construction and
performance of this Agreement will be governed by the laws of the State of
Delaware.
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IN WITNESS WHEREOF, the parties have caused this Exchange Agreement
to be executed effective as of the date first written above.
CHANCELLOR RADIO BROADCASTING COMPANY
By: /s/ Steven Dinetz
---------------------
Steven Dinetz
President
SFX BROADCASTING, INC.
By: /s/ Robert F. X. Sillerman
---------------------------
Robert F. X. Sillerman
Executive Chairman & CEO
WBLI, INC.
WBLI-FM, INC.
By: /s/ Robert F. X. Sillerman
----------------------------
Robert F. X. Sillerman
Executive Chairman & CEO
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WHFM, INC.
By: /s/ Robert F. X. Sillerman
----------------------------
Robert F. X. Sillerman
Executive Chairman & CEO
WBAB, INC.
By: /s/ Robert F. X. Sillerman
----------------------------
Robert F. X. Sillerman
Executive Chairman & CEO
WGBB, INC.
By: /s/ Robert F. X. Sillerman
----------------------------
Robert F. X. Sillerman
Executive Chairman & CEO
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