SECOND AMENDMENT
TO
ASSET PURCHASE AGREEMENT
THIS SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT (the "SECOND
AMENDMENT") is made and entered as of the 28th day of June, 1996 by and
between HMW COMMUNICATIONS, INC., a Delaware corporation ("Parent"), and
MULTI-MARKET RADIO ACQUISITION CORP., a Delaware corporation ("Buyer").
W I T N E S S E T H:
WHEREAS, Parent and Buyer are parties to an Asset Purchase
Agreement, dated as of January 18, 1996, as amended by that certain First
Amendment to Asset Purchase Agreement and Agreement as to Schedules, dated as
of March 6, 1996 (such Asset Purchase Agreement, as so amended, being referred
to herein as the "Asset Purchase Agreement");
WHEREAS, Parent and SFX Broadcasting, Inc., a Delaware corporation
("SFX"), are parties to an Asset Purchase Agreement, dated as of January 18,
1996 (the "SFX Agreement");
WHEREAS, Buyer and SFX are related parties and Liberty Acquisition
Subsidiary Corporation, a Delaware corporation and a subsidiary of SFX, will
acquire the assets to be sold to Buyer under the Asset Purchase Agreement;
WHEREAS, Section 4.1(a) of the Asset Purchase Agreement provides
for the payment of an amount equal to the WTRG Purchase Price in consideration
for the sale of the Station Assets of WTRG Operating and WTRG License and
Section 4.1(b) of the Asset Purchase Agreement provides for the payment of an
amount equal to the WRDU Purchase Price in consideration for the sale of the
Station Assets of WRDU Operating and WRDU License;
WHEREAS, the Asset Purchase Agreement provides that the WTRG
Purchase Price is to be calculated based on the WTRG Closing Broadcast Cash
Flow and that the WRDU Purchase Price is to be calculated based on the WRDU
Closing Broadcast Cash Flow and sets forth the basis for calculating the WTRG
Closing Broadcast Cash Flow and the WRDU Closing Broadcast Cash Flow;
WHEREAS, although the Asset Purchase Agreement sets forth the basis
for calculating the WTRG Closing Broadcast Cash Flow and the WRDU Closing
Broadcast Cash Flow, Parent, Buyer and SFX have disagreed as to the amount of
the WTRG Closing Broadcast Cash Flow and the WRDU Closing Broadcast Cash Flow
and, accordingly, the amount of the WTRG Purchase Price and the WRDU Purchase
Price;
WHEREAS, contemporaneously with the execution and delivery of this
Second Amendment, Parent and SFX are executing and delivering a First
Amendment to Asset Purchase Agreement (the "First Amendment") pursuant to
which, among other things, (i) SFX has agreed to immediately exercise the
rights granted to SFX under Section 2.1 of the SFX Agreement, (ii) Parent and
SFX have agreed to increase the cash purchase price payable under the SFX
Agreement and to eliminate Parent's option to receive shares of SFX common
stock in lieu of the payment of a cash purchase price under the SFX Agreement,
and (iii) SFX has agreed to deposit into escrow a portion of the purchase
price under the SFX Agreement;
WHEREAS, in connection with the execution and delivery of the First
Amendment, Parent and Buyer wish to agree as to the amount that will be paid
at Closing for the Station Assets of WTRG Operating and WTRG License and the
Station Assets of WRDU Operating and WRDU License;
WHEREAS, Parent and Buyer wish to provide that the Closing shall
occur contemporaneously with the execution and
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delivery hereof and shall be effective as of 12:01 a.m.,
eastern time, on June 1, 1996;
WHEREAS, Parent and Buyer wish to amend the form of Indemnification
Escrow Agreement to be delivered at Closing pursuant to the Asset Purchase
Agreement; and
WHEREAS, Parent and Buyer wish to amend the provisions regarding
the allocation of the purchase price under the Asset Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing premises
(including, without limitation, the execution and delivery by SFX of the First
Amendment) and the mutual covenants and agreements hereinafter set forth, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. Defined Terms. Terms used herein with their initial letters
capitalized and not otherwise defined herein (including those terms so used
and not defined in the recitals above) shall have the respective meanings
given such terms in the Asset Purchase Agreement.
2. Amendment of Section 4.1 of the Asset Purchase Agreement.
Section 4.1 of the Asset Purchase Agreement is hereby amended to read in its
entirety as follows:
4.1 Delivery of Consideration.At the Closing:
(a) In consideration for the sale of the Station Assets of
WTRG Operating and WTRG License and the Station Assets of WRDU
Operating and WRDU License, in addition to the assumption of
certain obligations of WTRG Operating, WTRG License, WRDU Operating
and WRDU License pursuant to Section 3.1 above, Buyer shall
deliver, by wire transfer of
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immediately available funds, (i) to Parent as agent for WTRG
Operating, WTRG License, WRDU Operating and WRDU License an amount
equal to $30,381,500 and (ii) to the Indemnification Escrow Agent,
an amount equal to $418,500, such amount to be held by the
Indemnification Escrow Agent pursuant to the terms of the
Indemnification Escrow Agreement.
(b) [Intentionally left blank.]
(c) In consideration for the sale of the Station Assets of
WWWB Operating, WWWB License, WMFR/WMAG Operating, and WMFR/WMAG
License, in addition to the assumption of certain obligations of
such Sellers pursuant to Section 3.1 above, Buyer shall deliver, by
wire transfer of immediately available funds, (i) to Parent as
agent for WWWB Operating, WWWB License, WMFR/WMAG Operating, and
WMFR/WMAG License, an amount equal to $5,918,500 and (ii) to the
Indemnification Escrow Agent, an amount equal to $81,500, such
amount to be held by the Indemnification Escrow Agent pursuant to
the terms of the Indemnification Escrow Agreement.
3. Amendment of Section 4.2 of the Asset Purchase Agreement.
Section 4.2 of the Asset Purchase Agreement is hereby amended to read in its
entirety as follows: "4.2 [Intentionally left blank.]".
4. Closing. The Closing shall occur contemporaneously with the
execution and delivery of this Second Amendment and shall be effective as of
12:01 a.m., eastern time, on June 1, 1996.
5. Amendment to Form of Indemnification Escrow Agreement. Section
5.1 of the form of the Indemnification
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Escrow Agreement attached as Exhibit D to the Asset Purchase Agreement is
hereby amended to read in its entirety as follows:
5.1 INVESTMENT. The Escrow Agent shall invest the Escrow
Sum in such (a) obligations of the United States Government or any
agency thereof, (b) commercial paper of companies incorporated or
organized under the laws of the United States or one of the States
thereof and in each case having a rating assigned to such
commercial paper by Standard & Poor's Corporation or Moody's
Investor Services, Inc. equal to the highest rating assigned by
such organization, (c) U.S. dollar-denominated certificates of
deposit issued by any bank, trust company or national banking
association incorporated in the United States and having a combined
capital and surplus and retained earnings of at least $100,000,000,
(d) interest bearing accounts of any bank, trust company or
national banking association incorporated in the United States and
having a combined capital and surplus and retained earnings of at
least $100,000,000, or (e) money market mutual funds, as shall be
specified in written instructions signed by Parent. The Escrow Sum
does not form a part of the capital or assets of the Escrow Agent,
and will not be subject to the claims of its creditors or
depositors. Escrow Agent hereby agrees that during the term of this
Agreement, the Escrow Sum shall be physically segregated from the
other assets of the Escrow Agent, and held for the exclusive
benefit of Parent and Buyer.
6. Amendment of Section 4.4 of the Asset Purchase Agreement. The
first sentence of Section 4.4 of
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the Asset Purchase Agreement is hereby amended to read in its entirety as
follows:
Parent and Buyer shall mutually agree upon the allocation of the
Total Purchase Price among the Station Assets of the respective
Sellers (the "Allocation") by the fifth (5th) day following the
Closing Date (the "Allocation Determination
Date").
7. Amendment of Definition. The definition of "Total Purchase
Price" set forth in Article 1 of the Asset Purchase Agreement is hereby
amended to read in its entirety as follows:
"TOTAL PURCHASE PRICE" shall mean $36,800,000.
8. Effectiveness. Parent and Buyer agree that the Asset Purchase
Agreement, as modified by this Second Amendment, is in full force and effect
and that, except as provided herein, there have been no modifications of, or
waivers granted under, the Asset Purchase Agreement.
9. Counterparts. This Second Amendment may be executed in one or
more counterparts, each of which will be deemed an original and all of which
together will constitute one and the same instrument.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as of the date and year first above written.
PARENT:
HMW COMMUNICATIONS, INC.
By: /s/ Eric C. Hellman
----------------------------
Name: Eric C. Hellman
Title: President
BUYER:
MULTI-MARKET RADIO ACQUISITION
CORP.
By: /s/ Kraig Fox
-----------------------------
Name: Kraig Fox
Title: Secretary
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