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Delaware
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4832
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27-1996555
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(State or other jurisdiction of
incorporation or organization) |
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(Primary Standard Industrial
Classification Code Number) |
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(I.R.S. Employer
Identification No.) |
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Joshua N. Korff
Christopher A. Kitchen Kirkland & Ellis LLP 601 Lexington Avenue New York, New York 10022 (212) 446-4800 |
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Luis R. Penalver
Cahill Gordon & Reindel LLP 80 Pine Street New York, New York 10005 (212) 701-3000 |
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Large accelerated filer
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☐
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Accelerated filer
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☐
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Non-accelerated filer
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☒
(Do not check if a smaller reporting company)
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Smaller reporting company
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☐
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Title of Each Class of
Securities to be Registered
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Amount to be
Registered |
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Estimated Maximum
Offering Price Per Share (1) |
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Proposed
Maximum Aggregate Offering Price (1) (2) |
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Amount of
Registration Fee (3) |
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Class A Common Stock, $0.01 par value per share
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9,583,333
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$
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16.00
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$
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153,333,328.00
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$
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19,749.33
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Per Share
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Total
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Public offering price
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$
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$
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Underwriting discounts and commissions
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$
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$
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Proceeds, before expenses, to us
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$
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$
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BofA Merrill Lynch
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Jefferies
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RBC Capital Markets
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Guggenheim Securities
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Macquarie Capital
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Page
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
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F-1
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Year Ended
December 31, |
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Three Months
Ended March 31, |
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
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Pro Forma
Year Ended December 31, 2013 |
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Pro Forma
Three Months Ended March 31, 2014 |
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($ in thousands, except share and per share data)
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2012
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2013
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2013
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2014
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Statement of Operations Data:
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Net revenue
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$
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222,736
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$
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268,578
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$
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53,473
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$
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79,161
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|
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$
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345,111
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$
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79,161
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Operating costs and expenses:
|
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Direct operating expenses, excluding depreciation and amortization
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153,103
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185,214
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40,476
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57,742
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229,071
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57,742
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Depreciation and amortization
|
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14,824
|
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15,189
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4,026
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4,386
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18,714
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4,386
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Corporate expenses
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17,750
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21,124
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3,791
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5,437
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23,846
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5,437
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Transaction and other restructuring costs
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1,782
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2,001
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1
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28
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2,001
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28
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Change in fair value of contingent consideration
|
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—
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(1,100
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)
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—
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|
|
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—
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(1,100
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)
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—
|
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Net loss (gain) on sale of assets
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123
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(36
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)
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(45
|
)
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(110
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)
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(33
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)
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(110
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)
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Total operating costs and expenses
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|
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187,582
|
|
|
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|
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222,392
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48,249
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|
|
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67,483
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272,499
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67,483
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Operating income
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35,154
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46,186
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5,224
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11,678
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72,612
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11,678
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Other (expense) income:
|
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Interest expense, net
|
|
|
|
|
(28,291
|
)
|
|
|
|
|
|
(35,620
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)
|
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|
|
|
|
(7,409
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)
|
|
|
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(12,080
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)
|
|
|
|
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|
(45,766
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)
|
|
|
|
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|
(10,568
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)
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Loss on early extinguishment of debt
|
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|
—
|
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|
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|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(199
|
)
|
|
|
|
|
|
—
|
|
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|
|
Net loss on derivative instruments
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
(1
|
)
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|
|
|
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
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|
Other income (expense), net
|
|
|
|
|
6
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
(37
|
)
|
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
(37
|
)
|
|
|
|
Total other expense
|
|
|
|
|
(28,414
|
)
|
|
|
|
|
|
(35,735
|
)
|
|
|
|
|
|
(7,422
|
)
|
|
|
|
|
|
(12,117
|
)
|
|
|
|
|
|
(46,080
|
)
|
|
|
|
|
|
(10,605
|
)
|
|
|
|
Income (loss) before income taxes
|
|
|
|
|
6,740
|
|
|
|
|
|
|
10,451
|
|
|
|
|
|
|
(2,198
|
)
|
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
26,532
|
|
|
|
|
|
|
1,073
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
340
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
91
|
|
|
|
|
|
|
10,321
|
|
|
|
|
|
|
417
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
|
$
|
16,211
|
|
|
|
|
|
$
|
656
|
|
|
|
|
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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|
|
|
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|
|
|
|
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|
|
|
|
|
|
|
|
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|
Cash
|
|
|
|
$
|
22,305
|
|
|
|
|
|
$
|
45,647
|
|
|
|
|
|
$
|
28,896
|
|
|
|
|
|
$
|
57,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital
|
|
|
|
|
31,440
|
|
|
|
|
|
|
58,486
|
|
|
|
|
|
|
30,679
|
|
|
|
|
|
|
60,681
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
610,121
|
|
|
|
|
|
|
939,203
|
|
|
|
|
|
|
613,783
|
|
|
|
|
|
|
941,897
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|
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|
|
|
|
|
|
|
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|
Total debt, including current maturities
|
|
|
|
|
367,447
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|
|
|
|
|
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653,472
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|
|
|
|
|
|
367,156
|
|
|
|
|
|
|
653,518
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling interest
|
|
|
|
|
207,896
|
|
|
|
|
|
|
234,039
|
|
|
|
|
|
|
205,613
|
|
|
|
|
|
|
233,668
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Non-controlling interest
|
|
|
|
|
442
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
442
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Cash Flow Data:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
|
|
|
|
|
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Cash flow provided by operating activities
|
|
|
|
$
|
19,847
|
|
|
|
|
|
$
|
26,204
|
|
|
|
|
|
$
|
9,116
|
|
|
|
|
|
$
|
14,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow used in investing activities
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|
|
|
|
(142,200
|
)
|
|
|
|
|
|
(286,170
|
)
|
|
|
|
|
|
(2,061
|
)
|
|
|
|
|
|
(2,079
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow provided by (used in) financing activities
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|
|
|
|
119,666
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|
|
|
|
|
|
283,308
|
|
|
|
|
|
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(464
|
)
|
|
|
|
|
|
(424
|
)
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma C corporation data (unaudited):
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|
|
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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|
|
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|
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|
|
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|
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|
|
|
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Historical profit (loss) before taxes
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|
|
|
|
|
|
|
|
|
|
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma income taxes
|
|
|
|
|
|
|
|
|
|
|
|
4,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(171
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income (loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
6,386
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(268
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pro forma net income (loss) per share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
$
|
0.63
|
|
|
|
|
|
$
|
0.02
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
|
$
|
0.50
|
|
|
|
|
|
$
|
0.02
|
|
|
|
|
Weighted average shares outstanding
(1)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
25,604,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,263,050
|
|
|
|
|
|
|
25,604,985
|
|
|
|
|
|
|
26,263,050
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
32,305,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,963,308
|
|
|
|
|
|
|
32,305,242
|
|
|
|
|
|
|
32,963,308
|
|
|
|
|
Other Financial Data:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Direct Profit
(2)
|
|
|
|
|
69,633
|
|
|
|
|
|
|
83,364
|
|
|
|
|
|
|
12,997
|
|
|
|
|
|
|
21,419
|
|
|
|
|
|
|
116,040
|
|
|
|
|
|
|
21,419
|
|
|
|
|
Adjusted EBITDA
(2)
|
|
|
|
|
51,883
|
|
|
|
|
|
|
62,240
|
|
|
|
|
|
|
9,206
|
|
|
|
|
|
|
16,141
|
|
|
|
|
|
|
92,194
|
|
|
|
|
|
|
16,141
|
|
|
|
|
Adjusted EBITDA excluding duplicative corporate expenses
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,916
|
|
|
|
|
|
|
16,141
|
|
|
|
|
Capital expenditures
|
|
|
|
|
9,894
|
|
|
|
|
|
|
9,526
|
|
|
|
|
|
|
1,941
|
|
|
|
|
|
|
1,995
|
|
|
|
|
|
|
9,855
|
|
|
|
|
|
|
1,995
|
|
|
|
|
Adjusted EBIT
D
A adjusted for certain
expenditures
(2)
|
|
|
|
$
|
21,996
|
|
|
|
|
|
$
|
20,829
|
|
|
|
|
|
$
|
6,215
|
|
|
|
|
|
$
|
12,242
|
|
|
|
|
|
$
|
41,505
|
|
|
|
|
|
$
|
12,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
Three Months
Ended March 31, |
|
|
Pro Forma
Year Ended December 31, 2013 |
|
|
Pro Forma
Three Months Ended March 31, 2014 |
|
||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
|
||||||||||||||||||||||||||||||
|
Net income (loss)
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
|
$
|
16,211
|
|
|
|
|
|
$
|
656
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
340
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
91
|
|
|
|
|
|
|
10,321
|
|
|
|
|
|
|
417
|
|
|
|
|
Interest expense, net
|
|
|
|
|
28,291
|
|
|
|
|
|
|
35,620
|
|
|
|
|
|
|
7,409
|
|
|
|
|
|
|
12,080
|
|
|
|
|
|
|
45,766
|
|
|
|
|
|
|
10,568
|
|
|
|
|
Transaction and other restructuring costs
(a)
|
|
|
|
|
1,782
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
28
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
14,824
|
|
|
|
|
|
|
15,189
|
|
|
|
|
|
|
4,026
|
|
|
|
|
|
|
4,386
|
|
|
|
|
|
|
18,714
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Corporate expenses
(b)
|
|
|
|
|
17,750
|
|
|
|
|
|
|
21,124
|
|
|
|
|
|
|
3,791
|
|
|
|
|
|
|
5,437
|
|
|
|
|
|
|
23,846
|
|
|
|
|
|
|
5,437
|
|
|
|
|
Other
(c)
|
|
|
|
|
246
|
|
|
|
|
|
|
(1,021
|
)
|
|
|
|
|
|
(32
|
)
|
|
|
|
|
|
(73
|
)
|
|
|
|
|
|
(819
|
)
|
|
|
|
|
|
(73
|
)
|
|
|
|
Direct Profit
|
|
|
|
|
69,633
|
|
|
|
|
|
|
83,364
|
|
|
|
|
|
|
12,997
|
|
|
|
|
|
|
21,419
|
|
|
|
|
|
|
116,040
|
|
|
|
|
|
|
21,419
|
|
|
|
|
Corporate expenses
(b)
|
|
|
|
|
(17,750
|
)
|
|
|
|
|
|
(21,124
|
)
|
|
|
|
|
|
(3,791
|
)
|
|
|
|
|
|
(5,437
|
)
|
|
|
|
|
|
(23,846
|
)
|
|
|
|
|
|
(5,437
|
)
|
|
|
|
Stock-based compensation
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
159
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
159
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
51,883
|
|
|
|
|
|
|
62,240
|
|
|
|
|
|
|
9,206
|
|
|
|
|
|
|
16,141
|
|
|
|
|
|
|
92,194
|
|
|
|
|
|
|
16,141
|
|
|
|
|
Adjustment to corporate expenses to reflect removal of duplicative acquired company corporate expenses
(d)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,722
|
|
|
|
|
|
|
—
|
|
|
|
|
Adjusted EBITDA excluding duplicative corporate expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94,916
|
|
|
|
|
|
|
16,141
|
|
|
|
|
Net cash interest expense
|
|
|
|
|
(19,757
|
)
|
|
|
|
|
|
(31,392
|
)
|
|
|
|
|
|
(930
|
)
|
|
|
|
|
|
(1,894
|
)
|
|
|
|
|
|
(43,063
|
)
|
|
|
|
|
|
(1,142
|
)
|
|
|
|
Capital expenditures
|
|
|
|
|
(9,894
|
)
|
|
|
|
|
|
(9,526
|
)
|
|
|
|
|
|
(1,941
|
)
|
|
|
|
|
|
(1,995
|
)
|
|
|
|
|
|
(9,855
|
)
|
|
|
|
|
|
(1,995
|
)
|
|
|
|
Cash paid for taxes
(e)
|
|
|
|
|
(236
|
)
|
|
|
|
|
|
(493
|
)
|
|
|
|
|
|
(120
|
)
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
(493
|
)
|
|
|
|
|
|
(10
|
)
|
|
|
|
Adjusted EBIT
D
A adjusted for
certain
expenditures
|
|
|
|
$
|
21,996
|
|
|
|
|
|
$
|
20,829
|
|
|
|
|
|
$
|
6,215
|
|
|
|
|
|
$
|
12,242
|
|
|
|
|
|
$
|
41,505
|
|
|
|
|
|
$
|
12,994
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of March 31, 2014
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
Actual
|
|
|
Pro Forma
|
|
||||||||
|
Cash
(1)
|
|
|
|
$
|
57,339
|
|
|
|
|
|
$
|
10,869
|
|
|
|
|
Debt:
|
|
| | | | | | | | | | | | | |
|
Senior Secured Credit Facility
|
|
| | | | | | | | | | | | | |
|
Revolving credit facility
(2)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Term loans
|
|
|
|
|
202,468
|
|
|
|
|
|
|
73,899
|
|
|
|
|
Senior PIK Notes
|
|
|
|
|
31,151
|
|
|
|
|
|
|
—
|
|
|
|
|
Capitalized obligations
|
|
|
|
|
525
|
|
|
|
|
|
|
525
|
|
|
|
|
Total Secured Debt
|
|
|
|
|
234,144
|
|
|
|
|
|
|
74,424
|
|
|
|
|
Senior Notes
(3)
|
|
|
|
|
410,900
|
|
|
|
|
|
|
410,900
|
|
|
|
|
Total Debt
|
|
|
|
|
645,044
|
|
|
|
|
|
|
485,324
|
|
|
|
|
Total Members’ Equity/Stockholders’ Equity
(4)
|
|
|
|
|
234,160
|
|
|
|
|
|
|
345,970
|
|
|
|
|
Total Capitalization
|
|
|
|
$
|
879,204
|
|
|
|
|
|
$
|
831,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assumed initial public offering price per share
|
|
|
|
|
|
|
|
|
|
|
$
|
15.00
|
|
|
|
|
N
et tangible book
value
per share as of March 31, 2014
after giving
effect to the Conversion
|
|
|
|
$
|
(27.02
|
)
|
|
|
| | | | | | |
|
Increase per share attributable to new investors
|
|
|
|
$
|
12.88
|
|
|
|
| | | | | | |
|
|
|
| | | | | | | | | | | | | |
|
Pro forma net tangible book value per share after this offering
|
|
|
|
|
|
|
|
|
|
|
$
|
(14.14
|
)
|
|
|
|
Dilution per share to new investors
|
|
|
|
|
|
|
|
|
|
|
$
|
29.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Purchased
|
|
|
Total
Consideration |
|
|
Average
Price Per Share |
|
||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Number
|
|
|
Percent
|
|
|
Amount
(millions) |
|
|
Percent
|
|
|||||||||||||||||||||||
|
Existing stockholders
|
|
|
|
|
485,331
|
|
|
|
|
|
|
5.5
|
%
|
|
|
|
|
$
|
5.6
|
|
|
|
|
|
|
4.3
|
%
|
|
|
|
|
$
|
11.54
|
|
|
|
|
New investors
|
|
|
|
|
8,333,333
|
|
|
|
|
|
|
94.5
|
%
|
|
|
|
|
$
|
125.0
|
|
|
|
|
|
|
95.7
|
%
|
|
|
|
|
$
|
15.00
|
|
|
|
|
Total
|
|
|
|
|
8,818,664
|
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
$
|
130.6
|
|
|
|
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
Three Months
Ended March 31, |
|
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands, except share and per share data)
|
|
|
2012
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
|
||||||||||||||||
|
Statement of Operations Data:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Net revenue
|
|
|
|
$
|
222,736
|
|
|
|
|
|
$
|
268,578
|
|
|
|
|
|
$
|
53,473
|
|
|
|
|
|
$
|
79,161
|
|
|
|
|
Operating costs and expenses:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
153,103
|
|
|
|
|
|
|
185,214
|
|
|
|
|
|
|
40,476
|
|
|
|
|
|
|
57,742
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
14,824
|
|
|
|
|
|
|
15,189
|
|
|
|
|
|
|
4,026
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Corporate expenses
|
|
|
|
|
17,750
|
|
|
|
|
|
|
21,124
|
|
|
|
|
|
|
3,791
|
|
|
|
|
|
|
5,437
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
1,782
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
28
|
|
|
|
|
Change in fair value of contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Net loss (gain) on sale of assets
|
|
|
|
|
123
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
(110
|
)
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
187,582
|
|
|
|
|
|
|
222,392
|
|
|
|
|
|
|
48,249
|
|
|
|
|
|
|
67,483
|
|
|
|
|
Operating income
|
|
|
|
|
35,154
|
|
|
|
|
|
|
46,186
|
|
|
|
|
|
|
5,224
|
|
|
|
|
|
|
11,678
|
|
|
|
|
Other (expense) income:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense, net
|
|
|
|
|
(28,291
|
)
|
|
|
|
|
|
(35,620
|
)
|
|
|
|
|
|
(7,409
|
)
|
|
|
|
|
|
(12,080
|
)
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Other income (expense), net
|
|
|
|
|
6
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
(37
|
)
|
|
|
|
Total other expense
|
|
|
|
|
(28,414
|
)
|
|
|
|
|
|
(35,735
|
)
|
|
|
|
|
|
(7,422
|
)
|
|
|
|
|
|
(12,117
|
)
|
|
|
|
Income (loss) before income taxes
|
|
|
|
|
6,740
|
|
|
|
|
|
|
10,451
|
|
|
|
|
|
|
(2,198
|
)
|
|
|
|
|
|
(439
|
)
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
340
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
91
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
Pro
forma
C corporat
ion
data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical profit (loss) before taxes
|
|
|
|
|
|
|
|
|
|
|
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(439
|
)
|
|
|
|
Pro forma income tax
es
|
|
|
|
|
|
|
|
|
|
|
|
4,065
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(171
|
)
|
|
|
|
Pro forma net income (loss)
|
|
|
|
|
|
|
|
|
|
|
$
|
6,386
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(268
|
)
|
|
|
|
Pro forma n
et income (loss) per share
(1)
:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
|
|
|
|
|
|
|
|
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
Weighted Average Shares Outstanding
(1)
:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
25,604,985
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,263,050
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
32,305,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,963,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|
Three Months
Ended March 31, 2014 |
|
|||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
|||||||||||||||
|
Selected Balance Sheet Data (at end of period):
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Cash
|
|
|
|
$
|
22,305
|
|
|
|
|
|
$
|
45,647
|
|
|
|
|
|
$
|
57,339
|
|
|
|
|
Working capital
|
|
|
|
|
31,440
|
|
|
|
|
|
|
58,486
|
|
|
|
|
|
|
60,681
|
|
|
|
|
Total assets
|
|
|
|
|
610,121
|
|
|
|
|
|
|
939,203
|
|
|
|
|
|
|
941,897
|
|
|
|
|
Total debt, including current maturities
|
|
|
|
|
367,447
|
|
|
|
|
|
|
653,472
|
|
|
|
|
|
|
653,518
|
|
|
|
|
Members’ equity:
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Controlling interest
|
|
|
|
|
207,896
|
|
|
|
|
|
|
234,039
|
|
|
|
|
|
|
233,668
|
|
|
|
|
Non-controlling interest
|
|
|
|
|
442
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($ in thousands)
|
|
|
Townsquare
Media, LLC |
|
|
Pro Forma
Adjustments for the Offering |
|
|
Townsquare
Media, LLC Pro Forma for the Offering |
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Local Advertising net revenue
|
|
|
|
|
65,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,272
|
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
13,889
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,889
|
|
|
|
|
Net revenue
|
|
|
|
$
|
79,161
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
79,161
|
|
|
|
|
Local Advertising direct operating expenses
|
|
|
|
|
45,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45,074
|
|
|
|
|
Other Media and Entertainment direct operating expenses
|
|
|
|
|
12,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,668
|
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
57,742
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
57,742
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Corporate expenses
|
|
|
|
|
5,437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,437
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
Net g
ain on sale of assets
|
|
|
|
|
(110
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
(110
|
)
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
67,483
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
67,483
|
|
|
|
|
Operating income
|
|
|
|
|
11,678
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
11,678
|
|
|
|
|
Other (expense) income:
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Interest expense, net
|
|
|
|
|
(12,080
|
)
|
|
|
|
|
|
1,512
|
(1)
|
|
|
|
|
|
(10,568
|
)
|
|
|
|
Other expense, net
|
|
|
|
|
(37
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(37
|
)
|
|
|
|
(Loss) income before income taxes
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
1,512
|
|
|
|
|
|
|
1,073
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
91
|
|
|
|
|
|
|
326
|
(2)
|
|
|
|
|
|
417
|
|
|
|
|
Net (loss) income
|
|
|
|
$
|
(530
|
)
|
|
|
|
|
$
|
1,186
|
|
|
|
|
|
$
|
656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Removal of cash interest expense on incremental term loans related to $82.1 million contemplated paydown with proceeds of this offering, assuming historical 1-month LIBOR (3.60% for the period)
|
|
|
|
$
|
752
|
|
|
|
|
Removal of non-cash interest expense on Senior PIK Notes related to contemplated paydown with proceeds of this offering
|
|
|
|
|
760
|
|
|
|
|
Total
|
|
|
|
$
|
1,512
|
|
|
|
|
|
|
|
|
|
Removal of historical Townsquare Media provision for income taxes
|
|
|
|
$
|
(91
|
)
|
|
|
|
Inclusion of provision for income taxes at an assumed 38.9% corporate tax rate
|
|
|
|
|
417
|
|
|
|
|
Total
|
|
|
|
$
|
326
|
|
|
|
|
|
|
|
|
|
($ in thousands)
|
|
|
Townsquare
Media, LLC |
|
|
Boise
Jan 1, – Nov 13, 2013 |
|
|
Cumulus II
Jan 1, – Nov 13, 2013 |
|
|
Live Events
|
|
|
Divestitures
(1)
|
|
|
Pro Forma
Adjustments for the Transactions |
|
|
Townsquare
Media, LLC Pro Forma for the Transactions |
|
|
Pro Forma
Adjustments for the Offering |
|
|
Townsquare
Media, LLC Pro Forma for the Offering |
|
||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Local Advertising net revenue
|
|
|
|
$
|
229,653
|
|
|
|
|
|
$
|
7,075
|
|
|
|
|
|
$
|
58,338
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
(2
|
)
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
295,064
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
295,064
|
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
38,925
|
|
|
|
|
|
|
730
|
|
|
|
|
|
|
3,153
|
|
|
|
|
|
|
7,239
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
50,047
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
50,047
|
|
|
|
|
Net revenue
|
|
|
|
|
268,578
|
|
|
|
|
|
|
7,805
|
|
|
|
|
|
|
61,491
|
|
|
|
|
|
|
7,239
|
|
|
|
|
|
|
(2
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
345,111
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
345,111
|
|
|
|
|
Local Advertising direct operating
expenses |
|
|
|
|
147,720
|
|
|
|
|
|
|
5,346
|
|
|
|
|
|
|
31,888
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(10
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
184,944
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
184,944
|
|
|
|
|
Other Media and Entertainment direct operating expenses
|
|
|
|
|
37,494
|
|
|
|
|
|
|
316
|
|
|
|
|
|
|
846
|
|
|
|
|
|
|
5,472
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
44,127
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
44,127
|
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
185,214
|
|
|
|
|
|
|
5,662
|
|
|
|
|
|
|
32,734
|
|
|
|
|
|
|
5,472
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
229,071
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
229,071
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
15,189
|
|
|
|
|
|
|
560
|
|
|
|
|
|
|
4,439
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,474
|
)
(2)
|
|
|
|
|
|
18,714
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
18,714
|
|
|
|
|
Corporate expenses
|
|
|
|
|
21,124
|
|
|
|
|
|
|
238
|
|
|
|
|
|
|
2,484
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
23,846
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
23,846
|
|
|
|
|
Change in fair value of contingent consideration
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
2,001
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,001
|
|
|
|
|
Net (gain) loss on sale of assets
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
3
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(33
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(33
|
)
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
222,392
|
|
|
|
|
|
|
6,460
|
|
|
|
|
|
|
39,660
|
|
|
|
|
|
|
5,472
|
|
|
|
|
|
|
(11
|
)
|
|
|
|
|
|
(1,474
|
)
|
|
|
|
|
|
272,499
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
272,499
|
|
|
|
|
Operating income
|
|
|
|
|
46,186
|
|
|
|
|
|
|
1,345
|
|
|
|
|
|
|
21,831
|
|
|
|
|
|
|
1,767
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
1,474
|
|
|
|
|
|
|
72,612
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
72,612
|
|
|
|
|
Other (expense) income:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense, net
|
|
|
|
|
(35,620
|
)
|
|
|
|
|
|
(785
|
)
|
|
|
|
|
|
(6,839
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(8,661
|
)
(3)
|
|
|
|
|
|
(51,905
|
)
|
|
|
|
|
|
6,139
|
(4)
|
|
|
|
|
|
(45,766
|
)
|
|
|
|
Loss on early extinguishment of debt
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(199
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(199
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(199
|
)
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
Other expense, net
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
Income before income taxes
|
|
|
|
|
10,451
|
|
|
|
|
|
|
560
|
|
|
|
|
|
|
14,793
|
|
|
|
|
|
|
1,767
|
|
|
|
|
|
|
9
|
|
|
|
|
|
|
(7,187
|
)
|
|
|
|
|
|
20,393
|
|
|
|
|
|
|
6,139
|
|
|
|
|
|
|
26,532
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
5,956
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(5,956
|
)
(5)
|
|
|
|
|
|
340
|
|
|
|
|
|
|
9,981
|
(6)
|
|
|
|
|
|
10,321
|
|
|
|
|
Net income (loss)
|
|
|
|
$
|
10,111
|
|
|
|
|
|
$
|
560
|
|
|
|
|
|
$
|
8,837
|
|
|
|
|
|
$
|
1,767
|
|
|
|
|
|
$
|
9
|
|
|
|
|
|
$
|
(1,231
|
)
|
|
|
|
|
$
|
20,053
|
|
|
|
|
|
$
|
(3,842
|
)
|
|
|
|
|
$
|
16,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
|
Divestitures include results of operations for KDOK-AM sold in January 2013 and KDBN-FM sold in July 2013.
|
|
| | | | | | |
|
(2)
|
|
|
Pro forma adjustments to depreciation and amortization include the following:
|
|
| | | | | | |
|
|
|
|
Removal of Cumulus II depreciation
|
|
|
|
$
|
(4,439
|
)
|
|
|
|
|
|
|
Removal of Boise depreciation
|
|
|
|
|
(560
|
)
|
|
|
|
|
|
|
Inclusion of Boise depreciation for period January 1, 2013 through November 13, 2013 at fair market value
|
|
|
|
|
285
|
|
|
|
|
|
|
|
Inclusion of Cumulus II depreciation for period January 1, 2013 through November 13, 2013 at fair market value
|
|
|
|
|
3,240
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
(1,474
|
)
|
|
|
|
(3)
|
|
|
Pro forma adjustments to net interest expense for the period January 1, 2013 through November 13, 2013 related to acquisitions and related financings that occurred in 2013:
|
|
| | | | | | |
|
|
|
|
Removal of historical net interest expense for debt not assumed
|
|
| | | | | | |
|
|
|
|
Removal of historical Boise net interest expense
|
|
|
|
$
|
785
|
|
|
|
|
|
|
|
Removal of historical Cumulus II net interest expense
|
|
|
|
|
6,839
|
|
|
|
|
|
|
|
Sub-total
|
|
|
|
$
|
7,624
|
|
|
|
|
|
|
|
Inclusion of net interest expense for acquisition financing
|
|
| | | | | | |
|
|
|
|
Inclusion of cash interest expense on $145.9 million of add-on Unsecured Senior Notes at an interest rate of 9.0%
|
|
|
|
$
|
(11,417
|
)
|
|
|
|
|
|
|
Inclusion of non-cash bond premium amortization on $145.9 million of add-on Unsecured Senior Notes which were issued at a premium
|
|
|
|
|
1,474
|
|
|
|
|
|
|
|
Net interest expense on $145.9 million of add-on Unsecured Senior Notes
|
|
|
|
$
|
(9,943
|
)
|
|
|
|
|
|
|
Inclusion of cash interest expense on $102.0 million of incremental term loans at an interest rate of L+350 basis points, assuming historical 1-month LIBOR (3.69% for the period)
|
|
|
|
|
(3,309
|
)
|
|
|
|
|
|
|
Inclusion of non-cash interest expense on $30.0 million of Senior PIK Notes
|
|
|
|
|
(2,693
|
)
|
|
|
|
|
|
|
Sub-total
|
|
|
|
$
|
(15,945
|
)
|
|
|
|
|
|
|
Inclusion of non-cash deferred financing costs related to acquisition financing
|
|
|
|
|
|
|
|
|
|
|
|
|
Inclusion of non-cash amortization of deferred financing costs on $145.9 million of add-on Unsecured Senior Notes
|
|
|
|
$
|
(238
|
)
|
|
|
|
|
|
|
Inclusion of non-cash amortization of deferred financing costs on $102.0 million of incremental term loans
|
|
|
|
|
(102
|
)
|
|
|
|
|
|
|
Sub-total
|
|
|
|
$
|
(340
|
)
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
(8,661
|
)
|
|
|
|
(4)
|
|
|
Pro forma adjustments to net interest expense related to this offering and the use of proceeds thereof:
|
|
|
|
|
|
|
|
|
|
|
|
|
Removal of cash interest expense on incremental term loans related to $82.1 million contemplated paydown with proceeds of this offering, assuming historical 1-month LIBOR (3.69% for the period)
|
|
|
|
$
|
3,055
|
|
|
|
|
|
|
|
Removal of non-cash interest expense on Senior PIK Notes related to contemplated paydown with proceeds of this offering
|
|
|
|
|
3,084
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
6,139
|
|
|
|
|
(5)
|
|
|
Reflects removal of historical Cumulus II provision for income taxes
|
|
|
|
$
|
(5,956
|
)
|
|
|
|
(6)
|
|
|
Pro forma adjustments to provision for income taxes related to conversion of Townsquare Media to a corporation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Removal of historical Townsquare Media provision for income taxes
|
|
|
|
$
|
(340
|
)
|
|
|
|
|
|
|
Inclusion of provision for income taxes at an assumed 38.9% corporate tax rate
|
|
|
|
|
10,321
|
|
|
|
|
|
|
|
Total
|
|
|
|
$
|
9,981
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
|
$ Change
|
|
|
% Change
|
|
||||||||||||||||
|
Statement of Operations Data:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Local Advertising net revenue
|
|
|
|
$
|
198,306
|
|
|
|
|
|
$
|
229,653
|
|
|
|
|
|
$
|
31,347
|
|
|
|
|
|
|
15.8
|
%
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
24,430
|
|
|
|
|
|
|
38,925
|
|
|
|
|
|
|
14,495
|
|
|
|
|
|
|
59.3
|
%
|
|
|
|
Net revenue
|
|
|
|
|
222,736
|
|
|
|
|
|
|
268,578
|
|
|
|
|
|
|
45,842
|
|
|
|
|
|
|
20.6
|
%
|
|
|
|
Operating Costs and Expenses:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Local Advertising direct operating expenses
|
|
|
|
|
133,255
|
|
|
|
|
|
|
147,720
|
|
|
|
|
|
|
14,465
|
|
|
|
|
|
|
10.9
|
%
|
|
|
|
Other Media and Entertainment direct operating expenses
|
|
|
|
|
19,848
|
|
|
|
|
|
|
37,494
|
|
|
|
|
|
|
17,646
|
|
|
|
|
|
|
88.9
|
%
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
153,103
|
|
|
|
|
|
|
185,214
|
|
|
|
|
|
|
32,111
|
|
|
|
|
|
|
21.0
|
%
|
|
|
|
Depreciation and amortization
|
|
|
|
|
14,824
|
|
|
|
|
|
|
15,189
|
|
|
|
|
|
|
365
|
|
|
|
|
|
|
2.5
|
%
|
|
|
|
Corporate expenses
|
|
|
|
|
17,750
|
|
|
|
|
|
|
21,124
|
|
|
|
|
|
|
3,374
|
|
|
|
|
|
|
19.0
|
%
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
1,782
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
219
|
|
|
|
|
|
|
12.3
|
%
|
|
|
|
Change in fair value of contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Net loss (gain) on sale of assets
|
|
|
|
|
123
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(159
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
187,582
|
|
|
|
|
|
|
222,392
|
|
|
|
|
|
|
34,810
|
|
|
|
|
|
|
18.6
|
%
|
|
|
|
Operating income
|
|
|
|
|
35,154
|
|
|
|
|
|
|
46,186
|
|
|
|
|
|
|
11,032
|
|
|
|
|
|
|
31.4
|
%
|
|
|
|
Other (expense) income:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense, net
|
|
|
|
|
(28,291
|
)
|
|
|
|
|
|
(35,620
|
)
|
|
|
|
|
|
(7,329
|
)
|
|
|
|
|
|
25.9
|
%
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
128
|
|
|
|
|
|
|
99.2
|
%
|
|
|
|
Other income (expense), net
|
|
|
|
|
6
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
|
|
(120
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Total other expense
|
|
|
|
|
(28,414
|
)
|
|
|
|
|
|
(35,735
|
)
|
|
|
|
|
|
(7,321
|
)
|
|
|
|
|
|
25.8
|
%
|
|
|
|
Income before income taxes
|
|
|
|
|
6,740
|
|
|
|
|
|
|
10,451
|
|
|
|
|
|
|
3,711
|
|
|
|
|
|
|
55.1
|
%
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
340
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Net income
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
|
$
|
3,711
|
|
|
|
|
|
|
58.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Bank borrowings—term loan and revolving credit facilities
|
|
|
|
$
|
2,972
|
|
|
|
|
|
$
|
—
|
|
|
|
|
Senior Notes
|
|
|
|
|
17,689
|
|
|
|
|
|
|
27,668
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
3,912
|
|
|
|
|
|
|
5,353
|
|
|
|
|
Subordinated Notes
|
|
|
|
|
979
|
|
|
|
|
|
|
392
|
|
|
|
|
Capital loans and other
|
|
|
|
|
155
|
|
|
|
|
|
|
98
|
|
|
|
|
Loan origination cost
|
|
|
|
|
2,605
|
|
|
|
|
|
|
2,111
|
|
|
|
|
Interest income
|
|
|
|
|
(21
|
)
|
|
|
|
|
|
(2
|
)
|
|
|
|
Interest expense, net
|
|
|
|
$
|
28,291
|
|
|
|
|
|
$
|
35,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended March 31, |
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2013
|
|
|
2014
|
|
|
$ Change
|
|
|
% Change
|
|
||||||||||||||||
|
Statement of Operations Data:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Local Advertising net revenue
|
|
|
|
$
|
47,324
|
|
|
|
|
|
$
|
65,272
|
|
|
|
|
|
$
|
17,948
|
|
|
|
|
|
|
37.9
|
%
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
6,149
|
|
|
|
|
|
|
13,889
|
|
|
|
|
|
|
7,740
|
|
|
|
|
|
|
125.9
|
%
|
|
|
|
Net revenue
|
|
|
|
|
53,473
|
|
|
|
|
|
|
79,161
|
|
|
|
|
|
|
25,688
|
|
|
|
|
|
|
48.0
|
%
|
|
|
|
Operating Costs and Expenses:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Local Advertising direct operating expenses
|
|
|
|
|
34,507
|
|
|
|
|
|
|
45,074
|
|
|
|
|
|
|
10,567
|
|
|
|
|
|
|
30.6
|
%
|
|
|
|
Other Media and Entertainment direct operating expenses
|
|
|
|
|
5,969
|
|
|
|
|
|
|
12,668
|
|
|
|
|
|
|
6,699
|
|
|
|
|
|
|
112.2
|
%
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
40,476
|
|
|
|
|
|
|
57,742
|
|
|
|
|
|
|
17,266
|
|
|
|
|
|
|
42.7
|
%
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,026
|
|
|
|
|
|
|
4,386
|
|
|
|
|
|
|
360
|
|
|
|
|
|
|
8.9
|
%
|
|
|
|
Corporate expenses
|
|
|
|
|
3,791
|
|
|
|
|
|
|
5,437
|
|
|
|
|
|
|
1,646
|
|
|
|
|
|
|
43.4
|
%
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
1
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
—
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
|
(65
|
)
|
|
|
|
|
|
144.4
|
%
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
48,249
|
|
|
|
|
|
|
67,483
|
|
|
|
|
|
|
19,234
|
|
|
|
|
|
|
39.9
|
%
|
|
|
|
Operating income
|
|
|
|
|
5,224
|
|
|
|
|
|
|
11,678
|
|
|
|
|
|
|
6,454
|
|
|
|
|
|
|
123.5
|
%
|
|
|
|
Other Expense:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Interest expense, net
|
|
|
|
|
(7,409
|
)
|
|
|
|
|
|
(12,080
|
)
|
|
|
|
|
|
(4,671
|
)
|
|
|
|
|
|
63.0
|
%
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
(100
|
)%
|
|
|
|
Other expense, net
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
(37
|
)
|
|
|
|
|
|
(25
|
)
|
|
|
|
|
|
208.3
|
%
|
|
|
|
Total other expense
|
|
|
|
|
(7,422
|
)
|
|
|
|
|
|
(12,117
|
)
|
|
|
|
|
|
(4,695
|
)
|
|
|
|
|
|
63.3
|
%
|
|
|
|
Loss before income taxes
|
|
|
|
|
(2,198
|
)
|
|
|
|
|
|
(439
|
)
|
|
|
|
|
|
1,759
|
|
|
|
|
|
|
—
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
85
|
|
|
|
|
|
|
91
|
|
|
|
|
|
|
6
|
|
|
|
|
|
|
7.1
|
%
|
|
|
|
Net loss
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
|
$
|
1,753
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2013
|
|
|
2014
|
|
||||||||
|
Senior Notes
|
|
|
|
$
|
5,963
|
|
|
|
|
|
$
|
8,822
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
922
|
|
|
|
|
|
|
1,865
|
|
|
|
|
Subordinated Notes
|
|
|
|
|
—
|
|
|
|
|
|
|
760
|
|
|
|
|
Capital loans and other
|
|
|
|
|
8
|
|
|
|
|
|
|
10
|
|
|
|
|
Loan origination cost
|
|
|
|
|
517
|
|
|
|
|
|
|
624
|
|
|
|
|
Interest income
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
Interest expense, net
|
|
|
|
$
|
7,409
|
|
|
|
|
|
$
|
12,080
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2012
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
Townsquare
Media, LLC |
|
|
Double O
January 1 - February 28, 2012 |
|
|
Cumulus I
January 1 - July 30, 2012 |
|
|
MMN
January 1 - August 9, 2012 |
|
|
Boise
January 1 - December 31, 2012 |
|
|
Cumulus II
January 1 - December 31, 2012 |
|
|
Live Events
|
|
|
Divestitures
|
|
|
Townsquare
Media, LLC Pro Forma |
|
||||||||||||||||||||||||||||||||||||
|
Local Advertising net revenue
|
|
|
|
$
|
198,306
|
|
|
|
|
|
$
|
1,335
|
|
|
|
|
|
$
|
22,909
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
7,769
|
|
|
|
|
|
$
|
71,314
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
(6,342
|
)
|
|
|
|
|
$
|
295,291
|
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
24,430
|
|
|
|
|
|
|
75
|
|
|
|
|
|
|
946
|
|
|
|
|
|
|
3,992
|
|
|
|
|
|
|
859
|
|
|
|
|
|
|
2,996
|
|
|
|
|
|
|
9,725
|
|
|
|
|
|
|
(600
|
)
|
|
|
|
|
|
42,423
|
|
|
|
|
Net revenue
|
|
|
|
$
|
222,736
|
|
|
|
|
|
$
|
1,410
|
|
|
|
|
|
$
|
23,855
|
|
|
|
|
|
$
|
3,992
|
|
|
|
|
|
$
|
8,628
|
|
|
|
|
|
$
|
74,310
|
|
|
|
|
|
$
|
9,725
|
|
|
|
|
|
$
|
(6,942
|
)
|
|
|
|
|
$
|
337,714
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, 2013
|
|
||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
Townsquare
Media, LLC |
|
|
Boise
January 1, – November 13, 2013 |
|
|
Cumulus II
January 1, – November 13, 2013 |
|
|
Live Events
|
|
|
Divestitures
|
|
|
Townsquare
Media, LLC Pro Forma |
|
||||||||||||||||||||||||
|
Local Advertising net revenue
|
|
|
|
$
|
229,653
|
|
|
|
|
|
$
|
7,075
|
|
|
|
|
|
$
|
58,338
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
(2
|
)
|
|
|
|
|
$
|
295,064
|
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
38,925
|
|
|
|
|
|
|
730
|
|
|
|
|
|
|
3,153
|
|
|
|
|
|
|
7,239
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
50,047
|
|
|
|
|
Net revenue
|
|
|
|
$
|
268,578
|
|
|
|
|
|
$
|
7,805
|
|
|
|
|
|
$
|
61,491
|
|
|
|
|
|
$
|
7,239
|
|
|
|
|
|
$
|
(2
|
)
|
|
|
|
|
$
|
345,111
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
|
$ Change
|
|
|
% Change
|
|
||||||||||||||||
|
Statement of Net Revenue:
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
Local Advertising net revenue
|
|
|
|
$
|
295,291
|
|
|
|
|
|
$
|
295,064
|
|
|
|
|
|
$
|
(227
|
)
|
|
|
|
|
|
(0.1
|
)%
|
|
|
|
Other Media and Entertainment net revenue
|
|
|
|
|
42,423
|
|
|
|
|
|
|
50,047
|
|
|
|
|
|
|
7,624
|
|
|
|
|
|
|
18.0
|
%
|
|
|
|
Net revenue
|
|
|
|
$
|
337,714
|
|
|
|
|
|
$
|
345,111
|
|
|
|
|
|
$
|
7,397
|
|
|
|
|
|
|
2.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
|
Three Months Ended March 31,
|
|
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
($ in thousands)
|
|
|
2012
|
|
|
2013
|
|
|
2013
|
|
|
2014
|
|
||||||||||||||||
|
Cash
|
|
|
|
$
|
22,305
|
|
|
|
|
|
$
|
45,647
|
|
|
|
|
|
$
|
28,896
|
|
|
|
|
|
$
|
57,339
|
|
|
|
|
Cash provided by operating activities
|
|
|
|
|
19,847
|
|
|
|
|
|
|
26,204
|
|
|
|
|
|
|
9,116
|
|
|
|
|
|
|
14,195
|
|
|
|
|
Cash used in investing activities
|
|
|
|
|
(142,200
|
)
|
|
|
|
|
|
(286,170
|
)
|
|
|
|
|
|
(2,061
|
)
|
|
|
|
|
|
(2,079
|
)
|
|
|
|
Cash provided by (used in) financing activities
|
|
|
|
|
119,666
|
|
|
|
|
|
|
283,308
|
|
|
|
|
|
|
(464
|
)
|
|
|
|
|
|
(424
|
)
|
|
|
|
Net (decrease) increase in cash
|
|
|
|
$
|
(2,687
|
)
|
|
|
|
|
$
|
23,342
|
|
|
|
|
|
$
|
6,591
|
|
|
|
|
|
$
|
11,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
|
Redemption Price
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
2015
|
|
|
|
|
106.750
|
%
|
|
|
|
2016
|
|
|
|
|
104.500
|
%
|
|
|
|
2017
|
|
|
|
|
102.250
|
%
|
|
|
|
2018 and thereafter
|
|
|
|
|
100.000
|
%
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by period
|
|
||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
Less than 1 year
|
|
|
1 to 3 years
|
|
|
3 to 5 years
|
|
|
More than 5 years
|
|
|
Total
|
|
||||||||||||||||||||
|
Unsecured Senior Notes
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
410,900
|
|
|
|
|
|
$
|
410,900
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
2,040
|
|
|
|
|
|
|
4,080
|
|
|
|
|
|
|
196,603
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
202,723
|
|
|
|
|
Senior PIK Notes
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
53,629
|
|
|
|
|
|
|
53,629
|
|
|
|
|
Capitalized obligations
|
|
|
|
|
150
|
|
|
|
|
|
|
324
|
|
|
|
|
|
|
85
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
559
|
|
|
|
|
Interest payments
(1)
|
|
|
|
|
44,480
|
|
|
|
|
|
|
88,729
|
|
|
|
|
|
|
83,258
|
|
|
|
|
|
|
18,491
|
|
|
|
|
|
|
234,958
|
|
|
|
|
Significant contracts
(2)
|
|
|
|
|
6,369
|
|
|
|
|
|
|
12,844
|
|
|
|
|
|
|
6,243
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
25,456
|
|
|
|
|
Operating leases
|
|
|
|
|
8,408
|
|
|
|
|
|
|
14,492
|
|
|
|
|
|
|
11,138
|
|
|
|
|
|
|
12,981
|
|
|
|
|
|
|
47,019
|
|
|
|
|
Total contractual cash obligations
|
|
|
|
$
|
61,447
|
|
|
|
|
|
$
|
120,469
|
|
|
|
|
|
$
|
297,327
|
|
|
|
|
|
$
|
496,001
|
|
|
|
|
|
$
|
975,244
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments due by period
|
|
||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
(in thousands)
|
|
|
Less than 1 year
|
|
|
1 to 3 years
|
|
|
3 to 5 years
|
|
|
More than 5 years
|
|
|
Total
|
|
||||||||||||||||||||
|
Unsecured Senior Notes
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
410,900
|
|
|
|
|
|
$
|
410,900
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
2,040
|
|
|
|
|
|
|
4,080
|
|
|
|
|
|
|
196,348
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
202,468
|
|
|
|
|
Senior PIK Notes
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
53,629
|
|
|
|
|
|
|
53,629
|
|
|
|
|
Capitalized obligations
|
|
|
|
|
152
|
|
|
|
|
|
|
326
|
|
|
|
|
|
|
47
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
525
|
|
|
|
|
Interest payments
(1)
|
|
|
|
|
44,437
|
|
|
|
|
|
|
88,657
|
|
|
|
|
|
|
81,459
|
|
|
|
|
|
|
18,491
|
|
|
|
|
|
|
233,044
|
|
|
|
|
Significant contracts
(2)
|
|
|
|
|
6,109
|
|
|
|
|
|
|
12,984
|
|
|
|
|
|
|
4,547
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
23,640
|
|
|
|
|
Operating leases
|
|
|
|
|
8,521
|
|
|
|
|
|
|
14,522
|
|
|
|
|
|
|
11,071
|
|
|
|
|
|
|
12,213
|
|
|
|
|
|
|
46,327
|
|
|
|
|
Total contractual cash obligations
|
|
|
|
$
|
61,259
|
|
|
|
|
|
$
|
120,569
|
|
|
|
|
|
$
|
293,472
|
|
|
|
|
|
$
|
495,233
|
|
|
|
|
|
$
|
970,533
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Abilene, TX (#238)
|
|
|
KEAN-FM
|
|
|
Abilene, TX
|
|
|
|
|
105.1
|
|
|
|
|
August 1, 2021
|
|
|
KEYJ-FM
|
|
|
Abilene, TX
|
|
|
|
|
107.9
|
|
|
|
|
August 1, 2021
|
|
|||
|
KULL(FM)
|
|
|
Abilene, TX
|
|
|
|
|
100.7
|
|
|
|
|
August 1, 2021
|
|
|||
|
KSLI(AM)
|
|
|
Abilene, TX
|
|
|
|
|
1280
|
|
|
|
|
August 1, 2021
|
|
|||
|
KMWX(FM)
|
|
|
Abilene, TX
|
|
|
|
|
92.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KYYW(AM)
|
|
|
Abilene, TX
|
|
|
|
|
1470
|
|
|
|
|
August 1, 2021
|
|
|||
|
Albany-Schenectady-Troy, NY (#65)
|
|
|
WQSH(FM)
|
|
|
Malta, NY
|
|
|
|
|
105.7
|
|
|
|
|
June 1, 2022
|
|
|
W256BU(FX)
|
|
|
Albany, NY
|
|
|
|
|
99.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WGNA-FM
|
|
|
Albany, NY
|
|
|
|
|
107.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WQBJ(FM)
|
|
|
Cobleskill, NY
|
|
|
|
|
103.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
WQBK-FM
(1)
|
|
|
Rensselaer, NY
|
|
|
|
|
103.9
|
|
|
|
|
June 1, 2014
|
|
|||
|
WTMM-FM
|
|
|
Mechanicville, NY
|
|
|
|
|
104.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Amarillo, TX (#168)
|
|
|
KATP(FM)
(2)
|
|
|
Amarillo, TX
|
|
|
|
|
101.9
|
|
|
|
|
August 1, 2013
|
|
|
KIXZ(AM)
|
|
|
Amarillo, TX
|
|
|
|
|
940
|
|
|
|
|
August 1, 2021
|
|
|||
|
KXSS-FM
|
|
|
Amarillo, TX
|
|
|
|
|
96.9
|
|
|
|
|
August 1, 2021
|
|
|||
|
KMXJ-FM
|
|
|
Amarillo, TX
|
|
|
|
|
94.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KPRF(FM)
|
|
|
Amarillo, TX
|
|
|
|
|
98.7
|
|
|
|
|
August 1, 2021
|
|
|||
|
Atlantic City-Cape May, NJ (#147)
|
|
|
WENJ(FM)
|
|
|
Millville, NJ
|
|
|
|
|
97.3
|
|
|
|
|
June 1, 2022
|
|
|
WPGG(AM)
|
|
|
Atlantic City, NJ
|
|
|
|
|
1450
|
|
|
|
|
June 1, 2022
|
|
|||
|
WFPG(FM)
|
|
|
Atlantic City, NJ
|
|
|
|
|
96.9
|
|
|
|
|
June 1, 2022
|
|
|||
|
WPUR(FM)
|
|
|
Atlantic City, NJ
|
|
|
|
|
107.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
WSJO(FM)
|
|
|
Egg Harbor City, NJ
|
|
|
|
|
104.9
|
|
|
|
|
June 1, 2022
|
|
|||
|
Augusta-Waterville, ME (#260)
|
|
|
WEBB(FM)
|
|
|
Waterville, ME
|
|
|
|
|
98.5
|
|
|
|
|
April 1, 2022
|
|
|
WJZN(AM)
|
|
|
Augusta, ME
|
|
|
|
|
1400
|
|
|
|
|
April 1, 2022
|
|
|||
|
WMME-FM
|
|
|
Augusta, ME
|
|
|
|
|
92.3
|
|
|
|
|
April 1, 2022
|
|
|||
|
WTVL(AM)
|
|
|
Waterville, ME
|
|
|
|
|
1490
|
|
|
|
|
April 1, 2022
|
|
|||
|
Bangor, ME (#218)
|
|
|
WEZQ(FM)
|
|
|
Bangor, ME
|
|
|
|
|
92.9
|
|
|
|
|
April 1, 2022
|
|
|
WWMJ(FM)
|
|
|
Ellsworth, ME
|
|
|
|
|
95.7
|
|
|
|
|
April 1, 2022
|
|
|||
|
WQCB(FM)
|
|
|
Brewer, ME
|
|
|
|
|
106.5
|
|
|
|
|
April 1, 2022
|
|
|||
|
WBZN(FM)
|
|
|
Old Town, ME
|
|
|
|
|
107.3
|
|
|
|
|
April 1, 2022
|
|
|||
|
WDEA(AM)
|
|
|
Ellsworth, ME
|
|
|
|
|
1370
|
|
|
|
|
April 1, 2022
|
|
|||
|
Battle Creek, MI (#255)
|
|
|
WBCK-FM
|
|
|
Battle Creek, MI
|
|
|
|
|
95.3
|
|
|
|
|
October 1, 2020
|
|
|
WBXX(FM)
|
|
|
Marshall, MI
|
|
|
|
|
104.9
|
|
|
|
|
October 1, 2020
|
|
|||
|
Billings, MT (#243)
|
|
|
KMHK(FM)
|
|
|
Billings, MT
|
|
|
|
|
103.7
|
|
|
|
|
April 1, 2021
|
|
|
KBUL(AM)
|
|
|
Billings, MT
|
|
|
|
|
970
|
|
|
|
|
April 1, 2021
|
|
|||
|
KCTR-FM
|
|
|
Billings, MT
|
|
|
|
|
102.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KKBR(FM)
|
|
|
Billings, MT
|
|
|
|
|
97.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
KCHH(FM)
|
|
|
Worden, MT
|
|
|
|
|
95.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
K236AB(FX)
|
|
|
Billings, MT
|
|
|
|
|
95.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
Binghamton, NY (#186)
|
|
|
WAAL(FM)
|
|
|
Binghamton, NY
|
|
|
|
|
99.1
|
|
|
|
|
June 1, 2022
|
|
|
WHWK(FM)
|
|
|
Binghamton, NY
|
|
|
|
|
98.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WNBF(AM)
|
|
|
Binghamton, NY
|
|
|
|
|
1290
|
|
|
|
|
June 1, 2022
|
|
|||
|
WWYL(FM)
|
|
|
Chenango Bridge, NY
|
|
|
|
|
104.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WYOS(AM)
|
|
|
Binghamton, NY
|
|
|
|
|
1360
|
|
|
|
|
June 1, 2022
|
|
|||
|
Bismarck, ND (#265)
|
|
|
KBYZ(FM)
|
|
|
Bismarck, ND
|
|
|
|
|
96.5
|
|
|
|
|
April 1, 2021
|
|
|
KACL(FM)
|
|
|
Bismarck, ND
|
|
|
|
|
98.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
KKCT(FM)
|
|
|
Bismarck, ND
|
|
|
|
|
97.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
KUSB(FM)
|
|
|
Hazelton, ND
|
|
|
|
|
103.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KLXX(AM)
|
|
|
Bismarck-Mandan, ND
|
|
|
|
|
1270
|
|
|
|
|
April 1, 2021
|
|
|||
|
Boise, ID (#100)
|
|
|
KAWO(FM)
|
|
|
Boise, ID
|
|
|
|
|
104.3
|
|
|
|
|
October 1, 2021
|
|
|
KCIX(FM)
|
|
|
Garden City, ID
|
|
|
|
|
105.9
|
|
|
|
|
October 1, 2021
|
|
|||
|
KFXD(AM)
|
|
|
Boise, ID
|
|
|
|
|
630
|
|
|
|
|
October 1, 2021
|
|
|||
|
KIDO(AM)
|
|
|
Nampa, ID
|
|
|
|
|
580
|
|
|
|
|
October 1, 2021
|
|
|||
|
KSAS-FM
|
|
|
Caldwell, ID
|
|
|
|
|
103.5
|
|
|
|
|
October 1, 2021
|
|
|||
|
KXLT-FM
|
|
|
Eagle, ID
|
|
|
|
|
107.9
|
|
|
|
|
October 1, 2021
|
|
|||
|
Bozeman, MT (Not Rated (“NR”))
|
|
|
KZMY(FM)
|
|
|
Bozeman, MT
|
|
|
|
|
103.5
|
|
|
|
|
April 1, 2021
|
|
|
KISN(FM)
|
|
|
Belgrade, MT
|
|
|
|
|
96.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
KMMS-FM
|
|
|
Bozeman, MT
|
|
|
|
|
95.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
KMMS(AM)
|
|
|
Bozeman, MT
|
|
|
|
|
1450
|
|
|
|
|
April 1, 2021
|
|
|||
|
KPRK(AM)
|
|
|
Livingston, MT
|
|
|
|
|
1340
|
|
|
|
|
April 1, 2021
|
|
|||
|
KXLB(FM)
|
|
|
Livingston, MT
|
|
|
|
|
100.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
K254AL(FX)
|
|
|
Livingston, MT
|
|
|
|
|
98.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Buffalo-Niagara Falls, NY (#56)
|
|
|
WBLK(FM)
|
|
|
Depew, NY
|
|
|
|
|
93.7
|
|
|
|
|
June 1, 2022
|
|
|
WBUF(FM)
|
|
|
Buffalo, NY
|
|
|
|
|
92.9
|
|
|
|
|
June 1, 2022
|
|
|||
|
WJYE(FM)
|
|
|
Buffalo, NY
|
|
|
|
|
96.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WYRK(FM)
|
|
|
Buffalo, NY
|
|
|
|
|
106.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
Casper, WY (#275)
|
|
|
KKTL(AM)
|
|
|
Casper, WY
|
|
|
|
|
1400
|
|
|
|
|
October 1, 2021
|
|
|
KRNK(FM)
|
|
|
Casper, WY
|
|
|
|
|
96.7
|
|
|
|
|
October 1, 2021
|
|
|||
|
KRVK(FM)
|
|
|
Vista West, WY
|
|
|
|
|
107.9
|
|
|
|
|
October 1, 2021
|
|
|||
|
KTRS-FM
|
|
|
Casper, WY
|
|
|
|
|
104.7
|
|
|
|
|
October 1, 2021
|
|
|||
|
KTWO(AM)
|
|
|
Casper, WY
|
|
|
|
|
1030
|
|
|
|
|
October 1, 2021
|
|
|||
|
KWYY(FM)
|
|
|
Midwest, WY
|
|
|
|
|
95.5
|
|
|
|
|
October 1, 2021
|
|
|||
|
Cedar Rapids, IA (#205)
|
|
|
KDAT(FM)
|
|
|
Cedar Rapids, IA
|
|
|
|
|
104.5
|
|
|
|
|
February 1, 2021
|
|
|
KHAK(FM)
|
|
|
Cedar Rapids, IA
|
|
|
|
|
98.1
|
|
|
|
|
February 1, 2021
|
|
|||
|
KRNA(FM)
|
|
|
Iowa City, IA
|
|
|
|
|
94.1
|
|
|
|
|
February 1, 2021
|
|
|||
|
KRQN(FM)
(3)
|
|
|
Vinton, IA
|
|
|
|
|
107.1
|
|
|
|
|
February 1, 2021
|
|
|||
|
Cheyenne, WY (#273)
|
|
|
KIGN(FM)
|
|
|
Burns, WY
|
|
|
|
|
101.9
|
|
|
|
|
October 1, 2021
|
|
|
KGAB(AM)
|
|
|
Orchard Valley, WY
|
|
|
|
|
650
|
|
|
|
|
October 1, 2021
|
|
|||
|
KLEN(FM)
|
|
|
Cheyenne, WY
|
|
|
|
|
106.3
|
|
|
|
|
October 1, 2021
|
|
|||
|
Danbury, CT (#197)
|
|
|
WPUT(AM)
|
|
|
Brewster, NY
|
|
|
|
|
1510
|
|
|
|
|
June 1, 2022
|
|
|
WINE(AM)
|
|
|
Brookfield, CT
|
|
|
|
|
940
|
|
|
|
|
April 1, 2022
|
|
|||
|
WRKI(FM)
|
|
|
Brookfield, CT
|
|
|
|
|
95.1
|
|
|
|
|
April 1, 2022
|
|
|||
|
WDBY(FM)
|
|
|
Patterson, NY
|
|
|
|
|
105.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
WDBY-FM1
|
|
|
Brookfield, CT
|
|
|
|
|
105.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
Dubuque, IA (NR)
|
|
|
KLYV(FM)
|
|
|
Dubuque, IA
|
|
|
|
|
105.3
|
|
|
|
|
February 1, 2021
|
|
|
KXGE(FM)
|
|
|
Dubuque, IA
|
|
|
|
|
102.3
|
|
|
|
|
February 1, 2021
|
|
|||
|
WDBQ(AM)
|
|
|
Dubuque, IA
|
|
|
|
|
1490
|
|
|
|
|
February 1, 2021
|
|
|||
|
WDBQ-FM
|
|
|
Galena, IL
|
|
|
|
|
107.5
|
|
|
|
|
December 1, 2020
|
|
|||
|
WJOD(FM)
|
|
|
Asbury, IA
|
|
|
|
|
103.3
|
|
|
|
|
February 1, 2021
|
|
|||
|
Duluth-Superior, MN, WI (#206)
|
|
|
KKCB(FM)
|
|
|
Duluth, MN
|
|
|
|
|
105.1
|
|
|
|
|
April 1, 2021
|
|
|
KLDJ(FM)
|
|
|
Duluth, MN
|
|
|
|
|
101.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
WEBC(AM)
|
|
|
Duluth, MN
|
|
|
|
|
560
|
|
|
|
|
April 1, 2021
|
|
|||
|
KBMX(FM)
|
|
|
Proctor, MN
|
|
|
|
|
107.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
El Paso, TX (#74)
|
|
|
KLAQ(FM)
|
|
|
El Paso, TX
|
|
|
|
|
95.5
|
|
|
|
|
August 1, 2021
|
|
|
KROD(AM)
|
|
|
El Paso, TX
|
|
|
|
|
600
|
|
|
|
|
August 1, 2021
|
|
|||
|
KSII(FM)
|
|
|
El Paso, TX
|
|
|
|
|
93.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
Evansville, IN (#164)
|
|
|
WDKS(FM)
|
|
|
Newburgh, IN
|
|
|
|
|
106.1
|
|
|
|
|
August 1, 2020
|
|
|
WGBF(AM)
|
|
|
Evansville, IN
|
|
|
|
|
1280
|
|
|
|
|
August 1, 2020
|
|
|||
|
WGBF-FM
|
|
|
Henderson, KY
|
|
|
|
|
103.1
|
|
|
|
|
August 1, 2020
|
|
|||
|
WJLT(FM)
|
|
|
Evansville, IN
|
|
|
|
|
105.3
|
|
|
|
|
August 1, 2020
|
|
|||
|
WKDQ(FM)
|
|
|
Henderson, KY
|
|
|
|
|
99.5
|
|
|
|
|
August 1, 2020
|
|
|||
|
Faribault/Owatonna, MN (NR)
|
|
|
KDHL(AM)
|
|
|
Faribault, MN
|
|
|
|
|
920
|
|
|
|
|
April 1, 2021
|
|
|
KQCL(FM)
|
|
|
Faribault, MN
|
|
|
|
|
95.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KRFO(AM)
|
|
|
Owatonna, MN
|
|
|
|
|
1390
|
|
|
|
|
April 1, 2021
|
|
|||
|
KRFO-FM
|
|
|
Owatonna, MN
|
|
|
|
|
104.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
Flint, MI (#135)
|
|
|
WCRZ(FM)
|
|
|
Flint, MI
|
|
|
|
|
107.9
|
|
|
|
|
October 1, 2020
|
|
|
WFNT(AM)
|
|
|
Flint, MI
|
|
|
|
|
1470
|
|
|
|
|
October 1, 2020
|
|
|||
|
WLCO(AM)
|
|
|
Lapeer, MI
|
|
|
|
|
1530
|
|
|
|
|
October 1, 2020
|
|
|||
|
WQUS(FM)
|
|
|
Lapeer, MI
|
|
|
|
|
103.1
|
|
|
|
|
October 1, 2020
|
|
|||
|
WRCL(FM)
|
|
|
Frankenmuth, MI
|
|
|
|
|
93.7
|
|
|
|
|
October 1, 2020
|
|
|||
|
WWBN(FM)
|
|
|
Tuscola, MI
|
|
|
|
|
101.5
|
|
|
|
|
October 1, 2020
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Ft. Collins-Greeley, CO (#117)
|
|
|
KKPL(FM)
|
|
|
Cheyenne, WY
|
|
|
|
|
99.9
|
|
|
|
|
October 1, 2021
|
|
|
KMAX-FM
|
|
|
Wellington, CO
|
|
|
|
|
94.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KTRR(FM)
|
|
|
Loveland, CO
|
|
|
|
|
102.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
KUAD-FM
|
|
|
Windsor, CO
|
|
|
|
|
99.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
Grand Junction, CO (#250)
|
|
|
KEKB(FM)
|
|
|
Fruita, CO
|
|
|
|
|
99.9
|
|
|
|
|
April 1, 2021
|
|
|
KBKL(FM)
|
|
|
Grand Junction, CO
|
|
|
|
|
107.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KMXY(FM)
|
|
|
Grand Junction, CO
|
|
|
|
|
104.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KKNN(FM)
|
|
|
Delta, CO
|
|
|
|
|
95.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
KEXO(AM)
|
|
|
Grand Junction, CO
|
|
|
|
|
1230
|
|
|
|
|
April 1, 2021
|
|
|||
|
Grand Rapids, MI (#69)
|
|
|
WFGR(FM)
|
|
|
Grand Rapids, MI
|
|
|
|
|
98.7
|
|
|
|
|
October 1, 2020
|
|
|
WGRD-FM
(4)
|
|
|
Grand Rapids, MI
|
|
|
|
|
97.9
|
|
|
|
|
October 1, 2012
|
|
|||
|
WLHT-FM
|
|
|
Grand Rapids, MI
|
|
|
|
|
95.7
|
|
|
|
|
October 1, 2020
|
|
|||
|
WNWZ(AM)
|
|
|
Grand Rapids, MI
|
|
|
|
|
1410
|
|
|
|
|
October 1, 2020
|
|
|||
|
WTRV(FM)
|
|
|
Walker, MI
|
|
|
|
|
100.5
|
|
|
|
|
October 1, 2020
|
|
|||
|
Kalamazoo, MI (#184)
|
|
|
WKFR-FM
|
|
|
Battle Creek, MI
|
|
|
|
|
103.3
|
|
|
|
|
October 1, 2020
|
|
|
WKMI(AM)
|
|
|
Kalamazoo, MI
|
|
|
|
|
1360
|
|
|
|
|
October 1, 2020
|
|
|||
|
WRKR(FM)
|
|
|
Portage, MI
|
|
|
|
|
107.7
|
|
|
|
|
October 1, 2020
|
|
|||
|
W273AR(FX)
|
|
|
Paw Paw, MI
|
|
|
|
|
102.5
|
|
|
|
|
October 1, 2020
|
|
|||
|
Killeen-Temple, TX (#141)
|
|
|
KSSM(FM)
|
|
|
Copperas Cove, TX
|
|
|
|
|
103.1
|
|
|
|
|
August 1, 2021
|
|
|
KUSJ(FM)
|
|
|
Harker Heights, TX
|
|
|
|
|
105.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KLTD(FM)
|
|
|
Temple, TX
|
|
|
|
|
101.7
|
|
|
|
|
August 1, 2021
|
|
|||
|
KTEM(AM)
|
|
|
Temple, TX
|
|
|
|
|
1400
|
|
|
|
|
August 1, 2021
|
|
|||
|
KOOC(FM)
|
|
|
Belton, TX
|
|
|
|
|
106.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
Lafayette, LA (#107)
|
|
|
KPEL-FM
|
|
|
Breaux Bridge, LA
|
|
|
|
|
96.5
|
|
|
|
|
June 1, 2020
|
|
|
KHXT(FM)
|
|
|
Erath, LA
|
|
|
|
|
107.9
|
|
|
|
|
June 1, 2020
|
|
|||
|
KMDL(FM)
|
|
|
Kaplan, LA
|
|
|
|
|
97.3
|
|
|
|
|
June 1, 2020
|
|
|||
|
KPEL(AM)
|
|
|
Lafayette, LA
|
|
|
|
|
1420
|
|
|
|
|
June 1, 2020
|
|
|||
|
KROF(AM)
|
|
|
Abbeville, LA
|
|
|
|
|
960
|
|
|
|
|
June 1, 2020
|
|
|||
|
KTDY(FM)
|
|
|
Lafayette, LA
|
|
|
|
|
99.9
|
|
|
|
|
June 1, 2020
|
|
|||
|
Lansing-East Lansing, MI (#127)
|
|
|
WFMK(FM)
|
|
|
East Lansing, MI
|
|
|
|
|
99.1
|
|
|
|
|
October 1, 2020
|
|
|
WMMQ(FM)
|
|
|
East Lansing, MI
|
|
|
|
|
94.9
|
|
|
|
|
October 1, 2020
|
|
|||
|
WVFN(AM)
|
|
|
East Lansing, MI
|
|
|
|
|
730
|
|
|
|
|
October 1, 2020
|
|
|||
|
WITL-FM
|
|
|
Lansing, MI
|
|
|
|
|
100.7
|
|
|
|
|
October 1, 2020
|
|
|||
|
WJIM(AM)
|
|
|
Lansing, MI
|
|
|
|
|
1240
|
|
|
|
|
October 1, 2020
|
|
|||
|
WJIM-FM
|
|
|
Lansing, MI
|
|
|
|
|
97.5
|
|
|
|
|
October 1, 2020
|
|
|||
|
Lake Charles, LA (#222)
|
|
|
KHLA(FM)
|
|
|
Jennings, LA
|
|
|
|
|
92.9
|
|
|
|
|
June 1, 2020
|
|
|
KLCL(AM)
|
|
|
Lake Charles, LA
|
|
|
|
|
1470
|
|
|
|
|
June 1, 2020
|
|
|||
|
KJMH(FM)
|
|
|
Lake Arthur, LA
|
|
|
|
|
107.5
|
|
|
|
|
June 1, 2020
|
|
|||
|
KNGT(FM)
|
|
|
Lake Charles, LA
|
|
|
|
|
99.5
|
|
|
|
|
June 1, 2020
|
|
|||
|
KJEF(AM)
|
|
|
Jennings, LA
|
|
|
|
|
1290
|
|
|
|
|
June 1, 2020
|
|
|||
|
KTSR(FM)
|
|
|
De Quincy, LA
|
|
|
|
|
92.1
|
|
|
|
|
June 1, 2020
|
|
|||
|
Laramie, WY (NR)
|
|
|
KCGY(FM)
|
|
|
Laramie, WY
|
|
|
|
|
95.1
|
|
|
|
|
October 1, 2021
|
|
|
KOWB(AM)
|
|
|
Laramie, WY
|
|
|
|
|
1290
|
|
|
|
|
October 1, 2021
|
|
|||
|
Lawton, OK (#261)
|
|
|
KLAW(FM)
|
|
|
Lawton, OK
|
|
|
|
|
101.3
|
|
|
|
|
June 1, 2021
|
|
|
KVRW(FM)
|
|
|
Lawton, OK
|
|
|
|
|
107.3
|
|
|
|
|
June 1, 2021
|
|
|||
|
KZCD(FM)
|
|
|
Lawton, OK
|
|
|
|
|
94.1
|
|
|
|
|
June 1, 2021
|
|
|||
|
Lubbock, TX (#174)
|
|
|
KFMX-FM
|
|
|
Lubbock, TX
|
|
|
|
|
94.5
|
|
|
|
|
August 1, 2021
|
|
|
KFYO(AM)
|
|
|
Lubbock, TX
|
|
|
|
|
790
|
|
|
|
|
August 1, 2021
|
|
|||
|
KKAM(AM)
|
|
|
Lubbock, TX
|
|
|
|
|
1340
|
|
|
|
|
August 1, 2021
|
|
|||
|
KKCL(FM)
|
|
|
Lorenzo, TX
|
|
|
|
|
98.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KQBR(FM)
|
|
|
Lubbock, TX
|
|
|
|
|
99.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KZII-FM
|
|
|
Lubbock, TX
|
|
|
|
|
102.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Lufkin-Nacogdoches, TX (#240)
|
|
|
KVLL-FM
|
|
|
Wells, TX
|
|
|
|
|
94.7
|
|
|
|
|
August 1, 2021
|
|
|
KYKS(FM)
|
|
|
Lufkin, TX
|
|
|
|
|
105.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KAFX-FM
|
|
|
Diboll, TX
|
|
|
|
|
95.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KSFA(AM)
|
|
|
Nacogdoches, TX
|
|
|
|
|
860
|
|
|
|
|
August 1, 2021
|
|
|||
|
KTBQ(FM)
|
|
|
Nacogdoches, TX
|
|
|
|
|
107.7
|
|
|
|
|
August 1, 2021
|
|
|||
|
Missoula, MT (NR)
|
|
|
KYSS-FM
|
|
|
Missoula, MT
|
|
|
|
|
94.9
|
|
|
|
|
April 1, 2021
|
|
|
KGVO(AM)
|
|
|
Missoula, MT
|
|
|
|
|
1290
|
|
|
|
|
April 1, 2021
|
|
|||
|
KMPT(AM)
|
|
|
East Missoula, MT
|
|
|
|
|
930
|
|
|
|
|
April 1, 2021
|
|
|||
|
KBAZ(FM)
|
|
|
Hamilton, MT
|
|
|
|
|
96.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KLYQ(AM)
|
|
|
Hamilton, MT
|
|
|
|
|
1240
|
|
|
|
|
April 1, 2021
|
|
|||
|
KGVO-FM
|
|
|
Frenchtown, MT
|
|
|
|
|
101.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
KENR(FM)
(5)
|
|
|
Superior, MT
|
|
|
|
|
107.5
|
|
|
|
|
April 1, 2013
|
|
|||
|
K252BM(FX)
|
|
|
Seeley Lake, MT
|
|
|
|
|
98.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KENR-FM1
(5)
|
|
|
Missoula, MT
|
|
|
|
|
107.5
|
|
|
|
|
April 1, 2013
|
|
|||
|
Monmouth-Ocean, NJ (#53)
|
|
|
WADB(AM)
|
|
|
Asbury Park, NJ
|
|
|
|
|
1310
|
|
|
|
|
June 1, 2022
|
|
|
WCHR-FM
|
|
|
Manahawkin, NJ
|
|
|
|
|
105.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WJLK(FM)
|
|
|
Asbury Park, NJ
|
|
|
|
|
94.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
WOBM(AM)
|
|
|
Lakewood Township, NJ
|
|
|
|
|
1160
|
|
|
|
|
June 1, 2022
|
|
|||
|
WOBM-FM
|
|
|
Toms River, NJ
|
|
|
|
|
92.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
New Bedford-Fall River, MA (#181)
|
|
|
WBSM(AM)
|
|
|
New Bedford, MA
|
|
|
|
|
1420
|
|
|
|
|
April 1, 2022
|
|
|
WFHN(FM)
|
|
|
Fairhaven, MA
|
|
|
|
|
107.1
|
|
|
|
|
April 1, 2022
|
|
|||
|
Odessa-Midland, TX (#171)
|
|
|
KBAT(FM)
|
|
|
Monahans, TX
|
|
|
|
|
99.9
|
|
|
|
|
August 1, 2021
|
|
|
KODM(FM)
|
|
|
Odessa, TX
|
|
|
|
|
97.9
|
|
|
|
|
August 1, 2021
|
|
|||
|
KNFM(FM)
|
|
|
Midland, TX
|
|
|
|
|
92.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
KZBT(FM)
|
|
|
Midland, TX
|
|
|
|
|
93.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
KMND(AM)
|
|
|
Midland, TX
|
|
|
|
|
1510
|
|
|
|
|
August 1, 2021
|
|
|||
|
KRIL(AM)
|
|
|
Odessa, TX
|
|
|
|
|
1410
|
|
|
|
|
August 1, 2021
|
|
|||
|
KGEE(FM)
|
|
|
Pecos, TX
|
|
|
|
|
97.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
Oneonta, NY (NR)
|
|
|
WBKT(FM)
|
|
|
Norwich, NY
|
|
|
|
|
95.3
|
|
|
|
|
June 1, 2022
|
|
|
WCHN(AM)
|
|
|
Norwich, NY
|
|
|
|
|
970
|
|
|
|
|
June 1, 2022
|
|
|||
|
WDHI(FM)
|
|
|
Delhi, NY
|
|
|
|
|
100.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
W232AS(FX)
|
|
|
Oneonta, NY
|
|
|
|
|
94.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
WDLA(AM)
|
|
|
Walton, NY
|
|
|
|
|
1270
|
|
|
|
|
June 1, 2022
|
|
|||
|
WDLA-FM
|
|
|
Walton, NY
|
|
|
|
|
92.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WDOS(AM)
|
|
|
Oneonta, NY
|
|
|
|
|
730
|
|
|
|
|
June 1, 2022
|
|
|||
|
WIYN(FM)
|
|
|
Deposit, NY
|
|
|
|
|
94.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WKXZ(FM)
|
|
|
Norwich, NY
|
|
|
|
|
93.9
|
|
|
|
|
June 1, 2022
|
|
|||
|
W232AT(FX)
|
|
|
Norwich, NY
|
|
|
|
|
94.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
W257BE(FX)
|
|
|
Hamilton, NY
|
|
|
|
|
99.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
WSRK(FM)
|
|
|
Oneonta, NY
|
|
|
|
|
103.9
|
|
|
|
|
June 1, 2022
|
|
|||
|
WTBD-FM
|
|
|
Delhi, NY
|
|
|
|
|
97.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
WZOZ(FM)
|
|
|
Oneonta, NY
|
|
|
|
|
103.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
Owensboro, KY (NR)
|
|
|
WBKR(FM)
|
|
|
Owensboro, KY
|
|
|
|
|
92.5
|
|
|
|
|
August 1, 2020
|
|
|
WOMI(AM)
|
|
|
Owensboro, KY
|
|
|
|
|
1490
|
|
|
|
|
August 1, 2020
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Poughkeepsie, NY (#165)
|
|
|
WRRB(FM)
|
|
|
Arlington, NY
|
|
|
|
|
96.9
|
|
|
|
|
June 1, 2022
|
|
|
WCZX(FM)
|
|
|
Hyde Park, NY
|
|
|
|
|
97.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WPDA(FM)
|
|
|
Jeffersonville, NY
|
|
|
|
|
106.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
WKNY(AM)
|
|
|
Kingston, NY
|
|
|
|
|
1490
|
|
|
|
|
June 1, 2022
|
|
|||
|
WKXP(FM)
|
|
|
Kingston, NY
|
|
|
|
|
94.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
WALL(AM)
|
|
|
Middletown, NY
|
|
|
|
|
1340
|
|
|
|
|
June 1, 2022
|
|
|||
|
WRRV(FM)
|
|
|
Middletown, NY
|
|
|
|
|
92.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WEOK(AM)
|
|
|
Poughkeepsie, NY
|
|
|
|
|
1390
|
|
|
|
|
June 1, 2022
|
|
|||
|
WPDH(FM)
|
|
|
Poughkeepsie, NY
|
|
|
|
|
101.5
|
|
|
|
|
June 1, 2022
|
|
|||
|
WZAD(FM)
|
|
|
Wurtsboro, NY
|
|
|
|
|
97.3
|
|
|
|
|
June 1, 2022
|
|
|||
|
Portland, ME (#91)
|
|
|
WBLM(FM)
|
|
|
Portland, ME
|
|
|
|
|
102.9
|
|
|
|
|
April 1, 2022
|
|
|
WCYY(FM)
|
|
|
Biddeford, ME
|
|
|
|
|
94.3
|
|
|
|
|
April 1, 2022
|
|
|||
|
WHOM(FM)
|
|
|
Mount Washington, NH
|
|
|
|
|
94.9
|
|
|
|
|
April 1, 2022
|
|
|||
|
WJBQ(FM)
|
|
|
Portland, ME
|
|
|
|
|
97.9
|
|
|
|
|
April 1, 2022
|
|
|||
|
Portsmouth-Dover-Rochester,
NH (#123) |
|
|
WSHK(FM)
|
|
|
Kittery, ME
|
|
|
|
|
105.3
|
|
|
|
|
April 1, 2022
|
|
|
WOKQ(FM)
|
|
|
Dover, NH
|
|
|
|
|
97.5
|
|
|
|
|
April 1, 2022
|
|
|||
|
WSAK(FM)
|
|
|
Hampton, NH
|
|
|
|
|
102.1
|
|
|
|
|
April 1, 2022
|
|
|||
|
WPKQFM)
|
|
|
North Conway, NH
|
|
|
|
|
103.7
|
|
|
|
|
April 1, 2022
|
|
|||
|
W250AB
|
|
|
Manchester, NH
|
|
|
|
|
97.9
|
|
|
|
|
April 1, 2022
|
|
|||
|
Presque Isle, ME (NR)
|
|
|
WBPW(FM)
|
|
|
Presque Isle, ME
|
|
|
|
|
96.9
|
|
|
|
|
April 1, 2022
|
|
|
WOZI(FM)
|
|
|
Presque Isle, ME
|
|
|
|
|
101.9
|
|
|
|
|
April 1, 2022
|
|
|||
|
WQHR(FM)
|
|
|
Presque Isle, ME
|
|
|
|
|
96.1
|
|
|
|
|
April 1, 2022
|
|
|||
|
Quad Cities, IA-IL (#152)
|
|
|
KQCS(FM)
|
|
|
Bettendorf, IA
|
|
|
|
|
93.5
|
|
|
|
|
February 1, 2021
|
|
|
KJOC(AM)
|
|
|
Davenport, IA
|
|
|
|
|
1170
|
|
|
|
|
February 1, 2021
|
|
|||
|
KBOB-FM
|
|
|
De Witt, IA
|
|
|
|
|
104.9
|
|
|
|
|
February 1, 2021
|
|
|||
|
WXLP(FM)
|
|
|
Moline, IL
|
|
|
|
|
96.9
|
|
|
|
|
December 1, 2020
|
|
|||
|
KBEA-FM
|
|
|
Muscatine, IA
|
|
|
|
|
99.7
|
|
|
|
|
February 1, 2021
|
|
|||
|
Quincy, IL-Hannibal, MO (NR)
|
|
|
KHMO(AM)
|
|
|
Hannibal, MO
|
|
|
|
|
1070
|
|
|
|
|
February 1, 2021
|
|
|
KICK-FM
|
|
|
Palmyra, MO
|
|
|
|
|
97.9
|
|
|
|
|
February 1, 2021
|
|
|||
|
KRRY(FM)
|
|
|
Canton, MO
|
|
|
|
|
100.9
|
|
|
|
|
February 1, 2021
|
|
|||
|
WLIQ(AM)
|
|
|
Quincy, IL
|
|
|
|
|
1530
|
|
|
|
|
December 1, 2020
|
|
|||
|
Richland-Kennewick-Pasco,
WA (#183) |
|
|
KEYW(FM)
|
|
|
Pasco, WA
|
|
|
|
|
98.3
|
|
|
|
|
February 1, 2022
|
|
|
KFLD(AM)
|
|
|
Pasco, WA
|
|
|
|
|
870
|
|
|
|
|
February 1, 2022
|
|
|||
|
KOLW(FM)
|
|
|
Basin City, WA
|
|
|
|
|
97.5
|
|
|
|
|
February 1, 2022
|
|
|||
|
KORD-FM
|
|
|
Richland, WA
|
|
|
|
|
102.7
|
|
|
|
|
February 1, 2022
|
|
|||
|
KXRX(FM)
|
|
|
Walla Walla, WA
|
|
|
|
|
97.1
|
|
|
|
|
February 1, 2022
|
|
|||
|
Rochester, MN (#225)
|
|
|
KFIL-FM
|
|
|
Chatfield, MN
|
|
|
|
|
103.1
|
|
|
|
|
April 1, 2021
|
|
|
KFIL(AM)
|
|
|
Preston, MN
|
|
|
|
|
1060
|
|
|
|
|
April 1, 2021
|
|
|||
|
KDCZ(FM)
|
|
|
Eyota, MN
|
|
|
|
|
103.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KOLM(AM)
|
|
|
Rochester, MN
|
|
|
|
|
1520
|
|
|
|
|
April 1, 2021
|
|
|||
|
KROC(AM)
|
|
|
Rochester, MN
|
|
|
|
|
1340
|
|
|
|
|
April 1, 2021
|
|
|||
|
KROC-FM
|
|
|
Rochester, MN
|
|
|
|
|
106.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KWWK(FM)
|
|
|
Rochester, MN
|
|
|
|
|
96.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
KDZZ(FM)
|
|
|
St. Charles, MN
|
|
|
|
|
107.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
KVGO(FM)
|
|
|
Spring Valley, MN
|
|
|
|
|
104.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KYBA(FM)
|
|
|
Stewartville, MN
|
|
|
|
|
105.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
K285EL(FX)
|
|
|
Rochester, MN
|
|
|
|
|
104.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
K292EM(FX)
|
|
|
Rochester, MN
|
|
|
|
|
106.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
Rockford, IL (#160)
|
|
|
WXXQ(FM)
|
|
|
Freeport, IL
|
|
|
|
|
98.5
|
|
|
|
|
December 1, 2020
|
|
|
WKGL-FM
|
|
|
Loves Park, IL
|
|
|
|
|
96.7
|
|
|
|
|
December 1, 2020
|
|
|||
|
WROK(AM)
|
|
|
Rockford, IL
|
|
|
|
|
1440
|
|
|
|
|
December 1, 2020
|
|
|||
|
WZOK(FM)
|
|
|
Rockford, IL
|
|
|
|
|
97.5
|
|
|
|
|
December 1, 2020
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
San Angelo, TX (#267)
|
|
|
KELI(FM)
|
|
|
San Angelo, TX
|
|
|
|
|
98.7
|
|
|
|
|
August 1, 2021
|
|
|
KGKL(AM)
|
|
|
San Angelo, TX
|
|
|
|
|
960
|
|
|
|
|
August 1, 2021
|
|
|||
|
KGKL-FM
|
|
|
San Angelo, TX
|
|
|
|
|
97.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KKCN(FM)
|
|
|
Ballinger, TX
|
|
|
|
|
103.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KKCN-FM1
|
|
|
San Angelo, TX
|
|
|
|
|
103.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KNRX(FM)
|
|
|
Sterling City, TX
|
|
|
|
|
96.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KNRX-FM1
|
|
|
San Angelo, TX
|
|
|
|
|
96.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
Sedalia, MO (NR)
|
|
|
KSDL(FM)
|
|
|
Sedalia, MO
|
|
|
|
|
92.3
|
|
|
|
|
February 1, 2021
|
|
|
KSIS(AM)
|
|
|
Sedalia, MO
|
|
|
|
|
1050
|
|
|
|
|
February 1, 2021
|
|
|||
|
KXKX(FM)
|
|
|
Knob Noster, MO
|
|
|
|
|
105.7
|
|
|
|
|
February 1, 2021
|
|
|||
|
St. Cloud, MN (#219)
|
|
|
KLZZ(FM)
|
|
|
Waite Park, MN
|
|
|
|
|
103.7
|
|
|
|
|
April 1, 2021
|
|
|
KMXK(FM)
|
|
|
Cold Spring, MN
|
|
|
|
|
94.9
|
|
|
|
|
April 1, 2021
|
|
|||
|
KXSS(AM)
|
|
|
Waite Park, MN
|
|
|
|
|
1390
|
|
|
|
|
April 1, 2021
|
|
|||
|
KZRV(FM)
|
|
|
Sartell, MN
|
|
|
|
|
96.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
WJON(AM)
|
|
|
St. Cloud, MN
|
|
|
|
|
1240
|
|
|
|
|
April 1, 2021
|
|
|||
|
WWJO(FM)
|
|
|
St. Cloud, MN
|
|
|
|
|
98.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
Shelby, MT (NR)
|
|
|
KSEN(AM)
|
|
|
Shelby, MT
|
|
|
|
|
1150
|
|
|
|
|
April 1, 2021
|
|
|
KZIN-FM
|
|
|
Shelby, MT
|
|
|
|
|
96.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
Shreveport, LA (#133)
|
|
|
KEEL(AM)
|
|
|
Shreveport, LA
|
|
|
|
|
710
|
|
|
|
|
June 1, 2020
|
|
|
KXKS-FM
|
|
|
Shreveport, LA
|
|
|
|
|
93.7
|
|
|
|
|
June 1, 2020
|
|
|||
|
KRUF(FM)
|
|
|
Shreveport, LA
|
|
|
|
|
94.5
|
|
|
|
|
June 1, 2020
|
|
|||
|
KVKI-FM
|
|
|
Shreveport, LA
|
|
|
|
|
96.5
|
|
|
|
|
June 1, 2020
|
|
|||
|
KWKH(AM)
|
|
|
Shreveport, LA
|
|
|
|
|
1130
|
|
|
|
|
June 1, 2020
|
|
|||
|
KTUX(FM)
(6)
|
|
|
Carthage, TX
|
|
|
|
|
98.9
|
|
|
|
|
August 1, 2013
|
|
|||
|
Sioux Falls, SD (NR)
|
|
|
KXRB(AM)
|
|
|
Sioux Falls, SD
|
|
|
|
|
1000
|
|
|
|
|
April 1, 2021
|
|
|
KKLS-FM
|
|
|
Sioux Falls, SD
|
|
|
|
|
104.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
KIKN-FM
|
|
|
Salem, SD
|
|
|
|
|
100.5
|
|
|
|
|
April 1, 2021
|
|
|||
|
KSOO(AM)
|
|
|
Sioux Falls, SD
|
|
|
|
|
1140
|
|
|
|
|
April 1, 2021
|
|
|||
|
KMXC(FM)
|
|
|
Sioux Falls, SD
|
|
|
|
|
97.3
|
|
|
|
|
April 1, 2021
|
|
|||
|
KYBB(FM)
|
|
|
Canton, SD
|
|
|
|
|
102.7
|
|
|
|
|
April 1, 2021
|
|
|||
|
KDEZ(FM)
|
|
|
Brandon, SD
|
|
|
|
|
100.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
KSOO-FM
|
|
|
Lennox, SD
|
|
|
|
|
99.1
|
|
|
|
|
April 1, 2021
|
|
|||
|
Texarkana, TX-AR (#254)
|
|
|
KKYR-FM
|
|
|
Texarkana, TX
|
|
|
|
|
102.5
|
|
|
|
|
August 1, 2021
|
|
|
KOSY(AM)
|
|
|
Texarkana, AR
|
|
|
|
|
790
|
|
|
|
|
June 1, 2020
|
|
|||
|
KPWW(FM)
|
|
|
Hooks, TX
|
|
|
|
|
95.9
|
|
|
|
|
August 1, 2021
|
|
|||
|
KYGL(FM)
|
|
|
Texarkana, AR
|
|
|
|
|
106.3
|
|
|
|
|
June 1, 2020
|
|
|||
|
KMJI(FM)
|
|
|
Ashdown, AR
|
|
|
|
|
93.3
|
|
|
|
|
June 1, 2020
|
|
|||
|
Trenton, NJ (#150)
|
|
|
WKXW(FM)
(7)
|
|
|
Trenton, NJ
|
|
|
|
|
101.5
|
|
|
|
|
June 1, 2014
|
|
|
Tuscaloosa, AL (#215)
|
|
|
WBEI(FM)
|
|
|
Reform, AL
|
|
|
|
|
101.7
|
|
|
|
|
April 1, 2020
|
|
|
WDGM(FM)
|
|
|
Greensboro, AL
|
|
|
|
|
99.1
|
|
|
|
|
April 1, 2020
|
|
|||
|
WFFN(FM)
|
|
|
Coaling, AL
|
|
|
|
|
95.3
|
|
|
|
|
April 1, 2020
|
|
|||
|
WTSK(AM)
|
|
|
Tuscaloosa, TL
|
|
|
|
|
790
|
|
|
|
|
April 1, 2020
|
|
|||
|
WTUG-FM
|
|
|
Northport, AL
|
|
|
|
|
92.9
|
|
|
|
|
April 1, 2020
|
|
|||
|
WJRD(AM)
(8)
|
|
|
Tuscaloosa, AL
|
|
|
|
|
1150
|
|
|
|
|
April 1, 2020
|
|
|||
|
Twin Falls (Sun Valley),
ID (#231) |
|
|
KEZJ-FM
|
|
|
Twin Falls, ID
|
|
|
|
|
95.7
|
|
|
|
|
October 1, 2021
|
|
|
KLIX(AM)
|
|
|
Twin Falls, ID
|
|
|
|
|
1310
|
|
|
|
|
October 1, 2021
|
|
|||
|
KLIX-FM
|
|
|
Twin Falls, ID
|
|
|
|
|
96.5
|
|
|
|
|
October 1, 2021
|
|
|||
|
KSNQ(FM)
|
|
|
Twin Falls, ID
|
|
|
|
|
98.3
|
|
|
|
|
October 1, 2021
|
|
|||
|
Tyler-Longview, TX (#145)
|
|
|
KISX(FM)
|
|
|
Whitehouse, TX
|
|
|
|
|
107.3
|
|
|
|
|
August 1, 2021
|
|
|
KNUE(FM)
|
|
|
Tyler, TX
|
|
|
|
|
101.5
|
|
|
|
|
August 1, 2021
|
|
|||
|
KTYL-FM
|
|
|
Tyler, TX
|
|
|
|
|
93.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
KKTX-FM
|
|
|
Kilgore, TX
|
|
|
|
|
96.1
|
|
|
|
|
August 1, 2021
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Market (Nielsen Ranking)
|
|
|
Station
|
|
|
City of License
|
|
|
Frequency
|
|
|
License
Expiration Date |
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Utica/Rome, NY (#167)
|
|
|
WFRG-FM
|
|
|
Utica, NY
|
|
|
|
|
104.3
|
|
|
|
|
June 1, 2022
|
|
|
WIBX(AM)
|
|
|
Utica, NY
|
|
|
|
|
950
|
|
|
|
|
June 1, 2022
|
|
|||
|
WLZW(FM)
|
|
|
Utica, NY
|
|
|
|
|
98.7
|
|
|
|
|
June 1, 2022
|
|
|||
|
WODZ-FM
|
|
|
Rome, NY
|
|
|
|
|
96.1
|
|
|
|
|
June 1, 2022
|
|
|||
|
Victoria, TX (NR)
|
|
|
KIXS(FM)
|
|
|
Victoria, TX
|
|
|
|
|
107.9
|
|
|
|
|
August 1, 2021
|
|
|
KLUB(FM)
|
|
|
Bloomington, TX
|
|
|
|
|
106.9
|
|
|
|
|
August 1, 2021
|
|
|||
|
KQVT(FM)
|
|
|
Victoria, TX
|
|
|
|
|
92.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
KTXN-FM
(9)
|
|
|
Victoria, TX
|
|
|
|
|
98.7
|
|
|
|
|
August 1, 2021
|
|
|||
|
Waterloo, IA (#242)
|
|
|
KOEL(AM)
|
|
|
Oelwein, IA
|
|
|
|
|
950
|
|
|
|
|
February 1, 2021
|
|
|
Wichita Falls, TX (#252)
|
|
|
KBZS(FM)
|
|
|
Wichita Falls, TX
|
|
|
|
|
106.3
|
|
|
|
|
August 1, 2021
|
|
|
KNIN-FM
(10)
|
|
|
Wichita Falls, TX
|
|
|
|
|
92.9
|
|
|
|
|
August 1, 2013
|
|
|||
|
KWFS(AM)
|
|
|
Wichita Falls, TX
|
|
|
|
|
1290
|
|
|
|
|
August 1, 2021
|
|
|||
|
KWFS-FM
|
|
|
Wichita Falls, TX
|
|
|
|
|
102.3
|
|
|
|
|
August 1, 2021
|
|
|||
|
Yakima, WA (#195)
|
|
|
KDBL(FM)
|
|
|
Toppenish, WA
|
|
|
|
|
92.9
|
|
|
|
|
February 1, 2022
|
|
|
KATS(FM)
|
|
|
Yakima, WA
|
|
|
|
|
94.5
|
|
|
|
|
February 1, 2022
|
|
|||
|
KFFM(FM)
|
|
|
Yakima, WA
|
|
|
|
|
107.3
|
|
|
|
|
February 1, 2022
|
|
|||
|
KIT(AM)
|
|
|
Yakima, WA
|
|
|
|
|
1280
|
|
|
|
|
February 1, 2022
|
|
|||
|
KUTI(AM)
|
|
|
Yakima, WA
|
|
|
|
|
1460
|
|
|
|
|
February 1, 2022
|
|
|||
|
KIT-FM
|
|
|
Naches, WA
|
|
|
|
|
99.3
|
|
|
|
|
February 1, 2022
|
|
|||
|
K232CV(FX)
|
|
|
Ellensburg, WA
|
|
|
|
|
94.3
|
|
|
|
|
February 1, 2022
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Age
|
|
|
Position
|
|
---|---|---|---|---|---|---|---|---|
|
Steven Price
|
|
|
52
|
|
|
Chairman and Chief Executive Officer
|
|
|
B. James Ford
|
|
|
4
6
|
|
|
Director
|
|
|
Gary Ginsberg
|
|
|
51
|
|
|
Director
|
|
|
Stephen Kaplan
|
|
|
55
|
|
|
Director
|
|
|
David Lebow
|
|
|
52
|
|
|
Director
|
|
|
David Quick
|
|
|
34
|
|
|
Director
|
|
|
Amy Miles
|
|
|
47
|
|
|
Director
|
|
|
Stuart Rosenstein
|
|
|
53
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
Bill Wilson
|
|
|
46
|
|
|
Executive Vice President and Chief Content and Digital Officer
|
|
|
Alex Berkett
|
|
|
39
|
|
|
Executive Vice President, Business Development and Mergers and Acquisitions
|
|
|
Erik Hellum
|
|
|
49
|
|
|
Executive Vice President
|
|
|
Dhruv Prasad
|
|
|
36
|
|
|
Executive Vice President, Live Events
|
|
|
Mark Stewart
|
|
|
54
|
|
|
Executive Vice President and Chief Strategic Officer
|
|
|
|
|
|
|
|
|
Name and principal position
|
|
|
Year
|
|
|
Salary
|
|
|
Bonus
(2)
|
|
|
Stock
Awards |
|
|
Option
Awards |
|
|
Non-Equity
Incentive Plan Compensation |
|
|
Nonqualified
deferred compensation earnings |
|
|
All Other
Compensation (3) |
|
|
Total
|
|
||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Steven Price
(1)
Chief Executive Officer |
|
|
|
|
2013
|
|
|
|
|
|
$
|
400,000
|
|
|
|
|
|
$
|
600,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
55,257
|
|
|
|
|
|
$
|
1,055,257
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
$
|
400,000
|
|
|
|
|
|
$
|
500,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
49,907
|
|
|
|
|
|
$
|
949,907
|
|
|
|
|||
|
Stuart Rosenstein
Executive Vice President and Chief Financial Officer |
|
|
|
|
2013
|
|
|
|
|
|
$
|
300,000
|
|
|
|
|
|
$
|
600,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
55,257
|
|
|
|
|
|
$
|
955,257
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
$
|
300,000
|
|
|
|
|
|
$
|
500,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
51,532
|
|
|
|
|
|
$
|
851,532
|
|
|
|
|||
|
Bill Wilson
Executive Vice President and Chief Content and Digital Officer |
|
|
|
|
2013
|
|
|
|
|
|
$
|
650,000
|
|
|
|
|
|
$
|
450,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
30,543
|
|
|
|
|
|
$
|
1,130,543
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
$
|
650,000
|
|
|
|
|
|
$
|
450,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
26,514
|
|
|
|
|
|
$
|
1,126,514
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Year
|
|
|
Commuting
(1)
|
|
|
Healthcare
Benefits (2) |
|
|
Total
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Steven Price
|
|
|
|
|
2013
|
|
|
|
|
|
$
|
18,000
|
|
|
|
|
|
$
|
37,257
|
|
|
|
|
|
$
|
55,257
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
$
|
18,000
|
|
|
|
|
|
$
|
31,907
|
|
|
|
|
|
$
|
49,907
|
|
|
|
|||
|
Stuart Rosenstein
|
|
|
|
|
2013
|
|
|
|
|
|
$
|
18,000
|
|
|
|
|
|
$
|
37,257
|
|
|
|
|
|
$
|
55,257
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
$
|
18,000
|
|
|
|
|
|
$
|
33,532
|
|
|
|
|
|
$
|
51,532
|
|
|
|
|||
|
Bill Wilson
|
|
|
|
|
2013
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
30,543
|
|
|
|
|
|
$
|
30,543
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
26,514
|
|
|
|
|
|
$
|
26,514
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Name
|
|
|
Number of Shares or
Units of Stock That Have Not Vested (#) (1) |
|
|
Market Value of
Shares or Units of Stock That Have Not Vested ($) |
|
|
Equity Incentive Plan
Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) |
|
|
Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares or Other Rights That Have Not Vested ($) (1) |
|
||||||||||||||||
|
Steven Price
|
|
|
|
|
700,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Stuart Rosenstein
|
|
|
|
|
350,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Bill Wilson
|
|
|
|
|
385,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Name
|
|
|
Number of Shares
(#) |
|
|
Value Realized on
Exercise ($) |
|
|
Number of Shares
Acquired on Vesting (#) (1) |
|
|
Value Realized on
Vesting ($) |
|
||||||||||||||||
|
Steven Price
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
700,000
|
|
|
|
|
|
|
—
|
|
|
|
|
Stuart Rosenstein
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
350,000
|
|
|
|
|
|
|
—
|
|
|
|
|
Bill Wilson
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
140,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
|
Fees
Earned or Paid in Cash ($) |
|
|
Stock
Awards ($) (3) |
|
|
Option
Awards ($) |
|
|
Non-Equity
Incentive Plan Compensation ($) |
|
|
Nonqualified
Deferred Compensation Earnings ($) |
|
|
All
Other Compensation ($) |
|
|
Total
($) |
|
||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
B. James Ford
(1)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
Gary Ginsberg
(2)
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
Stephen Kaplan
(1)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
David Lebow
(2)
|
|
|
|
$
|
25,000
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
$
|
25,000
|
|
|
|
|
David Quick
(1)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
owned before
the offering
(18)
|
|
|
% of total
voting power before the offering (20) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
|
Total
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Name of Beneficial Owner
(1)
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
(19)
|
|
|||||||||||||||||||||||||||||||||||
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Certain funds managed by Oaktree
(2)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
94.6
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
68.4
|
%
|
|
|
|
GE Capital and its
affiliates (3) |
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
66.6
|
%
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
—
|
|
|
|
|
Funds affiliated with
MSD Capital Management
(4)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
%
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
33.4
|
%
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
—
|
|
|
|
|
Non-Employee Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
B. James Ford
(5)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
94.6
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
68.4
|
%
|
|
|
|
Gary Ginsberg
(6)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
5.4
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Stephen Kaplan
(7)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
94.6
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
|
%
|
|
|
|
David Lebow
(8)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
5.4
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Amy Miles
(9)
|
|
|
|
|
7,850
|
|
|
|
|
|
|
1.6
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
7,850
|
|
|
|
|
|
|
—
|
|
|
|
|
David Quick
(10)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
94.6
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
68.4
|
%
|
|
|
|
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Steven Price
(11)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
51.4
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
23.4
|
%
|
|
|
|
Stuart Rosenstein
(12)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
24.2
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
2.6
|
%
|
|
|
|
Bill Wilson
(13)
|
|
|
|
|
583,653
|
|
|
|
|
|
|
63.1
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
583,653
|
|
|
|
|
|
|
*
|
|
|
|
|
Alex Berkett
(14)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.7
|
%
|
|
|
|
Erik Hellum
(15)
|
|
|
|
|
228,826
|
|
|
|
|
|
|
33.2
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
228,826
|
|
|
|
|
|
|
*
|
|
|
|
|
Dhruv Prasad
(16)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.7
|
%
|
|
|
|
Mark Stewart
(17)
|
|
|
|
|
68,598
|
|
|
|
|
|
|
12.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
68,598
|
|
|
|
|
|
|
—
|
|
|
|
|
All Directors and Current Executive Officers as a Group
(1
3 persons
)
|
|
|
|
|
9,526,134
|
|
|
|
|
|
|
96.9
|
%
|
|
|
|
|
|
6,584,143
|
|
|
|
|
|
|
99.6
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
20,991,582
|
|
|
|
|
|
|
98.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
owned after
the offering
if underwriters’
option is
not exercised
(18)
|
|
|
% of total
voting power after the offering if underwriters’ option is not exercised (20) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
|
Total
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Name of Beneficial Owner
(1)
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
(19)
|
|
|||||||||||||||||||||||||||||||||||
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Certain funds managed by
Oaktree
(2)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
49.3
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
54.0
|
%
|
|
|
|
GE Capital and its
affiliates
(3)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
66.6
|
%
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
—
|
|
|
|
|
Funds affiliated with
MSD Capital Management
(4)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
33.4
|
%
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
—
|
|
|
|
|
Non-Employee
Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
B. James Ford
(5)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
49.3
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
54.0
|
%
|
|
|
|
Gary Ginsberg
(6)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Stephen Kaplan
(7)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
49.3
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
54.0
|
%
|
|
|
|
David Lebow
(8)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Amy Miles
(9)
|
|
|
|
|
7,850
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
7,850
|
|
|
|
|
|
|
—
|
|
|
|
|
David Quick
(10)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
49.3
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
54.0
|
%
|
|
|
|
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Steven Price
(11)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
51.4
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
18.5
|
%
|
|
|
|
Stuart Rosenstein
(12)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
24.2
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
2.0
|
%
|
|
|
|
Bill Wilson
(13)
|
|
|
|
|
583,653
|
|
|
|
|
|
|
6.3
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
583,653
|
|
|
|
|
|
|
*
|
|
|
|
|
Alex Berkett
(14)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.3
|
%
|
|
|
|
Erik Hellum
(15)
|
|
|
|
|
228,826
|
|
|
|
|
|
|
2.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
228,826
|
|
|
|
|
|
|
*
|
|
|
|
|
Dhruv Prasad
(16)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.3
|
%
|
|
|
|
Mark Stewart
(17)
|
|
|
|
|
68,598
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
68,598
|
|
|
|
|
|
|
—
|
|
|
|
|
All Directors and Current
Executive
Officers as a
Group
(1
3 persons
)
|
|
|
|
|
9,526,134
|
|
|
|
|
|
|
52.4
|
%
|
|
|
|
|
|
6,584,143
|
|
|
|
|
|
|
99.6
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
20,991,582
|
|
|
|
|
|
|
77.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
owned after
the offering
if underwriters’
option is
exercised in full
(18)
|
|
|
% of total
voting power after the offering if underwriters’ option is exercised in full (20) |
|
||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
Class A
|
|
|
Class B
|
|
|
Class C
|
|
|
Total
|
|
||||||||||||||||||||||||||||||||||||||||||||
|
Name of Beneficial Owner
(1)
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
|
|
|
%
|
|
|
Number
(19)
|
|
|||||||||||||||||||||||||||||||||||
|
5% Stockholders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Certain funds managed by
Oaktree
(2)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
46.0
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
52.4
|
%
|
|
|
|
GE Capital and its
affiliates
(3)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
66.6
|
%
|
|
|
|
|
|
3,249,370
|
|
|
|
|
|
|
—
|
|
|
|
|
Funds affiliated with
MSD Capital Management
(4)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
33.4
|
%
|
|
|
|
|
|
1,631,936
|
|
|
|
|
|
|
—
|
|
|
|
|
Non-Employee Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
B. James Ford
(5)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
46.0
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
52.4
|
%
|
|
|
|
Gary Ginsberg
(6)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Stephen Kaplan
(7)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
46.0
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
52.4
|
%
|
|
|
|
David Lebow
(8)
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
27,439
|
|
|
|
|
|
|
*
|
|
|
|
|
Amy Miles
(9)
|
|
|
|
|
7,850
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
7,850
|
|
|
|
|
|
|
—
|
|
|
|
|
David Quick
(10)
|
|
|
|
|
8,582,329
|
|
|
|
|
|
|
46.0
|
%
|
|
|
|
|
|
2,145,582
|
|
|
|
|
|
|
69.5
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
10,727,911
|
|
|
|
|
|
|
52.4
|
%
|
|
|
|
Executive Officers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
Steven Price
(11)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
51.4
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,494,176
|
|
|
|
|
|
|
17.9
|
%
|
|
|
|
Stuart Rosenstein
(12)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
24.2
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
960,372
|
|
|
|
|
|
|
2.0
|
%
|
|
|
|
Bill Wilson
(13)
|
|
|
|
|
583,653
|
|
|
|
|
|
|
5.6
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
583,653
|
|
|
|
|
|
|
*
|
|
|
|
|
Alex Berkett
(14)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.3
|
%
|
|
|
|
Erik Hellum
(15)
|
|
|
|
|
228,826
|
|
|
|
|
|
|
2.2
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
228,826
|
|
|
|
|
|
|
*
|
|
|
|
|
Dhruv Prasad
(16)
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
13.9
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
492,006
|
|
|
|
|
|
|
1.3
|
%
|
|
|
|
Mark Stewart
(17)
|
|
|
|
|
68,598
|
|
|
|
|
|
|
*
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
68,598
|
|
|
|
|
|
|
—
|
|
|
|
|
All Directors and Current
Executive
Officers as a
Group
(1
3 persons
)
|
|
|
|
|
9,526,134
|
|
|
|
|
|
|
49.1
|
%
|
|
|
|
|
|
6,584,143
|
|
|
|
|
|
|
99.6
|
%
|
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
20,991,582
|
|
|
|
|
|
|
75.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period
|
|
|
Redemption Price
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
2015
|
|
|
|
|
106.750
|
%
|
|
|
|
2016
|
|
|
|
|
104.500
|
%
|
|
|
|
2017
|
|
|
|
|
102.250
|
%
|
|
|
|
2018 and thereafter
|
|
|
|
|
100.000
|
%
|
|
|
|
|
|
|
|
|
|
Underwriter
|
|
|
Number
of Shares |
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
|
| | | | | | |
|
Jefferies LLC
|
|
| | | | | | |
|
RBC Capital Markets, LLC
|
|
| | | | | | |
|
Guggenheim Securities, LLC
|
|
| | | | | | |
|
Macquarie Capital (USA) Inc.
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
8,333,333
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
|
|
|
Without Option
|
|
|
With Option
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Public offering price
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
Underwriting discount
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
Proceeds, before expenses, to us
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
$
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
December 31,
2012 |
|
|
December 31,
2013 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
22,305
|
|
|
|
|
|
$
|
45,647
|
|
|
|
|
Accounts receivable, net of allowance of $2,774 and $2,914, respectively
|
|
|
|
|
40,431
|
|
|
|
|
|
|
56,994
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
2,331
|
|
|
|
|
|
|
8,298
|
|
|
|
|
Total current assets
|
|
|
|
|
65,067
|
|
|
|
|
|
|
110,939
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
77,876
|
|
|
|
|
|
|
96,294
|
|
|
|
|
Intangible assets, net
|
|
|
|
|
362,569
|
|
|
|
|
|
|
501,899
|
|
|
|
|
Goodwill
|
|
|
|
|
91,999
|
|
|
|
|
|
|
217,150
|
|
|
|
|
Deferred financing costs, net
|
|
|
|
|
12,080
|
|
|
|
|
|
|
12,357
|
|
|
|
|
Investments
|
|
|
|
|
234
|
|
|
|
|
|
|
234
|
|
|
|
|
Other assets
|
|
|
|
|
296
|
|
|
|
|
|
|
330
|
|
|
|
|
Total assets
|
|
|
|
$
|
610,121
|
|
|
|
|
|
$
|
939,203
|
|
|
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
5,142
|
|
|
|
|
|
$
|
8,640
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
1,164
|
|
|
|
|
|
|
2,186
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
18,077
|
|
|
|
|
|
|
22,820
|
|
|
|
|
Deferred revenue
|
|
|
|
|
3,281
|
|
|
|
|
|
|
9,396
|
|
|
|
|
Accrued interest
|
|
|
|
|
5,963
|
|
|
|
|
|
|
9,411
|
|
|
|
|
Total current liabilities
|
|
|
|
|
33,627
|
|
|
|
|
|
|
52,453
|
|
|
|
|
Long-term debt, less current portion, (inclusive of bond premium of $0 and $8,898, respectively)
|
|
|
|
|
366,283
|
|
|
|
|
|
|
651,286
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
1,873
|
|
|
|
|
|
|
933
|
|
|
|
|
Total liabilities
|
|
|
|
|
401,783
|
|
|
|
|
|
|
704,672
|
|
|
|
|
Commitments and Contingencies
|
|
| | | | | | | | | | | | | |
|
Members’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling interest
|
|
|
|
|
207,896
|
|
|
|
|
|
|
234,039
|
|
|
|
|
Non-controlling interest
|
|
|
|
|
442
|
|
|
|
|
|
|
492
|
|
|
|
|
Total liabilities and members’ equity
|
|
|
|
$
|
610,121
|
|
|
|
|
|
$
|
939,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Net revenue
|
|
|
|
$
|
222,736
|
|
|
|
|
|
$
|
268,578
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
153,103
|
|
|
|
|
|
|
185,214
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
14,824
|
|
|
|
|
|
|
15,189
|
|
|
|
|
Corporate expenses
|
|
|
|
|
17,750
|
|
|
|
|
|
|
21,124
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
1,782
|
|
|
|
|
|
|
2,001
|
|
|
|
|
Change in fair value of contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
Net loss (gain) on sale of assets
|
|
|
|
|
123
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
187,582
|
|
|
|
|
|
|
222,392
|
|
|
|
|
Operating income
|
|
|
|
|
35,154
|
|
|
|
|
|
|
46,186
|
|
|
|
|
Other (expense) income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(28,291
|
)
|
|
|
|
|
|
(35,620
|
)
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(129
|
)
|
|
|
|
|
|
(1
|
)
|
|
|
|
Other income (expense), net
|
|
|
|
|
6
|
|
|
|
|
|
|
(114
|
)
|
|
|
|
Income before income taxes
|
|
|
|
|
6,740
|
|
|
|
|
|
|
10,451
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
340
|
|
|
|
|
|
|
340
|
|
|
|
|
Net income
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
Pro forma C corporation data (unaudited):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical income before taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
10,451
|
|
|
|
|
Pro forma income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
4,065
|
|
|
|
|
Pro forma net income
|
|
|
|
|
|
|
|
|
|
|
$
|
6,386
|
|
|
|
|
Pro forma net income per share
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
$
|
0.25
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
|
|
Weighted average shares outstanding
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
25,604,985
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
32,305,242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling
Interest |
|
|
Non-
Controlling Interest |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance at December 31, 2011
|
|
|
|
$
|
186,131
|
|
|
|
|
|
$
|
—
|
|
|
|
|
Capital contribution from members
|
|
|
|
|
15,100
|
|
|
|
|
|
|
—
|
|
|
|
|
Equity issued in respect of Double O acquisition
|
|
|
|
|
265
|
|
|
|
|
|
|
—
|
|
|
|
|
Non-controlling interest in Mountain Jam, LLC
|
|
|
|
|
—
|
|
|
|
|
|
|
420
|
|
|
|
|
Non-controlling interest in Taste of Country Productions, LLC
|
|
|
|
|
—
|
|
|
|
|
|
|
22
|
|
|
|
|
Net income
|
|
|
|
|
6,400
|
|
|
|
|
|
|
—
|
|
|
|
|
Balance at December 31, 2012
|
|
|
|
|
207,896
|
|
|
|
|
|
|
442
|
|
|
|
|
Equity issued in respect of Peak acquisition
|
|
|
|
|
16,241
|
|
|
|
|
|
|
—
|
|
|
|
|
Units repurchased and held in Treasury
|
|
|
|
|
(159
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Net income
|
|
|
|
|
10,061
|
|
|
|
|
|
|
50
|
|
|
|
|
Balance at December 31, 2013
|
|
|
|
$
|
234,039
|
|
|
|
|
|
$
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
6,400
|
|
|
|
|
|
$
|
10,111
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
14,824
|
|
|
|
|
|
|
15,189
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
|
2,605
|
|
|
|
|
|
|
2,111
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
1,429
|
|
|
|
|
|
|
8
|
|
|
|
|
Noncash interest expense
|
|
|
|
|
1,015
|
|
|
|
|
|
|
170
|
|
|
|
|
Loss on derivative instruments
|
|
|
|
|
129
|
|
|
|
|
|
|
1
|
|
|
|
|
Net loss (gain) on sale of assets
|
|
|
|
|
123
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
(7,514
|
)
|
|
|
|
|
|
(4,202
|
)
|
|
|
|
Prepaid expenses and other assets
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(5,183
|
)
|
|
|
|
Accounts payable
|
|
|
|
|
(106
|
)
|
|
|
|
|
|
385
|
|
|
|
|
Accrued expenses
|
|
|
|
|
(2,335
|
)
|
|
|
|
|
|
5,140
|
|
|
|
|
Accrued interest
|
|
|
|
|
5,842
|
|
|
|
|
|
|
3,449
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
(2,529
|
)
|
|
|
|
|
|
(939
|
)
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
19,847
|
|
|
|
|
|
|
26,204
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payments for acquisitions, net of cash acquired
|
|
|
|
|
(133,776
|
)
|
|
|
|
|
|
(276,799
|
)
|
|
|
|
Acquisition of intangibles
|
|
|
|
|
(256
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Proceeds from insurance settlement
|
|
|
|
|
181
|
|
|
|
|
|
|
—
|
|
|
|
|
Purchase of investments
|
|
|
|
|
(234
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Purchase of property and equipment
|
|
|
|
|
(9,894
|
)
|
|
|
|
|
|
(9,526
|
)
|
|
|
|
Proceeds from sale of assets
|
|
|
|
|
1,779
|
|
|
|
|
|
|
155
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(142,200
|
)
|
|
|
|
|
|
(286,170
|
)
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of bank debt
|
|
|
|
|
(252,274
|
)
|
|
|
|
|
|
(1,020
|
)
|
|
|
|
Capital contributions from members
|
|
|
|
|
15,100
|
|
|
|
|
|
|
—
|
|
|
|
|
Proceeds from issuance of unsecured senior notes
|
|
|
|
|
265,000
|
|
|
|
|
|
|
155,019
|
|
|
|
|
Debt financing costs paid
|
|
|
|
|
(13,023
|
)
|
|
|
|
|
|
(2,388
|
)
|
|
|
|
Proceeds from issuance of incremental term loans
|
|
|
|
|
105,000
|
|
|
|
|
|
|
102,000
|
|
|
|
|
Proceeds from issuance of Senior PIK Notes
|
|
|
|
|
—
|
|
|
|
|
|
|
30,000
|
|
|
|
|
Units repurchased
|
|
|
|
|
—
|
|
|
|
|
|
|
(159
|
)
|
|
|
|
Repayments of capitalized obligations
|
|
|
|
|
(137
|
)
|
|
|
|
|
|
(144
|
)
|
|
|
|
Net cash provided by financing activities
|
|
|
|
|
119,666
|
|
|
|
|
|
|
283,308
|
|
|
|
|
Net (decrease) increase in cash
|
|
|
|
|
(2,687
|
)
|
|
|
|
|
|
23,342
|
|
|
|
|
Cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
|
24,992
|
|
|
|
|
|
|
22,305
|
|
|
|
|
End of period
|
|
|
|
$
|
22,305
|
|
|
|
|
|
$
|
45,647
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
$
|
19,757
|
|
|
|
|
|
$
|
31,392
|
|
|
|
|
Income taxes
|
|
|
|
|
236
|
|
|
|
|
|
|
493
|
|
|
|
|
Barter transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barter revenue
–
included in broadcasting revenue, net
|
|
|
|
|
8,020
|
|
|
|
|
|
|
9,296
|
|
|
|
|
Barter expense
–
included in direct operating expenses
|
|
|
|
|
7,506
|
|
|
|
|
|
|
8,542
|
|
|
|
|
Equity issued in respect of Double O acquisition
|
|
|
|
|
265
|
|
|
|
|
|
|
—
|
|
|
|
|
Fair value of contingent consideration in respect of MMN acquisition
|
|
|
|
|
1,100
|
|
|
|
|
|
|
—
|
|
|
|
|
Equity issued in respect of Peak acquisition
|
|
|
|
|
—
|
|
|
|
|
|
|
16,241
|
|
|
|
|
Allocation of business acquisition to non-controlling interest:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mountain Jam, LLC
|
|
|
|
|
420
|
|
|
|
|
|
|
—
|
|
|
|
|
Taste of Country Productions, LLC
|
|
|
|
|
22
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property Type
|
|
|
Depreciation Period in Years
|
|
---|---|---|---|---|---|
|
Buildings and improvements
|
|
|
10 to 39 years
|
|
|
Broadcasting equipment
|
|
|
3 to 20 years
|
|
|
Computer and office equipment
|
|
|
3 to 5 years
|
|
|
Furniture and fixtures
|
|
|
5 to 10 years
|
|
|
Vehicles
|
|
|
5 years
|
|
|
Software development costs
|
|
|
1 to 2 years
|
|
|
Leasehold improvements
|
|
|
Shorter of their useful life or remaining term
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
30
|
|
|
|
|
Other current assets
|
|
|
|
|
69
|
|
|
|
|
Goodwill
|
|
|
|
|
265
|
|
|
|
|
Property and equipment
|
|
|
|
|
4,517
|
|
|
|
|
FCC licenses
|
|
|
|
|
6,518
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(134
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
11,265
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
141
|
|
|
|
|
Other current assets
|
|
|
|
|
96
|
|
|
|
|
Property and equipment
|
|
|
|
|
17,239
|
|
|
|
|
Goodwill
|
|
|
|
|
32,840
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
1,400
|
|
|
|
|
FCC licenses
|
|
|
|
|
80,400
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(2,807
|
)
|
|
|
|
Subtotal
|
|
|
|
|
129,309
|
|
|
|
|
Less: Carrying value of radio stations exchanged
|
|
|
|
|
(14,450
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
114,859
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
1,731
|
|
|
|
|
Other current assets
|
|
|
|
|
127
|
|
|
|
|
Property and equipment
|
|
|
|
|
20
|
|
|
|
|
Goodwill
|
|
|
|
|
7,000
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(1,912
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
6,966
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
3,499
|
|
|
|
|
Other current assets
|
|
|
|
|
241
|
|
|
|
|
Property and equipment
|
|
|
|
|
8,364
|
|
|
|
|
Goodwill
|
|
|
|
|
25,802
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
400
|
|
|
|
|
FCC licenses
|
|
|
|
|
14,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(2,657
|
)
|
|
|
|
Total
|
|
|
|
$
|
50,149
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
9,677
|
|
|
|
|
Other current assets
|
|
|
|
|
521
|
|
|
|
|
Property and equipment
|
|
|
|
|
16,436
|
|
|
|
|
Goodwill
|
|
|
|
|
101,022
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
4,400
|
|
|
|
|
FCC licenses
|
|
|
|
|
107,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(3,642
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
235,914
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
1,377
|
|
|
|
|
Other current assets
|
|
|
|
|
76
|
|
|
|
|
Property and equipment
|
|
|
|
|
3,016
|
|
|
|
|
Goodwill
|
|
|
|
|
8,945
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
500
|
|
|
|
|
FCC licenses
|
|
|
|
|
18,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(248
|
)
|
|
|
|
Total purchase price
|
|
|
|
|
32,166
|
|
|
|
|
Less: Fair value of radio stations exchanged
|
|
|
|
|
(33,074
|
)
|
|
|
|
Total cash consideration received
|
|
|
|
$
|
(908
|
)
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
562
|
|
|
|
|
Other current assets
|
|
|
|
|
425
|
|
|
|
|
Trademark
|
|
|
|
|
1,073
|
|
|
|
|
Goodwill
|
|
|
|
|
2,947
|
|
|
|
|
Deferred revenue
|
|
|
|
|
(1,313
|
)
|
|
|
|
Accounts payable
|
|
|
|
|
(307
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
3,387
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Net revenue
|
|
|
|
$
|
344,656
|
|
|
|
|
|
$
|
345,113
|
|
|
|
|
Net income
|
|
|
|
$
|
38,764
|
|
|
|
|
|
$
|
35,976
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2012 |
|
|
December 31,
2013 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Land and improvements
|
|
|
|
$
|
18,087
|
|
|
|
|
|
$
|
25,640
|
|
|
|
|
Buildings and leasehold improvements
|
|
|
|
|
21,751
|
|
|
|
|
|
|
29,438
|
|
|
|
|
Broadcast equipment
|
|
|
|
|
58,990
|
|
|
|
|
|
|
69,095
|
|
|
|
|
Computer and office equipment
|
|
|
|
|
4,882
|
|
|
|
|
|
|
6,791
|
|
|
|
|
Furniture and fixtures
|
|
|
|
|
2,938
|
|
|
|
|
|
|
3,728
|
|
|
|
|
Vehicles
|
|
|
|
|
2,335
|
|
|
|
|
|
|
2,819
|
|
|
|
|
Software development costs
|
|
|
|
|
5,701
|
|
|
|
|
|
|
9,560
|
|
|
|
|
|
|
|
|
|
114,684
|
|
|
|
|
|
|
147,071
|
|
|
|
|
Less: Accumulated depreciation and amortization
|
|
|
|
|
(36,808
|
)
|
|
|
|
|
|
(50,777
|
)
|
|
|
|
Property and equipment, net
|
|
|
|
$
|
77,876
|
|
|
|
|
|
$
|
96,294
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012
|
|
|
|
$
|
50,464
|
|
|
|
|
Double O acquisition
|
|
|
|
|
265
|
|
|
|
|
Cumulus I asset exchange
|
|
|
|
|
32,840
|
|
|
|
|
MMN acquisition
|
|
|
|
|
7,000
|
|
|
|
|
Mountain Jam acquisition
|
|
|
|
|
1,155
|
|
|
|
|
Taste of Country Productions
|
|
|
|
|
275
|
|
|
|
|
Balance, December 31, 2012
|
|
|
|
|
91,999
|
|
|
|
|
Headwaters Country Jam acquisition
|
|
|
|
|
373
|
|
|
|
|
Country Jam acquisition
|
|
|
|
|
2,749
|
|
|
|
|
Rock Jam acquisition
|
|
|
|
|
100
|
|
|
|
|
AOL Music acquisition
|
|
|
|
|
118
|
|
|
|
|
Peak acquisition
|
|
|
|
|
25,802
|
|
|
|
|
Fresno exchange
|
|
|
|
|
(16,906
|
)
|
|
|
|
Cumulus II acquisition
|
|
|
|
|
101,022
|
|
|
|
|
Cumulus II asset exchange
|
|
|
|
|
8,946
|
|
|
|
|
MAC Events acquisition
|
|
|
|
|
2,947
|
|
|
|
|
Balance, December 31, 2013
|
|
|
|
$
|
217,150
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Useful Life |
|
|
December 31,
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
|||||||||||
|
Intangible Assets:
|
|
|
|
|
|
|
|
|
|
|
|
| | | | | | |
|
FCC licenses
|
|
|
Indefinite
|
|
|
|
$
|
355,893
|
|
|
|
|
|
$
|
487,794
|
|
|
|
|
Customer and advertising relationships
|
|
|
10 years
|
|
|
|
|
9,217
|
|
|
|
|
|
|
14,317
|
|
|
|
|
Leasehold interests
|
|
|
5 to 39 years
|
|
|
|
|
1,085
|
|
|
|
|
|
|
1,085
|
|
|
|
|
Tower space
|
|
|
3 to 9 years
|
|
|
|
|
637
|
|
|
|
|
|
|
637
|
|
|
|
|
Sports broadcast rights
|
|
|
1 to 2 years
|
|
|
|
|
665
|
|
|
|
|
|
|
665
|
|
|
|
|
Non-compete agreements
|
|
|
1 to 2 years
|
|
|
|
|
243
|
|
|
|
|
|
|
243
|
|
|
|
|
Trademark
|
|
|
10 years
|
|
|
|
|
490
|
|
|
|
|
|
|
3,967
|
|
|
|
|
Other intangibles
|
|
|
1 to 2 years
|
|
|
|
|
50
|
|
|
|
|
|
|
—
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
368,280
|
|
|
|
|
|
|
508,708
|
|
|
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
(5,711
|
)
|
|
|
|
|
|
(6,809
|
)
|
|
|
|
Net amount
|
|
|
|
|
|
|
$
|
362,569
|
|
|
|
|
|
$
|
501,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
$
|
1,974
|
|
|
|
|
2015
|
|
|
|
|
1,974
|
|
|
|
|
2016
|
|
|
|
|
1,908
|
|
|
|
|
2017
|
|
|
|
|
1,843
|
|
|
|
|
2018
|
|
|
|
|
1,135
|
|
|
|
|
Thereafter
|
|
|
|
|
5,271
|
|
|
|
|
|
|
|
|
$
|
14,105
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2012
|
|
|
December 31, 2013
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Townsquare Radio, LLC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unsecured Senior Notes (inclusive of bond premium of $0 and $8,898, respectively)
|
|
|
|
$
|
265,000
|
|
|
|
|
|
$
|
419,798
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
101,743
|
|
|
|
|
|
|
202,722
|
|
|
|
|
Townsquare Media, LLC:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Senior PIK Notes
|
|
|
|
|
—
|
|
|
|
|
|
|
30,392
|
|
|
|
|
Capitalized obligations
|
|
|
|
|
704
|
|
|
|
|
|
|
560
|
|
|
|
|
|
|
|
|
|
367,447
|
|
|
|
|
|
|
653,472
|
|
|
|
|
Less: current portion of long-term debt
|
|
|
|
|
(1,164
|
)
|
|
|
|
|
|
(2,186
|
)
|
|
|
|
|
|
|
|
$
|
366,283
|
|
|
|
|
|
$
|
651,286
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
$
|
2,190
|
|
|
|
|
2015
|
|
|
|
|
2,198
|
|
|
|
|
2016
|
|
|
|
|
2,206
|
|
|
|
|
2017
|
|
|
|
|
2,125
|
|
|
|
|
2018
|
|
|
|
|
194,563
|
|
|
|
|
2019
|
|
|
|
|
441,292
|
|
|
|
|
|
|
|
|
$
|
644,574
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Class A Common
|
|
|
|
|
40,351,108
|
|
|
|
|
|
|
41,555,705
|
|
|
|
|
Class A Preferred
|
|
|
|
|
40,351,108
|
|
|
|
|
|
|
41,555,705
|
|
|
|
|
Class B Common
|
|
|
|
|
9,792,350
|
|
|
|
|
|
|
9,709,300
|
|
|
|
|
Class B Preferred
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012
|
|
|
|
|
9,725,650
|
|
|
|
|
Issued
|
|
|
|
|
529,700
|
|
|
|
|
Forfeited
|
|
|
|
|
(463,000
|
)
|
|
|
|
Balance, December 31, 2012
|
|
|
|
|
9,792,350
|
|
|
|
|
Issued
|
|
|
|
|
218,500
|
|
|
|
|
Forfeited
|
|
|
|
|
(301,550
|
)
|
|
|
|
Balance, December 31, 2013
|
|
|
|
|
9,709,300
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Warrants to purchase Class A Common
|
|
|
|
|
15,609,760
|
|
|
|
|
|
|
16,987,561
|
|
|
|
|
Warrants to purchase Class A Preferred
|
|
|
|
|
15,609,760
|
|
|
|
|
|
|
16,987,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Deferred Tax Assets:
|
|
| | | | | | | | | | | | | |
|
Net operating loss carryforwards
|
|
|
|
$
|
21,314
|
|
|
|
|
|
$
|
21,409
|
|
|
|
|
Intangibles and long-lived assets
|
|
|
|
|
15,957
|
|
|
|
|
|
|
11,737
|
|
|
|
|
Accounts receivable
|
|
|
|
|
334
|
|
|
|
|
|
|
382
|
|
|
|
|
Property and equipment
|
|
|
|
|
398
|
|
|
|
|
|
|
419
|
|
|
|
|
Total deferred tax assets
|
|
|
|
|
38,003
|
|
|
|
|
|
|
33,947
|
|
|
|
|
Valuation allowance
|
|
|
|
|
(38,003
|
)
|
|
|
|
|
|
(33,947
|
)
|
|
|
|
Net deferred tax assets
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
Pretax income at federal statutory rate
|
|
|
|
$
|
2,359
|
|
|
|
|
Income for which no federal tax effect
|
|
|
|
|
(2,359
|
)
|
|
|
|
State income tax expense, net of tax benefit
|
|
|
|
|
340
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
340
|
|
|
|
|
|
|
|
|
|
Pretax income at federal statutory rate
|
|
|
|
$
|
3,658
|
|
|
|
|
Income for which no federal tax effect
|
|
|
|
|
(3,658
|
)
|
|
|
|
State income tax expense, net of tax benefit
|
|
|
|
|
340
|
|
|
|
|
Provision for income taxes
|
|
|
|
$
|
340
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
|
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2012
|
|
|
2013
|
|
||||||||
|
Accrued compensation and benefits
|
|
|
|
$
|
6,063
|
|
|
|
|
|
$
|
11,412
|
|
|
|
|
Accrued professional fees
|
|
|
|
|
3,375
|
|
|
|
|
|
|
1,476
|
|
|
|
|
Accrued commissions
|
|
|
|
|
1,909
|
|
|
|
|
|
|
1,880
|
|
|
|
|
Fair value of contingent consideration
|
|
|
|
|
1,100
|
|
|
|
|
|
|
—
|
|
|
|
|
Accrued taxes
|
|
|
|
|
922
|
|
|
|
|
|
|
952
|
|
|
|
|
Accrued music and FCC licensing
|
|
|
|
|
310
|
|
|
|
|
|
|
1,108
|
|
|
|
|
Accrued publisher fees
|
|
|
|
|
575
|
|
|
|
|
|
|
793
|
|
|
|
|
Accrued national representation fees
|
|
|
|
|
510
|
|
|
|
|
|
|
660
|
|
|
|
|
Accrued other
|
|
|
|
|
3,313
|
|
|
|
|
|
|
4,539
|
|
|
|
|
|
|
|
|
$
|
18,077
|
|
|
|
|
|
$
|
22,820
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
|
|
$
|
8,408
|
|
|
|
|
2015
|
|
|
|
|
7,588
|
|
|
|
|
2016
|
|
|
|
|
6,904
|
|
|
|
|
2017
|
|
|
|
|
6,013
|
|
|
|
|
2018
|
|
|
|
|
5,125
|
|
|
|
|
Thereafter
|
|
|
|
|
12,981
|
|
|
|
|
Total minimum payments
|
|
|
|
$
|
47,019
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Advertising |
|
|
Other Media &
Entertainment |
|
|
Corporate
and other reconciling items |
|
|
Consolidated
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Year Ended December 31, 2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
|
$
|
198,306
|
|
|
|
|
|
$
|
24,430
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
222,736
|
|
|
|
|
Direct operating expenses
|
|
|
|
|
133,255
|
|
|
|
|
|
|
19,848
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
153,103
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
11,214
|
|
|
|
|
|
|
3,228
|
|
|
|
|
|
|
382
|
|
|
|
|
|
|
14,824
|
|
|
|
|
Corporate expenses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
17,750
|
|
|
|
|
|
|
17,750
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1,782
|
|
|
|
|
|
|
1,782
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
123
|
|
|
|
|
|
|
123
|
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
53,837
|
|
|
|
|
|
$
|
1,354
|
|
|
|
|
|
$
|
(20,037
|
)
|
|
|
|
|
$
|
35,154
|
|
|
|
|
Long-Lived Assets
|
|
|
|
$
|
519,228
|
|
|
|
|
|
$
|
12,647
|
|
|
|
|
|
$
|
569
|
|
|
|
|
|
$
|
532,444
|
|
|
|
|
Capital expenditures
|
|
|
|
$
|
4,777
|
|
|
|
|
|
$
|
4,227
|
|
|
|
|
|
$
|
890
|
|
|
|
|
|
$
|
9,894
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Advertising |
|
|
Other Media &
Entertainment |
|
|
Corporate
and other reconciling items |
|
|
Consolidated
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Year Ended December 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
|
$
|
229,653
|
|
|
|
|
|
$
|
38,925
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
268,578
|
|
|
|
|
Direct operating expenses
|
|
|
|
|
147,720
|
|
|
|
|
|
|
37,494
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
185,214
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
11,202
|
|
|
|
|
|
|
3,498
|
|
|
|
|
|
|
489
|
|
|
|
|
|
|
15,189
|
|
|
|
|
Corporate expenses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
21,124
|
|
|
|
|
|
|
21,124
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
2,001
|
|
|
|
|
|
|
2,001
|
|
|
|
|
Change in fair value of contingent consideration
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
|
|
(1,100
|
)
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(36
|
)
|
|
|
|
|
|
(36
|
)
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
70,731
|
|
|
|
|
|
$
|
(2,067
|
)
|
|
|
|
|
$
|
(22,478
|
)
|
|
|
|
|
$
|
46,186
|
|
|
|
|
Long-Lived Assets
|
|
|
|
$
|
791,447
|
|
|
|
|
|
$
|
22,676
|
|
|
|
|
|
$
|
1,220
|
|
|
|
|
|
$
|
815,343
|
|
|
|
|
Capital expenditures
|
|
|
|
$
|
4,586
|
|
|
|
|
|
$
|
4,089
|
|
|
|
|
|
$
|
851
|
|
|
|
|
|
$
|
9,526
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013 |
|
|
March 31,
2014 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
$
|
45,647
|
|
|
|
|
|
$
|
57,339
|
|
|
|
|
Accounts receivable, net of allowance of $2,914 and $2,883, respectively
|
|
|
|
|
56,994
|
|
|
|
|
|
|
52,875
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
8,298
|
|
|
|
|
|
|
5,939
|
|
|
|
|
Total current assets
|
|
|
|
|
110,939
|
|
|
|
|
|
|
116,153
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
96,294
|
|
|
|
|
|
|
94,467
|
|
|
|
|
Intangible assets, net
|
|
|
|
|
501,899
|
|
|
|
|
|
|
501,635
|
|
|
|
|
Goodwill
|
|
|
|
|
217,150
|
|
|
|
|
|
|
217,274
|
|
|
|
|
Deferred financing costs, net
|
|
|
|
|
12,357
|
|
|
|
|
|
|
11,867
|
|
|
|
|
Investments
|
|
|
|
|
234
|
|
|
|
|
|
|
234
|
|
|
|
|
Other assets
|
|
|
|
|
330
|
|
|
|
|
|
|
267
|
|
|
|
|
Total assets
|
|
|
|
$
|
939,203
|
|
|
|
|
|
$
|
941,897
|
|
|
|
|
LIABILITIES AND MEMBERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
$
|
8,640
|
|
|
|
|
|
$
|
7,612
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
2,186
|
|
|
|
|
|
|
2,186
|
|
|
|
|
Accrued expenses and other current liabilities
|
|
|
|
|
22,820
|
|
|
|
|
|
|
16,041
|
|
|
|
|
Deferred revenue
|
|
|
|
|
9,396
|
|
|
|
|
|
|
10,998
|
|
|
|
|
Accrued interest
|
|
|
|
|
9,411
|
|
|
|
|
|
|
18,635
|
|
|
|
|
Total current liabilities
|
|
|
|
|
52,453
|
|
|
|
|
|
|
55,472
|
|
|
|
|
Long-term debt, less current portion, (inclusive of bond premium of $8,898 and $8,474, respectively)
|
|
|
|
|
651,286
|
|
|
|
|
|
|
651,332
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
933
|
|
|
|
|
|
|
933
|
|
|
|
|
Total liabilities
|
|
|
|
|
704,672
|
|
|
|
|
|
|
707,737
|
|
|
|
|
Commitments and Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Members’ equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling interest
|
|
|
|
|
234,039
|
|
|
|
|
|
|
233,668
|
|
|
|
|
Non-controlling interest
|
|
|
|
|
492
|
|
|
|
|
|
|
492
|
|
|
|
|
Total liabilities and members’ equity
|
|
|
|
$
|
939,203
|
|
|
|
|
|
$
|
941,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013
|
|
|
2014
|
|
||||||||
|
Net revenue
|
|
|
|
$
|
53,473
|
|
|
|
|
|
$
|
79,161
|
|
|
|
|
Operating costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating expenses, excluding depreciation and amortization
|
|
|
|
|
40,476
|
|
|
|
|
|
|
57,742
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,026
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Corporate expenses
|
|
|
|
|
3,791
|
|
|
|
|
|
|
5,437
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
1
|
|
|
|
|
|
|
28
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
(110
|
)
|
|
|
|
Total operating costs and expenses
|
|
|
|
|
48,249
|
|
|
|
|
|
|
67,483
|
|
|
|
|
Operating income
|
|
|
|
|
5,224
|
|
|
|
|
|
|
11,678
|
|
|
|
|
Other expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(7,409
|
)
|
|
|
|
|
|
(12,080
|
)
|
|
|
|
Net loss on derivative instruments
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Other expense, net
|
|
|
|
|
(12
|
)
|
|
|
|
|
|
(37
|
)
|
|
|
|
Loss before income taxes
|
|
|
|
|
(2,198
|
)
|
|
|
|
|
|
(439
|
)
|
|
|
|
Provision for income taxes
|
|
|
|
|
85
|
|
|
|
|
|
|
91
|
|
|
|
|
Net loss
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
Pro forma C corporation data
(unaudited)
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Historical loss before taxes
|
|
|
|
|
|
|
|
|
|
|
$
|
(439
|
)
|
|
|
|
Pro forma income tax
es
|
|
|
|
|
|
|
|
|
|
|
|
(171
|
)
|
|
|
|
Pro forma net loss
|
|
|
|
|
|
|
|
|
|
|
$
|
(268
|
)
|
|
|
|
Pro forma net loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.01
|
)
|
|
|
|
Weighte
d average shares ou
tstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
|
|
|
|
|
|
26,263,050
|
|
|
|
|
Diluted
|
|
|
|
|
|
|
|
|
|
|
|
32,963,308
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Controlling
Interest |
|
|
Non-Controlling
Interest |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Balance at December 31, 2013
|
|
|
|
$
|
234,039
|
|
|
|
|
|
$
|
492
|
|
|
|
|
Units issued from Treasury
|
|
|
|
|
159
|
|
|
|
|
|
|
—
|
|
|
|
|
Net loss
|
|
|
|
|
(530
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Balance at March 31, 2014
|
|
|
|
$
|
233,668
|
|
|
|
|
|
$
|
492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013
|
|
|
2014
|
|
||||||||
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
$
|
(2,283
|
)
|
|
|
|
|
$
|
(530
|
)
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,026
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Amortization of deferred financing costs
|
|
|
|
|
517
|
|
|
|
|
|
|
624
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
294
|
|
|
|
|
|
|
447
|
|
|
|
|
Units issued as compensation
|
|
|
|
|
—
|
|
|
|
|
|
|
159
|
|
|
|
|
Noncash interest expense
|
|
|
|
|
—
|
|
|
|
|
|
|
336
|
|
|
|
|
Loss on derivative instruments
|
|
|
|
|
1
|
|
|
|
|
|
|
—
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
(110
|
)
|
|
|
|
Changes in assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
1,404
|
|
|
|
|
|
|
3,566
|
|
|
|
|
Prepaid expenses and other assets
|
|
|
|
|
(743
|
)
|
|
|
|
|
|
2,425
|
|
|
|
|
Accounts payable
|
|
|
|
|
(906
|
)
|
|
|
|
|
|
(1,027
|
)
|
|
|
|
Accrued expenses
|
|
|
|
|
1,047
|
|
|
|
|
|
|
(5,305
|
)
|
|
|
|
Accrued interest
|
|
|
|
|
5,963
|
|
|
|
|
|
|
9,224
|
|
|
|
|
Other long-term liabilities
|
|
|
|
|
(159
|
)
|
|
|
|
|
|
—
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
9,116
|
|
|
|
|
|
|
14,195
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of intangibles
|
|
|
|
|
(212
|
)
|
|
|
|
|
|
(231
|
)
|
|
|
|
Purchase of property and equipment
|
|
|
|
|
(1,941
|
)
|
|
|
|
|
|
(1,995
|
)
|
|
|
|
Proceeds from sale of assets
|
|
|
|
|
92
|
|
|
|
|
|
|
147
|
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(2,061
|
)
|
|
|
|
|
|
(2,079
|
)
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Repayment of bank debt
|
|
|
|
|
(255
|
)
|
|
|
|
|
|
(255
|
)
|
|
|
|
Debt financing costs paid
|
|
|
|
|
(174
|
)
|
|
|
|
|
|
(134
|
)
|
|
|
|
Repayments of capitalized obligations
|
|
|
|
|
(35
|
)
|
|
|
|
|
|
(35
|
)
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(464
|
)
|
|
|
|
|
|
(424
|
)
|
|
|
|
Net increase in cash
|
|
|
|
|
6,591
|
|
|
|
|
|
|
11,692
|
|
|
|
|
Cash:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning of period
|
|
|
|
|
22,305
|
|
|
|
|
|
|
45,647
|
|
|
|
|
End of period
|
|
|
|
$
|
28,896
|
|
|
|
|
|
$
|
57,339
|
|
|
|
|
Supplemental Disclosure of Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash payments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
|
|
$
|
930
|
|
|
|
|
|
$
|
1,894
|
|
|
|
|
Income taxes
|
|
|
|
|
120
|
|
|
|
|
|
|
10
|
|
|
|
|
Barter transactions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Barter revenue—included in broadcasting revenue, net
|
|
|
|
|
1,678
|
|
|
|
|
|
|
2,656
|
|
|
|
|
Barter expense—included in direct operating expenses
|
|
|
|
|
1,479
|
|
|
|
|
|
|
2,377
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
3,499
|
|
|
|
|
Other current assets
|
|
|
|
|
241
|
|
|
|
|
Property and equipment
|
|
|
|
|
8,364
|
|
|
|
|
Goodwill
|
|
|
|
|
25,802
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
400
|
|
|
|
|
FCC licenses
|
|
|
|
|
14,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(2,657
|
)
|
|
|
|
Total
|
|
|
|
$
|
50,149
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
9,677
|
|
|
|
|
Other current assets
|
|
|
|
|
521
|
|
|
|
|
Property and equipment
|
|
|
|
|
16,436
|
|
|
|
|
Goodwill
|
|
|
|
|
101,022
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
4,400
|
|
|
|
|
FCC licenses
|
|
|
|
|
107,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(3,642
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
235,914
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
1,377
|
|
|
|
|
Other current assets
|
|
|
|
|
76
|
|
|
|
|
Property and equipment
|
|
|
|
|
3,016
|
|
|
|
|
Goodwill
|
|
|
|
|
8,945
|
|
|
|
|
Other intangibles—advertising relationships
|
|
|
|
|
500
|
|
|
|
|
FCC licenses
|
|
|
|
|
18,500
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(248
|
)
|
|
|
|
Total purchase price
|
|
|
|
|
32,166
|
|
|
|
|
Less: Fair value of radio stations exchanged
|
|
|
|
|
(33,074
|
)
|
|
|
|
Total cash consideration received
|
|
|
|
$
|
(908
|
)
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
562
|
|
|
|
|
Other current assets
|
|
|
|
|
425
|
|
|
|
|
Trademark
|
|
|
|
|
1,073
|
|
|
|
|
Goodwill
|
|
|
|
|
2,947
|
|
|
|
|
Deferred revenue
|
|
|
|
|
(1,313
|
)
|
|
|
|
Accounts Payable
|
|
|
|
|
(307
|
)
|
|
|
|
Total purchase price
|
|
|
|
$
|
3,387
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, |
|
|||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
|
|
|
2013
|
|
|
2014
|
|
||||||||
|
Net revenue
|
|
|
|
$
|
72,463
|
|
|
|
|
|
$
|
79,199
|
|
|
|
|
Net income
|
|
|
|
$
|
1,799
|
|
|
|
|
|
$
|
1,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013 |
|
|
March 31,
2014 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Land and improvements
|
|
|
|
$
|
25,640
|
|
|
|
|
|
$
|
25,634
|
|
|
|
|
Buildings and leasehold improvements
|
|
|
|
|
29,438
|
|
|
|
|
|
|
29,543
|
|
|
|
|
Broadcast equipment
|
|
|
|
|
69,095
|
|
|
|
|
|
|
69,450
|
|
|
|
|
Computer and office equipment
|
|
|
|
|
6,791
|
|
|
|
|
|
|
7,068
|
|
|
|
|
Furniture and fixtures
|
|
|
|
|
3,728
|
|
|
|
|
|
|
4,104
|
|
|
|
|
Vehicles
|
|
|
|
|
2,819
|
|
|
|
|
|
|
2,831
|
|
|
|
|
Software development costs
|
|
|
|
|
9,560
|
|
|
|
|
|
|
10,441
|
|
|
|
|
|
|
|
|
|
147,071
|
|
|
|
|
|
|
149,071
|
|
|
|
|
Less: Accumulated depreciation and amortization
|
|
|
|
|
(50,777
|
)
|
|
|
|
|
|
(54,604
|
)
|
|
|
|
Property and equipment, net
|
|
|
|
$
|
96,294
|
|
|
|
|
|
$
|
94,467
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2014
|
|
|
|
$
|
217,150
|
|
|
|
|
Live Events acquisitions
|
|
|
|
|
124
|
|
|
|
|
Balance, March 31, 2014
|
|
|
|
$
|
217,274
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Useful Life |
|
|
December 31,
2013 |
|
|
March 31,
2014 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Intangible Assets:
|
|
| | | | | | | | | | | | | | | | |
|
FCC licenses
|
|
|
Indefinite
|
|
|
|
$
|
487,794
|
|
|
|
|
|
$
|
487,794
|
|
|
|
|
Customer and advertising relationships
|
|
|
10 years
|
|
|
|
|
14,317
|
|
|
|
|
|
|
14,317
|
|
|
|
|
Leasehold interests
|
|
|
5 to 39 years
|
|
|
|
|
1,085
|
|
|
|
|
|
|
1,085
|
|
|
|
|
Tower space
|
|
|
3 to 9 years
|
|
|
|
|
637
|
|
|
|
|
|
|
637
|
|
|
|
|
Sports broadcast rights
|
|
|
1 to 2 years
|
|
|
|
|
665
|
|
|
|
|
|
|
665
|
|
|
|
|
Non-compete agreements
|
|
|
1 to 2 years
|
|
|
|
|
243
|
|
|
|
|
|
|
243
|
|
|
|
|
Trademark
|
|
|
10 years
|
|
|
|
|
3,967
|
|
|
|
|
|
|
4,199
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
508,708
|
|
|
|
|
|
|
508,940
|
|
|
|
|
Less: Accumulated amortization
|
|
|
|
|
|
|
|
(6,809
|
)
|
|
|
|
|
|
(7,305
|
)
|
|
|
|
Net amount
|
|
|
|
|
|
|
$
|
501,899
|
|
|
|
|
|
$
|
501,635
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 (remainder)
|
|
|
|
$
|
1,497
|
|
|
|
|
2015
|
|
|
|
|
1,997
|
|
|
|
|
2016
|
|
|
|
|
1,930
|
|
|
|
|
2017
|
|
|
|
|
1,866
|
|
|
|
|
2018
|
|
|
|
|
1,157
|
|
|
|
|
Thereafter
|
|
|
|
|
5,394
|
|
|
|
|
|
|
|
|
$
|
13,841
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013 |
|
|
March 31,
2014 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Townsquare Radio, LLC:
|
|
| | | | | | | | | | | | | |
|
Unsecured Senior Notes (inclusive of bond premium of $8,898 and $8,474, respectively)
|
|
|
|
$
|
419,798
|
|
|
|
|
|
$
|
419,374
|
|
|
|
|
Incremental Term Loans
|
|
|
|
|
202,722
|
|
|
|
|
|
|
202,468
|
|
|
|
|
Townsquare Media, LLC:
|
|
| | | | | | | | | | | | | |
|
Senior PIK Notes
|
|
|
|
|
30,392
|
|
|
|
|
|
|
31,151
|
|
|
|
|
Capitalized obligations
|
|
|
|
|
560
|
|
|
|
|
|
|
525
|
|
|
|
|
|
|
|
|
|
653,472
|
|
|
|
|
|
|
653,518
|
|
|
|
|
Less: current portion of long-term debt
|
|
|
|
|
(2,186
|
)
|
|
|
|
|
|
(2,186
|
)
|
|
|
|
|
|
|
|
$
|
651,286
|
|
|
|
|
|
$
|
651,332
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 (remainder)
|
|
|
|
$
|
1,901
|
|
|
|
|
2015
|
|
|
|
|
2,198
|
|
|
|
|
2016
|
|
|
|
|
2,206
|
|
|
|
|
2017
|
|
|
|
|
2,125
|
|
|
|
|
2018
|
|
|
|
|
194,563
|
|
|
|
|
2019
|
|
|
|
|
442,051
|
|
|
|
|
|
|
|
|
$
|
645,044
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Class A Common
|
|
|
|
|
41,555,705
|
|
|
|
|
Class A Preferred
|
|
|
|
|
41,555,705
|
|
|
|
|
Class B Common
|
|
|
|
|
10,035,850
|
|
|
|
|
Class B Preferred
|
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2014
|
|
|
|
|
9,709,300
|
|
|
|
|
Issued
|
|
|
|
|
340,000
|
|
|
|
|
Forfeited
|
|
|
|
|
(13,470
|
)
|
|
|
|
Balance, March 31, 2014
|
|
|
|
|
10,035,830
|
|
|
|
|
|
|
|
|
|
|
|
|
2014
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Warrants to purchase Class A Common
|
|
|
|
|
16,987,561
|
|
|
|
|
Warrants to purchase Class A Preferred
|
|
|
|
|
16,987,561
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2013 |
|
|
March 31,
2014 |
|
||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Accrued compensation and benefits
|
|
|
|
$
|
11,412
|
|
|
|
|
|
$
|
4,747
|
|
|
|
|
Accrued professional fees
|
|
|
|
|
1,476
|
|
|
|
|
|
|
1,025
|
|
|
|
|
Accrued commissions
|
|
|
|
|
1,880
|
|
|
|
|
|
|
1,841
|
|
|
|
|
Accrued taxes
|
|
|
|
|
952
|
|
|
|
|
|
|
1,148
|
|
|
|
|
Accrued music and FCC licensing
|
|
|
|
|
1,108
|
|
|
|
|
|
|
991
|
|
|
|
|
Accrued publisher fees
|
|
|
|
|
793
|
|
|
|
|
|
|
620
|
|
|
|
|
Accrued national representation fees
|
|
|
|
|
660
|
|
|
|
|
|
|
564
|
|
|
|
|
Accrued other
|
|
|
|
|
4,539
|
|
|
|
|
|
|
5,105
|
|
|
|
|
|
|
|
|
$
|
22,820
|
|
|
|
|
|
$
|
16,041
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 (remainder)
|
|
|
|
$
|
6,512
|
|
|
|
|
2015
|
|
|
|
|
7,800
|
|
|
|
|
2016
|
|
|
|
|
7,102
|
|
|
|
|
2017
|
|
|
|
|
6,219
|
|
|
|
|
2018
|
|
|
|
|
5,320
|
|
|
|
|
Thereafter
|
|
|
|
|
13,374
|
|
|
|
|
Total minimum payments
|
|
|
|
$
|
46,327
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Advertising |
|
|
Other Media &
Entertainment |
|
|
Corporate
and other reconciling items |
|
|
Consolidated
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Three Months Ended March 31, 2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
|
$
|
47,324
|
|
|
|
|
|
$
|
6,149
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
53,473
|
|
|
|
|
Direct operating expenses
|
|
|
|
|
34,507
|
|
|
|
|
|
|
5,969
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
40,476
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
2,807
|
|
|
|
|
|
|
1,111
|
|
|
|
|
|
|
108
|
|
|
|
|
|
|
4,026
|
|
|
|
|
Corporate expenses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
3,791
|
|
|
|
|
|
|
3,791
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
1
|
|
|
|
|
|
|
1
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(45
|
)
|
|
|
|
|
|
(45
|
)
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
10,010
|
|
|
|
|
|
$
|
(931
|
)
|
|
|
|
|
$
|
(3,855
|
)
|
|
|
|
|
$
|
5,224
|
|
|
|
|
Long-Lived Assets
|
|
|
|
$
|
517,091
|
|
|
|
|
|
$
|
13,051
|
|
|
|
|
|
$
|
676
|
|
|
|
|
|
$
|
530,818
|
|
|
|
|
Capital expenditures
|
|
|
|
$
|
710
|
|
|
|
|
|
$
|
1,069
|
|
|
|
|
|
$
|
162
|
|
|
|
|
|
$
|
1,941
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Local
Advertising |
|
|
Other Media &
Entertainment |
|
|
Corporate
and other reconciling items |
|
|
Consolidated
|
|
||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Three Months Ended March 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net revenue
|
|
|
|
$
|
65,272
|
|
|
|
|
|
$
|
13,889
|
|
|
|
|
|
$
|
—
|
|
|
|
|
|
$
|
79,161
|
|
|
|
|
Direct operating expenses
|
|
|
|
|
45,074
|
|
|
|
|
|
|
12,668
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
57,742
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
3,324
|
|
|
|
|
|
|
912
|
|
|
|
|
|
|
150
|
|
|
|
|
|
|
4,386
|
|
|
|
|
Corporate expenses
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
5,437
|
|
|
|
|
|
|
5,437
|
|
|
|
|
Transaction and other restructuring costs
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
28
|
|
|
|
|
Net gain on sale of assets
|
|
|
|
|
—
|
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(110
|
)
|
|
|
|
|
|
(110
|
)
|
|
|
|
Operating income (loss)
|
|
|
|
$
|
16,874
|
|
|
|
|
|
$
|
309
|
|
|
|
|
|
$
|
(5,505
|
)
|
|
|
|
|
$
|
11,678
|
|
|
|
|
Long-Lived Assets
|
|
|
|
$
|
789,146
|
|
|
|
|
|
$
|
22,941
|
|
|
|
|
|
$
|
1,289
|
|
|
|
|
|
$
|
813,376
|
|
|
|
|
Capital expenditures
|
|
|
|
$
|
579
|
|
|
|
|
|
$
|
1,158
|
|
|
|
|
|
$
|
258
|
|
|
|
|
|
$
|
1,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
23,855
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Direct operating expenses (excluding depreciation and amortization)
|
|
|
|
|
14,468
|
|
|
|
|
Corporate allocation from Cumulus Media, Inc. (including allocated stock-based compensation expense of $175)
|
|
|
|
|
814
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
1,094
|
|
|
|
|
Loss on exchange of assets or stations
|
|
|
|
|
2
|
|
|
|
|
Total operating expenses
|
|
|
|
|
16,378
|
|
|
|
|
Operating income
|
|
|
|
|
7,477
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(2,161
|
)
|
|
|
|
Other expense, net
|
|
|
|
|
(7
|
)
|
|
|
|
Income before income taxes
|
|
|
|
|
5,309
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
2,083
|
|
|
|
|
Net income
|
|
|
|
$
|
3,226
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012
|
|
|
|
$
|
6,429
|
|
|
|
|
Net income
|
|
|
|
|
3,226
|
|
|
|
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(6,419
|
)
|
|
|
|
Balance, July 30, 2012
|
|
|
|
$
|
3,236
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
3,226
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
1,094
|
|
|
|
|
Amortization of debt issuance costs/discounts
|
|
|
|
|
108
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
212
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
175
|
|
|
|
|
Loss on sale of assets
|
|
|
|
|
2
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
1,047
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
22
|
|
|
|
|
Trade receivable
|
|
|
|
|
94
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
83
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
273
|
|
|
|
|
Accrued interest
|
|
|
|
|
43
|
|
|
|
|
Trade payable
|
|
|
|
|
268
|
|
|
|
|
Accrued income taxes payable
|
|
|
|
|
1,036
|
|
|
|
|
Other liabilities
|
|
|
|
|
30
|
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
7,713
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(64
|
)
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(64
|
)
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(6,419
|
)
|
|
|
|
Repayment of long-term debt
|
|
|
|
|
(1,227
|
)
|
|
|
|
Deferred financing costs
|
|
|
|
|
(4
|
)
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(7,650
|
)
|
|
|
|
Net decrease in cash
|
|
|
|
|
(1
|
)
|
|
|
|
Cash at beginning of period
|
|
|
|
|
4
|
|
|
|
|
Cash at end of period
|
|
|
|
$
|
3
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
$
|
1,992
|
|
|
|
|
Income taxes paid
|
|
|
|
|
53
|
|
|
|
|
Supplemental disclosures of non-cash flow information:
|
|
|
|
|
|
|
|
|
|
Trade revenue
|
|
|
|
$
|
1,199
|
|
|
|
|
Trade expense
|
|
|
|
|
606
|
|
|
|
|
|
|
|
|
|
|
2012 (remainder)
|
|
|
|
$
|
494
|
|
|
|
|
2013
|
|
|
|
|
1,186
|
|
|
|
|
2014
|
|
|
|
|
1,186
|
|
|
|
|
2015
|
|
|
|
|
1,186
|
|
|
|
|
2016
|
|
|
|
|
1,186
|
|
|
|
|
Thereafter
|
|
|
|
|
2,371
|
|
|
|
|
Total other intangibles, net
|
|
|
|
$
|
7,609
|
|
|
|
|
|
|
|
|
|
Current income tax expense:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
|
$
|
825
|
|
|
|
|
State and local
|
|
|
|
|
211
|
|
|
|
|
Total current income tax expense
|
|
|
|
|
1,036
|
|
|
|
|
Deferred tax expense:
|
|
| | | | | | |
|
Federal
|
|
|
|
|
834
|
|
|
|
|
State and local
|
|
|
|
|
213
|
|
|
|
|
Total deferred tax expense
|
|
|
|
|
1,047
|
|
|
|
|
Total provision for income taxes
|
|
|
|
$
|
2,083
|
|
|
|
|
|
|
|
|
|
Pretax income at federal statutory rate
|
|
|
|
$
|
1,794
|
|
|
|
|
State income tax expense, net of federal tax benefit
|
|
|
|
|
278
|
|
|
|
|
Other, net
|
|
|
|
|
11
|
|
|
|
|
Total provision for income taxes
|
|
|
|
$
|
2,083
|
|
|
|
|
|
|
|
|
|
Year Ending December 31:
|
|
|||||||
---|---|---|---|---|---|---|---|---|---|
|
2012 (remainder)
|
|
|
|
$
|
394
|
|
|
|
|
2013
|
|
|
|
|
823
|
|
|
|
|
2014
|
|
|
|
|
610
|
|
|
|
|
2015
|
|
|
|
|
522
|
|
|
|
|
2016
|
|
|
|
|
368
|
|
|
|
|
Thereafter
|
|
|
|
|
1,111
|
|
|
|
|
Total
|
|
|
|
$
|
3,828
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2012 |
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
$
|
4
|
|
|
|
|
Accounts receivable, less allowance for doubtful accounts of $357
|
|
|
|
|
10,793
|
|
|
|
|
Trade receivable
|
|
|
|
|
362
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
459
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
145
|
|
|
|
|
Total current assets
|
|
|
|
|
11,763
|
|
|
|
|
Property and equipment, net
|
|
|
|
|
12,237
|
|
|
|
|
Broadcast licenses
|
|
|
|
|
61,384
|
|
|
|
|
Other intangible assets, net
|
|
|
|
|
11,862
|
|
|
|
|
Goodwill
|
|
|
|
|
66,808
|
|
|
|
|
Other assets
|
|
|
|
|
2,079
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
451
|
|
|
|
|
Total assets
|
|
|
|
$
|
166,584
|
|
|
|
|
Liabilities and Invested Equity
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
$
|
1,680
|
|
|
|
|
Trade payable
|
|
|
|
|
414
|
|
|
|
|
Accrued income taxes payable
|
|
|
|
|
3,660
|
|
|
|
|
Current portion of long-term debt
|
|
|
|
|
3,348
|
|
|
|
|
Total current liabilities
|
|
|
|
|
9,102
|
|
|
|
|
Long-term debt
|
|
|
|
|
114,915
|
|
|
|
|
Other liabilities
|
|
|
|
|
108
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
17,893
|
|
|
|
|
Total liabilities
|
|
|
|
|
142,018
|
|
|
|
|
Invested equity from Cumulus Media, Inc
|
|
|
|
|
24,566
|
|
|
|
|
Total liabilities and invested equity
|
|
|
|
$
|
166,584
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2012 |
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Broadcast revenue
|
|
|
|
$
|
74,310
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Direct operating expenses (excluding depreciation, amortization and LMA fees)
|
|
|
|
|
38,627
|
|
|
|
|
Corporate allocation from Cumulus Media, Inc. (including allocated stock-based compensation expense of $636)
|
|
|
|
|
2,869
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
6,568
|
|
|
|
|
LMA fees
|
|
|
|
|
91
|
|
|
|
|
Impairment of intangible assets
|
|
|
|
|
1,156
|
|
|
|
|
Total operating expenses
|
|
|
|
|
49,311
|
|
|
|
|
Operating income
|
|
|
|
|
24,999
|
|
|
|
|
Non-operating (expense) income:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(8,697
|
)
|
|
|
|
Loss on early extinguishment of debt
|
|
|
|
|
(106
|
)
|
|
|
|
Other income, net
|
|
|
|
|
5
|
|
|
|
|
Total non-operating expense, net
|
|
|
|
|
(8,798
|
)
|
|
|
|
Income before income taxes
|
|
|
|
|
16,201
|
|
|
|
|
Income tax expense
|
|
|
|
|
(6,567
|
)
|
|
|
|
Net income
|
|
|
|
$
|
9,634
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
December 31, 2012 |
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
9,634
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
6,568
|
|
|
|
|
Amortization of debt issuance costs/discounts
|
|
|
|
|
475
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
500
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
636
|
|
|
|
|
Loss on early extinguishment of debt
|
|
|
|
|
106
|
|
|
|
|
Impairment of intangible assets
|
|
|
|
|
1,156
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
2,907
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
337
|
|
|
|
|
Trade receivable
|
|
|
|
|
490
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
(11
|
)
|
|
|
|
Other assets
|
|
|
|
|
(15
|
)
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
1,768
|
|
|
|
|
Trade payable
|
|
|
|
|
(234
|
)
|
|
|
|
Other liabilities
|
|
|
|
|
(147
|
)
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
24,170
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(75
|
)
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(75
|
)
|
|
|
|
Cash flows from financing activities:
|
|
| | | | | | |
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(17,413
|
)
|
|
|
|
Repayment of long-term debt
|
|
|
|
|
(7,602
|
)
|
|
|
|
Proceeds from borrowings under long-term debt
|
|
|
|
|
919
|
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(24,096
|
)
|
|
|
|
Decrease in cash and cash equivalents
|
|
|
|
|
(1
|
)
|
|
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
|
5
|
|
|
|
|
Cash and cash equivalents at end of period
|
|
|
|
$
|
4
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Income taxes paid (refunds)
|
|
|
|
|
—
|
|
|
|
|
Supplemental disclosures of non-cash flow information:
|
|
|
|
|
|
|
|
|
|
Trade revenue
|
|
|
|
|
2,709
|
|
|
|
|
Trade expense
|
|
|
|
|
2,917
|
|
|
|
|
Balance, January 1, 2012
|
|
|
|
$
|
32,345
|
|
|
|
|
Net income
|
|
|
|
|
9,634
|
|
|
|
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(17,413
|
)
|
|
|
|
Balance, December 31, 2012
|
|
|
|
$
|
24,566
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2012
|
|
|
|
$
|
32,345
|
|
|
|
|
Net income
|
|
|
|
|
9,634
|
|
|
|
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(17,413
|
)
|
|
|
|
Balance, December 31, 2012
|
|
|
|
$
|
24,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated
Useful Life |
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Land
|
|
|
|
|
|
|
$
|
3,097
|
|
|
|
|
Broadcasting and other equipment
|
|
|
3 to 7 years
|
|
|
|
|
22,111
|
|
|
|
|
Computer and capitalized software costs
|
|
|
1 to 3 years
|
|
|
|
|
1,059
|
|
|
|
|
Furniture and fixtures
|
|
|
5 years
|
|
|
|
|
2,055
|
|
|
|
|
Leasehold improvements
|
|
|
5 years
|
|
|
|
|
732
|
|
|
|
|
Buildings
|
|
|
20 years
|
|
|
|
|
7,901
|
|
|
|
|
Construction in progress
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
36,982
|
|
|
|
|
Less: accumulated depreciation
|
|
|
|
|
|
|
|
(24,745
|
)
|
|
|
|
|
|
|
|
|
|
|
$
|
12,237
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Indefinite-Lived
|
|
|
Definite-Lived
|
|
|
Total
|
|
||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Intangible Assets:
|
|
| | | | | | | | | | | | | | | | | | | | |
|
Balance as of January 1, 2012
|
|
|
|
$
|
62,540
|
|
|
|
|
|
$
|
16,874
|
|
|
|
|
|
$
|
79,414
|
|
|
|
|
Impairments
|
|
|
|
|
(1,156
|
)
|
|
|
|
|
|
—
|
|
|
|
|
|
|
(1,156
|
)
|
|
|
|
Amortization
|
|
|
|
|
—
|
|
|
|
|
|
|
(5,012
|
)
|
|
|
|
|
|
(5,012
|
)
|
|
|
|
Balance as of December 31, 2012
|
|
|
|
$
|
61,384
|
|
|
|
|
|
$
|
11,862
|
|
|
|
|
|
$
|
73,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013
|
|
|
|
$
|
3,871
|
|
|
|
|
2014
|
|
|
|
|
2,990
|
|
|
|
|
2015
|
|
|
|
|
2,307
|
|
|
|
|
2016
|
|
|
|
|
1,750
|
|
|
|
|
2017
|
|
|
|
|
944
|
|
|
|
|
Total other intangibles, net
|
|
|
|
$
|
11,862
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Accounts payable
|
|
|
|
$
|
207
|
|
|
|
|
Accrued employee costs
|
|
|
|
|
685
|
|
|
|
|
Accrued other
|
|
|
|
|
320
|
|
|
|
|
Accrued real estate taxes
|
|
|
|
|
108
|
|
|
|
|
Accrued interest
|
|
|
|
|
360
|
|
|
|
|
Total accounts payable and accrued expenses
|
|
|
|
$
|
1,680
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Current income tax expense:
|
|
| | | | | | |
|
Federal
|
|
|
|
$
|
2,895
|
|
|
|
|
State and local
|
|
|
|
|
765
|
|
|
|
|
Total current income tax expense
|
|
|
|
$
|
3,660
|
|
|
|
|
Deferred tax expense:
|
|
| | | | | | |
|
Federal
|
|
|
|
$
|
2,300
|
|
|
|
|
State and local
|
|
|
|
|
607
|
|
|
|
|
Total deferred tax expense
|
|
|
|
|
2,907
|
|
|
|
|
Total income tax expense
|
|
|
|
$
|
6,567
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Pretax income at federal statutory rate
|
|
|
|
$
|
5,670
|
|
|
|
|
State income tax expense, net of tax benefit
|
|
|
|
|
892
|
|
|
|
|
Other
|
|
|
|
|
5
|
|
|
|
|
Net income tax expense
|
|
|
|
$
|
6,567
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
Current deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
$
|
145
|
|
|
|
|
Noncurrent deferred tax assets:
|
|
|
|
|
|
|
|
|
|
Stock compensation cost
|
|
|
|
|
257
|
|
|
|
|
Property and equipment
|
|
|
|
|
194
|
|
|
|
|
|
|
|
|
|
451
|
|
|
|
|
Noncurrent deferred tax liabilities:
|
|
| | | | | | |
|
Intangible assets
|
|
|
|
|
17,893
|
|
|
|
|
Net noncurrent deferred tax liabilities
|
|
|
|
|
17,893
|
|
|
|
|
Net deferred tax liabilities
|
|
|
|
$
|
17,297
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
$
|
61,491
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
Direct operating expenses (excluding depreciation and amortization)
|
|
|
|
|
32,734
|
|
|
|
|
Corporate allocation from Cumulus Media, Inc. (including allocated
stock-based compensation expense of $435) |
|
|
|
|
2,484
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,439
|
|
|
|
|
Loss on exchange of assets or stations
|
|
|
|
|
3
|
|
|
|
|
Total operating expenses
|
|
|
|
|
39,660
|
|
|
|
|
Operating income
|
|
|
|
|
21,831
|
|
|
|
|
Other expense:
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
|
|
(6,839
|
)
|
|
|
|
Loss on early extinguishment of debt
|
|
|
|
|
(199
|
)
|
|
|
|
Income before income taxes
|
|
|
|
|
14,793
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
5,956
|
|
|
|
|
Net income
|
|
|
|
$
|
8,837
|
|
|
|
|
|
|
|
|
|
|
Balance, January 1, 2013
|
|
|
|
$
|
24,566
|
|
|
|
|
Net income
|
|
|
|
|
8,837
|
|
|
|
|
Net distributions to Cumulus Media, Inc.
|
|
|
|
|
(16,317
|
)
|
|
|
|
Balance, November 13, 2013
|
|
|
|
$
|
17,086
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
$
|
8,837
|
|
|
|
|
Adjustments to reconcile net income to net cash provided by (used for) operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
4,439
|
|
|
|
|
Amortization of debt issuance costs/discounts
|
|
|
|
|
381
|
|
|
|
|
Provision for doubtful accounts
|
|
|
|
|
231
|
|
|
|
|
Stock-based compensation expense
|
|
|
|
|
435
|
|
|
|
|
Loss on sale of assets
|
|
|
|
|
1
|
|
|
|
|
Loss on early extinguishment of debt
|
|
|
|
|
199
|
|
|
|
|
Deferred income taxes
|
|
|
|
|
3,263
|
|
|
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
37
|
|
|
|
|
Trade receivables
|
|
|
|
|
(534
|
)
|
|
|
|
Accrued income taxes payable
|
|
|
|
|
2,693
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
|
|
246
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
|
(702
|
)
|
|
|
|
Accrued interest
|
|
|
|
|
272
|
|
|
|
|
Trade payable
|
|
|
|
|
645
|
|
|
|
|
Other liabilities
|
|
|
|
|
(2
|
)
|
|
|
|
Net cash provided by operating activities
|
|
|
|
|
20,441
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
|
|
(227
|
)
|
|
|
|
Net cash used in investing activities
|
|
|
|
|
(227
|
)
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
Net distributions to Cumulus Media, Inc
|
|
|
|
|
(16,317
|
)
|
|
|
|
Repayment of long-term debt
|
|
|
|
|
(3,894
|
)
|
|
|
|
Deferred financing costs
|
|
|
|
|
(3
|
)
|
|
|
|
Net cash used in financing activities
|
|
|
|
|
(20,214
|
)
|
|
|
|
Net change in cash
|
|
|
|
|
—
|
|
|
|
|
Cash at beginning of period
|
|
|
|
|
4
|
|
|
|
|
Cash at end of period
|
|
|
|
$
|
4
|
|
|
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
|
|
$
|
6,081
|
|
|
|
|
Income taxes paid
|
|
|
|
|
135
|
|
|
|
|
Supplemental disclosures of non-cash flow information:
|
|
|
|
|
|
|
|
|
|
Trade revenue
|
|
|
|
$
|
2,744
|
|
|
|
|
Trade expense
|
|
|
|
|
2,694
|
|
|
|
|
|
|
|
|
|
|
2013 (remainder)
|
|
|
|
$
|
643
|
|
|
|
|
2014
|
|
|
|
|
2,990
|
|
|
|
|
2015
|
|
|
|
|
2,307
|
|
|
|
|
2016
|
|
|
|
|
1,750
|
|
|
|
|
2017
|
|
|
|
|
944
|
|
|
|
|
Total other intangibles, net
|
|
|
|
$
|
8,634
|
|
|
|
|
|
|
|
|
|
Current income tax expense:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
|
$
|
2,117
|
|
|
|
|
State and local
|
|
|
|
|
576
|
|
|
|
|
Total current income tax expense
|
|
|
|
|
2,693
|
|
|
|
|
Deferred tax expense:
|
|
|
|
|
|
|
|
|
|
Federal
|
|
|
|
$
|
2,581
|
|
|
|
|
State and local
|
|
|
|
|
682
|
|
|
|
|
Total deferred tax expense
|
|
|
|
|
3,263
|
|
|
|
|
Total provision for income taxes
|
|
|
|
$
|
5,956
|
|
|
|
|
|
|
|
|
|
Pretax income at federal statutory rate
|
|
|
|
$
|
5,177
|
|
|
|
|
State income tax expense, net of tax benefit
|
|
|
|
|
814
|
|
|
|
|
Other, net
|
|
|
|
|
(35
|
)
|
|
|
|
Net provision for income taxes
|
|
|
|
$
|
5,956
|
|
|
|
|
|
|
|
|
|
Year Ending December 31:
|
|
|
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
2013 (remainder)
|
|
|
|
$
|
191
|
|
|
|
|
2014
|
|
|
|
|
1,396
|
|
|
|
|
2015
|
|
|
|
|
1,258
|
|
|
|
|
2016
|
|
|
|
|
971
|
|
|
|
|
2017
|
|
|
|
|
801
|
|
|
|
|
Thereafter
|
|
|
|
|
2,977
|
|
|
|
|
Total
|
|
|
|
$
|
7,594
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
|
|
||||
---|---|---|---|---|---|---|---|---|---|
|
SEC registration fee
|
|
|
|
$
|
19,749
|
|
|
|
|
FINRA filing fee
|
|
|
|
|
21,413
|
|
|
|
|
Listing fee
|
|
|
|
|
150,000
|
|
|
|
|
Printing expenses
|
|
|
|
|
500,000
|
|
|
|
|
Accounting fees and expenses
|
|
|
|
|
600,000
|
|
|
|
|
Legal fees and expenses
|
|
|
|
|
1,500,000
|
|
|
|
|
Blue Sky fees and expenses
|
|
|
|
|
5,000
|
|
|
|
|
Transfer Agent and Registrar fees and expenses
|
|
|
|
|
10,000
|
|
|
|
|
Miscellaneous expenses
|
|
|
|
|
150,000
|
|
|
|
|
Total
|
|
|
|
$
|
2,956,162
|
|
|
|
|
|
|
|
|
|
By:
|
|
|
/s/ Stuart Rosenstein
|
|
|
|
|
|
Name: Stuart Rosenstein
|
|
|
|
|
|
Title: Executive Vice President and Chief
Financial Officer |
|
|
|
|
|
|
Name
|
|
|
Title
|
|
|
Date
|
|
|||
---|---|---|---|---|---|---|---|---|---|---|---|
|
/s/ Steven Price
|
|
|
Chief Executive Officer and Chairman (Principal Executive Officer) |
|
|
July
14
, 2014
|
|
|||
|
/s/ Stuart Rosenstein
|
|
|
Executive Vice President and Chief Financial
Officer
(Principal Financial and Accounting Officer) |
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
Director
|
|
|
July
14
, 2014
|
|
|||
|
*
|
|
|
/s/ Stuart Rosenstein
as Attorney-in-fact |
|
|
|
|
| | |
|
|
|
|
|
|
|
|
|
Exhibit
No. |
|
|
Description
|
|
---|---|---|---|---|---|
|
1.1*
|
|
|
Form of Underwriting Agreement
|
|
|
2.1*
¥
|
|
|
Asset Purchase and Exchange Agreement, dated as of April 28, 2012, among Townsquare Radio, LLC, Townsquare Media of Bloomington, Inc., Townsquare Media of Peoria, Inc. and companies set forth as Townsquare Purchasers on the signature page thereto and Cumulus Media Inc., Cumulus Broadcasting LLC, Cumulus Licensing LLC, Citadel Broadcasting Company and Radio License Holding CBC, LLC
|
|
|
2.2*
¥
|
|
|
Asset Purchase and Exchange Agreement, dated as of August 30, 2013, among Townsquare Radio, LLC, on the one hand, and Cumulus Media Holdings Inc., Cumulus Broadcasting LLC and Cumulus Licensing LLC
|
|
|
2.3*
¥
|
|
|
Asset Purchase Agreement, dated as of August 30, 2013, among Townsquare Radio, LLC and Cumulus Media Holdings Inc., Cumulus Broadcasting LLC, Cumulus Licensing LLC, Citadel Broadcasting Company and Radio License Holding CBC, LLC
|
|
|
2.4**
|
|
|
Form of Plan of Conversion of Townsquare Media, LLC, to be effective prior to the completion of this offering
|
|
|
3.1*
|
|
|
Form of Certificate of Incorporation of Townsquare Media, Inc.
|
|
|
3.2*
|
|
|
Form of Bylaws of Townsquare Media, Inc.
|
|
|
4.1
†
|
|
|
Indenture, dated as of April 4, 2012, by and among Townsquare Radio, LLC, Townsquare Radio, Inc., the guarantors party thereto and Wilmington Trust, National Association, as Trustee
|
|
|
4.2
†
|
|
|
Third Supplemental Indenture, dated as of February 19, 2014, by and among Townsquare Radio, LLC, Townsquare Radio, Inc., the guarantors party thereto and Wilmington Trust, National Association, as Trustee
|
|
|
4.3*
|
|
|
Form of Warrant Agreement
|
|
|
4.4*
|
|
|
Specimen Class A Common Stock Certificate
|
|
|
5.1**
|
|
|
Form of Opinion of Kirkland & Ellis LLP
|
|
|
10.1
†
|
|
|
Credit Agreement, dated as of April 4, 2012, by and among Townsquare Radio, LLC, Townsquare Radio Holdings, LLC, General Electric Capital Corporation, as Administrative Agent and Collateral Agent, and the lenders party thereto
|
|
|
10.2
†
|
|
|
Amendment No. 1 to Credit Agreement, dated as of November 7, 2012, by and among Townsquare Radio, LLC, Townsquare Radio Holdings, LLC, General Electric Capital Corporation, as Administrative Agent and Collateral Agent, and the lenders party thereto
|
|
|
10.3
†
|
|
|
Amendment No. 2 to Credit Agreement, dated as of August 30, 2013, by and among Townsquare Radio, LLC, Townsquare Radio Holdings, LLC, General Electric Capital Corporation, as Administrative Agent and Collateral Agent, and the lenders party thereto
|
|
|
10.4*
|
|
|
Amendment No. 3 to Credit Agreement, dated as of July 11, 2014, by and among Townsquare Radio, LLC, Townsquare Radio Holdings, LLC, General Electric Capital Corporation, as Administrative Agent, and the lenders party thereto.
|
|
|
10.
5
*
|
|
|
Form of
Second Amended and Restated
Registration Agreement
|
|
|
10.
6
*
|
|
|
Form of Stockholders’ Agreement
|
|
|
10.
7
*
|
|
|
Form of Selldown Agreement
|
|
|
10.
8
*
|
|
|
Form of 2014 Omnibus Incentive Plan
|
|
|
10.
9
*
|
|
|
Form of Option Grant Agreement
|
|
|
10.10**
|
|
|
Form of Option Grant at IPO
|
|
|
10.
11
*
|
|
|
Form of Indemnification Agreement
|
|
|
21.1*
|
|
|
List of Subsidiaries of Townsquare Media, LLC
|
|
|
23.1*
|
|
|
Consent of McGladrey LLP
|
|
|
23.2*
|
|
|
Consent of McGladrey LLP with respect to Cumulus I Markets
|
|
|
23.3*
|
|
|
Consent of McGladrey LLP with respect to Cumulus II Markets
|
|
|
|
|
|
|
Exhibit
No. |
|
|
Description
|
|
---|---|---|---|---|---|
|
23.4*
|
|
|
Consent of PricewaterhouseCoopers LLP
|
|
|
23.5**
|
|
|
Consent of Kirkland & Ellis LLP (included in Exhibit 5.1)
|
|
|
24.1
†
|
|
|
Power of Attorney (previously included on the signature page of this Registration Statement)
|
|
|
|
|
|
Exhibit 1.1
TOWNSQUARE MEDIA, LLC
(a Delaware limited liability company)
[●] Shares of Common Stock
UNDERWRITING AGREEMENT
Dated: [●], 2014
TOWNSQUARE MEDIA, LLC
(a Delaware limited liability company)
[●] Shares of Common Stock
UNDERWRITING AGREEMENT
[●], 2014
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Jefferies LLC
RBC Capital Markets, LLC
as Representatives of the several Underwriters
c/o Merrill Lynch, Pierce, Fenner & Smith
Incorporated
One Bryant Park
New York, New York 10036
Ladies and Gentlemen:
Townsquare Media, LLC, a Delaware limited liability company (“ Company ”), which shall be converted into a Delaware corporation by the name of Townsquare Media, Inc., a Delaware corporation (the “ Corporation ”) confirms its respective agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ Merrill Lynch ”) and each of the other Underwriters named in Schedule A hereto (collectively, the “ Underwriters ,” which term shall also include any underwriter substituted as hereinafter provided in Section 10 hereof), for whom Merrill Lynch, Jefferies LLC and RBC Capital Markets, LLC are acting as representatives (in such capacity, the “ Representatives ”), with respect to (i) the sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the respective numbers of shares of Common Stock, par value $0.01 per share, of the Corporation (“ Common Stock ”) set forth in Schedules A and B hereto and (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of [●] additional shares of Common Stock. The aforesaid [●] shares of Common Stock (the “ Initial Securities ”) to be purchased by the Underwriters and all or any part of the [●] shares of Common Stock subject to the option described in Section 2(b) hereof (the “ Option Securities ”) are herein called, collectively, the “ Securities .”
The Company understands that the Underwriters propose to make a public offering of the Securities as soon as the Representatives deem(s) advisable after this Agreement has been executed and delivered.
The Company and the Underwriters agree that up to [●] shares of the Initial Securities to be purchased by the Underwriters (the “ Reserved Securities ”) shall be reserved for sale by the Underwriters to certain persons designated by the Company (the “ Invitees ”), as part of the distribution of the Securities by the Underwriters, subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the Financial Industry Regulatory Authority, Inc. (“ FINRA ”) and all other applicable laws, rules and regulations. The Company solely determined, without any direct or indirect participation by the
Underwriters, the Invitees who will purchase Reserved Securities (including the amount to be purchased by such persons) sold by the Underwriters. To the extent that such Reserved Securities are not orally confirmed for purchase by Invitees by 9:00 A.M. (New York City time) on the first business day after the date of this Agreement, such Reserved Securities may be offered to the public as part of the public offering contemplated hereby.
The Company has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement on Form S-1 (No. 333-197002), including the related preliminary prospectus or prospectuses, covering the registration of the sale of the Securities under the Securities Act of 1933, as amended (the “ 1933 Act ”). Promptly after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule 430A (“ Rule 430A ”) of the rules and regulations of the Commission under the 1933 Act (the “ 1933 Act Regulations ”) and Rule 424(b) (“ Rule 424(b) ”) of the 1933 Act Regulations. The information included in such prospectus that was omitted from such registration statement at the time it became effective but that is deemed to be part of such registration statement at the time it became effective pursuant to Rule 430A(b) is herein called the “ Rule 430A Information .” Such registration statement, including the amendments thereto, the exhibits thereto and any schedules thereto, at the time it became effective, and including the Rule 430A Information, is herein called the “ Registration Statement .” Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein called the “Rule 462(b) Registration Statement” and, after such filing, the term “Registration Statement” shall include the Rule 462(b) Registration Statement. Each prospectus used prior to the effectiveness of the Registration Statement, and each prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior to the execution and delivery of this Agreement, is herein called a “ preliminary prospectus .” The final prospectus, in the form first furnished to the Underwriters for use in connection with the offering of the Securities, is herein called the “ Prospectus .” For purposes of this Agreement, all references to the Registration Statement, any preliminary prospectus, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system or any successor system (“ EDGAR ”).
As used in this Agreement:
“ Applicable Time ” means [●], New York City time, on [●], 2014 or such other time as agreed by the Company and Merrill Lynch.
“ General Disclosure Package ” means any Issuer General Use Free Writing Prospectuses issued at or prior to the Applicable Time, the most recent preliminary prospectus that is distributed to investors prior to the Applicable Time and the information included on Schedule C-1 hereto, all considered together.
“ Issuer Free Writing Prospectus ” means any “issuer free writing prospectus,” as defined in Rule 433 of the 1933 Act Regulations (“ Rule 433 ”), including without limitation any “free writing prospectus” (as defined in Rule 405 of the 1933 Act Regulations (“ Rule 405 ”)) relating to the Securities that is (i) required to be filed with the Commission by the Company, (ii) a “road show that is a written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission, or (iii) exempt from filing with the Commission pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).
“ Issuer General Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors (other than a “ bona fide electronic road
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show,” as defined in Rule 433 (the “ Bona Fide Electronic Road Show ”)), as evidenced by its being specified in Schedule C-2 hereto.
“ Issuer Limited Use Free Writing Prospectus ” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.
“ Testing-the-Waters Communication ” means any oral or written communication with potential investors undertaken in reliance on Section 5(d) of the 1933 Act.
“ Written Testing-the-Waters Communication ” means any Testing-the-Waters Communication that is a written communication within the meaning of Rule 405 under the 1933 Act.
SECTION 1. Representations and Warranties . The Company represents and warrants to each Underwriter as of the date hereof, the Applicable Time, the Closing Time (as defined below) and any Date of Delivery (as defined below), and agrees with each Underwriter, as follows:
(a) Registration Statement and Prospectuses . Each of the Registration Statement and any post-effective amendment thereto has become effective under the 1933 Act. No stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated. The Company has complied with each request (if any) from the Commission for additional information.
Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus, the Prospectus and any amendment or supplement thereto, at the time each was filed with the Commission, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations. Each preliminary prospectus delivered to the Underwriters for use in connection with this offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(b) Accurate Disclosure . Neither the Registration Statement nor any amendment thereto, at its effective time, at the Closing Time or at any Date of Delivery, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. As of the Applicable Time, none of (A) the General Disclosure Package and (B) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, when considered together with the General Disclosure Package, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Neither the Prospectus nor any amendment or supplement thereto (including any prospectus wrapper), as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), at the Closing Time or at any Date of Delivery, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
The representations and warranties in this subsection shall not apply to statements in or omissions from the Registration Statement (or any amendment thereto), the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) made in reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives
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expressly for use therein. For purposes of this Agreement, the only information so furnished shall be the information in the first paragraph under the heading “Underwriting—Commissions and Discounts,” the information in the second, third and fourth paragraphs under the heading “Underwriting—Price Stabilization, Short Positions and Penalty Bids” and the information contained under the heading “Underwriting—Electronic Distribution” in each case contained in the Prospectus (collectively, the “ Underwriter Information ”).
(c) Issuer Free Writing Prospectuses . No Issuer Free Writing Prospectus conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, and any preliminary or other prospectus deemed to be a part thereof that has not been superseded or modified. The Company has made available a Bona Fide Electronic Road Show in compliance with Rule 433(d)(8)(ii) such that no filing of any “road show” (as defined in Rule 433(h)) is required in connection with the offering of the Securities.
(d) Testing-the-Waters Materials . The Company (A) has not engaged in any Testing-the-Waters Communication and (B) has not authorized anyone other than the Representatives to engage in Testing-the-Waters Communications. The Company reconfirms that the Representatives have been authorized to act on its behalf in undertaking Testing-the-Waters Communications.
(e) Company Not Ineligible Issuer . At the time of filing the Registration Statement and any post-effective amendment thereto, at the earliest time thereafter that the Company or another offering participant made a bona fide offer (within the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405, without taking account of any determination by the Commission pursuant to Rule 405 that it is not necessary that the Company be considered an ineligible issuer.
(f) Emerging Growth Company Status . From the time of the initial confidential submission of the Registration Statement to the Commission (or, if earlier, the first date on which the Company engaged directly or through any Person authorized to act on its behalf in any Testing-the-Waters Communication) through the date hereof, the Company has been and is an “emerging growth company,” as defined in Section 2(a) of the Securities Act (an “ Emerging Growth Company ”).
(g) Independent Accountants . (i) McGladrey LLP, which expressed its opinion with respect to the financial statements (which term as used in this Agreement includes the related notes thereto) and supporting schedules included in the Registration Statement, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm within the meaning of the 1933 Act, the Securities Exchange Act of 1934 (the “ 1934 Act ”) and the rules of the Public Company Accounting Oversight Board, and any non-audit services provided by McGladrey LLP to the Company have been approved by the Audit Committee of the Boards of Directors of the Company, (ii) PricewaterhouseCoopers LLP, which expressed its opinion with respect to the financial statements and supporting schedules of Cumulus Media, Inc. and its consolidated subsidiaries included in the Registration Statement, the General Disclosure Package and the Prospectus, is an independent registered public accounting firm within the meaning of the 1933 Act, the 1934 Act and the rules of the Public Company Accounting Oversight Board, and any non-audit services provided by PricewaterhouseCoopers LLP to Cumulus Media, Inc. and its subsidiaries have been approved by the Audit Committee of the Boards of Directors of Millennium Group Radio LLC.
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(h) Financial Statements . The financial statements, together with the related schedules and notes, included in the Registration Statement, the General Disclosure Package and the Prospectus present fairly in all material respects the consolidated financial position of the entities to which they relate as of and at the dates indicated and the results of their operations and cash flows for the periods specified. Such financial statements have been prepared in conformity with generally accepted accounting principles as applied in the United States (“ GAAP ”) applied on a consistent basis throughout the periods involved, except as may be expressly stated in the related notes thereto and, in the case of unaudited financial statements, subject to normal year end audit adjustments and the exclusion of certain footnotes as permitted by the applicable rules of the Commission. The financial data set forth in the Registration Statement, the General Disclosure Package and the Prospectus under the caption “Prospectus Summary—Summary Historical and Unaudited Pro Forma Consolidated Financial and Other Data” fairly present in all material respects, the information set forth therein and have been compiled on a basis consistent with that of the audited financial statements contained in the Registration Statement. The unaudited pro forma condensed consolidated financial statements of the Company, and its subsidiaries and the related notes thereto included under the captions “Prospectus Summary—Summary Historical and Unaudited Pro Forma Consolidated Financial and Other Data,” “Unaudited Pro Forma Condensed Consolidated Financial Information” and elsewhere in the Registration Statement, the General Disclosure Package and the Prospectus present fairly the information contained therein, have been prepared in accordance with the Commission’s rules and guidelines with respect to pro forma financial statements and have been properly presented on the bases described therein, and the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions and circumstances referred to therein. The statistical and market-related data and forward-looking statements included in the Registration Statement, the General Disclosure Package and the Prospectus are based on or derived from sources that the Company and its subsidiaries believe to be reliable and accurate in all material respects and represent their good faith estimates that are made on the basis of data derived from such sources.
(i) No Material Adverse Change in Business . Except as otherwise disclosed in the Registration Statement, the General Disclosure Package or the Prospectus (exclusive of any amendment or supplement thereto), subsequent to the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus (exclusive of any amendment or supplement thereto): (i) there has been no material adverse change in the condition, financial or otherwise, or in the business or operations or business prospects, whether or not arising from transactions in the ordinary course of business, of the Company and its subsidiaries, taken as a whole (any such change is called a “ Material Adverse Change ”) and (ii) the Company and its subsidiaries, considered as one entity, have not incurred any liability or obligation, indirect, direct or contingent, not in the ordinary course of business nor entered into any material transaction or agreement not in the ordinary course of business, in each case, material to the Company and its subsidiaries, taken as a whole.
(j) Incorporation and Good Standing of the Company and Its Subsidiaries . Each of the Company and its subsidiaries has been duly incorporated, organized or formed, as applicable, and is validly existing as a corporation, limited partnership or limited liability company, as applicable, in good standing under the laws of the jurisdiction of its incorporation or formation, as applicable, and has corporate, partnership or limited liability company, as applicable, power and authority (i) to own, lease and operate its properties and to conduct its business as described in the Registration Statement, the General Disclosure Package and the Prospectus, except where the failure to do so, be in good standing or to possess the power and authority, as the case may be, would not reasonably be expected to result in a Material Adverse Change and (ii) in the case of
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the Company, to enter into and perform its obligations under each of the Transaction Documents to which it is a party. Each of the Company and its subsidiaries is duly qualified as a foreign corporation, limited partnership or limited liability company, as applicable, to transact business and is in good standing or any equivalent status in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business, except for such jurisdictions where the failure to so qualify or to be in good standing would not, individually or in the aggregate, result in a Material Adverse Change. All of the issued and outstanding capital stock or other ownership interest of each subsidiary has been duly authorized and validly issued, is fully paid and, with respect to the capital stock of any corporation, non-assessable, and is owned by the Company, as the case may be, directly or through subsidiaries, free and clear of any security interest, mortgage, pledge, lien, encumbrance or claim, except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus. None of the outstanding shares of capital stock of any Subsidiary were issued in violation of the preemptive or similar rights of any securityholder of such Subsidiary. The only subsidiaries of the Company are (A) the subsidiaries listed on Exhibit 21 to the Registration Statement.
(k) Capitalization . The authorized, issued and outstanding shares of capital stock of the Company are as set forth in the Registration Statement, the General Disclosure Package and the Prospectus in the column entitled “Actual” under the caption “Capitalization” (except for subsequent issuances, if any, pursuant to this Agreement, pursuant to reservations, agreements or employee benefit plans referred to in the Registration Statement, the General Disclosure Package and the Prospectus or pursuant to the exercise of convertible securities or options referred to in the Registration Statement, the General Disclosure Package and the Prospectus). The outstanding shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and non-assessable. None of the outstanding shares of capital stock of the Company were issued in violation of the preemptive or other similar rights of any securityholder of the Company.
(l) Authorization of Agreement . This Agreement has been duly authorized, executed and delivered by the Company.
(m) Authorization and Description of Securities . The Securities to be purchased by the Underwriters from the Company have been duly authorized for issuance and sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the Company pursuant to this Agreement against payment of the consideration set forth herein, will be validly issued and fully paid and non-assessable; and the issuance of the Securities is not subject to the preemptive or other similar rights of any securityholder of the Company. The Common Stock conforms in all material respects to all statements relating thereto contained in the Registration Statement, the General Disclosure Package and the Prospectus and such description conforms in all material respects to the rights set forth in the instruments defining the same. No holder of Securities will be subject to personal liability by reason of being such a holder.
(n) Registration Rights . There are no persons with registration rights or other similar rights to have any securities registered for sale pursuant to the Registration Statement or otherwise registered for sale or sold by the Company under the 1933 Act pursuant to this Agreement, other than those rights that have been disclosed in the Registration Statement, the General Disclosure Package and the Prospectus and have been waived.
(o) Non-Contravention of Existing Instruments; No Further Authorizations or Approvals Required . None of the Company or its subsidiaries is (i) in violation of its charter, bylaws or other similar organizational document or (ii) in default (or, with the giving of notice or lapse of time, would be in default) (“ Default ”) under any indenture, mortgage, loan or credit
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agreement, note, contract, franchise, lease or other instrument to which the Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to which any of the property or assets of the Company or any of its subsidiaries is subject (each, an “ Existing Instrument ”), except, in the case of clause (ii) above, for such Defaults as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change. The execution, delivery and performance of this Agreement by the Company, and the issuance and sale of the Securities, and consummation of the transactions contemplated hereby and in the Registration Statement, the General Disclosure Package and the Prospectus (i) have been duly authorized by all necessary corporate action and will not result in any violation of the provisions of the charter, bylaws or other constitutive document of the Company or any of its subsidiaries, (ii) will not conflict with or constitute a breach of, or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, or require the consent of any other party to, any Existing Instrument, except for such conflicts, breaches, Defaults, Debt Repayment Triggering Events, liens, charges or encumbrances as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change and (iii) will not result in any violation of any law, administrative regulation or administrative or court decree applicable to the Company or any of its subsidiaries, the violation of which would result in a Material Adverse Change. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency is required (including, without limitation, under the Communications Act of 1934, as amended (the “ Communications Act ”) and the rules and regulations of the Federal Communications Commission (the “ FCC ”) (all such statutes, laws, rules and regulations, including the Communications Act, the “ Communications Laws ”)), judgment, order or decree of any court, regulatory body, administrative agency (including, without limitation, the FCC) for the execution, delivery and performance of this Agreement by the Company, or the issuance and sale of the Securities, or consummation of the transactions contemplated hereby and by the Registration Statement, the General Disclosure Package and the Prospectus, except (i) such as have been obtained or made by the Company (ii) as may be required by the securities laws of the several states of the United States or provinces of Canada or (iii) to the extent the failure to obtain any such consent, approval, authorization or other order of, or registration or filing could not reasonably be expected to have a Material Adverse Change; provided , however , that certain Transaction Documents must be filed with the FCC within thirty days of execution. As used herein, a “ Debt Repayment Triggering Event ” means any event or condition which gives, or with the giving of notice or lapse of time would give, the holder of any note, debenture or other evidence of indebtedness (or any person acting on such holder’s behalf) the right to require the repurchase, redemption or repayment of all or a portion of such indebtedness by the Company or any of its respective subsidiaries.
(p) Compliance with ERISA . The Company and its subsidiaries and any “employee benefit plan” (as defined under the Employee Retirement Income Security Act of 1974 (as amended, “ ERISA ,” which term, as used herein, includes the regulations and published interpretations thereunder) established or maintained by the Company, its subsidiaries or their ERISA Affiliates (as defined below) are in compliance in all material respects with ERISA and, to the knowledge of the Company, each “multiemployer plan” (as defined in Section 4001 of ERISA) to which the Company, its subsidiaries or an ERISA Affiliate contributes (a “ Multiemployer Plan ”) is in compliance in all material respects with ERISA, except where any failure to comply would not, individually or in the aggregate, result in a Material Adverse Change. “ ERISA Affiliate ” means, with respect to the Company or a subsidiary, any member of any group of organizations described in Section 414 of the Internal Revenue Code of 1986 (as amended, the “ Code ,” which term, as used herein, includes the regulations and published
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interpretations thereunder) of which the Company or such subsidiary is a member. No “reportable event” (as defined under Section 4043(c) ERISA) has occurred or is reasonably expected to occur with respect to any “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that would reasonably be expected to result in a Material Adverse Change. No “single employer plan” (as defined in Section 4001 of ERISA) established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates, if such “employee benefit plan” were terminated, would have any material amount of unfunded “benefit liabilities” (as defined under Section 4001(a)(16) of ERISA) that in the aggregate would reasonably be expected to result in a Material Adverse Change. Neither the Company or any of its subsidiaries nor any of their ERISA Affiliates has incurred or reasonably expects to incur any liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any “employee benefit plan” or (ii) Sections 412, 4971, 4975 or 4980B of the Code that individually or in the aggregate would reasonably be likely to result in a Material Adverse Change. Each “employee benefit plan” established or maintained by the Company, its subsidiaries or any of their ERISA Affiliates that is intended to be qualified under Section 401 of the Code is so qualified and, to the Company’s knowledge, nothing has occurred, whether by action or failure to act, which would be reasonably likely to cause the loss of such qualification to the extent any loss of qualified status would reasonably be expected to result in a Material Adverse Change.
(q) Compliance with Labor Laws . Except as would not, individually or in the aggregate, result in a Material Adverse Change, (i) there is (A) no unfair labor practice complaint pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries before the National Labor Relations Board, and no grievance or arbitration proceeding arising out of or under collective bargaining agreements pending, or to the Company’s knowledge, threatened, against the Company or any of its subsidiaries, (B) no strike, labor dispute, slowdown or stoppage pending or, to the Company’s knowledge, threatened against the Company or any of its subsidiaries and (C) no union representation question existing with respect to the employees of the Company, or any of its subsidiaries and, to the Company’s knowledge, no union organizing activities taking place and (ii) there has been no violation of any federal, state or local law relating to discrimination in hiring, promotion or pay of employees or of any applicable wage or hour laws.
(r) No Material Actions or Proceedings . There are no legal or governmental actions, suits or proceedings pending or, to the best of the Company’s knowledge, threatened (i) against or affecting the Company or any of its subsidiaries or (ii) which has as the subject thereof any property owned or leased by, the Company or any of its subsidiaries and, in each case, any such action, suit or proceeding, would reasonably be expected to result in a Material Adverse Change or seeks to enjoin the consummation of the transactions contemplated by this Agreement. Except as would not result in a Material Adverse Change, no material labor dispute with the employees of the Company or any of its subsidiaries, or with the employees of any principal supplier of the Company, exists or, to the best of the Company’s knowledge, is threatened or imminent.
(s) Accuracy of Exhibits . There are no contracts or documents which are required to be described in the Registration Statement, the General Disclosure Package or the Prospectus or to be filed as exhibits to the Registration Statement which have not been so described in all material respects and filed as required.
(t) Absence of Further Requirements . No filing with, or consent, approval, authorization, order, registration, qualification or decree of any arbitrator, court, governmental body, regulatory body, administrative agency or other authority, body or agency, domestic or
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foreign, is necessary or required for the performance by the Company of its obligations hereunder or in the Power of Attorney and Custody Agreement, or in connection with the sale and delivery of the Securities hereunder or the consummation of the transactions contemplated by this Agreement, except such as have been already obtained or as may be required under the 1933 Act, the 1933 Act Regulations, the rules of the New York Stock Exchange, state securities laws or the rules of FINRA.
(u) FCC Matters .
(i) Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company and each of its subsidiaries hold all material FCC permits, licenses, authorizations and approvals for its broadcast stations (collectively, the “ FCC Authorizations ”) that are necessary to conduct their respective businesses in the manner in which they are currently being conducted as described in the Registration Statement, the General Disclosure Package and the Prospectus; the FCC Authorizations are in full force and effect; the operations of the stations owned or operated by the Company and any of its subsidiaries (the “ Stations ”) are in compliance with the Communications Laws; and all reports and documents that are required by the Communications Laws to be filed with respect to the ownership, management or operation of the Stations have been duly and timely filed, except, in each case, as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change;
(ii) There is no event or occurrence existing, nor, to the best of the Company’s knowledge, is there any condition, or any proceeding being conducted or threatened by any governmental or regulatory authority, which would reasonably be expected to cause the termination, suspension, cancellation, or nonrenewal of any of the FCC Authorizations, or the imposition of any penalty or fine by any governmental or regulatory authority with respect to any of the FCC Authorizations or the Company, in each case which would result in a Material Adverse Change;
(iii) There is no (a) outstanding decree, decision, judgment, or order that has been issued by the FCC against the Company or the FCC Authorizations or (b) notice of violation, order to show cause, complaint, investigation or other administrative or judicial proceeding pending or, to the best of the Company’s knowledge, threatened by or before the FCC against the Company or the FCC Authorizations that, assuming an unfavorable decision, ruling or finding, in the case of each of (a) or (b) above, would result in a Material Adverse Change; and
(iv) The Company has filed with the FCC all necessary reports, documents, instruments, information, or applications required to be filed pursuant to the Communications Laws, and have paid all fees required to be paid pursuant to the Communications Laws, except as would not result in a Material Adverse Change.
(v) Possession of Licenses and Permits . Except as would not result in a Material Adverse Change, (i) the Company and each of its subsidiaries possess such valid and current certificates, authorizations, licenses (in addition to the FCC Authorizations) or permits issued by the appropriate state, federal or foreign regulatory agencies or bodies necessary to own, lease and operate its properties and to conduct their respective businesses, and (ii) none of the Company or any of its subsidiaries has received any written notice of proceedings relating to the revocation or modification of, or non-compliance with, any such certificate, authorization or permit.
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(w) Title to Property . Except as would not reasonably be expected to result in a Material Adverse Change, the Company and its subsidiaries have good and marketable title to all the properties and assets reflected as owned in the financial statements referred to in Section 1(viii) hereof (or elsewhere in the Offering Memorandum), in each case free and clear of any security interests, mortgages, liens, encumbrances, equities, claims and other defects, except (x) as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus or (y) as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change.
(x) Possession of Intellectual Property . The Company and its subsidiaries own or possess, or can acquire for an immaterial amount sufficient trademarks, trade names, patent rights, copyrights, licenses, approvals, trade secrets and other similar rights (collectively, “ Intellectual Property Rights ”) reasonably necessary to conduct their businesses as now conducted; and the expected expiration of any of such Intellectual Property Rights would not reasonably be expected to result in a Material Adverse Change. Neither the Company nor any of its subsidiaries has received any notice of infringement or conflict with asserted Intellectual Property Rights of others, which infringement or conflict would reasonably be expected to result in a Material Adverse Change.
(y) Environmental Laws . Except as described in the Registration Statement, the General Disclosure Package or the Prospectus or as would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Change, (i) each of the Company and its subsidiaries and their respective operations and facilities are in compliance with, and not subject to any known liabilities under, applicable Environmental Laws, which compliance includes, without limitation, having obtained and being in compliance with any permits, licenses or other governmental authorizations or approvals, and having made all filings and provided all financial assurances and notices, required for the ownership and operation of the business, properties and facilities of the Company or any of its subsidiaries under applicable Environmental Laws, and compliance with the terms and conditions thereof; (ii) neither the Company nor its subsidiaries has received any written communication, whether from a governmental authority, citizens group, employee or otherwise, that alleges that the Company or any of its subsidiaries is in violation of any Environmental Law; (iii) there is no claim, action or cause of action filed with a court or governmental authority, no investigation with respect to which the Company has received written notice, and no written notice by any person or entity alleging actual or potential liability on the part of the Company or any of its subsidiaries based on or pursuant to any Environmental Law pending or, to the best of the Company’s knowledge, threatened against the Company or any of its subsidiaries or any person or entity whose liability under or pursuant to any Environmental Law the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law; (iv) neither the Company nor its subsidiaries is conducting or paying for, in whole or in part, any investigation, response or other corrective action pursuant to any Environmental Law at any site or facility, nor is any of them subject or a party to any order, judgment, decree, contract or agreement which imposes any obligation or liability under any Environmental Law; (v) no lien, charge, encumbrance or restriction has been recorded pursuant to any Environmental Law with respect to any assets, facility or property owned, operated or leased by the Company or any of its subsidiaries; and (vi) there are no past or present actions, activities, circumstances, conditions or occurrences, including, without limitation, the Release or threatened Release of any Material of Environmental Concern, that could reasonably be expected to result in a violation of or liability under any Environmental Law on the part of the Company or any of its subsidiaries, including, without limitation, any such liability which the Company or any of its subsidiaries has retained or assumed either contractually or by operation of law.
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For purposes of this Agreement, “ Environment ” means ambient air, indoor air, surface water, groundwater, drinking water, soil, surface and subsurface strata, and natural resources such as wetlands, flora and fauna. “ Environmental Laws ” means the common law and all federal, state, and local laws or regulations, ordinances, codes, orders, decrees, judgments and injunctions issued, promulgated or entered thereunder, relating to pollution or protection of the Environment or human health (as it relates to exposure to Materials of Environmental Concern), including without limitation, those relating to (i) the Release or threatened Release of Materials of Environmental Concern; and (ii) the manufacture, processing, distribution, use, generation, treatment, storage, transport, handling or recycling of Materials of Environmental Concern. “ Materials of Environmental Concern ” means any substance, material, pollutant, contaminant, chemical, waste, compound, or constituent, in any form, including without limitation, petroleum and petroleum products, subject to regulation under Environmental Law or which can give rise to liability under any Environmental Law. “ Release ” means any release, spill, emission, discharge, deposit, disposal, leaking, pumping, pouring, dumping, emptying, injection or leaching into the Environment, or into, from or through any building, structure or facility.
(z) The Company’s Accounting System . The Company and its subsidiaries maintain a system of accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management’s general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.
(aa) Compliance with the Sarbanes-Oxley Act . The Company has taken all necessary actions to ensure that, upon the effectiveness of the Registration Statement, it will be in compliance with all provisions of the Sarbanes-Oxley Act of 2002 and all rules and regulations promulgated thereunder or implementing the provisions thereof (the “ Sarbanes-Oxley Act ”) that are then in effect and with which the Company is required to comply as of the effectiveness of the Registration Statement, and is actively taking steps to ensure that it will be in compliance with other provisions of the Sarbanes-Oxley Act not currently in effect, upon the effectiveness of such provisions, or which will become applicable to the Company at all times after the effectiveness of the Registration Statement.
(bb) Disclosure Controls and Procedures . The Company has established and maintains disclosure controls and procedures (as such term is defined in Rules 13a-15 and 15d-15 under the 1934 Act); such disclosure controls and procedures are designed to ensure that material information relating to the Company and its subsidiaries is made known to the applicable chief executive officer and chief financial officer by others within the Company, or any of its subsidiaries, as the case may be, and such disclosure controls and procedures are reasonably effective to perform the functions for which they were established subject to the limitations of any such control system; the Company’s auditors and the Audit Committee of the Board of Directors of the Company have been advised of (i) any significant deficiencies or material weaknesses in the design or operation of its internal controls which could adversely affect the Company’s ability to record, process, summarize, and report financial data; and since the date of the most recent audited financial statements included in the General Disclosure Package, there have been no significant changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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(cc) Tax Law Compliance . Except as would not have a material adverse effect, individually or in the aggregate, (i) the Company and its consolidated subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them and (ii) the Company has made adequate charges, accruals and reserves in accordance with GAAP in the applicable financial statements referred to in Section 1(h) hereof in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its consolidated subsidiaries has not been finally determined.
(dd) Insurance . The Company and its subsidiaries are insured by recognized, financially sound institutions with policies in such amounts and with such deductibles and covering such risks as the Company’s management believes are adequate and customary for their businesses. The Company does not believe that it or any of its subsidiaries will not be able to renew its existing insurance coverage as and when such policies expire or, alternatively, to obtain comparable coverage from similar institutions as may be necessary or appropriate to conduct its business as now conducted and at a cost that would not reasonably be expected to result in a Material Adverse Change.
(ee) Investment Company Act . The Company is not required, and upon the issuance and sale of the Securities as herein contemplated and the application of the net proceeds therefrom as described in the Registration Statement, the General Disclosure Package and the Prospectus will not be required, to register as an “investment company” under the Investment Company Act of 1940, as amended (the “ 1940 Act ”).
(ff) Absence of Manipulation . Neither the Company nor any affiliate of the Company has taken, nor will the Company or any affiliate take, directly or indirectly, any action which is designed, or would be expected, to cause or result in, or which constitutes, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or to result in a violation of Regulation M under the 1934 Act.
(gg) Foreign Corrupt Practices Act . None of the Company or its subsidiaries nor, to the knowledge of the Company, any director, officer, agent, employee or affiliate of the Company, or any of its subsidiaries is aware of or has taken any action, directly or indirectly, that would result in a violation by such persons of the FCPA, including, without limitation, making use of the mails or any means or instrumentality of interstate commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the payment of any money, or other property, gift, promise to give, or authorization of the giving of anything of value to any “foreign official” (as such term is defined in the FCPA) or any foreign political party or official thereof or any candidate for foreign political office, in contravention of the FCPA and the Company, its subsidiaries and, to the knowledge of the Company, the Company, and its affiliates have conducted their businesses in compliance with the FCPA and have instituted and maintain policies and procedures designed to ensure, and which are reasonably expected to continue to ensure, continued compliance therewith.
“ FCPA ” means Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder.
(hh) Money Laundering Laws . The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all applicable jurisdictions, the rules and regulations
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thereunder and any related or similar rules, regulations or guidelines issued, administered or enforced by any governmental agency (collectively, the “ Money Laundering Laws ”) and no action, suit or proceeding by or before any court or governmental agency, authority or body having jurisdiction over the Company involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.
(ii) OFAC. None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee, affiliate or representative of the Company or any of its subsidiaries is an individual or entity (“ Person ”) currently the subject or target of any sanctions administered or enforced by the United States Government, including, without limitation, the U.S. Department of the Treasury’s Office of Foreign Assets Control (“ OFAC ”), the United Nations Security Council (“ UNSC ”), the European Union, Her Majesty’s Treasury (“ HMT ”), or other relevant sanctions authority (collectively, “ Sanctions ”), nor is the Company located, organized or resident in a country or territory that is the subject of Sanctions; and the Company will not directly or indirectly use the proceeds of the sale of the Securities, or lend, contribute or otherwise make available such proceeds to any subsidiaries, joint venture partners or other Person, to fund any activities of or business with any Person, or in any country or territory, that, at the time of such funding, is the subject of Sanctions or in any other manner that will result in a violation by any Person (including any Person participating in the transaction, whether as underwriter, advisor, investor or otherwise) of Sanctions.
(jj) Sales of Reserved Securities . The Company has not offered, or caused the Representatives to offer, Reserved Securities to any person with the specific intent to unlawfully influence (i) a customer or supplier of the Company or any of its affiliates to alter the customer’s or supplier’s level or type of business with any such entity or (ii) a trade journalist or publication to write or publish favorable information about the Company or any of its affiliates, or their respective businesses or products.
(kk) Lending Relationship . Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company (i) does not have any material lending or other relationship with any bank or lending affiliate of any Underwriter and (ii) does not intend to use any of the proceeds from the sale of the Securities to repay any outstanding debt owed to any affiliate of any Underwriter.
(ll) Statistical and Market-Related Data . Any statistical and market-related data included in the Registration Statement, the General Disclosure Package or the Prospectus are based on or derived from sources that the Company believes to be reliable and accurate and, to the extent required, the Company has obtained the written consent to the use of such data from such sources.
SECTION 2. Sale and Delivery to Underwriters; Closing .
(a) Initial Securities . On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company agrees to sell to each Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to purchase from the Company, at the price per share set forth in Schedule A, that proportion of the number of Initial Securities set forth in Schedule B opposite the name of the Company, as the case may be, which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional number of Initial Securities which such Underwriter may become obligated to purchase pursuant to the provisions of Section 10 hereof, bears to the total number of Initial Securities, subject, in each case, to
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such adjustments among the Underwriters as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(b) Option Securities . In addition, on the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, the Company hereby grants an option to the Underwriters, severally and not jointly, to purchase up to an additional [●] shares of Common Stock, as set forth in Schedule B, at the price per share set forth in Schedule A, less an amount per share equal to any dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities. The option hereby granted may be exercised for 30 days after the date hereof and may be exercised in whole or in part at any time from time to time upon notice by the Representatives to the Company setting forth the number of Option Securities as to which the several Underwriters are then exercising the option and the time and date of payment and delivery for such Option Securities. Any such time and date of delivery (a “ Date of Delivery ”) shall be determined by the Representatives, but shall not be later than seven full business days after the exercise of said option, nor in any event prior to the Closing Time. If the option is exercised as to all or any portion of the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase that proportion of the total number of Option Securities then being purchased which the number of Initial Securities set forth in Schedule A opposite the name of such Underwriter bears to the total number of Initial Securities, subject, in each case, to such adjustments as Merrill Lynch in its sole discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment . Payment of the purchase price for, and delivery of certificates for, the Initial Securities shall be made at the offices of Cahill Gordon & Reindel llp , 80 Pine Street, New York, New York 10005, or at such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M. (New York City time) on the third (fourth, if the pricing occurs after 4:30 P.M. (New York City time) on any given day) business day after the date hereof (unless postponed in accordance with the provisions of Section 10), or such other time not later than ten business days after such date as shall be agreed upon by the Representatives and the Company (such time and date of payment and delivery being herein called “ Closing Time ”).
In addition, in the event that any or all of the Option Securities are purchased by the Underwriters, payment of the purchase price for, and delivery of certificates for, such Option Securities shall be made at the above mentioned offices, or at such other place as shall be agreed upon by the Representatives and the Company, on each Date of Delivery as specified in the notice from Merrill Lynch to the Company.
Payment shall be made to the Company by wire transfer of immediately available funds to a bank account designated by the Company against delivery to the Representatives for the respective accounts of the Underwriters of certificates for the Securities to be purchased by them. It is understood that each Underwriter has authorized the Representatives, for its account, to accept delivery of, receipt for, and make payment of the purchase price for, the Initial Securities and the Option Securities, if any, which it has agreed to purchase. Merrill Lynch, individually and not as representative of the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds have not been received by the Closing Time or the relevant Date of Delivery, as the case may be, but such payment shall not relieve such Underwriter from its obligations hereunder.
(d) Appointment of Qualified Independent Underwriter . The Company hereby confirms its engagement of Merrill Lynch as, and Merrill Lynch hereby confirms its agreement with the Company to render services as, a “qualified independent underwriter” within the meaning of NASD Conduct Rule 2720 (or any successor rule) adopted by FINRA (“ Rule 2720 ”) with respect to the offering and sale
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of the Securities. Merrill Lynch, solely in its capacity as qualified independent underwriter and not otherwise, is referred to herein as the “ QIU .”
SECTION 3. Covenants of the Company . The Company covenants with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests . The Company, subject to Section 3(b), will comply with the requirements of Rule 430A, and will notify the Representatives promptly, and confirm the notice in writing, (i) when any post-effective amendment to the Registration Statement shall become effective or any amendment or supplement to the Prospectus shall have been filed, (ii) of the receipt of any comments from the Commission, (iii) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or for additional information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto or of any order preventing or suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of any examination pursuant to Section 8(d) or 8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the Securities. The Company will effect all filings required under Rule 424(b), in the manner and within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted for filing under Rule 424(b) was received for filing by the Commission and, in the event that it was not, it will promptly file such prospectus. The Company will make every reasonable effort to prevent the issuance of any stop order, prevention or suspension and, if any such order is issued, to obtain the lifting thereof at the earliest possible moment.
(b) Continued Compliance with Securities Laws . The Company will comply with the 1933 Act and the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as contemplated in this Agreement and in the Registration Statement, the General Disclosure Package and the Prospectus. If at any time when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172 of the 1933 Act Regulations (“ Rule 172 ”), would be) required by the 1933 Act to be delivered in connection with sales of the Securities, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company, to (i) amend the Registration Statement in order that the Registration Statement will not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) amend or supplement the General Disclosure Package or the Prospectus in order that the General Disclosure Package or the Prospectus, as the case may be, will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in the light of the circumstances existing at the time it is delivered to a purchaser or (iii) amend the Registration Statement or amend or supplement the General Disclosure Package or the Prospectus, as the case may be, in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly (A) give the Representatives notice of such event, (B) prepare any amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement, the General Disclosure Package or the Prospectus comply with such requirements and, a reasonable amount of time prior to any proposed filing or use, furnish the Representatives with copies of any such amendment or supplement and (C) file with the
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Commission any such amendment or supplement; provided that the Company shall not file or use any such amendment or supplement to which the Representatives or counsel for the Underwriters shall object. The Company will furnish to the Underwriters such number of copies of such amendment or supplement as the Underwriters may reasonably request. The Company will give the Representatives notice of its intention to make any such filing from the Applicable Time to the Closing Time and will furnish the Representatives with copies of any such documents a reasonable amount of time prior to such proposed filing, as the case may be, and will not file or use any such document to which the Representatives or counsel for the Underwriters shall reasonably object (other than a document that the Company believes in good faith, based on advice of counsel, it is required by law to file).
(c) Delivery of Registration Statements . The Company has furnished or will deliver to the Representatives and counsel for the Underwriters, without charge, conformed copies of the Registration Statement as originally filed and each amendment thereto (including exhibits filed therewith) and conformed copies of all consents and certificates of experts, and will also deliver to the Representatives, without charge, a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) for each of the Underwriters. The copies of the Registration Statement and each amendment thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses . The Company has delivered to each Underwriter, without charge, as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The Company will furnish to each Underwriter, without charge, during the period when a prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any amendments or supplements thereto furnished to the Underwriters will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(e) Blue Sky Qualifications . The Company will use its best efforts, in cooperation with the Underwriters, to qualify the Securities for offering and sale under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Representatives may designate and to maintain such qualifications in effect so long as required to complete the distribution of the Securities; provided , however , that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject.
(f) Rule 158 . The Company will timely file such reports pursuant to the 1934 Act as are necessary in order to make generally available to its securityholders as soon as practicable an earnings statement for the purposes of, and to provide to the Underwriters the benefits contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(g) Use of Proceeds . The Company will use the net proceeds received by it from the sale of the Securities in the manner specified in the Registration Statement, the General Disclosure Package and the Prospectus under “Use of Proceeds.”
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(h) Listing . The Company will use its best efforts to effect and maintain the listing of the Common Stock (including the Securities) on the New York Stock Exchange.
(i) Restriction on Sale of Securities . During a period of 180 days from the date of the Prospectus, the Company will not, without the prior written consent of Merrill Lynch, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any shares of Common Stock or any securities convertible into or exercisable or exchangeable for Common Stock or file any registration statement under the 1933 Act with respect to any of the foregoing or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Common Stock, whether any such swap or transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any shares of Common Stock issued by the Company upon the exercise of an option or warrant or the conversion of a security outstanding on the date hereof and referred to in the Registration Statement, the General Disclosure Package and the Prospectus, (C) any shares of Common Stock issued or options to purchase Common Stock granted pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package and the Prospectus or (D) any shares of Common Stock issued pursuant to any non-employee director stock plan or dividend reinvestment plan referred to in the Registration Statement, the General Disclosure Package and the Prospectus.
(j) If Merrill Lynch, in its sole discretion, agrees to release or waive the restrictions set forth in a lock-up agreement described in Section 5(k) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit D hereto through a major news service at least two business days before the effective date of the release or waiver.
(k) Reporting Requirements . The Company, during the period when a Prospectus relating to the Securities is (or, but for the exception afforded by Rule 172, would be) required to be delivered under the 1933 Act, will file all documents required to be filed with the Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and 1934 Act Regulations. Additionally, the Company shall report the use of proceeds from the issuance of the Shares as may be required under Rule 463 under the 1933 Act.
(l) Issuer Free Writing Prospectuses . The Company agrees that, unless it obtains the prior written consent of the Representatives, it will not make any offer relating to the Securities that would constitute an Issuer Free Writing Prospectus or that would otherwise constitute a “free writing prospectus,” or a portion thereof, required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Representatives will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule C-2 hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Representatives. The Company represents that it has treated or agrees that it will treat each such free writing prospectus consented to, or deemed consented to, by the Representatives as an “issuer free writing prospectus,” as defined in Rule 433, and that it has complied and will comply with the applicable requirements of Rule 433 with respect thereto, including timely filing with the Commission where required, legending and record keeping. If at any time following issuance of an Issuer Free Writing Prospectus there
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occurred or occurs an event or development as a result of which such Issuer Free Writing Prospectus conflicted or would conflict with the information contained in the Registration Statement, any preliminary prospectus or the Prospectus or included or would include an untrue statement of a material fact or omitted or would omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at that subsequent time, not misleading, the Company will promptly notify the Representatives and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission. Each Underwriter represents that it has not made and agrees that, without the prior consent of the Company, it will not make any offer relating to the Securities that would constitute a “free writing prospectus” required to be filed by the Company with the Commission or retained by the Company under Rule 433; provided that the Company will be deemed to have consented to the Issuer Free Writing Prospectuses listed on Schedule C-2 hereto and any “road show that is a written communication” within the meaning of Rule 433(d)(8)(i) that has been reviewed by the Company.
(m) Emerging Growth Company Status . The Company will promptly notify the Representatives if the Company ceases to be an Emerging Growth Company at any time prior to the later of (i) completion of the distribution of the Securities within the meaning of the Securities Act and (ii) completion of the 180-day restricted period referred to in Section 3(i).
(n) Compliance with FINRA Rules . The Company hereby agrees that it will ensure that the Reserved Securities will be restricted as required by FINRA or the FINRA rules from sale, transfer, assignment, pledge or hypothecation for a period of three months following the date of this Agreement. The Underwriters will notify the Company as to which persons will need to be so restricted. At the request of the Underwriters, the Company will direct the transfer agent to place a stop transfer restriction upon such securities for such period of time. Should the Company release, or seek to release, from such restrictions any of the Reserved Securities, the Company agrees to reimburse the Underwriters for any reasonable expenses (including, without limitation, legal expenses) they incur in connection with such release.
SECTION 4. Payment of Expenses .
(a) Expenses . The Company will pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation, printing and filing of the Registration Statement (including financial statements and exhibits) as originally filed and each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of copies of each preliminary prospectus, each Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto and any costs associated with electronic delivery of any of the foregoing by the Underwriters to investors, (iii) the preparation, issuance and delivery of the certificates for the Securities to the Underwriters, including any stock or other transfer taxes and any stamp or other duties payable upon the sale, issuance or delivery of the Securities to the Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other advisors, (v) the qualification of the Securities under securities laws in accordance with the provisions of Section 3(e) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the fees and expenses of any transfer agent or registrar for the Securities, (vii) the costs and expenses of the Company relating to investor presentations on any “road show” undertaken in connection with the marketing of the Securities, including without limitation, expenses associated with the production of road show slides and graphics, fees and expenses of any consultants engaged in connection with the road show presentations, travel and lodging expenses of the representatives and officers of the Company and any such consultants, and 50% of the cost of any aircraft and other transportation used in connection with the road show (it
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being understood that the other 50% of such private aircraft and other private transportation shall be the responsibility of the Underwriters, except that the lodging, commercial airfare and individual expenses of the Underwriters shall be the responsibility of the Underwriters), (viii) the filing fees incident to, and the reasonable fees and disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms of the sale of the Securities ( provided that the Company shall not be required to reimburse or pay more than $25,000 of the fees of such counsel), (ix) the fees and expenses incurred in connection with the listing of the Securities on the New York Stock Exchange and (x) the costs and expenses (including, without limitation, any damages or other amounts payable in connection with legal or contractual liability) associated with the reforming of any contracts for sale of the Securities made by the Underwriters caused by a breach of the representation contained in the third sentence of Section 1(a)(ii) and (xi) all reasonable costs and expenses of the Underwriters, including the reasonable fees and disbursements of counsel for the Underwriters, in connection with matters related to the Reserved Securities which are designated by the Company for sale to Invitees.
(b) Termination of Agreement . If this Agreement is terminated by the Representatives in accordance with the provisions of Section 5, Section 9(a)(i) or (iii), Section 10 or Section 11 hereof, the Company shall reimburse the Underwriters for all of their out of pocket expenses, including the reasonable fees and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations . The obligations of the several Underwriters hereunder are subject to the accuracy of the representations and warranties of the Company contained herein or in certificates of any officer of the Company or any of its subsidiaries delivered pursuant to the provisions hereof, to the performance by the Company of its covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement; Rule 430A Information . The Registration Statement, including any Rule 462(b) Registration Statement, has become effective and, at the Closing Time, no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the 1933 Act, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated; and the Company has complied with each request (if any) from the Commission for additional information. A prospectus containing the Rule 430A Information shall have been filed with the Commission in the manner and within the time frame required by Rule 424(b) without reliance on Rule 424(b)(8) or a post-effective amendment providing such information shall have been filed with, and declared effective by, the Commission in accordance with the requirements of Rule 430A.
(b) Opinion of Counsel for Company . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Kirkland & Ellis LLP, counsel for the Company, in the form attached as Exhibit A hereto.
(c) Opinion of Counsel for Underwriters . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Cahill Gordon & Reindel llp , counsel for the Underwriters, together with signed or reproduced copies of such letter for each of the other Underwriters with respect to such matters as may be reasonably requested by the Representatives.
(d) Opinion of Special FCC Counsel for the Company . At the Closing Time, the Representatives shall have received the favorable opinion, dated the Closing Time, of Drinker,
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Biddle & Reath, LLP, special FCC counsel for the Company, in the form attached as Exhibit B hereto.
(e) Officers’ Certificate . At the Closing Time, there shall not have been, since the date hereof or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, and the Representatives shall have received a certificate of the Chief Executive Officer or the President of the Company and of the chief financial or chief accounting officer of the Company, dated the Closing Time, to the effect that (i) there has been no such material adverse change, (ii) the representations and warranties of the Company in this Agreement are true and correct with the same force and effect as though expressly made at and as of the Closing Time, (iii) the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied at or prior to the Closing Time and (iv) no stop order suspending the effectiveness of the Registration Statement under the 1933 Act has been issued, no order preventing or suspending the use of any preliminary prospectus or the Prospectus has been issued and, to their knowledge, no proceedings for any of those purposes have been instituted or are pending or contemplated.
(f) Accountant’s Comfort Letter . At the time of the execution of this Agreement, the Representatives shall have received from McGladrey LLP, the independent registered public accounting firm for the Company, and Pricewaterhouse Coopers LLP, the independent registered public accounting firm for Cumulus Media Holdings, Inc., a letter, dated such date, in form and substance satisfactory to the Representatives, together with signed or reproduced copies of such letter for each of the other Underwriters containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the General Disclosure Package and the Prospectus.
(g) Bring-down Comfort Letter . At the Closing Time, the Representatives shall have received from McGladrey LLP, the independent registered public accounting firm for the Company, and Pricewaterhouse Coopers LLP, the independent registered public accounting firm for Cumulus Media Holdings, Inc., a letter, dated as of the Closing Time, to the effect that they reaffirm the statements made in the letter furnished pursuant to subsection (f) of this Section, except that the specified date referred to shall be a date not more than three business days prior to the Closing Time.
(h) CFO Certificate . The Company shall have furnished to the Representatives a certificate, dated the date hereof and as of the Closing Time and addressed to the Underwriters, of its chief financial officer with respect to certain financial data contained in the General Disclosure Package and the Prospectus, providing “management comfort” with respect to such information, in form and substance reasonably satisfactory to the Representative.
(i) Approval of Listing . At the Closing Time, the Securities shall have been approved for listing on the New York Stock Exchange, subject only to official notice of issuance.
(j) No Objection . FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Securities.
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(k) Lock-up Agreements . At the date of this Agreement, the Representatives shall have received an agreement substantially in the form of Exhibit C hereto signed by the persons listed on Schedule D hereto.
(l) FCC Consent . As of the date of the Agreement, the FCC has approved the conversion of Townsquare Media, LLC to Townsquare Media, Inc.
(m) Maintenance of Rating . Since the execution of this Agreement, there shall not have been any decrease in or withdrawal of the rating of any securities of the Company or any of its subsidiaries by any “nationally recognized statistical rating organization” (as defined for purposes of Rule 436(g) under the 1933 Act) or any notice given of any intended or potential decrease in or withdrawal of any such rating or of a possible change in any such rating that does not indicate the direction of the possible change.
(n) Conditions to Purchase of Option Securities . In the event that the Underwriters exercise their option provided in Section 2(b) hereof to purchase all or any portion of the Option Securities, the representations and warranties of the Company contained herein and the statements in any certificates furnished by the Company, any of its subsidiaries hereunder shall be true and correct as of each Date of Delivery and, at the relevant Date of Delivery, the Representatives shall have received:
(i) Officers’ Certificate . A certificate, dated such Date of Delivery, of the President or a Vice President of the Company and of the chief financial or chief accounting officer of the Company confirming that the certificate delivered at the Closing Time pursuant to Section 5(e) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company . If requested by the Representatives, the favorable opinion of Kirkland & Ellis LLP, counsel for the Company, together with the favorable opinion of Drinker, Biddle & Reath, LLP, special FCC counsel for the Company, each] in form and substance satisfactory to counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Sections 5(b) and 5(d) hereof.
(iii) Opinion of Counsel for Underwriters . If requested by the Representatives, the favorable opinion of Cahill Gordon & Reindel llp , counsel for the Underwriters, dated such Date of Delivery, relating to the Option Securities to be purchased on such Date of Delivery and otherwise to the same effect as the opinion required by Section 5(c) hereof.
(iv) Bring-down Comfort Letter . If requested by the Representatives, a letter from McGladrey LLP, the independent registered public accounting firm for the Company, and Pricewaterhouse Coopers LLP, the independent registered public accounting firm for Cumulus Media Holdings, Inc., in form and substance satisfactory to the Representatives and dated such Date of Delivery, substantially in the same form and substance as the letter furnished to the Representatives pursuant to Section 5(g) hereof, except that the “specified date” in the letter furnished pursuant to this paragraph shall be a date not more than three business days prior to such Date of Delivery.
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(o) Additional Documents . At the Closing Time and at each Date of Delivery (if any) counsel for the Underwriters shall have been furnished with such documents and opinions as they may require for the purpose of enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Representatives and counsel for the Underwriters.
(p) Termination of Agreement . If any condition specified in this Section shall not have been fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the obligations of the several Underwriters to purchase the relevant Option Securities, may be terminated by the Representatives by notice to the Company at any time at or prior to Closing Time or such Date of Delivery, as the case may be, and such termination shall be without liability of any party to any other party except as provided in Section 4 and except that Sections 1, 6, 7, 8, 15, 16 and 17 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification .
(a) Indemnification of Underwriters . The Company agrees to indemnify and hold harmless each Underwriter, its affiliates (as such term is defined in Rule 501(b) under the 1933 Act (each, an “ Affiliate ”)), its selling agents and each person, if any, who controls any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the Rule 430A Information, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included (A) in any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto), or (B) in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Stock (“ Marketing Materials ”), including any roadshow or investor presentations made to investors by the Company (whether in person or electronically), or the omission or alleged omission in any preliminary prospectus, Issuer Free Writing Prospectus, any Written Testing-the-Waters Communication, Prospectus or in any Marketing Materials of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 6(e) below) any such settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by Merrill Lynch), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any
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governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above;
provided , however , that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in the Registration Statement (or any amendment thereto), including the Rule 430A Information, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.
(b) Indemnification of Company, Directors and Officers . Each Underwriter severally agrees to indemnify and hold harmless the Company, its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in subsection (a) of this Section, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto), including the Rule 430A Information, the General Disclosure Package or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with the Underwriter Information.
(c) Actions Against Parties; Notification . Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action commenced against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. In the case of parties indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by Merrill Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above, counsel to the indemnified parties shall be selected by the Company. An indemnifying party may participate at its own expense in the defense of any such action; provided , however , that counsel to the indemnifying party shall not (except with the consent of the indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying parties be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances; provided, that, if indemnity is sough pursuant to Section 6(e), then, in addition to the fees and expenses of such counsel for the indemnified parties, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one counsel (in addition to any local counsel) separate from its own counsel and that of the other indemnified parties for the QIU in its capacity as a “qualified independent underwriter” and all persons, if any, who control the QIU within the meaning of Section 15 of the 1933 Act of Section 20 of 1934 Act in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances if, in the reasonable judgment of the QIU, there may exist a conflict of interest between the QIU and the other indemnified parties. Any such separate counsel for the QIU and such control persons of the QIU shall be designated in writing by the QIU. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include
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a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement Without Consent if Failure to Reimburse . If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a)(ii) or settlement of any claim in connection with any violation referred to in Section 6(f) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
(e) Indemnification of QIU . In addition to and without limitation of the Company’s obligation to indemnify Merrill Lynch as an Underwriter, the Company also agrees to indemnify and hold harmless the QIU, its Affiliates and selling agents and each person, if any, who controls the QIU within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss, liability, claim, damage and expense whatsoever, as incurred, incurred as a result of the QIU’s participation as a “qualified independent underwriter” within the meaning of Rule 2720 in connection with the offering of the Securities.
(f) Indemnification for Reserved Securities . In connection with the offer and sale of the Reserved Securities, the Company agrees to indemnify and hold harmless the Underwriters, their Affiliates and selling agents and each person, if any, who controls any Underwriter within the meaning of either Section 15 of the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss, liability, claim, damage and expense (including, without limitation, any legal or other expenses reasonably incurred in connection with defending, investigating or settling any such action or claim), as incurred, (i) arising out of any untrue statement or alleged untrue statement of a material fact contained in any prospectus wrapper or other material prepared by or with the consent of the Company for distribution to Invitees in connection with the offering of the Reserved Securities or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) caused by the failure of any Invitee to pay for and accept delivery of Reserved Securities which have been orally confirmed for purchase by any Invitee by 9:00 A.M. (New York City time) on the first business day after the date of the Agreement.
SECTION 7. Contribution . If the indemnification provided for in Section 6 hereof is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, from the offering of the Securities pursuant to this Agreement or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company, on the one hand, and of the Underwriters, on the other hand, in connection with the statements or omissions, or in connection with any violation of the nature referred to in Section 6(f) hereof, which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in connection with the offering of the Securities pursuant to this Agreement shall be deemed to be in the same respective proportions as the total net proceeds from the offering of the Securities pursuant to this
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Agreement (before deducting expenses) received by the Company, on the one hand, and the total underwriting discount received by the Underwriters, on the other hand, in each case as set forth on the cover of the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth on the cover of the Prospectus.
The relative fault of the Company, on the one hand, and the Underwriters, on the other hand, shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that Merrill Lynch will not receive any additional benefits hereunder for serving as the QIU in connection with the offering and sale of the Securities.
The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 7 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to contribute any amount in excess of the underwriting commissions received by such Underwriter in connection with the Shares underwritten by it and distributed to the public.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in proportion to the number of Initial Securities set forth opposite their respective names in Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive . All representations, warranties and agreements contained in this Agreement or in certificates of officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its officers or directors, any person controlling the Company and (ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement .
(a) Termination . The Representatives may terminate this Agreement, by notice to the Company, at any time at or prior to the Closing Time (i) if there has been, in the judgment of the
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Representatives, since the time of execution of this Agreement or since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package or the Prospectus, any material adverse change in the condition, financial or otherwise, or in the earnings, business affairs or business prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, or (ii) if there has occurred any material adverse change in the financial markets in the United States or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Representatives, impracticable or inadvisable to proceed with the completion of the offering or to enforce contracts for the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended or materially limited by the Commission or the New York Stock Exchange, or (iv) if trading generally on the NYSE Amex or the New York Stock Exchange or in the Nasdaq Global Market has been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by order of the Commission, FINRA or any other governmental authority, or (v) a material disruption has occurred in commercial banking or securities settlement or clearance services in the United States or with respect to Clearstream or Euroclear systems in Europe, or (vi) if a banking moratorium has been declared by either Federal or New York authorities.
(b) Liabilities . If this Agreement is terminated pursuant to this Section, such termination shall be without liability of any party to any other party except as provided in Section 4 hereof, and provided further that Sections 1, 6, 7, 8, 15, 16 and 17 shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters . If one or more of the Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Securities which it or they are obligated to purchase under this Agreement (the “ Defaulted Securities ”), the Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however, the Representatives shall not have completed such arrangements within such 24 hour period, then:
(i) if the number of Defaulted Securities does not exceed 10% of the number of Securities to be purchased on such date, each of the non-defaulting Underwriters shall be obligated, severally and not jointly, to purchase the full amount thereof in the proportions that their respective underwriting obligations hereunder bear to the underwriting obligations of all non-defaulting Underwriters, or
(ii) if the number of Defaulted Securities exceeds 10% of the number of Securities to be purchased on such date, this Agreement or, with respect to any Date of Delivery which occurs after the Closing Time, the obligation of the Underwriters to purchase, and the Company to sell, the Option Securities to be purchased and sold on such Date of Delivery shall terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement or, in the case of a Date of Delivery which is after the Closing Time, which does not result in a termination of the obligation of the Underwriters to purchase and the Company to sell the relevant Option Securities, as the case may be, either the (i) Representatives or (ii) the Company shall have the right to postpone Closing
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Time or the relevant Date of Delivery, as the case may be, for a period not exceeding seven days in order to effect any required changes in the Registration Statement, the General Disclosure Package or the Prospectus or in any other documents or arrangements. As used herein, the term “Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Default By the Company . If the Company shall fail at the Closing Time or a Date of Delivery, as the case may be, to sell the number of Securities that it is obligated to sell hereunder, then this Agreement shall terminate without any liability on the part of any non-defaulting party; provided, however, that the provisions of Sections 1, 4, 6, 7, 8, 15, 16 and 17 shall remain in full force and effect. No action taken pursuant to this Section shall relieve the Company from liability, if any, in respect of such default.
SECTION 12. Notices . All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Underwriters shall be directed to Merrill Lynch at One Bryant Park, New York, New York 10036, attention of Syndicate Department (facsimile: (646) 855-3073), with a copy to ECM Legal (facsimile: (212) 230-8730); notices to the Company shall be directed to it at 240 Greenwich Avenue, Greenwich, CT 06830, attention of the Chief Financial Officer.
SECTION 13. No Advisory or Fiduciary Relationship . The Company acknowledges and agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the determination of the initial public offering price of the Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other hand, (b) in connection with the offering of the Securities and the process leading thereto, each Underwriter is and has been acting solely as a principal and is not the agent or fiduciary of the Company, any of its subsidiaries, or its respective stockholders, creditors, employees or any other party, (c) no Underwriter has assumed or will assume an advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company or any of its subsidiaries on other matters) and no Underwriter has any obligation to the Company with respect to the offering of the Securities except the obligations expressly set forth in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (e) the Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the offering of the Securities and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.
SECTION 14. Parties . This Agreement shall each inure to the benefit of and be binding upon the Underwriters, the Company and their respective successors. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any person, firm or corporation, other than the Underwriters, the Company and their respective successors and the controlling persons and officers and directors referred to in Sections 6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. This Agreement and all conditions and provisions hereof are intended to be for the sole and exclusive benefit of the Underwriters, the Company and their respective successors, and said controlling persons and officers and directors and their heirs and legal representatives, and for the benefit of no other person, firm or corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 15. Trial by Jury . The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and each of the Underwriters hereby
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irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.
SECTION 16. GOVERNING LAW . THIS AGREEMENT AND ANY CLAIM, CONTROVERSY OR DISPUTE ARISING UNDER OR RELATED TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF, THE STATE OF NEW YORK WITHOUT REGARD TO ITS CHOICE OF LAW PROVISIONS.
SECTION 17. Consent to Jurisdiction; Waiver of Immunity . Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby (“ Related Proceedings ”) shall be instituted in (i) the federal courts of the United States of America located in the City and County of New York, Borough of Manhattan or (ii) the courts of the State of New York located in the City and County of New York, Borough of Manhattan (collectively, the “ Specified Courts ”), and each party irrevocably submits to the exclusive jurisdiction (except for proceedings instituted in regard to the enforcement of a judgment of any such court (a “ Related Judgment ”), as to which such jurisdiction is non-exclusive) of such courts in any such suit, action or proceeding. Service of any process, summons, notice or document by mail to such party’s address set forth above shall be effective service of process for any suit, action or other proceeding brought in any such court. The parties irrevocably and unconditionally waive any objection to the laying of venue of any suit, action or other proceeding in the Specified Courts and irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such suit, action or other proceeding brought in any such court has been brought in an inconvenient forum.
SECTION 18. TIME . TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 19. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same Agreement.
SECTION 20. Effect of Headings . The Section headings herein are for convenience only and shall not affect the construction hereof.
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If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement between the Underwriters and the Company in accordance with its terms.
Very truly yours, | ||
TOWNSQUARE MEDIA, LLC | ||
By: | ||
Title: |
For themselves and as Representatives of the other Underwriters named in Schedule A hereto.
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SCHEDULE A
The initial public offering price per share for the Securities shall be $[●].
The purchase price per share for the Securities to be paid by the several Underwriters shall be $[●], being an amount equal to the initial public offering price set forth above less $[●] per share, subject to adjustment in accordance with Section 2(b) for dividends or distributions declared by the Company and payable on the Initial Securities but not payable on the Option Securities.
Name of Underwriter |
Number
of
Initial Securities |
|||
Merrill Lynch, Pierce, Fenner & Smith
Incorporated |
$ | [●] | ||
Jefferies LLC | $ | [●] | ||
RBC Capital Markets, LLC | $ | [●] | ||
Guggenheim Securities, LLC | $ | [●] | ||
Macquarie Capital (USA) Inc. | $ | [●] | ||
Total | $ | [●] |
Sch A- 1 |
SCHEDULE B
Number of Initial
Securities to Be Sold |
Maximum Number of Option
Securities to Be Sold |
|||
TOWNSQUARE MEDIA, INC. | ||||
Total |
Sch B- 1 |
SCHEDULE C-1
Pricing Terms
1. The Company is selling [●] shares of Common Stock.
2. The Company has granted an option to the Underwriters, severally and not jointly, to purchase up to an additional [●] shares of Common Stock.
3. The initial public offering price per share for the Securities shall be $[●].
Sch C- 1 |
SCHEDULE C-2
Free Writing Prospectuses
[ ]
Sch C- 2 |
SCHEDULE D
List of Persons and Entities Subject to Lock-up
[ ] 1
1 Note: to come.
Sch D- 1 |
Exhibit A
FORM OF OPINION OF COMPANY’S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(b)
1
1 K&E to provide.
A- 1 |
Exhibit B
FORM OF OPINION OF COMPANY’S SPECIAL
FCC COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(e)
1
1 DBR to provide.
B- 1 |
[Form of lock-up from directors, officers or other stockholders pursuant to Section 5(l)]
Exhibit C
July 11, 2014
Merrill Lynch, Pierce, Fenner
& Smith
Incorporated,
Jefferies LLC
RBC Capital Markets, LLC
as Representatives of the several
Underwriters to be named in the
within mentioned Underwriting Agreement
c/o Merrill Lynch, Pierce, Fenner
& Smith
Incorporated
One Bryant Park
New York, New York 10036
Re: Proposed Public Offering by Townsquare Media, Inc.
Dear Sirs:
The undersigned, a stockholder [and an officer and/or director] of Townsquare Media, Inc., a Delaware corporation (the “ Company ”), understands that Merrill Lynch, Pierce, Fenner & Smith Incorporated (“ Merrill Lynch ”), Jefferies LLC and RBC Capital Markets, LLC propose to enter into an Underwriting Agreement (the “ Underwriting Agreement ”) with the Company providing for the public offering (the “ Offering ”) of shares (the “ Securities ”) of the Company’s common stock, par value $0.01 per share (the “ Common Stock ”). In recognition of the benefit that such an offering will confer upon the undersigned as a stockholder [and an officer and/or director] of the Company, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned agrees with each underwriter to be named in the Underwriting Agreement that, during the period beginning on the date hereof and ending on the date that is 180 days from the date of the Underwriting Agreement, the undersigned will not, without the prior written consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale of, or otherwise dispose of or transfer any shares of the Company’s Common Stock or any securities convertible into or exchangeable or exercisable for Common Stock, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “ Lock-Up Securities ”), or exercise any right with respect to the registration of any of the Lock-up Securities, or file or cause to be filed any registration statement in connection therewith, under the Securities Act of 1933, as amended, or (ii) enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether any such swap or transaction is to be settled by delivery of Common Stock or other securities, in cash or otherwise. If the undersigned is an officer or director of the Company, the undersigned further agrees that
C- 1 |
the foregoing provisions shall be equally applicable to any issuer-directed Securities the undersigned may purchase in the offering.
If the undersigned is an officer or director of the Company, (1) Merrill Lynch agrees that, at least three business days before the effective date of any release or waiver of the foregoing restrictions in connection with a transfer of shares of the Common Stock, Merrill Lynch will notify the Company of the impending release or waiver, and (2) the Company has agreed in the Underwriting Agreement to announce the impending release or waiver by press release through a major news service at least two business days before the effective date of the release or waiver. Any release or waiver granted by Merrill Lynch hereunder to any such officer or director shall only be effective two business days after the publication date of such press release. The provisions of this paragraph will not apply if (i) the release or waiver is effected solely to permit a transfer not for consideration and (ii) the transferee has agreed in writing to be bound by the same terms described in this letter to the extent and for the duration that such terms remain in effect at the time of the transfer.
Notwithstanding the foregoing, and subject to the conditions below, the undersigned may transfer the Lock-Up Securities without the prior written consent of Merrill Lynch, provided that (1) Merrill Lynch receives a signed lock-up agreement for the balance of the lockup period from each donee, trustee, distributee, or transferee, as the case may be, (2) any such transfer shall not involve a disposition for value, (3) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended, and (4) the undersigned does not otherwise voluntarily effect any public filing or report regarding such transfers:
(i) as a bona fide gift or gifts or charitable contribution; or
(ii) by will or intestacy; or
(iii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned (for purposes of this lock-up agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin); or
(iv) as a distribution to limited partners or stockholders of the undersigned; or
(v) to the undersigned’s affiliates or to any investment fund or other entity controlled or managed by the undersigned.
Furthermore, the undersigned may (1) sell shares of Common Stock of the Company purchased by the undersigned on the open market following the Offering if and only if (i) such sales are not required to be reported in any public report or filing with the Securities and Exchange Commission, or otherwise and (ii) the undersigned does not otherwise voluntarily effect any public filing or report regarding such sales; (2) establish a trading plan pursuant to Rule 10b5-1 under the Exchange Act for the transfer of shares of Common Stock, provided that (i) such plan does not provide for the transfer of Common Stock during the Restricted Period and (ii) there is no voluntary or required disclosure as to the establishment of such plan during the Restricted Period; (3) exercise an option to purchase shares of Common Stock granted under any stock incentive plan or stock purchase plan of the Company, including on a “net” basis, provided that (i) the underlying shares of Common Stock shall continue to be subject to the restrictions on transfer set forth in this letter, (ii) in the event of an exercise on a “net” basis, the Company becomes the owner of the shares of Common Stock surrendered in the net exercise and (iii) such transfers are not required to be reported with the Securities and Exchange Commission on Form 4 in accordance with Section 16 of the Securities Exchange Act of 1934, as amended or otherwise; and (4) transfer, sell, tender or otherwise dispose of Common Stock to a bona fide third party pursuant to a tender offer for securities of the Company or any merger, consolidation or other business combination involving a Change of Control of the Company occurring after the settlement of the Offering, that, in each case, has been approved by the board of directors of the Company (including, without limitation, entering into any lock-up, voting or
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similar agreement pursuant to which the undersigned may agree to transfer, sell, tender or otherwise dispose of Common Stock in connection with any such transaction, or vote any Common Stock in favor of any such transaction); provided that all shares of Common Stock subject to this lock-up agreement that are not so transferred, sold, tendered or otherwise disposed of remain subject to this lock-up agreement; and provided , further , that it shall be a condition of transfer, sale, tender or other disposition that if such tender offer or other transaction is not completed, any Common Stock subject to this lock-up agreement shall remain subject to the restrictions herein. For the purposes of this paragraph, “ Change of Control ” means the consummation of any bona fide third party tender offer, merger, consolidation or other similar transaction, the result of which is that any “person” (as defined in Section 13(d)(3) of the Exchange Act), or group of persons, other than the Company or its subsidiaries, becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5 of the Exchange Act) of 100% of the total voting power of the voting stock of the Company.
This lock-up agreement shall automatically terminate, and the undersigned shall be released from its obligations hereunder, upon the earliest to occur, if any, of the following (i) Merrill Lynch, on the one hand, or the Company, on the other hand, advises the other(s) in writing prior to the closing of the Offering that it has determined not to proceed with the Offering, (ii) the Company files an application to withdraw the registration statement related to the Offering, (iii) the Underwriting Agreement is executed but is terminated prior to the closing of the Offering (other than the provisions thereof that survive termination) prior to payment for and delivery of the shares of Common Stock to be sold thereunder or (iv) September 30, 2014, in the event that the Underwriting Agreement has not been executed by such date.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the Lock-Up Securities except in compliance with the foregoing restrictions.
Very truly yours, | |||
Signature: | |||
Print Name: | |||
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Exhibit D
FORM OF PRESS RELEASE
TO BE ISSUED PURSUANT TO SECTION 3(j)
TOWNSQUARE MEDIA, INC.
[ ], 2014
TOWNSQUARE MEDIA, INC. (the “ Company ”) announced today that BofA Merrill Lynch, the lead book-running manager in the Company’s recent public sale of [●] shares of common stock, is [waiving] [releasing] a lock-up restriction with respect to [●] shares of the Company’s common stock held by [certain officers or directors] [an officer or director] of the Company. The [waiver] [release] will take effect on [ ], 2014, and the shares may be sold on or after such date.
This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.
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Exhibit 2.1
EXECUTION VERSION
ASSET PURCHASE AND EXCHANGE AGREEMENT
THIS ASSET PURCHASE AND EXCHANGE AGREEMENT (this “ Agreement ”) is made as of this April 28, 2012 among Townsquare Radio, LLC (“ Townsquare Parent ”), Townsquare Media of Bloomington, Inc. (“ Townsquare Bloomington ”), Townsquare Media of Peoria, Inc. (“ Townsquare Peoria ”) and companies set forth as Townsquare Purchasers on the signature page hereto (“ Townsquare Purchasers ”) (Townsquare Parent, Townsquare Bloomington, Townsquare Peoria and Townsquare Purchasers collectively, “ Townsquare ”) and Cumulus Media Inc. (“ Cumulus Parent ”), Cumulus Broadcasting LLC (“ Cumulus Broadcasting ”), Cumulus Licensing LLC (“ Cumulus Licensing ”), Citadel Broadcasting Company (“ Citadel Broadcasting ”) and Radio License Holding CBC, LLC (“ Radio License ”) (“Cumulus Sellers” and collectively, “ Cumulus ”).
Recitals
A. Townsquare Bloomington owns and operates the radio broadcast stations set forth opposite its name on Schedule A attached hereto (each a “ Bloomington Station ” and collectively the “ Bloomington Stations ”) pursuant to certain authorizations issued by the Federal Communications Commission (the “ FCC ”).
B. Cumulus Broadcasting owns and operates the radio broadcast stations and Cumulus Licensing owns the related licenses, permits and authorizations issued by the FCC in the Killeen-Temple, Texas market set forth opposite its name on Schedule B attached hereto (each a “ Killeen-Temple Station ” and collectively the “ Killeen-Temple Stations ”) pursuant to certain authorizations issued by the FCC.
C. Townsquare Peoria owns and operates the radio broadcast stations set forth opposite its name on Schedule A attached hereto (each a “ Peoria Station ” and collectively the “ Peoria Stations ”) pursuant to certain authorizations issued by the FCC.
D. Citadel Broadcasting owns and operates the radio broadcast stations and Radio License owns the related licenses, permits and authorizations issued by the FCC in the Presque Isle, Maine market set forth opposite its name on Schedule B attached hereto (each a “ Presque Isle Station ” and collectively the “ Presque Isle Stations ”) pursuant to certain authorizations issued by the FCC.
E. The Cumulus Sellers own and operate the radio broadcast stations set forth opposite their names on Schedule B attached hereto (each a “ Cumulus Seller Station ” and collectively the “ Cumulus Seller Stations ”) pursuant to certain authorizations issued by the FCC.
F. Townsquare Parent and Cumulus Parent desire to cause Townsquare Bloomington and Cumulus Broadcasting and Cumulus Licensing to exchange the Townsquare Station Assets (defined below) used exclusively in the Bloomington Stations plus the Bloomington Cash Consideration (defined below) for the Cumulus Station Assets (defined below) used exclusively in the Killeen-Temple Stations. The parties intend this exchange to be a like-kind exchange in accordance with the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the “ Code ”).
G. Townsquare Parent and Cumulus Parent desire to cause Townsquare Peoria and Citadel Broadcasting and Radio License to exchange the Townsquare Station Assets used exclusively in the Peoria Stations plus the Peoria Cash Consideration (defined below) for the Cumulus Station Assets used exclusively in the Presque Isle Stations. The parties intend this exchange to be a like-kind exchange in accordance with the provisions of Section 1031 of the Code.
H. Townsquare Parent and Cumulus Parent desire to cause the Townsquare Purchasers to purchase the remaining Cumulus Station Assets from the Cumulus Sellers for the remaining Cash Consideration.
Agreement
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1: EXCHANGE OF ASSETS AND CASH CONSIDERATION
1.1 Station Assets .
1.1.1. Townsquare Station Assets . On the terms and subject to the conditions hereof, at Closing (defined below), except as set forth in Sections 1.2 and 1.3, Townsquare shall assign, transfer, convey and deliver to Cumulus, and Cumulus shall acquire from Townsquare, all right, title and interest of Townsquare in and to all assets and properties of Townsquare, real and personal, tangible and intangible, that are used or held for use exclusively in the operation of the Townsquare Stations (the “ Townsquare Station Assets ”), including, without limitation, the following:
(a) all licenses, permits and other authorizations issued to Townsquare by the FCC with respect to the Townsquare Stations (the “ Townsquare FCC Licenses ”) described on Schedule 1.1.1(a) , including any renewals or modifications thereof between the date hereof and Closing, along with assignable applications pending before the FCC with respect to the renewal or modification of the Townsquare FCC Licenses or for any new FCC authorizations for the Townsquare Stations, and all other permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities held by or in respect of the Townsquare Stations that are (i) necessary to or otherwise used in the operation of the Townsquare Stations or (ii) required as a result of the activities of Townsquare Stations;
(b) all of Townsquare’s equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts and other tangible personal property of every kind and description that are used or held for use in the operation of the Townsquare Stations, including, without limitation, those listed on Schedule 1.1.1(b) and Schedule 2.6 , except for any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Townsquare Tangible Personal Property ”);
(c) all of Townsquare’s real property used or held for use in the operation of the Townsquare Stations (including any appurtenant easements and improvements located
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thereon) , including, without limitation, those listed on Schedule 1.1.1(c) and Schedule 2.7 (the “ Townsquare Real Property ”);
(d) all agreements for the sale of advertising time on the Townsquare Stations entered into in the ordinary course of business, and all other contracts, agreements and leases entered into in the ordinary course of the Townsquare Stations’ business, including, without limitation, those listed on Schedule 1.1.1(d) and Schedule 2.8 , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4, but excluding (i) the Excluded Townsquare Station Contracts (defined below) and (ii) any such agreements, contracts and leases which are Shared Contracts (defined below), which shall be governed by Section 1.3 hereof (collectively, the “ Townsquare Station Contracts ”);
(e) all of Townsquare’s rights in and to the Townsquare Stations’ call letters and Townsquare’s rights in and to the trademarks, trade names, service marks, internet domain names, copyrights, programs and programming material, jingles, slogans, logos, and other intangible property which are used or held for use in the operation of the Townsquare Stations, including, without limitation, those listed on Schedule 1.1.1(e) and Schedule 2.10 (the “ Townsquare Intangible Property ”); and
(f) all of Townsquare’s rights in and to all the files, documents, records, and books of account (originals to the extent existing, or copies thereof) to the extent relating primarily to the operation of the Townsquare Stations, including the Townsquare Stations’ local public files, programming information and studies, engineering data, advertising studies, email databases, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to Townsquare Excluded Assets (defined below).
The Townsquare Station Assets shall be transferred to Cumulus free and clear of liens, claims and encumbrances (“ Liens ”), except for (A) Cumulus Assumed Obligations (defined below), (B) Liens for taxes not yet due and payable, (C) Liens that will be released at or prior to Closing, and (D) with respect to the Townsquare Real Property, such other easements, rights of way, building and use restrictions and other exceptions that do not in any material respect detract from the value of the property (on an individual basis) subject thereto or impair the use thereof in the ordinary course of the business of the Townsquare Stations for which such property relates (collectively, “ Townsquare Permitted Liens ”). Notwithstanding the foregoing or anything to the contrary contained elsewhere in this Agreement (including, without limitation, Section 5.10), Townsquare Permitted Liens shall not include, and Townsquare will at the Closing cause the release, removal or discharge of, monetary obligations such as mortgages, mechanics’ and materialmen’s liens, judgment liens and fines for the violation of municipal ordinances, orders or requirements issued in connection with the Townsquare Real Property prior to the Closing Date.
1.1.2. Cumulus Station Assets . On the terms and subject to the conditions hereof, at Closing (defined below), except as set forth in Sections 1.2 and 1.3, Cumulus shall assign, transfer, convey and deliver to Townsquare, and Townsquare shall acquire from Cumulus, all right, title and interest of Cumulus in and to all assets and properties of Cumulus, real and personal, tangible and intangible, that are used or held for use exclusively in the operation of the Cumulus Stations (the “ Cumulus Station Assets ”), including, without limitation, the following:
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(a) all licenses, permits and other authorizations issued to Cumulus by the FCC with respect to the Cumulus Stations (the “ Cumulus FCC Licenses ”) described on Schedule 1.1.2(a) , including any renewals or modifications thereof between the date hereof and Closing, along with assignable applications pending before the FCC with respect to the renewal or modification of the Cumulus FCC Licenses or for any new FCC authorizations for the Cumulus Stations, and all other permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities held by or in respect of the Cumulus Stations that are (i) necessary to or otherwise used in the operation of the Cumulus Stations or (ii) required as a result of the activities of Cumulus Stations;
(b) all of Cumulus’ equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts and other tangible personal property of every kind and description that are used or held for use in the operation of the Cumulus Stations, including, without limitation, those listed on Schedule 1.1.2(b) and Schedule 3.6 , except for any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Cumulus Tangible Personal Property ”);
(c) all of Cumulus’ real property used or held for use in the operation of the Cumulus Stations (including any appurtenant easements and improvements located thereon), including, without limitation, those listed on Schedule 1.1.2(c) and Schedule 3.7 (the “ Cumulus Real Property ”);
(d) all agreements for the sale of advertising time on the Cumulus Stations entered into in the ordinary course of business, and all other contracts, agreements and leases entered into in the ordinary course of the Cumulus Stations’ business, including, without limitation, those listed on Schedule 1.1.2(d) and Schedule 3.8 , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4, but excluding (i) the Excluded Cumulus Station Contracts (defined below) and (ii) any such agreements, contracts and leases which are Shared Contracts, which shall be governed by Section 1.3 hereof (collectively, the “ Cumulus Station Contracts ”);
(e) all of Cumulus’ rights in and to the Cumulus Stations’ call letters and Cumulus’ rights in and to the trademarks, trade names, service marks, internet domain names, copyrights, programs and programming material, jingles, slogans, logos, and other intangible property which are used or held for use in the operation of the Cumulus Stations, including, without limitation, those listed on Schedule 1.1.2(e) and Schedule 3.10 (the “ Cumulus Intangible Property ”); and
(f) all of Cumulus’ rights in and to all the files, documents, records, and books of account (originals to the extent existing, or copies thereof) to the extent relating primarily to the operation of the Cumulus Stations, including the Cumulus Stations’ local public files, programming information and studies, engineering data, advertising studies, email databases, marketing and demographic data, sales correspondence, lists of advertisers, credit and sales reports, and logs, but excluding records relating to Cumulus Excluded Assets (defined below).
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The Cumulus Station Assets shall be transferred to Townsquare free and clear of Liens, except for (A) Townsquare Assumed Obligations (defined below), (B) Liens for taxes not yet due and payable, (C) Liens that will be released at or prior to Closing, and (D) with respect to the Cumulus Real Property, such other easements, rights of way, building and use restrictions and other exceptions that do not in any material respect detract from the value of the property (on an individual basis) subject thereto or impair the use thereof in the ordinary course of the business of the Cumulus Stations for which such property relates (collectively, “ Cumulus Permitted Liens ”). Notwithstanding the foregoing or anything to the contrary contained elsewhere in this Agreement (including, without limitation, Section 5.10), Cumulus Permitted Liens shall not include, and Cumulus will at the Closing cause the release, removal or discharge of, monetary obligations such as mortgages, mechanics’ and materialmen’s liens, judgment liens and fines for the violation of municipal ordinances, orders or requirements issued in connection with the Cumulus Real Property prior to the Closing Date.
1.1.3 Determination of Transferees. The conveyances described in Sections 1.1.1 and 1.1.2 shall be made to the transferees listed on Schedule 1.1.3 .
1.2 Excluded Assets . Notwithstanding anything to the contrary contained herein, the assets to be exchanged under this Agreement shall not include the following assets or any rights, title and interest therein (the “ Townsquare Excluded Assets ” or the “ Cumulus Excluded Assets ”, as applicable):
(a) all cash and cash equivalents, including, without limitation, certificates of deposit, commercial paper, treasury bills, marketable securities, money market accounts and all such similar accounts or investments;
(b) all tangible and intangible personal property retired in the ordinary course of business or disposed of between the date of this Agreement and Closing in accordance with Article 4;
(c) all contracts that are terminated or expire prior to Closing and all contracts to which Townsquare is a party that are listed on Schedule 1.2(c) (the “ Excluded Townsquare Station Contracts ”);
(d) all contracts that are terminated or expire prior to Closing and all contracts to which Cumulus is a party that are listed on Schedule 1.2(d) (the “ Excluded Cumulus Station Contracts ”);
(e) all trade names not exclusive to the operation of the Townsquare Stations or the Cumulus Stations, as applicable, the respective corporate names of the parties and their respective affiliates (including, without limitation, the names “Townsquare”, “Cumulus” and “Citadel”), charter documents, and books and records relating to organization, existence or ownership, duplicate copies of records, and all records not relating to the operation of the Townsquare Stations or the Cumulus Stations, as applicable;
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(f) all contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including, without limitation, rights arising from any refunds due with respect to insurance premium payments to the extent related to such insurance policies; provided that, to the extent of any proceeds which would cover any damages or losses which are required to be repaired and/or remediated pursuant to Sections 5.4 or 5.5, the proceeds therefrom shall be used exclusively to repair and/or remediate any such damages or losses;
(g) all pension, profit sharing plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any;
(h) all accounts receivable and any other rights to payment of cash consideration for goods or services sold or provided prior to the Effective Time (defined below) or otherwise arising during or attributable to any period prior to the Effective Time, which shall be governed by Section 5.8 hereof;
(i) any non-transferable shrink-wrapped computer software and any other non-transferable computer licenses that are not material to the operation of the Townsquare Stations or the Cumulus Stations, as applicable;
(j) all deposits and prepaid expenses (and rights arising therefrom or related thereto), except to the extent the conveying party receives a credit therefor under Section 1.7;
(k) files, documents, records, and books of account that relate to multiple stations (other than solely the Townsquare Stations or Cumulus Stations, as applicable) or other business units (other than solely the business of the Townsquare Stations or Cumulus Stations, as applicable);
(l) computers and other similar assets and any operating systems and related assets that are used in the operation of multiple stations (other than solely the Townsquare Stations or Cumulus Stations, as applicable) or other business units (other than solely the business of the Townsquare Stations or Cumulus Stations, as applicable);
(m) the Townsquare assets specifically listed on Schedule 1.2(a) , and the Cumulus assets specifically listed on Schedule 1.2(b) ; and
(n) all rights and claims of the conveying party to the extent related solely to the Townsquare Retained Obligations or the Cumulus Retained Obligations, respectively.
For the avoidance of doubt, with respect to any marks or similar intangible property used in the operation of multiple stations, the Townsquare Station Assets or Cumulus Station Assets, as applicable, include only the right to use such items in the manner used by the conveying party at the applicable station on a basis exclusive in the market, but non-exclusive in that no right is granted with respect to other markets (some of which may overlap), and such right (i) is limited to the extent of the conveying party’s transferable rights, (ii) may not be assigned by the acquiring party except to a transferee of the applicable station who assumes the acquiring party’s obligations in respect thereof (and any such assignment shall not relieve the acquiring party of any obligation or liability), (iii) may be used by the acquiring party only in a manner that does not diminish the quality of such items, and only without violating law or any
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third party rights (and the acquiring party shall be solely responsible for such use and the related services), and (iv) shall terminate for noncompliance or non-use, but otherwise shall be coterminous with the conveying party’s rights. At Closing, the parties shall enter into a separate license agreement that provides such rights in accordance with this Agreement in the form attached hereto as Exhibit A (the “ License Agreement ”). Notwithstanding the foregoing, in no event shall this paragraph relate to any of the following marks (or any other rights with respect thereto): the names “Townsquare”, “Cumulus” or “Citadel”.
1.3 Shared Contracts .
(a) Some contracts, agreements and leases relating to the Townsquare Stations or Cumulus Stations, as applicable, may be used in the operation of multiple stations or other business units (each, a “ Shared Contract ”). Schedule 1.3(a) sets forth all Shared Contracts relating to the Townsquare Stations that are material with respect to the applicable market, and Schedule 1.3(b) sets forth all Shared Contracts relating to the Cumulus Stations that are material with respect to the applicable market. Except as provided by Schedule 1.2(c) or Schedule 1.2(d) , as applicable, at the Closing, the rights and obligations under Shared Contracts shall be equitably allocated among stations and such other business units in a manner reasonably determined by the parties in accordance with the following equitable allocation principles:
(i) any allocation expressly set forth in the Shared Contract shall control;
(ii) if none, then any allocation previously made by the conveying party in the ordinary course of station operations shall control;
(iii) if none, then the quantifiable proportionate benefit to be received by the parties after Closing shall control; and
(iv) if not quantifiable, then reasonable accommodation shall control.
(b) With respect to each such Shared Contract, (i) the parties shall cooperate with each other and each contract counterparty in such allocation, (ii) only the allocated portion of each such Shared Contract is included in the contracts to be assigned and assumed under this Agreement (without need for further action), and (iii) the parties shall use their commercially reasonable efforts to ensure that such allocation shall occur by termination of the Shared Contract and execution of new contracts between each contract counterparty and each of Townsquare and Cumulus (but only if such contract is on terms at least as favorable than the existing contract), but shall include the allocated portion of such contracts will not include any group discounts or similar benefits specific to a party or its affiliates. Completion of documentation of any such allocation is not a condition to Closing; provided , however , that with respect to each such Shared Contract which is not allocated at Closing pursuant to subsection (iii) of this Section 1.3(b), the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which acquiring party shall receive the allocable benefits thereunder from and after Closing, and to the extent of the allocable benefits received, the acquiring party shall pay and perform the conveying party’s obligations arising thereunder from and after Closing in accordance with its terms, until new documentation
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effecting the allocation described in this Section 1.3 is executed and delivered. With respect to each Shared Contract, each party shall be responsible for all costs associated with the portion allocated to such party, and shall indemnify and hold harmless the other party for any losses associated with the performance of such party for the portion allocated to such party.
(c) In the event that the terms of any Shared Contract prohibits the allocation contemplated by this Section 1.3, the parties shall use commercially reasonable efforts to provide the benefits and obligations of the portion of the Shared Contract that would have been allocated to a party hereunder but for any such prohibition.
(d) Notwithstanding the foregoing, in no event shall a Shared Contract relate to any employees of Townsquare or Cumulus, or the following marks (or any other rights with respect thereto): the names “Townsquare”, “Cumulus” and “Citadel”.
1.4 Cumulus Assumed Obligations . On the Closing Date (defined below), Cumulus shall assume the obligations of Townsquare arising during, or attributable to, any period of time on or after the Closing Date under the Townsquare Station Contracts, the obligations described in Section 5.7(c), any other non-employment liabilities of Townsquare to the extent Cumulus receives a credit therefor or otherwise assumes such liabilities under Section 1.7 and liabilities listed on Schedule 1.4 (collectively, the “ Cumulus Assumed Obligations ”). Except for the Cumulus Assumed Obligations, Cumulus does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Townsquare (the “ Townsquare Retained Obligations ”), including any liability for borrowed money, any liability under a mortgage or notices of violation, municipal ordinances, orders or requirements issued in connection with the Townsquare Real Property prior to the Closing Date or any liability for any employees of Townsquare (other than as specifically contemplated Section 5.7(c) or related to the employment of any such individuals by Cumulus from and after the Closing).
1.5 Townsquare Assumed Obligations . On the Closing Date, Townsquare shall assume the obligations of Cumulus arising during, or attributable to, any period of time on or after the Closing Date under the Cumulus Station Contracts, the obligations described in Section 5.7(c), any other non-employment liabilities of Cumulus to the extent Townsquare receives a credit therefor or otherwise assumes such liabilities under Section 1.7 and liabilities listed on Schedule 1.5 (collectively, the “ Townsquare Assumed Obligations ”). Except for the Townsquare Assumed Obligations, Townsquare does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Cumulus (the “ Cumulus Retained Obligations ”), including any liability for borrowed money, any liability under a mortgage or notices of violation, municipal ordinances, orders or requirements issued in connection with the Cumulus Real Property prior to the Closing Date or any liability for any employees of Cumulus (other than as specifically contemplated Section 5.7(c) or related to the employment of any such individuals by Townsquare from and after the Closing).
1.6 Cash Consideration . In addition to delivery of the Townsquare Station Assets, in further consideration of Cumulus’ performance of this Agreement, the sale, assignment, transfer, conveyance, setting over, and delivery of the Cumulus Station Assets as defined hereinabove to
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Townsquare, Townsquare shall pay Cumulus the sum of $115,750,113, subject to the adjustments in Section 1.7 below (the “ Cash Consideration ”). In particular, Townsquare Bloomington shall pay Cumulus Broadcasting and Cumulus Licensing a portion of the Cash Consideration equal to the excess of the value of the Killeen-Temple Station Assets over the value of the Bloomington Station Assets as determined under Section 1.8 (the “ Bloomington Cash Consideration ”), Townsquare Peoria shall pay Citadel Broadcasting and Radio License a portion of the Cash Consideration equal to the excess of the value of the Presque Isle Station Assets over the value of the Peoria Station Assets as determined under Section 1.8 (the “ Peoria Cash Consideration ”), and the Townsquare Purchasers shall pay the remainder of the Cash Consideration to the Cumulus Sellers, in proportion to the values of the respective Station Assets purchased, all as determined under Section 1.8. On the Closing Date, Townsquare will pay to Cumulus by wire transfer of immediately available funds to a bank designated by Cumulus the Cash Consideration., and the determination of the Cash Consideration paid by each Townsquare entity shall be made according to this Section 1.6, taking into account as applicable the provisions of Sections 1.7 and 1.8 and Article 9.
1.7 Prorations and Adjustments .
(a) All prepaid and deferred income and expenses arising from the operation of the Townsquare Stations and the Cumulus Stations shall be prorated between the transferors and transferees in accordance with generally accepted accounting principles, consistently applied (“GAAP”), as of 12:01 a.m. local time in each market on the day of Closing (the “Effective Time”). Such prorations shall include, without limitation, any proration required by Section 5.7, all FCC regulatory fees, ad valorem, real estate and other property taxes (except transfer taxes as provided by Section 11.1), music and other license fees, utility expenses, rent and other amounts under contracts and similar prepaid and deferred items. Each conveying party shall receive a credit for deposits and prepaid expenses. Sales commissions related to the sale of advertisements broadcast prior to Closing shall be the responsibility of conveying party, and sales commissions related to the sale of advertisements broadcast after Closing shall be the responsibility of the acquiring party.
(b) With respect to trade, barter or similar agreements for the sale of time for goods or services (“ Barter ”) assumed by the acquiring party, if at Closing the Townsquare Stations or Cumulus Stations, as the case may be, have an aggregate negative or positive Barter balance (i.e., the amount by which the value of air time to be provided by such stations after the Closing exceeds, or conversely, is less than, the fair market value of corresponding goods and services), there shall be an adjustment therefor in favor of the applicable party. In determining Barter balances, the value of air time shall be based upon the rates of the conveying party as of the date hereof, and the corresponding goods and services shall include those to be received by the applicable stations after the Closing. Notwithstanding anything herein to the contrary, in no event shall Townsquare, on the one hand, or Cumulus, on the other hand, assume any Barter obligations of the stations acquired by such party in excess of (i) $200,000 in the aggregate per market or (ii) $400,000 in the aggregate in the case of the Townsquare Stations and $2,200,000 in the aggregate in the case of the Cumulus Stations, in each case for which the goods or services provided by a third party in exchange for on-air time has been provided to the conveying party prior to Closing.
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(c) No later than five (5) business days prior to the Closing Date, (i) Townsquare shall deliver to Cumulus a written statement (including reasonable detail and supporting documentation) setting forth a reasonable and good faith estimate of its calculation of the net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Townsquare Stations, and (ii) Cumulus shall provide to Townsquare a statement (including reasonable detail and supporting documentation) setting forth a reasonable and good faith estimate of its calculation of the net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Cumulus Stations. Each party’s proposed estimated adjustment shall be subject to the receiving party’s reasonable consent thereto (not to be unreasonably withheld, delayed or conditioned) (to the extent that a consent is not forthcoming, the party withholding consent shall, together with notice it is not consenting, set forth its explanation of why it is withholding such consent). To the extent that the net amount of such estimated adjustments, when taken together in the aggregate, results in a credit to Townsquare, then the Cash Consideration payable at Closing shall be reduced by the Estimated Adjustment Amount, and to the extent that the net amount of such estimated adjustments, when taken together in the aggregate, results in a credit to Cumulus, then the Cash Consideration payable at Closing shall be increased by the Estimated Adjustment Amount.
(d) As soon as reasonably practicable, and in any event within sixty (60) calendar days after the Closing Date, (i) Cumulus shall deliver to Townsquare a written statement (including reasonable detail and supporting documentation) setting forth its calculation of the actual net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Townsquare Stations, and (ii) Townsquare shall deliver to Cumulus a written statement (including reasonable detail and supporting documentation) setting forth its calculation of the actual net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Cumulus Stations. Following its receipt of such statements, each party shall permit the other party and its auditors to have access during normal business hours and upon advance written notice to the books, records and other documents pertaining to or used in connection with preparation of such statements. Within thirty (30) calendar days of receipt of such statements, the receiving party shall deliver any objections to the delivering party that it may have to the calculation of the prorations and adjustments ( provided , that failure of the receiving party to deliver such notice within such time period shall be deemed to be acceptance of the statement of the delivering party by the receiving party). To the extent of any such objections, the parties shall negotiate in good faith to resolve their disputes promptly and mutually agree on the final prorations and adjustments. In the event the parties are unable to resolve any such dispute within thirty (30) calendar days of written notice of the dispute, the parties shall engage a mutually agreeable accountant or other third party (whose fees and expenses shall be equally shared), who shall resolve such dispute and whose determination shall be final and binding on the parties.
(e) The final adjustment amount due to Townsquare or Cumulus, as determined pursuant to Section 1.7(d), shall be paid promptly by check or wire transfer from the party owning the final amount made payable to the party to whom the payment is due. Any adjustment pursuant to this Section 1.7 shall be deemed to be an adjustment to the Cash Consideration for all purposes.
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1.8 Allocation .
(a) Townsquare and Cumulus agree that the fair market value of the Townsquare Station Tangible Assets (defined below) and the Cumulus Station Tangible Assets (defined below) (collectively, the “ Tangible Assets ”) will be appraised by a mutually agreed appraisal firm, at a level of specificity that will permit the parties to complete IRS Forms 8594 and 8824. The expense of such appraisal (the “ Appraisal ”) will be shared equally by the parties. The parties shall use their commercially reasonable efforts to cause the Appraisal to be completed within a reasonable period of time after the Closing Date. The parties will negotiate the allocation of the Townsquare Station Intangible Assets (defined below) and the Cumulus Station Intangible Assets (defined below) (collectively, the “ Intangible Assets ”) for a period of ninety (90) days after Closing. If the parties cannot agree on the allocation of the Intangible Assets, then each party shall use the allocation they deem appropriate and consistent with the fair market value of each Intangible Asset.
(b) The parties shall each prepare IRS Forms 8594 and 8824 reflecting the allocation of the fair market value among the Tangible Assets consistent with the Appraisal and reflecting the allocation of the Intangible Assets consistent with the agreed upon allocation, if agreed, or using each parties own allocation if not agreed. and the requirements of Sections 1031 and 1060 of the Code and the Treasury Regulations thereunder (including, without limitation, Treasury Regulations sections 1.1031(j)-1(b) and 1.1060-1(b)(8)) and such other information as required by such IRS forms, and taking into account the fact that the parties are exchanging some or all of the assets as part of a like-kind exchange under Section 1031 of the Code. The parties shall cooperate with each other in good faith to file, with their respective federal income tax returns for the tax year in which the Closing occurs, IRS Forms 8594 and 8824 that are consistent with each other’s forms, the Appraisal and the principles set forth in the immediately preceding sentence. If, after fulfilling their obligation to cooperate in good faith to agree on consistent Forms 8594 and 8824, the parties cannot so agree, then each party shall file such forms as it deems appropriate and consistent with the Appraisal and the principles set forth in the second preceding sentence. Each party, not later than thirty (30) days prior to the filing of its Forms 8594 and 8824 relating to this transaction, shall deliver to the other party a copy of its Forms 8594 and 8824.
(c) As used herein, (i) Townsquare Station Intangible Assets means the Townsquare FCC Licenses the goodwill/going concern of the Townsquare Stations, and any other identified intangible assets such as network affiliation agreements, (ii) Cumulus Station Intangible Assets means the Cumulus FCC Licenses, the goodwill/going concern of the Cumulus Stations, and any other identified intangible assets such as network affiliation agreements, (iii) Townsquare Station Tangible Assets means all Townsquare Station Assets other than the Townsquare Station Intangible Assets, and (iv) Cumulus Station Tangible Assets means all Cumulus Station Assets other than the Cumulus Station Intangible Assets.
1.9 Closing . The consummation of the exchange of assets provided for in this Agreement (the “Closing”) shall take place on or before the tenth (10th) calendar day after the date of the last to occur of the date on which the FCC Consents shall have been issued and shall have become a Final Order (as defined below), the issuance of the HSR Clearance (defined below), or on such later day (after such governmental consents and approvals have been issued)
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as Cumulus and Townsquare may mutually agree, subject to Section 5.10(b)(iii) and the satisfaction or waiver of the conditions set forth in Articles 6 and 7 below; provided that the parties shall endeavor to cause the Closing to occur on the last day of a month. The date on which the Closing is to occur is referred to herein as the “Closing Date.” For purposes of this Agreement, “ Final Order ” means that the FCC Consent for any FCC Application or Divestiture Application shall not have been reversed, stayed, enjoined, set aside, annulled or suspended, with respect no which no timely request for stay, petition for rehearing, appeal or certiorari or sua sponte action of the FCC with comparable effect shall have been filed or be pending and as to which the time for filing any such request, petition, appeal, certiorari or for the taking of any such sua sponte action by the FCC shall have expired or otherwise terminated, or in the event of any such stay, petition for rehearing or reconsideration, review, appeal, application for review, certiorari or sua sponte action of the FCC, the period provided by the Communications Act of 1934, as amended (the “ Communications Act ”), and the rules, regulations and published policies of the FCC (collectively, the “ FCC Rules ”) for further stay, application for review, petition for rehearing or reconsideration, review, appeal, certiorari or sua sponte action has expired or otherwise terminated.
1.10 Governmental Consents .
(a) Not later than ten (10) business days after the date of this Agreement, (i) Cumulus and Townsquare shall file applications with the FCC (each an “ FCC Application ” and collectively the “ FCC Applications ”) requesting FCC consent to the assignment of the Townsquare FCC Licenses to Cumulus and the Cumulus FCC Licenses to Townsquare; and (ii) Townsquare shall file applications (or take other such actions as Townsquare deems necessary and appropriate in its sole discretion) with the FCC as may be commercially reasonable and necessary under the Communications Act and the FCC Rules which propose the assignment of the FCC licenses set forth on Schedule 1.10(a) to third parties or to a divestiture trust that would, upon consummation, enable Townsquare to be in compliance with 47 C.F.R. §73.3555(a) and the Notes thereto (collectively, “the Local Radio Ownership Rule” as of the Closing Date (each such application, a “ Divestiture Application ,” and collectively the “ Divestiture Applications ”). Any actions by the FCC (including any actions duly taken by the FCC’s staff pursuant to delegated authority) granting consent to any FCC Application or any Divestiture Application are referred to herein individually as the “ FCC Consent ” and collectively as the “ FCC Consents .” Cumulus and Townsquare shall diligently prosecute the FCC Applications, and Townsquare shall diligently prosecute the Divestiture Applications. Both parties shall promptly respond to any requests by the FCC for reasonable amendments of the FCC Applications and, for Townsquare the Divestiture Applications, oppose any petitions to deny or informal objections filed against the FCC Applications and, for Townsquare, the Divestiture Applications (and oppose any petition for reconsideration or application for review seeking reversal or rescission of the FCC Consents for the FCC Applications, and, for Townsquare, the FCC Consents for the Divestiture Applications) and otherwise use their commercially reasonable efforts to obtain the FCC Consents as soon as possible; provided, however, that neither Cumulus nor Townsquare shall have any obligation to (i) participate in any evidentiary hearing before the FCC on any of the FCC Applications or any of the Divestiture Applications or (ii) seek reconsideration or review or otherwise appeal a decision of the FCC to dismiss any of the FCC Applications or any of the Divestiture Applications as unacceptable for filing. Cumulus or Townsquare, as the case may be, shall notify as soon as reasonably practicable the other in the event it becomes aware of any
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facts, actions, communications or occurrences that might directly or indirectly impede the parties’ ability to secure FCC Consents for any of the FCC Applications or any of the Divestiture Applications. Neither Cumulus nor Townsquare shall take any action that it knows or should know would or materially delay or materially impede the receipt of the FCC Consent for any FCC Application or any Divestiture Application.
(b) As soon as reasonably practicable after the date of this Agreement, Cumulus and Townsquare shall make any required filings with the Federal Trade Commission (“ FTC ”) and the Antitrust Division of the United States Department of Justice (“ DOJ ”) pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. Expiration or termination of any applicable waiting period under the HSR Act is referred to herein as “ HSR Clearance .”
(c) Unless prohibited by law or government regulation, Cumulus and Townsquare shall keep the other informed of any material communications (including any meeting, conference or telephone call) and will promptly provide each other with copies of all correspondence to or from any governmental authorities with respect to this Agreement or the transactions contemplated hereby (including material correspondence, whether in electronic or documentary form, but excepting those documents containing proprietary information), and a summary of any oral communications to or from any governmental authority with respect to this Agreement or the transactions contemplated hereby (which may be by email). Cumulus and Townsquare shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. Cumulus and Townsquare shall consult and cooperate with each other in the preparation of such filings, and shall promptly inform the other party of any material communication received by such party from any governmental authority regarding the transactions contemplated by this Agreement. Cumulus and Townsquare shall review and discuss in advance, and consider in good faith the views of the other party in connection with any proposed written or material oral communication with any governmental authority. Neither Cumulus nor Townsquare shall participate in any meeting with any governmental authority unless it first consults with the other party in advance, and to the extent permitted by the governmental authority, gives that party the opportunity to be present thereat. Neither Cumulus nor Townsquare shall agree to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated by this Agreement at the behest of any governmental authority without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed). The FCC Consents and the HSR Clearance are referred to herein collectively as the “ Governmental Consents ”.
(d) Schedule 2.4(a) sets forth all license renewal applications (each a “ Townsquare Renewal Application ”) that are pending before the FCC or are required to be filed with the FCC on or before the Outside Date (as defined in Section 10.1(d)), with respect to certain of the Townsquare Stations (each, a “ Townsquare Renewal Station ”). Schedule 3.4(a) sets forth license renewal applications (each a “ Cumulus Renewal Application ” and, together with the Townsquare Renewal Applications, the “ Renewal Applications ”) that are pending before the FCC or are required to be filed with the FCC on or before the Outside Date (as
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defined in Section 10.1(d)), with respect to certain of the Cumulus Stations (each, a “ Cumulus Renewal Station ” and, together with the Townsquare Renewal Stations, the “ Renewal Stations ”). In order to avoid a disruption or delay in the processing of the FCC Applications and the Divestiture Applications, the parties will use commercially reasonable efforts to promptly prosecute and resolve any issues with respect to the pending Renewal Applications. The parties will promptly advise each other of any communications from the FCC with respect to the pending Renewal Applications. If before Closing any Townsquare Renewal Applications or Cumulus Renewal Applications are required to be filed under FCC Rules before the Outside Date, the FCC Applications will include a request that the FCC apply its policy permitting license assignments and transfers in transactions involving multiple markets to proceed, notwithstanding the pendency of one or more license renewal applications. Townsquare and Cumulus shall make such representations and undertakings as necessary or appropriate to invoke such policy, including an agreement by each party to assume the position of the applicant with respect to any Renewal Applications that remain pending when the FCC Consents are issued and to thereby assume the risks relating to such Renewal Applications; provided, that Townsquare or Cumulus, as the case may be, shall be entitled to reimbursement or indemnification from the other party for any forfeitures, fines, or other sanctions which the FCC imposes on such party after Closing (including non-renewal of a station’s license) in conjunction with or with respect to such Renewal Application that is not covered by an agreement identified in subsection (e) of this section; and, provided further, that such reimbursement or indemnification shall be made within thirty (30) days after a request therefor is received by the other party.
(e) To the extent reasonably necessary to facilitate grant of the FCC Applications and the Divestiture Applications, Townsquare will enter into any agreements requested by the FCC, including (i) tolling agreements to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against a Townsquare Station in connection with any pending complaints, investigations, letters of inquiry, or other proceedings, including, but not limited to complaints that such Townsquare Station aired programming that contained obscene, indecent or profane material; (ii) escrow agreements to place into escrow certain amounts to cover any potential monetary forfeiture against Townsquare with respect to the Townsquare Stations for violations of the FCC Rules; (iii) agreements regarding assignment for Townsquare to guarantee the obligations of the licensees of the Townsquare Stations with respect to any potential monetary forfeiture imposed by the FCC after consummation of the transactions contemplated hereby with respect to the Townsquare Stations for violations of the FCC Rules; and (iv) any other agreement with the FCC to enable the FCC to assess potential monetary forfeiture against Townsquare with respect to the Townsquare Stations for violations of the FCC Rules (collectively, the “ Townsquare FCC Agreements ”). To the extent reasonably necessary to facilitate grant of the FCC Applications and the Divestiture Applications, Cumulus will enter into any agreements requested by the FCC, including (i) tolling agreements to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against a Cumulus Station in connection with any pending complaints, investigations, letters of inquiry, or other proceedings, including, but not limited to complaints that such Cumulus Station aired programming that contained obscene, indecent or profane material; (ii) escrow agreements to place into escrow certain amounts to cover any potential monetary forfeiture against Cumulus with respect to the Cumulus Stations for violations of the FCC Rules; (iii) agreements regarding assignment for Cumulus to guarantee the obligations of the licensees of the Cumulus Stations
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with respect to any potential monetary forfeiture imposed by the FCC after consummation of the transactions contemplated hereby with respect to the Cumulus Stations for violations of the FCC Rules and (iv) any other agreement with the FCC to enable the FCC to assess potential monetary forfeiture against Cumulus with respect to the Cumulus Stations for violations of the FCC Rules (collectively, the “ Cumulus FCC Agreements ” and, together with the Townsquare FCC Agreements, the “ FCC Agreements ”). The parties will consult in good faith with each other prior to entering into the FCC Agreements.
(f) Notwithstanding anything to the contrary in this Agreement, Townsquare and Cumulus agree that to the extent the satisfaction of any requirement or condition sought or imposed by the FCC, FTC or DOJ, relating in any way to this Agreement or the other transactions contemplated herein (“ Government Conditions ”) would require undertakings to divest or hold separate any of Townsquare’s existing assets, properties or businesses or any of the Cumulus Station Assets to be acquired by Townsquare hereunder, then in such event the parties shall work together in good faith to eliminate such Government Conditions. If the parties are unable to eliminate such Government Conditions, in lieu of undertaking such divestitures either Cumulus or Townsquare may elect to exclude all of the Cumulus Stations in the market(s) subject to such Government Condition from the transactions contemplated hereby. Such excluded Cumulus Stations shall be deemed to be Cumulus Excluded Assets and the amount of Cash Consideration shall be reduced in accordance with Schedule 1.10(f) . For the avoidance of doubt, it is the intention of the foregoing provisions that Cumulus be assured that this Agreement and the transactions contemplated hereby and thereby be consummated, notwithstanding any investigation, challenge or requirement of a remedy by the FCC, FTC or DOJ with respect to antitrust, competition or other matters.
ARTICLE 2: TOWNSQUARE REPRESENTATIONS AND WARRANTIES
Townsquare hereby makes the following representations and warranties to Cumulus:
2.1 Organization . Townsquare is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Townsquare Station Assets are located. Townsquare has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Townsquare pursuant hereto (collectively, the “ Townsquare Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
2.2 Authorization . The execution, delivery and performance of this Agreement and the Townsquare Ancillary Agreements by Townsquare have been duly authorized and approved by all necessary action of Townsquare and do not require any further authorization or consent of Townsquare. This Agreement is, and each Townsquare Ancillary Agreement when made by Townsquare and the other parties thereto will be, a legal, valid and binding agreement of Townsquare enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
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2.3 No Conflicts . Except as set forth on Schedule 2.3 and except for the Governmental Consents and consents to assign certain of the Townsquare Station Contracts, the execution, delivery and performance by Townsquare of this Agreement and the Townsquare Ancillary Agreements and the consummation by Townsquare of any of the transactions contemplated hereby does not conflict with any organizational documents of Townsquare, any contract or agreement to which Townsquare is a party or by which it is bound, or any law, judgment, order, or decree to which Townsquare is subject, require the consent or approval of, or a filing by Townsquare with, any governmental or regulatory authority or any third party, or result in the creation of any Lien other than a Townsquare Permitted Lien.
2.4 FCC Licenses . Except as set forth on Schedule 2.4 :
(a) Townsquare is the holder of the Townsquare FCC Licenses described on Schedule 1.1.1(a) , which are all of the licenses, permits and authorizations required for the present operation of the Townsquare Stations. Townsquare FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded, terminated or materially adversely modified and have not expired, and are not subject to any conditions except for conditions applicable to broadcast radio licensees generally or as otherwise disclosed on the face of the Townsquare FCC Licenses, and have been issued for full terms. No application is pending for renewal of any Townsquare FCC License and Townsquare is not aware of any reason that could reasonably be expected to result in a refusal by the FCC to renew any Townsquare FCC License for a full term without any conditions (other than those standard to renewals of radio broadcast licenses) in the normal course. There is not pending, or, to Townsquare’s knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Townsquare FCC Licenses (other than proceedings applicable to broadcast radio licensees generally). There is not issued or outstanding, or to Townsquare’s knowledge, threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Townsquare Stations or against Townsquare with respect to the Townsquare Stations that could result in any such action. There is no order to show cause, notice of violation, notice of apparent liability, notice of forfeiture issued by the FCC with respect to Townsquare, the Townsquare FCC Licenses or the Townsquare Stations that remains unsatisfied. The Townsquare Stations are operating in compliance in all material respects with the terms of the Townsquare FCC Licenses, the Communications and FCC Rules. All material reports and filings required to be filed with the FCC by Townsquare with respect to the Townsquare Stations have been timely filed, and all FCC regulatory fees have been timely paid. All such reports and filings and payments are accurate and complete in all material respects.
(b) Townsquare is in compliance in all material respects with the requirements of the Federal Aviation Administration (the “ FAA ”) with respect to the construction and/or alteration of the Townsquare Stations’ antenna structures and, where required, FAA “no hazard” determinations for each antenna structure have been obtained and, where required, each antenna structure has been registered with the FCC.
(c) Schedule 1.10(a) sets forth a list of all Arbitron-rated markets stations owned by Townsquare which, when combined with the Cumulus Stations listed in Schedule 1.10(a) , will cause Townsquare to hold attributable ownership interests in more radio stations
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that permitted under the Local Radio Ownership Rule, as in effect as of the date of this Agreement. Schedule 1.10(a) lists the stations owned by Townsquare in such market, the Cumulus Stations in such market, the total number of radio stations in such market, and the radio stations that Townsquare has agreed to sell to a third party. Upon consummation of the transactions contemplated by this Agreement, Townsquare shall be in compliance with the Local Radio Ownership Rule.
2.5 Taxes . Townsquare has, in respect of the Townsquare Stations’ business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law, and has paid all taxes in full or discharged (or set aside appropriate amounts for) all taxes which are required to be paid by it under applicable law. There are no pending or, to Townsquare’s knowledge, threatened, investigations or claims against Townsquare for or relating to any liability in respect of taxes related to the Townsquare Stations’ business. All taxes required to be withheld by Townsquare with respect to the Townsquare Stations’ business have been withheld and paid (or will be paid) when due to the appropriate governmental authority.
2.6 Personal Property . Schedule 2.6 contains a list of material items of Townsquare Tangible Personal Property included in the Townsquare Station Assets. Except as set forth on Schedule 2.6 , Townsquare has good and marketable title to the owned Townsquare Tangible Personal Property free and clear of Liens other than Townsquare Permitted Liens. Except as set forth on Schedule 2.6 , all material items of Townsquare Tangible Personal Property are in good operating condition, ordinary wear and tear excepted.
2.7 Real Property . Schedule 2.7 contains a description of the Townsquare Real Property. The Townsquare Real Property constitutes all real properties used or occupied by Townsquare in connection with the Townsquare Stations’ business. Townsquare has good and marketable fee simple title to the owned Townsquare Real Property described on Schedule 2.7 (the “ Townsquare Owned Real Property ”) (if any), free and clear of Liens other than Townsquare Permitted Liens. With respect to the Townsquare Owned Real Property, no portion thereof is subject to any pending or, to Townsquare’s knowledge, threatened condemnation proceeding or proceeding by any public authority. The Townsquare Owned Real Property is sufficient for the operation of the Townsquare Stations as currently operated, and to the knowledge of Townsquare, no material capital expenditures are required in respect of the Townsquare Owned Real Property to continue to operate the Townsquare Stations as currently operated. Except as set forth in Schedule 2.8 and except for Townsquare Permitted Liens, there are no leases, subleases, licenses or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of any parcel of Townsquare Owned Real Property. Schedule 2.7 includes a description of each lease of Townsquare Real Property or similar agreement included in the Townsquare Station Contracts (the “ Townsquare Real Property Leases ”). Townsquare has valid leasehold interests in the Townsquare Real Property Leases, free and clear of all Liens other than Townsquare Permitted Liens. The Townsquare Real Property is not subject to any suit for condemnation or other taking by any public authority. The Townsquare Real Property includes access to the Townsquare Stations’ facilities consistent with past practices.
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2.8 Contracts . Schedule 2.8 contains a list of all contracts (written or oral) that are as of the date hereof are used in the operation of, or bind or otherwise restrict in any material respect, the Townsquare Stations, including, but not limited to, programming agreements, vendor agreement, service contracts, licensing agreements, tower agreements, local marketing agreements and network agreements, but excluding agreements for the sale of advertising time entered into in the ordinary course of business terminable on not more than sixty (60) days or less notice, barter arrangements and contracts involving payments or receipts of less than $7,500 per annum. The Townsquare Station Contracts requiring the consent of a third party to assignment are identified with an asterisk on Schedule 1.1.1(c) and 1.1.1(d) . Each of the Townsquare Station Contracts (including, without limitation, each of the Townsquare Real Property Leases) is in effect and is binding upon Townsquare and, to Townsquare’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Townsquare has performed its obligations under each of the Townsquare Station Contracts in all material respects, and is not in material default thereunder, and to Townsquare’s knowledge, no other party to any of the Townsquare Station Contracts is in default thereunder in any material respect. Schedule 2.8 lists a summary of barter payables and barter receivables. To the extent of any oral agreement required to be disclosed on Schedule 2.8 , a summary of such agreement is set forth on Schedule 2.8 . Except as set forth on Schedule 2.8 , none of the Townsquare Station Contracts (i) involve Townsquare and any entity in which any officer, director or shareholder of Townsquare has any interest, (ii) require Townsquare to make any payment upon consummation of the transactions contemplated hereby, or upon any subsequent sale of the Townsquare Station Assets or (iii) restrict the ability of Townsquare to compete in any jurisdiction.
2.9 Environmental . Except as set forth on Schedule 2.9 or in any environmental report delivered by Townsquare to Cumulus prior to the date of this Agreement, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Townsquare Real Property included in the Townsquare Station Assets. Except as set forth on Schedule 2.9 or in any environmental report delivered by Townsquare to Cumulus prior to the date of this Agreement, (a) Townsquare has complied in all material respects with all environmental, health and safety laws applicable to the Townsquare Stations, (b) there has been no action, notice, claim or proceeding pending or, to Townsquare’s knowledge, threatened, against Townsquare that asserts that Townsquare has violated any environmental, health or safety laws applicable to the Townsquare Real Property, and (c) to Townsquare’s knowledge, no conditions with respect to the past or present operations or business of the Townsquare Stations exist which could reasonably be expected to give rise to any common law or statutory liability in respect of the Townsquare Stations’ business under any environmental, health or safety law based on any such condition.
2.10 Intangible Property . Schedule 2.10 contains a description of the material Townsquare Intangible Property included in the Townsquare Station Assets, including (i) all patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications and domain names included in the intangible property and (ii) all (A) licenses of intangible property included in the Townsquare Station Assets to any third party, (B) licenses of intellectual property by any third party to Townsquare included in the Townsquare Station Assets, (C) agreements between Townsquare and any third party relating to
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the development or use of intellectual property, the development or transmission of data, or the use, modification, framing, linking, advertisement or other practices with respect to Internet web sites of any of Townsquare Stations and (C) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of intangible property included in the Townsquare Station Assets, other than commercially available off-the-shelf computer software licensed pursuant to shrink-wrap or click-wrap licenses that is not material to the operation of the Townsquare Stations. Except as set forth on Schedule 2.10 , (i) to Townsquare’s knowledge Townsquare’s use of the Townsquare Intangible Property does not infringe upon any third party rights in any respect, (ii) no material Townsquare Intangible Property is the subject of any pending, or, to Townsquare’s knowledge, threatened legal proceedings claiming infringement or unauthorized use, (iii) Townsquare has not received any written notice that its use of any material Townsquare Intangible Property is unauthorized or infringes upon the rights of any other person, and (iv) to Townsquare’s knowledge, no person is engaging in any activity that infringes the Townsquare Intangible Property in any material respect. Except as set forth on Schedule 2.10 , to Townsquare’s knowledge, Townsquare owns or has the right to use the Townsquare Intangible Property free and clear of Liens other than Townsquare Permitted Liens.
2.11 Employees . Except as set forth on Schedule 2.11(a) , (i) Townsquare has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Townsquare Stations’ business, including, without limitation, those which relate to prices, wages, hours, discrimination in employment and collective bargaining, (ii) there is no unfair labor practice charge or complaint against Townsquare in respect of the Townsquare Stations’ business pending or, to Townsquare’s knowledge, threatened before the National Labor Relations Board, any state labor relations board or any court or tribunal, and there is no strike, dispute, request for representation, slowdown or stoppage pending or threatened in respect of the Townsquare Stations’ business, and (iii) Townsquare is not party to any collective bargaining, union or similar agreement with respect to the employees of Townsquare at the Townsquare Stations, and to Townsquare’s knowledge, no union represents or claims to represent or is attempting to organize such employees. Schedule 2.11(b) lists, as of the date hereof, by each Townsquare Station, the name, current annual salary rate, bonus, accrued personal time off, date of employment and position of each employee of such Townsquare Station. Except as set forth on Schedule 2.11(c) , each employee of the Townsquare Stations is an employee at-will, and no severance is payable upon the cessation of employment. Except as set forth on Schedule 2.11(d ), no employee of the Townsquare Stations has been transferred to another Townsquare station (excepting any Townsquare Station) or division or group (or to any affiliate of Townsquare) in the past three months.
2.12 Insurance . Townsquare maintains insurance policies or other arrangements with respect to the Townsquare Stations and the Townsquare Station Assets consistent with its practices for other stations, and will maintain such policies or arrangements until the Effective Time. Townsquare has not received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any such insurance policy. Each such insurance policy is in full force and effect, and Townsquare is not in default in any material respect thereunder.
2.13 Compliance with Law . Other than with respect to the Townsquare FCC Licenses (which are governed by Section 2.4) and except as set forth on Schedule 2.13 , (i) Townsquare has complied in all material respects with all laws, rules and regulations, applicable to the
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operation of the Townsquare Stations or to any of the Townsquare Station Assets, and all decrees and orders of any court or governmental authority which are applicable to the operation of the Townsquare Stations or to any of the Townsquare Station Assets, and (ii) to Townsquare’s knowledge there are no governmental claims or investigations pending or threatened against Townsquare in respect of the Townsquare Stations except those affecting the industry generally. Except as set forth in Schedule 2.13 , the Townsquare Stations hold all permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authority that are necessary or appropriate to the operation of the Townsquare Stations or which are required as a result of the activities of Townsquare Stations, except where the failure to hold any such permits, registrations, licenses, variances, exemptions, orders and approvals would not be material to any of the Townsquare Stations.
2.14 Litigation . Other than with respect to the Townsquare FCC Licenses (which are governed by Section 2.4) and except as set forth on Schedule 2.14 , there is no action, suit or proceeding pending or, to Townsquare’s knowledge, threatened against Townsquare before any governmental authority (excluding the FCC) or any court of competent jurisdiction in respect of the Townsquare Stations that will subject Cumulus to liability or which will affect Townsquare’s ability to perform its obligations under this Agreement. Except as a set forth on Schedule 2.14 , Townsquare is not operating under or subject to any order, writ, injunction or decree relating to the Townsquare Stations or the Townsquare Station Assets of any court or governmental authority which would have a material adverse effect on the condition of the Townsquare Stations or any of the Townsquare Station Assets or on the ability of Townsquare to enter into this Agreement or consummate the transactions contemplated hereby, other than those of general applicability. Except as set forth on Schedule 2.14 , there were no material litigation matters to which Townsquare was a party in respect of any of the Townsquare Stations during the three (3) years preceding the date of this Agreement.
2.15 Financial Statements . Townsquare has provided to Cumulus copies of a balance sheet for the Townsquare Stations as of December 31, 2011 and March 31, 2012 and income statements for the Townsquare Stations for the year ended December 31, 2010, December 31, 2011 and for the year to date through March 31, 2012 (together with copies of monthly income statements for the Townsquare Stations during all such periods). Such year-end statements are the statements included in the audited consolidated financial statements of Townsquare and its affiliates (but such statements are not separately audited and the year to date statements are not audited). Shared operating expenses and revenue from combined sales are allocated among the Townsquare Stations and other stations and business units as determined by Townsquare. Such statements may reflect the results of intercompany arrangements that are Townsquare Excluded Assets. Except for the foregoing and except for the absence of footnotes, such statements have been prepared in accordance with GAAP, and in the aggregate present fairly in all material respects the results of operations of the Townsquare Stations as operated by Townsquare for the respective periods covered thereby.
2.16 No Undisclosed Liabilities . There are no liabilities or obligations of Townsquare with respect to the Townsquare Stations that will be binding upon Cumulus after the Effective Time other than the Cumulus Assumed Obligations and other than pursuant to the prorations under Section 1.7.
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2.17 Townsquare Station Assets . The Townsquare Station Assets include all properties, assets and rights that are owned or leased by Townsquare and used or held for use in the operation of the Townsquare Stations in all material respects as currently operated, except for the Townsquare Excluded Assets.
2.18 Qualification . Townsquare is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Cumulus Stations under the Communications Act and the FCC Rules. Except as set forth on Schedule 2.18 , to Townsquare’s knowledge, there are no facts that would, under existing law and the FCC Rules in effect as of the date hereof, disqualify Townsquare as an assignee of the Cumulus FCC Licenses or as the owner and operator of the Cumulus Stations, and the FCC Applications will not include a request by Townsquare for a waiver of FCC Rules.
2.19 Conduct of Business . Except as set forth on Schedule 2.19 , since January 1, 2012, Townsquare has conducted the business of the Townsquare Stations solely in the ordinary course of business consistent with past custom and practice, and there has been no Material Adverse Effect (defined below) with respect to the Townsquare Stations. Without limitation of the foregoing and except as described herein or set forth on Schedule 2.19 , since January 1, 2012, Townsquare has not, with respect to the Townsquare Stations and the Townsquare Stations’ business:
(a) sold, assigned or transferred any of the Townsquare Station Assets other than in the ordinary course of business;
(b) sold, assigned, transferred, abandoned or permitted to lapse any licenses or permits which, individually or in the aggregate, are material to the Townsquare Stations’ business or operations; or
(c) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits (including, without limitation any Employee Benefit Plan (defined below)) payable by Townsquare to any of its employees except as required by applicable law or any collective bargaining agreement or other contract, and ordinary increases consistent with the past practices of Townsquare.
For purposes of this Agreement, “ Material Adverse Effect ” means, with respect to the Townsquare Stations’ business or Cumulus Stations’ business, as applicable, any condition, event or circumstance that is or would reasonably expected to be materially adverse to (a) the business, financial condition, operating results or prospects of the Townsquare Stations or Cumulus Stations, as applicable, on an individual market (and not on a collective) basis, whether or not covered by insurance or other third-party indemnification obligation, or (b) the ability of Townsquare or Cumulus, as applicable, to comply with and perform its obligations, covenants and agreements herein or in any Townsquare Ancillary Agreement or Cumulus Ancillary Agreement, as applicable; provided , however , that in no event shall any of the following constitute a Material Adverse Effect: any condition, event or circumstance caused by or related to (i) any change or development in the broadcast radio industry in which does not have a disproportionate impact on the Townsquare Stations or Cumulus Stations, as applicable, (ii) any change or development in the financial, banking, credit, securities or capital markets, or any
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change in the general, national, international or regional economic or financial conditions, (iii) any change or development in general regulatory, social or political conditions, (iv) any change or development in laws; or (v) any announcement of this Agreement or the pendency of the transactions contemplated hereby.
2.20 Employee Benefits . Schedule 2.20 sets forth each Employee Benefit Plan which Townsquare or any of its affiliates maintains, sponsors, makes contributions to, has obligated itself to make contributions to, or to pays any benefits to or for the benefit of employees of the Townsquare Stations. Correct and complete copies of such Employee Benefit Plans have been previously furnished to Cumulus. For purposes of this Agreement: (a) “ Employee Benefit Plan ” means any “Employee Pension Benefit Plan” (as defined in Section 3(2) of ERISA), “Employee Welfare Benefit Plan” (as defined in Section 3(1) of ERISA), “multi-employer plan” (as defined in Section 3(37) of ERISA), plan of deferred compensation, medical plan, life insurance plan, long-term disability plan, dental plan or other plan providing for the welfare of any of such person’s or entity’s employees or former employees or beneficiaries thereof, personnel policy (including vacation time, holiday pay, bonus programs, moving expense reimbursement programs and sick leave), excess benefit plan, bonus or incentive plan (including stock options, restricted stock, stock bonus and deferred bonus plans), salary reduction agreement, change-of-control agreement, employment agreement, consulting agreement or any other benefit, program or contract; and (b) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
2.21 Financial Resources . Townsquare has adequate cash on hand or commitments from one or more third parties to provide Townsquare with adequate cash to enable Townsquare to pay the Cash Consideration at Closing.
2.22 No Broker . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Townsquare.
ARTICLE 3: CUMULUS REPRESENTATIONS AND WARRANTIES
Cumulus hereby makes the following representations and warranties to Townsquare:
3.1 Organization . Cumulus is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Cumulus Station Assets are located. Cumulus has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Cumulus pursuant hereto (collectively, the “ Cumulus Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
3.2 Authorization . The execution, delivery and performance of this Agreement and the Cumulus Ancillary Agreements by Cumulus have been duly authorized and approved by all necessary action of Cumulus and do not require any further authorization or consent of Cumulus. This Agreement is, and each Cumulus Ancillary Agreement when made by Cumulus and the other parties thereto will be, a legal, valid and binding agreement of Cumulus enforceable in accordance with its terms, except in each case as such enforceability may be limited by
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bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.3 No Conflicts . Except as set forth on Schedule 3.3 and except for the Governmental Consents and consents to assign certain of the Cumulus Station Contracts, the execution, delivery and performance by Cumulus of this Agreement and the Cumulus Ancillary Agreements and the consummation by Cumulus of any of the transactions contemplated hereby does not conflict with any organizational documents of Cumulus, any contract or agreement to which Cumulus is a party or by which it is bound, or any law, judgment, order, or decree to which Cumulus is subject, require the consent or approval of, or a filing by Cumulus with, any governmental or regulatory authority or any third party, or result in the creation of any Lien other than a Cumulus Permitted Lien.
3.4 FCC Licenses . Except as set forth on Schedule 3.4 :
(a) Cumulus is the holder of the Cumulus FCC Licenses described on Schedule 1.1.2(a) , which are all of the licenses, permits and authorizations required for the present operation of the Cumulus Stations. The Cumulus FCC Licenses are in full force and effect and have not been revoked, suspended, canceled, rescinded, terminated or materially adversely modified and have not expired, and are not subject to any conditions except for conditions applicable to broadcast radio licensees generally or as otherwise disclosed on the face of the Cumulus FCC Licenses, and have been issued for full terms. No application is pending for renewal of any Cumulus FCC Licenses and Cumulus is not aware of any reason that could reasonably be expected to result in a refusal by the FCC to renew any Cumulus FCC License for a full term without any conditions (other than those standard to renewals of radio broadcast licenses) in the normal course. There is not pending, or, to Cumulus’ knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Cumulus FCC Licenses (other than proceedings applicable to radio broadcast licensees generally). There is not issued or outstanding, or to Cumulus’ knowledge, threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Cumulus Stations or against Cumulus with respect to the Cumulus Stations that could result in any such action. There is no order to show cause, notice of violation, notice of apparent liability, notice of forfeiture issued by the FCC with respect to Cumulus, the Cumulus FCC Licenses or the Cumulus Stations that remains unsatisfied. The Cumulus Stations are operating in compliance in all material respects with the terms of Cumulus FCC Licenses, the Communications Act, and the FCC Rules. All material reports and filings required to be filed with the FCC by Cumulus with respect to the Cumulus Stations have been timely filed, and all FCC regulatory fees have been timely paid. All such reports and filings and payments are accurate and complete in all material respects.
(b) Cumulus is in compliance in all material respects with the requirements of the FAA with respect to the construction and/or alteration of the Cumulus Stations’ antenna structures and, where required, FAA “no hazard” determinations for each antenna structure have been obtained and, where required, each antenna structure has been registered with the FCC.
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3.5 Taxes . Cumulus has, in respect of the Cumulus Stations’ business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise and other tax returns and reports which are required to have been filed by it under applicable law, and has paid all taxes in full or discharged (or set aside appropriate amounts for) all taxes which are required to be paid by it under applicable law. There are no pending or, to Cumulus’ knowledge, threatened, investigations or claims against Cumulus for or relating to any liability in respect of taxes related to the Cumulus Stations’ business. All taxes required to be withheld by Cumulus with respect to the Cumulus Stations’ business have been withheld and paid (or will be paid) when due to the appropriate governmental authority.
3.6 Personal Property . Schedule 3.6 contains a list of material items of Cumulus Tangible Personal Property included in the Cumulus Station Assets. Except as set forth on Schedule 3.6 , Cumulus has good and marketable title to the owned Cumulus Tangible Personal Property free and clear of Liens other than Cumulus Permitted Liens. Except as set forth on Schedule 3.6 , all material items of Cumulus Tangible Personal Property are in good operating condition, ordinary wear and tear excepted.
3.7 Real Property . Schedule 3.7 contains a description of the Cumulus Real Property. The Cumulus Real Property constitutes all real properties used or occupied by Cumulus in connection with the Cumulus Stations’ business. Cumulus has good and marketable fee simple title to the owned Cumulus Real Property described on Schedule 3.7 (the “ Cumulus Owned Real Property ”) (if any), free and clear of Liens other than Cumulus Permitted Liens. With respect to the Cumulus Owned Real Property, no portion thereof is subject to any pending or, to Cumulus’ knowledge, threatened condemnation proceeding or proceeding by any public authority. The Cumulus Owned Real Property is sufficient for the operation of the Cumulus Stations as currently operated, and to the knowledge of Cumulus, no material capital expenditures are required in respect of the Cumulus Owned Real Property to continue to operate the Cumulus Stations as currently operated. Except as set forth in Schedule 3.8 and except for Cumulus Permitted Liens, there are no leases, subleases, licenses or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of any parcel of Cumulus Owned Real Property. Schedule 3.7 includes a description of each lease of Cumulus Real Property or similar agreement included in the Cumulus Station Contracts (the “ Cumulus Real Property Leases ”). Cumulus has valid leasehold interests in the Cumulus Real Property Leases, free and clear of all Liens other than Cumulus Permitted Liens. The Cumulus Real Property is not subject to any suit for condemnation or other taking by any public authority. The Cumulus Real Property includes access to the Cumulus Stations’ facilities consistent with past practices.
3.8 Contracts . Schedule 3.8 contains a list of all contracts (written or oral) that are as of the date hereof used in the operation of, or bind or otherwise restrict in any material respect, the Townsquare Stations, including, but not limited to, programming agreements, vendor agreement, service contracts, licensing agreements, tower agreements, local marketing agreements and network agreements, but excluding agreements for the sale of advertising time entered into in the ordinary course of business terminable on sixty (60) days or less notice, barter arrangements and contracts involving payments or receipts of less than $7,500 per annum. The Cumulus Station Contracts requiring the consent of a third party to assignment are identified with an asterisk on Schedule 1.1.2(c) and Schedule 1.1.2(d) . Each of the Cumulus Station
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Contracts (including, without limitation, each of the Cumulus Real Property Leases) is in effect and is binding upon Cumulus and, to Cumulus’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Cumulus has performed its obligations under each of the Cumulus Station Contracts in all material respects, and is not in material default thereunder, and to Cumulus’s knowledge, no other party to any of the Cumulus Station Contracts is in default thereunder in any material respect. Schedule 3.8 lists a summary of barter payables and barter receivables. To the extent of any oral agreement required to be disclosed on Schedule 3.8 , a summary of such agreement is set forth on Schedule 3.8 . Except as set forth on Schedule 3.8 , none of the Cumulus Station Contracts (i) involve Cumulus and any entity in which any officer, director or shareholder of Cumulus has any interest, (ii) require Cumulus to make any payment upon consummation of the transactions contemplated hereby, or upon any subsequent sale of the Cumulus Station Assets or (iii) restrict the ability of Cumulus to compete in any jurisdiction.
3.9 Environmental . Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, to Cumulus’ knowledge no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to the Cumulus Real Property included in the Cumulus Station Assets. Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, (a) Cumulus has complied in all material respects with all environmental, health and safety laws applicable to the Cumulus Stations, (b) there has been no action, notice or claim pending or, to Cumulus’ knowledge, threatened, against Cumulus that asserts that Cumulus has violated any environmental, health or safety laws applicable to the Cumulus Real Property and (c) to Cumulus’ knowledge, no conditions with respect to the past or present operations or business of the Cumulus Stations exist which could reasonably be expected to give rise to any common law or statutory liability in respect of the Cumulus Stations’ business under any environmental, health or safety law based on any such condition.
3.10 Intangible Property . Schedule 3.10 contains a description of the material Cumulus Intangible Property included in the Cumulus Station Assets, including (i) all patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications and domain names included in the intangible property and (ii) all (A) licenses of intangible property included in the Cumulus Station Assets to any third party, (B) licenses of intellectual property by any third party to Cumulus included in the Cumulus Station Assets, (C) agreements between Cumulus and any third party relating to the development or use of intellectual property, the development or transmission of data, or the use, modification, framing, linking, advertisement or other practices with respect to Internet web sites of any of Cumulus Stations and (C) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of intangible property included in the Cumulus Station Assets, other than commercially available off-the-shelf computer software licensed pursuant to shrink-wrap or click-wrap licenses that is not material to the operation of the Cumulus Stations. Except as set forth on Schedule 3.10 , (i) to Cumulus’ knowledge Cumulus’ use of the Cumulus Intangible Property does not infringe upon any third party rights in any respect, (ii) no material Cumulus Intangible Property is the subject of any pending, or, to Cumulus’ knowledge, threatened legal proceedings claiming infringement or unauthorized use, (iii) Cumulus has not received any written notice that its use of any material Cumulus Intangible
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Property is unauthorized or infringes upon the rights of any other person, and (iv) to Cumulus’ knowledge, no person is engaging in any activity that infringes the Cumulus Intangible Property in any material respect. Except as set forth on Schedule 3.10 , to Cumulus’ knowledge, Cumulus owns or has the right to use the Cumulus Intangible Property free and clear of Liens other than Cumulus Permitted Liens.
3.11 Employees . Except as set forth on Schedule 3.11(a) , (i) Cumulus has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Cumulus Stations’ business, including, without limitation, those which relate to prices, wages, hours, discrimination in employment and collective bargaining, (ii) there is no unfair labor practice charge or complaint against Cumulus in respect of the Cumulus Stations’ business pending or, to Cumulus’ knowledge, threatened before the National Labor Relations Board, any state labor relations board or any court or tribunal, and there is no strike, dispute, request for representation, slowdown or stoppage pending or threatened in respect of the Cumulus Stations’ business, and (iii) Cumulus is not party to any collective bargaining, union or similar agreement with respect to the employees of Cumulus at the Cumulus Stations, and to Cumulus’ knowledge, no union represents or claims to represent or is attempting to organize such employees. Schedule 3.11(b) lists, as of the date hereof, by each Cumulus Station, the name, current annual salary rate, bonus, accrued vacation, date of employment and position of each employee of such Cumulus Station. Except as set forth on Schedule 3.11(c) , each employee of the Cumulus Stations is an employee at-will, and no severance is payable upon the cessation of employment. Except as set forth on Schedule 3.11(d) , no employee of the Cumulus Stations has been transferred to another Cumulus station (excepting any Cumulus Station) or division or group (or to any affiliate of Cumulus) in the past three months.
3.12 Insurance . Cumulus maintains insurance policies or other arrangements with respect to the Cumulus Stations and the Cumulus Station Assets consistent with its practices for other stations, and will maintain such policies or arrangements until the Effective Time. Cumulus has not received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any such insurance policy. Each such insurance policy is in full force and effect, and Cumulus is not in default in any material respect thereunder.
3.13 Compliance with Law . Other than with respect to the Cumulus FCC Licenses (which are governed by Section 3.4) and except as set forth on Schedule 3.13 , (i) Cumulus has complied in all material respects with all laws, rules and regulations applicable to the operation of the Cumulus Stations or to any of the Cumulus Station Assets, and all decrees and orders of any court or governmental authority which are applicable to the operation of the Cumulus Stations or to any of the Cumulus Station Assets, and (ii) to Cumulus’ knowledge there are no governmental claims or investigations pending or threatened against Cumulus in respect of the Cumulus Stations except those affecting the industry generally. Except as set forth in Schedule 3.13 , the Cumulus Stations hold all permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities that are necessary or appropriate to the operation of the Cumulus Stations or which are required as a result of the activities of Cumulus Stations, except where the failure to hold any such permits, registrations, licenses, variances, exemptions, orders and approvals would not be material to any of the Cumulus Stations.
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3.14 Litigation . Other than with respect to the Cumulus FCC Licenses (which are governed by Section 3.4) and except as set forth on Schedule 3.14 , there is no action, suit or proceeding pending or, to Cumulus’ knowledge, threatened against Cumulus before any governmental agency authorities (excluding the FCC) or any court of competent jurisdiction in respect of the Cumulus Stations that will subject Townsquare to liability or which will affect Cumulus’ ability to perform its obligations under this Agreement. Cumulus is not operating under or subject to any order, writ, injunction or decree relating to the Cumulus Stations or the Cumulus Station Assets of any court or governmental authority which would have a material adverse effect on the condition of the Cumulus Stations or any of the Cumulus Station Assets or on the ability of Cumulus to enter into this Agreement or consummate the transactions contemplated hereby, other than those of general applicability. Except as set forth on Schedule 3.14 , there were no material litigation matters to which Cumulus was a party in respect of any of the Cumulus Stations during the three (3) years preceding the date of this Agreement.
3.15 Financial Statements . Cumulus has provided to Townsquare copies of a balance sheet for the Cumulus Stations as of December 31, 2011 and March 31, 2012 and income statements for the Cumulus Stations for the year ended December 31, 2010, December 31, 2011 and for the year to date through March 31, 2012 (together with copies of monthly income statements for the Cumulus Stations during all such periods). Such year-end statements are the statements included in the audited consolidated financial statements of Cumulus and its affiliates (but such statements are not separately audited and the year to date statements are not audited). Shared operating expenses and revenue from combined sales are allocated among the Cumulus Stations and other stations and business units as determined by Cumulus. Such statements may reflect the results of intercompany arrangements that are Cumulus Excluded Assets. Except for the foregoing and except for the absence of footnotes, such statements have been prepared in accordance with GAAP, and in the aggregate present fairly in all material respects the results of operations of the Cumulus Stations as operated by Cumulus for the respective periods covered thereby.
3.16 No Undisclosed Liabilities . There are no liabilities or obligations of Cumulus with respect to the Cumulus Stations that will be binding upon Townsquare after the Effective Time other than the Townsquare Assumed Obligations and other than pursuant to the prorations under Section 1.7.
3.17 Cumulus Station Assets . The Cumulus Station Assets include all properties, assets and rights that are owned or leased by Cumulus and used or held for use in the operation of the Cumulus Stations in all material respects as currently operated, except for the Cumulus Excluded Assets.
3.18 Qualification . Cumulus is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Townsquare Stations under the Communications Act and the FCC Rules. To Cumulus’ knowledge, there are no facts that would, under existing law and the FCC Rules in effect as of the date hereof, disqualify Cumulus as an assignee of the Townsquare FCC Licenses or as the owner and operator of the Townsquare Stations. The FCC Applications will not include a request by Cumulus for a waiver of FCC Rules.
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3.19 Conduct of Business . Except as set forth on Schedule 3.19 , since January 1, 2012, Cumulus has conducted the business of the Cumulus Stations in the ordinary course of business consistent with past custom and practice in all material respects and there has been no Material Adverse Effect with respect to the Cumulus Stations. Without limitation of the foregoing and except as described herein or set forth on Schedule 3.19 , since January 1, 2012, Cumulus has not, with respect to the Cumulus Stations and the Cumulus Stations’ business:
(a) sold, assigned or transferred any of the Cumulus Station Assets other than in the ordinary course of business;
(b) sold, assigned, transferred, abandoned or permitted to lapse any licenses or permits which, individually or in the aggregate, are material to the Cumulus Stations’ business or operations; or
(c) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits (including, without limitation any Employee Benefit Plan) payable by Cumulus to any of its employees except as required by applicable law or any collective bargaining agreement or other contract, and ordinary increases consistent with the past practices of Cumulus.
3.20 Employee Benefits . Schedule 3.20 sets forth each Employee Benefit Plan which Cumulus or any of its affiliates maintains, sponsors, makes contributions to, has obligated itself to make contributions to, or to pays any benefits to or for the benefit of employees of the Cumulus Stations. Correct and complete copies of such Employee Benefit Plans have been previously furnished to Townsquare.
3.21 No Broker . Except for UBS, no broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Cumulus.
3.22 Network Revenue . Cumulus represents that it has been the historical practice of the Cumulus Stations located in the New Bedford, MA, Binghamton, NY, Tuscaloosa, AL, Augusta-Waterville, ME, and Presque Isle, ME markets (the “ Citadel Legacy Stations ”) to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday, to Impact Marketing Network (“Impact”) for sale through the network and that the network revenue (net of expenses) from Impact for the twelve-month period ending March 31, 2011 was $473,215.
ARTICLE 4: COVENANTS
4.1 Townsquare Covenants . Townsquare covenants and agrees that between the date hereof and the time of the Closing, Townsquare shall conduct the business of the Townsquare Stations in the ordinary course in all material respects. Without limiting the generality of the foregoing, Townsquare shall, with respect to the Townsquare Stations, (i) continue their advertising and promotional activities; (ii) not shorten or lengthen the payment cycles for any of their payables or receivables; and (iii) use their commercially reasonable efforts to preserve
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intact the Townsquare Stations and the business organization (including employees) of the Townsquare Stations. Without limiting the foregoing, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Cumulus, which shall not be unreasonably withheld, delayed or conditioned, Townsquare shall:
(a) operate the Townsquare Stations in the ordinary course of business (for avoidance of doubt, any expense reductions made consistent with Townsquare’s past practices shall be deemed in the ordinary course of business), consistent with past practice and in all material respects in accordance with the Communications Act, FCC Rules and with all other applicable laws, regulations, rules and orders;
(b) not materially adversely modify, and in all material respects maintain in full force and effect, the Townsquare FCC Licenses;
(c) not make any engineering or technical change which materially reduces the power or coverage of any Townsquare Station or which requires consent or filing with the FCC, except as permitted by FCC Rules, for periods of maintenance or as reasonably necessary due to matters outside of Townsquare’s reasonable control;
(d) promptly deliver to Cumulus copies of any material reports, applications or other documents filed with the FCC;
(e) promptly notify Cumulus of (i) any Broadcast Interruption (defined below), (ii) any inquiry, investigation or proceeding which, to the knowledge of Townsquare, has been initiated by the FCC relating to the Townsquare Stations and (iii) any petition to deny, informal objection or other objection that has been filed against any Townsquare Station;
(f) diligently prosecute and use commercially reasonable efforts to obtain approval of any applications pending before the FCC (including the Townsquare Renewal Applications, if any) and prosecute or timely make and use commercially reasonable efforts to obtain approval of any filings necessary or appropriate in other proceedings before the FCC to preserve or obtain any FCC License for a Townsquare Station without material adverse modification (including timely submitting and prosecuting and using commercially reasonable efforts to obtain approval of any applications for renewal of the Townsquare FCC Licenses, if any);
(g) not other than in the ordinary course of business, sell, lease or dispose of or agree to sell, lease or dispose of any of the Townsquare Station Assets unless replaced with similar items of substantially equal or greater value and utility (which replacement items shall constitute Townsquare Station Assets), or create, assume or permit to exist any Liens upon the Townsquare Station Assets, except for Townsquare Permitted Liens, and not dissolve, liquidate, merge or consolidate with any other entity;
(h) maintain the Townsquare Tangible Personal Property and the Townsquare Real Property in the ordinary course of business;
(i) upon reasonable notice, give Cumulus and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives reasonable access during
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normal business hours to the Townsquare Station Assets and the offices, properties, facilities, books and records of Townsquare relating to the Townsquare Stations and to those officers, directors, employees, agents, accountants and counsel of Townsquare who have knowledge regarding the Townsquare Stations, and furnish Cumulus and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives with information relating to the Townsquare Station Assets and the Cumulus Assumed Obligations that Cumulus may reasonably request, provided that such access rights shall not be exercised in a manner that interferes with the operation of the Townsquare Stations;
(j) except in the ordinary course of business and as otherwise required by law, not (i) enter into any employment, labor, or union agreement or plan (or amendments of any such existing agreements or plan) that will be binding upon Cumulus after Closing or (ii) increase the compensation payable to any employee of the Townsquare Stations, except for such bonuses and other compensation payable by Townsquare in connection with the consummation of the transactions contemplated by this Agreement (if any), which are set forth on Schedule 4.1(j) ; and
(k) not enter into new Townsquare Station Contracts that will be binding upon Cumulus after Closing or amend any existing Townsquare Station Contracts, except for (A) new advertising time sales agreements and other Townsquare Station Contracts made in the ordinary course of business that are terminable on ninety days notice or less without penalty, (B) other Townsquare Station Contracts made with Cumulus’ prior consent, and (C) other Townsquare Station Contracts that do not require post-Closing payments (terminal value) by Cumulus or Barter of more than $50,000 (in the aggregate for all such new contracts).
For purposes of calculating the amount of said post-Closing payments by Cumulus, if a contract is terminable by giving advance notice, then such amount shall include only the post-Closing amount that would be payable if a termination notice were given at Closing (whether or not such notice is in fact given), but in no event shall such amount be more than the amount payable absent such termination notice.
4.2 Cumulus Covenants . Cumulus covenants and agrees that between the date hereof and the time of the Closing, Cumulus shall conduct the business of the Cumulus Stations in the ordinary course in all material respects. Without limiting the generality of the foregoing, Cumulus shall, with respect to the Cumulus Stations, (i) continue their advertising and promotional activities; (ii) not shorten or lengthen the payment cycles for any of their payables or receivables; and (iii) use their commercially reasonable efforts to preserve intact the Cumulus Stations and the business organization (including employees) of the Cumulus Stations. Without limiting the foregoing, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Townsquare, which shall not be unreasonably withheld, delayed or conditioned, Cumulus shall:
(a) operate the Cumulus Stations in the ordinary course of business (for avoidance of doubt, any expense reductions made consistent with Cumulus’ past practices shall be deemed in the ordinary course of business), consistent with past practice and in all material respects in accordance with the Communications Act, FCC Rules and with all other applicable laws, regulations, rules and orders;
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(b) not materially adversely modify, and in all material respects maintain in full force and effect, the Cumulus FCC Licenses;
(c) not make any engineering or technical change which materially reduces the power or coverage of any Cumulus Station or which requires consent or filing with the FCC, except as permitted by FCC Rules, for periods of maintenance or as reasonably necessary due to matters outside of Cumulus’ reasonable control;
(d) promptly deliver to Townsquare copies of any material reports, applications or other documents filed with the FCC;
(e) promptly notify Townsquare of (i) any Broadcast Interruption, (ii) any inquiry, investigation or proceeding which, to the knowledge of Cumulus, has been initiated by the FCC relating to the Cumulus Stations and (iii) any petition to deny, informal objection or other objection that has been filed against any Cumulus Station;
(f) diligently prosecute and use commercially reasonable efforts to obtain approval of any applications pending before the FCC (including the Cumulus Renewal Applications, if any) and prosecute or timely make and use commercially reasonable efforts to obtain approval of any filings necessary or appropriate in other proceedings before the FCC to preserve or obtain any FCC License for a Cumulus Station without material adverse modification (including timely submitting and prosecuting and using commercially reasonable efforts to obtain approval of any applications for renewal of the Cumulus FCC Licenses, if any);
(g) not other than in the ordinary course of business, sell, lease or dispose of or agree to sell, lease or dispose of any of the Cumulus Station Assets unless replaced with similar items of substantially equal or greater value and utility (which replacement items shall constitute Townsquare Station Assets), or create, assume or permit to exist any Liens upon the Cumulus Station Assets, except for Cumulus Permitted Liens, and not dissolve, liquidate, merge or consolidate with any other entity;
(h) maintain the Cumulus Tangible Personal Property and the Cumulus Real Property in the ordinary course of business, subject to Section 5.4;
(i) upon reasonable notice, give Townsquare and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives reasonable access during normal business hours to the Cumulus Station Assets and the offices, facilities, books and records of Cumulus relating to the Cumulus Stations (including the Cumulus general ledgers and accounting systems) and to those officers, directors, employees, agents, accounts and counsel of Cumulus who have knowledge regarding the Cumulus Stations, and furnish Townsquare and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives with information relating to the Cumulus Station Assets and the Townsquare Assumed Obligations that Townsquare may reasonably request, provided that such access rights shall not be exercised in a manner that interferes with the operation of the Cumulus Stations;
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(j) except in the ordinary course of business and as otherwise required by law, not (i) enter into any employment, labor, or union agreement or plan (or amendments of any such existing agreements or plan) that will be binding upon Townsquare after Closing or (ii) increase the compensation payable to any employee of the Cumulus Stations, except for such bonuses and other compensation payable by Cumulus in connection with the consummation of the transactions contemplated by this Agreement (if any), which are set forth on Schedule 4.2(j) ; and
(k) not enter into new Cumulus Station Contracts that will be binding upon Townsquare after Closing or amend any existing Cumulus Station Contracts, except for (A) new advertising time sales agreements and other Cumulus Station Contracts made in the ordinary course of business that are terminable on ninety days notice or less without penalty, (B) other Cumulus Station Contracts made with Townsquare’s prior consent, and (C) other Cumulus Station Contracts that do not require post-Closing payments (terminal value) by Townsquare or Barter of more than $50,000 (in the aggregate for all such new contracts).
For purposes of calculating the amount of said post-Closing payments by Townsquare, if a contract is terminable by giving advance notice, then such amount shall include only the post-Closing amount that would be payable if a termination notice were given at Closing (whether or not such notice is in fact given), but in no event shall such amount be more than the amount payable absent such termination notice.
ARTICLE 5: OTHER COVENANTS
Cumulus and Townsquare hereby covenant and agree as follows:
5.1 Confidentiality .
(a) Townsquare or an affiliate of Townsquare and Cumulus or an affiliate of Cumulus are parties to one or more nondisclosure agreements (collectively, the “ NDA ”) with respect to the parties and their stations. To the extent not already a direct party thereto, Cumulus and Townsquare hereby assume the NDA and agree to be bound by the provisions thereof. Without limiting the terms of the NDA, subject to the requirements of applicable law, all non-public information regarding the parties and their business and properties that is disclosed in connection with the negotiation, preparation or performance of this Agreement (including without limitation all financial information) shall be confidential and shall not be disclosed to any other person or entity, except the parties’ representatives and lenders for the purpose of consummating the transaction contemplated by this Agreement.
(b) For a period of three (3) years after the Closing, each of Townsquare and Cumulus shall, and shall cause their agents, representatives and affiliates to: (i) treat and hold as confidential (and not disclose or provide access to any third party other than its agents, representatives and affiliates) all information relating to advertiser lists, advertising rates, and marketing plans, details of contracts, and all other confidential or proprietary information (A) for Townsquare, that are exclusively related to the Townsquare Station Assets and the Townsquare Stations’ business, and (B) for Cumulus, that are exclusively related to the Cumulus Station Assets and the Cumulus Stations’ business, (ii) in the event that Townsquare or Cumulus or any
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agent, representative, affiliate, employee, officer or director of such party becomes legally compelled to disclose any such information, provide the other party with prompt written notice of such requirement so that such other party may seek a protective order or other remedy or waive compliance with this Section 5.1(b), and (iii) in the event that such protective order or other remedy is not obtained, or such other party waives compliance with this Section 5.1(b), furnish only that portion of such confidential information which is legally required to be provided and exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such information; provided , however , that this Section 5.1(b) shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed by Cumulus or Townsquare in breach of this Agreement; provided , further , that either party (and any employee, representative or other agent of such party) may disclose, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.
5.2 Announcements . Except as otherwise required by FCC Rules, prior to Closing, no party shall, without the prior written consent of the other party, which shall not be unreasonably withheld, issue any press release or make any other public announcement concerning the transactions contemplated by this Agreement, except to the extent that such party is so obligated by law or judicial process, in which case such party shall give advance notice to the other, and except that the parties shall cooperate to make a mutually agreeable announcement, and except as necessary to enforce rights under or in connection with this Agreement. Notwithstanding the foregoing, the parties acknowledge that this Agreement and the terms hereof will be filed with the FCC Applications and thereby become public. From and after the Closing, no party shall, without the prior written consent of the other party, which shall not be unreasonably withheld, issue any press release or make any other public announcement concerning the closing of the transactions contemplated by this Agreement, other than the filing of consummation notices and ownership reports with the FCC.
5.3 Control .
(a) Cumulus shall not, directly or indirectly, control, supervise or direct the operation of the Townsquare Stations prior to Closing. Consistent with the Communications Act and the FCC Rules, control, supervision and direction of the operation of the Townsquare Stations prior to Closing shall remain the responsibility of Townsquare as the holder of the Townsquare FCC Licenses.
(b) Townsquare shall not, directly or indirectly, control, supervise or direct the operation of the Cumulus Stations prior to Closing. Consistent with the Communications Act and the FCC Rules, control, supervision and direction of the operation of the Cumulus Stations prior to Closing shall remain the responsibility of Cumulus as the holder of the Cumulus FCC Licenses.
5.4 Risk of Loss . With respect to the Townsquare Station Assets and the Cumulus Station Assets, as applicable:
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(a) The conveying party shall bear the risk of any loss of or damage to any of its assets at all times until the Effective Time, and the acquiring party shall bear the risk of any such loss or damage thereafter.
(b) If prior to the Effective Time any item of the conveying party’s tangible personal property included in the Townsquare Station Assets or the Cumulus Station Assets, as applicable, is damaged or destroyed or otherwise not in the condition described in Section 2.6 or Section 3.6, as applicable, in any material respect, then:
(i) the conveying party shall repair or replace such item in all material respects as soon as reasonably practicable, and shall use commercially reasonable efforts to repair or replace such item completed prior to Closing; and
(ii) if such repair or replacement is not completed prior to Closing, then the parties shall proceed to Closing (with the conveying party’s representations and warranties deemed modified to take into account any such condition) and the conveying party shall promptly repair or replace such item in all material respects after Closing (and the acquiring party will provide access and any other reasonable assistance requested with respect to such obligation) and shall apply all insurance proceeds actually received as a result of such loss or damage (to the extent there is any) to such repair or replacement, except that if such damage or destruction materially disrupts station operations, then the acquiring party may postpone Closing until the date five (5) business days after operations are restored in all material respects, subject to Section 10.1 (for the avoidance of doubt, whether or not the Closing is delayed, the conveying party shall remain obligated to make all required repair or replacements as herein contemplated).
(c) If prior to Closing a Townsquare Station or Cumulus Station is off the air, operating at a power level that results in a material reduction in coverage, or if the regular broadcast transmissions of a Townsquare Station or Cumulus Station in the normal and usual manner are otherwise interrupted or discontinued (a “ Broadcast Interruption ”), then the conveying party shall return the station to the air and restore prior coverage as promptly as possible in the ordinary course of business, and shall timely make any filings for such Broadcast Interruption as may be required under the FCC Rules. Notwithstanding anything herein to the contrary, if prior to Closing there is a Broadcast Interruption in excess of 24 consecutive hours or for more than seventy-two (72) hours (or, in the event of force majeure, ninety-six (96) hours), whether or not consecutive, during any period of ten (10) consecutive days, then the acquiring party may postpone Closing until the date five (5) business days after the station returns to the air and prior coverage is restored in all material respects, subject to Section 10.1.
5.5 Environmental .
(a) With respect to any owned real property or ground lease included in the Townsquare Station Assets or the Cumulus Station Assets, the acquiring party may conduct Phase I environmental assessments (each a “ Phase I ”) within sixty (60) days after the date of this Agreement; provided , that such assessments are conducted during normal business hours upon reasonable prior notice (and subject to landlord consent if necessary), but completion of such assessments (or the results thereof) is not a condition to Closing.
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(b) If any Phase I or any item set forth on Schedule 1.1.1(c) or Schedule 1.1.2(c) as applicable or any environmental report provided by the conveying party to the acquiring party prior to the date of this Agreement identifies a condition requiring remediation under, applicable environmental law, then:
(i) except as set forth below, the conveying party shall remediate such condition in all material respects as soon as reasonably practicable, and shall use commercially reasonable efforts to complete such remediation prior to Closing; and
(ii) if such remediation is not completed prior to Closing, then the parties shall proceed to Closing (with the conveying party’s representations and warranties deemed modified to take into account any such condition) and the conveying party shall remediate such item in all material respects after Closing (and the acquiring party will provide access and any other reasonable assistance requested with respect to such obligation) as soon as practicable, and shall apply all insurance proceeds actually received as a result of such loss or damage (to the extent there is any) to such remediation.
5.6 Consents .
(a) The parties shall use commercially reasonable efforts to obtain (i) any third party consents necessary for the assignment of any Townsquare Station Contract and any Cumulus Station Contract (which shall not require any payment to any such third party), and (ii) execution of reasonable estoppel certificates by lessors under any Townsquare Real Property Leases or Cumulus Real Property Leases requiring consent to assignment (if any), but no such consents or estoppel certificates are conditions to Closing except that (i) receipt of consent to assign to Cumulus the Townsquare Stations’ main tower leases and studio leases designated with a diamond on Schedule 1.1.1(c) (if any) and any Townsquare Station Contracts designated with a diamond on Schedule 1.1.1(d) (if any) is a condition precedent to Cumulus’ obligation to close under this Agreement (the “ Townsquare Required Consents ”) and (ii) receipt of consent to assign to Townsquare the Cumulus Stations’ main tower leases and studio leases designated with a diamond on Schedule 1.1.2(c) (if any) and any Cumulus Station Contracts designated with a diamond on Schedule 1.1.2(d) (if any) is a condition precedent to Townsquare’s obligation to close under this Agreement (the “ Cumulus Required Consents ”).
(b) To the extent that any Townsquare Station Contract or Cumulus Station Contract (other than those described in Section 5.6(a)(i) and (ii) above) may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant to this Agreement shall not constitute an assignment thereof; provided, however, with respect to each such contract, the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which acquiring party shall receive the benefits thereunder from and after Closing, and to the extent of the benefits received, the acquiring party shall pay and perform the conveying party’s obligations arising thereunder from and after Closing in accordance with its terms.
5.7 Employees . With respect to the Townsquare Stations and the Cumulus Stations, as applicable:
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(a) The conveying party has provided the acquiring party a list showing employee positions and certain compensation information for employees of its stations who are available to the acquiring party for hire. Except as set forth on Schedule 1.1.1(d) or 1.1.2(d), as applicable, the acquiring party may, but is not obligated to, offer post-Closing employment to such employees. With respect to each such employee, within sixty (60) calendar days after the date of this Agreement, the acquiring party shall notify the conveying party in writing whether or not it will offer Comparable Employment (defined below) to such employee upon Closing. Within thirty (30) calendar days after Closing, the acquiring party shall give the conveying party written notice identifying (i) all Transferred Employees (defined below) and (ii) all individuals who were employed by the conveying party prior to Closing who were offered Comparable Employment with the acquiring party who did not accept such offers. As used herein, “ Comparable Employment ” means employment with no material reduction in base salary or material change in the amount of scheduled hours, and no requirement to commute more than 30 miles further than the employee’s commute while employed by the conveying party. For the avoidance of doubt, the acquiring party may offer employment on such terms and conditions as are consistent with its employment policies and has no obligation to offer Comparable Employment, or to offer employment to an individual, or to maintain the employment of any individual.
(b) At Closing, the conveying party shall pay a pro-rata portion of any bonuses its respective employees would have earned if such employees were still employed by the acquiring party at the end of the relevant period following Closing based on whether as of Closing such employees achieved a pro-rata portion of the goals required to earn such bonuses.
(c) If applicable, the conveying party shall give any notice to any applicable employees required under the Worker Adjustment and Retraining Notification Act (the “ WARN Act ”) or any similar state or local law, and the acquiring party shall comply with any applicable requirements thereunder after the Effective Time. If the WARN Act or any such other law is applicable, then the conveying party may by written notice to the acquiring party extend the Closing Date to a date within five (5) business days after the expiration of all applicable notice periods.
(d) With respect to employees of the Townsquare Stations or Cumulus Stations, as applicable, hired by the acquiring party (“ Transferred Employees ”), the conveying party shall be responsible for all compensation and benefits arising prior to the Effective Time (in accordance with the conveying party’s employment terms), and the acquiring party shall be responsible for all compensation and benefits arising after the Effective Time (in accordance with the acquiring party’s employment terms). The acquiring party shall grant credit to each Transferred Employee for any sick leave accrued in the current calendar year (but not any prior calendar year) and any vacation days accrued and unpaid in the current calendar year (but not any prior calendar year unless and to the extent it constitutes an accrued benefit under the conveying party’s policies) that exists as of the Effective Time. The acquiring party shall receive an appropriate adjustment as provided by Section 1.7 for any such accrued sick time and vacation that it assumes.
(e) The acquiring party shall permit Transferred Employees (and their spouses and dependents) to participate in its “employee welfare benefit plans” (including, without
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limitation, health insurance plans) and “employee pension benefit plans” (as defined in ERISA) in which similarly situated employees are generally eligible to participate, with coverage effective immediately upon Closing (and without exclusion from coverage on account of any pre-existing condition), with service with the conveying party deemed service with the acquiring party for purposes of any length of service requirements, waiting periods, vesting periods and differential benefits based on length of service, and with credit under any welfare benefit plan for any deductibles or co-insurance paid for the current plan year under any plan maintained by the conveying party.
(f) The acquiring party shall also permit each Transferred Employee who participates in the conveying party’s 401(k) plan to elect to make direct rollovers of their account balances into the acquiring party’s 401(k) plan as soon as administratively feasible after Closing, including the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under the acquiring party’s 401(k) plan, subject to compliance with applicable law and subject to the reasonable requirements of the acquiring party’s 401(k) plan.
5.8 Accounts Receivable . At Closing, Cumulus and Townsquare shall deliver to the other party an aging report of all accounts receivable arising from the broadcast operations of the Cumulus Stations and the Townsquare Stations, respectively. For a period of 120 days following the Closing (the “ Collection Period ”), all accounts receivable arising from the broadcast operations of the Cumulus Stations and the Townsquare Stations, respectively, shall be assigned to the other party hereto for collection on Cumulus’ or Townsquare’s Licensee’s behalf and for Cumulus’ or Townsquare’s benefit, as the case may be. Each party shall make every good faith and reasonable effort to collect such accounts receivable of the other party in the usual course of business, provided , however , that neither party shall be required to institute suit or refer any accounts to an attorney or agency for collection; and provided further , that in the event that an account debtor registers any dispute with respect to an account receivable, or it is determined by the collecting party that it is necessary to institute suit or other third party action with regard to a particular account receivable, that collecting party shall assign back to Cumulus or Townsquare, as the case may be, all rights with regard to such account receivable and Cumulus or Townsquare, as the owner of such accounts receivable shall be free to take any action it deems appropriate with respect to any account receivable, provided that commissions relating to any collections made by the owner shall be paid to owner’s former employees in accordance with this Section 5.8. All account receivables that are collected by Cumulus and Townsquare, respectively, during the Collection Period shall be paid to the owner of such account receivables on a monthly basis, with such payment being made by the 10 th day of each calendar month during the Collection Period for any account receivables collected in the prior calendar month (with a final payment to be made within ten (10) days after the expiration of the Collection Period). Each payment shall be accompanied by a list of the monies received for each account receivable for which any money was collected during the preceding calendar month (or, in the case of the last payment, since the last report to the other party). The owner of such account receivables, in turn, promptly will pay commissions relating to such collections directly to their former employees. In the absence of and except for any dispute by the customer with respect to a particular account receivable, any payment received by Cumulus and Townsquare, as the case may be, during the Collection Period from any customer which continues to be serviced by Cumulus or Townsquare, respectively, shall first be applied to reduction of the accounts
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receivable owed by such customer to the owner of such account receivables. Cumulus and Townsquare shall each cause to be delivered to the other on or as soon as practical after the Closing Date a complete statement of such accounts receivable, showing the account debtor’s name, the date on which the account receivable was invoiced, and the amount of each account receivable. Neither Cumulus nor Townsquare shall compromise, settle or adjust the amount of any assigned account receivable except with the prior written consent of the owner of such account receivable. After the expiration of the Collection Period, each party will furnish the other with a list of all accounts receivable that have not been paid in full, together with all files and documents concerning or necessary to the collection or attempts to collect such accounts. Thereafter, neither party shall have further obligations to collect accounts receivable of the other except that each party shall immediately pay over to the other any amount subsequently paid to such party with respect to any reassigned account receivable. Cumulus and Townsquare, as the case may be, shall be free to take any action it deems appropriate with respect to any of its respective accounts receivable after the expiration of the Collection Period; provided, that commissions relating to any collections made by such party shall be paid to such party’s former employees in accordance with this Section 5.8.
5.9 Actions . With respect to the Townsquare Stations and the Cumulus Stations, as applicable, after Closing the acquiring party shall cooperate with the conveying party in the investigation, defense or prosecution of any action which is pending or threatened against the conveying party or its affiliates, whether or not any party has notified the other of a claim for indemnification with respect to such matter; provided , however , that the conveying party shall reimburse the acquiring party for the out-of-pocket costs reasonably incurred by the acquiring party as a result of its compliance with this Section 5.9. Without limiting the generality of the foregoing, the acquiring party shall make available its employees to give depositions or testimony and shall preserve and furnish all documentary or other evidence that the conveying party may reasonably request.
5.10 Real Property .
(a) With respect to each parcel of Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, the acquiring party may obtain, at the acquiring party’s expense, current surveys and preliminary title reports in order to obtain customary owner’s title commitments to issue a policy of title insurance containing the standard stipulations and conditions of the most current standard ALTA Form of Owner’s Title Insurance Policy in use in the states in which such real property is located insuring that the acquiring party shall receive at Closing indefeasible fee simple title to such real property, free and clear of all Liens, other than a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable. The conveying party shall provide the acquiring party reasonable assistance in obtaining such title commitments, including, without limitation, providing access to the applicable owned real property to perform such surveys, provided that such surveys are conducted during normal business hours upon reasonable prior notice to the conveying party. Without in any way limiting the parties’ rights under Article 6 or Article 7, the parties agree that the Closing is not conditioned upon the completion of any such survey or title report.
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(b) If any such title report or survey obtained prior to Closing discloses a Lien on the Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, that is not a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable, then:
(i) the acquiring party shall so notify the conveying party within twenty (20) days of its receipt of such title report or survey but in any event prior to Closing;
(ii) except as set forth below, the conveying party shall remediate such Lien as soon as reasonably practicable in all material respects; and
(iii) if remediation of any such Lien of which the conveying party was notified prior to Closing is not completed prior to Closing, then, unless the acquiring party elects not to consummate the Closing pursuant to the terms of Article 6 or 7, as applicable, the parties shall proceed to Closing (with the conveying party’s representations and warranties deemed modified to take into account any such condition) and the conveying party shall remediate such Lien in all material respects after Closing as promptly as practicable (and the acquiring party will, to the extent necessary, provide reasonable access with respect to such obligation); provided, however, that the conveying party’s obligations under this Section 5.10(b)(iii) to remediate such Liens shall be subject to the limitations on such party’s liability under Section 9.2(b) or Section 9.2(d), as applicable, such that the baskets and caps applicable to Damages under Section 9.2(b) and Section 9.2(d) shall be applicable to the costs and expenses (including attorneys’ fees and expenses) of remediating Liens under this Section 5.10(b)(iii), and such costs and expenses (including attorneys’ fees and expenses) of remediating Liens under this Section 5.10(b)(iii) shall be deemed Damages for purposes of Section 9.2(b) and Section 9.2(d), as applicable, it being the parties’ intent that the same baskets and caps shall apply to both the conveying party’s obligations under this Section 5.10(b)(iii) and its liability under Section 9.2(a)(i) or Section 9.2(c)(i), as applicable.
(c) Any Lien on the Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, that is not a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable, discovered after Closing, or with respect to which the acquiring party did not notify the conveying party prior to Closing, shall not be subject to this Section 5.10 but rather shall be subject to the provisions of Article 9 to the extent that the existence of such Lien constitutes a breach by Townsquare or Cumulus, as applicable, of its representations and warranties made under this Agreement.
(d) Notwithstanding anything to the contrary contained in this Section 5.10, if any title report or title commitment or title report discloses judgments, bankruptcies or other returns against other persons or entities having names the same as or similar to that of a conveying party, then the conveying party, at the Closing and to the extent applicable, shall deliver to the applicable title company affidavits to the effect that such judgments, bankruptcies or other returns are not against the conveying party in order to induce the title company to omit exceptions with respect to such judgments, bankruptcies or other returns or to insure over the same.
(e) Nothing in this Section 5.10 shall in any way limit the parties’ rights under Article 6 and Article 7.
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5.11 Retention of and Access to Books and Records . Each of Townsquare and Cumulus may retain a copy of all data books and records relating to the pre-Closing operations of the Townsquare Stations or Cumulus Stations, as applicable. After the Closing, the acquiring party shall retain those records delivered to the acquiring party by the conveying party for a period of at least three (3) years. Each acquiring party shall provide the conveying party and its representatives with reasonable access to any such books and records of which the conveying party did not retain a copy, during normal business hours and on reasonable prior written notice to the acquiring party. From the date hereof until Closing, Cumulus agrees to make its CFO available to discuss on-going operations and the status of the businesses of the Cumulus Stations during normal business hours and on reasonable prior written notice.
5.12 Insurance Policies . Each of Townsquare and Cumulus shall maintain in effect, and pay all premiums with respect to, all of their respective insurance policies (on such terms and with such limits as in effect on the date hereof) on the Townsquare Stations and Cumulus Stations, respectively, until the Closing. Upon the occurrence of any event that requires repair, replacement or remediation pursuant to Sections 5.4 and 5.5, then to the extent such event is covered by any such insurance policy, the party suffering any such event shall promptly make a claim to the appropriate insurer under such insurance policy. Any and all such insurance proceeds received by the party suffering any such event shall be used exclusively by such party to take such actions as are required by Sections 5.4 and 5.5.
5.13 Marks .
(a) Cumulus shall not have any right, title, interest, license or any other right whatsoever to use the words “Townsquare” or any trademarks containing or comprising “Townsquare” or any trademark confusingly similar thereto or dilutive thereof (collectively, the “ Townsquare Marks ”). From and after the Closing, Cumulus agrees that it shall (a) cease using Townsquare Marks in any manner, directly or indirectly, except for such uses that cannot be promptly terminated (e.g., signage, e-mail addresses, and as a referral or pointer to the acquired website), and to cease such limited usage of Townsquare Marks as promptly as possible after the Closing and in any event within sixty (60) days following the Closing Date, (b) use commercially reasonable efforts to, within sixty (60) days following the Closing Date, remove, strike over or otherwise obliterate all Townsquare Marks from all assets and all other materials owned, possessed or used by it, and (c) use commercially reasonable efforts to cause any third parties using or licensing such Townsquare Marks on behalf of, or with the consent of the Cumulus, to remove, strike over, or otherwise obliterate all Townsquare Marks from all materials owned, possessed or used by such third parties.
(b) Townsquare shall not have any right, title, interest, license or any other right whatsoever to use the words “Cumulus” or “Citadel” or any trademarks containing or comprising “Cumulus” or “Citadel” or any trademark confusingly similar thereto or dilutive thereof (collectively, the “ Cumulus Marks ”). From and after the Closing, Townsquare agrees that it shall (a) cease using Cumulus Marks in any manner, directly or indirectly, except for such uses that cannot be promptly terminated (e.g., signage, e-mail addresses, and as a referral or pointer to the acquired website), and to cease such limited usage of Cumulus Marks as promptly as possible after the Closing and in any event within sixty (60) days following the Closing Date, (b) use commercially reasonable efforts to, within sixty (60) days following the Closing Date,
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remove, strike over or otherwise obliterate all Cumulus Marks from all assets and all other materials owned, possessed or used by it, and (c) use commercially reasonable efforts to cause any third parties using or licensing such Cumulus Marks on behalf of, or with the consent of the Townsquare, to remove, strike over, or otherwise obliterate all Cumulus Marks from all materials owned, possessed or used by such third parties.
5.14 Cooperation . Each of the parties hereto shall use its respective commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things necessary, proper or advisable and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement. Cumulus and Townsquare each covenant and agree to take such commercially reasonable actions as may be reasonably requested by the other party in order to effect an orderly transition of the Cumulus Stations and Townsquare Stations, respectively, to the other party. In furtherance thereof, upon request each party shall provide to the other party accounting and financial information created or maintained above the market and exclusively related to the Cumulus Stations or Townsquare Stations, respectively, and technical support for the purpose of transitioning web hosting and similar matters.
5.15 Network Revenue . Cumulus hereby unconditionally guarantees for each of the first five 12-month periods after the Closing, that the Citadel Legacy Stations will receive an amount of network revenue (net of expenses) from Impact as described in this Section 5.16 (the “ Guaranteed Network Net Revenue ”). In exchange, the Citadel Legacy Stations will continue to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday. to Impact for sale through the network. The share of net revenue due to the Citadel Legacy Stations will be calculated based upon the AQH contribution of the Citadel Legacy Stations to Impact, consistent with historical practice, and will be paid semi-annually following the Closing. For the first 12-month period following Closing (the “ Base Year ”), Guaranteed Network Net Revenue shall be $473,215. At the end of the Base Year and each of the four 12-month periods following the Base Year (each, a “ Following Year ”), to the extent a decrease in ratings, AQH contribution of the Citadel Legacy Stations to Impact or overall decline in the network market has occurred during the prior 12-month period, the Guaranteed Network Net Revenue amount for such prior period will be adjusted to reflect such changes (the “ Adjusted Guaranteed Network Net Revenue ”). The Adjusted Guaranteed Network Net Revenue at the end of each year shall serve as the projected network revenue for each Following Year. For each 12-month period, in the event network revenue received by the Cumulus Stations for any 12-month period following Closing is less than the then applicable Adjusted Guaranteed Network Net Revenue, Cumulus shall pay such shortfall to Townsquare within 30 days following the end of such 12-month period. Townsquare shall have the option to cancel the arrangement with Cumulus to provide time to Impact on thirty (30) days prior written notice to Cumulus, and upon such cancellation, Cumulus shall have no further obligations under this Section 5.15.
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ARTICLE 6: TOWNSQUARE CLOSING CONDITIONS
The obligation of Townsquare to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Townsquare):
6.1 Representations and Covenants .
(a) Each of the representations and warranties of Cumulus made in this Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Cumulus made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement.
(b) The covenants and agreements to be complied with and performed by Cumulus at or prior to Closing shall have been complied with or performed in all material respects.
(c) Townsquare shall have received a certificate dated as of the Closing Date from Cumulus executed by an authorized officer of Cumulus to the effect that the conditions set forth in Sections 6.1(a) and (b) shall have been satisfied.
6.2 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
6.3 FCC Consents . Each of the FCC Consents shall have been issued and shall have become a Final Order.
6.4 Hart Scott Rodino . The HSR Clearance shall have been obtained.
6.5 Deliveries . Cumulus shall have complied with its obligations set forth in Section 8.2.
6.6 Required Consents . The Cumulus Required Consents shall have been obtained.
6.7 Cumulus Owned Real Property . The Cumulus Owned Real Property shall be able to be conveyed to Townsquare at Closing free and clear of all Liens, other than Cumulus Permitted Liens.
6.8 No Liens . There shall not be any Liens on the Cumulus Stations (other than the Cumulus Assumed Obligations, Cumulus Permitted Liens, and Liens created by Townsquare) or any financing statements of record with respect to the Cumulus Stations, except those to be released at the Closing and the Cumulus Assumed Obligations.
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ARTICLE 7: CUMULUS CLOSING CONDITIONS
The obligation of Cumulus to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Cumulus):
7.1 Representations and Covenants .
(a) Each of the representations and warranties of Townsquare made in this Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Townsquare made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement.
(b) The covenants and agreements to be complied with and performed by Townsquare at or prior to Closing shall have been complied with or performed in all material respects.
(c) Cumulus shall have received a certificate dated as of the Closing Date from Townsquare executed by an authorized officer of Townsquare to the effect that the conditions set forth in Sections 7.1(a) and (b) have been satisfied.
7.2 Cash Consideration . Townsquare shall have delivered to Cumulus the Cash Consideration.
7.3 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
7.4 FCC Consents . Each of the FCC Consents shall have been issued and shall have become a Final Order.
7.5 Hart Scott Rodino . The HSR Clearance shall have been obtained.
7.6 Deliveries . Townsquare shall have complied with its obligations set forth in Section 8.1.
7.7 Required Consents . The Townsquare Required Consents (if any) shall have been obtained.
7.8 Townsquare Owned Real Property . The Townsquare Owned Real Property shall be able to be conveyed to Cumulus at Closing free and clear of all Liens, other than Townsquare Permitted Liens.
7.9 No Liens . There shall not be any Liens on the Townsquare Stations (other than the Townsquare Assumed Obligations, Townsquare Permitted Liens, and Liens created by
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Cumulus) or any financing statements of record with respect to Townsquare or the Townsquare Stations, except those to be released at the Closing and the Townsquare Assumed Obligations.
ARTICLE 8: CLOSING DELIVERIES
8.1 Townsquare Deliveries . At Closing, Townsquare shall deliver or cause to be delivered to Cumulus:
(i) the Cash Consideration as provided in Section 1.6;
(ii) good standing certificates for Townsquare, dated not more than five (5) business days prior to the Closing Date, issued by the Secretary of State of Townsquare’s jurisdiction of formation;
(iii) a certificate executed by Townsquare’s secretary or assistant secretary confirming that the officers executing this Agreement and the Townsquare Ancillary Agreements are authorized to execute such documents;
(iv) the certificate described in Section 7.1(c);
(v) an assignment of FCC authorizations assigning the Townsquare FCC Licenses from Townsquare to Cumulus;
(vi) an assignment and assumption of contracts with respect to the Townsquare Station Contracts and an assignment and assumption of contracts with respect to the Cumulus Station Contracts;
(vii) an assignment and assumption of leases with respect to the Townsquare Real Property Leases and an assignment and assumption of leases with respect to the Cumulus Real Property Leases (if any);
(viii) special warranty deeds conveying the Townsquare Owned Real Property (if any) from Townsquare to Cumulus, together with customary owner affidavits reasonably requested by Cumulus or any title company retained by Cumulus;
(ix) an affidavit of non-foreign status of Townsquare that complies with Section 1445 of the Code;
(x) an assignment of marks assigning the Townsquare Stations’ registered marks listed on Schedule 1.1.1(e) from Townsquare to Cumulus;
(xi) domain name transfers with respect to the Townsquare Stations’ domain names listed on Schedule 1.1.1(e) and domain name transfers with respect to the Cumulus Stations’ domain names listed on Schedule 1.1.2(e) (if any), following customary procedures of the domain name administrator;
(xii) endorsed vehicle titles conveying the vehicles included in the Townsquare Tangible Personal Property (if any) from Townsquare to Cumulus;
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(xiii) a bill of sale conveying the other Townsquare Station Assets from Townsquare to Cumulus;
(xiv) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(xv) the License Agreement;
(xvi) any consents and estoppel certificates obtained by Townsquare; and
(xvii) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement.
8.2 Cumulus Deliveries . At Closing, Cumulus shall deliver or cause to be delivered to Townsquare:
(i) good standing certificates for Cumulus, dated not more than five (5) business days prior to the Closing Date, issued by the Secretary of State of Cumulus’ jurisdiction of formation;
(ii) a certificate executed by Cumulus’ secretary or assistant secretary certifying confirming that the officers executing this Agreement and the Cumulus Ancillary Agreements are authorized to execute such documents;
(iii) the certificate described in Section 6.1(c);
(iv) an assignment of FCC authorizations assigning the Cumulus FCC Licenses from Cumulus to Townsquare;
(v) an assignment and assumption of contracts with respect to the Townsquare Station Contracts and an assignment and assumption of contracts with respect to the Cumulus Station Contracts;
(vi) an assignment and assumption of leases with respect to the Townsquare Real Property Leases and an assignment and assumption of leases with respect to the Cumulus Real Property Leases (if any);
(vii) special warranty deeds conveying the Cumulus Owned Real Property (if any) from Cumulus to Townsquare, together with customary owner affidavits reasonably requested of Cumulus by any title company retained by Townsquare;
(viii) an affidavit of non-foreign status of Cumulus that complies with Section 1445 of the Code;
(ix) an assignment of marks assigning the Cumulus Stations’ registered marks listed on Schedule 1.1.2(e) (if any) from Cumulus to Townsquare;
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(x) domain name transfers with respect to the Townsquare Stations’ domain names listed on Schedule 1.1.1(e) and domain name transfers with respect to the Cumulus Stations’ domain names listed on Schedule 1.1.2(e) (if any), following customary procedures of the domain name administrator;
(xi) endorsed vehicle titles conveying the vehicles included in the Cumulus Tangible Personal Property (if any) from Cumulus to Townsquare;
(xii) a bill of sale conveying the other Cumulus Station Assets from Cumulus to Townsquare;
(xiii) the License Agreement;
(xiv) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(xv) any consents and estoppel certificates obtained by Cumulus; and
(xvi) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement.
ARTICLE 9: SURVIVAL; INDEMNIFICATION
9.1 Survival . The representations and warranties in this Agreement shall survive Closing for a period of eighteen (18) months from the Closing Date whereupon they shall expire and be of no further force or effect, except (i) those under Sections 2.5 and 3.5 (Taxes), and those under Sections 2.6, 2.7, 2.10, 3.6, 3.7 and 3.10 solely with respect to title (collectively, the “ SOL Representations ”), all of which shall survive until the expiration of any applicable statute of limitations, (ii) those under Sections 2.9 and 3.9 (Environmental) shall survive for twenty-four (24) months from the Closing Date, (iii) those under Sections 2.1 and 3.1 (Organization), 2.2 and 3.2 (Authorization), and 2.21 and 3.21 (No Broker) (collectively, the “ Fundamental Representations ”) shall survive indefinitely and (iv) that if within such applicable period the indemnified party gives the indemnifying party written notice of a claim for breach thereof describing in reasonable detail the nature and basis of such claim, then such claim shall survive until the resolution of such claim. The covenants and agreements in this Agreement shall survive Closing until performed.
9.2 Indemnification .
(a) Subject to Section 9.2(b), from and after Closing, Townsquare shall defend, indemnify and hold harmless Cumulus from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys’ fees and expenses (“ Damages ”) incurred by Cumulus arising out of or resulting from:
(i) any breach by Townsquare of its representations and warranties made under this Agreement; or
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(ii) any material default by Townsquare of any covenant or agreement made under this Agreement; or
(iii) the Townsquare Retained Obligations or the business or operation of the Townsquare Stations before the Effective Time, except for the Cumulus Assumed Obligations; or
(iv) the business or operation of the Cumulus Stations after the Effective Time; or
(v) the Townsquare Assumed Obligations.
(b) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Townsquare shall have no liability to Cumulus under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) until Cumulus’ aggregate Damages exceed $200,000, after which such threshold amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Townsquare under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) shall be an amount equal to $3,000,000;
(c) Subject to Section 9.2(d), from and after Closing, Cumulus shall defend, indemnify and hold harmless Townsquare from and against any and all Damages incurred by Townsquare arising out of or resulting from:
(i) any breach by Cumulus of its representations and warranties made under this Agreement; or
(ii) any material default by Cumulus of any covenant or agreement made under this Agreement; or
(iii) the Cumulus Retained Obligations or the business or operation of the Cumulus Stations before the Effective Time except for Townsquare Assumed Obligations; or
(iv) the business or operation of the Townsquare Stations after the Effective Time; or
(v) the Cumulus Assumed Obligations.
(d) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Cumulus shall have no liability to Townsquare under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) until Townsquare’s aggregate Damages exceed $1,350,000, after which such threshold amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Cumulus under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) shall be an amount equal to $20,250,000.
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(e) Notwithstanding anything in this Agreement to the contrary, the parties’ respective obligations under Section 5.8 to pay over to the other party any and all collected accounts receivable shall not be subject to any limitations on the survival period set forth in Section 9.1 or the threshold limitations set forth in Sections 9.2(b) or 9.2(d).
9.3 Procedures .
(a) The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties that is subject to indemnification hereunder (a “ Claim ”), but a failure to give such notice or delaying such notice shall not affect the indemnified party’s rights or the indemnifying party’s obligations except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced and provided that such notice is given within the time period described in Section 9.1.
(b) The indemnifying party shall have the right to undertake the defense or opposition to such Claim with counsel selected by it. In the event that the indemnifying party does not undertake such defense or opposition in a timely manner, the indemnified party may undertake the defense, opposition, compromise or settlement of such Claim with counsel selected by it at the indemnifying party’s cost (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding:
(i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim;
(ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include the giving by the claimant to the indemnified party of a release from all liability in respect of such Claim;
(iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel concerning such Claim and the indemnifying party and the indemnified party and their respective counsel shall cooperate in good faith with respect to such Claim; and
(iv) neither party shall have any liability to the other under any circumstances for special, indirect, consequential, punitive or exemplary damages or lost profits or similar damages of any kind, whether or not foreseeable.
(d) After Closing, excepting claims for fraud, all claims for breach of representations or warranties under this Agreement shall be subject to the limitations set forth in Section 9.2(b) or 9.2(d), as applicable.
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ARTICLE 10: TERMINATION AND REMEDIES
10.1 Termination . Subject to Section 10.3, this Agreement may be terminated prior to Closing as follows:
(a) by mutual written consent of Cumulus and Townsquare;
(b) by written notice of Cumulus to Townsquare if Townsquare breaches its representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period (defined below); provided , that Cumulus may not terminate pursuant to this Section 10.1(b) if it is then in material breach of or default under this Agreement;
(c) by written notice of Townsquare to Cumulus if Cumulus breaches its representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period; provided, that Townsquare may not terminate pursuant to this Section 10.1(c) if it is then in material breach of or default under this Agreement;
(d) by written notice of Townsquare to Cumulus or Cumulus to Townsquare if Closing does not occur by the date twelve (12) months after the date of this Agreement (as may be extended by the written agreement of the parties, the “ Outside Date ”);
(e) by written notice of either party to the other if the FCC (or its staff pursuant to delegated authority) issues a decision which designates any of the FCC Applications or the Divestiture Applications for an evidentiary hearing, dismisses any of the FCC Applications or Divestiture Applications as unacceptable for filing, or otherwise denies any of the FCC Applications or the Divestiture Applications; provided , that a party may not terminate pursuant to this Section 10.1(e) if its material breach of or default under this Agreement was the basis for the FCC action;
(f) by written notice of either party to the other if there shall be in effect a final, non-appealable order of a court or governmental authority or authority of competent jurisdiction prohibiting the consummation of the transactions contemplated hereby; or
(g) as provided by Section 5.5(c).
10.2 Cure Period . Each party shall give the other party prompt written notice upon learning of any breach or default by the other party under this Agreement. The term “ Cure Period ” as used herein means a period commencing on the date Cumulus or Townsquare receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) ten (10) calendar days thereafter or (ii) the Closing Date determined under Section 1.9; provided, however, that if the breach or default is non-monetary and cannot reasonably be cured within such period but can be cured before the Closing Date determined under Section 1.9, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date determined under Section 1.9.
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10.3 Survival . The termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Sections 5.1(a) (Confidentiality) and 11.1 (Expenses) shall survive any termination of this Agreement.
10.4 Specific Performance . Each party hereto agrees and acknowledges that the other party would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated by monetary damages alone. Accordingly, in the event of failure or threatened failure by either party to comply with the terms of this Agreement, the other party shall be entitled to an injunction (without posting bond or other security) restraining such failure or threatened failure and, subject to obtaining any necessary FCC consent, to enforcement of this Agreement by a decree of specific performance requiring compliance with this Agreement.
ARTICLE 11: MISCELLANEOUS
11.1 Expenses . Each party 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, except as otherwise set forth expressly herein (including, without limitation, pursuant to Section 5.9). All governmental fees and charges applicable to any requests for Governmental Consents under this Agreement shall be shared equally by the parties, except for filing fees related to the Divesture Applications which shall be paid by Townsquare, transfer taxes with respect to the Cumulus Stations, which shall be paid by Cumulus, and transfer taxes with respect to the Townsquare Stations, which shall be paid by Townsquare. The costs of any Phase I’s or surveys commissioned or obtained by Townsquare pursuant to this Agreement shall be paid by Townsquare and any Phase I’s or surveys commissioned or obtained pursuant to this Agreement by Cumulus shall be paid by Cumulus. Each party is responsible for any commission, brokerage fee, advisory fee or other similar payment that arises as a result of any agreement or action of it or any party acting on its behalf in connection with this Agreement or the transactions contemplated hereby.
11.2 Further Assurances . After Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments of conveyance and assumption and take such other actions as may reasonably be requested in order to carry out the provisions of this Agreement and more effectively consummate the transactions contemplated hereby.
11.3 Assignment . Neither party may assign this Agreement without the prior written consent of the other party hereto, except that (a) a party may assign to an affiliate its right to acquire assets under this Agreement upon written notice to (but without need for the consent of) the other party if it does not adversely affect the other party’s like-kind exchange treatment under the Code and (i) any such assignment does not delay processing of the FCC Applications, issuance of the FCC Consents or Closing, (ii) the assignee delivers to the other party a written assumption of this Agreement, (iii) the assignor shall remain liable for all of its obligations hereunder, and (iv) the assignor shall be solely responsible for any third party consents necessary in connection therewith (none of which are a condition to Closing), and (b) Townsquare and Cumulus may each collaterally assign its rights and remedies hereunder to any bank, financial
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institution or other lender that has loaned funds or otherwise extended credit to it or any of its affiliates but only to the extent such assignment is in compliance with the requirements of the Communications Act and the FCC Rules, or make any assignment that is undertaken to comply with any FCC Rules, including the Local Radio Ownership Rule. The terms of this Agreement shall bind and inure to the benefit of the parties’ respective successors and any permitted assigns, and no assignment shall relieve any party of any obligation or liability under this Agreement.
11.4 Notices . Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or confirmed facsimile transmission, transmission by electronic mail or confirmed delivery by a nationally recognized overnight courier service, and shall be addressed as follows (or to such other address as any party may request by written notice):
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Facsimile: (404) 581-8330 | |
Email: wbrowland@jonesday.com | |
with a copy (which shall not | Pillsbury Winthrop Shaw Pittman LLP |
constitute notice) to: | 2300 N Street, NW |
Washington, D.C. 20037-1122 | |
Attention: Lewis J. Paper | |
Facsimile: (202) 663-8007 | |
Email: lew.paper@pillsburylaw.com |
11.5 Waivers . No waiver of compliance with any provision 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 such waiver is sought. The rights and remedies of the parties are cumulative and not alternative and may be exercised concurrently or separately. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege.
11.6 Entire Agreement; Amendments . This Agreement (including the Exhibits and Schedules hereto) constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings with respect to the subject matter hereof, except any confidentiality agreement among the parties, which shall remain in full force and effect. No party makes any representation or warranty with respect to the transactions contemplated by this Agreement except as expressly set forth in this Agreement. Without limiting the generality of the foregoing, neither party makes any representation or warranty to the other with respect to any projections, budgets or other estimates of revenues, expenses or results of operations, or, except as expressly set forth in Article 2 or Article 3, as applicable, any other financial or other information made available to the other party. This Agreement may only be amended by a document executed by the parties.
11.7 Severability . If any court or governmental authority holds any provision in this Agreement invalid, illegal or unenforceable under any applicable law, then, so long as no party is deprived of the benefits of this Agreement in any material respect, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.
11.8 No Beneficiaries . Nothing in this Agreement expressed or implied is intended or shall be construed to give any rights to any person or entity other than the parties hereto and their successors and permitted assigns.
11.9 Governing Law . The construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the choice of law provisions thereof. Except as provided in Section 1.7(d), the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or
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in connection with, this Agreement or the transactions contemplated hereby shall be brought in any state or federal court located in the State of Delaware, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party as provided in Section 11.9 shall be deemed effective service of process on such party.
11.10 WAIVER OF JURY TRIAL . THE PARTIES EACH IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION IN CONNECTION WITH THIS AGREEMENT, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL.
11.11 Neutral Construction . The parties agree that this Agreement was negotiated at arms-length and that the final terms hereof are the product of the parties’ negotiations. This Agreement shall be deemed to have been jointly and equally drafted by Townsquare and Cumulus, and the provisions hereof should not be construed against a party on the grounds that the party drafted or was more responsible for drafting the provision.
11.12 Counterparts . This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which together will constitute one and the same agreement. A telecopy, PDF or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties by facsimile, e-mail or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
CUMULUS: | CUMULUS BROADCASTING LLC | ||
CUMULUS LICENSING LLC | |||
CITADEL BROADCASTING COMPANY | |||
RADIO LICENSE HOLDING CBC, LLC | |||
By: | /s/ Richard S. Denning | ||
Name: | Richard S. Denning | ||
Title: | Senior Vice President, Secretary and | ||
General Counsel | |||
TOWNSQUARE: | TOWNSQUARE RADIO, LLC | ||
TOWNSQUARE MEDIA OF BLOOMINGTON, INC. | |||
TOWNSQUARE MEDIA OF PEORIA, INC. | |||
TOWNSQUARE MEDIA LICENSEE OF PEORIA, INC. | |||
By: | |||
Name: | Alex Berkett | ||
Title: | Executive Vice President |
[Signature Page to Asset Purchase and Exchange Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
CUMULUS: | CUMULUS BROADCASTING LLC | ||
CUMULUS LICENSING LLC | |||
CITADEL BROADCASTING COMPANY | |||
RADIO LICENSE HOLDING CBC, LLC | |||
By: | |||
Name: | Richard S. Denning | ||
Title: | Senior Vice President, Secretary and | ||
General Counsel | |||
TOWNSQUARE: | TOWNSQUARE RADIO, LLC | ||
TOWNSQUARE MEDIA OF BLOOMINGTON, INC. | |||
TOWNSQUARE MEDIA OF PEORIA, INC. | |||
TOWNSQUARE MEDIA LICENSEE OF PEORIA, INC. | |||
By: | /s/ Alex Berkett | ||
Name: | Alex Berkett | ||
Title: | Executive Vice President |
[Signature Page to Asset Purchase and Exchange Agreement]
Exhibit A
LICENSE AGREEMENT
See attached.
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CUMULUS MEDIA HOLDINGS INC.
Software License Agreement
This License Agreement, by and between Cumulus Media Holdings Inc. (“Cumulus”) and Townsquare Radio, LLC (“Townsquare”), is entered into in connection with that certain asset exchange agreement by and between Cumulus and Townsquare, dated April 28, 2012 (the “Exchange Agreement”). Capitalized terms used herein but not otherwise defined shall have the meanings assigned to them in the Exchange Agreement.
Cumulus grants to Townsquare a nonexclusive, nontransferable and royalty-free license to use at the Cumulus Stations the computer software package listed on Exhibit A hereto (the “Software”) for a period of one-year from the Closing Date.
THE LICENSE HEREBY GRANTED TO TOWNSQUARE DOES NOT INCLUDE ANY RIGHT TO USE THE SOFTWARE FOR PURPOSES OTHER THAN OPERATION OF THE CUMULUS STATIONS OR TO COPY, REPRODUCE, SELL, ASSIGN, TRANSFER, OR SUBLICENSE THE SOFTWARE FOR ANY PURPOSE, IN WHOLE OR IN PART, WITHOUT THE PRIOR WRITTEN PERMISSION OF CUMULUS, WHICH PERMISSION MAY BE WITHHELD BY CUMULUS IN ITS SOLE DISCRETION. If such permission is obtained, Townsquare agrees to apply Cumulus’ copyright notice or other identifying legends to such copies or reproductions.
The rights herein granted to Townsquare shall not affect the exclusive ownership by Cumulus of the Software or of any trademarks, copyrights, patents, trade secrets, proprietary rights, or other property rights of Cumulus pertaining to the Software.
Townsquare agrees that only authorized officers, employees, contractors and agents of Townsquare (each, an “Authorized User”) will use the Software or have access to the same (or to any part thereof) and that Townsquare will require each Authorized User to not disclose any part or all of the Software, or permit any part or all the same to be used by any person or entity other than those identified herein. Townsquare acknowledges that certain of Cumulus’s rights may be derived from license agreements with third parties and as such Townsquare agrees to preserve the confidentiality of information imparted to Cumulus under such third party license agreements.
Cumulus shall defend, indemnify and hold harmless Townsquare and Authorized Users from and against any and all third party claims that the use of the Software by the Authorized Users infringes on the intellectual property rights of such third party provided Townsquare advises Cumulus of any such claim in reasonably sufficient time to respond to and defend such claims. Cumulus shall have the sole right to defend any such third party claim. Upon receipt of such claim or any claim against Cumulus that the use of the Software infringes the intellectual property rights of any third party, Cumulus may elect to terminate this license to the Software.
If Townsquare modifies the Software in any manner, this license shall automatically terminate. If the Townsquare or any of its officers, employees, or agents should devise any revisions, enhancements, or improvements in the Software, Townsquare shall disclose such improvements to Cumulus, and Cumulus shall have a royalty-free license to use such revisions, enhancements and improvements and the right to grant sub-licenses thereof. Cumulus does not
assume any responsibility or liability with respect to unauthorized modification or substitution of subsystems or components.
Townsquare shall require each Authorized User of the Software to abide by the terms and conditions of this License Agreement as if each were a party hereof, and shall indemnify and hold harmless Cumulus from any breach of this License Agreement by an Authorized User.
The term of Townsquare’s license to the Software shall continue until the earlier of: (a) any sublicense, assignment or transfer or attempted sublicense, assignment or transfer by Townsquare of the Software without the consent of Cumulus; (b) the transport, movement or attempted transport or movement by the Townsquare of the Software, or the hardware on which the Software is installed, from the Cumulus Stations without prior written consent of Cumulus; (c) Townsquare modifies the Software in any way; (d) the mutual written consent of Townsquare and Cumulus; or (e) the first anniversary of the Closing Date.
CUMULUS MAKES NO EXPRESS OR IMPLIED WARRANTIES REGARDING THE SOFTWARE AND HEREBY DISCLAIMS ANY SUCH WARRANTIES, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN ADDITION, CUMULUS SHALL NOT BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES (INCLUDING, WITHOUT LIMITATION, LOST PROFITS OR DAMAGES) CAUSED BY THE SOFTWARE.
Townsquare may not assign this License Agreement or any interest herein without the prior written consent of Cumulus. Cumulus may assign this Agreement or any interest herein to a parent, subsidiary, affiliate, or third party as part of the sale of any portion of its business or pursuant to any merger, consolidation, or reorganization, without Townsquare’s consent, provided that the entity to which Cumulus intends to assign this Agreement must have the necessary assets, including intangible assets, to satisfy all Cumulus obligations under this License Agreement.
Both parties agree that this License Agreement shall be interpreted and enforced in accordance with the laws of the State of Delaware without giving effect to the choice of law provisions thereof.
IN WITNESS WHEREOF, the parties have executed this License Agreement as of the date set forth above.
CUMULUS MEDIA HOLDINGS INC. | ||
By: | ||
Name: | ||
Title: | ||
TOWNSQUARE RADIO, LLC | ||
By: | ||
Name: | ||
Title: |
EXHIBIT A
SOFTWARE
Stratus Traffic & Billing
Stratus Music Scheduling
Opx Automation by BSI*
* The license to the Software is limited to the markets where the individual software packages comprising the Software are currently being used as of the date of the Exchange Agreement.
Exhibit 2.2
Execution Version
ASSET PURCHASE AND EXCHANGE AGREEMENT
THIS ASSET PURCHASE AND EXCHANGE AGREEMENT (this “ Agreement ”) is made as of August 30, 2013 among Townsquare Radio, LLC (“ Townsquare ”), on the one hand, and Cumulus Media Holdings Inc. (“ Cumulus Parent ”), Cumulus Broadcasting LLC (“ Cumulus Broadcasting ”) and Cumulus Licensing LLC (“ Cumulus Licensing ”), (Cumulus Parent, Cumulus Broadcasting and Cumulus Licensing collectively, “ Cumulus ”).
Recitals
A. Townsquare has entered into that certain Exchange Agreement dated August 30, 2013 (the “ Townsquare Purchase Agreement ”) to acquire the radio broadcast stations of Peak Broadcasting LLC and its affiliates (“ Townsquare Seller ”) in the Fresno, California market set forth on Schedule A attached hereto (each a “ Townsquare Station ” collectively the “ Townsquare Stations ”).
C. Cumulus Broadcasting owns and operates certain radio broadcast stations in the Dubuque, Iowa market set forth on Schedule B attached hereto (each an “ Iowa Station ” and collectively the “ Iowa Stations ”), and Cumulus Licensing holds licensees, construction permits and other authorizations issued by the Federal Communications Commission (“ FCC ”) for the operation of the Iowa Stations.
D. Cumulus Broadcasting owns and operates certain radio broadcast stations in the Poughkeepsie, New York market set forth on Schedule C attached hereto (each a “ Poughkeepsie Station ” and collectively the “ Poughkeepsie Stations ”) (the Iowa Stations and Poughkeepsie Stations collectively the “ Cumulus Stations ”), and Cumulus Licensing holds licenses, construction permits and other authorizations issued by the FCC for the operation of the Poughkeepsie Stations.
E. Townsquare Parent and Cumulus Parent desire to cause Townsquare Purchasers and Cumulus Purchasers to exchange the Townsquare Station Assets (defined below) used exclusively in the Townsquare Stations for the Cumulus Station Assets (defined below) used exclusively in the Cumulus Stations. The parties intend this exchange to be a like-kind exchange in accordance with the provisions of Section 1031 of the Internal Revenue Code of 1986, as amended (the “ Code ”).
Agreement
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1: EXCHANGE OF ASSETS
1.1 Station Assets .
1.1.1. Townsquare Station Assets . On the terms and subject to the conditions hereof, at
Closing (defined below), except as set forth in Sections 1.2 and 1.3, Townsquare shall assign, transfer, convey and deliver to Cumulus, and Cumulus shall acquire from Townsquare, all right, title and interest of Townsquare in and to all assets, properties, rights and interests of Townsquare, real and personal, tangible and intangible, that are used or held for use exclusively in the operation of the Townsquare Stations (the “ Townsquare Station Assets ”), including, without limitation, the following:
(a) all licenses, construction permits and other authorizations issued by the FCC with respect to the Townsquare Stations (the “ Townsquare FCC Licenses ”) described on Schedule 2.4(a) , including any renewals or modifications thereof between the date hereof and Closing, along with assignable applications pending before the FCC with respect to the renewal or modification of the Townsquare FCC Licenses or for any new FCC authorizations for the Townsquare Stations, and all other permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities held by or in respect of the Townsquare Stations that are (i) necessary to or otherwise used in the operation of the Townsquare Stations or (ii) required as a result of the activities of the Townsquare Stations;
(b) all equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts, office materials and supplies, inventory and other tangible personal property of every kind and description that are used or held for use in the operation of the Townsquare Stations, including, without limitation, those listed on Schedule 2.6 , except for any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Townsquare Tangible Personal Property ”);
(c) all real property used or held for use in the operation of the Townsquare Stations (including any appurtenant easements and improvements located thereon), including, without limitation, those listed on Schedule 2.7 (the “ Townsquare Real Property ”);
(d) all agreements for the sale of advertising time on the Townsquare Stations entered into in the ordinary course of business, and all other contracts, agreements and leases entered into in the ordinary course of the Townsquare Stations’ business, (including those associated with any live events to the extent solely related to the markets of the Townsquare Stations (whether or not ongoing) developed, organized, sponsored or planned by the Stations (collectively “ Townsquare Live Events ”), such as sponsorship agreements, talent agreements, ticketing and other vendor agreements, merchandising agreements, etc.), including, without limitation, those listed on Schedule 2.7 and Schedule 2.8 , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4, but excluding (i) the Excluded Townsquare Station Contracts (defined below) and (ii) any such agreements, contracts and leases which are Shared Contracts (defined below), which shall be governed by Section 1.3 hereof (collectively, the “ Townsquare Station Contracts ”);
(e) all rights in and to the Townsquare Stations’ call letters, the trademarks (including logos), trade names and service marks associated with the Townsquare Stations, together with the goodwill connected with the use of such names and marks and symbolized thereby including, without limitation, all rights of the Townsquare Stations in and to names, marks, logos, and other identifiers associated with any Townsquare Live Events; internet domain names and leases for domain names used in the operation of the Townsquare Stations (including
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those used for any Townsquare Live Events); the exclusive right to the use of HTML content located and publicly accessible from such domain names; the “visitor” email database for such sites and other “visitor” personal information collected by such sites; emails and other personal information collected from visitors and attendants at any Townsquare Live Events; franchises; copyrights; programs and programming material and their titles; jingles; slogans; and other intangible properties which are used or held for use in the operation of the Townsquare Stations (including those used for any Townsquare Live Events), including, without limitation, those listed on Schedule 2.10, together with registrations of and applications to register the foregoing in any jurisdiction, including any extension, modification or renewal of any such registration or application (the “ Townsquare Intangible Property ”);
(f) all rights in and to all the files, documents, records, and books of account (originals to the extent existing, or copies thereof) to the extent relating primarily to the operation of the Townsquare Stations, including the Townsquare Stations’ local public files, programming information and studies, engineering data, advertising studies, email and personal information databases, marketing and demographic data, sales correspondence, lists of advertisers, lists of exhibitors and vendors for any Townsquare Live Events, credit and sales reports (including ticket buying reports and history for any Townsquare Live Events), and logs, filings with the FCC, copies of all written Townsquare Station Contracts, copies of paid invoices for the prior 12 months, copies of those Townsquare databases and data links that relate solely to the Townsquare Stations, and logs, but excluding records relating to Townsquare Excluded Assets (defined below);
(g) all prepaid expenses and deposits (and rights arising therefrom or related thereto) with respect to the Townsquare Stations held by third parties in Townsquare’s name paid by Townsquare;
(h) any and all rights and claims of Townsquare, whether mature, contingent or otherwise, against third parties with respect to the Townsquare Stations and the Townsquare Station Assets, to the extent attributable to any period after the Effective Time (defined below), including, without limitation, all assignable rights under manufacturers’ and vendors’ warranties; and
(i) all accounts receivable and any other rights to payment of cash consideration for goods or services sold or provided prior to the Effective Time or otherwise arising during or attributable to any period prior to the Effective Time from the operation of the Townsquare Stations.
The Townsquare Station Assets shall be transferred to Cumulus free and clear of liens, claims and encumbrances (“ Liens ”), except for (A) Cumulus Assumed Obligations (defined below), (B) Liens for taxes not yet due and payable, (C) Liens that will be released at or prior to Closing, (D) mechanics’ workmen’s, repairmen’s, warehouseman’s carrier’s or other like Liens arising or incurred in the ordinary course of business or by operation of law if the underlying obligations are not delinquent, and (E) with respect to the Townsquare Real Property, such other liens, imperfections in title, charges, easements, rights of way, zoning, subdivision, building and land use restrictions, Environmental Laws and other restrictions and exceptions that do not in any material respect detract from operation of the Townsquare Stations in the ordinary course of
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the business of the Townsquare Stations (collectively, “ Townsquare Permitted Liens ”). Notwithstanding the foregoing or anything to the contrary contained elsewhere in this Agreement (including, without limitation, Section 5.10), Townsquare Permitted Liens shall not include, and Townsquare will at the Closing cause the release, removal or discharge of, monetary obligations such as mortgages, mechanics’ and materialmen’s liens, judgment liens and fines for the violation of municipal ordinances, orders or requirements issued in connection with the Townsquare Real Property prior to the Closing Date.
1.1.2. Cumulus Station Assets . On the terms and subject to the conditions hereof, at Closing (defined below), except as set forth in Sections 1.2 and 1.3, Cumulus shall assign, transfer, convey and deliver to Townsquare, and Townsquare shall acquire from Cumulus, all right, title and interest of Cumulus in and to all assets and properties of Cumulus, real and personal, tangible and intangible, that are used or held for use exclusively in the operation of the Cumulus Stations (the “ Cumulus Station Assets ”), including, without limitation, the following:
(a) all licenses, construction permits and other authorizations issued by the FCC with respect to the Cumulus Stations (the “ Cumulus FCC Licenses ”) described on Schedule 3.4(a) , including any renewals or modifications thereof between the date hereof and Closing, along with assignable applications pending before the FCC with respect to the renewal or modification of the Cumulus FCC Licenses or for any new FCC authorizations for the Cumulus Stations, and all other permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities held by or in respect of the Cumulus Stations that are (i) necessary to or otherwise used in the operation of the Cumulus Stations or (ii) required as a result of the activities of Cumulus Stations;
(b) all equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts, office materials and supplies, inventory and other tangible personal property of every kind and description that are used or held for use in the operation of the Cumulus Stations, including, without limitation, those listed on Schedule 3.6, except for any retirements or dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Cumulus Tangible Personal Property ”);
(c) all real property used or held for use in the operation of the Cumulus Stations (including any appurtenant easements and improvements located thereon), including, without limitation, those listed on Schedule 3.7 (the “ Cumulus Real Property ”);
(d) all agreements for the sale of advertising time on the Cumulus Stations entered into in the ordinary course of business, and all other contracts, agreements and leases entered into in the ordinary course of the Cumulus Stations’ business, (including those associated with any live events to the extent solely related to the markets of the Cumulus Stations (whether or not ongoing) developed, organized, sponsored or planned by the Cumulus Stations (collectively “ Cumulus Live Events ”), such as sponsorship agreements, talent agreements, ticketing and other vendor agreements, merchandising agreements, etc.), including, without limitation, those listed on Schedule 3.7 and Schedule 3.8 , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4, but excluding (i) the Excluded Cumulus Station Contracts (defined below) and (ii) any such agreements, contracts and leases which are Shared Contracts, which shall be governed by Section 1.3 hereof
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(collectively, the “ Cumulus Station Contracts ”);
(e) all rights in and to the Cumulus Stations’ call letters; the trademarks (including logos), trade names and service marks associated with the Cumulus Stations, together with the goodwill connected with the use of such names and marks and symbolized thereby including, without limitation, all rights of the Cumulus Stations in and to names, marks, logos, and other identifiers associated with any Cumulus Live Events; internet domain names and leases for domain names used in the operation of the Cumulus Stations (including those used for any Cumulus Live Events); the exclusive right to the use of HTML content located and publicly accessible from such domain names; the “visitor” email database for such sites and other “visitor” personal information collected by such sites; emails and other personal information collected from visitors and attendants at any Cumulus Live Events; franchises; copyrights; programs and programming material and their titles; jingles; slogans; and other intangible properties which are used or held for use in the operation of the Cumulus Stations (including those used for any Cumulus Live Event), including, without limitation, those listed on Schedule 3.10, together with registrations of and applications to register the foregoing in any jurisdiction, including any extension, modification or renewal of any such registration or application (the “ Cumulus Intangible Property ”);
(f) all rights in and to all the files, documents, records, and books of account (originals to the extent existing, or copies thereof) to the extent relating primarily to the operation of the Cumulus Stations, including the Cumulus Stations’ local public files, programming information and studies, engineering data, advertising studies, email and personal information databases, marketing and demographic data, sales correspondence, lists of advertisers, lists of exhibitors and vendors for any Cumulus Live Events, credit and sales reports (including ticket buying reports and history for any Cumulus Live Events), and logs, filings with the FCC, copies of all written Townsquare Station Contracts, copies of paid invoices for the prior 12 months, copies of those Townsquare databases and data links that relate solely to the Cumulus Stations, and logs, but excluding records relating to Cumulus Excluded Assets (defined below);
(g) all prepaid expenses and deposits (and rights arising therefrom or related thereto) with respect to the Cumulus Stations held by third parties in Cumulus’s name paid by Cumulus;
(h) any and all rights and claims of Cumulus, whether mature, contingent or otherwise, against third parties with respect to the Cumulus Stations and the Cumulus Station Assets, to the extent attributable to any period after the Effective Time (defined below), including, without limitation, all assignable rights under manufacturers’ and vendors’ warranties; and
(i) all accounts receivable and any other rights to payment of cash consideration for goods or services sold or provided prior to the Effective Time or otherwise arising during or attributable to any period prior to the Effective Time from the operation of the Cumulus Stations.
The Cumulus Station Assets shall be transferred to Townsquare free and clear of Liens, except for (A) Townsquare Assumed Obligations (defined below), (B) Liens for taxes not yet
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due and payable, (C) Liens that will be released at or prior to Closing, (D) mechanics’, workmen’s, repairmen’s, warehousemen’s, carrier’s or other like Liens arising or incurred in the ordinary course of business or by operation of law if the underlying obligations are not delinquent, and (E) with respect to the Cumulus Real Property, such other liens, imperfections in title, charges, easements, rights of way, zoning subdivision, building and land use restrictions, Environmental Laws and other restrictions and exceptions that do not in any material respect detract from operation of the Cumulus Stations in the ordinary course of the business of the Cumulus Stations (collectively, “ Cumulus Permitted Liens ”). Notwithstanding the foregoing or anything to the contrary contained elsewhere in this Agreement (including, without limitation, Section 5.10), Cumulus Permitted Liens shall not include, and Cumulus will at the Closing cause the release, removal or discharge of, monetary obligations such as mortgages, mechanics’ and materialmen’s liens, judgment liens and fines for the violation of municipal ordinances, orders or requirements issued in connection with the Cumulus Real Property prior to the Closing Date.
1.1.3 Determination of Transferees . The conveyances described in Sections 1.1.1 and 1.1.2 shall be made by the transferors and to the transferees listed on Appendix I hereto.
1.2 Excluded Assets . Notwithstanding anything to the contrary contained herein, the assets to be exchanged under this Agreement shall not include the following assets or any rights, title and interest therein (the “ Townsquare Excluded Assets ” or the “ Cumulus Excluded Assets ”, as applicable):
(a) all cash and cash equivalents, including, without limitation, certificates of deposit, commercial paper, treasury bills, marketable securities, money market accounts and all such similar accounts or investments;
(b) all tangible and intangible personal property retired in the ordinary course of business or disposed of between the date of this Agreement and Closing in accordance with Article 4;
(c) all contracts that are terminated or expire prior to Closing and all contracts to which Townsquare or the Townsquare Seller are a party that are listed on Schedule 1.2(c) (the “ Excluded Townsquare Station Contracts ”);
(d) all contracts that are terminated or expire prior to Closing and all contracts to which Cumulus is a party that are listed on Schedule 1.2(d) (the “ Excluded Cumulus Station Contracts ”);
(e) all trade names not exclusive to the operation of the Townsquare Stations or the Cumulus Stations, as applicable, the respective corporate names of the parties and their respective affiliates (including, without limitation, the names “Townsquare”, “Cumulus” and “Citadel”), charter documents, and books and records relating to organization, existence or ownership, duplicate copies of records, and all records not relating to the operation of the Townsquare Stations or the Cumulus Stations, as applicable;
(f) all contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including, without limitation, rights arising from any refunds due
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with respect to insurance premium payments to the extent related to such insurance policies; provided that, to the extent of any proceeds which would cover any damages or losses which are required to be repaired and/or remediated pursuant to Sections 5.4 or 5.5, the proceeds therefrom shall be used exclusively to repair and/or remediate any such damages or losses;
(g) all pension, profit sharing plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any;
(h) any non-transferable shrink-wrapped computer software and any other non-transferable computer licenses that are not material to the operation of the Townsquare Stations or the Cumulus Stations, as applicable;
(i) all deposits and prepaid expenses (and rights arising therefrom or related thereto) except to the extent the conveying party receives a credit therefor under Section 1.7;
(j) files, documents, records, and books of account that relate to multiple stations (other than solely the Townsquare Stations or Cumulus Stations, as applicable) or other business units (other than solely the business of the Townsquare Stations or Cumulus Stations, as applicable);
(k) computers and other similar assets and any operating systems and related assets that are used in the operation of multiple stations (other than solely the Townsquare Stations or Cumulus Stations, as applicable) or other business units (other than solely the business of the Townsquare Stations or Cumulus Stations, as applicable);
(l) the Townsquare assets specifically listed on Schedule 1.2(l) ;
(m) the Cumulus assets specifically listed on Schedule 1.2(m) ; and
(n) all rights and claims of the conveying party to the extent related solely to the Townsquare Retained Obligations or the Cumulus Retained Obligations, respectively.
For the avoidance of doubt, with respect to any marks or similar intangible property used in the operation of multiple stations, the Townsquare Station Assets or Cumulus Station Assets, as applicable, include only the right to use such items in the manner used by the conveying party at the applicable station on a basis exclusive in the market, but non-exclusive in that no right is granted with respect to other markets (some of which may overlap), and such right (i) is limited to the extent of the conveying party’s transferable rights, (ii) may not be assigned by the acquiring party except to a transferee of the applicable station who assumes the acquiring party’s obligations in respect thereof (and any such assignment shall not relieve the acquiring party of any obligation or liability), (iii) may be used by the acquiring party only in a manner that does not diminish the quality of such items, and only without violating law or any third party rights (and the acquiring party shall be solely responsible for such use and the related services), and (iv) shall terminate for noncompliance or non-use, but otherwise shall be coterminous with the conveying party’s rights. Notwithstanding the foregoing, in no event shall this paragraph relate to any of the following names (or any rights with respect thereto): “Townsquare”, “Cumulus” or “Citadel”. At Closing, the parties shall enter into a separate software license agreement that provides rights to certain Cumulus software in the form attached
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hereto as Exhibit A (the “ Software License Agreement ”).
1.3 Shared Contracts .
(a) Some contracts, agreements and leases relating to the Townsquare Stations or Cumulus Stations, as applicable, may be used in the operation of multiple stations or other business units (each, a “ Shared Contract ”). Schedule 1.3(a) sets forth all Shared Contracts relating to the Townsquare Stations that are material with respect to the applicable market, and Schedule 1.3(b) sets forth all Shared Contracts relating to the Cumulus Stations that are material with respect to the applicable market. Except as provided by Schedule 1.2(c) or Schedule 1.2(d) , as applicable, at the Closing, the rights and obligations under Shared Contracts shall be equitably allocated among stations and such other business units in a manner reasonably determined by the parties in accordance with the following equitable allocation principles:
(i) any allocation expressly set forth in the Shared Contract shall control;
(ii) if none, then any allocation previously made by the conveying party in the ordinary course of station operations shall control;
(iii) if none, then the quantifiable proportionate benefit to be received by the parties after Closing shall control; and
(iv) if not quantifiable, then reasonable accommodation shall control.
(b) With respect to each such Shared Contract, (i) the parties shall cooperate with each other and each contract counterparty in such allocation, (ii) only the allocated portion of each such Shared Contract is included in the contracts to be assigned and assumed under this Agreement (without need for further action), and (iii) the parties shall use their commercially reasonable efforts to ensure that such allocation shall occur by termination of the Shared Contract and execution of new contracts between each contract counterparty and each of Townsquare and Cumulus (but only if such contract is on terms at least as favorable than the existing contract), but shall include the allocated portion of such contracts will not include any group discounts or similar benefits specific to a party or its affiliates. Completion of documentation of any such allocation is not a condition to Closing; provided , however , that with respect to each such Shared Contract which is not allocated at Closing pursuant to subsection (iii) of this Section 1.3(b), the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which acquiring party shall receive the allocable benefits thereunder from and after Closing, and to the extent of the allocable benefits received, the acquiring party shall pay and perform the conveying party’s obligations arising thereunder from and after Closing in accordance with its terms, until new documentation effecting the allocation described in this Section 1.3 is executed and delivered. With respect to each Shared Contract, each party shall be responsible for all costs associated with the portion allocated to such party, and shall indemnify and hold harmless the other party for any losses associated with the performance of such party for the portion allocated to such party.
(c) In the event that the terms of any Shared Contract prohibits the allocation
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contemplated by this Section 1.3, the parties shall use commercially reasonable efforts to provide the benefits and obligations of the portion of the Shared Contract that would have been allocated to a party hereunder but for any such prohibition.
(d) Notwithstanding the foregoing, in no event shall a Shared Contract relate to any employees of Townsquare or Cumulus, or the following marks (or any other rights with respect thereto): the names “Townsquare”, “Cumulus” and “Citadel”.
1.4 Cumulus Assumed Obligations . On the Closing Date, Cumulus shall assume and be obligated for, and shall agree to pay, perform and discharge in accordance with their terms, the following obligations of Townsquare (except to the extent such obligations and liabilities are included in the Townsquare Retained Obligations (as defined below) or the Townsquare Excluded Assets) arising during, or attributable to, any period of time on or after the Closing Date:
(a) All liabilities under the Townsquare Station Contracts and, to the extent allocated among the Townsquare Stations in accordance with Section 1.3, the Shared Contracts;
(b) The other non-employment liabilities of Townsquare to the extent Cumulus receives a credit therefor or otherwise assumes such liabilities under Section 1.7;
(c) The specific liabilities listed on Schedule 1.4 ; and
(d) All accounts payable relating to or arising under the Townsquare Station Assets that are outstanding as of the Closing Date to the extent such liabilities are included in the calculation of the Net AR Adjustment Amount (as defined below) under Section 1.7 or Cumulus otherwise assumes such liabilities under Section 1.7.
All of the foregoing to be assumed by Cumulus hereunder are referred to herein as the “ Cumulus Assumed Obligations .” Cumulus does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Townsquare or the Townsquare Seller (the “ Townsquare Retained Obligations ”), including any liability for borrowed money, any liability under a mortgage or notices of violation, municipal ordinances, orders or requirements issued in connection with the Townsquare Real Property prior to the Closing Date or any liability for any employees of Townsquare or the Townsquare Seller (other than related to the employment of any such individuals by Cumulus from and after the Closing) and any taxes of Townsquare (other than as specifically contemplated by Section 1.7 or solely related to the Townsquare Station Assets arising during and attributable to any period of time on or after the Closing Date). Notwithstanding anything herein to the contrary, all bonuses, success fees, or change of control payments payable to any employees of the Townsquare Stations, whether pursuant to a Townsquare Station Contract or otherwise, in connection with the Closing shall be Townsquare Retained Obligations.
1.5 Townsquare Assumed Obligations . On the Closing Date, Townsquare shall assume and be obligated for, and shall agree to pay, perform and discharge in accordance with their terms, the following obligations of Cumulus (except to the extent such obligations and
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liabilities are included in the Cumulus Retained Obligations (as defined below) or the Cumulus Excluded Assets) arising during, or attributable to, any period of time on or after the Closing Date:
(a) All liabilities under the Cumulus Station Contracts and, to the extent allocated among the Cumulus Stations in accordance with Section 1.3, the Shared Contracts;
(b) The other non-employment liabilities of Cumulus to the extent Townsquare receives a credit therefor or otherwise assumes such liabilities under Section 1.7;
(c) The specific liabilities listed on Schedule 1.4 ; and
(d) All accounts payable relating to or arising under the Cumulus Station Assets that are outstanding as of the Closing Date to the extent such liabilities are included in the calculation of the Net AR Adjustment Amount (as defined below) under Section 1.7 or Townsquare otherwise assumes such liabilities under Section 1.7.
All of the foregoing to be assumed by Townsquare hereunder are referred to herein as the “ Townsquare Assumed Obligations .” Townsquare does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Cumulus or the Cumulus Sellers (the “ Cumulus Retained Obligations ”), including any liability for borrowed money, any liability under a mortgage or notices of violation, municipal ordinances, orders or requirements issued in connection with the Cumulus Real Property prior to the Closing Date or any liability for any employees of Cumulus or the Cumulus Sellers (other than related to the employment of any such individuals by Townsquare from and after the Closing) and any taxes of Cumulus (other than as specifically contemplated by Section 1.7 or solely related to the Cumulus Station Assets arising during and attributable to any period of time on or after the Closing Date). Notwithstanding anything herein to the contrary, all bonuses, success fees, or change of control payments payable to any employees of the Cumulus Stations, whether pursuant to a Cumulus Station Contract or otherwise, in connection with the Closing shall be Cumulus Retained Obligations.
1.6 Cash Consideration . In consideration of the parties respective performance of this Agreement, the sale, assignment, transfer, conveyance, setting over, and delivery of the Townsquare Station Assets and the Cumulus Station Assets to Cumulus and Townsquare, respectively, Cumulus shall pay Townsquare the sum of $341,067.07, subject to the adjustments in Sections 1.7 and 5.16 below (the “ Cash Consideration ”). In particular, Cumulus Broadcasting and Cumulus Licensing shall pay Townsquare a portion of the Cash Consideration equal to the excess of the value of the Iowa Station Assets over the value of the Fresno Station Assets as determined under Section 1.8, subject to a credit in favor of Cumulus in an amount equal to the excess of the value of the Portland Station Assets over the value of the San Jose Station Assets as determined under Section 1.8, all in proportion to the values of the respective Station Assets purchased and as determined under Section 1.8. On the Closing Date, Cumulus will pay to Townsquare by wire transfer of immediately available funds to a bank designated by Townsquare the Cash Consideration, and the determination of the Cash Consideration paid by each Cumulus entity shall be made according to this Section 1.6, taking into account as
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applicable the provisions of Sections 1.7 and 1.8 and Article 9.
1.7 Prorations and Adjustments .
(a) Except with respect to those items governed by Section 1.7(c), all prepaid and deferred income and expenses arising from the operation of the Townsquare Stations and the Cumulus Stations shall be prorated between the transferors and transferees in accordance with generally accepted accounting principles, consistently applied (“ GAAP ”), as of 12:01 a.m. local time in each market on the day of Closing (the “Effective Time”). Such prorations shall include, without limitation, any proration required by Section 5.7, all FCC regulatory fees, ad valorem, real estate and other property taxes (except transfer taxes as provided by Section 11.1), music and other license fees, utility expenses, rent and other amounts under contracts and similar prepaid and deferred items. Each conveying party shall receive a credit for deposits and prepaid expenses (other than for items which are governed by Section 1.7(c)). Sales commissions related to the sale of advertisements broadcast prior to Closing shall be the responsibility of conveying party, and sales commissions related to the sale of advertisements broadcast after Closing shall be the responsibility of the acquiring party. Solely for illustrative purposes, Schedule 1.7(a) sets forth a calculation of the net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Townsquare Stations and the Cumulus Stations, including, without limitation, a calculation of the Net AR Adjustment Amount (as defined below) as of June 30, 2013.
(b) With respect to trade, barter or similar agreements for the sale of time for goods or services (“ Barter ”) assumed by the acquiring party, if at Closing the Townsquare Stations or Cumulus Stations, as the case may be, have an aggregate negative or positive Barter balance (i.e., the amount by which the value of air time to be provided by such stations after the Closing exceeds, or conversely, is less than, the fair market value of corresponding goods and services), there shall be an adjustment therefor in favor of the applicable party. In determining Barter balances, the value of air time shall be based upon the rates of the conveying party as of the date hereof, and the corresponding goods and services shall include those to be received by the applicable stations after the Closing. Notwithstanding anything herein to the contrary, in no event shall Townsquare, on the one hand, or Cumulus, on the other hand, assume any Barter obligations of the stations acquired by such party in excess of (i) $200,000 in the aggregate per market or (ii) in the case of Townsquare, $400,000 in the aggregate for all markets and in the case of Cumulus, $600,000 in the aggregate for all markets, in each case for which the goods or services provided by a third party in exchange for on-air time has been provided to the conveying party prior to Closing.
(c) No later than five (5) business days prior to the Closing Date, Cumulus shall provide to Townsquare a statement (including reasonable detail and supporting documentation) setting forth a reasonable and good faith estimate of its calculation of the net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Cumulus Stations, including, without limitation, its calculation of the Net AR Adjustment Amount as of the Effective Time. The Cash Consideration payable at Closing shall be adjusted by the net amount of such estimated adjustments. For purposes hereof, “ Net AR Adjustment Amount ” means an amount equal to (A) the sum of (i) the accounts receivable of the Townsquare Stations or the Cumulus Stations, as applicable, as of the Effective Time multiplied by (ii) the acquisition
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price of such accounts receivables as determined by the age of such accounts receivables as of the Effective Time as set forth on Schedule 1.7(c), less (B) the sum of all accounts payable of the Townsquare Stations or the Cumulus Stations, as applicable, as of the Effective Time which remain outstanding as of such time, in each case as calculated pursuant to this Section 1.7(c) or (d), as appropriate.
(d) As soon as reasonably practicable, and in any event within sixty (60) calendar days after the Closing Date, (i) Cumulus shall deliver to Townsquare a written statement (including reasonable detail and supporting documentation) setting forth its calculation of the actual net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Cumulus Stations, including, without limitation, its calculation of the final Net AR Adjustment Amount; and (ii) Townsquare shall deliver to Cumulus a written statement (including reasonable detail and supporting documentation) setting forth its calculation of the actual net amount of all prorations and adjustments pursuant to this Section 1.7 with respect to the Townsquare Stations, including, without limitation, its calculation of the final Net AR Adjustment Amount. Following its receipt of such statements, each party shall permit the other party and its auditors to have access during normal business hours and upon advance written notice to the books, records and other information and documents pertaining to or used in connection with preparation of such statements, including working papers of its accountants, and access to employees of the receiving party reasonably necessary for the delivering party to respond to the calculation of the final Net AR Adjustment Amount and each party will otherwise cooperate with and assist Cumulus as may be reasonably necessary to carry out the purposes of this Section. Within thirty (30) calendar days of receipt of such statements, the receiving party shall deliver any objections to the delivering party that it may have to the calculation of the prorations and adjustments ( provided , that failure of the receiving party to deliver such notice within such time period shall be deemed to be acceptance of the statement of the delivering party by the receiving party). To the extent of any such objections, the parties shall negotiate in good faith to resolve their disputes promptly and mutually agree on the final prorations and adjustments. In the event the parties are unable to resolve any such dispute within thirty (30) calendar days of written notice of the dispute, the parties shall engage a mutually agreeable accountant or other third party (whose fees and expenses shall be equally shared), who shall resolve such dispute and whose determination shall be final and binding on the parties.
(e) The final adjustment amount due to Townsquare or Cumulus, as determined pursuant to Section 1.7(d), shall be paid promptly by check or wire transfer from the party owning the final amount made payable to the party to whom the payment is due. Any adjustment pursuant to this Section 1.7 shall be deemed to be an adjustment to the Cash Consideration for all purposes.
1.8 Allocation .
(a) Townsquare and Cumulus agree that the fair market value of the Townsquare Station Tangible Assets (defined below) and the Cumulus Station Tangible Assets (defined below) (collectively, the “ Tangible Assets ”) will be appraised by a mutually agreed appraisal firm, at a level of specificity that will permit the parties to complete IRS Forms 8594 and 8824. The expense of such appraisal (the “ Appraisal ”) will be shared equally by the parties. The parties shall use their commercially reasonable efforts to cause the Appraisal to be
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completed within a reasonable period of time after the Closing Date. The parties will negotiate the allocation of the Townsquare Station Intangible Assets (defined below) and the Cumulus Station Intangible Assets (defined below) (collectively, the “ Intangible Assets ”) for a period of ninety (90) days after Closing. If the parties cannot agree on the allocation of the Intangible Assets, then each party shall use the allocation they deem appropriate and consistent with the fair market value of each Intangible Asset.
(b) The parties shall each prepare IRS Forms 8594 and 8824 reflecting the allocation of the fair market value among the Tangible Assets consistent with the Appraisal and reflecting the allocation of the Intangible Assets consistent with the agreed upon allocation, if agreed, or using each parties own allocation if not agreed. and the requirements of Sections 1031 and 1060 of the Code and the Treasury Regulations thereunder (including, without limitation, Treasury Regulations sections 1.1031(j)-1(b) and 1.1060-1(b)(8)) and such other information as required by such IRS forms, and taking into account the fact that the parties are exchanging some or all of the assets as part of a like-kind exchange under Section 1031 of the Code. The parties shall cooperate with each other in good faith to file, with their respective federal income tax returns for the tax year in which the Closing occurs, IRS Forms 8594 and 8824 that are consistent with each other’s forms, the Appraisal and the principles set forth in the immediately preceding sentence. If, after fulfilling their obligation to cooperate in good faith to agree on consistent Forms 8594 and 8824, the parties cannot so agree, then each party shall file such forms as it deems appropriate and consistent with the Appraisal and the principles set forth in the second preceding sentence. Each party, not later than thirty (30) days prior to the filing of its Forms 8594 and 8824 relating to this transaction, shall deliver to the other party a copy of its Forms 8594 and 8824.
(c) As used herein, (i) “ Townsquare Station Intangible Assets ” means the Townsquare FCC Licenses the goodwill/going concern of the Townsquare Stations, and any other identified intangible assets such as network affiliation agreements, (ii) “ Cumulus Station Intangible Assets ” means the Cumulus FCC Licenses, the goodwill/going concern of the Cumulus Stations, and any other identified intangible assets such as network affiliation agreements, (iii) “ Townsquare Station Tangible Assets ” means all Townsquare Station Assets other than the Townsquare Station Intangible Assets, and (iv) “ Cumulus Station Tangible Assets ” means all Cumulus Station Assets other than the Cumulus Station Intangible Assets.
1.9 Closing . The consummation of the exchange of assets provided for in this Agreement (the “ Closing ”) shall take place on the twenty-fifth (25 th ) business day after the date of the last to occur of the date on which the FCC shall have provided public notice of the issuance of the FCC Consents (defined below), the issuance of the HSR Clearance (defined below), or on such other date (after such governmental consents and approvals have been issued) as Cumulus and Townsquare may agree, subject to Section 5.10 and the satisfaction or waiver of the conditions set forth in Articles 6 and 7 below; provided, that, notwithstanding anything in this Section to the contrary, the parties shall endeavor to cause the Closing to occur on the last day of a month. The date on which the Closing occurs is referred to herein as the “ Closing Date ”.
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1.10 Governmental Consents .
(a) Not later than ten (10) business days after the date of this Agreement, (i) Cumulus and Townsquare shall each file applications with the FCC (each an “ FCC Application ” and collectively the “ FCC Applications ”) requesting FCC consent to the assignment of the Townsquare FCC Licenses to Cumulus, or as the case may be, the Cumulus FCC Licenses to Townsquare; (ii) Cumulus shall file an application (the “ Cumulus Divestiture Application ”) with the FCC (which proposes the assignment of the FCC license for the radio station set forth on Schedule 1.10(a)(i) to third parties or to a divestiture trustee (or take other such actions as Cumulus, in its sole discretion, deems appropriate) that would, upon consummation, enable Cumulus to be in compliance with 47 C.F.R. §73.3555(a) and the Notes thereto (collectively, the “ Local Radio Ownership Rule ”) as of the Closing, and (iii) Townsquare shall file one or more applications (collectively, the “ Townsquare Divestiture Applications, ” and, with the Cumulus Divestiture Application, the “ Divestiture Applications ”) with the FCC which proposes the assignment of the FCC licenses for the radio stations set forth on Schedule 1.10(a)(ii) to third parties or to a divestiture trustee (or take other such actions as Townsquare, in its sole discretion, deems appropriate) that would, upon consummation, enable Townsquare to be in compliance with the Local Radio Ownership Rule as of the Closing. Any actions by the FCC (including any actions duly taken by the FCC’s staff pursuant to delegated authority) granting consent to any FCC Application or any Divestiture Application are referred to herein individually as the “FCC Consent” and collectively as the “ FCC Consents .” Cumulus and Townsquare shall diligently prosecute the FCC Applications, Cumulus shall diligently prosecute the Cumulus Divestiture Application, and Townsquare shall diligently prosecute the Townsquare Divestiture Applications. Both parties shall promptly respond to any requests by the FCC for reasonable amendments of the FCC Applications, Cumulus shall promptly respond to any requests by the FCC for reasonable amendments of the Cumulus Divestiture Application, and Townsquare shall promptly respond to any requests by the FCC for reasonable amendments of the Townsquare Divestiture Applications. Both parties shall oppose any petitions to deny or informal objections filed against the FCC Applications (as well as any petition for reconsideration or application for review seeking reversal or rescission of any FCC Consent for the FCC Applications), Cumulus shall oppose any petitions to deny or informal objections filed against the Cumulus Divestiture Application (as well as any petition for reconsideration or application for review seeking reversal or rescission of any FCC Consent for the Cumulus Divestiture Application), and Townsquare shall oppose any petitions to deny or informal objections filed against the Townsquare Divestiture Applications (and oppose any petition for reconsideration or application for review seeking reversal or rescission of the FCC Consents for the Townsquare Divestiture Applications) and otherwise use their commercially reasonable efforts to obtain the FCC Consents as soon as possible; provided, however, that neither Cumulus nor Townsquare shall have any obligation to (i) participate in any evidentiary hearing before the FCC on any of the FCC Applications or any of the Divestiture Applications or (ii) seek reconsideration or review or otherwise appeal a decision of the FCC to deny or dismiss any of the FCC Applications or any of the Divestiture Applications. Cumulus or Townsquare, as the case may be, shall notify as soon as reasonably practicable the other party in the event it becomes aware of any facts, actions, communications or occurrences that might directly or indirectly impede the parties’ ability to secure FCC Consents for any of the FCC Applications or any of the Divestiture Applications. Neither Cumulus nor Townsquare shall take any action that it knows or should know would materially delay or materially impede the receipt of the FCC Consent for any FCC Application or any Divestiture Application.
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(b) As soon as reasonably practicable after the date of this Agreement, Cumulus and Townsquare shall make any required filings with the Federal Trade Commission (“ FTC ”) and the Antitrust Division of the United States Department of Justice (“ DOJ ”) pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. Expiration or termination of any applicable waiting period under the HSR Act is referred to herein as “ HSR Clearance .”
(c) Unless prohibited by law or government regulation, Cumulus and Townsquare shall keep the other informed of any material communications (including any meeting, conference or telephone call) concerning the FCC Applications and the Divestiture Applications and will promptly provide each other with copies of all correspondence to or from any governmental authorities with respect to this Agreement or the transactions contemplated hereby (including material correspondence, whether in electronic or documentary form, but excepting those documents containing proprietary information), and a summary of any oral communications to or from any governmental authority with respect to this Agreement or the transactions contemplated hereby (which may be by email). Cumulus and Townsquare shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. Cumulus and Townsquare shall consult and cooperate with each other in the preparation of such filings, and shall promptly inform the other party of any material communication to or from any governmental authority regarding the transactions contemplated by this Agreement. Cumulus and Townsquare shall review and discuss in advance, and consider in good faith, the views of the other party in connection with any proposed written or material oral communication with any governmental authority. Neither Cumulus nor Townsquare shall participate in any meeting with any governmental authority unless it first consults with the other party in advance, and to the extent permitted by the governmental authority, gives that party the opportunity to be present thereat. Neither Cumulus nor Townsquare shall agree to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated by this Agreement at the behest of any governmental authority without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed). The FCC Consents and the HSR Clearance are referred to herein collectively as the “ Governmental Consents .”
(d) Schedule 2.4(a) sets forth all license renewal applications (each a “ Townsquare Renewal Application ”) that are pending before the FCC or are required to be filed with the FCC on or before the Outside Date (as defined in Section 10.1(d)), with respect to certain of the Townsquare Stations (each, a “ Townsquare Renewal Station ”). Schedule 3.4(a) sets forth license renewal applications (each a “ Cumulus Renewal Application ” and, together with the Townsquare Renewal Applications, the “ Renewal Applications ”) that are pending before the FCC or are required to be filed with the FCC on or before the Outside Date (as defined in Section 10.1(d)), with respect to certain of the Cumulus Stations (each, a “ Cumulus Renewal Station ” and, together with the Townsquare Renewal Stations, the “ Renewal Stations ”). In order to avoid a disruption or delay in the processing of the FCC Applications, the parties will use commercially reasonable efforts to promptly prosecute and resolve any issues with respect to the pending Renewal Applications. The parties will promptly advise each other of any
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communications from the FCC with respect to the pending Renewal Applications. If before Closing any Townsquare Renewal Applications or Cumulus Renewal Applications are required to be filed under the rules, regulations and published policies of the FCC (collectively, the “ FCC Rules ”) before the Outside Date, the FCC Applications will include a request that the FCC apply its policy permitting license assignments and transfers in transactions involving multiple markets to proceed, notwithstanding the pendency of one or more license renewal applications if the buyer agrees to assume any responsibilities, risks and liabilities associated with the pending Renewal Application. Townsquare and Cumulus shall, and Townsquare shall cause the Townsquare Seller to make such representations and undertakings as necessary or appropriate to invoke such policy, including an agreement by each party to assume the position of the applicant with respect to any Renewal Applications that remain pending when the FCC Consents are issued and to thereby assume the risks relating to such Renewal Applications; provided, that Townsquare or Cumulus, as the case may be, shall be entitled to reimbursement or indemnification from the other party for any forfeitures, fines, or other sanctions which the FCC imposes on such party after Closing with respect to such Renewal Application(s) (including non-renewal of a Renewal Station’s license) in conjunction with or with respect to such Renewal Application that is not covered by an agreement identified in subsection (e) of this section; and provided further, that such reimbursement or indemnification shall be made within thirty (30) days after a request therefor is received by the other party.
(e) To the extent reasonably necessary to facilitate a grant of the FCC Applications and the Divestiture Applications, Townsquare will enter into any agreements requested by the FCC, including (i) tolling agreements to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against a Townsquare Station in connection with any pending complaints, investigations, letters of inquiry, or other proceedings, including, but not limited to complaints that such Townsquare Station aired programming that contained obscene, indecent or profane material; (ii) escrow agreements to place into escrow certain amounts to cover any potential monetary forfeiture against Townsquare with respect to the Townsquare Stations for alleged violations of the FCC Rules; (iii) agreements regarding assignment for Townsquare to guarantee the obligations of the licensees of the Townsquare Stations with respect to any potential monetary forfeiture imposed by the FCC after consummation of the transactions contemplated hereby with respect to the Townsquare Stations for alleged violations of the FCC Rules; and (iv) any other agreement with the FCC to enable the FCC to assess a potential monetary forfeiture against Townsquare with respect to the Townsquare Stations for alleged violations of the FCC Rules (collectively, the “ Townsquare FCC Agreements ”). To the extent reasonably necessary to facilitate a grant of the FCC Applications and the Divestiture Applications, Cumulus will enter into any agreements requested by the FCC, including (i) tolling agreements to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against a Cumulus Station in connection with any pending complaints, investigations, letters of inquiry, or other proceedings, including, but not limited to complaints that such Cumulus Station aired programming that contained obscene, indecent or profane material; (ii) escrow agreements to place into escrow certain amounts to cover any potential monetary forfeiture against Cumulus with respect to the Cumulus Stations for alleged violations of the FCC Rules; (iii) agreements regarding assignment for Cumulus to guarantee the obligations of the licensees of the Cumulus Stations with respect to any potential monetary forfeiture imposed by the FCC after consummation of the transactions contemplated
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hereby with respect to the Cumulus Stations for alleged violations of the FCC Rules and (iv) any other agreement with the FCC to enable the FCC to assess potential monetary forfeiture against Cumulus with respect to the Cumulus Stations for alleged violations of the FCC Rules (collectively, the “ Cumulus FCC Agreements ” and, together with the Townsquare FCC Agreements, the “ FCC Agreements ”). The parties will consult in good faith with each other prior to entering into the FCC Agreements.
ARTICLE 2: TOWNSQUARE REPRESENTATIONS AND WARRANTIES
Townsquare hereby makes the following representations and warranties to Cumulus:
2.1 Organization . Townsquare is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Townsquare Station Assets are located. Townsquare has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Townsquare pursuant hereto (collectively, the “ Townsquare Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
2.2 Authorization . The execution, delivery and performance of this Agreement and the Townsquare Ancillary Agreements by Townsquare have been duly authorized and approved by all necessary action of Townsquare and do not require any further authorization or consent of Townsquare. This Agreement is, and each Townsquare Ancillary Agreement when made by Townsquare and the other parties thereto will be, a legal, valid and binding agreement of Townsquare enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
2.3 No Conflicts . Except as set forth on Schedule 2.3 and except for the Governmental Consents and consents to assign certain of the Townsquare Station Contracts, the execution, delivery and performance by Townsquare of this Agreement and the Townsquare Ancillary Agreements and the Townsquare Purchase Agreement and the consummation by Townsquare of any of the transactions contemplated hereby and thereby does not conflict with any organizational documents of Townsquare, conflict with any Townsquare Material Contract or require the consent of any party to such agreement to which Townsquare or the Townsquare Seller are a party or by which it or they are bound, or any law, judgment, order, or decree to which Townsquare or the Townsquare Seller are subject, require the consent or approval of, or a filing by Townsquare or the Townsquare Seller with, any governmental or regulatory authority or any third party, or result in the creation of any Lien other than a Townsquare Permitted Lien.
2.4 FCC Licenses . Except as set forth on Schedule 2.4(a) or Schedule 2.4(b) :
(a) As of the date hereof the Townsquare Seller is, and as of the Closing, Townsquare will be, the holder of the Townsquare FCC Licenses described on Schedule 2.4(a) , which are all of the licenses, construction permits and other authorizations issued by the FCC
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that are required for the present operation of the Townsquare Stations. The Townsquare FCC Licenses are in full force and effect, have not been revoked, suspended, canceled, rescinded, terminated or materially adversely modified, have not expired, are not subject to any conditions except for conditions applicable to broadcast radio licensees generally or as otherwise disclosed on the face of the Townsquare FCC Licenses, and have been issued for full terms. Except as set forth on Schedule 2.4(a) , no Renewal Application is pending for renewal of any Townsquare FCC Licenses and neither Townsquare nor the Townsquare Seller is aware of any reason that could reasonably be expected to result in a refusal by the FCC to renew any Townsquare FCC License for a full term without any conditions (other than those standard to renewals of radio broadcast licenses) in the normal course. There is not pending, or, to Townsquare’s or the Townsquare Seller’s knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Townsquare FCC Licenses (other than proceedings applicable to radio broadcast licensees generally). There is not issued or outstanding, or to Townsquare’s or the Townsquare Seller’s knowledge, threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Townsquare Stations or against Townsquare or the Townsquare Seller with respect to the Townsquare Stations that could result in any such action. There is no order to show cause, notice of violation, notice of apparent liability, notice of forfeiture issued by the FCC against Townsquare (as the licensee of the Townsquare Stations) or with respect to Townsquare or the Townsquare Seller with respect to the Townsquare Stations, the Townsquare FCC Licenses or the Townsquare Stations that remains unsatisfied. The Townsquare Stations are operating in compliance in all material respects with the terms of the Townsquare FCC Licenses, the Communications Act of 1934, as amended (the “ Communications Act ”) and FCC Rules. All material reports and filings required to be filed with the FCC by Townsquare with respect to the Townsquare Stations during the Townsquare Stations’ current license terms have been timely filed, and all FCC regulatory fees have been timely paid. All such reports and filings and payments are accurate and complete in all material respects.
(b) The Townsquare Stations are in compliance in all material respects with the requirements of the Federal Aviation Administration (the “ FAA ”) with respect to the construction and/or alteration of the Townsquare Stations’ antenna structures and, where required, FAA “no hazard” determinations for each antenna structure have been obtained and, where required, each antenna structure has been registered with the FCC.
2.5 Taxes . Townsquare and the Townsquare Seller have, in respect of the Townsquare Stations’ business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise, payroll and other tax returns, forms and reports which are required to have been filed by either of them under applicable law, and have paid all taxes in full or discharged (or set aside appropriate amounts for) all taxes which are required to be paid by either of them under applicable law. There are no pending or, to Townsquare’s knowledge, threatened, investigations or claims against Townsquare or the Townsquare Seller for or relating to any liability in respect of taxes related to the Townsquare Stations’ business. All taxes required to be withheld by Townsquare or the Townsquare Seller with respect to the Townsquare Stations’ business have been withheld and paid (or will be paid) when due to the appropriate governmental authority.
2.6 Personal Property . Schedule 2.6 contains a list of material items of Townsquare
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Tangible Personal Property included in the Townsquare Station Assets. Except as set forth on Schedule 2.6 , the Townsquare Seller has, and as of Closing Townsquare will have good and marketable title to or, in the case of leased Tangible Personal Property, valid and subsisting leasehold interest in, the owned Townsquare Tangible Personal Property free and clear of Liens other than Townsquare Permitted Liens. Except as set forth on Schedule 2.6 , all material items of Townsquare Tangible Personal Property are in good operating condition, ordinary wear and tear excepted.
2.7 Real Property . Schedule 2.7 contains a description of the Townsquare Real Property. The Townsquare Real Property constitutes all real properties used or occupied by Townsquare or the Townsquare Seller in connection with the Townsquare Stations’ business other than Townsquare Real Property used or occupied that is immaterial to the Townsquare Stations’ business. The Townsquare Seller has, and as of Closing Townsquare will have good and marketable fee simple title to the owned Townsquare Real Property described on Schedule 2.7 (the “ Townsquare Owned Real Property ”) (if any), free and clear of Liens other than Townsquare Permitted Liens. With respect to the Townsquare Owned Real Property, no portion thereof is subject to any pending or, to Townsquare’s knowledge, threatened condemnation proceeding or proceeding by any public authority. The Townsquare Owned Real Property is sufficient for the operation of the Townsquare Stations as currently operated, and to the knowledge of Townsquare, no material capital expenditures are required in respect of the Townsquare Owned Real Property to continue to operate the Townsquare Stations as currently operated. Except as set forth in Schedule 2.7 and except for Townsquare Permitted Liens, there are no leases, subleases, licenses or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of any parcel of Townsquare Owned Real Property. Schedule 2.7 includes a description of each lease of Townsquare Real Property or similar agreement included in the Townsquare Station Contracts (the “ Townsquare Real Property Leases ”). The Townsquare Seller has, and as of Closing Townsquare will have valid leasehold interests in the Townsquare Real Property Leases, free and clear of all Liens other than Townsquare Permitted Liens. The Townsquare Real Property is not subject to any suit for condemnation or other taking by any public authority. The Townsquare Real Property includes access to the Townsquare Stations’ facilities consistent with past practices.
2.8 Contracts . Schedule 2.8(a) contains a list of all material contracts (written or oral) that as of the date hereof are used in the operation of, or bind or otherwise restrict in any material respect, the Townsquare Stations, including, but not limited to, programming agreements, vendor agreement, service contracts, licensing agreements, tower agreements, local marketing agreements and network agreements, but excluding agreements for the sale of advertising time entered into in the ordinary course of business terminable on not more than sixty (60) days or less notice, barter arrangements and contracts involving payments or receipts of less than $50,000 per annum, except for the Townsquare Real Property Leases listed on Schedule 2.7 hereto (the “ Townsquare Material Contracts ”). The Townsquare Real Property Leases and Townsquare Material Contracts requiring the consent of a third party to assignment are set forth on 2.8(b) . Each of the Townsquare Material Contracts is in effect and is binding upon Townsquare and the Townsquare Seller, to Townsquare’s and the Townsquare Seller’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Townsquare and the Townsquare Seller has performed their respective obligations under each of the
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Townsquare Material Contracts in all material respects, and are not in material default thereunder, and to Townsquare’s and the Townsquare Seller’s knowledge, no other party to any of the Townsquare Material Contracts is in default thereunder in any material respect. Schedule 2.8(a) lists a summary of Barter payables and Barter receivables as of July 31, 2013, which summary shall be updated as of the close of business on the Business Day immediately preceding the Closing Date. To the extent of any binding oral agreement required to be disclosed on Schedule 2.8(a) , a summary of such agreement is set forth on Schedule 2.8(a) . Except as set forth on Schedule 2.8(a) , none of the Townsquare Material Contracts (i) involve Townsquare or the Townsquare Seller and any entity in which any officer, director or shareholder of Townsquare or the Townsquare Seller has any interest, (ii) require Townsquare or the Townsquare Seller to make any payment upon consummation of the transactions contemplated hereby or by the Townsquare Purchase Agreement, or upon any subsequent sale of the Townsquare Station Assets or (iii) restrict the ability of Townsquare or the Townsquare Seller to compete in any jurisdiction.
2.9 Environmental . Except as set forth on Schedule 2.9 or in any environmental report delivered by Townsquare to Cumulus prior to the date of this Agreement, to Townsquare’s and the Townsquare Seller’s knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to or are present on, in or under the Townsquare Real Property included in the Townsquare Station Assets. Except as set forth on Schedule 2.9 or in any environmental report delivered by Townsquare to Cumulus prior to the date of this Agreement, (a) Townsquare and the Townsquare Seller has complied in all material respects with all environmental, health and safety laws applicable to the Townsquare Stations, (b) there has been no action, notice, claim or proceeding pending or, to Townsquare’s or the Townsquare Seller’s knowledge, threatened, against Townsquare or the Townsquare Seller that asserts that Townsquare or the Townsquare Seller has violated any environmental, health or safety laws applicable to the Townsquare Real Property, and (c) to Townsquare’s and the Townsquare Seller’s knowledge, no conditions with respect to the past or present operations or business of the Townsquare Stations exist which could reasonably be expected to give rise to any common law or statutory liability in respect of the Townsquare Stations’ business under any environmental, health or safety law based on any such condition.
2.10 Intangible Property . Schedule 2.10 contains a description of the material Townsquare Intangible Property included in the Townsquare Station Assets, including (i) all material patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications and domain names included in the Townsquare Intangible Property and (ii) all material (A) licenses of intangible property to any third party included in the Townsquare Station Assets, (B) licenses of intellectual property by any third party to Townsquare or the Townsquare Seller included in the Townsquare Station Assets, (C) agreements between Townsquare or the Townsquare Seller and any third party relating to the development or use of intellectual property, the development or transmission of data, or the use, modification, framing, linking, advertisement or other practices with respect to Internet web sites of any of the Townsquare Stations and (D) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of intangible property included in the Townsquare Station Assets, other than commercially available off-the-shelf computer software licensed pursuant to shrink-wrap or click-wrap licenses that is not material to the
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operation of the Townsquare Stations. Except as set forth on Schedule 2.10, (i) to Townsquare’s and the Townsquare Seller’s knowledge, Townsquare’s and the Townsquare Seller’s use of the Townsquare Intangible Property does not infringe upon any third party rights in any respect, (ii) no material Townsquare Intangible Property is the subject of any pending, or, to Townsquare’s and the Townsquare Seller’s knowledge, threatened legal proceedings claiming infringement or unauthorized use, (iii) neither Townsquare nor the Townsquare Seller has received any written notice that their respective use of any material Townsquare Intangible Property is unauthorized or infringes upon the rights of any other person which has not been settled or resolved, and (iv) to Townsquare’s and the Townsquare Seller’s knowledge, no person is engaging in any activity that infringes upon the Townsquare Intangible Property in any material respect. Except as set forth on Schedule 2.10, to Townsquare’s and the Townsquare Seller’s knowledge, the Townsquare Seller own or has the right to use, and as of Closing Townsquare will own or have the right to use, the Townsquare Intangible Property free and clear of Liens other than Townsquare Permitted Liens.
2.11 Employees . Except as set forth on Schedule 2.11(a) , (i) Townsquare and the Townsquare Seller has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Townsquare Stations’ business, including, without limitation, those which relate to prices, wages, hours, discrimination in employment, health, safety and welfare, immigration and collective bargaining, (ii) there is no unfair labor practice charge or complaint against Townsquare or the Townsquare Seller in respect of the Townsquare Stations’ business pending or, to Townsquare’s and the Townsquare Seller’s knowledge, threatened before the National Labor Relations Board, any state labor relations board or any court or tribunal, and there is no strike, dispute, request for representation, slowdown or stoppage pending or threatened in respect of the Townsquare Stations’ business, and (iii) neither Townsquare nor the Townsquare Seller is party to any collective bargaining, union or similar agreement with respect to the employees of the Townsquare Stations, and to Townsquare’s and the Townsquare Seller’s knowledge, no union represents or claims to represent or is attempting to organize such employees. Schedule 2.11(b) lists, as of the date hereof, by each Townsquare Station, the name, current annual salary rate, date of employment and position of each employee of such Townsquare Station. Except as set forth on Schedule 2.11(c) , each employee of the Townsquare Stations is an employee at-will, and no severance is payable upon the cessation of employment. Except as set forth on Schedule 2.11(d ), no employee of the Townsquare Stations has been transferred to another station (excepting any Townsquare Station) or division or group (or to any affiliate of the Townsquare Seller or Townsquare) in the past three months.
2.12 Insurance . The Townsquare Seller maintains insurance policies or other arrangements with respect to the Townsquare Stations and the Townsquare Station Assets consistent with its practices for other stations, and the Townsquare Seller or Townsquare will maintain such policies or arrangements until the Effective Time. Neither Townsquare nor the Townsquare Seller has received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any such insurance policy. Each such insurance policy is in full force and effect, and neither Townsquare nor the Townsquare Seller is in default in any material respect thereunder.
2.13 Compliance with Law . Other than with respect to the Townsquare FCC Licenses (which are governed by Section 2.4) and except as set forth on Schedule 2.13 , (i) Townsquare
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and the Townsquare Seller has complied in all material respects with all laws, rules and regulations, applicable to the operation of the Townsquare Stations or to any of the Townsquare Station Assets, and all decrees and orders of any court or governmental authority which are applicable to the operation of the Townsquare Stations or to any of the Townsquare Station Assets, and (ii) to Townsquare’s and the Townsquare Seller’s knowledge there are no governmental claims or investigations pending or threatened against Townsquare or the Townsquare Seller in respect of the Townsquare Stations except those affecting the industry generally. Except as set forth in Schedule 2.13 , the Townsquare Stations hold all permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities that are necessary or appropriate to the operation of the Townsquare Stations or which are required as a result of the activities of Townsquare Stations, except where the failure to hold any such permits, registrations, licenses, variances, exemptions, orders and approvals would not be material to the operation of any of the Townsquare Stations.
2.14 Litigation . Other than with respect to the Townsquare FCC Licenses (which are governed by Section 2.4) and except as set forth on Schedule 2.14 , there is no action, suit or proceeding pending or, to Townsquare’s and the Townsquare Seller’s knowledge, threatened against Townsquare or the Townsquare Seller before any governmental authority (excluding the FCC) or any court of competent jurisdiction in respect of the Townsquare Stations that will subject Cumulus to liability or which will affect Townsquare’s ability to perform its obligations under this Agreement or the Townsquare Seller’s ability to perform its obligations under the Townsquare Purchase Agreement. Except as a set forth on Schedule 2.14 , neither Townsquare nor the Townsquare Seller is operating under or subject to any order, writ, injunction or decree relating to the Townsquare Stations or the Townsquare Station Assets of any court or governmental authority which would have a Material Adverse Effect on the condition of the Townsquare Stations or any of the Townsquare Station Assets or on the ability of Townsquare to enter into this Agreement or consummate the transactions contemplated hereby, or on the ability of the Townsquare Seller to enter into the Townsquare Purchase Agreement or consummate the transactions contemplated thereby, other than those of general applicability. Except as set forth on Schedule 2.14 , there were no material litigation matters to which Townsquare was a party in respect of any of the Townsquare Stations during the three (3) years preceding the date of this Agreement.
2.15 Financial Statements . Townsquare has provided to Cumulus copies of a balance sheet for the Townsquare Stations as of December 31, 2012 and June 30, 2013 and income statements for the Townsquare Stations for the year ended December 31, 2012 and for the year to date through June 30, 2013 (together with copies of monthly income statements for the Townsquare Stations during all such periods). Such year-end statements are the statements included in the audited consolidated financial statements of Townsquare Seller and its affiliates (but such statements are not separately audited and the year to date statements are not audited). Shared operating expenses and revenue from combined sales are allocated among the Townsquare Stations and other stations and business units as determined by the Townsquare Seller. Such statements may reflect the results of intercompany arrangements that are Townsquare Excluded Assets. Except for the foregoing and except for the absence of footnotes, such statements have been prepared in accordance with GAAP, and in the aggregate present fairly in all material respects the results of operations of the Townsquare Stations as operated by the Townsquare Seller for the respective periods covered thereby.
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2.16 No Undisclosed Liabilities . There are no liabilities or obligations of Townsquare or the Townsquare Seller with respect to the Townsquare Stations that will be binding upon Cumulus after the Effective Time other than the Cumulus Assumed Obligations and other than pursuant to the prorations under Section 1.7.
2.17 Townsquare Station Assets . The Townsquare Station Assets include all properties, assets and rights that are owned or leased by Townsquare or the Townsquare Seller and used or held for use in the operation of the Townsquare Stations in all material respects as currently operated, except for the Townsquare Excluded Assets.
2.18 Qualification . Subject to the grant of the Townsquare Divestiture Applications, Townsquare is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Cumulus Stations under the Communications Act and the FCC Rules. Except as set forth on Schedule 2.18 and subject to grant of the Townsquare Divestiture Applications, to Townsquare’s knowledge, there are no facts that would, under existing law and the FCC Rules in effect as of the date hereof, disqualify Townsquare as an assignee of the Cumulus FCC Licenses or as the owner and operator of the Cumulus Stations. Neither the FCC Applications nor the Townsquare Divestiture Applications will include a request by Townsquare for a waiver of any provision of the Communications Act or the FCC Rules.
2.19 Conduct of Business . Except as set forth on Schedule 2.19 , since January 1, 2013, the business of the Townsquare Stations has been conducted solely in the ordinary course of business consistent with past custom and practice, in all material respects, and there has been no Material Adverse Effect (defined below) with respect to the Townsquare Stations. Without limitation of the foregoing and except as described herein, or in the Townsquare Purchase Agreement, or set forth on Schedule 2.19 , since January 1, 2013, neither Townsquare nor the Townsquare Seller has, with respect to the Townsquare Stations and the Townsquare Stations’ business:
(a) sold, assigned or transferred any of the Townsquare Station Assets other than in the ordinary course of business;
(b) conducted cash management customs and practices (including the timing of collection of receivables and payment of payables and other current liabilities) and maintained books and records other than in the ordinary course of business consistent with past custom and practice, in all material respects;
(c) made any material change in the customary methods of operations of the Townsquare Stations, including practices and policies relating to purchasing, marketing, selling and pricing;
(d) sold, assigned, transferred, abandoned or permitted to lapse any licenses or permits which, individually or in the aggregate, are material to the Townsquare Stations’ business or operations; or
(e) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits (including, without limitation any
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Employee Benefit Plan (defined below)) payable to any employees of the Townsquare Stations except as required by applicable law or any collective bargaining agreement or other contract, and ordinary increases consistent with the past practices.
For purposes of this Agreement, “ Material Adverse Effect ” means, with respect to the Townsquare Stations’ business or Cumulus Stations’ business, as applicable, any condition, event or circumstance that is or would reasonably expected to be materially adverse to (a) the business, financial condition, or operating results of the Townsquare Stations or Cumulus Stations, as applicable, on an individual market (and not on a collective) basis, whether or not covered by insurance or other third-party indemnification obligation, or (b) the ability of Townsquare or Cumulus, as applicable, to comply with and perform its obligations, covenants and agreements herein or in any Townsquare Ancillary Agreement or Cumulus Ancillary Agreement, as applicable; provided , however , that in no event shall any of the following constitute a Material Adverse Effect: any condition, event or circumstance caused by or related to (i) any change or development in the broadcast radio industry which does not have a disproportionate impact on the Townsquare Stations or Cumulus Stations, as applicable, (ii) any change or development in the financial, banking, credit, securities or capital markets, or any change in the general, national, international or regional economic or financial conditions, (iii) any change or development in general regulatory, social or political conditions, (iv) any change or development in laws; or (v) any announcement of this Agreement or the pendency of the transactions contemplated hereby.
2.20 Employee Benefits . Schedule 2.20 sets forth each material Employee Benefit Plan which Townsquare or the Townsquare Seller or any of their respective affiliates maintain, sponsor, make contributions to, have obligated themselves to make contributions to, or to pay any benefits to or for the benefit of employees of the Townsquare Stations. Correct and complete copies of such material Employee Benefit Plans have been previously furnished to Cumulus. For purposes of this Agreement: (a) “ Employee Benefit Plan ” means any “Employee Pension Benefit Plan” (as defined in Section 3(2) of ERISA), “Employee Welfare Benefit Plan” (as defined in Section 3(1) of ERISA), “multi-employer plan” (as defined in Section 3(37) of ERISA), plan of deferred compensation, medical plan, life insurance plan, long-term disability plan, dental plan or other plan providing for the welfare of any of such person’s or entity’s employees or former employees or beneficiaries thereof, personnel policy (including vacation time, holiday pay, bonus programs, moving expense reimbursement programs and sick leave), excess benefit plan, bonus or incentive plan (including stock options, restricted stock, stock bonus and deferred bonus plans), salary reduction agreement, change-of-control agreement, employment agreement, consulting agreement or any other benefit, program or contract; and (b) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
2.21 No Broker . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Townsquare.
ARTICLE 3: CUMULUS REPRESENTATIONS AND WARRANTIES
Cumulus hereby makes the following representations and warranties to Townsquare:
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3.1 Organization . Cumulus is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Cumulus Station Assets are located. Cumulus has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Cumulus pursuant hereto (collectively, the “ Cumulus Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
3.2 Authorization . The execution, delivery and performance of this Agreement and the Cumulus Ancillary Agreements by Cumulus have been duly authorized and approved by all necessary action of Cumulus and do not require any further authorization or consent of Cumulus. This Agreement is, and each Cumulus Ancillary Agreement when made by Cumulus and the other parties thereto will be, a legal, valid and binding agreement of Cumulus enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.3 No Conflicts . Except as set forth on Schedule 3.3 and except for the Governmental Consents and consents to assign certain of the Cumulus Station Contracts, the execution, delivery and performance by Cumulus of this Agreement and the Cumulus Ancillary Agreements and the consummation by Cumulus of any of the transactions contemplated hereby and thereby does not conflict with any organizational documents of Cumulus, conflict with any Cumulus Material Contract or require the consent of any party to such agreement to which Cumulus is a party or by which it is bound, or any law, judgment, order, or decree to which Cumulus is subject, require the consent or approval of, or a filing by Cumulus with, any governmental or regulatory authority or any third party, or result in the creation of any Lien other than a Cumulus Permitted Lien.
3.4 FCC Licenses . Except as set forth on Schedule 3.4(a) or Schedule 3.4(b) :
(a) Cumulus is the holder of the Cumulus FCC Licenses described on Schedule 3.4(a) , which are all of the licenses, construction permits and other authorizations issued by the FCC that are required for the present operation of the Cumulus Stations. The Cumulus FCC Licenses are in full force and effect, have not been revoked, suspended, canceled, rescinded, terminated or materially adversely modified, have not expired, are not subject to any conditions except for conditions applicable to broadcast radio licensees generally or as otherwise disclosed on the face of the Cumulus FCC Licenses, and have been issued for full terms. Except as set forth on Schedule 3.4(a), no Renewal Application is pending for renewal of any Cumulus FCC License and Cumulus is not aware of any reason that could reasonably be expected to result in a refusal by the FCC to renew any Cumulus FCC License for a full term without any conditions (other than those standard to renewals of radio broadcast licenses) in the normal course. There is not pending, or, to Cumulus’ knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the Cumulus FCC Licenses (other than proceedings applicable to radio broadcast licensees generally). There is not issued or outstanding, or to Cumulus’ knowledge, threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the
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Cumulus Stations or against Cumulus with respect to the Cumulus Stations that could result in any such action. There is no order to show cause, notice of violation, notice of apparent liability, notice of forfeiture issued by the FCC against Cumulus (as the licensee of the Cumulus Stations) or with respect to Cumulus with respect to the Cumulus Stations, the Cumulus FCC Licenses or the Cumulus Stations that remains unsatisfied. The Cumulus Stations are operating in compliance in all material respects with the terms of the Cumulus FCC Licenses, the Communications Act, and the FCC Rules. All material reports and filings required to be filed with the FCC by Cumulus with respect to the Cumulus Stations during the Cumulus Stations’ current license terms have been timely filed, and all FCC regulatory fees have been timely paid. All such reports and filings and payments are accurate and complete in all material respects.
(b) The Cumulus Stations are in compliance in all material respects with the requirements of the FAA with respect to the construction and/or alteration of the Cumulus Stations’ antenna structures and, where required, FAA “no hazard” determinations for each antenna structure have been obtained and, where required, each antenna structure has been registered with the FCC.
3.5 Taxes . Cumulus has, in respect of the Cumulus Stations’ business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise, payroll and other tax returns, forms and reports which are required to have been filed by it under applicable law, and has paid all taxes in full or discharged (or set aside appropriate amounts for) all taxes which are required to be paid by it under applicable law. There are no pending or, to Cumulus’ knowledge, threatened, investigations or claims against Cumulus for or relating to any liability in respect of taxes related to the Cumulus Stations’ business. All taxes required to be withheld by Cumulus with respect to the Cumulus Stations’ business have been withheld and paid (or will be paid) when due to the appropriate governmental authority.
3.6 Personal Property . Schedule 3.6 contains a list of material items of Cumulus Tangible Personal Property included in the Cumulus Station Assets. Except as set forth on Schedule 3.6 , Cumulus has good and marketable title to or, in the case of leased Tangible Personal Property, valid and subsisting leasehold interest in, the Cumulus Tangible Personal Property free and clear of Liens other than Cumulus Permitted Liens. Except as set forth on Schedule 3.6 , all material items of Cumulus Tangible Personal Property are in good operating condition, ordinary wear and tear excepted.
3.7 Real Property . Schedule 3.7 contains a description of the Cumulus Real Property. The Cumulus Real Property constitutes all real properties used or occupied by Cumulus in connection with the Cumulus Stations’ business other than Cumulus Real Property used or occupied that is immaterial to the Cumulus Stations’ business. Cumulus has good and marketable fee simple title to the owned Cumulus Real Property described on Schedule 3.7 (the “ Cumulus Owned Real Property ”) (if any), free and clear of Liens other than Cumulus Permitted Liens. With respect to the Cumulus Owned Real Property, no portion thereof is subject to any pending or, to Cumulus’ knowledge, threatened condemnation proceeding or proceeding by any public authority. The Cumulus Owned Real Property is sufficient for the operation of the Cumulus Stations as currently operated, and to the knowledge of Cumulus, no material capital expenditures are required in respect of the Cumulus Owned Real Property to continue to operate the Cumulus Stations as currently operated. Except as set forth in Schedule 3.7 and except for
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Cumulus Permitted Liens, there are no leases, subleases, licenses or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of any parcel of Cumulus Owned Real Property. Schedule 3.7 includes a description of each lease of Cumulus Real Property or similar agreement included in the Cumulus Station Contracts (the “ Cumulus Real Property Leases ”). Cumulus has valid leasehold interests in the Cumulus Real Property Leases, free and clear of all Liens other than Cumulus Permitted Liens. The Cumulus Real Property is not subject to any suit for condemnation or other taking by any public authority. The Cumulus Real Property includes access to the Cumulus Stations’ facilities consistent with past practices.
3.8 Contracts . Schedule 3.8(a) contains a list of all material contracts (written or oral) that as of the date hereof are used in the operation of, or bind or otherwise restrict in any material respect, the Cumulus Stations, including, but not limited to, programming agreements, vendor agreement, service contracts, licensing agreements, tower agreements, local marketing agreements and network agreements, but excluding agreements for the sale of advertising time entered into in the ordinary course of business terminable on not more than sixty (60) days or less notice, barter arrangements and contracts involving payments or receipts of less than $50,000 per annum, except for the Cumulus Real Property Leases listed on Schedule 3.7 hereto (the “ Cumulus Material Contracts ”). The Cumulus Real Property Leases and the Cumulus Material Contracts requiring the consent of a third party to assignment are set forth on Schedule 3.8(b) . Each of the Cumulus Material Contracts is in effect and is binding upon Cumulus and, to Cumulus’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Cumulus has performed its obligations under each of the Cumulus Material Contracts in all material respects, and is not in material default thereunder, and to Cumulus’s knowledge, no other party to any of the Cumulus Material Contracts is in default thereunder in any material respect. Schedule 3.8(a) lists a summary of Barter payables and Barter receivables as of June 30, 2013, which summary shall be updated as of the close of business on the Business Day immediately preceding the Closing Date. To the extent of any binding oral agreement required to be disclosed on Schedule 3.8(a) , a summary of such agreement is set forth on Schedule 3.8(a) . Except as set forth on Schedule 3.8(a) , none of the Cumulus Material Contracts (i) involve Cumulus and any entity in which any officer, director or shareholder of Cumulus has any interest, (ii) require Cumulus to make any payment upon consummation of the transactions contemplated hereby, or upon any subsequent sale of the Cumulus Station Assets or (iii) restrict the ability of Cumulus to compete in any jurisdiction.
3.9 Environmental . Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, to Cumulus’ knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to or are present on, in or under the Cumulus Real Property included in the Cumulus Station Assets. Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, (a) Cumulus has complied in all material respects with all environmental, health and safety laws applicable to the Cumulus Stations, (b) there has been no action, notice, claim or proceeding pending or, to Cumulus’ knowledge, threatened, against Cumulus that asserts that Cumulus has violated any environmental, health or safety laws applicable to the Cumulus Real Property and (c) to
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Cumulus’ knowledge, no conditions with respect to the past or present operations or business of the Cumulus Stations exist which could reasonably be expected to give rise to any common law or statutory liability in respect of the Cumulus Stations’ business under any environmental, health or safety law based on any such condition.
3.10 Intangible Property . Schedule 3.10 contains a description of the material Cumulus Intangible Property included in the Cumulus Station Assets, including (i) all material patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications and domain names included in the Cumulus Intangible Property and (ii) all material (A) licenses of intangible property to any third party included in the Cumulus Station Assets, (B) licenses of intellectual property by any third party to Cumulus included in the Cumulus Station Assets, (C) agreements between Cumulus and any third party relating to the development or use of intellectual property, the development or transmission of data, or the use, modification, framing, linking, advertisement or other practices with respect to Internet web sites of any of the Cumulus Stations and (D) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of intangible property included in the Cumulus Station Assets, other than commercially available off-the-shelf computer software licensed pursuant to shrink-wrap or click-wrap licenses that is not material to the operation of the Cumulus Stations. Except as set forth on Schedule 3.10, (i) to Cumulus’ knowledge Cumulus’ use of the Cumulus Intangible Property does not infringe upon any third party rights in any respect, (ii) no material Cumulus Intangible Property is the subject of any pending, or, to Cumulus’ knowledge, threatened legal proceedings claiming infringement or unauthorized use, (iii) Cumulus has not received any written notice that its use of any material Cumulus Intangible Property is unauthorized or infringes upon the rights of any other person which has not been settled or resolved, and (iv) to Cumulus’ knowledge, no person is engaging in any activity that infringes upon the Cumulus Intangible Property in any material respect. Except as set forth on Schedule 3.10, to Cumulus’ knowledge, Cumulus owns or has the right to use the Cumulus Intangible Property free and clear of Liens other than Cumulus Permitted Liens.
3.11 Employees . Except as set forth on Schedule 3.11(a) , (i) Cumulus has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Cumulus Stations’ business, including, without limitation, those which relate to prices, wages, hours, discrimination in employment, health, safety and welfare, immigration and collective bargaining, (ii) there is no unfair labor practice charge or complaint against Cumulus in respect of the Cumulus Stations’ business pending or, to Cumulus’ knowledge, threatened before the National Labor Relations Board, any state labor relations board or any court or tribunal, and there is no strike, dispute, request for representation, slowdown or stoppage pending or threatened in respect of the Cumulus Stations’ business, and (iii) Cumulus is not party to any collective bargaining, union or similar agreement with respect to the employees of Cumulus at the Cumulus Stations, and to Cumulus’ knowledge, no union represents or claims to represent or is attempting to organize such employees. Schedule 3.11(b) lists, as of the date hereof, by each Cumulus Station, the name, current annual salary rate, date of employment and position of each employee of such Cumulus Station. Except as set forth on Schedule 3.11(c) , each employee of the Cumulus Stations is an employee at-will, and no severance is payable upon the cessation of employment. Except as set forth on Schedule 3.11(d) , no employee of the Cumulus Stations has been transferred to another Cumulus station (excepting any Cumulus Station) or division or group (or to any affiliate of Cumulus) in the past three months.
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3.12 Insurance . Cumulus maintains insurance policies or other arrangements with respect to the Cumulus Stations and the Cumulus Station Assets consistent with its practices for other stations, and will maintain such policies or arrangements until the Effective Time. Cumulus has not received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any such insurance policy. Each such insurance policy is in full force and effect, and Cumulus is not in default in any material respect thereunder.
3.13 Compliance with Law . Other than with respect to the Cumulus FCC Licenses (which are governed by Section 3.4) and except as set forth on Schedule 3.13 , (i) Cumulus has complied in all material respects with all laws, rules and regulations applicable to the operation of the Cumulus Stations or to any of the Cumulus Station Assets, and all decrees and orders of any court or governmental authority which are applicable to the operation of the Cumulus Stations or to any of the Cumulus Station Assets, and (ii) to Cumulus’ knowledge there are no governmental claims or investigations pending or threatened against Cumulus in respect of the Cumulus Stations except those affecting the industry generally. Except as set forth in Schedule 3.13 , the Cumulus Stations hold all permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities that are necessary or appropriate to the operation of the Cumulus Stations or which are required as a result of the activities of Cumulus Stations, except where the failure to hold any such permits, registrations, licenses, variances, exemptions, orders and approvals would not be material to the operation of any of the Cumulus Stations.
3.14 Litigation . Other than with respect to the Cumulus FCC Licenses (which are governed by Section 3.4) and except as set forth on Schedule 3.14 , there is no action, suit or proceeding pending or, to Cumulus’ knowledge, threatened against Cumulus before any governmental authority (excluding the FCC) or any court of competent jurisdiction in respect of the Cumulus Stations that will subject Townsquare to liability or which will affect Cumulus’ ability to perform its obligations under this Agreement. Cumulus is not operating under or subject to any order, writ, injunction or decree relating to the Cumulus Stations or the Cumulus Station Assets of any court or governmental authority which would have a Material Adverse Effect on the condition of the Cumulus Stations or any of the Cumulus Station Assets or on the ability of Cumulus to enter into this Agreement or consummate the transactions contemplated hereby, other than those of general applicability. Except as set forth on Schedule 3.14 , there were no material litigation matters to which Cumulus was a party in respect of any of the Cumulus Stations during the three (3) years preceding the date of this Agreement.
3.15 Financial Statements . Cumulus has provided to Townsquare copies of a balance sheet for the Cumulus Stations as of December 31, 2012 and June 30, 2013 and income statements for the Cumulus Stations for the year ended December 31, 2012 and for the year to date through June 30, 2013 (together with copies of monthly income statements for the Cumulus Stations during all such periods), each as attached to Schedule 3.15 hereto. Such year-end statements are the statements included in the audited consolidated financial statements of Cumulus and its affiliates (but such statements are not separately audited and the year to date statements are not audited). Shared operating expenses and revenue from combined sales are allocated among the Cumulus Stations and other stations and business units as determined by Cumulus. Such statements may reflect the results of intercompany arrangements that are Cumulus Excluded Assets. Except for the foregoing and except for the absence of footnotes, such statements have been prepared in accordance with GAAP, and in the aggregate present
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fairly in all material respects the results of operations of the Cumulus Stations as operated by Cumulus for the respective periods covered thereby.
3.16 No Undisclosed Liabilities . There are no liabilities or obligations of Cumulus with respect to the Cumulus Stations that will be binding upon Townsquare after the Effective Time other than the Townsquare Assumed Obligations and other than pursuant to the prorations under Section 1.7.
3.17 Cumulus Station Assets . The Cumulus Station Assets include all properties, assets and rights that are owned or leased by Cumulus and used or held for use in the operation of the Cumulus Stations in all material respects as currently operated, except for the Cumulus Excluded Assets.
3.18 Qualification . Subject to grant of the Cumulus Divestiture Application, Cumulus is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Townsquare Stations under the Communications Act and the FCC Rules. Subject to grant of the Cumulus Divestiture Application, to Cumulus’ knowledge, there are no facts that would, under existing law and the FCC Rules in effect as of the date hereof, disqualify Cumulus as an assignee of the Townsquare FCC Licenses or as the owner and operator of the Townsquare Stations. Neither the FCC Applications nor the Cumulus Divestiture Applications will include a request by Cumulus for a waiver of any provision of the Communications Act or the FCC Rules.
3.19 Conduct of Business . Except as set forth on Schedule 3.19 , since January 1, 2013, Cumulus has conducted the business of the Cumulus Stations in the ordinary course of business consistent with past custom and practice, in all material respects, and there has been no Material Adverse Effect with respect to the Cumulus Stations. Without limitation of the foregoing and except as described herein or set forth on Schedule 3.19 , since January 1, 2013, Cumulus has not, with respect to the Cumulus Stations and the Cumulus Stations’ business:
(a) sold, assigned or transferred any of the Cumulus Station Assets other than in the ordinary course of business;
(b) conducted cash management customs and practices (including the timing of collection of receivables and payment of payables and other current liabilities) and maintained books and records other than in the ordinary course of business consistent with past custom and practice, in all material respects;
(c) made any material change in the customary methods of operations of the Cumulus Stations, including practices and policies relating to purchasing, marketing, selling and pricing;
(d) sold, assigned, transferred, abandoned or permitted to lapse any licenses or permits which, individually or in the aggregate, are material to the Cumulus Stations’ business or operations; or
(e) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits (including, without limitation any Employee Benefit Plan) payable to any employees of the Cumulus Stations except as required by
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applicable law or any collective bargaining agreement or other contract, and ordinary increases consistent with the past practices.
3.20 Employee Benefits . Schedule 3.20 sets forth each material Employee Benefit Plan which Cumulus or any of its affiliates maintains, sponsors, makes contributions to, has obligated itself to make contributions to, or to pays any benefits to or for the benefit of employees of the Cumulus Stations. Correct and complete copies of such material Employee Benefit Plans have been previously furnished to Townsquare.
3.21 No Broker . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Cumulus.
3.22 Impact Network Revenue . Cumulus represents that it has been the historical practice of the Stations located in the Portland market (the “ Citadel Legacy Stations ”) to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday, to Impact Marketing Network (“ Impact ”) for sale through the network and that the network revenue (net of expenses) from Impact for the twelve-month period ending May 31, 2013 was $168,301.
3.23 Legacy Cumulus Market Network Inventory . Cumulus represents that it has been the historical practice of its Stations on Schedule 3.22 (the “Cumulus Legacy Stations”) to make available fifty six (56) units per week (or one hundred twelve (112) units per week in certain cases), as outlined on Schedule 3.22 , to the Cumulus Media Network (“ CMN ”) for sale through the network.
ARTICLE 4: COVENANTS
4.1 Townsquare Covenants . Townsquare covenants and agrees that between the date hereof and the time of the Closing, Townsquare shall conduct the business of the Townsquare Stations in the ordinary course in all material respects; provided, however, prior to the consummation of the acquisition of the Townsquare Stations by Townsquare pursuant to the Townsquare Purchase Agreement, Townsquare’s obligations pursuant to this Section 4.1 shall be limited to the extent of Townsquare’s rights under the Townsquare Purchase Agreement to cause the Townsquare Seller to conduct the business of the Townsquare Stations in accordance with this Section 4.1. Subject to and without limiting the foregoing, Townsquare shall, and shall cause the Townsquare Seller to, with respect to the Townsquare Stations, (i) continue their advertising and promotional activities; (ii) not shorten or lengthen the payment cycles for any of their payables or receivables; and (iii) use their commercially reasonable efforts to preserve intact the Townsquare Stations and the business organization (including employees) of the Townsquare Stations. Without limiting the foregoing, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Cumulus, which shall not be unreasonably withheld, delayed or conditioned, Townsquare shall, and shall cause the Townsquare Seller to:
(a) operate the Townsquare Stations in the ordinary course of business (for avoidance of doubt, any expense reductions made consistent with past practices shall be deemed
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in the ordinary course of business), consistent with past practice and in all material respects in accordance with the Communications Act, FCC Rules and with all other applicable laws, and government regulations, rules and orders;
(b) not materially adversely modify, and in all material respects maintain in full force and effect, the Townsquare FCC Licenses;
(c) not make any engineering or technical change which materially reduces the power or coverage of any Townsquare Station or which requires the consent of or filing with the FCC, except as permitted by FCC Rules, for periods of maintenance or as reasonably necessary due to matters outside of Townsquare’s reasonable control;
(d) promptly deliver to Cumulus copies of any reports, applications or other documents filed with the FCC;
(e) promptly notify Cumulus of (i) any Broadcast Interruption, (ii) any inquiry, investigation or proceeding which, to the knowledge of Townsquare, has been initiated by the FCC relating to the Townsquare Stations and (iii) any petition to deny, informal objection or other objection that has been filed against any Townsquare Station;
(f) diligently prosecute and use commercially reasonable efforts to obtain approval of any applications pending before the FCC (including the Townsquare Renewal Applications, if any) and prosecute or timely make and use commercially reasonable efforts to obtain approval of any filings necessary or appropriate in other proceedings before the FCC to preserve or obtain any FCC License for a Townsquare Station without material adverse modification (including timely submitting and prosecuting and using commercially reasonable efforts to obtain approval of any Renewal Applications);
(g) not other than in the ordinary course of business, sell, lease or dispose of or agree to sell, lease or dispose of any of the Townsquare Station Assets unless replaced with similar items of substantially equal or greater value and utility (which replacement items shall constitute Townsquare Station Assets), or create, assume or permit to exist any Liens upon the Townsquare Station Assets, except for Townsquare Permitted Liens, and not dissolve, liquidate, merge or consolidate with any other entity;
(h) maintain the Townsquare Tangible Personal Property and the Townsquare Real Property in the ordinary course of business;
(i) upon reasonable notice, give Cumulus and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives reasonable access during normal business hours to the Townsquare Station Assets and the offices, properties, facilities, books and records of Townsquare relating to the Townsquare Stations and to those officers, directors, employees, agents, accountants and counsel of Townsquare who have knowledge regarding the Townsquare Stations, and furnish Cumulus and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives with information relating to the Townsquare Station Assets and the Cumulus Assumed Obligations that Cumulus may reasonably request, provided that such access rights shall be undertaken consistent with
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applicable antitrust rules and shall not be exercised in a manner that interferes with the operation of the Townsquare Stations;
(j) except in the ordinary course of business and as otherwise required by law, not (i) enter into any employment, labor, or union agreement or plan (or amendments of any such existing agreements or plan) that will be binding upon Cumulus after Closing or (ii) increase the compensation payable to any employee of the Townsquare Stations, except for such bonuses and other compensation payable by Townsquare or the Townsquare Seller in connection with the consummation of the transactions contemplated by this Agreement (if any) and the Townsquare Purchase Agreement (if any), which are set forth on Schedule 4.1(j) ; and
(k) not enter into new Townsquare Station Contracts that will be binding upon Cumulus after Closing or amend or terminate any existing Townsquare Station Contracts, except for (i) new advertising time sales agreements and other Townsquare Station Contracts made in the ordinary course of business that are terminable on ninety days’ notice or less without penalty, (ii) other Townsquare Station Contracts made with Cumulus’ prior consent, and (iii) other Townsquare Station Contracts that do not require post-Closing payments (terminal value) by Cumulus or Barter of more than $50,000 (in the aggregate for all such new contracts).
For purposes of calculating the amount of said post-Closing payments by Cumulus, if a contract is terminable by giving advance notice, then such amount shall include only the post-Closing amount that would be payable if a termination notice were given at Closing (whether or not such notice is in fact given), but in no event shall such amount be more than the amount payable absent such termination notice.
4.2 Cumulus Covenants . Cumulus covenants and agrees that between the date hereof and the time of the Closing, Cumulus shall conduct the business of the Cumulus Stations in the ordinary course in all material respects. Without limiting the generality of the foregoing, Cumulus shall, with respect to the Cumulus Stations, (i) continue their advertising and promotional activities; (ii) not shorten or lengthen the payment cycles for any of their payables or receivables; and (iii) use their commercially reasonable efforts to preserve intact the Cumulus Stations and the business organization (including employees) of the Cumulus Stations. Without limiting the foregoing, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Townsquare, which shall not be unreasonably withheld, delayed or conditioned, Cumulus shall:
(a) operate the Cumulus Stations in the ordinary course of business (for avoidance of doubt, any expense reductions made consistent with past practices shall be deemed in the ordinary course of business), consistent with past practice and in all material respects in accordance with the Communications Act, FCC Rules and with all other applicable laws, and government regulations, rules and orders;
(b) not materially adversely modify, and in all material respects maintain in full force and effect, the Cumulus FCC Licenses;
(c) not make any engineering or technical change which materially reduces the power or coverage of any Cumulus Station or which requires the consent of or filing with the
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FCC, except as permitted by FCC Rules, for periods of maintenance or as reasonably necessary due to matters outside of Cumulus’ reasonable control;
(d) promptly deliver to Townsquare copies of any reports, applications or other documents filed with the FCC;
(e) promptly notify Townsquare of (i) any Broadcast Interruption, (ii) any inquiry, investigation or proceeding which, to the knowledge of Cumulus, has been initiated by the FCC relating to the Cumulus Stations and (iii) any petition to deny, informal objection or other objection that has been filed against any Cumulus Station;
(f) diligently prosecute and use commercially reasonable efforts to obtain approval of any applications pending before the FCC (including the Cumulus Renewal Applications, if any) and prosecute or timely make and use commercially reasonable efforts to obtain approval of any filings necessary or appropriate in other proceedings before the FCC to preserve or obtain any FCC License for a Cumulus Station without material adverse modification (including timely submitting and prosecuting and using commercially reasonable efforts to obtain approval of any Renewal Applications);
(g) not other than in the ordinary course of business, sell, lease or dispose of or agree to sell, lease or dispose of any of the Cumulus Station Assets unless replaced with similar items of substantially equal or greater value and utility (which replacement items shall constitute Townsquare Station Assets), or create, assume or permit to exist any Liens upon the Cumulus Station Assets, except for Cumulus Permitted Liens, and not dissolve, liquidate, merge or consolidate with any other entity;
(h) maintain the Cumulus Tangible Personal Property and the Cumulus Real Property in the ordinary course of business, subject to Section 5.4;
(i) upon reasonable notice, give Townsquare and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives reasonable access during normal business hours to the Cumulus Station Assets and the offices, facilities, books and records of Cumulus relating to the Cumulus Stations (including the Cumulus general ledgers and accounting systems) and to those officers, directors, employees, agents, accounts and counsel of Cumulus who have knowledge regarding the Cumulus Stations, and furnish Townsquare and its officers, employees, agents, accountants, counsel, consultants, financing sources and representatives with information relating to the Cumulus Station Assets and the Townsquare Assumed Obligations that Townsquare may reasonably request, provided that such access rights shall be undertaken consistent with applicable antitrust rules and shall not be exercised in a manner that interferes with the operation of the Cumulus Stations;
(j) except in the ordinary course of business and as otherwise required by law, not (i) enter into any employment, labor, or union agreement or plan (or amendments of any such existing agreements or plan) that will be binding upon Townsquare after Closing or (ii) increase the compensation payable to any employee of the Cumulus Stations, except for such bonuses and other compensation payable by Cumulus in connection with the consummation of the transactions contemplated by this Agreement (if any), which are set forth on Schedule 4.2(j) ;
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and
(k) not enter into new Cumulus Station Contracts that will be binding upon Townsquare after Closing or amend or terminate any existing Cumulus Station Contracts, except for (i) new advertising time sales agreements and other Cumulus Station Contracts made in the ordinary course of business that are terminable on ninety days’ notice or less without penalty, (ii) other Cumulus Station Contracts made with Townsquare’s prior consent, and (iii) other Cumulus Station Contracts that do not require post-Closing payments (terminal value) by Townsquare or Barter of more than $50,000 (in the aggregate for all such new contracts).
For purposes of calculating the amount of said post-Closing payments by Townsquare, if a contract is terminable by giving advance notice, then such amount shall include only the post-Closing amount that would be payable if a termination notice were given at Closing (whether or not such notice is in fact given), but in no event shall such amount be more than the amount payable absent such termination notice.
ARTICLE 5: OTHER COVENANTS
Cumulus and Townsquare hereby covenant and agree as follows:
5.1 Confidentiality .
(a) An affiliate of Townsquare and Cumulus or an affiliate of Cumulus are parties to that certain letter agreement, dated as of May 24, 2013, as amended (collectively, the “ NDA ”) with respect to the transaction contemplated hereby. To the extent not already a direct party thereto, Cumulus and Townsquare hereby assume the NDA and agree to be bound by the provisions thereof. Without limiting the terms of the NDA, subject to the requirements of applicable law, all non-public information regarding the parties and their business and properties that is disclosed in connection with the negotiation, preparation or performance of this Agreement (including without limitation all financial information) shall be confidential and shall not be disclosed to any other person or entity, except the parties’ representatives and lenders for the purpose of consummating the transaction contemplated by this Agreement.
(b) For a period of three (3) years after the Closing, each of Townsquare and Cumulus shall, and shall cause their agents, representatives and affiliates to: (i) treat and hold as confidential (and not disclose or provide access to any third party other than its agents, representatives and affiliates) all information relating to advertiser lists, advertising rates, and marketing plans, details of contracts, and all other confidential or proprietary information (A) for Townsquare, that are exclusively related to the Townsquare Station Assets and the Townsquare Stations’ business, and (B) for Cumulus, that are exclusively related to the Cumulus Station Assets and the Cumulus Stations’ business, (ii) in the event that Townsquare or Cumulus or any agent, representative, affiliate, employee, officer or director of such party becomes legally compelled to disclose any such information, provide the other party with prompt written notice of such requirement so that such other party may seek a protective order or other remedy or waive compliance with this Section 5.1(b), and (iii) in the event that such protective order or other remedy is not obtained, or such other party waives compliance with this Section 5.1(b), furnish only that portion of such confidential information which is legally required to be
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provided and exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such information; provided , however , that this Section 5.1(b) shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed by Cumulus or Townsquare in breach of this Agreement; provided , further , that either party (and any employee, representative or other agent of such party) may disclose, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.
5.2 Announcements . Except as otherwise required by FCC Rules, prior to Closing, no party shall, without the prior written consent of the other party, which shall not be unreasonably withheld, issue any press release or make any other public announcement concerning the transactions contemplated by this Agreement, except to the extent that such party is so obligated by law or judicial process, in which case such party shall give advance notice to the other, and except that the parties shall cooperate to make a mutually agreeable announcement, and except as necessary to enforce rights under or in connection with this Agreement. Notwithstanding the foregoing, the parties acknowledge that this Agreement and the terms hereof will be filed with the FCC Applications and thereby become public. From and after the Closing, no party shall, without the prior written consent of the other party, which shall not be unreasonably withheld, issue any press release or make any other public announcement concerning the closing of the transactions contemplated by this Agreement, other than the filing of consummation notices and ownership reports with the FCC.
5.3 Control .
(a) Cumulus shall not, directly or indirectly, control, supervise or direct the operation of the Townsquare Stations prior to Closing. Consistent with the Communications Act and the FCC Rules, control, supervision and direction of the operation of the Townsquare Stations prior to Closing shall remain the responsibility of the Townsquare Seller or Townsquare, as applicable, as the holder of the Townsquare FCC Licenses.
(b) Townsquare shall not, directly or indirectly, control, supervise or direct the operation of the Cumulus Stations prior to Closing. Consistent with the Communications Act and the FCC Rules, control, supervision and direction of the operation of the Cumulus Stations prior to Closing shall remain the responsibility of Cumulus as the holder of the Cumulus FCC Licenses.
5.4 Risk of Loss . With respect to the Townsquare Station Assets and the Cumulus Station Assets, as applicable:
(a) The conveying party shall bear the risk of any loss of or damage to any of its assets at all times until the Effective Time, and the acquiring party shall bear the risk of any such loss or damage thereafter.
(b) If prior to Closing a Townsquare Station or Cumulus Station is off the air, operating at a power level that results in a material reduction in coverage, or if the regular broadcast transmissions of a Townsquare Station or Cumulus Station in the normal and usual
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manner are otherwise interrupted or discontinued (a “ Broadcast Interruption ”), then the conveying party shall return (or cause the return of) the station to the air and restore (or cause the restoration of) prior coverage as promptly as possible in the ordinary course of business, and shall timely make (or cause the timely making of) any filings for such Broadcast Interruption as may be required under the FCC Rules. Notwithstanding anything herein to the contrary, if prior to Closing there is a Broadcast Interruption in excess of twenty-four (24) consecutive hours or for more than seventy-two (72) hours (or, in the event of force majeure, ninety-six (96) hours), whether or not consecutive, during any period of ten (10) consecutive days, then the acquiring party may postpone Closing until the date five (5) business days after the Townsquare Station or Cumulus Station, as the case may be, returns to the air and prior coverage is restored in all material respects, subject to Section 10.1.
5.5 Environmental .
(a) With respect to any owned real property or ground lease included in the Townsquare Station Assets or the Cumulus Station Assets, the acquiring party may conduct Phase I environmental assessments (each a “ Phase I ”) within sixty (60) days after the date of this Agreement; provided , that such assessments are conducted during normal business hours upon reasonable prior notice (and subject to landlord consent if necessary), but completion of such assessments (or the results thereof) is not a condition to Closing.
(b) If any Phase I or any item set forth on Schedule 3.9 or any environmental report provided by either party to the other prior to the date of this Agreement identifies a condition requiring remediation under applicable environmental law, then:
(i) except as set forth below, Cumulus or Townsquare, as applicable, shall remediate (or cause the remediation of) such condition in all material respects as soon as reasonably practicable, and shall use commercially reasonable efforts to complete such remediation prior to Closing; and
(ii) if such remediation is not completed prior to Closing, then the parties shall proceed to Closing (with Townsquare’s or Cumulus’ representations and warranties, as applicable, deemed modified to take into account any such condition) and Townsquare or Cumulus, as applicable, shall remediate such item in all material respects after Closing (and Townsquare or Cumulus, as applicable, will provide access and any other reasonable assistance requested with respect to such obligation) as soon as practicable.
5.6 Consents .
(a) The parties shall use commercially reasonable efforts to obtain (i) any third party consents necessary for the assignment of any Townsquare Station Contract or Townsquare Real Property Leases and any Cumulus Station Contract or Cumulus Real Property Leases (which shall not require any payment to any such third party), but no such consents are conditions to Closing except that (i) receipt of consent to assign to Cumulus the Townsquare Stations’ main tower leases and studio leases designated with a diamond on Schedule 2. 7 (if any) and any Townsquare Station Contracts designated with a diamond on Schedule 2. 8(b) (if any) is a condition precedent to Cumulus’ obligation to close under this Agreement (the “ Townsquare
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Required Consents ”) and (ii) receipt of consent to assign to Townsquare the Cumulus Stations’ main tower leases and studio leases designated with a diamond on Schedule 3. 7 (if any) and any Townsquare Station Contracts designated with a diamond on Schedule 3. 8(b) (if any) is a condition precedent to Townsquare’s obligation to close under this Agreement (the “ Cumulus Required Consents ”).
(b) To the extent that any Townsquare Station Contract or Cumulus Station Contract (other than those described in Section 5.6(a)(i) and (ii) above) may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant to this Agreement shall not constitute an assignment thereof; provided, however, with respect to each such contract, the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which the acquiring party shall receive the benefits thereunder from and after Closing, and to the extent of the benefits received, the acquiring party shall pay and perform the conveying party’s obligations arising thereunder from and after Closing in accordance with its terms.
5.7 Employees . With respect to the Townsquare Stations and the Cumulus Stations, as applicable:
(a) The conveying party has provided the acquiring party a list showing employee positions and certain compensation information for employees of the Townsquare Stations and Cumulus Stations, respectively, who are available to the acquiring party for hire. Except as set forth on Schedule 5.7(a), the acquiring party may, but is not obligated to, offer post-Closing employment to such employees. With respect to each such employee, within sixty (60) calendar days after the date of this Agreement, the acquiring party shall notify the conveying party in writing whether or not it will offer Comparable Employment (defined below) to such employee upon Closing. Notwithstanding anything in Section 1.4, within thirty (30) calendar days after Closing, the acquiring party shall give the conveying party written notice identifying (i) all Transferred Employees (defined below) and (ii) all individuals who were employed by the Townsquare Stations or Cumulus Stations, as applicable, prior to Closing who were offered Comparable Employment with the acquiring party who did not accept such offers. As used herein, “ Comparable Employment ” means employment with no material reduction in base salary or material change in the amount of scheduled hours, and no requirement to commute more than thirty (30) miles further than the employee’s commute while employed by the Townsquare Stations or Cumulus Stations, as applicable. For the avoidance of doubt, the acquiring party may offer employment on such terms and conditions as are consistent with its employment policies and has no obligation to offer Comparable Employment, or to offer employment to an individual, or to maintain the employment of any individual.
(b) At Closing, the conveying party shall pay a pro-rata portion of any bonuses that employees would have earned if such employees were still employed by the Townsquare Stations or Cumulus Stations, as applicable, at the end of the relevant period following Closing based on whether as of Closing such employees achieved a pro-rata portion of the goals required to earn such bonuses.
(c) If applicable, the conveying party shall give any notice to any applicable employees required under the Worker Adjustment and Retraining Notification Act (the “ WARN
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Act ”) or any similar state or local law, and, notwithstanding Section 1.4, the acquiring party shall comply with any applicable requirements thereunder after the Effective Time. If the WARN Act or any such other law is applicable, then the conveying party may by written notice to the acquiring party extend the Closing Date to a date within five (5) business days after the expiration of all applicable notice periods.
(d) With respect to employees of the Townsquare Stations or Cumulus Stations, as applicable, hired by the acquiring party (“ Transferred Employees ”), the conveying party shall be responsible for all compensation and benefits arising prior to the Effective Time (in accordance with the conveying party’s employment terms), and the acquiring party shall be responsible for all compensation and benefits arising after the Effective Time (in accordance with the acquiring party’s employment terms). The acquiring party shall grant credit to each Transferred Employee for any sick leave accrued in the current calendar year (but not any prior calendar year) and any vacation days accrued and unpaid in the current calendar year (but not any prior calendar year unless and to the extent it constitutes an accrued benefit under the conveying party’s policies) that exists as of the Effective Time. The acquiring party shall receive an appropriate adjustment as provided by Section 1.7 for any such accrued sick time and vacation that it assumes.
(e) The acquiring party shall permit Transferred Employees (and their spouses and dependents) to participate in its “employee welfare benefit plans” (including, without limitation, health insurance plans) and “employee pension benefit plans” (as defined in ERISA) in which similarly situated employees are generally eligible to participate, with coverage effective immediately upon Closing (and without exclusion from coverage on account of any pre-existing condition), with service with the conveying party deemed service with the acquiring party for purposes of any length of service requirements, waiting periods, vesting periods and differential benefits based on length of service, and with credit under any welfare benefit plan for any deductibles or co-insurance paid for the current plan year under any plan maintained by the conveying party.
(f) The acquiring party shall also permit each Transferred Employee who participates in the conveying party’s 401(k) plan to elect to make direct rollovers of their account balances into the acquiring party’s 401(k) plan as soon as administratively feasible after Closing, including the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under the acquiring party’s 401(k) plan, subject to compliance with applicable law and subject to the reasonable requirements of the acquiring party’s 401(k) plan.
(g) For the avoidance of doubt, nothing contained in this Section 5.7 shall have any effect on or otherwise impair any rights under, in any respect, any contract in effect on the date hereof between any of the parties or any of their respective affiliates, on the one hand, and any employee, on the other hand. No employee, Transferred Employee, or any other person shall be third party beneficiaries of this Section 5.7 and the parties hereto do not intend to permit any third party claims hereunder. This Agreement shall not be deemed to amend or modify any employee benefit plan sponsored by Townsquare or its affiliates or employee benefit plans sponsored by Cumulus or its affiliates.
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5.8 [Intentionally Left Blank]
5.9 Actions . With respect to the Townsquare Stations and the Cumulus Stations, as applicable, after Closing the acquiring party shall cooperate with the conveying party in the investigation, defense or prosecution of any action which is pending or threatened against the conveying party or its affiliates, whether or not any party has notified the other of a claim for indemnification with respect to such matter; provided , however , that the conveying party shall reimburse the acquiring party for the out-of-pocket costs reasonably incurred by the acquiring party as a result of its compliance with this Section 5.9. Without limiting the generality of the foregoing, the acquiring party shall make available its employees to give depositions or testimony and shall preserve and furnish all documentary or other evidence that the conveying party may reasonably request.
5.10 Real Property .
(a) With respect to each parcel of Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, the acquiring party may obtain, at the acquiring party’s expense, current surveys and preliminary title reports in order to obtain customary owner’s title commitments to issue a policy of title insurance containing the standard stipulations and conditions of the most current standard ALTA Form of Owner’s Title Insurance Policy in use in the states in which such real property is located insuring that the acquiring party shall receive at Closing indefeasible fee simple title to such real property, free and clear of all Liens, other than a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable. The conveying party shall provide the acquiring party reasonable assistance in obtaining such title commitments, including, without limitation, providing access to the applicable owned real property to perform such surveys, provided that such surveys are conducted during normal business hours upon reasonable prior notice to the conveying party. Without in any way limiting the parties’ rights under Article 6 or Article 7, the parties agree that the Closing is not conditioned upon the completion of any such survey or title report.
(b) If any such title report or survey obtained prior to Closing discloses a Lien on the Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, that is not a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable, then:
(i) the acquiring party shall so notify the conveying party within twenty (20) days of its receipt of such title report or survey but in any event prior to Closing;
(ii) except as set forth below, the conveying party shall remediate (or cause the remediation of) such Lien as soon as reasonably practicable in all material respects; and
(iii) if remediation of any such Lien of which the conveying party was notified prior to Closing is not completed prior to Closing, then, the parties shall proceed to Closing (with the conveying party’s representations and warranties deemed modified to take into account any such condition) and the conveying party shall remediate such Lien in all material respects after Closing as promptly as practicable (and the acquiring party will, to the extent necessary, provide reasonable access with respect to such obligation); provided, however, that
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the conveying party's obligations under this Section 5.10(b)(iii) to remediate such Liens shall be subject to the limitations on such party's liability under Section 9.2(b) or Section 9.2(d), as applicable, such that the baskets and caps applicable to Damages under Section 9.2(b) and Section 9.2(d) shall be applicable to the costs and expenses (including attorneys' fees and expenses) of remediating Liens under this Section 5.10(b)(iii), and such costs and expenses (including attorneys' fees and expenses) of remediating Liens under this Section 5.10(b)(iii) shall be deemed Damages for purposes of Section 9.2(b) and Section 9.2(d), as applicable, it being the parties' intent that the same baskets and caps shall apply to both the conveying party's obligations under this Section 5.10(b)(iii) and its liability under Section 9.2(a)(i) or Section 9.2(c)(i), as applicable.
(c) Any Lien on the Townsquare Owned Real Property or Cumulus Owned Real Property, as applicable, that is not a Townsquare Permitted Lien or Cumulus Permitted Lien, as applicable, discovered after Closing, or with respect to which the acquiring party did not notify the conveying party prior to Closing, shall not be subject to this Section 5.10 but rather shall be subject to the provisions of Article 9 to the extent that the existence of such Lien constitutes a breach by Townsquare or Cumulus, as applicable, of its representations and warranties made under this Agreement.
(d) Notwithstanding anything to the contrary contained in this Section 5.10, if any title report or title commitment discloses judgments, bankruptcies or other returns against other persons or entities having names the same as or similar to that of a conveying party, then the conveying party, at the Closing and to the extent applicable, shall deliver to the applicable title company affidavits to the effect that such judgments, bankruptcies or other returns are not against the conveying party in order to induce the title company to omit exceptions with respect to such judgments, bankruptcies or other returns or to insure over the same.
(e) Nothing in this Section 5.10 shall in any way limit the parties' rights under Article 6 and Article 7.
5.11 Retention of and Access to Books and Records . Each of Townsquare and Cumulus may retain a copy of all data books and records relating to the pre-Closing operations of the Townsquare Stations or Cumulus Stations, as applicable. After the Closing, the acquiring party shall retain those records delivered to the acquiring party by the conveying party for a period of at least three (3) years. Each acquiring party shall provide the conveying party and its representatives with reasonable access to any such books and records of which the conveying party did not retain a copy, during normal business hours and on reasonable prior written notice to the acquiring party. From the date hereof until Closing, each party agrees to make its CFO available to discuss ongoing operations and the status of the businesses of the Cumulus Stations or Townsquare Stations, as applicable, during normal business hours and on reasonable prior written notice.
5.12 Insurance Policies . Each of Townsquare and Cumulus shall, and Townsquare shall cause the Townsquare Seller to maintain in effect, and pay all premiums with respect to, all of their respective insurance policies (on such terms and with such limits as in effect on the date hereof) on the Townsquare Stations and Cumulus Stations, respectively, until the Closing. Upon the occurrence of any event that requires repair, replacement or remediation pursuant to Sections
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5.5 or 5.18 , then to the extent such event is covered by any such insurance policy and the party maintaining such insurance policy elects not to use available funds other than insurance proceeds to complete such repair, replacement or remediation, such party shall make a claim to the appropriate insurer under such insurance policy, and any and all such insurance proceeds received by such party shall be used exclusively by such party to take such actions as are required by Sections 5.5 or 5.18 .
5.13 Marks .
(a) Cumulus shall not have any right, title, interest, license or any other right whatsoever to use the words “Townsquare” or any trademarks containing or comprising “Townsquare” or any trademark confusingly similar thereto or dilutive thereof (collectively, the “ Townsquare Marks ”). From and after the Closing, Cumulus agrees that it shall (a) cease using Townsquare Marks in any manner, directly or indirectly, except for such uses that cannot be promptly terminated (e.g., signage, e-mail addresses, and as a referral or pointer to the acquired website), and to cease such limited usage of Townsquare Marks as promptly as possible after the Closing and in any event within sixty (60) days following the Closing Date, (b) use commercially reasonable efforts to, within sixty (60) days following the Closing Date, remove, strike over or otherwise obliterate all Townsquare Marks from all assets and all other materials owned, possessed or used by it, and (c) use commercially reasonable efforts to cause any third parties using or licensing such Townsquare Marks on behalf of, or with the consent of Cumulus, to remove, strike over, or otherwise obliterate all Townsquare Marks from all materials owned, possessed or used by such third parties.
(b) Townsquare shall not have any right, title, interest, license or any other right whatsoever to use the words “Cumulus” or “Citadel” or any trademarks containing or comprising “Cumulus” or “Citadel” or any trademark confusingly similar thereto or dilutive thereof (collectively, the “ Cumulus Marks ”). From and after the Closing, Townsquare agrees that it shall (a) cease using Cumulus Marks in any manner, directly or indirectly, except for such uses that cannot be promptly terminated (e.g., signage, e-mail addresses, and as a referral or pointer to the acquired website), and to cease such limited usage of Cumulus Marks as promptly as possible after the Closing and in any event within sixty (60) days following the Closing Date, (b) within sixty (60) days following the Closing Date, use commercially reasonable efforts to remove, strike over or otherwise obliterate all Cumulus Marks from all assets and all other materials owned, possessed or used by it, and (c) use commercially reasonable efforts to cause any third parties using or licensing such Cumulus Marks on behalf of, or with the consent of Townsquare, to remove, strike over, or otherwise obliterate all Cumulus Marks from all materials owned, possessed or used by such third parties.
5.14 Cooperation . Each of the parties hereto shall use its respective commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things necessary, proper or advisable and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement. Cumulus and Townsquare each covenant and agree to take such commercially reasonable actions as may be reasonably requested by the other party in order to effect an orderly transition of the Cumulus Stations and Townsquare Stations, respectively, to the other party. In furtherance thereof, upon request each
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party shall provide to the other party accounting and financial information created or maintained about the market and exclusively related to the Cumulus Stations or Townsquare Stations, respectively, and technical support for the purpose of transitioning web hosting and similar matters.
5.15 Acquisition of Townsquare Stations . Townsquare shall use its commercially reasonable efforts to (a) take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the acquisition of the Townsquare Stations as soon as reasonably practicable, (b) timely file and diligently prosecute any and all applications with the FCC proposing the assignment of one or more radio stations or television stations to a third party or a divestiture trust as may be necessary to enable Townsquare to be in compliance with Section 73.3555 (including the Notes thereto) of the FCC Rules upon the closing of the Townsquare Purchase Agreement, (c) not materially breach any of its representations, warranties, covenants or agreements under the Townsquare Purchase Agreement and otherwise satisfy on a timely basis all conditions in the Townsquare Purchase Agreement applicable to Townsquare to acquiring the Townsquare Stations; (d) not permit any amendment or modification to be made to, or any waiver of any provision or remedy under, the Townsquare Purchase Agreement that would impact the ability of Townsquare to consummate the transactions contemplated under this Agreement without the prior written approval of Cumulus, which shall be withheld in its sole discretion, (e) not take any actions or cause any actions to be taken that could delay or prevent the consummation of the acquisition of the Townsquare Stations, make the same less likely to occur or adversely impact the ability of Townsquare to enforce its rights thereunder; and (f) promptly upon execution of the Townsquare Purchase Agreement provide complete executed copies of such definitive agreements to Cumulus and fully enforce the counterparties’ obligations and its rights thereunder, including by suit or other appropriate proceeding. Townsquare will keep Cumulus reasonably informed on a timely basis of the status of Townsquare’s efforts to consummate the acquisition of the Townsquare Stations.
5.16 [Intentionally Left Blank]
5.17 Network Revenue . For each of the first four 12-month periods after the Closing, Cumulus will compensate the Citadel Legacy Stations for inventory contribution (the “ Inventory Compensation Amount ”), on a quarterly basis. In exchange, the Citadel Legacy Stations will continue to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday to Impact for sale through the network. For the first 12-month period following Closing (the “ Base Year ”), the Inventory Compensation Amount shall be $210,476 . At the end of the Base Year, and at the end of each of the two 12-month periods following the Base Year, to the extent a decrease in ratings, AQH contribution of the Citadel Legacy Stations to Impact or overall decline in the network market has occurred during the prior 12-month period, the Inventory Compensation Amount for the immediately following year will be adjusted to reflect such changes. The Inventory Compensation Amount as so adjusted will serve as the base from which any adjustments for subsequent 12 - month periods shall be made. Townsquare shall have the option to cancel the aforementioned arrangement with Cumulus to Impact provided that such termination may only begin on the day preceding the first day of a broadcast calendar quarter and Townsquare shall have provided prior written notice to Cumulus at least 45 days prior to the beginning of such broadcast calendar quarter. Upon such cancellation, Cumulus shall have no
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further obligations under this Section 5.17 .
5.18 Pre-Closing Inspections and Fixes . Prior to the Closing, Townsquare and Cumulus shall each have a right to conduct, at its own expense, inspections of the material items of Cumulus Tangible Personal Property and Townsquare Tangible Personal Property, respectively, to determine whether such material items of Cumulus Tangible Personal Property and Townsquare Tangible Personal Property, as applicable, are in the condition described in Sections 2.6 and 3.6, respectively. Station access for such assessments shall be provided by Townsquare and Cumulus during normal business hours and upon reasonable advance written notice provided to Townsquare or Cumulus, as applicable, by the other party. If during such inspections, Townsquare or Cumulus identifies any (i) such assets are not in the condition described in Sections 2.6 or 3.6, as applicable, and the current condition of such assets has a material impact on the operation of the Townsquare Station(s) or the Cumulus Station(s), as applicable, to which such assets relate; or (ii) the Townsquare Station(s) or the Cumulus Station(s), as applicable, are not operating in compliance in all material respects with the terms of the FCC Licenses, the Communications Act, and the FCC Rules (the “ Assets to be Repaired ”), then Townsquare or Cumulus, as the case may be, shall notify the other party in writing thereof prior to Closing and provide a written statement setting forth the Assets to be Repaired. Townsquare or Cumulus, as the case may be, may provide a written objection to the Assets to be Repaired. Townsquare or Cumulus, as the case may be, will use commercially reasonable efforts to repair or replace any mutually agreed upon Assets to be Repaired or, alternatively, the Parties may mutually agree to an adjustment to the Cash Consideration in an amount equal to reasonable costs and expenses associated necessary to repair and correct such Assets to be Repaired.
5.19 Financing Efforts .
(a) Townsquare has delivered to Cumulus true, correct and complete copies, as of the date of this Agreement, of (i) a commitment letter in effect as of the date hereof by and among Townsquare, Townsquare Holdings LLC (“ Holdings ”) and the incremental lenders party thereto (the “ Term Loan Commitment Letter ”), (ii) a commitment letter in effect as of the date hereof by and among Townsquare, Holdings and the bridge lead arrangers party thereto (the “ Bridge Commitment Letter ”) and (iii) a commitment letter in effect as of the date hereof by and among Townsquare Media, LLC and the initial purchasers thereto (the “ Senior Notes Commitment Letter ”, and together with the Term Loan Commitment Letter and the Bridge Commitment Letter, the “ Financing Letters ”) pursuant to which each of the financial institutions party thereto (the “ Lenders ”) have committed to provide, subject to the terms and conditions set forth in each respective Financing Letter, financing in the amounts set forth in each respective Financing Letter (collectively, the “ Financing ”). Cumulus will use its commercially reasonable efforts to provide, and to cause its officers, employees and advisors (including its independent auditors) to provide, to Townsquare all such reasonable assistance and cooperation reasonably requested by Townsquare that is customary and reasonably necessary to assist Townsquare in the arrangement, obtainment and syndication of any Financing contemplated by the Financing Letters or any Alternative Financing. Such cooperation shall include, without limitation, furnishing Townsquare as promptly as reasonably practicable following the delivery of a written request therefor to Cumulus by Townsquare any and all financial information regarding the Cumulus Stations that is (i) requested by the counterparties to the Financing Letters pursuant to the terms thereof, (ii) reasonably required in connection with the execution of the Financing
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and/or (iii) necessary to permit Townsquare to prepare the pro forma balance sheets, financial statements and/or offering or other similar documents and/or deliver financial information, in each case, in reference to the Cumulus Stations as required pursuant to conditions 7, 8 and 9 of the Bridge Commitment Letter and conditions 7 and 8 of the Senior Notes Commitment Letter. Cumulus shall use commercially reasonable efforts to cause its independent auditors to reasonably cooperate with Townsquare (subject to Townsquare's reimbursement obligation as set forth in this Section 5.19(a), to the extent applicable), to the extent contemplated by the Financing Letters, including commercially reasonable efforts to cause its independent auditors to provide Townsquare with audited financial statements for the Cumulus Stations for the most recently completed fiscal year ended at least 90 days before the Closing Date and customary “comfort letters” and an “agreed upon procedures letter” in respect thereof, in each case as contemplated by the relevant condition in the Bridge Commitment Letter. Townsquare shall reimburse Cumulus for any third-party costs incurred solely as a result of such assistance and cooperation, including the costs of its independent auditors but excluding attorneys’ fees incurred in connection with review of the Financing Agreements and the other matters contemplated by this Agreement; provided that any such third party fees shall be approved in writing in advance by Townsquare and; provided, further, that Cumulus’s assistance and cooperation, which requires the incurrence of such third party fees not approved by Townsquare, shall be limited to what Cumulus can provide without incurring such third party fees or other related expenses. Cumulus will deliver to Townsquare any payoff letters, lien releases (including UCC-3 termination statements) and instruments of termination or discharge as reasonably required in the Financing Letters.
(b) Townsquare will indemnify and hold harmless Cumulus and its affiliates and their respective representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with any claim, litigation, investigation, action, suit or proceeding brought against Cumulus and its affiliates relating to the arrangement of the Financing (including any action taken in accordance with this Section 5.19 ) and any information used in connection therewith, except with respect to (i) any information relating to Cumulus provided in writing by Cumulus; or (ii) any fraud or intentional misrepresentation or willful misconduct by such persons.
(c) Townsquare acknowledges and agrees that the obtaining of Financing is not a condition to Closing and reaffirm its obligation to consummate the transactions contemplated by this Agreement irrespective and independently of the availability of the Financing or any Alternative Financing, subject to fulfillment or waiver of the conditions set forth in Article 6 ; provided, however, if the release of any Liens (other than the Permitted Liens, and Liens created by Townsquare) on the Cumulus Stations or the termination of any financing statement of record with respect to the Cumulus Stations at or prior to Closing is a condition for obtaining of Financing, then such release of Liens and termination of financing statement shall be a condition to Closing notwithstanding Sections 5.10 or anything else herein to the contrary.
5.20 Collection of Townsquare Stations and Cumulus Station Funds .
(a) For a period of six (6) months after the Closing, Cumulus shall cause its bank to forward all payments received at its lockbox accounts relating to the Cumulus Stations to such Townsquare lockbox accounts designated in writing by Townsquare and, following such
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six-month period, Cumulus shall cause its bank to return all payments received at its lockbox accounts to the sender of such payment. If at any time after the Closing Date, Cumulus otherwise receives any funds properly belonging to the Cumulus Stations, Cumulus will promptly so advise Townsquare, will segregate and hold such funds in trust for the benefit of Townsquare and will promptly deliver such funds to an account or accounts designated in writing by Townsquare.
(b) For a period of six (6) months after the Closing, Townsquare shall cause its bank to forward all payments received at its lockbox accounts relating to the Townsquare Stations to such Cumulus lockbox accounts designated in writing by Cumulus and, following such six-month period, Townsquare shall cause its bank to return all payments received at its lockbox accounts to the sender of such payment. If at any time after the Closing Date, Townsquare otherwise receives any funds properly belonging to the Townsquare Stations, Townsquare will promptly so advise Cumulus, will segregate and hold such funds in trust for the benefit of Cumulus and will promptly deliver such funds to an account or accounts designated in writing by Cumulus.
5.21 Legacy Cumulus Market Network Inventory . From Closing until December 31, 2014, Townsquare will make available inventory to CMN as it relates to the Cumulus Legacy Stations in a manner consistent with historical practice as outlined in Schedule 3.22 . From January 1, 2015 to December 31, 2015, Townsquare will make available inventory to CMN as it relates to the Cumulus Legacy Stations in the amount of 28 minutes per week, or half of the inventory obligation as outlined in Schedule 3.22 with the same pro rata distribution across dayparts and weekparts. Cumulus shall have the option to cancel the aforementioned arrangement on ninety (90) days’ prior written notice to Townsquare.
5.22 Remnant Revenue . Cumulus has historically generated revenue at the corporate level, such revenue then allocated out to local markets, by engaging with remnant advertisers on behalf of local markets (“ Remnant Revenue ”). Cumulus will provide Townsquare with transitional services as it relates to generating Remnant Revenue, including but not limited to securing advertising relationships, communicating inventory parameters, invoicing and collections for a period of up to 90 days. Any Remnant Revenue generated related to the Stations will be remitted to Townsquare.
ARTICLE 6: TOWNSQUARE CLOSING CONDITIONS
The obligation of Townsquare to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Townsquare):
6.1 Representations and Covenants .
(a) Each of the representations and warranties of Cumulus made in this Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Cumulus made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement; provided that
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this condition shall be deemed satisfied unless all inaccuracies in such representations and warranties in the aggregate constitute a Material Adverse Effect on the Cumulus Station Assets at the Closing Date and Townsquare shall have received a certificate signed on behalf of Cumulus by the Chief Executive Officer or the Chief Financial Officer of Cumulus to the foregoing effect.
(b) The covenants and agreements to be complied with and performed by Cumulus at or prior to Closing shall have been complied with or performed in all material respects.
(c) Townsquare shall have received a certificate dated as of the Closing Date from Cumulus executed by an authorized officer of Cumulus to the effect that the conditions set forth in Sections 6.1(a) and (b) shall have been satisfied.
6.2 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
6.3 FCC Consents . The FCC shall have issued the FCC Consents.
6.4 Hart Scott Rodino . The HSR Clearance shall have been obtained.
6.5 Deliveries . Cumulus shall have complied with its obligations set forth in Section 8.2.
6.6 Required Consents . The Cumulus Required Consents shall have been obtained.
6.7 Townsquare Purchase Agreement . Townsquare shall have consummated the acquisition of the Townsquare Stations pursuant to the Townsquare Purchase Agreement.
6.8 Audit . If the Closing occurs on or before March 31, 2014, the audited financial statements for the Stations referenced in Section 5.19(a) hereto for the 2012 fiscal year shall not adversely deviate by more than 10% or more with respect to the calculation of revenue or broadcast cash flow from the relevant, same period unaudited financial statements of the Stations delivered Townsquare pursuant to Section 3.15 (other than with respect to corporate overhead allocations to the extent those allocations are removed and additional costs are not added (other than immaterial costs as reasonably determined by the Financing Sources party to the Bridge Commitment Letter).
ARTICLE 7: CUMULUS CLOSING CONDITIONS
The obligation of Cumulus to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Cumulus):
7.1 Representations and Covenants .
(a) Each of the representations and warranties of Townsquare made in this
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Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Townsquare made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement; provided that this condition shall be deemed satisfied unless all inaccuracies in such representations and warranties in the aggregate constitute a Material Adverse Effect on the Townsquare Station Assets at the Closing Date and Cumulus shall have received a certificate signed on behalf of Townsquare by the Chief Executive Officer or the Chief Financial Officer of Townsquare to the foregoing effect.
(b) The covenants and agreements to be complied with and performed by Townsquare at or prior to Closing shall have been complied with or performed in all material respects.
(c) Cumulus shall have received a certificate dated as of the Closing Date from Townsquare executed by an authorized officer of Townsquare to the effect that the conditions set forth in Sections 7.1(a) and (b) have been satisfied.
7.2 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
7.3 FCC Consents . The FCC shall have issued the FCC Consents.
7.4 Hart Scott Rodino . The HSR Clearance shall have been obtained.
7.5 Deliveries . Townsquare shall have complied with its obligations set forth in Section 8.1.
7.6 Required Consents . The Townsquare Required Consents shall have been obtained.
7.7 Townsquare Purchase Agreement . Townsquare shall have consummated the acquisition of the Townsquare Stations pursuant to the Townsquare Purchase Agreement.
ARTICLE 8: CLOSING DELIVERIES
8.1 Townsquare Deliveries . At Closing, Townsquare shall deliver or cause to be delivered to Cumulus:
(i) good standing certificates for Townsquare, dated not more than five (5) business days prior to the Closing Date, issued by the Secretary of State of Townsquare’s jurisdiction of formation;
(ii) a certificate executed by Townsquare’s secretary or assistant secretary confirming that the officers executing this Agreement and the Townsquare Ancillary Agreements are authorized to execute such documents;
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(iii) the certificate described in Section 7.1(c);
(iv) an assignment and assumption agreement with respect to the Townsquare FCC Licenses;
(v) an assignment and assumption of contracts with respect to the Townsquare Station Contracts and an assignment and assumption of contracts with respect to the Cumulus Station Contracts;
(vi) an assignment and assumption of leases with respect to the Townsquare Real Property Leases and an assignment and assumption of leases with respect to the Cumulus Real Property Leases (if any);
(vii) special warranty deeds conveying the Townsquare Owned Real Property (if any) from Townsquare to Cumulus, together with customary owner affidavits reasonably requested by Cumulus or any title company retained by Cumulus;
(viii) an affidavit of non-foreign status of Townsquare that complies with Section 1445 of the Code;
(ix) an assignment of marks assigning the Townsquare Stations’ registered marks listed on Schedule 2.10 from Townsquare to Cumulus;
(x) domain name transfers with respect to the Townsquare Stations’ domain names listed on Schedule 2.10 and domain name transfers with respect to the Cumulus Stations’ domain names listed on Schedule 2.10 (if any), following customary procedures of the domain name administrator;
(xi) endorsed vehicle titles conveying the vehicles included in the Townsquare Tangible Personal Property (if any) from Townsquare to Cumulus;
(xii) a bill of sale conveying the other Townsquare Station Assets from Townsquare to Cumulus;
(xiii) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(xiv) the Software License Agreement;
(xv) any consents obtained by Townsquare; and
(xvi) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement.
8.2 Cumulus Deliveries . At Closing, Cumulus shall deliver or cause to be delivered to Townsquare:
(i) good standing certificates for Cumulus, dated not more than five
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(5) business days prior to the Closing Date, issued by the Secretary of State of Cumulus’ jurisdiction of formation;
(ii) a certificate executed by Cumulus’ secretary or assistant secretary certifying confirming that the officers executing this Agreement and the Cumulus Ancillary Agreements are authorized to execute such documents;
(iii) the certificate described in Section 6.1(c);
(iv) an assignment and assumption agreement with respect to the Cumulus FCC Licenses;
(v) an assignment and assumption of contracts with respect to the Townsquare Station Contracts and an assignment and assumption of contracts with respect to the Cumulus Station Contracts;
(vi) an assignment and assumption of leases with respect to the Townsquare Real Property Leases and an assignment and assumption of leases with respect to the Cumulus Real Property Leases (if any);
(vii) special warranty deeds conveying the Cumulus Owned Real Property (if any) from Cumulus to Townsquare, together with customary owner affidavits reasonably requested of Cumulus by any title company retained by Townsquare;
(viii) an affidavit of non-foreign status of Cumulus that complies with Section 1445 of the Code;
(ix) an assignment of marks assigning the Cumulus Stations’ registered marks listed on Schedule 3.10 (if any) from Cumulus to Townsquare;
(x) domain name transfers with respect to the Townsquare Stations’ domain names listed on Schedule 3.10 and domain name transfers with respect to the Cumulus Stations’ domain names listed on Schedule 3.10 (if any), following customary procedures of the domain name administrator;
(xi) endorsed vehicle titles conveying the vehicles included in the Cumulus Tangible Personal Property (if any) from Cumulus to Townsquare;
(xii) a bill of sale conveying the other Cumulus Station Assets from Cumulus to Townsquare;
(xiii) the Software License Agreement;
(xiv) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(xv) any consents obtained by Cumulus; and
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(xvi) any payoff letters, lien releases and instruments of termination or discharge as provided in Sections 5.19(b) and 5.19(c) .
(xvii) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement.
ARTICLE 9: SURVIVAL; INDEMNIFICATION
9.1 Survival . The representations and warranties in this Agreement shall survive Closing for a period of eighteen (18) months from the Closing Date whereupon they shall expire and be of no further force or effect, except (i) those under Sections 2.5 and 3.5 (Taxes), and those under Sections 2.6, 2.7, 2.10, 3.6, 3.7 and 3.10 solely with respect to title (collectively, the “ SOL Representations ”), all of which shall survive until the expiration of any applicable statute of limitations, (ii) those under Sections 2.9 and 3.9 (Environmental) shall survive for twenty-four (24) months from the Closing Date, (iii) those under Sections 2.1 and 3.1 (Organization), 2.2 and 3.2 (Authorization), and 2.21 and 3.21 (No Broker) (collectively, the “ Fundamental Representations ”) shall survive indefinitely and (iv) that if within such applicable period the indemnified party gives the indemnifying party written notice of a claim for breach thereof describing in reasonable detail the nature and basis of such claim, then such claim shall survive until the resolution of such claim. The covenants and agreements in this Agreement shall survive Closing until performed. This Article 9 shall survive indefinitely in accordance with its terms.
9.2 Indemnification .
(a) Subject to Section 9.2(b), from and after Closing, Townsquare shall defend, indemnify and hold harmless Cumulus from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys’ fees and expenses (“ Damages ”) incurred by Cumulus arising out of or resulting from:
(i) any breach by Townsquare of its representations and warranties made under this Agreement; or
(ii) any material default by Townsquare of any covenant or agreement made under this Agreement; or
(iii) the Townsquare Retained Obligations or the business or operation of the Townsquare Stations before the Effective Time, except for the Cumulus Assumed Obligations; or
(iv) the business or operation of the Cumulus Stations after the Effective Time; or
(v) the Townsquare Assumed Obligations.
(b) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Townsquare shall have no liability to Cumulus under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) until Cumulus’ aggregate Damages exceed $630,000, after which such threshold
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amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Townsquare under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) shall be an amount equal to $9,450,000;
(c) Subject to Section 9.2(d), from and after Closing, Cumulus shall defend, indemnify and hold harmless Townsquare from and against any and all Damages incurred by Townsquare arising out of or resulting from:
(i) any breach by Cumulus of its representations and warranties made under this Agreement; or
(ii) any material default by Cumulus of any covenant or agreement made under this Agreement; or
(iii) the Cumulus Retained Obligations or the business or operation of the Cumulus Stations before the Effective Time except for Townsquare Assumed Obligations; or
(iv) the business or operation of the Townsquare Stations after the Effective Time; or
(v) the Cumulus Assumed Obligations.
(d) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Cumulus shall have no liability to Townsquare under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) until Townsquare’s aggregate Damages exceed $635,000 after which such threshold amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Cumulus under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) shall be an amount equal to $9,550,000.
9.3 Procedures .
(a) The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties that is subject to indemnification hereunder (a “ Claim ”), but a failure to give such notice or delaying such notice shall not affect the indemnified party’s rights or the indemnifying party’s obligations except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced and provided that such notice is given within the time period described in Section 9.1.
(b) The indemnifying party shall have the right to undertake the defense or opposition to such Claim with counsel selected by it. In the event that the indemnifying party does not undertake such defense or opposition in a timely manner, the indemnified party may undertake the defense, opposition, compromise or settlement of such Claim with counsel selected by it at the indemnifying party’s cost (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final
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determination thereof).
(c) Anything herein to the contrary notwithstanding:
(i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim;
(ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include the giving by the claimant to the indemnified party of a release from all liability in respect of such Claim;
(iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel concerning such Claim and the indemnifying party and the indemnified party and their respective counsel shall cooperate in good faith with respect to such Claim; and
(iv) neither party shall have any liability to the other under any circumstances for special, indirect, consequential, punitive or exemplary damages or lost profits or similar damages of any kind, whether or not foreseeable.
(d) After Closing, excepting claims for fraud, all claims for breach of representations or warranties under this Agreement shall be subject to the limitations set forth in Section 9.2(b) or 9.2(d), as applicable.
ARTICLE 10: TERMINATION AND REMEDIES
10.1 Termination . Subject to Section 10.3, this Agreement may be terminated prior to Closing as follows:
(a) by mutual written consent of Cumulus and Townsquare;
(b) by written notice of Cumulus to Townsquare if Townsquare breaches its representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period (defined below); provided , that Cumulus may not terminate pursuant to this Section 10.1(b) if it is then in material breach of or default under this Agreement;
(c) by written notice of Townsquare to Cumulus if Cumulus breaches its representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period; provided, that Townsquare may not terminate pursuant to this Section 10.1(c) if it is then in material breach of or default under this Agreement;
(d) by written notice of Townsquare to Cumulus or Cumulus to Townsquare if Closing does not occur by the date twelve (12) months after the date of this Agreement (as may
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be extended by the written agreement of the parties, the “ Outside Date ”);
(e) by written notice of either party to the other if the FCC (or its staff pursuant to delegated authority) issues a decision which designates any of the FCC Applications or any of the Divestiture Applications for an evidentiary hearing, dismisses any of the FCC Applications or any of the Divestiture Applications, or otherwise denies any of the FCC Applications or any of the Divestiture Applications; provided , that a party may not terminate pursuant to this Section 10.1(e) if its material breach of or default under this Agreement was the basis for the FCC action; or
(f) by written notice of either party to the other if there shall be in effect a final, non-appealable order of a court or governmental authority or authority of competent jurisdiction prohibiting the consummation of the transactions contemplated hereby.
10.2 Cure Period . Each party shall give the other party prompt written notice upon learning of any breach or default by the other party under this Agreement. The term “ Cure Period ” as used herein means a period commencing on the date Cumulus or Townsquare receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) calendar days thereafter or (ii) the Closing Date determined under Section 1.9; provided, however, that if the breach or default is non-monetary and cannot reasonably be cured within such period but can be cured before the Closing Date determined under Section 1.9, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date determined under Section 1.9.
10.3 Survival . The termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Sections 5.1(a) (Confidentiality), 11.1 (Expenses) and Article 9 (Survival; Indemnification) shall survive any termination of this Agreement.
10.4 Specific Performance . Each party hereto agrees and acknowledges that the other party would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated by monetary damages alone. Accordingly, in the event of failure or threatened failure by either party to comply with the terms of this Agreement, the other party shall be entitled to an injunction (without posting bond or other security) restraining such failure or threatened failure and, subject to obtaining any necessary FCC consent, to enforcement of this Agreement by a decree of specific performance requiring compliance with this Agreement.
ARTICLE 11: MISCELLANEOUS
11.1 Expenses . Each party 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, except as otherwise set forth expressly herein (including, without limitation, pursuant to Section 5.9). All governmental fees and charges applicable to any requests for Governmental Consents under this Agreement shall be shared equally by the parties, except for filing fees related to the Divesture Applications which shall be paid by Cumulus,
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transfer taxes with respect to the Cumulus Stations, which shall be paid by Cumulus, and transfer taxes with respect to the Townsquare Stations, which shall be paid by Townsquare. The costs of any Phase I’s or surveys commissioned or obtained by Townsquare pursuant to this Agreement shall be paid by Townsquare and any Phase I’s or surveys commissioned or obtained pursuant to this Agreement by Cumulus shall be paid by Cumulus. Each party is responsible for any commission, brokerage fee, advisory fee or other similar payment that arises as a result of any agreement or action of it or any party acting on its behalf in connection with this Agreement or the transactions contemplated hereby.
11.2 Further Assurances . After Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments of conveyance and assumption and take such other actions as may reasonably be requested in order to carry out the provisions of this Agreement and more effectively consummate the transactions contemplated hereby.
11.3 Assignment . Neither party may assign this Agreement without the prior written consent of the other party hereto, except that (a) a party may assign to an affiliate its right to acquire assets under this Agreement upon written notice to (but without need for the consent of) the other party if it does not adversely affect the other party’s like-kind exchange treatment under the Code and (i) any such assignment does not delay processing of the FCC Applications or the Divestiture Applications, issuance of the FCC Consents or Closing, (ii) the assignee delivers to the other party a written assumption of this Agreement, (iii) the assignor shall remain liable for all of its obligations hereunder, and (iv) the assignor shall be solely responsible for any third party consents necessary in connection therewith (none of which are a condition to Closing), and (b) Townsquare and Cumulus may each collaterally assign its rights and remedies hereunder to any bank, financial institution or other lender that has loaned funds or otherwise extended credit to it or any of its affiliates but only to the extent such assignment is in compliance with the requirements of the Communications Act and the FCC Rules. The terms of this Agreement shall bind and inure to the benefit of the parties’ respective successors and any permitted assigns, and no assignment shall relieve any party of any obligation or liability under this Agreement.
11.4 Notices . Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or confirmed facsimile transmission, confirmed transmission by electronic mail or confirmed delivery by a nationally recognized overnight courier service, and shall be addressed as follows (or to such other address as any party may request by written notice):
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Attention: Todd A. Finger | |
Facsimile: (212) 547-5444 | |
Email: tfinger@mwe.com |
11.5 Waivers . No waiver of compliance with any provision 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 such waiver is sought. The rights and remedies of the parties are cumulative and not alternative and may be exercised concurrently or separately. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege.
11.6 Entire Agreement; Amendments . This Agreement (including the Exhibits, Appendices and Schedules hereto) constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and
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understandings with respect to the subject matter hereof, except any confidentiality agreement among the parties, which shall remain in full force and effect. No party makes any representation or warranty with respect to the transactions contemplated by this Agreement except as expressly set forth in this Agreement. Without limiting the generality of the foregoing, neither party makes any representation or warranty to the other with respect to any projections, budgets or other estimates of revenues, expenses or results of operations, or, except as expressly set forth in Article 2 or Article 3, as applicable, any other financial or other information made available to the other party. This Agreement may only be amended by a document executed by the parties.
11.7 Severability . If any court or governmental authority holds any provision in this Agreement invalid, illegal or unenforceable under any applicable law, then, so long as no party is deprived of the benefits of this Agreement in any material respect, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.
11.8 No Beneficiaries . Nothing in this Agreement expressed or implied is intended or shall be construed to give any rights to any person or entity other than the parties hereto and their successors and permitted assigns.
11.9 Governing Law . The construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the choice of law provisions thereof. Except as provided in Section 1.7(d), the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any state or federal court located in the State of Delaware, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party to the address in Section 11.4 shall be deemed effective service of process on such party.
11.10 WAIVER OF JURY TRIAL . THE PARTIES EACH IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION IN CONNECTION WITH THIS AGREEMENT, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL.
11.11 Neutral Construction . The parties agree that this Agreement was negotiated at
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arms-length and that the final terms hereof are the product of the parties’ negotiations. This Agreement shall be deemed to have been jointly and equally drafted by Townsquare and Cumulus, and the provisions hereof should not be construed against a party on the grounds that the party drafted or was more responsible for drafting the provision. For purposes of this Agreement, a business day means any day other than (i) Saturday or Sunday, (ii) any other day on which banks in New York, New York, are permitted or required to be closed, (iii) any US federal holiday or (iv) for the purposes of Section 1.9 only, November 28, 2013 through November 29, 2013, December 20, 2013 through January 6, 2014, July 3, 2014 through July 4,
2014 and August 15, 2014 through September 2, 2014.
11.12 Counterparts . This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which together will constitute one and the same agreement. A telecopy, PDF or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties by facsimile, e-mail or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.
11.13 Financing Sources . Notwithstanding anything in this Agreement to the contrary, each of the parties on behalf of itself and each of its affiliates hereby: (a) agrees that any claim, action, suit, legal proceeding, investigation or arbitration (each, an “ Action ”), whether in law or in equity, whether in contract or in tort or otherwise, involving the Financing Sources, arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of any federal or state court in the Borough of Manhattan, New York, New York, and any appellate court thereof and each party irrevocably submits itself and its property with respect to any such Action to the exclusive jurisdiction of such court, (b) agrees that any such Action shall be governed by the Laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), (c) agrees not to bring or support or permit any of its affiliates to bring or support any Action, including any action, cause of action, claim, cross-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Sources in any way arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder in any forum other than any federal or state court in the Borough of Manhattan, New York, New York, (d) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such Action in any such court, (e) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable Law trial by jury in any Action brought against the Financing Sources in any way arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing, the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (f) agrees that none of the Financing Sources will have any liability to Cumulus or any of its affiliates relating to or arising out of this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or
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the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder and that it shall not and shall not permit any of its affiliates or any of their respective officers, directors, or employees to seek any action for specific performance against any of the Financing Sources relating to or in any way arising out of this Agreement, the Financing, the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, and (g) agrees that the Financing Sources are express third party beneficiaries of, and may enforce, any of the provisions in this Section 11.13 (and such provisions shall not be amended without the prior written consent of the Lenders). Notwithstanding anything contained herein to the contrary, nothing in this Section 11.13 shall in any way affect any party's or any of their respective affiliates' rights and remedies under any binding agreement to which a Financing Source is a party. “ Financing Sources ” means the Lenders, any person who signs a joinder to the Financing Letters and any person that provides, or in the future enters into any Financing Agreements with Townsquare or any of its affiliates to provide, any of the Financing (or any Alternative Financing), any of such person’s affiliates and any of such person’s or any of its affiliates’ respective current, former or future officers, directors, employees, agents, representatives, stockholders, limited partners, managers, members or partners.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE TO ASSET EXCHANGE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
TOWNSQUARE | ||
Town squa re Radio, LLC | ||
By: | /s/ Alex Berkett | |
Name: Alex Berkett | ||
Title: Executive Vice President |
CUMULUS MEDIA HOLDINGS, INC. | |
CUMULUS BROADCASTING LLC | |
CUMULUS LICENSING LLC |
By : | ||
Name: Richard S. Denning | ||
Title: Senior Vice Pre siden t , Secretary and General Counse l |
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SIGNATURE PAGE TO ASSET EXCHANGE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
TOWNSQUARE | ||
Town squa re Radio, LLC | ||
By: | ||
Name: Alex Berkett | ||
Title: Executive Vice President |
CUMULUS MEDIA HOLDINGS, INC. | |
CUMULUS BROADCASTING LLC | |
CUMULUS LICENSING LLC |
By : | /s/ Richard S. Denning | |
Name: Richard S. Denning | ||
Title: Senior Vice Pre siden t , Secretary and General Counse l |
[Signature Page to the Asset Purchase and Exchange Agreement]
Exhibit A
SOFTWARE LICENSE AGREEMENT
See attached.
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Exhibit 2.3
Execution Version
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this “ Agreement ”) is made as of August 30, 2013 among Townsquare Radio, LLC (“ Townsquare ”) and Cumulus Media Holdings Inc. (“ Cumulus Parent ”), Cumulus Broadcasting LLC (“ Cumulus Broadcasting ”), Cumulus Licensing LLC (“ Cumulus Licensing ”), Citadel Broadcasting Company (“ Citadel Broadcasting ”) and Radio License Holding CBC, LLC (“ Radio License ”) (“ Cumulus Purchasers ”) (Cumulus Parent and Cumulus Purchasers collectively, “ Cumulus ”).
Recitals
A. Cumulus, owns and operates the radio broadcast stations set forth opposite its name on Exhibit A attached hereto (each, a “ Station ” and collectively the “ Stations ”) pursuant to certain authorizations issued by the Federal Communications Commission (the “ FCC ”).
B. Townsquare desires to purchase the Station Assets (as defined below) from Cumulus, and Cumulus desires to sell the Station Assets to Townsquare, subject to and in accordance with the terms hereof.
Agreement
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:
ARTICLE 1: PURCHASE OF ASSETS AND CASH CONSIDERATION
1.1 Station Assets . On the terms and subject to the conditions hereof, at Closing (defined below), except as set forth in Sections 1.2 and 1.3 , Cumulus shall assign, transfer, convey and deliver to Townsquare, and Townsquare shall acquire from Cumulus, all right, title and interest of Cumulus in and to all assets, properties, rights and interests of Cumulus, real and personal, tangible and intangible, that are used or held for use exclusively in the operation of the Stations (the “ Station Assets ”), including, without limitation, the following:
(a) all licenses, construction permits and other authorizations issued by the FCC with respect to the Stations (the “ FCC Licenses ”) described on Schedule 3.4(a) , including any renewals or modifications thereof between the date hereof and Closing, along with assignable applications pending before the FCC with respect to the renewal or modification of the FCC Licenses or for any new FCC authorizations for the Stations, and all other permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities held by or in respect of the Stations that are (i) necessary to or otherwise used in the operation of the Stations or (ii) required as a result of the activities of Stations;
(b) all equipment, transmitters, antennas, cables, towers, vehicles, furniture, fixtures, spare parts, office materials and supplies, inventory and other tangible personal property of every kind and description that are used or held for use in the operation of the Stations, including, without limitation, those listed on Schedule 3.6 , except for any retirements or
dispositions thereof made between the date hereof and Closing in the ordinary course of business (the “ Tangible Personal Property ”);
(c) all real property used or held for use in the operation of the Stations (including any appurtenant easements and improvements located thereon), including, without limitation, those listed on Schedule 3.7 (the “ Real Property ”);
(d) all agreements for the sale of advertising time on the Stations entered into in the ordinary course of business, and all other contracts, agreements and leases entered into in the ordinary course of the Stations’ business, (including those associated with any live events to the extent solely related to the markets of the Stations (whether or not ongoing) developed, organized, sponsored or planned by the Stations (collectively “ Live Events ”), such as sponsorship agreements, talent agreements, ticketing and other vendor agreements, merchandising agreements, etc.), including, without limitation, those listed on Schedule 3.7 and Schedule 3.8(a) , together with all contracts, agreements and leases made between the date hereof and Closing in accordance with Article 4, but excluding (i) the Excluded Station Contracts (defined below) and (ii) any such agreements, contracts and leases which are Shared Contracts (defined below), which shall be governed by Section 1.3 hereof (collectively, the “ Station Contracts ”);
(e) all rights in and to the Stations’ call letters; the trademarks (including logos), trade names, and service marks associated with the Stations, together with the goodwill connected with the use of such names and marks and symbolized thereby including, without limitation, all rights of the Stations in and to names, marks, logos, and other identifiers associated with any Live Events; internet domain names and leases for domain names used in the operation of the Stations (including those used for any Live Events); the exclusive right to the use of HTML content located and publicly accessible from such domain names; the “visitor” email database for such sites and other “visitor” personal information collected by such sites; emails and other personal information collected from visitors and attendants at any Live Events; franchises; copyrights; programs and programming material and their titles; jingles; slogans; and other intangible properties which are used or held for use in the operation of the Stations (including those used for any Live Events), including, without limitation, those listed on Schedule 3.10 , together with registrations of and applications to register the foregoing in any jurisdiction, including any extension, modification or renewal of any such registration or application (the “ Intangible Property ”);
(f) all rights in and to all the files, documents, records, and books of account (originals to the extent existing, or copies thereof) to the extent relating primarily to the operation of the Stations, including the Stations’ local public files, programming information and studies, engineering data, advertising studies, email and personal information databases, marketing and demographic data, sales correspondence, lists of advertisers, lists of exhibitors and vendors for any Live Events, credit and sales reports (including ticket buying reports and history for any Live Events), and logs, filings with the FCC, copies of all written Station Contracts, copies of paid invoices for the prior 12 months, copies of those Cumulus databases and data links that relate solely to the Stations, and logs, but excluding records relating to Excluded Assets (defined below);
(g) all prepaid expenses and deposits (and rights arising therefrom or related
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thereto) with respect to the Stations held by third parties in Cumulus’s name paid by Cumulus;
(h) any and all rights and claims of Cumulus, whether mature, contingent or otherwise, against third parties with respect to the Stations and the Station Assets, to the extent attributable to any period after the Effective Time (defined below), including, without limitation, all assignable rights under manufacturers’ and vendors’ warranties; and
(i) all accounts receivable and any other rights to payment of cash consideration for goods or services sold or provided prior to the Effective Time or otherwise arising during or attributable to any period prior to the Effective Time from the operation of the Stations.
The Station Assets shall be transferred to Townsquare free and clear of liens, claims and encumbrances (“ Liens ”), except for (A) Assumed Obligations (defined below), (B) Liens for taxes not yet due and payable, (C) Liens that will be released at or prior to Closing, (D) mechanics’, workmen’s, repairmen’s warehouseman’s, carrier’s or other like Liens arising or incurred in the ordinary course of business or by operation of law if the underlying obligations are not delinquent, and (E) with respect to the Real Property, such other liens, imperfections in title, charges, easements, rights of way, zoning, subdivision, building and land use restrictions, Environmental Laws and other restrictions and exceptions that do not in any material respect detract from operation of the Stations in the ordinary course of the business of the Stations (collectively, “ Permitted Liens ”). Notwithstanding the foregoing or anything to the contrary contained elsewhere in this Agreement (including, without limitation, Section 5.9) , Permitted Liens shall not include, and Cumulus will at the Closing cause the release, removal or discharge of, monetary obligations such as mortgages, mechanics’ and materialmen’s liens, judgment liens and fines for the violation of municipal ordinances, orders or requirements issued in connection with the Real Property prior to the Closing Date.
The conveyances described in Section 1.1 shall be made by the transferors and to the transferees listed on Appendix I hereto.
1.2 Excluded Assets . Notwithstanding anything to the contrary contained herein, the Station Assets shall not include the following assets or any rights, title and interest therein (the “ Excluded Assets ”):
(a) all cash and cash equivalents, including, without limitation, certificates of deposit, commercial paper, treasury bills, marketable securities, money market accounts and all such similar accounts or investments;
(b) all tangible and intangible personal property retired in the ordinary course of business or disposed of between the date of this Agreement and Closing in accordance with Article 4 ;
(c) all contracts that are terminated or expire prior to Closing and all contracts to which Cumulus is a party that are listed on Schedule 1.2(c) (the “ Excluded Station Contracts ”);
(d) all trade names not exclusive to the operation of the Stations, as applicable, the respective corporate names of the parties and their respective affiliates
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(including, without limitation, the name “Cumulus” and “Citadel”), charter documents, and books and records relating to organization, existence or ownership, duplicate copies of records, and all records not relating to the operation of the Stations, as applicable;
(e) all contracts of insurance, all coverages and proceeds thereunder and all rights in connection therewith, including, without limitation, rights arising from any refunds due with respect to insurance premium payments to the extent related to such insurance policies; provided , that, to the extent of any proceeds which would cover any damages or losses which are required to be repaired and/or remediated pursuant to Sections 5.4 or 5.5 , the proceeds therefrom shall be used exclusively to repair and/or remediate any such damages or losses;
(f) all pension, profit sharing plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any;
(g) any non-transferable shrink-wrapped computer software and any other non-transferable computer licenses that are not material to the operation of the Stations, as applicable;
(h) files, documents, records, and books of account that relate to multiple stations (other than solely the Stations) or other business units (other than solely the business of the Stations);
(i) computers and other similar assets and any operating systems and related assets that are used in the operation of multiple stations (other than solely the Stations) or other business units (other than solely the business of the Stations);
(j) the Cumulus assets specifically listed on Schedule 1.2(j) ;
(k) Cumulus’ beneficial interest in the trusts for WBCK(AM) in Battle Creek, Michigan;
(l) all rights and claims of Cumulus to the extent related solely to the Retained Obligations (defined below).
For the avoidance of doubt, with respect to any marks or similar intangible property used in the operation of multiple stations, the Station Assets, include only the right to use such items in the manner used by Cumulus at the applicable Station on a basis exclusive in the market, but non-exclusive in that no right is granted with respect to other markets (some of which may overlap), and such right (i) is limited to the extent of Cumulus’s transferable rights, (ii) may not be assigned by Townsquare except to a transferee of the applicable Station who assumes Townsquare’s obligations in respect thereof (and any such assignment shall not relieve Townsquare of any obligation or liability), (iii) may be used by Townsquare only in a manner that does not diminish the quality of such items, and only without violating law or any third party rights (and Townsquare shall be solely responsible for such use and the related services), and (iv) shall terminate for noncompliance or non-use, but otherwise shall be coterminous with Cumulus’s rights. Notwithstanding the foregoing, in no event shall this paragraph relate to the names “Cumulus” or “Citadel” (or any rights with respect thereto). At Closing, the parties shall enter into a separate software license agreement that provides rights to certain Cumulus software in the form attached hereto as Exhibit B (the “ Software License Agreement ”).
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1.3 Shared Contracts .
(a) Some contracts, agreements and leases relating to the Stations, may be used in the operation of multiple stations or other business units (each, a “ Shared Contract ”). Schedule 1.3(a) sets forth all Shared Contracts relating to the Stations and that are material with respect to the applicable market. Except as provided by Schedule 1.2(c) , as applicable, at the Closing, the rights and obligations under Shared Contracts shall be equitably allocated among stations and such other business units in a manner reasonably determined by the parties in accordance with the following equitable allocation principles:
(i) any allocation expressly set forth in the Shared Contract shall control;
(ii) if none, then any allocation previously made by Cumulus in the ordinary course of Station operations shall control;
(iii) if none, then the quantifiable proportionate benefit to be received by the parties after Closing shall control; and
(iv) if not quantifiable, then reasonable accommodation shall control.
(b) With respect to each such Shared Contract, (i) the parties shall cooperate with each other and each contract counterparty in such allocation, (ii) only the allocated portion of each such Shared Contract is included in the contracts to be assigned and assumed under this Agreement (without need for further action), and (iii) the parties shall use their commercially reasonable efforts to ensure that such allocation shall occur by termination of the Shared Contract and execution of new contracts between each contract counterparty and Cumulus (but only if such contract is on terms at least as favorable than the existing contract), but shall include the allocated portion of such contracts will not include any group discounts or similar benefits specific to a party or its affiliates. Completion of documentation of any such allocation is not a condition to Closing; provided , however , that with respect to each such Shared Contract which is not allocated at Closing pursuant to subsection (iii) of this Section 1.3(b) , the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which acquiring party shall receive the allocable benefits thereunder from and after Closing, and to the extent of the allocable benefits received, Townsquare shall pay and perform Cumulus’s obligations arising thereunder from and after Closing in accordance with its terms, until new documentation effecting the allocation described in this Section 1.3 is executed and delivered. With respect to each Shared Contract, each party shall be responsible for all costs associated with the portion allocated to such party, and shall indemnify and hold harmless the other party for any losses associated with the performance of such party for the portion allocated to such party.
(c) In the event that the terms of any Shared Contract prohibits the allocation contemplated by this Section 1.3 , the parties shall use commercially reasonable efforts to provide the benefits and obligations of the portion of the Shared Contract that would have been allocated to a party hereunder but for any such prohibition.
(d) Notwithstanding the foregoing, in no event shall a Shared Contract relate
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to any employees of Cumulus, or the names “Cumulus” and “Citadel” (or any other rights with respect thereto).
1.4 Assumed Obligations . On the Closing Date, Townsquare shall assume and be obligated for, and shall agree to pay, perform and discharge in accordance with their terms, the following obligations of Cumulus (except to the extent such obligations and liabilities are Retained Obligations (as defined below) or are Excluded Assets) arising during, or attributable to, any period of time on or after the Closing Date:
(a) All liabilities under the Station Contracts and, to the extent allocated among the Stations in accordance with Section 1.3 , the Shared Contracts;
(b) The other non-employment liabilities of Cumulus to the extent Townsquare receives a credit therefor or otherwise assumes such liabilities under Section 1.6 ;
(c) The specific liabilities listed on Schedule 1.4 ; and
(d) All accounts payable relating to or arising under the Station Assets that are outstanding as of the Closing Date to the extent such liabilities are included in the calculation of the Net AR Adjustment Amount (as defined below) under Section 1.6 or Townsquare otherwise assumes such liabilities under Section 1.6 .
All of the foregoing to be assumed by Townsquare hereunder are referred to herein as the “ Assumed Obligations .” Townsquare does not assume, and will not be deemed by the execution and delivery of this Agreement or the consummation of the transactions contemplated hereby to have assumed, any other liabilities or obligations of Cumulus (the “ Retained Obligations ”), including, any liability for borrowed money, any liability under a mortgage or notices of violation, municipal ordinances, orders or requirements issued in connection with the Real Property prior to the Closing Date, any liability for any employees of Cumulus (other than related to the employment of any such individuals by Townsquare from and after the Closing) and any taxes of Cumulus (other than as specifically contemplated by Sections 1.6 or solely related to the Station Assets arising during and attributable to any period of time on or after the Closing Date).
1.5 Cash Consideration . In consideration of Cumulus’ performance of this Agreement, the sale, assignment, transfer, conveyance, setting over, and delivery of the Station Assets to Townsquare, Townsquare shall pay Cumulus the sum of (x) $228,968,580.68 subject to the adjustments described in Sections 1.6 and 5.16 below, minus (y) an amount equal to fifty percent (50%) of the commitment fees paid or payable by Townsquare in connection with and as set forth in the Financing Letters (as defined below), not to exceed in the aggregate One Million Sixty Two Thousand Five Hundred Dollars ($1,062,500) (the “ Fee Reduction ”) (the “ Cash Consideration ”). Townsquare shall pay the Cash Consideration to the Cumulus entities in proportion to the values of the respective Station Assets purchased, all as determined under Section 1.7 On the Closing Date, Townsquare will pay to Cumulus by wire transfer of immediately available funds to a bank designated by Cumulus the Cash Consideration, and the determination of the Cash Consideration paid by each Townsquare entity shall be made according to this Section 1.5 , taking into account, as applicable, the provisions of Sections 1.6 and Article 9 .
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1.6 Prorations and Adjustments .
(a) Except with respect to those items governed by Section 1.6(c) , all prepaid and deferred income and expenses arising from the operation of the Stations shall be prorated between Townsquare and Cumulus in accordance with generally accepted accounting principles, consistently applied (“ GAAP ”), as of 12:01 a.m. local time in each market on the day of Closing (the “ Effective Time ”). Such prorations shall include, without limitation, any proration required by Section 5.7 , all FCC regulatory fees, ad valorem, real estate and other property taxes (except transfer taxes as provided by Section 11.1 ), music and other license fees, utility expenses, rent and other amounts under contracts and similar prepaid and deferred items. Cumulus shall receive a credit for deposits and prepaid expenses (other than for items which are governed by Section 1.6(c)) . Sales commissions related to the sale of advertisements broadcast prior to Closing shall be the responsibility of Cumulus, and sales commissions related to the sale of advertisements broadcast after Closing shall be the responsibility of Townsquare. Solely for illustrative purposes, Schedule 1.6(a) sets forth a calculation of the net amount of all prorations and adjustments pursuant to this Section 1.6 with respect to the Stations, including, without limitation, a calculation of the Net AR Adjustment Amount (as defined below) as of June 30, 2013.
(b) With respect to trade, barter or similar agreements for the sale of time for goods or services (“ Barter ”) assumed by Townsquare, if at Closing the Stations have an aggregate negative or positive Barter balance (i.e., the amount by which the value of air time to be provided by such stations after the Closing exceeds, or conversely, is less than, the fair market value of corresponding goods and services), there shall be an adjustment therefor in favor of the applicable party. In determining Barter balances, the value of air time shall be based upon the rates of Stations as of the date hereof, and the corresponding goods and services shall include those to be received by the applicable stations after the Closing. Notwithstanding anything herein to the contrary, in no event shall Townsquare, assume any Barter obligations of the stations acquired by Townsquare in excess of (i) $200,000 in the aggregate per market or (ii) $2,800,000 in the aggregate for all markets, in each case for which the goods or services provided by a third party in exchange for on-air time has been provided to Cumulus prior to Closing.
(c) No later than five (5) business days prior to the Closing Date, Cumulus shall provide to Townsquare a statement (including reasonable detail and supporting documentation) setting forth a reasonable and good faith estimate of its calculation of the net amount of all prorations and adjustments pursuant to this Section 1.6 with respect to the Stations, including, without limitation, its calculation of the Net AR Adjustment Amount as of the Effective Date. The Cash Consideration payable at Closing shall be adjusted by the net amount of such estimated adjustments. For purposes hereof, “ Net AR Adjustment Amount ” means an amount equal to (A) the sum of (i) the accounts receivable of the Stations as of the Effective Time multiplied by (ii) the acquisition price of such accounts receivables as determined by the age of such accounts receivables as of the Effective Time as set forth on Schedule 1.6(c) , less (B) the sum of all accounts payable of the Stations as of the Effective Time which remain outstanding as of such time, in each case as calculated pursuant to this Section 1.6(c) or (d), as appropriate.
(d) As soon as reasonably practicable, and in any event within sixty (60)
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calendar days after the Closing Date, Townsquare shall deliver to Cumulus a written statement (including reasonable detail and supporting documentation) setting forth its calculation of the actual net amount of all prorations and adjustments pursuant to this Section 1.6 with respect to the Stations, including, without limitation, its calculation of the final Net AR Adjustment Amount. Following Cumulus’s receipt of such statement, Townsquare shall permit Cumulus and its auditors to have access during normal business hours and upon advance written notice to the books, records and other information and documents pertaining to or used in connection with preparation of such statements, including working papers of its accountants, and access to employees of Townsquare reasonably necessary for Cumulus to respond to the calculation of the final Net AR Adjustment Amount and Townsquare will otherwise cooperate with and assist Cumulus as may be reasonably necessary to carry out the purposes of this Section. Within thirty (30) calendar days of receipt of such statement, Cumulus shall deliver any objections to Townsquare that it may have to the calculation of the prorations and adjustments ( provided , that the failure of Cumulus to deliver such notice within such time period shall be deemed to be acceptance of the statement of Townsquare by Cumulus). To the extent of any such objections, the parties shall negotiate in good faith to resolve their disputes promptly and mutually agree on the final prorations and adjustments. In the event the parties are unable to resolve any such dispute within thirty (30) calendar days of written notice of the dispute, the parties shall engage a mutually agreeable accountant or other third party (whose fees and expenses shall be equally shared), who shall resolve such dispute and whose determination shall be final and binding on the parties.
(e) The final adjustment amount due to Townsquare or Cumulus, as determined pursuant to Section 1.6(e) , shall be paid promptly by check or wire transfer from the party owning the final amount made payable to the party to whom the payment is due. Any adjustment pursuant to this Section 1.6 shall be deemed to be an adjustment to the Cash Consideration for all purposes.
1.7 Allocation . Within one hundred twenty (120) days after Closing, Townsquare shall deliver to Cumulus a schedule (the “ Allocation Schedule ”) allocating the Purchase Price and the Assumed Liabilities (plus other relevant items) among the Station Assets in accordance with the requirements of Section 1060 of the Internal Revenue Code of 1986, as amended (the “ Code ”). If Cumulus notifies Townsquare in writing within thirty (30) days of delivery of the Allocation Schedule that Cumulus objects to one or more items reflected in the Allocation Schedule, Cumulus and Townsquare shall negotiate in good faith to resolve such dispute; provided , however , that if Cumulus and Townsquare are unable to resolve any such dispute within fifteen (15) days thereof, Townsquare and Cumulus will engage a mutually agreeable appraiser (with the fees and expenses thereof to be equally shared), who resolve such dispute and whose allocation shall be final and binding on the parties. Townsquare and Cumulus shall file its federal income tax returns and its other tax returns in accordance with the Allocation Schedule (as finally determined pursuant to this Section 1.7 ).
1.8 Closing . The consummation of the sale and purchase of the Station Assets provided for in this Agreement (the “ Closing ”) shall take place on the twenty-fifth (25 th ) business day after the date of the last to occur of the date on which the FCC shall have provided public notice of the issuance of the FCC Consents (defined below), the issuance of the HSR Clearance (defined below), or on such other date (after such governmental consents and approvals have been issued) as Cumulus and Townsquare may agree, subject to Section 5.9 and
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the satisfaction or waiver of the conditions set forth in Articles 6 and 7 below; provided that, notwithstanding anything in this Section to the contrary, the parties shall endeavor to cause the Closing to occur on the last day of a month. The date on which the Closing is to occur is referred to herein as the “ Closing Date .”
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1.9 Governmental Consents .
(a) Not later than ten (10) business days after the date of this Agreement, (i) Cumulus and Townsquare shall file applications with the FCC (each an “ FCC Application ” and collectively the “ FCC Applications ”) requesting FCC consent to the assignment of the FCC Licenses to Townsquare, and (ii) Townsquare shall file applications with the FCC which propose the assignment of the FCC licenses set forth on Schedule 1.9(a) to third parties or to a divestiture trustee (or take other such actions as Townsquare, in its sole discretion, deems appropriate) that would, upon consummation, enable Townsquare to be in compliance with 47 C.F.R. §73.3555(a) and the Notes thereto (collectively, “the Local Radio Ownership Rule ”) as of the Closing (each such application, a “ Divestiture Application ,” and collectively the “ Divestiture Applications ”). Any actions by the FCC (including any actions duly taken by the FCC’s staff pursuant to delegated authority) granting consent to any FCC Application or any Divestiture Application are referred to herein individually as the “ FCC Consent ” and collectively as the “ FCC Consents .” Cumulus and Townsquare shall diligently prosecute the FCC Applications and Townsquare shall diligently prosecute the Divestiture Applications. Both parties shall promptly respond to any requests by the FCC for reasonable amendments of the FCC Applications, and Townsquare shall do so with respect to the Divestiture Applications. Both parties shall oppose any petitions to deny or informal objections filed against the FCC Applications (and oppose any petition for reconsideration or application for review seeking reversal or rescission of the FCC Consents for the FCC Applications) and Townsquare shall do so with respect to the Divestiture Applications. Both parties shall otherwise use their commercially reasonable efforts to obtain the FCC Consents as soon as possible; provided , however , that neither Cumulus nor Townsquare shall have any obligation to (i) participate in any evidentiary hearing before the FCC on any of the FCC Applications or any of the Divestiture Applications or (ii) seek reconsideration or review or otherwise appeal a decision of the FCC to deny or dismiss any of the FCC Applications or any of the Divestiture Applications. Cumulus or Townsquare, as the case may be, shall notify as soon as reasonably practicable the other party in the event it becomes aware of any facts, actions, communications or occurrences that might directly or indirectly impede the parties’ ability to secure FCC Consents for any of the FCC Applications or any of the Divestiture Applications. Neither Cumulus nor Townsquare shall take any action that it knows or should know would materially delay or materially impede the receipt of the FCC Consent for any FCC Application or any Divestiture Application.
(b) As soon as reasonably practicable after the date of this Agreement, Cumulus and Townsquare shall make any required filings with the Federal Trade Commission (“ FTC ”) and the Antitrust Division of the United States Department of Justice (“ DOJ ”) pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “ HSR Act ”) with respect to the transactions contemplated hereby (including a request for early termination of the waiting period thereunder), and shall thereafter promptly respond to all requests received from such agencies for additional information or documentation. Expiration or termination of any applicable waiting period under the HSR Act is referred to herein as “ HSR Clearance .”
(c) Unless prohibited by law or government regulation, Cumulus and Townsquare shall keep the other informed of any material communications (including any meeting, conference or telephone call) concerning the FCC Applications and the Divestiture Applications and will promptly provide each other with copies of all correspondence to or from any governmental authorities with respect to this Agreement or the transactions contemplated
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hereby (including material correspondence, whether in electronic or documentary form, but excepting those documents containing proprietary information), and a summary of any oral communications to or from any governmental authority with respect to this Agreement or the transactions contemplated hereby (which may be by email). Cumulus and Townsquare shall furnish each other with such information and assistance as the other may reasonably request in connection with their preparation of any governmental filing hereunder. Cumulus and Townsquare shall consult and cooperate with each other in the preparation of such filings, and shall promptly inform the other party of any material communication to or from any governmental authority regarding the transactions contemplated by this Agreement. Cumulus and Townsquare shall review and discuss in advance, and consider in good faith, the views of the other party in connection with any proposed written or material oral communication with any governmental authority. Neither Cumulus nor Townsquare shall participate in any meeting with any governmental authority unless it first consults with the other party in advance, and to the extent permitted by the governmental authority, gives that party the opportunity to be present thereat. Neither Cumulus nor Townsquare shall agree to any voluntary extension of any statutory deadline or waiting period or to any voluntary delay of the consummation of the transactions contemplated by this Agreement at the behest of any governmental authority without the prior written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed). The FCC Consents and the HSR Clearance are referred to herein collectively as the “ Governmental Consents .”
(d) Schedule 3.4(a) sets forth license renewal applications (each a “ Renewal Application ”) that are pending before the FCC or are required to be filed with the FCC on or before the Outside Date (as defined in Section 10.1(d) ), with respect to certain of the Stations (each, a “ Renewal Station ”). In order to avoid a disruption or delay in the processing of the FCC Applications, the parties will use commercially reasonable efforts to promptly prosecute and resolve any issues with respect to the pending Renewal Applications. The parties will promptly advise each other of any communications from the FCC with respect to the pending Renewal Applications. If before Closing any Renewal Applications are required to be filed under the rules, regulations and published policies of the FCC (collectively, the “ FCC Rules ”) before the Outside Date, the FCC Applications will include a request that the FCC apply its policy permitting license assignments and transfers in transactions involving multiple markets to proceed, notwithstanding the pendency of one or more license renewal applications, if the buyer agrees to assume any responsibilities, risks and liabilities associated with the pending Renewal Application(s). Townsquare shall make such representations and undertakings as necessary or appropriate to invoke such policy, including an agreement by Townsquare to assume the position of Cumulus with respect to any Renewal Applications that remain pending when the FCC Consents are issued and to thereby assume the risks relating to such Renewal Applications; provided , that Townsquare shall be entitled to reimbursement or indemnification from Cumulus for any forfeitures, fines, or other sanctions which the FCC imposes on Townsquare after Closing with respect to such Renewal Application(s) (including non-renewal of a Station’s license) in conjunction with or with respect to such Renewal Application that is not covered by an agreement identified in subsection (e) of this section; and provided further , that such reimbursement or indemnification shall be made within thirty (30) days after a request therefor is received by Cumulus.
(e) To the extent reasonably necessary to facilitate a grant of the FCC Applications and the Divestiture Applications, Cumulus will enter into any agreements
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requested by the FCC, including (i) tolling agreements to extend the statute of limitations for the FCC to determine or impose a forfeiture penalty against a Station in connection with any pending complaints, investigations, letters of inquiry, or other proceedings, including, but not limited to complaints that such Station aired programming that contained obscene, indecent or profane material; (ii) escrow agreements to place into escrow certain amounts to cover any potential monetary forfeiture against Cumulus with respect to the Stations for violations of the FCC Rules; (iii) agreements regarding assignment for Cumulus to guarantee the obligations of the licensees of the Stations with respect to any potential monetary forfeiture imposed by the FCC after consummation of the transactions contemplated hereby with respect to the Stations for violations of the FCC Rules and (iv) any other agreement with the FCC to enable the FCC to assess potential monetary forfeiture against Cumulus with respect to the Stations for violations of the FCC Rules (collectively, the “ FCC Agreements ”). The parties will consult in good faith with each other prior to entering into the FCC Agreements.
(f) Notwithstanding anything to the contrary in this Agreement, Townsquare and Cumulus agree that to the extent the satisfaction of any requirement or condition sought or imposed by the FCC, FTC or DOJ, relating in any way to this Agreement or the other transactions contemplated herein (“ Government Conditions ”) would require undertakings to divest or hold separate any of Townsquare’s existing assets, properties or businesses or any of the Station Assets to be acquired by Townsquare hereunder, then in such event the parties shall work together in good faith to eliminate such Government Conditions. If the parties are unable to eliminate such Government Conditions, in lieu of undertaking such divestitures either Cumulus or Townsquare may elect to exclude all of the Stations in the market(s) subject to such Government Condition from the transactions contemplated hereby. A party shall make any election to exclude any Station because of such Government Conditions within thirty (30) days after receipt of notice of such Government Conditions. A party’s failure to make an election within that 30-day period shall constitute a waiver of its right to exclude the Station(s) from the transactions contemplated hereby. Any excluded Stations shall be deemed to be included within the Cumulus Excluded Assets and the amount of Cash Consideration shall be reduced in accordance with Schedule 1.9(f) . For the avoidance of doubt, other than as expressly contemplated in this Section 1.9 , Townsquare shall have no obligation under this Agreement to divest or hold separate any of Townsquare’s existing assets, properties or businesses in connection with any Government Conditions.
ARTICLE 2: TOWNSQUARE REPRESENTATIONS AND WARRANTIES
Townsquare hereby makes the following representations and warranties to Cumulus:
2.1 Organization . Townsquare is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization. Townsquare has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Townsquare pursuant hereto (collectively, the “ Townsquare Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
2.2 Authorization . The execution, delivery and performance of this Agreement and the Townsquare Ancillary Agreements by Townsquare have been duly authorized and approved by all necessary action of Townsquare and do not require any further authorization or consent of
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Townsquare. This Agreement is, and each Townsquare Ancillary Agreement when made by Townsquare and the other parties thereto will be, a legal, valid and binding agreement of Townsquare enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
2.3 No Conflicts . Except as set forth on Schedule 2.3 and except for the Governmental Consents, the execution, delivery and performance by Townsquare of this Agreement and the Townsquare Ancillary Agreements and the consummation by Townsquare of any of the transactions contemplated hereby does not conflict with any organizational documents of Townsquare, any contract or agreement to which Townsquare is a party or by which it is bound, or any law, judgment, order, or decree to which Townsquare is subject, require the consent or approval of, or a filing by Townsquare with, any governmental or regulatory authority or any third party, or result in the creation of any Lien.
2.4 Qualification . Subject to the grant of the Divestiture Applications, Townsquare is legally, financially and otherwise qualified to be the licensee of, acquire, own and operate the Stations under the Communications Act of 1934, as amended (the “ Communications Act ”) and the FCC Rules. Except as set forth on Schedule 2.4 and subject to the grant of the Divestiture Applications, to Townsquare’s knowledge, there are no facts that would, under existing law and the FCC Rules in effect as of the date hereof, disqualify Townsquare as an assignee of the FCC Licenses or as the owner and operator of the Stations. Neither the FCC Applications nor the Divestiture Applications will include a request by Townsquare for a waiver of any provision of the Communications Act or the FCC Rules.
2.5 Financial Resources . Townsquare has delivered to Cumulus true, correct and complete copies, as of the date of this Agreement, of (i) a commitment letter in effect as of the date hereof by and among Townsquare, Townsquare Holdings, LLC (“ Holdings ”) and the incremental lenders party thereto (the “ Term Loan Commitment Letter ”), (ii) a commitment letter in effect as of the date hereof by and among Townsquare, Holdings and the bridge lead arrangers party thereto (the “ Bridge Commitment Letter ”) and (iii) a commitment letter in effect as of the date hereof by and among Townsquare Media, LLC and the initial purchasers thereto (the “ Senior Notes Commitment Letter ”, and together with the Term Loan Commitment Letter and the Bridge Commitment Letter, the “ Financing Letters ”) pursuant to which each of the financial institutions party thereto (the “ Lenders ”) have committed to provide, subject to the terms and conditions set forth in each respective Financing Letter, financing in the amounts set forth in each respective Financing Letter (collectively, the “ Financing ”). As and when needed, Townsquare will have the funds sufficient to consummate the transactions contemplated by this Agreement on the terms set forth herein and to pay all related fees and expenses of Townsquare, including payment of all amounts under Section 1.5 of this Agreement. As of the date of this Agreement, the Financing Letters have not been amended or modified and the respective commitments contained in the same have not been withdrawn or rescinded in any respect (other than any reduction or termination, in each case, in accordance with the express terms of the Financing Letters as in effect on the date hereof). As of the date of this Agreement, the Financing Letters in the form(s) so delivered, are in full force and effect and are legal, valid and binding obligations of Townsquare and, to the knowledge of Townsquare, the other parties
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thereto, except as enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally or by general principles of equity. Townsquare has fully paid, or is paying, substantially contemporaneously with the execution and delivery of this Agreement, any and all commitment fees or other fees in connection with the Financing Letters that are payable on or prior to the date of this Agreement. As of the date of this Agreement, Townsquare has no reason to believe that it will be unable to satisfy any term or condition to funding contained in the Financing Letters. As of the date of this Agreement, to the knowledge of Townsquare, no event has occurred which, with or without notice, lapse of time or both, would constitute a default or breach on the part of Townsquare under any term or condition of the Financing Letters; provided that Townsquare is not making any representations in this Section regarding the effect of the inaccuracy of any of the representations and warranties in this Article 2. Except as set forth in the Financing Letters, there are no (i) conditions precedent to the respective obligation of the investors or Lenders to fund the full aggregate investment amount set forth in the Financing Letters; or (ii) agreements, side letters or arrangements relating to such Financing to which Townsquare or any of its affiliates is a party that would materially and adversely affect the availability of the Financing.
2.6 No Broker . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Townsquare.
ARTICLE 3: CUMULUS REPRESENTATIONS AND WARRANTIES
Cumulus hereby makes the following representations and warranties to Townsquare:
3.1 Organization . Cumulus is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization, and is qualified to do business in each jurisdiction in which the Station Assets are located. Cumulus has the requisite power and authority to execute, deliver and perform this Agreement and all of the other agreements and instruments to be made by Cumulus pursuant hereto (collectively, the “ Cumulus Ancillary Agreements ”) and to consummate the transactions contemplated hereby.
3.2 Authorization . The execution, delivery and performance of this Agreement and the Cumulus Ancillary Agreements by Cumulus have been duly authorized and approved by all necessary action of Cumulus and do not require any further authorization or consent of Cumulus. This Agreement is, and each Cumulus Ancillary Agreement when made by Cumulus and the other parties thereto will be, a legal, valid and binding agreement of Cumulus enforceable in accordance with its terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors’ rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
3.3 No Conflicts . Except as set forth on Schedule 3.3 and except for the Governmental Consents and consents to assign certain of the Station Contracts, the execution, delivery and performance by Cumulus of this Agreement and the Cumulus Ancillary Agreements and the consummation by Cumulus of any of the transactions contemplated hereby and thereby does not conflict with any organizational documents of Cumulus, any contract or agreement to
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which Cumulus is a party or by which it is bound, or any law, judgment, order, or decree to which Cumulus is subject, require the consent or approval of, or a filing by Cumulus with, any governmental or regulatory authority or any third party, or result in the creation of any Lien other than a Permitted Lien.
3.4 FCC Licenses . Except as set forth on Schedule 3.4 :
(a) Cumulus is the holder of the FCC Licenses described on Schedule 3.4(a) , which are all of the licenses, construction permits and other authorizations issued by the FCC that are required for the present operation of the Stations. The FCC Licenses are in full force and effect, have not been revoked, suspended, canceled, rescinded, terminated or materially adversely modified, have not expired, and are not subject to any conditions except for conditions applicable to broadcast radio licensees generally or as otherwise disclosed on the face of the FCC Licenses, and have been issued for full terms. Except as set forth on Schedule 3.4(a) , no Renewal Application is pending for renewal of any FCC Licenses and Cumulus is not aware of any reason that could reasonably be expected to result in a refusal by the FCC to renew any FCC License for a full term without any conditions (other than those standard to renewals of radio broadcast licenses) in the normal course. There is not pending, or, to Cumulus’ knowledge, threatened, any action by or before the FCC to revoke, suspend, cancel, rescind or materially adversely modify any of the FCC Licenses (other than proceedings applicable to radio broadcast licensees generally). There is not issued or outstanding, or to Cumulus’ knowledge, threatened, by or before the FCC, any order to show cause, notice of violation, notice of apparent liability, or order of forfeiture against the Stations or against Cumulus with respect to the Stations that could result in any such action. There is no order to show cause, notice of violation, notice of apparent liability, notice of forfeiture issued by the FCC against Cumulus (as the licensee of the Stations) or with respect to the FCC Licenses or the Stations that remains unsatisfied. The Stations are operating in compliance in all material respects with the terms of the FCC Licenses, the Communications Act, and the FCC Rules. All material reports and filings required to be filed with the FCC by Cumulus with respect to the Stations during the Stations’ current license terms have been timely filed, and all FCC regulatory fees have been timely paid. All such reports and filings and payments are accurate and complete in all material respects.
(b) The Stations are in compliance in all material respects with the requirements of the FAA with respect to the construction and/or alteration of the Stations’ antenna structures and, where required, FAA “no hazard” determinations for each antenna structure have been obtained and, where required, each antenna structure has been registered with the FCC.
3.5 Taxes . Cumulus has, in respect of the Stations’ business, filed all foreign, federal, state, county and local income, excise, property, sales, use, franchise, payroll and other tax returns, forms and reports which are required to have been filed by it under applicable law, and has paid all taxes in full or discharged (or set aside appropriate amounts for) all taxes which are required to be paid by it under applicable law. There are no pending or, to Cumulus’ knowledge, threatened, investigations or claims against Cumulus for or relating to any liability in respect of taxes related to the Stations’ business. All taxes required to be withheld by Cumulus with respect to the Stations’ business have been withheld and paid (or will be paid) when due to the appropriate governmental authority.
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3.6 Personal Property . Schedule 3.6 contains a list of material items of Tangible Personal Property included in the Station Assets. Except as set forth on Schedule 3.6 , Cumulus has good and marketable title to or, in the case of leased Tangible Personal Property, valid and subsisting leasehold interest in, the Tangible Personal Property free and clear of Liens other than Permitted Liens. Except as set forth on Schedule 3.6 , all material items of Tangible Personal Property are in good operating condition, ordinary wear and tear excepted.
3.7 Real Property . Schedule 3.7 contains a description of the Real Property. The Real Property constitutes all real properties used or occupied by Cumulus in connection with the Stations’ business other than Real Property used or occupied that is immaterial to the Stations’ business. Cumulus has good and marketable fee simple title to the owned Real Property described on Schedule 3.7 (the “ Owned Real Property ”) (if any), free and clear of Liens other than Permitted Liens. With respect to the Real Property, no portion thereof is subject to any pending or, to Cumulus’ knowledge, threatened condemnation proceeding or proceeding by any public authority. The Real Property is sufficient for the operation of the Stations as currently operated, and to the knowledge of Cumulus, no material capital expenditures are required in respect of the Real Property to continue to operate the Stations as currently operated. Except as set forth in Schedule 3.7(a) and except for Permitted Liens, there are no leases, subleases, licenses or other agreements, written or oral, granting to any party or parties the right of use or occupancy of any portion of any parcel of Real Property other than the Real Property Leases. Schedule 3.7(a) includes a description of each lease of Real Property or similar agreement included in the Station Contracts (the “ Real Property Leases ”). Cumulus has valid leasehold interests in the Real Property Leases, free and clear of all Liens other than Permitted Liens. The Real Property is not subject to any suit for condemnation or other taking by any public authority. The Real Property includes access to the Stations’ facilities consistent with past practices.
3.8 Contracts . Schedule 3.8(a) contains a list of all contracts (written or oral) that as of the date hereof used in the operation of, or bind or otherwise restrict in any material respect, the Stations, including, but not limited to, programming agreements, vendor agreement, service contracts, licensing agreements, tower agreements, local marketing agreements and network agreements, but excluding agreements for the sale of advertising time entered into in the ordinary course of business terminable on not more than sixty (60) days notice, barter arrangements and contracts involving payments or receipts of less than $50,000 per annum, except for Real Property Leases listed on Schedule 3.7 hereto (the “ Material Contracts ”). The Real Property Leases and the Material Contracts requiring the consent of a third party to assignment are set forth on Schedule 3.8(b) . Each of the Material Contracts is in effect and is binding upon Cumulus and, to Cumulus’s knowledge, the other parties thereto (subject to bankruptcy, insolvency, reorganization or other similar laws relating to or affecting the enforcement of creditors’ rights generally). Cumulus has performed its obligations under each of the Material Contracts in all material respects, and is not in material default thereunder, and to Cumulus’s knowledge, no other party to any of the Material Contracts is in default thereunder in any material respect. Schedule 3.8(a) lists a summary of barter payables and barter receivables. To the extent of any oral agreement required to be disclosed on Schedule 3.8(a) , a summary of such agreement is set forth on Schedule 3.8(a) . Except as set forth on Schedule 3.8(a) , none of the Material Contracts (i) involve Cumulus and any entity in which any officer, director or shareholder of Cumulus has any interest, (ii) require Cumulus to make any payment upon consummation of the transactions contemplated hereby, or upon any subsequent sale of the Station Assets or (iii) restrict the ability of Cumulus to compete in any jurisdiction.
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3.9 Environmental . Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, to Cumulus’ knowledge, no hazardous or toxic substance or waste regulated under any applicable environmental, health or safety law has been generated, stored, transported or released on, in, from or to or are present on, in or under the Real Property included in the Station Assets. Except as set forth on Schedule 3.9 or in any environmental report delivered by Cumulus to Townsquare prior to the date of this Agreement, (a) Cumulus has complied in all material respects with all environmental, health and safety laws applicable to the Stations, (b) there has been no action, notice or claim pending or, to Cumulus’ knowledge, threatened, against Cumulus that asserts that Cumulus has violated any environmental, health or safety laws applicable to the Real Property and (c) to Cumulus’ knowledge, no conditions with respect to the past or present operations or business of the Stations exist which could reasonably be expected to give rise to any common law or statutory liability in respect of the Stations’ business under any environmental, health or safety law based on any such condition.
3.10 Intangible Property . Schedule 3.10 contains a description of the material Intangible Property included in the Station Assets, including (i) all material patents and patent applications, registered trademarks and trademark applications, registered copyrights and copyright applications and domain names included in the Intangible Property and (ii) all material (A) licenses of Intangible Property to any third party included in the Station Assets, (B) licenses of intellectual property by any third party to Cumulus included in the Station Assets, (C) agreements between Cumulus and any third party relating to the development or use of intellectual property, the development or transmission of data, or the use, modification, framing, linking, advertisement or other practices with respect to Internet web sites of any of the Stations and (D) consents, settlements, decrees, orders, injunctions, judgments or rulings governing the use, validity or enforceability of Intangible Property included in the Station Assets, other than commercially available off-the-shelf computer software licensed pursuant to shrink-wrap or click-wrap licenses that is not material to the operation of the Stations. Except as set forth on Schedule 3.10 , (i) to Cumulus’ knowledge, Cumulus’ use of the Intangible Property does not infringe upon any third party rights in any respect, (ii) no material Intangible Property is the subject of any pending, or, to Cumulus’ knowledge, threatened legal proceedings claiming infringement or unauthorized use, (iii) Cumulus has not received any written notice that its use of any material Intangible Property is unauthorized or infringes upon the rights of any other person, and (iv) to Cumulus’ knowledge, no person is engaging in any activity that infringes upon the Intangible Property in any material respect. Except as set forth on Schedule 3.10 , to Cumulus’ knowledge, Cumulus owns or has the right to use the Intangible Property free and clear of Liens other than Permitted Liens.
3.11 Employees . Except as set forth on Schedule 3.11(a) , (i) Cumulus has complied in all material respects with all labor and employment laws, rules and regulations applicable to the Stations’ business, including, without limitation, those which relate to prices, wages, hours, discrimination in employment, health, safety and welfare, immigration and collective bargaining, (ii) there is no unfair labor practice charge or complaint against Cumulus in respect of the Stations’ business pending or, to Cumulus’ knowledge, threatened before the National Labor Relations Board, any state labor relations board or any court or tribunal, and there is no strike, dispute, request for representation, slowdown or stoppage pending or threatened in respect of the Stations’ business, and (iii) Cumulus is not party to any collective bargaining, union or similar agreement with respect to the employees of Cumulus at the Stations, and to Cumulus’
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knowledge, no union represents or claims to represent or is attempting to organize such employees. Schedule 3.11(b) lists, as of the date hereof, by each Station, the name, current annual salary rate, bonus year to date as of July 31, 2013, classification, accrued vacation, date of employment and position of each employee of such Station. Except as set forth on Schedule 3.11(c) , each employee of the Stations is an employee at-will, and no severance is payable upon the cessation of employment. Except as set forth on Schedule 3.11(d) , no employee of the Stations has been transferred to another Station (excepting any Station) or division or group in the past three months.
3.12 Insurance . Cumulus maintains insurance policies or other arrangements with respect to the Stations and the Station Assets consistent with its practices for other stations, and will maintain such policies or arrangements until the Effective Time. Cumulus has not received notice from any issuer of any such policies of its intention to cancel, terminate or refuse to renew any such insurance policy. Each such insurance policy is in full force and effect, and Cumulus is not in default in any material respect thereunder.
3.13 Compliance with Law . Other than with respect to the FCC Licenses (which are governed by Section 3.4 ) and except as set forth on Schedule 3.13 , (i) Cumulus has complied in all material respects with all laws, rules and regulations applicable to the operation of the Stations or to any of the Station Assets, and all decrees and orders of any court or governmental authority which are applicable to the operation of the Stations or to any of the Station Assets, and (ii) to Cumulus’ knowledge there are no governmental claims or investigations pending or threatened against Cumulus in respect of the Stations except those affecting the industry generally. Except as set forth in Schedule 3.13 , the Stations hold all permits, registrations, licenses, variances, exemptions, orders and approvals of all governmental authorities that are necessary or appropriate to the operation of the Stations or which are required as a result of the activities of Stations, except where the failure to hold any such permits, registrations, licenses, variances, exemptions, orders and approvals would not be material to the operation of any of the Stations.
3.14 Litigation . Other than with respect to the FCC Licenses (which are governed by Section 3.4 ) and except as set forth on Schedule 3.14 , there is no action, suit or proceeding pending or, to Cumulus’ knowledge, threatened against Cumulus before any governmental authority (excluding the FCC) or any court of competent jurisdiction in respect of the Stations that will subject Townsquare to liability or which will affect Cumulus’ ability to perform its obligations under this Agreement. Cumulus is not operating under or subject to any order, writ, injunction or decree relating to the Stations or the Station Assets of any court or governmental authority which would have a material adverse effect on the condition of the Stations or any of the Station Assets or on the ability of Cumulus to enter into this Agreement or consummate the transactions contemplated hereby, other than those of general applicability. Except as set forth on Schedule 3.14 , there were no material litigation matters to which Cumulus was a party in respect of any of the Stations during the three (3) years preceding the date of this Agreement.
3.15 Financial Statements . Cumulus has provided to Townsquare copies of a balance sheet for the Stations as of December 31, 2012 and June 30, 2013 and income statements for the Stations for the year ended December 31, 2011, December 31, 2012 and for the year to date through June 30, 2013 (together with copies of monthly income statements for the Stations during all such periods), each as attached to Schedule 3.15 hereto. Such year-end statements are
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the statements included in the audited consolidated financial statements of Cumulus and its affiliates (but such statements are not separately audited and the year to date statements are not audited). Shared operating expenses and revenue from combined sales are allocated among the Stations and other stations and business units as determined by Cumulus. Such statements may reflect the results of intercompany arrangements that are Cumulus Excluded Assets. Except for the foregoing and except for the absence of footnotes, such statements have been prepared in accordance with GAAP, and in the aggregate present fairly in all material respects the results of operations of the Stations as operated by Cumulus for the respective periods covered thereby.
3.16 No Undisclosed Liabilities . There are no liabilities or obligations of Cumulus with respect to the Stations that will be binding upon Townsquare after the Effective Time other than the Assumed Obligations and other than pursuant to the prorations under Section 1.6 .
3.17 Station Assets . The Station Assets include all properties, assets and rights that are owned or leased by Cumulus and used or held for use in the operation of the Stations in all material respects as currently operated, except for the Excluded Assets.
3.18 Conduct of Business . Except as set forth on Schedule 3.18 , since January 1, 2013, Cumulus has conducted the business of the Stations in the ordinary course of business consistent with past custom and practice in all material respects and there has been no Material Adverse Effect with respect to the Stations. Without limitation of the foregoing and except as described herein or set forth on Schedule 3.18 , since January 1, 2013, Cumulus has not, with respect to the Stations and the Stations’ business:
(a) sold, assigned or transferred any of the Station Assets other than in the ordinary course of business;
(b) conducted cash management customs and practices (including the timing of collection of receivables and payment of payables and other current liabilities) and maintained books and records other than in the ordinary course of business consistent with past custom and practice in all material respects;
(c) made any material change in the customary methods of operations of the Stations, including practices and policies relating to purchasing, marketing, selling and pricing;
(d) sold, assigned, transferred, abandoned or permitted to lapse any licenses or permits which, individually or in the aggregate, are material to the Stations’ business or operations; or
(e) granted any increase, or announced any increase, in the wages, salaries, compensation, bonuses, incentives, pension or other benefits (including, without limitation any Employee Benefit Plan) payable to any employees of the Stations except as required by applicable law or any collective bargaining agreement or other contract, and ordinary increases consistent with the past practices.
For purposes of this Agreement, “ Material Adverse Effect ” means any change, condition, event or circumstance that is or would reasonably expected to have, either individually or in the aggregate with all other changes, conditions, events or circumstances, with or without notice, lapse of time or both, a material adverse effect on (a) the Stations’ business or the Station
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Assets, the business, financial condition or operating results of the Stations, as applicable, on an individual market (and not on a collective) basis, whether or not covered by insurance or other third-party indemnification obligation, or (b) the ability of Cumulus, to comply with and perform its obligations, covenants and agreements herein or in any Cumulus Ancillary Agreement, as applicable; provided , however , that in no event shall any of the following constitute a Material Adverse Effect: any condition, event or circumstance caused by or related to (i) any change or development in the broadcast radio industry which does not have a material disproportionate impact on the Stations, as applicable, (ii) any change or development in the financial, banking, credit, securities or capital markets, or any change in the general, national, international or regional economic or financial conditions, (iii) any change or development in general regulatory, social or political conditions, (iv) any change or development in laws; or (v) any announcement of this Agreement or the pendency of the transactions contemplated hereby.
3.19 Employee Benefits . Schedule 3.19 sets forth each material Employee Benefit Plan which Cumulus or any of its affiliates maintains, sponsors, makes contributions to, has obligated itself to make contributions to, or to pays any benefits to or for the benefit of employees of the Cumulus Stations. Correct and complete copies of such material Employee Benefit Plans have been previously furnished to Townsquare. For purposes of this Agreement: (a) “ Employee Benefit Plan ” means any “Employee Pension Benefit Plan” (as defined in Section 3(2) of ERISA), “Employee Welfare Benefit Plan” (as defined in Section 3(1) of ERISA), “multi-employer plan” (as defined in Section 3(37) of ERISA), plan of deferred compensation, medical plan, life insurance plan, long-term disability plan, dental plan or other plan providing for the welfare of any of such person’s or entity’s employees or former employees or beneficiaries thereof, personnel policy (including vacation time, holiday pay, bonus programs, moving expense reimbursement programs and sick leave), excess benefit plan, bonus or incentive plan (including stock options, restricted stock, stock bonus and deferred bonus plans), salary reduction agreement, change-of-control agreement, employment agreement, consulting agreement or any other benefit, program or contract; and (b) “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.
3.20 No Broker . No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Cumulus.
3.21 Impact Network Revenue . Cumulus represents that it has been the historical practice of the Stations located in the Lansing and Portsmouth markets (the “ Citadel Legacy Stations ”) to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday, to Impact Marketing Network (“ Impact ”) for sale through the network and that the network revenue (net of expenses) from Impact for the twelve-month period ending June 30, 2013 was $320,921.
3.22 Legacy Cumulus Market Network Inventory . Cumulus represents that it has been the historical practice of its Stations on Schedule 3.22 (the “Cumulus Legacy Stations”) to make available fifty six (56) units per week (or one hundred twelve (112) units per week in certain cases), as outlined on Schedule 3.22 , to the Cumulus Media Network (“ CMN ”) for sale through the network.
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ARTICLE 4: COVENANTS
4.1 Cumulus Covenants . Cumulus covenants and agrees that between the date hereof and the time of the Closing, Cumulus shall conduct the business of the Stations in the ordinary course in all material respects. Subject to and without limiting the foregoing, Cumulus shall, with respect to the Stations, (i) continue their advertising and promotional activities; (ii) not shorten or lengthen the payment cycles for any of their payables or receivables; and (iii) use their commercially reasonable efforts to preserve intact the Stations and the business organization (including employees) of the Stations. Without limiting the foregoing, between the date hereof and Closing, except as permitted by this Agreement or with the prior written consent of Townsquare, which shall not be unreasonably withheld, delayed or conditioned, Cumulus shall:
(a) operate the Stations in the ordinary course of business (for avoidance of doubt, any expense reductions made consistent with past practices shall be deemed in the ordinary course of business), consistent with past practice and in all material respects in accordance with the Communications Act, FCC Rules and with all other applicable laws, and government regulations, rules and orders;
(b) not materially adversely modify, and in all material respects maintain in full force and effect, the FCC Licenses;
(c) not make any engineering or technical change which materially reduces the power or coverage of any Station or which requires the consent of or filing with the FCC, except as permitted by FCC Rules for periods of maintenance or as reasonably necessary due to matters outside of Cumulus’ reasonable control;
(d) promptly deliver to Townsquare copies of any reports, applications or other documents filed with the FCC;
(e) promptly notify Townsquare of (i) any Broadcast Interruption, (ii) any inquiry, investigation or proceeding which, to the knowledge of Cumulus, has been initiated by the FCC relating to the Stations and (iii) any petition to deny, informal objection or other objection that has been filed against any Station;
(f) diligently prosecute and use commercially reasonable efforts to obtain approval of any applications pending before the FCC (including the Renewal Applications, if any) and prosecute or timely make and use commercially reasonable efforts to obtain approval of any filings necessary or appropriate in other proceedings before the FCC to preserve or obtain any FCC License for a Station without material adverse modification (including timely submitting and prosecuting and using commercially reasonable efforts to obtain approval of any Renewal Application);
(g) not other than in the ordinary course of business, sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets unless replaced with similar items of substantially equal or greater value and utility (which replacement items shall constitute Station Assets), or create, assume or permit to exist any Liens upon the Station Assets, except for Permitted Liens, and not dissolve, liquidate, merge or consolidate with any other entity;
(h) maintain the Tangible Personal Property and the Real Property in the
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ordinary course of business, subject to Section 5.4 ;
(i) upon reasonable notice, give Townsquare and its officers, employees, agents, accountants, counsel, consultants, Financing Sources (as defined below) and representatives reasonable access during normal business hours to the Station Assets and the offices, facilities, books and records of Cumulus relating to the Stations (including the Cumulus general ledgers and accounting systems) and to those officers, directors, employees (including general managers), agents, accounts and counsel of Cumulus who have knowledge regarding the Stations, and furnish Townsquare and its officers, employees, agents, accountants, counsel, consultants, Financing Sources and representatives with information relating to the Station Assets and the Assumed Obligations that Townsquare may reasonably request, provided that such access rights shall be undertaken consistent with applicable antitrust rules and not be exercised in a manner that interferes with the operation of the Stations;
(j) except in the ordinary course of business and as otherwise required by law, not (i) enter into any employment, labor, or union agreement or plan (or amendments of any such existing agreements or plan) that will be binding upon Townsquare after Closing or (ii) increase the compensation payable to any employee of the Stations, except for such bonuses and other compensation payable by Cumulus in connection with the consummation of the transactions contemplated by this Agreement (if any), which are set forth on Schedule 4.1(j) ; and
(k) not enter into new Station Contracts that will be binding upon Townsquare after Closing or amend or terminate any existing Station Contracts, except for (i) new advertising time sales agreements and other Station Contracts made in the ordinary course of business that are terminable on ninety days’ notice or less without penalty, (ii) other Station Contracts made with Townsquare’s prior consent, and (iii) other Station Contracts that do not require post-Closing payments (terminal value) by Townsquare or Barter of more than $50,000 (in the aggregate for all such new contracts).
For purposes of calculating the amount of said post-Closing payments by Townsquare, if a contract is terminable by giving advance notice, then such amount shall include only the post-Closing amount that would be payable if a termination notice were given at Closing (whether or not such notice is in fact given), but in no event shall such amount be more than the amount payable absent such termination notice.
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ARTICLE 5: OTHER COVENANTS
Cumulus and Townsquare hereby covenant and agree as follows:
5.1 Confidentiality .
(a) An affiliate of Townsquare and an affiliate of Cumulus are parties to that certain letter agreement, dated as of May 24, 2013, as amended (collectively, the “ NDA ”) with respect to the transaction contemplated hereby. To the extent not already a direct party thereto, Cumulus and Townsquare hereby assume the NDA and agree to be bound by the provisions thereof. Without limiting the terms of the NDA, subject to the requirements of applicable law, all non-public information regarding the parties and their business and properties that is disclosed in connection with the negotiation, preparation or performance of this Agreement (including without limitation all financial information) shall be confidential and shall not be disclosed to any other person or entity, except the parties’ representatives and lenders for the purpose of consummating the transaction contemplated by this Agreement.
(b) For a period of three (3) years after the Closing, Cumulus shall, and shall cause its agents, representatives and affiliates to: (i) treat and hold as confidential (and not disclose or provide access to any third party other than its agents, representatives and affiliates) all information relating to advertiser lists, advertising rates, and marketing plans, details of contracts, and all other confidential or proprietary information that are exclusively related to the Station Assets and the Stations’ business, (ii) in the event that Cumulus or any agent, representative, affiliate, employee, officer or director of Cumulus becomes legally compelled to disclose any such information, provide Townsquare with prompt written notice of such requirement so that may seek a protective order or other remedy or waive compliance with this Section 5.1(b) , and (iii) in the event that such protective order or other remedy is not obtained, or such other party waives compliance with this Section 5.1(b) , furnish only that portion of such confidential information which is legally required to be provided and exercise its commercially reasonable efforts to obtain assurances that confidential treatment will be accorded such information; provided , however , that this Section 5.1(b) shall not apply to any information that, at the time of disclosure, is available publicly and was not disclosed by Cumulus in breach of this Agreement; provided , further, that either party (and any employee, representative or other agent of such party) may disclose, without limitation of any kind, the tax treatment and tax structure of the transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that are provided to it relating to such tax treatment and tax structure.
5.2 Announcements . Except as otherwise required by FCC Rules, prior to Closing, no party shall, without the prior written consent of the other party, which shall not be unreasonably withheld, issue any press release or make any other public announcement concerning the transactions contemplated by this Agreement, except to the extent that such party is so obligated by law or judicial process, in which case such party shall give advance notice to the other, and except that the parties shall cooperate to make a mutually agreeable announcement, and except as necessary to enforce rights under or in connection with this Agreement. Notwithstanding the foregoing, the parties acknowledge that this Agreement and the terms hereof will be filed with the FCC Applications and thereby become public. From and after the Closing, no party shall, without the prior written consent of the other party, which shall not
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be unreasonably withheld, issue any press release or make any other public announcement concerning the closing of the transactions contemplated by this Agreement, other than the filing of consummation notices and ownership reports with the FCC.
5.3 Control . Townsquare shall not, directly or indirectly, control, supervise or direct the operation of the Stations prior to Closing. Consistent with the Communications Act and the FCC Rules, control, supervision and direction of the operation of the Stations prior to Closing shall remain the sole responsibility of Cumulus as the holder of the FCC Licenses.
5.4 Risk of Loss . With respect to the Station Assets:
(a) Cumulus shall bear the risk of any loss of or damage to any of its assets at all times until the Effective Time, and Townsquare shall bear the risk of any such loss or damage thereafter.
(b) If prior to Closing a Station is off the air or operating at a power level that results in a material reduction in coverage, or if the regular broadcast transmissions of a Station in the normal and usual manner are otherwise interrupted or discontinued (a “ Broadcast Interruption ”), then Cumulus shall return (or cause the return of) the station to the air and restore (or cause the restoration of) prior coverage as promptly as possible in the ordinary course of business, and shall timely make (or cause the timely making of) any filings for such Broadcast Interruption as may be required under the FCC Rules. Notwithstanding anything herein to the contrary, if prior to Closing there is a Broadcast Interruption in excess of twenty four (24) consecutive hours or for more than seventy-two (72) hours (or, in the event of force majeure, ninety-six (96) hours), whether or not consecutive, during any period of ten (10) consecutive days, then Townsquare may postpone Closing until the date five (5) business days after the Station returns to the air and prior coverage is restored in all material respects, subject to Section 10.1 .
5.5 Environmental .
(a) With respect to any owned real property or ground lease included in the Station Assets, Townsquare may conduct Phase I environmental assessments (each a “ Phase I ”) within sixty (60) days after the date of this Agreement; provided , that such assessments are conducted during normal business hours upon reasonable prior notice (and subject to landlord consent if necessary), but completion of such assessments (or the results thereof) is not a condition to Closing.
(b) If any Phase I or any item set forth on Schedule 3.9 or any environmental report provided by Cumulus to Townsquare prior to the date of this Agreement identifies a condition requiring remediation under applicable environmental law, then:
(i) except as set forth below, Cumulus shall remediate (or cause the remediation of) such condition in all material respects as soon as reasonably practicable, and shall use commercially reasonable efforts to complete such remediation prior to Closing; and
(ii) if such remediation is not completed prior to Closing, then the parties shall proceed to Closing (with Cumulus’ representations and warranties deemed modified to take into account any such condition) and Cumulus shall remediate such item in all material
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respects after Closing (and Townsquare will provide access and any other reasonable assistance requested with respect to such obligation) as soon as practicable.
Notwithstanding the foregoing or anything herein to the contrary, in the event the costs and expenses to remediate any such condition exceeds $300,000 in the aggregate, Cumulus may elect (in its sole discretion) to not remediate such condition by written notice to Townsquare and in such event Townsquare may elect to exclude all of the Stations in the market(s) in which the condition exists from the transactions contemplated hereby by written notice to Cumulus within ten (10) days of receipt of notice from Cumulus and the Closing Date shall be delayed by two (2) business days to accommodate such election. Townsquare’s failure to make an election within such ten (10) day period shall constitute a waiver of its right to exclude the Stations in such market(s) from the transactions contemplated hereby. Any excluded Stations shall be deemed to be included within the Cumulus Excluded Assets and the amount of Cash Consideration shall be reduced in accordance with Schedule 1.9(f) .
5.6 Consents .
(a) The parties shall use commercially reasonable efforts to obtain any third party consents necessary for the assignment of any Station Contract or Real Property Leases (which shall not require any payment to any such third party), but no such consents are conditions to Closing.
(b) To the extent that any Station Contract may not be assigned without the consent of any third party, and such consent is not obtained prior to Closing, this Agreement and any assignment executed pursuant to this Agreement shall not constitute an assignment thereof; provided , however , with respect to each such contract, (i) the parties shall cooperate to the extent feasible in effecting a lawful and commercially reasonable arrangement under which Townsquare shall receive the benefits thereunder from and after Closing, and to the extent of the benefits received, Townsquare shall pay and perform Cumulus’s obligations arising thereunder from and after Closing in accordance with its terms; and (ii) the parties shall cooperate with each other and each contract counterparty and shall use their commercially reasonable efforts to obtain consent to such assignment as soon as practicable following the Closing. In the event the parties are unable to effect a lawful and commercially reasonable arrangement under which Townsquare shall receive the benefits from any Station Contract from and after Closing, then the parties shall proceed to Closing (with Cumulus’s representations and warranties deemed modified to take into account any such condition) and Cumulus shall either (A) defend, indemnify and hold harmless Townsquare to the extent necessary to make Townsquare whole as it relates to any such Station Contract, and from and against any and all Damages related thereto; provided , however, the maximum aggregate liability of Cumulus under this Section with respect to any Station to which any such Station Contract(s) relates shall be an amount equal to seven (7) times broadcast cash flow for the twelve months ended 5/31/13; or (2) exclude all of the Stations in the market(s) in which such Station Contract resides from the transactions contemplated hereby by written notice to Townsquare within two (2) days of the original Closing Date and the Closing Date shall be delayed by two (2) business days to accommodate such election. Any excluded Stations shall be deemed to be included within the Cumulus Excluded Assets and the amount of Cash Consideration shall be reduced in accordance with Schedule 1.9(f) .
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5.7 Employees . With respect to the Stations, as applicable:
(a) Cumulus has provided Townsquare a list showing employee positions and certain compensation information for employees of its stations who are available to Townsquare for hire. Except as set forth on Schedule 5.7(a) , Townsquare may, but is not obligated to, offer post-Closing employment to such employees. Notwithstanding Section 1.4 , with respect to each such employee, within sixty (60) calendar days after the date of this Agreement, Townsquare shall notify Cumulus in writing whether or not it will offer Comparable Employment (defined below) to such employee upon Closing. Notwithstanding Section 1.4 , within thirty (30) calendar days after Closing, Townsquare shall give Cumulus written notice identifying (i) all Transferred Employees (defined below) and (ii) all individuals who were employed by Cumulus prior to Closing who were offered Comparable Employment with Townsquare who did not accept such offers. As used herein, “ Comparable Employment ” means employment with no material reduction in base salary or material change in the amount of scheduled hours, and no requirement to commute more than thirty (30) miles further than the employee’s commute while employed by Cumulus. For the avoidance of doubt, Townsquare may offer employment on such terms and conditions as are consistent with its employment policies and has no obligation to offer Comparable Employment, or to offer employment to an individual, or to maintain the employment of any individual.
(b) At Closing, Cumulus shall pay a pro-rata portion of any bonuses that employees would have earned if such employees were still employed by Townsquare at the end of the relevant period following Closing based on whether as of Closing such employees achieved a pro-rata portion of the goals required to earn such bonuses.
(c) If applicable, Cumulus shall give any notice to any applicable employees required under the Worker Adjustment and Retraining Notification Act (the “ WARN Act ”) or any similar state or local law, and, notwithstanding Section 1.4 , Townsquare shall comply with any applicable requirements thereunder after the Effective Time. If the WARN Act or any such other law is applicable, then Cumulus may by written notice to Townsquare extend the Closing Date to a date within five (5) business days after the expiration of all applicable notice periods.
(d) With respect to employees of the Stations, hired by Townsquare (“ Transferred Employees ”), Cumulus shall be responsible for all compensation and benefits arising prior to the Effective Time (in accordance with Cumulus’s employment terms), and Townsquare shall be responsible for all compensation and benefits arising after the Effective Time (in accordance with Townsquare’s employment terms). Townsquare shall grant credit to each Transferred Employee for any sick leave accrued in the current calendar year (but not any prior calendar year) and any vacation days accrued and unpaid in the current calendar year (but not any prior calendar year unless and to the extent it constitutes an accrued benefit under Cumulus’s policies) that exists as of the Effective Time. Townsquare shall receive an appropriate adjustment as provided by Section 1.6 for any such accrued sick time and vacation that it assumes.
(e) Townsquare shall permit Transferred Employees (and their spouses and dependents) to participate in its “employee welfare benefit plans” (including, without limitation, health insurance plans) and “employee pension benefit plans” (as defined in ERISA) in which similarly situated employees are generally eligible to participate, with coverage effective
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immediately upon Closing (and without exclusion from coverage on account of any pre-existing condition), with service with Cumulus deemed service with Townsquare for purposes of any length of service requirements, waiting periods, vesting periods and differential benefits based on length of service, and with credit under any welfare benefit plan for any deductibles or co- insurance paid for the current plan year under any plan maintained by Cumulus.
(f) Townsquare shall also permit each Transferred Employee who participates in Cumulus’s 401(k) plan to elect to make direct rollovers of their account balances into Townsquare’s 401(k) plan as soon as administratively feasible after Closing, including the direct rollover of any outstanding loan balances such that they will continue to make payments under the terms of such loans under Townsquare’s 401(k) plan, subject to compliance with applicable law and subject to the reasonable requirements of Townsquare’s 401(k) plan.
(g) For the avoidance of doubt, nothing contained in this Section 5.7 shall have any effect on or otherwise impair any rights under, in any respect, any contract in effect on the date hereof between any of the parties or any of their respective affiliates, on the one hand, and any employee, on the other hand. No employee, Transferred Employee, or any other person shall be third party beneficiaries of this Section 5.7 and the parties hereto do not intend to permit any third party claims hereunder. This Agreement shall not be deemed to amend or modify any employee benefit plan sponsored by Townsquare or its affiliates.
5.8 Actions . With respect to the Stations, after Closing, Townsquare shall cooperate with Cumulus in the investigation, defense or prosecution of any action which is pending or threatened against Cumulus or its affiliates, whether or not any party has notified the other of a claim for indemnification with respect to such matter; provided , however , that Cumulus shall reimburse Townsquare for the out-of-pocket costs reasonably incurred by Townsquare as a result of its compliance with this Section 5.8 . Without limiting the generality of the foregoing, Townsquare shall make available its employees to give depositions or testimony and shall preserve and furnish all documentary or other evidence that Cumulus may reasonably request.
5.9 Real Property .
(a) With respect to each parcel of Owned Real Property, Townsquare may obtain, at Townsquare’s expense, current surveys and preliminary title reports in order to obtain customary owner’s title commitments to issue a policy of title insurance containing the standard stipulations and conditions of the most current standard ALTA Form of Owner’s Title Insurance Policy in use in the states in which such real property is located insuring that Townsquare shall receive at Closing indefeasible fee simple title to such real property, free and clear of all Liens, other than a Permitted Lien. Cumulus shall provide Townsquare reasonable assistance in obtaining such title commitments, including, without limitation, providing access to the applicable owned real property to perform such surveys, provided that such surveys are conducted during normal business hours upon reasonable prior notice to Cumulus. Without in any way limiting the parties rights under Article 6 or Article 7 , the parties agree that the Closing is not conditioned upon the completion of any such survey or title report.
(b) If any such title report or survey obtained prior to Closing discloses a
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Lien on the Owned Real Property that is not a Permitted Lien, then:
(i) Townsquare shall so notify Cumulus within twenty (20) days of its receipt of such title report or survey, but in any event prior to Closing; and
(ii) except as set forth below, Cumulus shall remediate such Lien as soon as reasonably practicable in all material respects.
(c) If remediation of all Liens on the Owned Real Property that are not Permitted Liens is not completed prior to Closing, then, subject to Section 5.15(d), the parties shall proceed to Closing (with Cumulus’s representations and warranties deemed modified to take into account any such condition), and Cumulus shall remediate such Lien as soon as reasonably practicable in all material respects and shall defend, indemnify and hold harmless Townsquare to the extent necessary to make Townsquare whole as it relates to such Liens (as if such Liens had not existed as of the Closing), including any costs and expenses (including attorneys' fees and expenses) of remediating such Liens, and from and against any and all Damages related thereto.
(d) Notwithstanding anything to the contrary contained in this Section 5.9 , if any title report or title commitment discloses judgments, bankruptcies or other returns against other persons or entities having names the same as or similar to that of a conveying party, then Cumulus, at the Closing and to the extent applicable, shall deliver to the applicable title company affidavits to the effect that such judgments, bankruptcies or other returns are not against Cumulus in order to induce the title company to omit exceptions with respect to such judgments, bankruptcies or other returns or to insure over the same.
(e) Nothing in this Section 5.9 shall in any way limit the parties' rights under Article 6 and Article 7 .
5.10 Retention of and Access to Books and Records . Cumulus may retain a copy of all data books and records relating to the pre-Closing operations of the Stations. After the Closing, Townsquare shall retain those records delivered to Townsquare by Cumulus for a period of at least three (3) years. Townsquare shall provide Cumulus and its representatives with reasonable access to any such books and records of which Cumulus did not retain a copy, during normal business hours and on reasonable prior written notice to Townsquare. From the date hereof until Closing, Cumulus agrees to make its CFO available to discuss ongoing operations and the status of the businesses of the Stations during normal business hours and on reasonable prior written notice.
5.11 Insurance Policies . Cumulus shall maintain in effect, and pay all premiums with respect to, all of their respective insurance policies (on such terms and with such limits as in effect on the date hereof) on the Stations until the Closing. Upon the occurrence of any event that requires repair, replacement or remediation pursuant to Sections 5.5 or 5.16 , then to the extent such event is covered by any such insurance policy and Cumulus elects not to use available funds other than insurance proceeds to complete such repair, replacement or remediation, Cumulus shall make a claim to the appropriate insurer under such insurance policy, and any and all such insurance proceeds received by Cumulus shall be used exclusively by Cumulus to take such actions as are required by Sections 5.5 or 5.16 .
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5.12 Marks . Townsquare shall not have any right, title, interest, license or any other right whatsoever to use the words “Cumulus” or “Citadel” or any trademarks containing or comprising “Cumulus” or “Citadel” or any trademark confusingly similar thereto or dilutive thereof (collectively, the “ Cumulus Marks ”). From and after the Closing, Townsquare shall (a) cease using Cumulus Marks in any manner, directly or indirectly, except for such uses that cannot be promptly terminated (e.g., signage, e-mail addresses, and as a referral or pointer to the acquired web site), and to cease such limited usage of Cumulus Marks as promptly as possible after the Closing and in any event within sixty (60) days following the Closing Date, (b) within sixty (60) days following the Closing Date, use commercially reasonable efforts to, remove, strike over or otherwise obliterate all Cumulus Marks from all assets and all other materials owned, possessed or used by it, and (c) use commercially reasonable efforts to cause any third parties using or licensing such Cumulus Marks on behalf or with the consent of Townsquare to remove, strike over, or otherwise obliterate all Cumulus Marks from all materials owned, possessed or used by such third parties.
5.13 Cooperation . Each of the parties hereto shall use its respective commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things necessary, proper or advisable and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Agreement and consummate and make effective the transactions contemplated by this Agreement. Cumulus and Townsquare each covenant and agree to take such commercially reasonable actions as may be reasonably requested by a party in order to effect an orderly transition of the Stations. In furtherance thereof, upon request Cumulus shall provide to Townsquare accounting and financial information created or maintained above the market and exclusively related to the Stations, and technical support for the purpose of transitioning web hosting and similar matters.
5.14 Network Revenue . For each of the first four 12-month periods after the Closing, Cumulus will compensate the Citadel Legacy Stations for inventory contribution (the “ Inventory Compensation Amount ”), on a quarterly basis. In exchange, the Citadel Legacy Stations will continue to make available one (1) minute per hour, between 6 A.M. and 12 A.M., Monday through Sunday, and an additional one (1) minute per hour between 5 A.M. and 6 A.M. Monday through Friday to Impact for sale through the network. For the first 12-month period following Closing (the “ Base Year ”), the Inventory Compensation Amount shall be $210,476 . At the end of the Base Year, and at the end of each of the two 12-month periods following the Base Year, to the extent a decrease in ratings, AQH contribution of the Citadel Legacy Stations to Impact or overall decline in the network market has occurred during the prior 12-month period, the Inventory Compensation Amount for the immediately following year will be adjusted to reflect such changes. The Inventory Compensation Amount as so adjusted will serve as the base from which any adjustments for subsequent 12 - month periods shall be made. Townsquare shall have the option to cancel the aforementioned arrangement with Cumulus to Impact provided that such termination may only begin on the day preceding the first day of a broadcast calendar quarter and Townsquare shall have provided prior written notice to Cumulus at least 45 days prior to the beginning of such broadcast calendar quarter. Upon such cancellation, Cumulus shall have no further obligations under this Section 5.14 .
5.15 Financing Efforts .
(a) Subject to the terms and conditions of this Agreement, Townsquare will
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use its reasonable best efforts to obtain the proceeds of the Financing on the terms and conditions described in the Financing Letters, and will not permit any amendment or modification to be made to, or any waiver of any provision or remedy under, the Financing Letters if such amendment, modification or waiver would reasonably be expected to (A) materially delay or prevent the Closing, (B) make the funding of the Financing (or satisfaction of the conditions to obtaining the Financing) materially less likely to occur, (C) materially adversely impact the ability of Townsquare to enforce its rights against the other parties to the Financing Letters or the definitive agreements with respect thereto or (D) materially adversely impact the ability of Townsquare to consummate the transactions contemplated under this Agreement or the likelihood of consummation of the same, except in each case, with the prior written consent of Cumulus; provided, however, that Townsquare may, without the prior written consent of Cumulus, (i) amend the Financing Letters to add lenders, lead arrangers, bookrunners, syndication agents or similar entities who had not executed the Financing Letters as of the date of this Agreement or (ii) otherwise amend or replace the Financing Letters so long as (x) such amendments do not impose terms or conditions that would reasonably be expected to materially delay or prevent the Closing and (y) with respect to replacements, the replacement debt commitments otherwise satisfy the terms and conditions of an Alternative Financing set forth below. Townsquare will use its reasonable best efforts to (I) maintain in effect the Financing Letters (including any definitive agreements entered into in connection with any such Financing Letters), (II) satisfy (or obtain a waiver of) on a timely basis all conditions in the Financing Letters applicable to (and within the control of) Townsquare to obtaining the Financing, (III) negotiate and enter into definitive agreements with respect to the Financing on terms and conditions contained in the Financing Letters (including any “market flex” provisions applicable thereto) or consistent in all material respects with the Financing Letters (such definitive agreements, together with the Financing Letters, the “Financing Agreements”), and (IV) cause each Lender and equity investors to fund its respective committed portion of the Financing (including by suit or other appropriate proceeding to cause the Lenders and the equity investors under the Financing Agreements to fund its respective committed portion of the Financing if all conditions to funding the Financing have been satisfied or waived, provided that Townsquare shall control all aspects of such proceeding, including litigation strategy and selection of counsel). Townsquare will keep Cumulus reasonably informed on a timely basis of the status of Townsquare’s efforts to arrange the Financing and to satisfy the conditions thereof, including, upon Cumulus’ reasonable request, advising and updating Cumulus, in a reasonable level of detail, with respect to status and proposed closing date for the Financing. Upon becoming aware of, or receiving written notice with respect to, any portion of the amount of the Financing necessary to consummate the transactions hereunder becoming unavailable on the material terms and conditions contemplated by the applicable Financing Agreements, (i) Townsquare will promptly notify Cumulus and (ii) Townsquare will use its reasonable best efforts to arrange and obtain alternative financing from alternative sources in an amount sufficient, when taken together with any remaining Financing and any other sources available to Townsquare, to consummate the transactions hereunder with terms and conditions not materially less favorable, taken as a whole, to Townsquare and Cumulus than the terms and conditions set forth in the applicable Financing Agreements (“ Alternative Financing ”) as promptly as practicable following the occurrence of such event but no later than thirty (30) days before Closing.
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(b) Cumulus will use its commercially reasonable efforts to provide, and to cause its officers, employees and advisors (including its independent auditors) to provide, to Townsquare all such reasonable assistance and cooperation reasonably requested by Townsquare that is customary and reasonably necessary to assist Townsquare in the arrangement, obtainment and syndication of any Financing contemplated by the Financing Letters or any Alternative Financing. Such cooperation shall include, without limitation, furnishing Townsquare as promptly as reasonably practicable following the delivery of a written request therefor to Cumulus by Townsquare any and all financial information regarding the Stations that is (i) requested by the counterparties to the Financing Letters pursuant to the terms thereof, (ii) reasonably required in connection with the execution of the Financing and/or (iii) necessary to permit Townsquare to prepare the pro forma balance sheets, financial statements and/or offering or other similar documents and/or deliver financial information, in each case, in reference to the Stations as required pursuant to conditions 7, 8 and 9 of the Bridge Commitment Letter and conditions 7 and 8 of the Senior Notes Commitment Letter. Cumulus shall use commercially reasonable efforts to cause its independent auditors to reasonably cooperate with Townsquare (subject to Townsquare’s reimbursement obligation as set forth in this Section 5.15(b), to the extent applicable) to the extent contemplated by the Financing Letters, including commercially reasonable efforts to cause its independent auditors to provide Townsquare with audited financial statements for the Stations for the most recently completed fiscal year ended at least 90 days before the Closing Date and customary “comfort letters” and an “agreed upon procedures letter” in respect thereof, in each case as contemplated by the relevant condition in the Bridge Commitment Letter. Townsquare shall reimburse Cumulus for any third-party costs incurred solely as a result of such assistance and cooperation, including the costs of its independent auditors but excluding attorneys’ fees incurred in connection with review of the Financing Agreements and the other matters contemplated by this Agreement; provided that any such third party fees shall be approved in writing in advance by Townsquare and; provided, further, that Cumulus’s assistance and cooperation, which requires the incurrence of such third party fees not approved by Townsquare, shall be limited to what Cumulus can provide without incurring such third party fees or other related expenses. Cumulus will deliver to Townsquare any payoff letters, lien releases (including UCC-3 termination statements) and instruments of termination or discharge as reasonably required in the Financing Letters.
(c) Townsquare will indemnify and hold harmless Cumulus and its affiliates and their respective representatives from and against any and all losses, damages, claims, costs or expenses suffered or incurred by any of them in connection with any claim, litigation, investigation, action, suit or proceeding brought against Cumulus and its affiliates relating to the arrangement of the Financing (including any action taken in accordance with this Section 5.15 ) and any information used in connection therewith, except with respect to (i) any information relating to Cumulus provided in writing by Cumulus; or (ii) any fraud or intentional misrepresentation or willful misconduct by such persons. Notwithstanding the foregoing, Cumulus hereby acknowledges payment of the Fee Reduction as described in Section 1.5.
(d) Townsquare acknowledges and agrees that the obtaining of Financing, or any Alternative Financing, is not a condition to Closing and reaffirm its obligation to consummate the transactions contemplated by this Agreement irrespective and independently of the availability of the Financing or any Alternative Financing, subject to fulfillment or waiver of the conditions set forth in Article 6 ; provided, however, if the release of any Liens (other than the Permitted Liens, and Liens created by Townsquare) on the Stations or the termination of any
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financing statement of record with respect to the Stations at or prior to Closing is a condition for obtaining of Financing, or any Alternative Financing, then such release of Liens and termination of financing statement shall be a condition to Closing notwithstanding Section 5.9 or anything else herein to the contrary.
5.16 Pre-Closing Inspections and Fixes . Prior to the Closing, Townsquare shall have a right to conduct, at its own expense, inspections of the material items of Tangible Personal Property to determine whether such material items of Tangible Personal Property are in the condition described in Section 3.6 , above. Station access for such assessments shall be provided by Cumulus during normal business hours and upon reasonable advance written notice provided to Cumulus by Townsquare. If during such inspections, Townsquare identifies any (i) such assets are not in the condition described in Section 3.6 , above, and the current condition of such assets has a material impact on the operation of the Station(s) to which such assets relate; or (ii) Stations that are not operating in compliance in all material respects with the terms of the FCC Licenses, the Communications Act, and the FCC Rules (the “ Assets to be Repaired ”), then Townsquare shall notify Cumulus in writing thereof prior to the Closing and provide a written statement setting forth the Assets to be Repaired. Cumulus may provide a written objection to the Assets to be Repaired. Cumulus will use commercially reasonable efforts to repair or replace any mutually agreed upon Assets to be Repaired or, alternatively, the Parties may mutually agree to an adjustment to reduce the Cash Consideration in an amount equal to reasonable costs and expenses necessary to repair and correct such Assets to be Repaired.
5.17 Michigan Talk Radio . Each of the parties acknowledges and agrees that Cumulus owns and operates a talk radio network (the “ Network ”) out of its Lansing, Michigan market, the assets of which are part of the Station Assets covered under and sold pursuant to this Agreement. The Network receives locally produced programming and content from stations that are not subject to this Agreement. In connection with the sale of the Network to Townsquare as part of this Agreement, the parties will enter into the following agreements concurrently with Closing (i) a Content Programming Agreement, in substantially the form attached hereto as Exhibit C (“ Programming Agreement ”), pursuant to which Cumulus will agree to continue to make Network content available to the Cumulus Stations currently receiving such content for a period of two years following the Closing; and (ii) a License Agreement, in substantially the form attached hereto as Exhibit D (“ License Agreement ”), for each of the Cumulus Stations currently broadcasting Network content pursuant to which Townsquare authorizes Cumulus and such Station to continue to affiliate content on those Cumulus Stations currently broadcasting Network content. In addition, each party will use its respective commercially efforts to require each of the stations that is currently affiliated with the Network but not owned and operated by such party to enter into affiliation agreements or such other agreements as may be necessary and required to formalize the relationship of such separately-owned stations with the Network, and each party hereto acknowledges that any such contracts signed by Cumulus shall constitute a Station Contract to be assigned to and assumed by Townsquare at Closing; provided that Cumulus shall not enter into any such contract without the prior written consent of Townsquare (such consent not to be unreasonably withheld, conditioned or delayed). Each of the parties hereto shall use its respective commercially reasonable efforts to take or cause to be taken all appropriate action, do or cause to be done all things necessary, proper or advisable and execute and deliver such documents and other papers, as may be required to carry out the provisions of this Section. Cumulus and Townsquare each covenant and agree to take such commercially reasonable actions as may be reasonably requested by a party in order to effect an orderly
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transition of the Network.
5.18 Legacy Cumulus Market Network Inventory . From Closing until December 31, 2014, Townsquare will make available inventory to CMN as it relates to the Cumulus Legacy Stations in a manner consistent with historical practice as outlined in Schedule 3.22 . From January 1, 2015 to December 31, 2015, Townsquare will make available inventory to CMN as it relates to the Cumulus Legacy Stations in the amount of 28 minutes per week, or half of the inventory obligation as outlined in Schedule 3.22 with the same pro rata distribution across dayparts and weekparts. Cumulus shall have the option to cancel the aforementioned arrangement on ninety (90) days’ prior written notice to Townsquare.
5.19 Remnant Revenue . Cumulus has historically generated revenue at the corporate level, such revenue then allocated out to local markets, by engaging with remnant advertisers on behalf of local markets (“ Remnant Revenue ”). Cumulus will provide Townsquare with transitional services as it relates to generating Remnant Revenue, including but not limited to securing advertising relationships, communicating inventory parameters, invoicing and collections for a period of up to 90 days. Any Remnant Revenue generated related to the Stations will be remitted to Townsquare.
5.20 Collection of Station Funds . For a period of six (6) months after the Closing, Cumulus shall cause its bank to forward all payments received at its lockbox accounts relating to the Stations to such Townsquare lockbox accounts designated in writing by Townsquare and, following such six-month period, Cumulus shall cause its bank to return all payments received at its lockbox accounts to the sender of such payment. If at any time after the Closing Date, Cumulus otherwise receives any funds properly belonging to the Stations, Cumulus will promptly so advise Townsquare, will segregate and hold such funds in trust for the benefit of Townsquare and will promptly deliver such funds to an account or accounts designated in writing by Townsquare.
ARTICLE 6: TOWNSQUARE CLOSING CONDITIONS
The obligation of Townsquare to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Townsquare):
6.1 Representations and Covenants .
(a) Each of the representations and warranties of Cumulus made in this Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Cumulus made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement; provided that this condition shall be deemed satisfied unless all inaccuracies in such representations and warranties in the aggregate constitute a Material Adverse Effect on any market or markets at the Closing Date. To the extent the inaccuracies in such representations and warranties in the aggregate constitute a Material Adverse Effect on any market or markets at the Closing Date, then in such event either Cumulus or Townsquare may elect to exclude all of the Stations in the
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market(s) subject to such Material Adverse Effect from the transactions contemplated hereby and the Closing Date shall be delayed by two (2) business days to accommodate such election. A party shall make any election to exclude any such Stations within two (2) days of the original Closing Date. A party’s failure to make an election within such two (2) day period shall constitute a waiver of its right to exclude the Station(s) from the transactions contemplated hereby. Any excluded Stations shall be deemed to be included within the Cumulus Excluded Assets and the amount of Cash Consideration shall be reduced in accordance with Schedule 1.9(f) .
(b) The covenants and agreements to be complied with and performed by Cumulus at or prior to Closing shall have been complied with or performed in all material respects.
(c) Townsquare shall have received a certificate dated as of the Closing Date from Cumulus executed by an authorized officer of Cumulus (i) to the effect that the conditions set forth in Sections 6.1(a) and (b) shall have been satisfied and (ii) setting forth all events, circumstances, facts and occurrences resulting in the representations and warranties of Cumulus made in this Agreement which are not qualified by materiality or words of similar import not being true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Cumulus made in this Agreement which are qualified by materiality or words of similar import not being true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement.
6.2 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
6.3 FCC Consents . The FCC shall have issued the FCC Consents.
6.4 Hart Scott Rodino . The HSR Clearance shall have been obtained.
6.5 Deliveries . Cumulus shall have complied with its obligations set forth in Section 8.2 .
6.6 Audit . If the Closing occurs on or before March 31, 2014, the audited financial statements for the Stations referenced in Section 5.15(b) hereto for the 2012 fiscal year shall not adversely deviate by more than 10% or more with respect to the calculation of revenue or broadcast cash flow from the relevant, same period unaudited financial statements of the Stations delivered Townsquare pursuant to Section 3.15 (other than with respect to corporate overhead allocations to the extent those allocations are removed and additional costs are not added (other than immaterial costs as reasonably determined by the Financing Sources party to the Bridge Commitment Letter).
ARTICLE 7: CUMULUS CLOSING CONDITIONS
The obligation of Cumulus to consummate the Closing hereunder is subject to satisfaction, at or prior to Closing, of each of the following conditions (unless waived in writing by Cumulus):
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7.1 Representations and Covenants .
(a) Each of the representations and warranties of Townsquare made in this Agreement which are not qualified by materiality or words of similar import shall be true and correct in all material respects as of the Closing Date, and each of the representations and warranties of Townsquare made in this Agreement which are qualified by materiality or words of similar import shall be true and correct in all respects as of the Closing Date, in each case except for changes expressly permitted or contemplated by the terms of this Agreement.
(b) The covenants and agreements to be complied with and performed by Townsquare at or prior to Closing shall have been complied with or performed in all material respects.
(c) Cumulus shall have received a certificate dated as of the Closing Date from Townsquare executed by an authorized officer of Townsquare to the effect that the conditions set forth in Sections 7.1(a) and ( b) have been satisfied.
7.2 Cash Consideration . Townsquare shall have delivered to Cumulus the Cash Consideration.
7.3 Proceedings . Neither Townsquare nor Cumulus shall be subject to any court or governmental order or injunction restraining or prohibiting the consummation of the transactions contemplated hereby.
7.4 FCC Consents . The FCC shall have issued the FCC Consents.
7.5 Hart Scott Rodino . The HSR Clearance shall have been obtained.
7.6 Deliveries . Townsquare shall have complied with its obligations set forth in Section 8.1 .
ARTICLE 8: CLOSING DELIVERIES
8.1 Townsquare Deliveries . At Closing, Townsquare shall deliver or cause to be delivered to Cumulus:
(i) the Cash Consideration as provided in Section 1.5 ;
(ii) good standing certificates for Townsquare, dated not more than five (5) business days prior to the Closing Date, issued by the Secretary of State of Townsquare’s jurisdiction of formation;
(iii) a certificate executed by Townsquare’s secretary or assistant secretary confirming that the officers executing this Agreement and the Townsquare Ancillary Agreements are authorized to execute such documents;
(iv) the certificate described in Section 7.1(c) ;
(v) an assignment and assumption of contracts with respect to the
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Station Contracts;
(vi) an assignment and assumption of leases with respect to the Real Property Leases;
(vii) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(viii) the Software License Agreement, the Programming Agreement and the License Agreement; and
(ix) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement.
8.2 Cumulus Deliveries . At Closing, Cumulus shall deliver or cause to be delivered to Townsquare:
(i) good standing certificates for Cumulus, dated not more than five (5) business days prior to the Closing Date, issued by the Secretary of State of Cumulus’ jurisdiction of formation;
(ii) a certificate executed by Cumulus’ secretary or assistant secretary certifying confirming that the officers executing this Agreement and the Cumulus Ancillary Agreements are authorized to execute such documents;
(iii) the certificate described in Section 6.1(c) ;
(iv) an assignment and assumption agreement with respect to the FCC Licenses;
(v) an assignment and assumption of contracts with respect to the Station Contracts;
(vi) an assignment and assumption of leases with respect to the Real Property Leases;
(vii) special warranty deeds conveying the Owned Real Property from Cumulus to Townsquare, together with customary owner affidavits reasonably requested of Cumulus by any title company retained by Townsquare;
(viii) an affidavit of non-foreign status of Cumulus that complies with Section 1445 of the Code;
(ix) an assignment of marks assigning the Stations’ registered marks listed on Schedule 3.10 (if any) from Cumulus to Townsquare;
(x) domain name transfers with respect to the Stations’ domain names listed on Schedule 3.10 following customary procedures of the domain name administrator;
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(xi) endorsed vehicle titles conveying the vehicles included in the Tangible Personal Property (if any) from Cumulus to Townsquare;
(xii) a bill of sale conveying the other Station Assets from Cumulus to Townsquare;
(xiii) the Software License Agreement, the Programming Agreement and the License Agreement;
(xiv) any new agreements required by the Schedules to this Agreement or otherwise required by this Agreement (if any);
(xv) any consents obtained by Cumulus;
(xvi) any other instruments of conveyance or assumption that may be reasonably necessary to consummate the exchange of assets as set forth in this Agreement; and
(xvii) any payoff letters, lien releases and instruments of termination or discharge as provided in Sections 5.15(b) and 5.15(d) .
ARTICLE 9: SURVIVAL; INDEMNIFICATION
9.1 Survival . The representations and warranties in this Agreement shall survive Closing for a period of eighteen (18) months from the Closing Date, whereupon they shall expire and be of no further force or effect, except (i) those under Section 3.5 (Taxes), and those under Sections 3.6 , 3.7 and 3.10 each solely with respect to title (collectively, the “ SOL Representations ”), all of which shall survive until the expiration of any applicable statute of limitations, (ii) those under Section 3.9 (Environmental) shall survive for twenty-four (24) months from the Closing Date, (iii) those under Sections 2.1 and 3.1 (Organization), 2.2 and 3.2 (Authorization), and 2.5 , 2.6 and 3.20 (No Broker) (collectively, the “ Fundamental Representations ”) shall survive indefinitely and (iv) that if within such applicable period the indemnified party gives the indemnifying party written notice of a claim for breach thereof describing in reasonable detail the nature and basis of such claim, then such claim shall survive until the resolution of such claim. The covenants and agreements in this Agreement shall survive Closing until performed. This Article 9 shall survive indefinitely in accordance with its terms.
9.2 Indemnification .
(a) Subject to Section 9.2(b) , from and after Closing, Townsquare shall defend, indemnify and hold harmless Cumulus from and against any and all losses, costs, damages, liabilities and expenses, including reasonable attorneys’ fees and expenses (“ Damages ”) incurred by Cumulus arising out of or resulting from:
(i) any breach by Townsquare of its representations and warranties made under this Agreement; or
(ii) any material default by Townsquare of any covenant or agreement made under this Agreement; or
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(iii) the business or operation of the Stations after the Effective Time; or
(iv) the Assumed Obligations.
(b) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Townsquare shall have no liability to Cumulus under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) until Cumulus’ aggregate Damages exceed $2,371,333, after which such threshold amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Townsquare under Section 9.2(a)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Townsquare) shall be an amount equal to $35,569,996;
(c) Subject to Section 9.2(d) , from and after Closing, Cumulus shall defend, indemnify and hold harmless Townsquare from and against any and all Damages incurred by Townsquare arising out of or resulting from:
(i) any breach by Cumulus of its representations and warranties made under this Agreement; or
(ii) any material default by Cumulus of any covenant or agreement made under this Agreement; or
(iii) the Retained Obligations; or
(iv) the business or operation of the Stations before the Effective Time, except for Assumed Obligations; or
(v) any events, circumstances, facts and occurrences set forth in the certificate delivered pursuant to Section 6.1(c)(ii) .
(d) Notwithstanding the foregoing or anything else herein to the contrary, after Closing, (i) Cumulus shall have no liability to Townsquare under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) until Townsquare’s aggregate Damages exceed $2,371,333, after which such threshold amount shall be included in, not excluded from, any calculation of Damages, and (ii) the maximum aggregate liability of Cumulus under Section 9.2(c)(i) (other than with respect to breaches of SOL Representations or Fundamental Representations of Cumulus) shall be an amount equal to $35,569,996.
9.3 Procedures .
(a) The indemnified party shall give prompt written notice to the indemnifying party of any demand, suit, claim or assertion of liability by third parties that is subject to indemnification hereunder (a “ Claim ”), but a failure to give such notice or delaying such notice shall not affect the indemnified party’s rights or the indemnifying party’s obligations except to the extent the indemnifying party’s ability to remedy, contest, defend or settle with respect to such Claim is thereby prejudiced, and provided that such notice is given
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within the time period described in Section 9.1 .
(b) The indemnifying party shall have the right to undertake the defense or opposition to such Claim with counsel selected by it. In the event that the indemnifying party does not undertake such defense or opposition in a timely manner, the indemnified party may undertake the defense, opposition, compromise or settlement of such Claim with counsel selected by it at the indemnifying party’s cost (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding:
(i) the indemnified party shall have the right, at its own cost and expense, to participate in the defense, opposition, compromise or settlement of the Claim;
(ii) the indemnifying party shall not, without the indemnified party’s written consent, settle or compromise any Claim or consent to entry of any judgment which does not include the giving by the claimant to the indemnified party of a release from all liability in respect of such Claim;
(iii) in the event that the indemnifying party undertakes defense of or opposition to any Claim, the indemnified party, by counsel or other representative of its own choosing and at its sole cost and expense, shall have the right to consult with the indemnifying party and its counsel concerning such Claim and the indemnifying party and the indemnified party and their respective counsel shall cooperate in good faith with respect to such Claim; and
(iv) neither party shall have any liability to the other under any circumstances for special, indirect, consequential, punitive or exemplary damages or lost profits or similar damages of any kind, whether or not foreseeable.
(d) After Closing, excepting claims for fraud, all claims for breach of representations or warranties under this Agreement shall be subject to the limitations set forth in Section 9.2(b) or 9.2(d) , as applicable.
ARTICLE 10: TERMINATION AND REMEDIES
10.1 Termination . Subject to Section 10.3 , this Agreement may be terminated prior to Closing as follows:
(a) by mutual written consent of Cumulus and Townsquare;
(b) by written notice of Cumulus to Townsquare if Townsquare breaches its representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period (defined below); provided , that Cumulus may not terminate pursuant to this Section 10.1(b) if it is then in material breach of or default under this Agreement;
(c) by written notice of Townsquare to Cumulus if Cumulus breaches its
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representations or warranties or defaults in the performance of its covenants contained in this Agreement and such breach or default is material in the context of the transactions contemplated hereby and is not cured within the Cure Period; provided , that Townsquare may not terminate pursuant to this Section 10.1(c) if it is then in material breach of or default under this Agreement;
(d) by written notice of Townsquare to Cumulus or Cumulus to Townsquare if Closing does not occur by the date twelve (12) months after the date of this Agreement (as may be extended by the written agreement of the parties, the “ Outside Date ”); and/or
(e) by written notice of either party to the other if there shall be in effect a final, non-appealable order of a court or governmental authority or authority of competent jurisdiction prohibiting the consummation of the transactions contemplated hereby.
10.2 Cure Period . Each party shall give the other party prompt written notice upon learning of any breach or default by the other party under this Agreement. The term “ Cure Period ” as used herein means a period commencing on the date Cumulus or Townsquare receives from the other written notice of breach or default hereunder and continuing until the earlier of (i) thirty (30) calendar days thereafter or (ii) the Closing Date determined under Section 1.8 ; provided , however , that if the breach or default is non-monetary and cannot reasonably be cured within such period but can be cured before the Closing Date determined under Section 1.8, and if diligent efforts to cure promptly commence, then the Cure Period shall continue as long as such diligent efforts to cure continue, but not beyond the Closing Date determined under Section 1.8 .
10.3 Survival . The termination of this Agreement shall not relieve any party of any liability for breach or default under this Agreement prior to the date of termination. Notwithstanding anything contained herein to the contrary, Sections 5.1(a) (Confidentiality), 11.1 (Expenses) and Article 9 (Survival; Indemnification) shall survive any termination of this Agreement.
10.4 Specific Performance . Each party hereto agrees and acknowledges that the other party would be irreparably damaged if any of the provisions of this Agreement are not performed in accordance with their specific terms and that any breach of this Agreement could not be adequately compensated by monetary damages alone. Accordingly, in the event of failure or threatened failure by either party to comply with the terms of this Agreement, the other party shall be entitled to an injunction (without posting bond or other security) restraining such failure or threatened failure and, subject to obtaining any necessary FCC consent, to enforcement of this Agreement by a decree of specific performance requiring compliance with this Agreement.
ARTICLE 11: MISCELLANEOUS
11.1 Expenses . Each party 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, except as otherwise set forth expressly herein (including, without limitation, pursuant to Section 5.9 ). All governmental fees and charges applicable to any requests for Governmental Consents under this Agreement shall be shared equally by the parties, except for filing fees related to the Divestiture Applications, which shall be paid by Townsquare, and transfer taxes with respect to the Stations, which shall be paid by Cumulus. The costs of any
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Phase I’s or surveys commissioned or obtained by Townsquare pursuant to this Agreement shall be paid by Townsquare. Each party is responsible for any commission, brokerage fee, advisory fee or other similar payment that arises as a result of any agreement or action of it or any party acting on its behalf in connection with this Agreement or the transactions contemplated hereby.
11.2 Further Assurances . After Closing, each party shall from time to time, at the request of and without further cost or expense to the other, execute and deliver such other instruments of conveyance and assumption and take such other actions as may reasonably be requested in order to carry out the provisions of this Agreement and more effectively consummate the transactions contemplated hereby.
11.3 Assignment . Neither party may assign this Agreement without the prior written consent of the other party hereto, except that (a) a party may assign to an affiliate its right to acquire assets under this Agreement upon written notice to (but without need for the consent of) the other party if (i) any such assignment does not delay processing of the FCC Applications or the Divestiture Applications, issuance of the FCC Consents or Closing, (ii) the assignee delivers to the other party a written assumption of this Agreement, (iii) the assignor shall remain liable for all of its obligations hereunder, and (iv) the assignor shall be solely responsible for any third party consents necessary in connection therewith (none of which are a condition to Closing), and (b) Townsquare and Cumulus may each collaterally assign its rights and remedies hereunder to any bank, financial institution or other lender that has loaned funds or otherwise extended credit to it or any of its affiliates but only to the extent such assignment is in compliance with the requirements of the Communications Act and the FCC Rules. The terms of this Agreement shall bind and inure to the benefit of the parties’ respective successors and any permitted assigns, and no assignment shall relieve any party of any obligation or liability under this Agreement.
11.4 Notices . Any notice pursuant to this Agreement shall be in writing and shall be deemed delivered on the date of personal delivery or confirmed facsimile transmission, confirmed transmission by electronic mail or confirmed delivery by a nationally recognized overnight courier service, and shall be addressed as follows (or to such other address as any party may request by written notice):
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11.5 Waivers . No waiver of compliance with any provision 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 such waiver is sought. The rights and remedies of the parties are cumulative and not alternative and may be exercised concurrently or separately. No failure or delay by any party in exercising any right, power or privilege under this Agreement shall operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege shall preclude any other or further exercise of such right, power or privilege.
11.6 Entire Agreement; Amendments . This Agreement (including the Exhibits, Appendices and Schedules hereto) constitutes the entire agreement and understanding among the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings with respect to the subject matter hereof, except any confidentiality agreement among the parties, which shall remain in full force and effect. No party makes any representation or warranty with respect to the transactions contemplated by this Agreement except as expressly set forth in this Agreement. Without limiting the generality of the foregoing, neither party makes any representation or warranty to the other with respect to any projections, budgets or other estimates of revenues, expenses or results of operations, or, except as expressly set forth in Article 3, any other financial or other information made available to the other party.
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This Agreement may only be amended by a document executed by the parties.
11.7 Severability . If any court or governmental authority holds any provision in this Agreement invalid, illegal or unenforceable under any applicable law, then, so long as no party is deprived of the benefits of this Agreement in any material respect, this Agreement shall be construed with the invalid, illegal or unenforceable provision deleted and the validity, legality and enforceability of the remaining provisions contained herein shall not be affected or impaired thereby.
11.8 No Beneficiaries . Nothing in this Agreement expressed or implied is intended or shall be construed to give any rights to any person or entity other than the parties hereto and their successors and permitted assigns.
11.9 Governing Law . The construction and performance of this Agreement shall be governed by the laws of the State of Delaware without giving effect to the choice of law provisions thereof. Except as provided in Section 1.6(d) , the parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be brought in any state or federal court located in the State of Delaware, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each party agrees that service of process on such party to the address in Section 11.4 shall be deemed effective service of process on such party.
11.10 WAIVER OF JURY TRIAL . THE PARTIES EACH IRREVOCABLY WAIVE THEIR RIGHT TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION (INCLUDING, WITHOUT LIMITATION, ANY COUNTERCLAIM) ARISING OUT OF OR BASED UPON THIS AGREEMENT OR ANY CONTEMPLATED TRANSACTION IN CONNECTION WITH THIS AGREEMENT, INCLUDING CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS A MATERIAL INDUCEMENT FOR ALL PARTIES TO ENTER INTO THIS AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL.
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11.11 Neutral Construction . The parties agree that this Agreement was negotiated at arms-length and that the final terms hereof are the product of the parties’ negotiations. This Agreement shall be deemed to have been jointly and equally drafted by Townsquare and Cumulus, and the provisions hereof should not be construed against a party on the grounds that the party drafted or was more responsible for drafting the provision. For purposes of this Agreement, a business day means any day other than (i) Saturday or Sunday, (ii) any other day on which banks in New York, New York, are permitted or required to be closed, (iii) any US federal holiday or (iv) for the purposes of Section 1.8 only, November 28, 2013 through November 29, 2013, December 20, 2013 through January 6, 2014, July 3, 2014 through July 4, 2014 and August 15, 2014 through September 2, 2014.
11.12 Counterparts . This Agreement may be executed in separate counterparts, each of which will be deemed an original and all of which together will constitute one and the same agreement. A telecopy, PDF or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties by facsimile, e-mail or similar electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes.
11.13 Financing Sources . Notwithstanding anything in this Agreement to the contrary, each of the parties on behalf of itself and each of its affiliates hereby: (a) agrees that any claim, action, suit, legal proceeding, investigation or arbitration (each, an “ Action ”), whether in law or in equity, whether in contract or in tort or otherwise, involving the Financing Sources, arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of any federal or state court in the Borough of Manhattan, New York, New York, and any appellate court thereof and each party irrevocably submits itself and its property with respect to any such Action to the exclusive jurisdiction of such court, (b) agrees that any such Action shall be governed by the Laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), (c) agrees not to bring or support or permit any of its affiliates to bring or support any Action, including any action, cause of action, claim, cross-claim or third party claim of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against the Financing Sources in any way arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder in any forum other than any federal or state court in the Borough of Manhattan, New York, New York, (d) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such Action in any such court, (e) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable Law trial by jury in any Action brought against the Financing Sources in any way arising out of or relating to, this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing, the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (f) agrees that none of the Financing Sources will have any liability to Cumulus or any of its affiliates relating to or arising out of this Agreement, the Financing, the Financing Agreements or any of the agreements entered into in connection with the Financing or
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the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder and that it shall not and shall not permit any of its affiliates or any of their respective officers, directors, or employees to seek any action for specific performance against any of the Financing Sources relating to or in any way arising out of this Agreement, the Financing, the Financing Agreements or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, and (g) agrees that the Financing Sources are express third party beneficiaries of, and may enforce, any of the provisions in this Section 11.13 (and such provisions shall not be amended without the prior written consent of the Lenders). Notwithstanding anything contained herein to the contrary, nothing in this Section 11.13 shall in any way affect any party's or any of their respective affiliates' rights and remedies under any binding agreement to which a Financing Source is a party. “ Financing Sources ” means the Lenders, any person who signs a joinder to the Financing Letters and any person that provides, or in the future enters into any Financing Agreements with Townsquare or any of its affiliates to provide, any of the Financing (or any Alternative Financing), any of such person’s affiliates and any of such person’s or any of its affiliates’ respective current, former or future officers, directors, employees, agents, representatives, stockholders, limited partners, managers, members or partners.
[SIGNATURE PAGE FOLLOWS]
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SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
CUMULUS: | CUMULUS MEDIA HOLDINGS INC. |
CUMULUS BROADCASTING LLC | |
CUMULUS LICENSING LLC | |
CITADEL BROADCASTING COMPANY | |
RADIO LICENSE HOLDING CBC, LLC |
By: | /s/ Richard S. Denning | |
Name: Richard S. Denning | ||
Title: Senior Vice President, Secretary and General Counsel |
TOWNSQUARE: | TOWNSQUARE RADIO, LLC | |
By: | ||
Name: Alex Berkett | ||
Title: Executive Vice President |
[Signature Page to the Asset Purchase Agreement]
SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date set forth above.
CUMULUS: | CUMULUS MEDIA HOLDINGS, INC. |
CUMULUS BROADCASTING LLC | |
CUMULUS LICENSING LLC | |
CITADEL BROADCASTING COMPANY | |
RADIO LICENSE HOLDING CBC, LLC |
By: | ||
Name: Richard S. Denning | ||
Title: Senior Vice President, Secretary and General Counsel |
TOWNSQUARE: | TOWNSQUARE RADIO, LLC | |
By: | /s/ Alex Berkett | |
Name: Alex Berkett | ||
Title: Executive Vice President |
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Exhibit A
STATIONS
See attached.
Exhibit B
SOFTWARE LICENSE AGREEMENT
See attached.
Exhibit C
PROGRAMMING AGREEMENT
See attached.
Exhibit D
LICENSE AGREEMENT
See attached.
Exhibit 3.1
CERTIFICATE OF CONVERSION TO CORPORATION
OF TOWNSQUARE MEDIA, LLC
TO
TOWNSQUARE MEDIA, INC.
This Certificate of Conversion to Corporation, dated as of [●], [●], 2014, is being duly executed and filed by Townsquare Media, LLC, a Delaware limited liability company (the “LLC”), to convert the LLC to Townsquare Media, Inc., a Delaware corporation (the “Corporation”), under the Delaware Limited Liability Company Act (6 Del. C. § 18-101, et seq.) and the General Corporation Law of the State of Delaware (8 Del. C. § 101, et seq.).
1. The LLC was first formed on February 26, 2010. The LLC was first formed under the laws of the State of Delaware and was a limited liability company under the laws of the State of Delaware immediately prior to the filing of this Certificate of Conversion to Corporation.
2. The name and type of entity of the LLC immediately prior to filing this Certificate of Conversion to Corporation was Townsquare Media, LLC, a Delaware limited liability company.
3. The name of the Corporation as set forth in its certificate of incorporation filed in accordance with Section 265(b) of the General Corporation Law of the State of Delaware is Townsquare Media, Inc.
IN WITNESS WHEREOF, the undersigned has executed this Certificate of Conversion to Corporation on the [●] day of [●] 2014.
TOWNSQUARE MEDIA, LLC | |||
By: | |||
Name: | |||
Title: | Authorized Person |
CERTIFICATE OF INCORPORATION
OF
TOWNSQUARE MEDIA, INC.
ARTICLE One
Section 1. Name of the Corporation . The name of this corporation is Townsquare Media, Inc. (the “Corporation”). | |||
Section 2. Incorporator . The name and mailing address of the sole incorporator are as follows: |
Name : | Martin O’Brien | ||
Address : | c/o Kirkland & Ellis LLP | ||
601 Lexington Avenue | |||
New York, NY 10022 |
ARTICLE Two
The registered office of this Corporation in the State of Delaware is located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, Delaware 19808. The name of its registered agent at such address is the Corporation Service Company.
ARTICLE Three
The purpose of this Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the “ Delaware General Corporation Law ”). The Corporation is being incorporated in connection with the conversion of Townsquare Media, LLC, a Delaware limited liability company (the “ LLC ”) to the Corporation (the “ Conversion ”) pursuant to Section 18-216 of the Delaware Limited Liability Company Act and Section 265 of the Delaware General Corporation Law, and this Certificate of Incorporation is being filed simultaneously with the Certificate of Conversion to Corporation (the “ Certificate of Conversion ”).
ARTICLE Four
Section 1. Authorized Shares . The total number of shares of all classes of capital stock that the Corporation has authority to issue is 450,000,000 shares, consisting of:
(a) 50,000,000 shares of Preferred Stock, par value $0.01 per share (the “ Preferred Stock ”);
(b) 300,000,000 shares of Class A Common Stock, par value $0.01 per share (the “ Class A Common Stock ”);
(c) 50,000,000 shares of Class B Common Stock, par value $0.01 per share (the “ Class B Common Stock ”); and
(d) 50,000,000 shares of Class C Common Stock, par value $0.01 per share (the “ Class C Common Stock ” and, together with the Class A Common Stock and the Class B Common Stock, the “Common Stock”).
Upon the filing of the Certificate of Conversion and this Certificate of Incorporation, the limited liability company interests in the LLC outstanding immediately prior to the effectiveness of the Conversion were converted, without any action required on the part of the Corporation or the former holders of such limited liability company interests, into that number of issued and outstanding, fully paid and nonassessable shares of Common Stock pursuant to and in accordance with the Plan of Conversion, dated [●], [●], 2014, in respect of the Conversion, a copy of which shall be on file with the books and records of the Corporation.
The Preferred Stock and the Common Stock shall have the rights, preferences and limitations set forth below.
Section 2. Preferred Stock . Shares of Preferred Stock may be issued from time to time in one or more series. The Board of Directors is authorized, to provide by resolution or resolutions from time to time for the issuance, out of the authorized but unissued shares of Preferred Stock, of all or any of the shares of Preferred Stock in one or more series, and to establish the number of shares to be included in each such series, and to fix the voting powers (full, limited or no voting powers), designations, powers, preferences, and relative, participating, optional or other rights, if any, and any qualifications, limitations or restrictions thereof, of such series, including, without limitation, that any such series may be (i) subject to redemption at such time or times and at such price or prices, (ii) entitled to receive dividends (which may be cumulative or non-cumulative) at such rates, on such conditions, and at such times, and payable in preference to, or in such relation to, the dividends payable on any other class or classes or series of capital stock, (iii) entitled to such rights upon the liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation or (iv) convertible into, or exchangeable for, shares of any other class or classes of capital stock, or of any other series of the same class of capital stock, of the Corporation at such price or prices or at such rates and with such adjustments; all as may be stated in such resolution or resolutions, which resolution or resolutions shall be set forth on a certificate of designations filed with the Secretary of State of the State of Delaware in accordance with the Delaware General Corporation Law. Except as otherwise provided in this Certificate of Incorporation, no vote of the holders of Preferred Stock or Common Stock shall be a prerequisite to the designation or issuance of any shares of any series of Preferred Stock authorized by and complying with the conditions of this Certificate of Incorporation. Notwithstanding the provisions of Section 242(b)(2) of the Delaware General Corporation Law, the number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority in voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, without the separate vote of the holders of the Preferred Stock as a class. Subject to Section 1 of this ARTICLE FOUR, the Board of Directors is also expressly authorized to increase or decrease the number of shares of any series of Preferred Stock subsequent to the issuance of shares of that series, but not below the number of shares of
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such series then outstanding. Unless otherwise expressly provided in this Certificate of Incorporation, including any certificate of designations in respect of any series of Preferred Stock, in case the number of shares of such series shall be decreased in accordance with the foregoing sentence, the shares constituting such decrease shall resume the status that they had prior to the adoption of the resolution originally fixing the number of shares of such series.
Section 3. Common Stock .
(a) Voting Rights . Except as otherwise provided by the Delaware General Corporation Law or this Certificate of Incorporation, and subject to the rights of holders of Preferred Stock, the holders of shares of Class A Common Stock and Class B Common Stock shall at all times vote together as one class on all matters (including the election of directors) submitted to a vote or for the consent of the stockholders of the Corporation. Each holder of shares of Class A Common Stock shall be entitled to one (1) vote for each share of Class A Common Stock held as of the applicable record date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation. Each holder of shares of Class B Common Stock shall be entitled to ten (10) votes for each share of Class B Common Stock held as of the applicable record date on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation. Except as otherwise expressly required by law, each holder of shares of Class C Common Stock, as such, shall have no right to vote on any matter that is submitted to a vote or for the consent of the stockholders of the Corporation. Notwithstanding any other provision of this Certificate of Incorporation to the contrary, the holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designation in respect of any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more such other series, to vote thereon pursuant to this Certificate of Incorporation or the Delaware General Corporation Law. Notwithstanding any other provision of this Certificate of Incorporation to the contrary, and in addition to any vote required by law, (i) the affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, voting as a separate class, shall be required to authorize any amendment or modification of any specific rights or obligations of the Class B Common Stock set forth in this Certificate of Incorporation that does not similarly affect the rights or obligations of the Class A Common Stock, and (ii) the affirmative vote of the holders of a majority of the outstanding shares of Class C Common Stock, voting as a separate class, shall be required to authorize any amendment or modification of any specific rights or obligations of the Class C Common Stock set forth in this Certificate of Incorporation that does not similarly affect the rights or obligations of the Class A Common Stock.
(b) Dividends . Subject to the rights of the holders of any series of Preferred Stock, and to the other provisions of this Certificate of Incorporation, holders of Common Stock shall be entitled to receive equally, on a per share basis, such dividends and other distributions in cash, securities or other property of the Corporation as may be declared thereon by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor; provided, however, that in the event that such
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dividend is paid in the form of shares of Common Stock or rights to acquire Common Stock, the holders of Class A Common Stock shall receive Class A Common Stock or rights to acquire Class A Common Stock, as the case may be, the holders of Class B Common Stock shall receive Class B Common Stock or rights to acquire Class B Common Stock, as the case may be, and the holders of Class C Common Stock shall receive Class C Common Stock or rights to acquire Class C Common Stock, as the case may be.
(c) Liquidation Rights . In the event of any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, after payment or provision for payment of the Corporation’s debts and subject to the rights of the holders of shares of any series of Preferred Stock upon such dissolution, liquidation or winding up, the remaining net assets of the Corporation shall be distributed among holders of shares of Common Stock equally on a per share basis. A merger or consolidation of the Corporation with or into any other corporation or entity, or a sale, lease, exchange, conveyance or other disposition of all or any part of the assets of the Corporation shall not be deemed to be a voluntary or involuntary liquidation or dissolution or winding up of the Corporation within the meaning of this Section 3(c).
(d) Equal Status . Except as expressly provided in this ARTICLE FOUR, the Class A Common Stock, Class B Common Stock and Class C Common Stock shall have the same rights and privileges and rank equally, share ratably and be identical in all respects as to all matters. Without limiting the generality of the foregoing, (i) in the event of a merger or consolidation requiring the approval of the holders of the Corporation’s capital stock entitled to vote thereon (whether or not the Corporation is the surviving entity), the holders of each class of Common Stock shall have the right to receive, or the right to elect to receive, the same form and amount of consideration, if any, as the holders of each other class of Common Stock on a per share basis, and (ii) in the event of (x) any tender or exchange offer to acquire any shares of Common Stock by any third party pursuant to an agreement to which the Corporation is a party or (y) any tender or exchange offer by the Corporation to acquire any shares of Common Stock, pursuant to the terms of the applicable tender or exchange offer, the holders of each class of Common Stock shall have the right to receive, or the right to elect to receive, the same form and amount of consideration on a per share basis as the holders of each other class of Common Stock, provided, however, that if the consideration to be received by the holders of Common Stock in connection with any such transaction is in the form of shares of stock of the surviving or resulting corporation (or any parent corporation), such shares received by the holders of Class A Common Stock, Class B Common Stock or Class C Common Stock may have varying voting powers or other rights as are equivalent to those of the Class A Common Stock, Class B Common Stock and Class C Common Stock, respectively, as set forth herein.
ARTICLE Five
Section 1. Conversion of Class B Common Stock . Each holder of shares of Class B Common Stock is entitled to convert at any time or times all or any part of such holder’s shares of Class B Common Stock into an equal number of shares of Class A Common Stock;
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provided, however, that to the extent that such conversion would result in such holder holding more than 4.99% of the voting power of the Common Stock issued and outstanding immediately following such conversion, such holder shall first deliver to the Corporation an ownership certification in form and substance reasonably satisfactory to the Corporation for the purpose of enabling the Corporation (x) to determine whether such holder has an attributable interest in another entity that would cause the Corporation to violate applicable Federal Communications Commission (“FCC”) rules and regulations and (y) to seek any necessary approvals from the FCC or the United States Department of Justice. Notwithstanding anything to the contrary contained herein, no shares of Class B Common Stock shall be convertible pursuant to this Section 1, and the Corporation shall not be required to convert (including upon transfer as set forth in this ARTICLE FIVE) any share of Class B Common Stock, if the Corporation determines in good faith that such conversion would result in a violation of the Communications Act of 1934, as amended (the “Communications Act”), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the rules and regulations promulgated under either such Act. In the event of the death or disability of any holder which results in the termination of such holder’s employment with the Corporation, each share of Class B Common Stock held by such deceased or disabled holder, or any Affiliate of such deceased or disabled holder, shall automatically be converted into one (1) share of Class A Common Stock. The holder of the shares of Class A Common Stock into which such shares of Class B Common Stock shall have been converted shall have no rights as a holder of Class B Common Stock with respect to the shares so converted, but shall be deemed to have become the holder of the number of shares of Class A Common Stock into which such shares of Class B Common Stock have been converted. Such holder shall exchange the certificates representing the shares of Class B Common Stock so converted for certificates representing the shares of Class A Common Stock into which such shares of Class B Common Stock have been converted, or, in the case of shares held in book-entry form, deliver written notice to the transfer agent for the Class A Common Stock and the Class B Common Stock, with a copy to the Secretary of the Corporation at its principal corporate office, notifying the transfer agent and the Secretary of such conversion and furnishing all proper instruments of conversion and/or transfer in accordance with the procedures of the transfer agent and The Depository Trust Company or any successor depositary (“DTC”), as applicable. As used herein, “Affiliate” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person; the term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controlling” have meanings correlative to the foregoing. “Person” means an individual, any general partnership, limited partnership, limited liability company, corporation, trust, business trust, joint stock company, joint venture, unincorporated association, cooperative or association or any other legal entity or organization of whatever nature, and shall include any successor (by merger or otherwise) of such entity. For the purpose of this Certificate of Incorporation, “beneficial ownership” shall be determined in accordance with Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended.
Section 2. Conversion of Class C Common Stock . Each holder of shares of Class C Common Stock is entitled to convert at any time or times all or any part of such holder’s shares of Class C Common Stock into an equal number of shares of Class A Common Stock; provided, however, that to the extent that such conversion would result in such holder holding
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more than 4.99% of the voting power of the Common Stock issued and outstanding immediately following such conversion, such holder shall first deliver to the Corporation an ownership certification in form and substance reasonably satisfactory to the Corporation for the purpose of enabling the Corporation (x) to determine whether such holder has an attributable interest in another entity that would cause the Corporation to violate applicable FCC rules and regulations and (y) to seek any necessary approvals from the FCC or the United States Department of Justice. Notwithstanding anything to the contrary contained herein, no shares of Class C Common Stock shall be convertible pursuant to this Section 2, and the Corporation shall not be required to convert (including upon transfer as set forth in this ARTICLE FIVE) any share of Class C Common Stock, if the Corporation determines in good faith that such conversion would result in a violation of the Communications Act, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the rules and regulations promulgated under either such Act. The holder of the shares of Class A Common Stock into which such shares of Class C Common Stock shall have been converted shall have no rights as a holder of Class C Common Stock with respect to the shares so converted, but shall be deemed to have become the holder of the number of shares of Class A Common Stock into which such shares of Class C Common Stock have been converted. Such holder shall exchange the certificates representing the shares of Class C Common Stock so converted for certificates representing the shares of Class A Common Stock into which such shares of Class C Common Stock have been converted, or, in the case of shares held in book-entry form, deliver written notice to the transfer agent for the Class A Common Stock and the Class C Common Stock, with a copy to the Secretary of the Corporation at its principal corporate office, notifying the transfer agent and the Secretary of such conversion and furnishing all proper instruments of conversion and/or transfer in accordance with the procedures of the transfer agent and DTC, as applicable.
Section 3. Transfer of Certain Shares . Subject to Section 11 of this ARTICLE FIVE, a record or beneficial owner of shares of Class B Common Stock or Class C Common Stock may transfer such shares (whether by sale, assignment, gift, bequest, appointment or otherwise) to any transferee; provided, however, that (x) in the case of Class B Common Stock, unless the transferee is an Affiliate or Related Party of a Principal and (y) in the case of Class C Common Stock, unless in connection with and prior to such transfer, the transferor or transferee sends a notice to the Corporation requesting that the shares of Class C Common Stock remain shares of Class C Common Stock immediately following such transfer, then, concurrently with any such transfer, each such transferred share of Class B Common Stock or Class C Common Stock, as applicable, shall automatically be converted into one (1) share of Class A Common Stock. To the extent that any transfer of Common Stock (including, for the avoidance of doubt, any transfer of shares of Class A Common Stock, whether or not in connection with any conversion from Class B Common Stock or Class C Common Stock) would result in such transferee holding more than 4.99% of the voting power of the Common Stock issued and outstanding immediately following such transfer, such transferee shall first deliver to the Corporation an ownership certification in form and substance reasonably satisfactory to the Corporation for the purpose of enabling the Corporation (x) to determine whether such holder has an attributable interest in another entity that would cause the Corporation to violate applicable FCC rules and regulations and (y) to seek any necessary approvals from the FCC or the United States Department of Justice. The holder of shares of Class A Common Stock into which such shares of Class B Common Stock or Class C Common Stock, as applicable, shall have been converted shall have no further rights as a holder of Class B Common Stock or Class C Common Stock, as applicable, with respect to the shares of
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Class B Common Stock or Class C Common Stock, as applicable, so converted, but shall be deemed to have become the holder of the number of shares of Class A Common Stock into which such shares of Class B Common Stock or Class C Common Stock, as applicable, have been converted pursuant to this Section 3. Any holder of a certificate representing shares of Class B Common Stock or Class C Common Stock, as applicable, so converted shall exchange the certificate(s) representing the shares of Class B Common Stock or Class C Common Stock so converted for one or more certificates representing the shares of Class A Common Stock into which such shares of Class B Common Stock or Class C Common Stock have been converted, or, in the case of shares held in book-entry form, deliver written notice to the transfer agent for the Class A Common Stock, the Class B Common Stock or the Class C Common Stock, as the case may be, with a copy to the Secretary of the Corporation at its principal corporate office, notifying the transfer agent and the Secretary of the conversion pursuant to this Section 3 and all other information reasonably requested by the transfer agent or the Secretary and furnishing all proper instruments of conversion and transfer in accordance with the procedures of the transfer agent and DTC, as applicable. As used in this Certificate of Incorporation, the term “Principal” means investment funds affiliated with Oaktree Capital Management, L.P. and their respective successors and Affiliates (collectively, “Oaktree”) and FiveWire Media Ventures LLC and its members; and the term “Related Party” means, with respect to any Principal, (x) any spouse or immediate family member of such Principal, or (y) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially owning an eighty percent (80%) or more controlling interest of which consist of such Principal and/or other Persons referred to in the immediately preceding clause (x).
Section 4. Conditions Precedent to Transfer or Conversion . As a condition precedent to any proposed transfer or conversion of any shares of Class B Common Stock or Class C Common Stock (other than any transfer in a Public Sale or conversion in connection therewith, which, for the avoidance of doubt, shall remain subject to the information delivery requirements by transferees set forth in Section 3 of this ARTICLE FIVE), the transferor or holder electing such conversion, as applicable, shall give the Corporation not less than four (4) business days’ prior written notice of the proposed transfer or conversion, as the case may be, and, if applicable, the name and mailing address of the proposed transferee or Person who will hold the converted shares, as applicable, and shall promptly provide the Corporation, in addition to the information required in Section 1 and Section 2 of this ARTICLE FIVE, with any information reasonably requested by the Corporation to ensure compliance with applicable law. As used herein, “Public Sale” shall mean any sale of Common Stock to (i) the public pursuant to an offering or other sale registered under the Securities Act of 1933, as amended (the “Securities Act”) or (ii) to or through a broker, dealer or market maker pursuant to the provisions of Rule 144 under the Securities Act or other applicable rule under the Securities Act.
Section 5. Effective Time of Conversion . Subject to Section 1, Section 2 and Section 3 of this ARTICLE FIVE, the conversion of shares of Class B Common Stock or Class C Common Stock, as the case may be, will be deemed to have been effected as of the close of business on the date on which occurs the last to occur of the following events: (i) the certificate or certificates representing the shares of Class B Common Stock or Class C Common Stock to be converted have been surrendered to the transfer agent or Secretary of the Corporation with duly executed conversion instructions and, if applicable, transfer instructions, or in the case of shares held in book-entry form, duly executed conversion instructions and, if applicable, transfer
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instructions have been delivered to the transfer agent or Secretary of the Corporation, and (ii) all information reasonably requested by or on behalf of the Corporation has been provided to the Corporation and Corporation has made a good faith determination that such conversion does not violate the FCC ownership and transfer restrictions set forth in Section 11. At such time as such conversion has been effected, the rights of the former holder of the shares of Class B Common Stock or Class C Common Stock so converted as such a holder will cease and the Person or Persons in whose name or names any certificate or certificates for shares of Class A Common Stock into which such shares of Class B Common Stock or Class C Common Stock have been converted are to be issued (or, if such shares of Class A Common Stock are uncertificated, the Person or Person in whose name or names the shares of Class A Common Stock will be registered in book-entry form) will be deemed to have become the holder or holders of record of the shares of the Class A Common Stock so issuable by reason of the conversion.
Section 6. Deliveries Upon Conversion . As soon as possible after a conversion has been effected (but in any event within three (3) business days), the Corporation or transfer agent will deliver to the holder whose shares have been converted: (i) a certificate or certificates representing the number of shares of Class A Common Stock issuable by reason of such conversion, or as the case may be, evidence or confirmation of the book entry into the stock ledger of the Corporation for shares issuable upon conversion shall be deemed to have been made, in such name or names and such denominations as the converting holder has specified and (ii) a certificate representing any shares of Class B Common Stock or Class C Common Stock which were represented by the certificate or certificates delivered to the Corporation or transfer agent, or as the case may be, evidence or confirmation of the book entry into the stock ledger of the Corporation, in connection with such conversion but which were not converted.
Section 7. No Charges . The issuance of certificates representing shares of Class A Common Stock upon conversion of Class B Common Stock or Class C Common Stock, or the registration thereof in book-entry form, will be made without charge to the holders of such Common Stock for any issuance tax in respect of such issuance or other costs incurred by the Corporation in connection with such conversion and the related issuance of shares of Class A Common Stock, except for any transfer taxes that may be payable if certificates are to be issued or shares are to be registered in book-entry form in a name other than that in which the surrendered certificate is registered or book-entry shares are registered. Upon conversion of a share of Class B Common Stock or Class C Common Stock, the Corporation will take all such actions as are necessary in order to ensure that the Class A Common Stock issued or issuable with respect to such conversion will be validly issued, fully paid and nonassessable.
Section 8. No Adverse Action . The Corporation will not close its books against the transfer of Class A Common Stock in accordance with this Certificate of Incorporation issued or issuable upon conversion of Class B Common Stock or Class C Common Stock in any manner which interferes with the timely conversion of Class B Common Stock or Class C Common Stock.
Section 9. Sufficient Shares . The Corporation shall at all times have authorized, reserved and set aside a sufficient number of shares of Class A Common Stock for the conversion of all shares of Class B Common Stock and Class C Common Stock then outstanding.
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Section 10. Requests for Information . If the Corporation believes that the ownership or proposed ownership of shares of Capital Stock (as defined below) by any Person (whether by reason of a change in such Person’s ownership, a change in the number of shares outstanding overall or in any class, or for any other reason) may give rise to an FCC Regulatory Limitation (as defined below) or subject the Corporation to FCC reporting requirements, such Person shall furnish promptly to the Corporation such information (including, without limitation, information with respect to its or the proposed transferee’s citizenship, ownership structure, and other ownership interests and affiliations) as the Corporation shall reasonably request; provided, however, that nothing herein shall require such Person or its Affiliates to disclose information regarding its borrowers in violation of any obligation of confidentiality towards such borrowers, and if such disclosure violation were to occur as a result of this requirement, such Person shall be entitled to withdraw its request for conversion or transfer of any or all of its shares.
Section 11. FCC Matters.
(a) To the extent necessary to avoid (i) a violation of the Communications Act or the rules, regulations and policies promulgated by the FCC and in effect from time to time (collectively, the “ FCC Regulations ”), (ii) a material limitation or impairment (including any impairment or limitation that could reasonably be expected to be material) of any existing business activity or proposed business activity of the Corporation or any of its subsidiaries under the Communications Act or FCC Regulations, (iii) a material limitation or impairment (including any impairment or limitation that could reasonably be expected to be material) under the Communications Act or FCC Regulations of the acquisition of an attributable interest in a full power radio station by the Corporation or any of its subsidiaries for which the Corporation or its subsidiary has entered into a definitive agreement with a third party, or (iv) the Corporation or any of its subsidiaries becoming subject (including where the Corporation or any of its subsidiaries could reasonably be expected to become subject) to any rule, regulation, order or policy under the Communications Act or FCC Regulations having or which could reasonably be expected to have a material effect on the Corporation or any subsidiary of the Corporation to which the Corporation or any subsidiary of the Corporation would not be subject but for such ownership, conversion or proposed ownership, then, in the case of each of (i) through (iv) above (each, an “ FCC Regulatory Limitation ”), the Board of Directors may, in its sole discretion, and only after allowing the applicable owner of shares of Capital Stock a reasonable opportunity to cure or prevent such FCC Regulatory Limitation, (I) take any action, including, without limitation, exchanging Capital Stock for non-voting securities of the Corporation, warrants to purchase securities of the Corporation or any other securities of the Corporation, it believes necessary to prohibit the ownership or voting of more than 25% of the Corporation’s outstanding Capital Stock by or for the account of aliens or their representatives or by a foreign government or representative thereof or by any entity organized under the laws of a foreign country (collectively “ Aliens ”), or by any other entity (x) that is subject to or deemed to be subject to control by Aliens on a de jure or de facto basis or (y) owned by, or held for the benefit of, Aliens in a manner that would cause the Corporation to be in violation of the Communications Act or FCC Regulations; (II) prohibit any conversion or transfer of the Corporation’s stock which the Corporation believes could cause more than 25% of the Corporation’s outstanding Capital Stock to be
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owned or voted by or for any Person identified in the foregoing clause (I); (III) prohibit the ownership, voting or transfer of any portion of its outstanding Capital Stock to the extent the ownership, voting or transfer of such portion would cause the Corporation to violate or would otherwise result in violation of any provision of the Communications Act or FCC Regulations; (IV) require the conversion of any or all shares of Capital Stock held by a holder into shares of any other class of Capital Stock in the Corporation with equivalent economic value (it being understood that for such purposes Class A Common Stock, Class B Common Stock and Class C Common Stock are deemed to have an equivalent economic value), (V) require the exchange of any or all shares held by a holder for warrants to acquire, at a nominal exercise price, the same number and class of shares of Capital Stock, and/or (VI) redeem any shares of Capital Stock in accordance with Section 11(b) of this ARTICLE FIVE. If any Person from whom information is requested pursuant to Section 10 of this ARTICLE FIVE does not provide all the information requested by the Corporation completely and accurately in a timely manner, the Board of Directors may, in its sole discretion, take any of the actions listed in clauses (I) through (VI) above with respect to such Person and the securities of the Corporation held by or proposed to be converted by or transferred by or to such Person provided, however, that if the Board of Directors decides to take any of the actions listed in clauses (I) through (VI) above with respect to such Person and such securities, the Person may in its sole discretion upon notice to the Corporation decide not to proceed with such transfer or conversion. As used in this Certificate of Incorporation, the term “ Capital Stock ” means all shares now or hereafter authorized of any class or series of capital stock of the Corporation having the right to participate in the distribution of the assets and earnings of the Corporation, including the Common Stock and Preferred Stock and any shares of capital stock into which the Common Stock or Preferred Stock may be converted from time to time (whether as a result of recapitalization, share exchange or similar event) or are issued with respect to the Common Stock or Preferred Stock, including, without limitation, with respect to any stock split or stock dividend, or a successor security. The Corporation may, but is not required to, take any action permitted under this Section 11, and the grant of specific powers to the Corporation under this Section 11 shall not be deemed to restrict the Corporation from pursuing, alternatively or concurrently, any other remedy or alternative course of action available to the Corporation.
(b) Without limiting the foregoing, the terms and conditions of redemption pursuant to clause (VI) of Section 11(a) of this ARTICLE FIVE shall be as follows:
(1) the redemption price of any shares of Capital Stock to be redeemed pursuant to clause (VI) of Section 11(a) of this ARTICLE FIVE shall be equal to the Fair Market Value (as hereinafter defined) of such shares;
(2) the redemption price of such shares of Capital Stock will be paid in cash;
(3) if less than all such shares are to be redeemed, the shares to be redeemed shall be selected in such manner as shall be determined by the Board of Directors in good faith, which may include selection first of the
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most recently purchased shares thereof, selection by lot or selection in any other manner determined by the Board of Directors in good faith;
(4) at least 15 days’ prior written notice of the Redemption Date (as hereinafter defined) shall be given to the record holder of the shares selected to be redeemed (unless waived in writing by any such holder); provided that the Redemption Date shall be the date on which written notice shall be given to record holder if the cash necessary to effect the redemption shall have been indefeasibly deposited in trust for the benefit of such record holder and is then subject to immediate payment to such holder upon surrender of the share certificates or compliance with DTC policies and procedures for the redemption of book entry securities for such holder’s redeemed shares;
(5) from and after the Redemption Date, any and all rights of whatever nature in respect of the shares selected for redemption (including, without limitation, any rights to vote or participate in dividends declared on shares (including declared and unpaid dividends) of the same class or series as such shares), shall cease and terminate and the holder of such shares shall thenceforth be entitled only to receive the cash payable upon redemption; and
(6) such other terms and conditions as the Board of Directors shall determine in good faith.
(c) For purposes of this Section 11 of this ARTICLE FIVE:
(1) “ Fair Market Value ” shall mean, with respect to a share of any class or series of Capital Stock, the volume weighted average sales price for such a share on the national securities exchange (if any) on which such Capital Stock is then listed during the 20 most recent days on which shares of stock of such class or series shall have been traded preceding the day on which notice of redemption shall be given pursuant to Section 11(b)(4) of this ARTICLE FIVE; provided, however, that if such shares are not traded on any national securities exchange, Fair Market Value shall mean the average of the reported bid and asked prices in any over the counter quotation system selected by the Corporation during the 20 most recent days during which such shares were traded immediately preceding the day on which notice of redemption shall be given pursuant to Section 11(b)(4) of this ARTICLE FIVE, or if trading of such shares is not reported in any over the counter quotation system, Fair Market Value shall be determined by the Board of Directors in good faith. Notwithstanding the foregoing, each share of Class B Common Stock and each share of Class C Common Stock shall be deemed to have a Fair Market Value equal to the Fair Market Value of a share of Class A Common Stock determined in accordance with the foregoing sentence.
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(2) “ Redemption Date ” shall mean the date fixed by the Board of Directors for the redemption of any shares of the Corporation pursuant to or on the date specified in Section 11(b)(4) of this ARTICLE FIVE, as the case may be.
(d) The Corporation shall instruct the Corporation’s transfer agent that the shares of the Corporation are subject to the restrictions set forth in this ARTICLE FIVE and such restrictions shall be noted conspicuously on the certificate or certificates representing such shares or, in the case of uncertificated securities, contained in the notice or notices sent as required by law and pursuant to any policies and procedures of DTC in respect of book entry securities.
ARTICLE Six
The Corporation shall have perpetual existence.
ARTICLE Seven
Section 1. Board of Directors, Number . Unless otherwise provided by this Certificate of Incorporation or the Delaware General Corporation Law, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors. Subject to any rights of the holders of Preferred Stock to elect additional directors under specified circumstances, the number of directors that shall constitute the whole Board of Directors shall be fixed from time to time by resolution adopted exclusively by the Board of Directors.
Section 2. Voting . Pursuant to that certain Stockholders’ Agreement, dated [●], 2014, by and between the Corporation and certain stockholders of the Corporation, Oaktree has the right to designate a specified number of designees for election to the Board of Directors, as set forth therein. Each director so designated by Oaktree (each, an “ Oaktree Director ”) shall be entitled to cast two (2) votes on each matter presented to the Board of Directors (but only one (1) vote on each matter presented to any committee thereof), as permitted under Section 141(d) of the Delaware General Corporation Law; provided, however, that, from and after the first date on which Oaktree ceases collectively to beneficially own (directly or indirectly) at least seventy percent (70.0%) of the number of shares Common Stock that Oaktree beneficially owned as of closing of the Corporation’s initial public offering (subject to adjustment for any stock split, combination, stock dividend, reclassification, recapitalization or like event), each Oaktree Director shall be entitled to cast only one (1) vote on each matter presented to the Board of Directors or any committee thereof. Each director of the Corporation (other than an Oaktree Director) shall be entitled to cast one (1) vote on each matter presented to the Board of Directors or any committee thereof.
Section 3. Classification of Directors . Subject to any rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the directors of the Corporation shall be divided into three classes as nearly equal in size as is practicable, designated Class I, Class II and Class III. The Oaktree Directors shall be allocated among the three classes as evenly as practicable. The term of office of the initial Class I directors shall expire at the first annual meeting of stockholders occurring after this Certificate of Incorporation
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becomes effective in accordance with the Delaware General Corporation Law (the “ Effective Time ”), the term of office of the initial Class II directors shall expire at the second annual meeting of stockholders occurring after the Effective Time, and the term of office of the initial Class III directors shall expire at the third annual meeting of the stockholders occurring after the Effective Time. At each annual meeting commencing with the first annual meeting of stockholders occurring after the Effective Time, each director elected to the class of directors expiring at such annual meeting shall be elected to hold office until the third succeeding annual meeting and until his or her successor shall have been duly elected and qualified, or until his or her earlier death, resignation, removal or retirement. If the number of directors divided into classes as set forth herein is hereafter changed, any newly created directorship(s) or decrease in the number of directors shall be so apportioned among the classes as to make all classes as nearly equal in number as practicable. Elections of directors need not be by written ballot unless the bylaws of the Corporation (as the same may be amended and/or restated from time to time, the “ Bylaws ”) shall so provide. The Board of Directors is authorized to assign members of the Board of Directors already in office to their respective classes.
Section 4. Newly-Created Directorships and Vacancies . Subject to the rights of the holders of any series of Preferred Stock, any newly created directorships resulting from any increase in the number of directors or any vacancies in the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or any other cause shall be filled exclusively by the affirmative vote of a majority in voting power of the directors then in office, even if less than a quorum, or by the sole remaining director, and shall not be filled by stockholders. A director elected to fill a vacancy shall be elected for the unexpired term of his or her predecessor in office, and a director chosen to fill a position resulting from an increase in the number of directors shall hold office until the next election of the class for which such director shall have been chosen and until his or her successor is duly elected and qualified, or his or her earlier death, resignation, removal or retirement.
Section 5. Removal of Directors . Subject to the rights of the holders of any series of Preferred Stock, (i) prior to the Trigger Date (as defined below), any director may be removed from office at any time with or without cause, at a meeting called for that purpose, by the affirmative vote of the holders of at least a majority of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class and (ii) after the Trigger Date, any director may be removed from office at any time but only with cause, at a meeting called for that purpose, by the affirmative vote of the holders of at least 75% of the voting power of all outstanding shares of capital stock entitled to vote generally in the election of directors, voting together as a single class.
Section 6. Rights of Holders of Preferred Stock . Notwithstanding the provisions of this ARTICLE SEVEN, whenever the holders of one or more series of Preferred Stock issued by the Corporation shall have the right, voting separately or together by series, to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies and other features of such directorship shall be governed by the rights of such Preferred Stock as set forth in the certificate of designations or certificates of designations governing such series.
Section 7. No Cumulative Voting . Except as may otherwise be set forth in the resolution or resolutions of the Board of Directors providing the issue of one or more series of
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Preferred Stock, and then only with respect to such series of Preferred Stock, cumulative voting in the election of directors is specifically denied.
ARTICLE Eight
Section 1. Limitation of Liability .
(a) To the fullest extent permitted by the Delaware General Corporation Law as it now exists or may hereafter be amended, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.
(b) Any repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the Corporation existing hereunder with respect to any act or omission occurring at or prior to the time of such repeal or modification.
ARTICLE Nine
Section 1. Action by Written Consent . From and after the first date (the “ Trigger Date ”) on which Oaktree ceases collectively to beneficially own (directly or indirectly) more than fifty percent (50%) of the voting power of the outstanding shares of Common Stock, any action required or permitted to be taken by the stockholders of the Corporation may be effected only at a duly called annual or special meeting of stockholders of the Corporation and may not be effected by any consent in writing by such stockholders. For the avoidance of doubt, prior to the Trigger Date, any action required or permitted to be taken at any annual or special meeting of stockholders of the Corporation may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, is signed by or on behalf of the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in the manner provided by the Delaware General Corporation Law.
Section 2. Annual Meetings of Stockholders . Except as otherwise expressly provided by law, an annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly come before the meeting shall be held at such date, time and place, if any, as shall be determined exclusively by resolution of the Board of Directors in its sole and absolute discretion. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders at any meeting of stockholders shall be given in the manner provided in the Bylaws.
Section 3. Special Meetings of Stockholders . Subject to any special rights of the holders of any series of Preferred Stock, special meetings of stockholders of the Corporation shall be called exclusively (i) by or at the direction of the Board of Directors pursuant to a written resolution adopted by the affirmative vote of a majority in voting power of the whole Board of Directors or (ii) prior to the Trigger Date, by the Secretary of the Corporation at the request of the holders of fifty percent (50%) or more of the voting power of the issued and outstanding shares of Common Stock, and shall not be called by stockholders. For the avoidance
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of doubt, from and after the Trigger Date, the stockholders shall not be entitled to call special meetings of stockholders. Any business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting given by or at the direction of the Board of Directors.
ARTICLE Ten
Section 1. Certificate of Incorporation . The Corporation reserves the right at any time from time to time to alter, amend, repeal or change any provision contained in this Certificate of Incorporation, and to adopt any other provision authorized by the Delaware General Corporation Law, in the manner now or hereafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding anything to the contrary contained in this Certificate of Incorporation or the Bylaws, and notwithstanding that a lesser percentage or vote may be permitted from time to time by applicable law, no provision of ARTICLE FIVE, ARTICLE SIX, ARTICLE SEVEN, ARTICLE EIGHT, ARTICLE NINE, this ARTICLE TEN, ARTICLE ELEVEN, ARTICLE TWELVE and ARTICLE THIRTEEN may be altered, amended or repealed in any respect, nor may any provision of this Certificate of Incorporation or of the Bylaws inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, (i) prior to the Trigger Date, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class and (ii) from and after the Trigger Date, such alteration, amendment, repeal or adoption is approved at a meeting of the stockholders called for that purpose by the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of all outstanding shares of capital stock of the Corporation entitled to vote thereon, voting together as a single class. In addition to the foregoing, (a) the provisions of ARTICLE FOUR, Section 3(a)(i) may not be altered, amended or repealed in any respect, nor may any provision of this Certificate of Incorporation or of the Bylaws inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class B Common Stock, voting as a separate class, and (b) the provisions of ARTICLE FOUR, Section 3(a)(ii) may not be altered, amended or repealed in any respect, nor may any provision of this Certificate of Incorporation or of the Bylaws inconsistent therewith be adopted, unless in addition to any other vote required by this Certificate of Incorporation or otherwise required by law, such alteration, amendment, repeal or adoption is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class C Common Stock, voting as a separate class.
Section 2. Bylaws . In furtherance and not in limitation of the powers conferred by law, the Board of Directors is expressly authorized to adopt, alter, amend or repeal the Bylaws. In addition to any other vote otherwise required by law or this Certificate of Incorporation, from and after the Trigger Date, with respect to the adoption, alteration, amendment or repeal of the Bylaws by the stockholders, the affirmative vote of the holders of at least seventy-five percent (75%) of the voting power of the outstanding shares of capital stock of the Corporation entitled to vote with respect thereto, voting together as a single class, shall be required to adopt, alter, amend or repeal the Bylaws.
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ARTICLE Eleven
The Corporation expressly elects not to be governed by Section 203 of the Delaware General Corporation Law.
ARTICLE Twelve
Section 1. Scope . The provisions of this ARTICLE TWELVE are set forth to define, to the extent permitted by applicable law, the duties of Exempted Persons (as defined below) to the Corporation with respect to certain classes or categories of business opportunities. “ Exempted Persons ” means Oaktree and their respective Affiliates (other than the Corporation and its subsidiaries) and all of their respective partners, principals, directors, officers, members, managers and employees, including any of the foregoing who serve as officers or directors of the Corporation.
Section 2. Competition and Allocation of Corporate Opportunities . To the fullest extent permitted by law, the Exempted Persons shall not have any fiduciary duty to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as the Corporation or any of its subsidiaries. To the fullest extent permitted by applicable law, the Corporation, on behalf of itself and its subsidiaries, renounces any interest or expectancy of the Corporation and its subsidiaries in, or in being offered an opportunity to participate in, business opportunities that are from time to time presented to the Exempted Persons, even if the opportunity is one that the Corporation or its subsidiaries might reasonably be deemed to have pursued or had the ability or desire to pursue if granted the opportunity to do so, and each such Exempted Person shall have no duty to communicate or offer such business opportunity to the Corporation and, to the fullest extent permitted by applicable law, shall not be liable to the Corporation or any of its subsidiaries for breach of any fiduciary or other duty, as a director or officer or otherwise, by reason of the fact that such Exempted Person pursues or acquires such business opportunity, directs such business opportunity to another Person or fails to present such business opportunity, or information regarding such business opportunity, to the Corporation or its subsidiaries.
Section 3. Certain Matters Deemed Not Corporate Opportunities . In addition to and notwithstanding the foregoing provisions of this ARTICLE TWELVE, a corporate opportunity shall not be deemed to belong to the Corporation if it is a business opportunity that the Corporation is not financially or legally able or contractually permitted to undertake, or that is, from its nature, not in the line of the Corporation’s business or is of no practical advantage to it or that is one in which the Corporation has no interest or reasonable expectancy.
Section 4. Amendment of this Article . To the fullest extent permitted by law, no amendment or repeal of this ARTICLE TWELVE in accordance with the provisions of Section 1 of ARTICLE TWELVE shall apply to or have any effect on the liability or alleged liability of any Exempted Person for or with respect to any activities or opportunities of which such Exempted Person becomes aware prior to such amendment or repeal. This ARTICLE TWELVE shall not limit or eliminate any protections or defenses otherwise available to, or any rights to indemnification or advancement of expenses of, any director or officer of the Corporation under
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this Certificate of Incorporation, the Bylaws, any agreement between the Corporation and such officer or director, or any applicable law.
Section 5. Deemed Notice . Any Person purchasing, holding or otherwise acquiring any interest in any shares of the Corporation shall be deemed to have notice of and to have consented to the provisions of this ARTICLE TWELVE.
ARTICLE Thirteen
Section 1. Exclusive Forum . Unless this Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall, to the fullest extent permitted by law, be the sole and exclusive forum for (i) any derivative action or proceeding brought on behalf of the Corporation, (ii) any action asserting a claim of breach of a fiduciary duty owed by any director, officer, employee or agent of the Corporation to the Corporation or the Corporation’s stockholders, (iii) any action asserting a claim arising pursuant to any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or the Bylaws or (iv) any action asserting a claim governed by the internal affairs doctrine. As used in this Certificate of Incorporation, the term “ Claim ” means the actions, proceedings or claims referred to in clauses (i) through (iv) on this Section 1.
Section 2. Personal Jurisdiction . If any Claim is filed in a court other than a court located within the State of Delaware (a “ Foreign Action ”) in the name of any stockholder, such stockholder shall, to the fullest extent permitted by law, be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce Section 1 of this ARTICLE THIRTEEN (an “ FSC Enforcement Action ”) and (ii) having service of process made upon such stockholder in any such FSC Enforcement Action by service upon such stockholder’s counsel in the Foreign Action as agent for such stockholder.
Section 3. Payment of Litigation Costs and Expenses . To the fullest extent permitted by law, in the event that any Person (the “ Claimant ”) (x) initiates or asserts a Claim, or joins any such Claim as a named party, and (y) does not thereby obtain a judgment on the merits that substantially achieves the full remedy or relief sought in the Claim, such Claimant shall be jointly and severally obligated to reimburse the Corporation for all fees, costs and expenses (including attorneys’ fees and the fees of experts) actually and reasonably incurred by the Corporation in defending such Claim.
Section 3. Notice . Any Person purchasing or otherwise acquiring or holding any interest in shares of capital stock of the Corporation (including, without limitation, shares of Common Stock) shall be deemed to have notice of and to have consented to the provisions of this ARTICLE THIRTEEN.
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I, the undersigned, being the sole incorporator hereinbefore named, for the purpose of forming a corporation in accordance with the General Corporation Law of the State of Delaware, do make and file this certificate, hereby declaring and certifying that the facts herein stated are true, and accordingly have hereunto set my hand on this [●] day of [●] 2014.
/s/ Martin O’Brien | |
Martin O’Brien, Sole Incorporator |
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Exhibit 3.2
BYLAWS
OF
TOWNSQUARE MEDIA, INC.
A Delaware corporation
(Adopted as of [●], 2014)
Article
I
OFFICES
Section 1. Registered Office . The address of the registered office of Townsquare Media, Inc. (the “Corporation”) in the State of Delaware, and the name of the Corporation’s registered agent at such address, shall be as set forth in the Certificate of Incorporation of the Corporation (as the same may be amended and/or restated from time to time, the “Certificate of Incorporation”). The registered office and/or registered agent of the Corporation may be changed from time to time by action of the Board of Directors of the Corporation (the “Board of Directors”).
Section 2. Other Offices . The Corporation may have an office or offices other than said registered office at such place or places, either within or outside the State of Delaware, as the Board of Directors shall from time to time determine or the business of the Corporation may from time to time require.
Article
II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings . All meetings of stockholders shall be held at such place, if any, as may be designated from time to time by the Board of Directors. The Board of Directors may designate such place of meeting, either within or outside the State of Delaware, or the Board of Directors may, in its sole discretion, determine that a meeting shall not be held at any place, but may instead be held solely by means of remote communication in accordance with Section 211(a) of the General Corporation Law of the State of Delaware.
Section 2. Annual Meeting . An annual meeting of the stockholders shall be held on such date and at such time as is specified by the Board of Directors. At the annual meeting, stockholders shall elect directors and transact such other business as may be properly brought before the annual meeting pursuant to Section 11 of ARTICLE II hereof. The Board of Directors may postpone, reschedule or cancel any previously scheduled annual meeting of the stockholders.
Section 3. Special Meetings . Special meetings of the stockholders may only be called in the manner provided in the Certificate of Incorporation. Business transacted at any special meeting of stockholders shall be limited to the purpose or purposes stated in the Corporation’s notice of the meeting given by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation). The Board
of Directors may postpone, reschedule or cancel any previously scheduled special meeting of stockholders.
Section 4. Notice .
(a) Timing; Contents . Whenever stockholders are required or permitted to take action at a meeting, written notice of each annual and special meeting of stockholders stating the date, time and place, if any, of the meeting, the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting, the record date for determining the stockholders entitled to vote at the meeting (if such date is different than the record date for stockholders entitled to notice of the meeting) and, in the case of a special meeting, the purpose or purposes for which the meeting is called, shall be given by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation), to each stockholder of record entitled to vote thereat not less than ten (10) nor more than sixty (60) days before the date of the meeting except as otherwise required by law.
(b) Form of Notice . All such notices shall be delivered in writing or by a form of electronic transmission if receipt thereof has been consented to by the stockholder to whom the notice is given. If mailed, such notice shall be deemed to be delivered when deposited in the United States mail, postage prepaid, addressed to the stockholder at his, her or its address as the same appears on the records of the Corporation. If given by facsimile telecommunication, such notice shall be deemed given when directed to a number at which the stockholder has consented to receive notice by facsimile. Subject to the limitations of Section 4(d) of this ARTICLE II, if given by electronic transmission, such notice shall be deemed given: (i) by electronic mail, when directed to an electronic mail address at which the stockholder has consented to receive notice; (ii) if by a posting on an electronic network together with separate notice to the stockholder of such specific posting, upon the later of (x) such posting and (y) the giving of such separate notice; and (iii) if by any other form of electronic transmission, when directed to the stockholder. An affidavit of the Secretary or an Assistant Secretary of the Corporation, the transfer agent of the Corporation or any other agent of the Corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.
(c) Waiver of Notice . Whenever notice is required to be given under any provisions of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, a written waiver thereof, signed by the stockholder entitled to notice, or a waiver by electronic transmission by the stockholder entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Neither the business to be transacted at, nor the purpose of, any meeting of stockholders of the Corporation need be specified in any waiver of notice of such meeting. Attendance of a stockholder of the Corporation at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends for the express purpose of objecting at the beginning of the meeting to the transaction of any business because the meeting is not lawfully called or convened.
(d) Notice by Electronic Delivery . Without limiting the manner by which notice otherwise may be given effectively to stockholders of the Corporation pursuant to the
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General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, any notice to stockholders of the Corporation given by the Corporation under any provision of the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws shall be effective if given by a form of electronic transmission consented to by the stockholder of the Corporation to whom the notice is given. Any such consent shall be revocable by the stockholder by written notice to the Corporation. Any such consent shall be deemed revoked if: (i) the Corporation is unable to deliver by electronic transmission two (2) consecutive notices of meetings or of other business given by the Corporation in accordance with such consent; and (ii) such inability becomes known to the Secretary or an Assistant Secretary of the Corporation or to the transfer agent or other person responsible for the giving of notice; provided, however, the inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. For purposes of these Bylaws, except as otherwise limited by applicable law, the term “electronic transmission” means any form of communication not directly involving the physical transmission of paper that creates a record that may be retained, retrieved and reviewed by a recipient thereof, and that may be directly reproduced in paper form by such a recipient through an automated process.
Section 5. List of Stockholders . The officer who has charge of the stock ledger of the Corporation shall prepare and make, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting (provided, however, if the record date for determining the stockholders entitled to vote is less than 10 days before the meeting date, the list shall reflect the stockholders entitled to vote as of the tenth day before the meeting date), arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Nothing contained in this section shall require the Corporation to include electronic mail addresses or other electronic contact information on such list. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting or (b) during ordinary business hours, at the principal place of business of the Corporation. In the event the Corporation determines to make the list available on an electronic network, the Corporation may take reasonable steps to ensure that such information is available only to stockholders of the Corporation. If the meeting is to be held at a place, then the list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present. If the meeting is to be held solely by means of remote communication, then the list shall also be open to the examination of any stockholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such list shall be provided with the notice of the meeting. The stock ledger of the Corporation shall be the only evidence as to who are the stockholders entitled to examine the list of stockholders required by this section or to vote in person or by proxy at any meeting of stockholders.
Section 6. Quorum . Except as otherwise provided by the General Corporation Law of the State of Delaware, the Certificate of Incorporation or these Bylaws, the holders of a majority in voting power of the shares of capital stock of the Corporation issued and outstanding and entitled to vote at the meeting, present in person or represented by proxy at the meeting, shall constitute a quorum for the transaction of business at all meetings of the stockholders. If a
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quorum is not present, the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote at the meeting, may adjourn the meeting to another time and/or place. Where a separate vote by a class or classes or series is required by law or by the Certificate of Incorporation, the holders of a majority in voting power of the shares of such class or classes or series of capital stock issued and outstanding and entitled to vote on such matter, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on the matter. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.
Section 7. Adjourned Meetings . Any meeting of stockholders, annual or special, may be adjourned from time to time to any other time and to any other place by the chairman of the meeting or by the stockholders present or represented at the meeting and entitled to vote thereon, although less than a quorum. When a meeting is adjourned to another time and place, notice need not be given of the adjourned meeting if the time and place, if any, thereof, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 30 days, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. If after the adjournment a new record date for stockholders entitled to vote is fixed for the adjourned meeting, the Board of Directors shall fix a new record date for notice of such adjourned meeting in accordance with Section 213(a) of the General Corporation Law of the State of Delaware, and shall give notice of the adjourned meeting to each stockholder of record entitled to vote at such adjourned meeting as of the record date fixed for notice of such adjourned meeting.
Section 8. Vote Required . When a quorum is present at any meeting of stockholders, the affirmative vote of the holders of a majority in voting power of the shares of capital stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall decide any question brought before the meeting (other than the election of directors), unless by express provisions of an applicable law or regulation applicable to the Corporation or its securities or of the rules or regulations of any stock exchange applicable to the Corporation or of the Certificate of Incorporation or of these Bylaws a different vote is required, in which case such express provision shall govern and control the decision of such question. Unless otherwise provided by the Certificate of Incorporation, directors shall be elected by a plurality of the votes cast by the holders of record of capital stock entitled to vote in the election of such directors.
Section 9. Voting Rights . Except as otherwise provided by the General Corporation Law of the State of Delaware or the Certificate of Incorporation (including any certificate of designation in respect of any series of preferred stock), each holder of record of capital stock shall at every meeting of the stockholders be entitled to one vote for each share of capital stock held by such stockholder on the record date for voting for such meeting.
Section 10. Proxies . Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy executed or transmitted in a manner permitted by applicable law, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly
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executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. At each meeting of stockholders, and before any voting commences, all proxies filed at or before the meeting shall be submitted to and examined by the Secretary or a person designated by the Secretary, and no shares may be represented or voted under a proxy that has been found to be invalid or irregular.
Section 11. Business Brought Before a Meeting of the Stockholders .
(A) Annual Meetings .
(1) At an annual meeting of the stockholders, only such nominations of persons for election to the Board of Directors shall be considered and such other business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, nominations and other business must be a proper matter for stockholder action under Delaware law and must be (a) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (b) brought before the meeting by or at the direction of the Board of Directors or (c) otherwise properly brought before the meeting by a stockholder who (i) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such business is proposed or such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (A) of this Section 11 of ARTICLE II is delivered to the Secretary of the Corporation and on the record date for the determination of stockholders entitled to vote at the annual meeting of stockholders, (ii) is entitled to vote at the meeting, and (iii) complies with the notice procedures set forth in paragraph (A) of this Section 11 of ARTICLE II. For nominations or other business to be properly brought before an annual meeting by a stockholder, the stockholder must have given timely notice thereof in writing and in proper form to the Secretary of the Corporation. To be timely, a stockholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation, not later than the close of business on the ninetieth (90th) day nor earlier than the close of business on the one hundred twentieth (120th) day prior to the first anniversary of the preceding year’s annual meeting (provided, however, that in the event that there was no annual meeting in the prior year or the date of the annual meeting is more than thirty (30) days before or more than seventy (70) days after such anniversary date, notice by the stockholder must be so delivered not earlier than the close of business on the one hundred twentieth (120th) day prior to such annual meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such annual meeting or the tenth (10th) day following the day on which public announcement of the date of such meeting is first made by the Corporation). In no event shall any adjournment, deferral or postponement of an annual meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above. Notwithstanding anything in this paragraph to the contrary, in the event that the number of directors to be elected to the Board of Directors at an annual meeting is increased and there is no public announcement by the Corporation naming the
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nominees for the additional directorships at least one hundred (100) days prior to the first anniversary of the preceding year’s annual meeting, a stockholder’s notice required by paragraph (A) of this Section 11 of ARTICLE II shall also be considered timely, but only with respect to nominees for the additional directorships, if it shall be delivered to the Secretary at the principal executive offices of the Corporation not later than the close of business on the tenth (10th) day following the day on which such public announcement is first made by the Corporation.
(2) A stockholder’s notice providing for the nomination of a person or persons for election as a director or directors of the Corporation shall set forth (a) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made (and for purposes of clauses (ii) through (ix) below, including any interests described therein held by any affiliates or associates (each within the meaning of Rule 12b-2 under the Securities Exchange Act of 1934 (the “Exchange Act”) for purposes of these Bylaws) of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household or Stockholder Associated Person (as defined below), in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)) (i) the name and address of such stockholder, as they appear on the Corporation’s books, and of such beneficial owner, (ii) the class or series and number of shares of capital stock of the Corporation which are, directly or indirectly, beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) (provided that a person shall in all events be deemed to beneficially own any shares of any class or series and number of shares of capital stock of the Corporation as to which such person has a right to acquire beneficial ownership at any time in the future) and owned of record by such stockholder or beneficial owner, (iii) the class or series, if any, and number of options, warrants, puts, calls, convertible securities, stock appreciation rights, or similar rights, obligations or commitments with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares or other securities of the Corporation or with a value derived in whole or in part from the value of any class or series of shares or other securities of the Corporation, whether or not such instrument, right, obligation or commitment shall be subject to settlement in the underlying class or series of shares or other securities of the Corporation (each a “Derivative Security”), which are, directly or indirectly, beneficially owned by such stockholder or beneficial owner or Stockholder Associated Person, (iv) any agreement, arrangement, understanding, or relationship, including any repurchase or similar so-called “stock borrowing” agreement or arrangement, engaged in, directly or indirectly, by such stockholder or beneficial owner or any Stockholder Associated Person, the purpose or effect of which is to mitigate loss to, reduce the economic risk (of ownership or otherwise) of any class or series of capital stock or other securities of the
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Corporation by, manage the risk of share price changes for, or increase or decrease the voting power of, such stockholder or beneficial owner or any Stockholder Associated Person with respect to any class or series of capital stock or other securities of the Corporation, or that provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of any class or series or capital stock or other securities of the Corporation, (v) a description of any other direct or indirect opportunity to profit or share in any profit (including any performance-based fees) derived from any increase or decrease in the value of shares or other securities of the Corporation, (vi) any proxy, contract, arrangement, understanding or relationship pursuant to which such stockholder or beneficial owner or any Stockholder Associated Person has a right to vote any shares or other securities of the Corporation, (vii) any rights to dividends on the shares of the Corporation owned beneficially by such stockholder or such beneficial owner or such Stockholder Associated Person that are separated or separable from the underlying shares of the Corporation, (viii) any proportionate interest in shares of the Corporation or Derivative Securities held, directly or indirectly, by a general or limited partnership in which such stockholder or beneficial owner or Stockholder Associated Person is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, if any, (ix) a description of all agreements, arrangements, and understandings between such stockholder or beneficial owner or Stockholder Associated Person and any other person(s) (including their name(s)) in connection with or related to the ownership or voting of capital stock of the Corporation or Derivative Securities, (x) any other information relating to such stockholder or beneficial owner or Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (xi) a statement as to whether either such stockholder or beneficial owner or Stockholder Associated Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to elect such stockholder’s nominees and/or otherwise to solicit proxies from the stockholders in support of such nomination and (xii) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such nomination, and (b) as to each person whom the stockholder proposes to nominate for election or reelection as a director, (i) all information relating to such person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to the Exchange Act and the rules and regulations promulgated thereunder (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected), (ii) a description of all direct and indirect compensation and other material agreements, arrangements and understandings during the past three years, and any other material relationships, between or among such stockholder or beneficial owner or Stockholder Associated Person, if any, and their respective affiliates and associates, or others acting in concert therewith, on the one hand, and each proposed nominee and his or her respective affiliates and associates, or others acting in concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 promulgated
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under Regulation S-K if the stockholder making the nomination and any beneficial owner on whose behalf the nomination is made, or any affiliate or associate thereof or person acting in concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (iii) a completed and signed questionnaire regarding the background and qualifications of such person to serve as a director, a copy of which may be obtained upon request to the Secretary of the Corporation, (iv) all information with respect to such person that would be required to be set forth in a stockholder’s notice pursuant to this Section 11 of ARTICLE II if such person were a stockholder or beneficial owner, on whose behalf the nomination was made, submitting a notice providing for the nomination of a person or persons for election as a director or directors of the Corporation in accordance with this Section 11 of ARTICLE II and (v) such additional information that the Corporation may reasonably request to determine the eligibility or qualifications of such person to serve as a director or an independent director of the Corporation, or that could be material to a reasonable stockholder’s understanding of the qualifications and/or independence, or lack thereof, of such nominee as a director. For purposes of these Bylaws, a “Stockholder Associated Person” of any stockholder means (i) any “affiliate” or “associate” (as those terms are defined in Rule 12b-2 under the Exchange Act) of such stockholder, (ii) any beneficial owner of any stock or other securities of the Corporation owned of record or beneficially by such stockholder, (iii) any person directly or indirectly controlling, controlled by or under common control with any such Stockholder Associated Person referred to in clause (i) or (ii) above and (iv) any person acting in concert in respect of any matter involving the Corporation or its securities with either such stockholder or any beneficial owner of any stock or other securities of the Corporation owned of record or beneficially by such stockholder.
(3) A stockholder’s notice regarding business proposed to be brought before a meeting of stockholders other than the nomination of persons for election to the Board of Directors shall set forth (a) as to the stockholder giving notice and the beneficial owner or Stockholder Associated Person, if any, on whose behalf the proposal is made, the information called for by clauses (a)(i) through (a)(ix) of the immediately preceding paragraph (2) (including any interests described therein held by any affiliates or associates of such stockholder or beneficial owner or by any member of such stockholder’s or beneficial owner’s immediate family sharing the same household, in each case as of the date of such stockholder’s notice, which information shall be confirmed or updated, if necessary, by such stockholder and beneficial owner (x) not later than ten (10) days after the record date for the notice of the meeting to disclose such ownership as of the record date for the notice of the meeting, and (y) not later than eight (8) business days before the meeting or any adjournment or postponement thereof to disclose such ownership as of the date that is ten (10) business days before the meeting or any adjournment or postponement thereof (or if not practicable to provide such updated information not later than eight (8) business days before any adjournment or postponement, on the first practicable date before any such adjournment or postponement)), (b) a brief description of (i) the business desired to be brought before such meeting, including the text of any resolution proposed for consideration by the stockholders, (ii) the reasons for conducting such business at the meeting and (iii) any material interest of such stockholder or beneficial owner or Stockholder Associated
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Person in such business, including a description of all agreements, arrangements and understandings between such stockholder or beneficial owner or Stockholder Associated Person and any other person(s) (including the name(s) of such other person(s)) in connection with or related to the proposal of such business by the stockholder, (c) as to the stockholder giving notice and the beneficial owner, if any, on whose behalf the proposal is made, (i) a statement as to whether either such stockholder or beneficial owner of Stockholder Associated Person intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Corporation’s voting shares required under applicable law to approve the proposal and/or otherwise to solicit proxies from stockholders in support of such proposal and (ii) any other information relating to such stockholder or beneficial owner or Stockholder Associated Person that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for the election of directors in a contested election pursuant to Section 14 of the Exchange Act and the rules and regulations promulgated thereunder, (d) if the matter such stockholder proposes to bring before any meeting of stockholders involves an amendment to the Corporation’s Bylaws, the specific wording of such proposed amendment, (e) a representation that the stockholder is a holder of record of shares of the Corporation entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business and (f) such additional information that the Corporation may reasonably request regarding such stockholder or beneficial owner or Stockholder Associated Person, if any, and/or the business that such stockholder proposes to bring before the meeting. The foregoing notice requirements shall be deemed satisfied by a stockholder if the stockholder has notified the Corporation of his or her intention to present a proposal at an annual meeting in compliance with Rule 14a-8 (or any successor thereof) promulgated under the Exchange Act and such stockholder’s proposal has been included in a proxy statement that has been prepared by the Corporation to solicit proxies for such annual meeting.
(B) Special Meetings of Stockholders . Special meetings of the stockholders of the Corporation may be called only in the manner set forth in the Certificate of Incorporation. Only such business shall be conducted at a special meeting of stockholders as is a proper matter for stockholder action under Delaware law and as shall have been brought before the meeting pursuant to the Corporation’s notice of the special meeting given by or at the direction of the Board or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation). The notice of such special meeting shall include the purpose or purposes for which the meeting is called. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation’s notice of meeting (1) by or at the direction of the Board of Directors or by the Secretary (solely to the extent and in the manner provided by the Certificate of Incorporation) or (2) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who (a) is a stockholder of record of the Corporation (and, with respect to any beneficial owner, if different, on whose behalf such nomination or nominations are made, only if such beneficial owner is the beneficial owner of shares of the Corporation) both at the time the notice provided for in paragraph (B) of this Section 11 of ARTICLE II is delivered to the Corporation’s Secretary and on the record date for the determination of stockholders entitled to vote at the special meeting, (b) is entitled to vote at the meeting and upon such election and (c) complies with the notice procedures set forth in
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subparagraph (2) of paragraph (A) of this Section 11 of ARTICLE II. In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder entitled to vote in such election of directors may nominate a person or persons (as the case may be) for election to such position(s) as specified in the Corporation’s notice of meeting, if the stockholder’s notice required by paragraph (A)(2) of this Section 11 of ARTICLE II shall be delivered to the Corporation’s Secretary at the principal executive offices of the Corporation not earlier than the close of business on the one hundred twentieth (120th) day prior to such special meeting and not later than the close of business on the later of the ninetieth (90th) day prior to such special meeting or the tenth (10th) day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall any adjournment, deferral or postponement of a special meeting or the public announcement thereof commence a new time period (or extend any time period) for the giving of a stockholder’s notice as described above.
(C) General .
(1) Only such persons who are nominated in accordance with the procedures set forth in this Section 11 of ARTICLE II shall be eligible to be elected at an annual or special meeting of stockholders of the Corporation to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 11 of ARTICLE II. Notwithstanding the foregoing provisions of this Section 11 of ARTICLE II, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the Corporation to present a nomination or proposed business, such nomination shall be disregarded and such proposed business shall not be transacted, notwithstanding that proxies in respect of such vote may have been received by the Corporation. For purposes of this Section 11 of this ARTICLE II, to be considered a “qualified representative” of the stockholder, a person must be a duly authorized officer, manager or partner of such stockholder or must be authorized by a writing executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such writing or electronic transmission, or a reliable reproduction of the writing or electronic transmission, at the meeting of stockholders.
(2) For purposes of this section, “public announcement” shall mean disclosure in a press release reported by Dow Jones News Service, Associated Press or a comparable national news service in the United States or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 11 of ARTICLE II, a stockholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 11 of ARTICLE II.
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(4) Nothing in this section shall be deemed to (a) affect any rights of stockholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act, (b) confer upon any stockholder a right to have a nominee or any proposed business included in the Corporation’s proxy statement, or (c) affect any rights of the holders of any series of preferred stock to elect directors pursuant to any applicable provisions of the Certificate of Incorporation.
(5) The chairman of the meeting of stockholders shall, if the facts warrant, determine and declare to the meeting that a nomination was not properly made or any business was not properly brought before the meeting, as the case may be, in accordance with the provisions of this Section 11 of ARTICLE II; if he or she should so determine, he or she shall so declare to the meeting and any such nomination not properly made or any business not properly brought before the meeting, as the case may be, shall not be transacted.
Section 12. Fixing a Record Date for Stockholder Meetings . In order that the Corporation may determine the stockholders entitled to notice of any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting. If the Board of Directors so fixes a date, such date shall also be the record date for determining the stockholders entitled to vote at such meeting unless the Board of Directors determines, at the time it fixes such record date, that a later date on or before the date of the meeting shall be the date for making such determination. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of and to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for determination of stockholders entitled to vote at the adjourned meeting, and in such case shall also fix as the record date for stockholders entitled to notice of such adjourned meeting the same or an earlier date as that fixed for determination of stockholders entitled to vote in accordance with the foregoing provisions of this Section 12 of ARTICLE II at the adjourned meeting.
Section 13. Fixing a Record Date for Other Purposes . In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment or any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purposes of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty (60) days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
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Section 14. Conduct of Meetings .
(a) Generally . Meetings of stockholders shall be presided over by a chairman designated by the Board of Directors, or in his or her absence or if no chairman is so designated, by the Chairman of the Board, if any, or in the absence of the Chairman of the Board, by the Chief Executive Officer, or in the absence of the Chief Executive Officer, by the President, or in the absence of the President, by the Chief Financial Officer, or in the absence of all of the foregoing, by the most senior officer of the Corporation present at the meeting. The Secretary shall act as secretary of the meeting, but in the absence of the Secretary, the chairman of the meeting may appoint any person to act as secretary of the meeting.
(b) Rules, Regulations and Procedures . The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the Corporation as it shall deem appropriate, including, without limitation, such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the Corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure. The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted. The chairman of the meeting shall have the power to adjourn the meeting to another place, if any, date and time or to recess the meeting.
(c) Inspectors of Elections . The Corporation may, and to the extent required by law shall, in advance of any meeting of stockholders, appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is able to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the Corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote is completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law.
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Article III
DIRECTORS
Section 1. General Powers . Except as otherwise provided by the Certificate of Incorporation or the General Corporation Law of the State of Delaware, the business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.
Section 2. Annual Meetings . Except as otherwise from time to time determined by resolution of the Board of Directors, an annual meeting of the Board of Directors shall be held without other notice than this Bylaw immediately after, and at the same place (if any) as, the annual meeting of stockholders.
Section 3. Regular Meetings and Special Meetings . Regular meetings, other than the annual meeting, of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by resolution of the Board of Directors. Special meetings of the Board of Directors may be called by the Chairman of the Board, the Chief Executive Officer or the President (in either case, if such person is a director) or upon the written request of at least a majority of the directors then in office.
Section 4. Notice of Meetings . Notice of regular meetings of the Board of Directors need not be given except as otherwise required by law or these Bylaws. Notice of each special meeting of the Board of Directors, and of each regular and annual meeting of the Board of Directors for which notice shall be required, shall be given by the Secretary as hereinafter provided in this Section 4. Any such notice shall state the time and place of the meeting. Notice of any special meeting, and of any regular or annual meeting for which notice is required, shall be given to each director at least (a) 24 hours before the meeting, if the notice is given by telephone, by delivery in person, or sent by telex, telecopy, electronic mail or similar means or (b) 5 days before the meeting if delivered by mail to the director’s residence or usual place of business. Such notice shall be deemed to be delivered when deposited in the United States mail so addressed, with postage prepaid, or when transmitted if sent by telex, telecopy, email or similar means. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting.
Section 5. Chairman of the Board, Quorum, Required Vote and Adjournment . The Board of Directors may elect from among its ranks, by the affirmative vote of a majority of the voting power of directors then in office, a Chairman of the Board, who shall preside at all meetings of the Board of Directors at which he or she is present and shall have such powers and perform such duties as the Board of Directors may from time to time prescribe. If the Chairman of the Board is not present at a meeting of the Board of Directors, the Chief Executive Officer shall preside at such meeting (if the Chief Executive Officer is a director and is not also Chairman of the Board), and, if the Chief Executive Officer is not present at such meeting or is not a director, the President shall preside at such meeting (if the President is a director and is not also the Chairman of the Board or the Chief Executive Officer), and, if the President is not present at such meeting or is not a director, a majority of the voting power of directors present at such meeting shall elect one of their members to so preside. A majority of the voting power of the whole Board of Directors shall constitute a quorum for the transaction of business. Unless by express provision of an applicable law, the Certificate of Incorporation or these Bylaws a
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different vote is required, the affirmative vote of a majority of the voting power present at a meeting at which a quorum is present shall be the act of the Board of Directors. If a quorum shall not be present at any meeting of the Board of Directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 6. Committees . The Board of Directors (i) may designate one or more committees consisting of one or more of the directors of the Corporation and (ii) shall, during such period of time as any securities of the Corporation are listed on a national securities exchange, designate all committees required by the rules and regulations of such exchange. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of such committee. Except to the extent restricted by applicable law or the Certificate of Incorporation, each such committee, to the extent provided in the resolution creating it, shall have and may exercise all the powers and authority of the Board of Directors. Each such committee shall serve at the pleasure of the Board of Directors as may be determined from time to time by resolution adopted by the Board of Directors or as required by the rules and regulations of such exchange, if applicable. Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors upon request.
Section 7. Committee Rules . Each committee of the Board of Directors may fix its own rules of procedure and shall hold its meetings as provided by such rules, except as may otherwise be provided by a resolution of the Board of Directors designating such committee. Unless otherwise provided in such a resolution, the presence of at least a majority of the voting power of the members of the committee shall be necessary to constitute a quorum. All matters shall be determined by the affirmative vote of a majority of the voting power present. Unless otherwise provided in such a resolution, in the event that a member and that member’s alternate, if alternates are designated by the Board of Directors, of such committee is or are absent or disqualified, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in place of any such absent or disqualified member.
Section 8. Telephonic and Other Meetings . Unless restricted by the Certificate of Incorporation, any one or more members of the Board of Directors or any committee thereof may participate in and act at any meeting of the Board of Directors or such committee by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other. Participation by such means shall constitute presence in person at a meeting.
Section 9. Waiver of Notice . Any director may waive notice of any meeting of the Board of Directors, or any committee thereof, by a written waiver signed by the director entitled to the notice, or a waiver by electronic transmission by the director entitled to notice, whether before or after the time stated therein. Attendance of a director at a meeting of the Board of Directors, or of any committee thereof, shall constitute a waiver of notice of such meeting, except when the director attends for the express purpose of objecting at the beginning of the
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meeting to the transaction of any business because the meeting is not lawfully called or convened.
Section 10. Action by Written Consent . Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board of Directors or such committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board of Directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
Section 11. Compensation . The Board of Directors shall have the authority to fix the compensation, including fees and reimbursement of expenses, of directors for services to the Corporation in any capacity.
Section 12. Reliance on Books and Records . A member of the Board of Directors, or a member of any committee designated by the Board of Directors shall, in the performance of such director’s duties, be fully protected in relying in good faith upon records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of the Corporation’s officers or employees, or committees of the Board of Directors, or by any other person as to matters the director reasonably believes are within such other person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.
Section 13. Resignation . Any director may resign by delivering a resignation in writing or by electronic transmission to the Corporation. Such resignation shall be effective upon delivery unless it is specified to be effective at some later time or upon the happening of some later event or events.
Article IV
OFFICERS
Section 1. Number, Titles . The officers of the Corporation shall be elected by the Board of Directors and may consist of a Chief Executive Officer, a President, a Chief Financial Officer, one or more Vice Presidents, a Secretary and such other officers and assistant officers as may be deemed necessary or desirable by the Board of Directors. Any number of offices may be held by the same person, except that neither the Chief Executive Officer nor the President shall also hold the office of Secretary. In its discretion, the Board of Directors may choose not to fill any office for any period as it may deem advisable, except that the offices of President and Secretary shall be filled as expeditiously as possible.
Section 2. Election and Term of Office . The officers of the Corporation shall be elected annually by the Board of Directors at its first meeting held after each annual meeting of stockholders or as soon thereafter as convenient. Vacancies may be filled or new offices created and filled at any meeting of the Board of Directors. Each officer shall hold office until a
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successor is duly elected and qualified or until his or her earlier death, resignation, removal, disqualification, or retirement as hereinafter provided.
Section 3. Removal . Any officer or agent elected by the Board of Directors may be removed by the Board of Directors at its sole discretion, but such removal shall be without prejudice to the contract rights, if any, of the person so removed.
Section 4. Vacancies . Any vacancy occurring in any office because of death, resignation, removal, disqualification, retirement or otherwise may be filled by the Board of Directors.
Section 5. Compensation . Compensation of all executive officers shall be approved by the Board of Directors, and no officer shall be prevented from receiving such compensation by virtue of his or her also being a director of the Corporation; provided, however, that compensation of some or all executive officers may be determined by a committee established for that purpose if so authorized by the Board of Directors or as required by applicable law or any applicable rule or regulation, including any rule or regulation of any stock exchange upon which the Corporation’s securities are then listed for trading.
Section 6. Chief Executive Officer . The Chief Executive Officer shall have, subject to the supervision, direction and control of the Board of Directors, the general powers and duties of supervision, direction, and management of the business and affairs of the Corporation, including, without limitation, all powers necessary to direct and control the organizational and reporting relationships within the Corporation. The Chief Executive Officer shall see that all orders and resolutions of the Board of Directors are carried into effect. In addition, the Chief Executive Officer shall have such other powers and perform such other duties as may be delegated to him or her by the Board of Directors or as are set forth in the Certificate of Incorporation or these Bylaws. If the Board of Directors has not elected or appointed a President or the office of the President is otherwise vacant, and no officer otherwise functions with the powers and duties of the President, then, unless otherwise determined by the Board of Directors, the Chief Executive Officer shall also have all the powers and duties of the President.
Section 7. The President . The President, if there is such an officer and the Board of Directors so directs, shall serve as chief operating officer and have the powers and duties customarily and usually associated with the office of chief operating officer unless the Board of Directors provides for another officer to serve as chief operating officer (or to have the powers and duties of chief operating officer). The President shall have such other powers and perform such other duties as may be delegated to him or her from time to time by the Board of Directors or the Chief Executive Officer. If the Board of Directors has not elected or appointed a Chief Executive Officer or the office of Chief Executive Officer is otherwise vacant, then, unless otherwise determined by the Board of Directors, the President shall also have all the powers and duties of the Chief Executive Officer.
Section 8. Vice Presidents . Each Vice President shall have the powers and duties delegated to him or her by the Board of Directors or the President. One Vice President may be designated by the Board of Directors to perform the duties and exercise the powers of the President in the event of the President’s absence or disability.
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Section 9. The Secretary and Assistant Secretaries . The Secretary shall issue all authorized notices for, and shall keep minutes of, all meetings of the stockholders and the Board of Directors. He or she shall have charge of the corporate books and shall perform other duties as the Board of Directors may from time to time prescribe.
Any Assistant Secretary, if there is such an officer, shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer, President or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors), shall perform the duties and exercise the powers of the Secretary.
Section 10. The Chief Financial Officer, Treasurer and Assistant Treasurers . The Chief Financial Officer shall keep or cause to be kept the books of account of the Corporation in a thorough and proper manner and shall render statements of the financial affairs of the Corporation in such form and as often as required by the Board of Directors, the Chief Executive Officer or the President. The Chief Financial Officer, subject to the order of the Board of Directors, shall have the custody of all funds and securities of the Corporation. The Chief Financial Officer shall perform other duties commonly incident to such office and shall also perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer or the President shall designate from time to time. The Chief Executive Officer or President may direct the Treasurer or any Assistant Treasurer, if there is such an officer, to assume and perform the duties of the Chief Financial Officer in the absence or disability of the Chief Financial Officer, and each Treasurer and Assistant Treasurer shall perform other duties commonly incident to such office and shall also perform such other duties and have such other powers as the Board of Directors, the Chief Executive Officer or the President shall designate from time to time.
Section 11. Other Officers, Assistant Officers and Agents . Officers, assistant officers and agents, if any, other than those whose duties are provided for in these Bylaws, shall have such authority and perform such duties as may from time to time be prescribed by resolution of the Board of Directors.
Section 12. Delegation of Authority . The Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person whom it may select.
Section 13. Officers’ Bonds or Other Security . If required by the Board of Directors, any officer of the Corporation shall give a bond or other security for the faithful performance of his duties, in such amount and with such surety as the Board of Directors may require.
Section 14. Absence or Disability of Officers . In the case of the absence or disability of any officer of the Corporation and of any person hereby authorized to act in such officer’s place during such officer’s absence or disability, the Board of Directors may by resolution delegate the powers and duties of such officer to any other officer or to any director, or to any other person selected by it.
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Article V
STOCK
Section 1. Form . The shares of stock of the Corporation shall be represented by certificates, provided that the Board of Directors may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the Corporation. Every holder of stock represented by certificates shall be entitled to have a certificate signed by, or in the name of the Corporation by, (i) the Chairman of the Board, or the President or Vice President and (ii) the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary. Any or all signatures on any such certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed, whose facsimile signature has been used on or who has duly affixed a facsimile signature or signatures to any such certificate or certificates shall cease to be such officer, transfer agent or registrar of the Corporation whether because of death, resignation or otherwise before such certificate or certificates have been issued by the Corporation, such certificate or certificates may nevertheless be issued as though the person or persons who signed such certificate or certificates, whose facsimile signature or signatures have been used thereon or who duly affixed a facsimile signature or signatures thereon had not ceased to be such officer, transfer agent or registrar of the Corporation. All certificates for shares shall be consecutively numbered or otherwise identified.
Section 2. Transfers of Stock. Except to the extent otherwise provided in the Certificate of Incorporation, transfers of shares of stock of the Corporation shall be made only on the stock record of the Corporation by the holder of record thereof or by his, her or its attorney thereunto authorized by the power of attorney duly executed and filed with the Secretary of the Corporation or the transfer agent thereof. Certificated shares shall be transferred only upon surrender of the certificate or certificates representing such shares, properly endorsed or accompanied by a duly executed stock transfer power. Uncertificated shares shall be transferred by delivery of a duly executed stock transfer power. Registration of transfer of any shares shall be subject to applicable provisions of the Certificate of Incorporation and applicable law with respect to the transfer of such shares. The Board of Directors may make such additional rules and regulations as it may deem expedient concerning the issue and transfer of shares of stock of the Corporation.
Section 3. Transfer Agent. The Board of Directors may appoint a bank or trust company organized under the laws of the United States or any state thereof to act as its transfer agent or registrar, or both in connection with the transfer of any class or series of securities of the Corporation.
Section 4. Lost, Stolen or Destroyed Certificates . The Corporation may issue or direct a new certificate or certificates or uncertificated shares to be issued in place of any certificate or certificates previously issued by the Corporation alleged to have been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, or of uncertificated shares, the Corporation may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or certificates, or his or her legal representative, to give the Corporation a bond sufficient to
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indemnify the Corporation against any claim that may be made against the Corporation on account of the loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.
Section 5. Registered Stockholders . The Corporation shall be entitled to recognize the exclusive right of a person registered on its records as the owner of shares of stock of the Corporation to receive dividends, to vote, to receive notifications and otherwise to exercise all the rights and powers of an owner of such shares. The Corporation shall not be bound to recognize any equitable or other claim to or interest in any such shares of stock on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware.
Article VI
GENERAL PROVISIONS
Section 1. Dividends . Subject to the provisions of the Certificate of Incorporation, dividends upon the shares of capital stock of the Corporation may be declared by the Board of Directors in accordance with applicable law. Dividends may be paid in cash, in property, in shares of the capital stock or in any combination thereof, subject to the provisions of applicable law and the Certificate of Incorporation. Before payment of any dividend, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the Board of Directors from time to time, in its absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors may think conducive to the interests of the Corporation. The Board of Directors may modify or abolish any such reserves in the manner in which it was created.
Section 2. Contracts . In addition to the powers otherwise granted to officers pursuant to ARTICLE IV hereof, the Board of Directors may authorize any officer or officers, or any agent or agents, in the name and on behalf of the Corporation to enter into or execute and deliver any and all deeds, bonds, mortgages, contracts and other obligations or instruments, and such authority may be general or confined to specific instances.
Section 3. Fiscal Year . The fiscal year of the Corporation shall be fixed by resolution of the Board of Directors.
Section 4. Corporate Seal . The Board of Directors may provide a corporate seal which shall be in the form as the Board of Directors shall from time to time determine. The seal may be used by causing it or a facsimile thereof to be impressed or affixed or reproduced or otherwise. Notwithstanding the foregoing, no seal shall be required by virtue of this section.
Section 5. Voting Securities Owned By Corporation . Voting securities in any other entity held by the Corporation shall be voted (or consents in writing may be provided in respect thereof) by the Chief Executive Officer, the President, the Chief Financial Officer, the Treasurer, the Secretary or any Vice President, unless the Board of Directors specifically confers authority to vote (or express consent in writing) with respect thereto, which authority may be general or confined to specific instances, upon some other person or officer. Any person authorized to vote
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or express consent with respect to such securities shall have the power to appoint proxies, with general power of substitution.
Section 6. Inspection of Books and Records . The Board of Directors shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware.
Section 7. Time Periods . Unless otherwise provided by applicable law, in applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included.
Section 8. Section Headings . Section headings in these Bylaws are for convenience of reference only and shall not be given any substantive effect in limiting or otherwise construing any provision herein.
Section 9. Inconsistent Provisions . In the event that any provision of these Bylaws is or becomes inconsistent with any provision of the Certificate of Incorporation, the General Corporation Law of the State of Delaware or any other applicable law, the provision of these Bylaws shall not be given any effect to the extent of such inconsistency but shall otherwise be given full force and effect.
Article VII
GENERAL PROVISIONS
Section 1. Right to Indemnification . Each person who was or is made a party or is threatened to be made a party to or is otherwise involved (including involvement, without limitation, as a witness) in any actual or threatened action, suit or proceeding, whether civil, criminal, administrative or investigative (a “proceeding”), by reason of the fact that such person is or was a director or officer of the Corporation or, while a director or officer of the Corporation, is or was serving at the request of the Corporation as an employee or agent of the Corporation or as a director, officer, partner, member, trustee, administrator, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan (an “indemnitee”), whether the basis of such proceeding is alleged action in an official capacity as a director or officer or in any other capacity while serving as a director or officer, shall be indemnified and held harmless by the Corporation to the fullest extent authorized by the General Corporation Law of the State of Delaware, as the same exists or may hereafter be amended, against all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”), and any other penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by such indemnitee in connection therewith and such indemnification shall continue as to an indemnitee who has ceased to be a director or officer of the Corporation (or has
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ceased to serve, at the request of the Corporation, as an employee or agent of the Corporation or as a director, officer, partner, member, trustee, administrator, employee or agent of another corporation or of a partnership, joint venture, limited liability company, trust or other enterprise, including service with respect to an employee benefit plan) and shall inure to the benefit of the indemnitee’s heirs, executors and administrators; provided, however, that, except as provided in Section 2 of this ARTICLE VII with respect to proceedings to enforce rights to indemnification or advancement of expenses, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized in the first instance by the Board of Directors. The right to indemnification conferred in this Section 1 of this ARTICLE VII shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (an “advancement of expenses”); provided, however, that an advancement of expenses incurred by an indemnitee shall be made only upon delivery to the Corporation of an undertaking (an “undertaking”), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (a “final adjudication”) that such indemnitee is not entitled to be indemnified for such expenses under this Section 1 or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification and advancement of expenses to employees and agents of the Corporation with the same or lesser scope and effect as the foregoing indemnification and advancement of expenses of directors and officers.
Section 2. Procedure for Indemnification . If a claim for indemnification under this Article VII (which may only be made following the final disposition of such proceeding) is not paid in full within sixty days after the Corporation has received a claim therefor by the indemnitee, or if a claim for any advancement of expenses under this Article VII is not paid in full within thirty days after the Corporation has received a statement or statements requesting such amounts to be advanced (provided that the indemnitee has delivered the undertaking contemplated by Section 1 of this Article VII), the indemnitee shall thereupon (but not before) be entitled to file suit to recover the unpaid amount of such claim. Such person’s costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation to the fullest extent permitted by law. It shall be a defense to any action by a director or officer for indemnification or the advancement of expenses (other than an action brought to enforce a claim for the advancement of expenses where the undertaking required pursuant to Section 2 of this ARTICLE VII, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the General Corporation Law of the State of Delaware for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be on the Corporation. Neither the failure of the Corporation (including its directors, a committee thereof, independent legal counsel or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because such person has met the applicable standard of conduct set forth in the General Corporation Law of the State of Delaware, nor an actual determination by the Corporation (including its directors, a committee thereof, independent legal counsel or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. The procedure for indemnification of
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other employees and agents of the Corporation for whom indemnification and advancement of expenses is provided pursuant to Section 1 of this ARTICLE VII shall be the same procedure set forth in this Section 2 for directors or officers of the Corporation, unless otherwise set forth in the action of the Board of Directors providing indemnification and advancement of expenses for such employees or agents of the Corporation.
Section 3. Insurance . The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was or has agreed to become a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan, against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the General Corporation Law of the State of Delaware.
Section 4. Service for Subsidiaries . Any person serving as a director, officer, employee or agent of another corporation, partnership, limited liability company, joint venture or other enterprise, at least 50% of whose equity interests are owned directly or indirectly by the Corporation (a “subsidiary” for this ARTICLE VII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.
Section 5. Reliance . Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnification, advancement of expenses and other rights contained in this ARTICLE VII in entering into or continuing such service. The rights to indemnification and to the advancement of expenses conferred in this ARTICLE VII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.
Section 6. Other Rights; Continuation of Rights to Indemnification . The rights to indemnification and to the advancement of expenses conferred in this ARTICLE VII shall not be exclusive of any other right which any person may have or hereafter acquire under the Certificate of Incorporation, these Bylaws or under any statute, agreement, vote of stockholders or disinterested directors or otherwise. All rights to indemnification and to the advancement of expenses under this ARTICLE VII shall be deemed to be a contract between the Corporation and each indemnitee who serves or served in such capacity at any time while this ARTICLE VII is in effect. Any repeal or modification of this ARTICLE VII or any repeal or modification of relevant provisions of the General Corporation Law of the State of Delaware or any other applicable laws shall not in any way diminish any rights to indemnification and advancement of expenses of such indemnitee or the obligations of the Corporation arising hereunder with respect to any proceeding arising out of, or relating to, any actions, transactions or facts occurring prior to the final adoption of such repeal or modification.
Section 7. Merger or Consolidation . For purposes of this ARTICLE VII, references to the “Corporation” shall include, in addition to the resulting or surviving corporation, any
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constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this ARTICLE VII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
Section 8. Savings Clause . If this ARTICLE VII or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify and advance expenses to each person entitled to indemnification or advancement of expenses under Section 1 of this ARTICLE VII as to all expense, liability and loss (including attorneys’ fees and related disbursements, judgments, fines, ERISA excise taxes and penalties, and any other penalties and amounts paid or to be paid in settlement) actually and reasonably incurred or suffered by such person and for which indemnification or advancement of expenses is available to such person pursuant to this ARTICLE VII to the fullest extent permitted by any applicable portion of this ARTICLE VII that shall not have been invalidated and to the fullest extent permitted by applicable law.
Article VIII
AMENDMENTS
These Bylaws may be amended, altered, changed or repealed or new Bylaws adopted only in accordance with Article Ten, Section 2 of the Certificate of Incorporation.
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Exhibit 4.3
WARRANT AGREEMENT
THIS WARRANT AGREEMENT dated as of [___________] , 2014 (this “ Agreement ”) is by and among Townsquare Media, Inc., a Delaware corporation (the “ Company ”), the Persons set forth on Schedule I hereto, and any other registered holders of the Warrant Certificates (as defined below) from time to time party hereto (each such Person or other holder, a “ Holder ” and, collectively, the “ Holders ”).
RECITALS:
WHEREAS, [_______________] warrants exercisable for shares of Common Stock (as defined below) are being issued to the Persons set forth on Schedule I hereto (collectively, the “ Warrants ”), with each such Person receiving the number of Warrants set forth opposite such Person’s name on Schedule I , in connection with the conversion of Townsquare Media, LLC, a Delaware limited liability company (the “ Predecessor LLC Entity ”), into the Company pursuant to the terms of the Plan of Conversion of the Predecessor LLC Entity, dated as of [___________] , 2014; and
WHEREAS, the Company and the Persons set forth on Schedule I hereto desire to enter into this Agreement to set forth the terms and conditions of the Warrants and the rights and obligations of the Company and the Holders.
NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Holders, intending to be legally bound, hereby agree as follows:
Article I
DEFINITIONS AND INTERPRETATION
Section 1.1 Certain Defined Terms . Capitalized terms used in this Agreement shall have the following respective meanings, except as otherwise provided herein or as the context shall otherwise require:
“ Board ” means the board of directors of the Company.
“ Business Day ” means a day other than a Saturday, Sunday or legal holiday in the state in which the Company’s principal executive office is located.
“ Certificate of Incorporation ” means the Certificate of Incorporation of the Company, as amended from time to time.
“ Common Stock ” means the Class A Common Stock, par value $0.01 per share, of the Company or any class or classes of units, stock or other equity interests issued in respect of such Class A Common Stock as a result of any reclassification, redemption or recharacterization thereof.
“ Exercise Price ” means $0.0001 per one (1) share of Common Stock, which amount is not subject to adjustment.
“ Expiration Date ” means, with respect to any Warrant, if elected by the Board, the tenth anniversary of the date hereof; otherwise, the Warrants will not expire.
“ FCC Restrictions ” means the FCC ownership and transfer restrictions set forth in Article Five of the Certificate of Incorporation, as determined in the Company’s sole and absolute discretion.
“ Governmental Authority ” means (i) any nation or government, (ii) any federal, state, county, province, city, town, municipality, local or other political subdivision thereof or thereto, (iii) any court, tribunal, department, commission, board, bureau, instrumentality, agency, council, arbitrator or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government and (iv) any other governmental entity, agency or authority having or exercising jurisdiction over any relevant Person, item or matter.
“ Laws ” means all laws, statutes, rules, regulations, ordinances, orders, writs, injunctions or decrees and other pronouncements having the effect of law of any Governmental Authority.
“ Non-U.S. Person ” means (i) a citizen of a country other than the United States, (ii) an entity organized under the laws of a jurisdiction other than those of the United States or any state, territory or possession of the United States, (iii) a government other than the government of the United States or of any state, territory or possession of the United States or (iv) a representative of, or entity controlled by, any person or entity referred to in any of the foregoing clauses (i) through (iii).
“ Organic Change ” means any recapitalization, reorganization, reclassification, consolidation, exchange of Common Stock, merger, sale of all or substantially all of the Company’s equity or assets or other transaction, in each case which is effected in such a way that holders of shares of Common Stock are entitled to receive (either directly or upon subsequent liquidation) cash, interests, securities or other assets or property with respect to or in exchange for shares of Common Stock.
“ Person ” means any individual, limited liability company, company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, Governmental Authority or other entity or enterprise.
“ Registration Agreement ” means the Second Amended and Restated Registration Agreement of the Company, among the parties from time to time party thereto, as amended from time to time.
“ Securities Act ” means the Securities Act of 1933, as amended.
“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended.
“ Transfer ” means any sale, transfer, assignment, pledge, mortgage, exchange, hypothecation, grant of a security interest or other direct or indirect disposition or encumbrance
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of an interest (including without limitation by operation of law) or the acts thereof, but explicitly excluding exchanges of a Warrant for Common Stock issuable upon the exercise of such Warrant in accordance with its terms. The term “ Transferred ” shall have a correlative meaning.
Section 1.2 Interpretation . In this Agreement, unless a clear contrary intention appears:
(a) the words “hereof,” “herein” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular provision of this Agreement;
(b) reference to any gender includes each other gender and the neuter;
(c) all terms defined in the singular shall have the same meanings in the plural and vice versa;
(d) reference to any Person includes such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained in this clause (d) is intended to authorize any assignment not otherwise permitted by this Agreement;
(e) reference to a Person in a particular capacity or capacities excludes such Person in any other capacity;
(f) reference to any contract or agreement means such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof;
(g) all references to Articles and Sections shall be deemed to be references to the Articles and Sections of this Agreement;
(h) all references to Exhibits shall be deemed to be references to the Exhibits attached hereto which are made a part hereof and incorporated herein by reference;
(i) the word “including” (and with correlative meaning “include”) means including, without limiting the generality of any description preceding such term;
(j) with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”;
(k) the captions and headings contained in this Agreement shall not be considered or given any effect in construing the provisions hereof if any question of intent should arise;
(l) reference to any Law means such Law as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time;
(m) where any provision of this Agreement refers to action to be taken by any Person, which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person; and
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(n) no provision of this Agreement shall be interpreted or construed against any party solely because that party or its legal representative drafted such provision.
Article II
ORIGINAL ISSUE OF WARRANTS
Section 2.1 Form of Warrant Certificates.
(a) The Warrants shall be evidenced by certificates substantially in the form attached hereto as Annex A (the “ Warrant Certificates ” and each a “ Warrant Certificate ”), with each Warrant Certificate dated the date on which such Warrant Certificate is countersigned by the Holder thereof. Each Warrant shall represent the right, subject to the provisions of this Agreement and such Warrant Certificate, to purchase one (1) share of Common Stock (subject to adjustment as set forth in Section 4.1) at the Exercise Price.
(b) The Warrant Certificates may have such insertions, letters, numbers or other marks of identification and such legends and endorsements stamped, printed, lithographed or engraved thereon as may, consistently herewith, be determined to be necessary or appropriate by the officers of the Company executing such Warrant Certificates as evidenced by their execution of the Warrant Certificates, or as may be required to comply with any applicable Law or with any rule or regulation of any securities exchange or to conform to usage. The definitive Warrant Certificates shall be typed, printed, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by applicable Law.
Section 2.2 Legends . The Warrant Certificates originally issued to each Holder, or issued upon registration of transfer of, or upon exchange for or in lieu of, any Warrant Certificate shall bear the following legend:
“THIS WARRANT, AND THE CLASS A COMMON STOCK OF THE COMPANY WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “ WARRANT SHARES ,” AND TOGETHER WITH THIS WARRANT, THE “ SECURITIES ”), HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY OF THE WARRANT SHARES REPRESENTED BY THIS WARRANT.
THE WARRANT SHARES REPRESENTED BY THIS WARRANT ARE SUBJECT TO THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
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SUCH PREFERENCES AND/OR RIGHTS, SPECIFIED IN THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED FROM TIME TO TIME. A COPY OF SUCH CERTIFICATE OF INCORPORATION SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
THE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS ON EXERCISE, TRANSFER, SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER SIMILAR TRANSFER AS SET FORTH IN A REGISTRATION AGREEMENT AMONG THE COMPANY AND THE PERSONS PARTY THERETO, AND A WARRANT AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDER OF THIS WARRANT, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.”
Each Holder further acknowledges and agrees that the Common Stock issued upon exercise of the Warrants, if certificated, shall bear a legend substantially in the form of the legend appearing above, and any other legends required by applicable federal and state securities laws, the Registration Agreement or otherwise called for by this Agreement or any other agreement between the Company and such Holder.
Section 2.3 Certain Transfer Restrictions.
(a) Any attempted Transfer that is prohibited by this Section 2.3 and not approved by majority vote of the Board shall be null and void ab initio and shall not be effective to Transfer any Warrants. The Company may seek any remedy available to it at law, in equity or otherwise, including an injunction prohibiting any such Transfer, to enforce the provisions of this Section 2.3.
(b) No Holder shall effect any Transfer of all or any portion of the Warrants held by such Holder, unless and until (i) such Holder shall have provided executed copies of the Assignment Form and the Joinder, in each case in the form attached to the Warrant Certificates and completed by the prospective transferee and (ii) if requested by the Company within ten (10) days of receiving the Assignment Form and the Joinder, such Holder shall have furnished the Company with an opinion of counsel reasonably satisfactory to the Company that such disposition will not require registration of such Warrants under the Securities Act.
(c) Subject to Section 2.3(b), a Holder may Transfer his, her or its Warrant Certificates by written application to the Company stating the name of the proposed transferee and otherwise complying with the terms of this Agreement and all applicable Laws. No such Transfer shall be effected until, and such transferee shall succeed to the rights of such Holder only upon, final acceptance and registration of the transfer by the Company in the register in accordance with this Agreement. Prior to due presentation for registration of transfer, the Company and any agent of the Company may deem and treat the Person in whose name the Warrant Certificates are registered as the absolute owner thereof for all purposes (notwithstanding any notation of ownership or other writing thereon made by anyone), and the Company shall not be affected by any notice to the contrary or be bound to recognize any equitable or other claim to or an interest in any Warrants on the part of any other Person and
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shall not be liable for any registration of transfer of Warrant Certificates that are registered or to be registered in the name of a fiduciary or the nominee of a fiduciary unless made with actual knowledge that a fiduciary or nominee is committing a breach of trust in requesting such registration of transfer or with such knowledge of such facts that its participation therein amounts to bad faith. When Warrant Certificates are presented to the Company with a request to register the transfer thereof or to exchange them for an equal number of Warrant Certificates of other authorized denominations, the Company shall register the transfer or make the exchange as requested if the requirements of this Agreement for such transaction are met, and shall execute any Warrant Certificates necessary to reflect such transfer or exchange. No service charge shall be made for any registration of transfer or exchange of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection with any registration of transfer of Warrant Certificates.
(d) Except as otherwise provided in this Section 2.3, all Warrant Certificates issued upon any registration of transfer or exchange of Warrants shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificates surrendered for registration of transfer or exchange.
(e) The Board shall have the power to determine, in its sole and absolute discretion, all matters related to this Section 2.3, including matters necessary or desirable to administer or to determine compliance with this Section 2.3 and, absent manifest error, the determinations of the Board shall be final and binding on the Company and the Holder.
Section 2.4 Surrender and Cancellation of Warrant Certificates . Any Warrant Certificate surrendered for registration of transfer, exchange or exercise of the Warrants represented thereby or pursuant to Section 3.3 shall be surrendered to the Company, and all Warrant Certificates surrendered shall be promptly canceled by the Company and shall not be reissued by the Company and, except as provided in Section 2.3 (in the case of a transfer or exchange), Section 3.2(c) (in the case of the exercise of less than all the Warrants represented by the surrendered Warrant Certificate) or ARTICLE V (in the case of a lost, stolen, destroyed or mutilated Warrant Certificate), no Warrant Certificate shall be issued hereunder in lieu thereof. The Company shall destroy all canceled Warrant Certificates in accordance with its normal procedures.
Article III
EXERCISE OF WARRANTS
Section 3.1 Exercise; Expiration Date . Each outstanding Warrant may be exercised on any Business Day which is on or after the date hereof and on or before the Expiration Date, but only if the exercise of such Warrant satisfies the FCC Restrictions and is exempt from the registration requirements of the Securities Act. Any Warrants not exercised by 5:00 p.m., Los Angeles time, on the Expiration Date shall expire and all rights thereunder and all rights in respect thereof under this Agreement shall automatically terminate at such time.
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Section 3.2 Method of Exercise; Payment of Exercise Price.
(a) All or any number of Warrants represented by a Warrant Certificate may be exercised prior to the Expiration Date by the Holder thereof by: (i) surrendering the Warrant Certificate evidencing such Warrants to the Company at its office set forth in Section 8.2 and (ii) the Holder’s completion and execution of the Exercise Form and the Ownership Certification, in each case in the form attached to such Warrant Certificate. The Company may, in its sole discretion, require such Holder to provide documentation in support of the Ownership Certification and such other information necessary for the Company to make a determination that the exercise of the Warrants by such Holder otherwise satisfies the FCC Restrictions. Upon delivery of the items set forth in subsections (i) and (ii) above, the election to exercise such Warrants shall be irrevocable. Such documents referenced above shall be accompanied by payment in full of the Exercise Price then in effect for each share of Common Stock for which such Warrant is exercised, together with any documentary, stamp or transfer tax, or other applicable tax or governmental charges.
(b) Except as set forth in Section 3.3, payment of the Exercise Price shall be made by the Holder exercising his, her or its Warrants by certified bank check or official bank check in funds payable to the order of the Company, and delivered to the Company at the address set forth in Section 8.2.
(c) Partial Exercise; Surrender of Warrant Certificates . All or any number of whole Warrants represented by a Warrant Certificate may be exercised by the Holder thereof. If less than all of the Warrants represented by a Warrant Certificate are exercised, such Warrant Certificate shall be surrendered and a new Warrant Certificate executed by the Company of the same tenor and for the number of Warrants which were not exercised shall be issued by the Company. The Company shall (i) countersign such Warrant Certificate, (ii) register such Warrant Certificate in such name or names as may be directed in writing by such Holder and (iii) deliver the new Warrant Certificate to the Person or Persons in whose name such new Warrant Certificate is so registered. Any Warrant Certificate surrendered for exercise to the Company shall be promptly cancelled by the Company and shall not be reissued by the Company.
(d) Issuance of Common Stock . Upon surrender of a Warrant Certificate evidencing Warrants in conformity with the foregoing provisions and payment of the Exercise Price in respect of the exercise of one or more Warrants evidenced thereby, the Company shall, when such payment is received and subject to Section 8.1, as promptly as practicable, and in any event within twenty (20) Business Days after receipt by the Company of such notice of exercise, issue the aggregate number of shares of Common Stock issuable upon such exercise (based upon the aggregate number of Warrants so exercised), as determined in accordance with Section 3.2(f). Such shares of Common Stock shall be registered in the name of such Holder in the Company’s stock records.
(e) Time of Exercise . Except for exercises in connection with an Optional Redemption (as defined below), any Warrant exercised hereunder shall be deemed to have been effected immediately prior to the close of business on the day on which the Warrant Certificate representing such Warrant shall have been surrendered for exercise as provided above, together with the notice of exercise referred to above and payment in full of the Exercise Price and any documentary, stamp or transfer tax, or other applicable tax or governmental charges. At such time, the shares of Common Stock issuable upon such exercise as provided in Section 3.2(d)
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shall be deemed to have been issued and, for all purposes of this Agreement, the Holder exercising such Warrant shall, as between such Person and the Company, be deemed to be and entitled to all rights of the holder of record of such shares of Common Stock.
(f) Stock Issuable . The number of shares of Common Stock “obtainable upon exercise” of Warrants at any time shall be the number of shares of Common Stock for which such Warrants are then exercisable. The number of shares “for which each Warrant is exercisable” shall be one (1) share of Common Stock subject to adjustment as provided in Section 4.1.
Section 3.3 Optional Redemption. If the Board elects at any time, the Board may cause all Warrants issued hereunder to be deemed exercised (an “ Optional Redemption ”) for Common Stock in accordance with the terms hereof and of the Warrant Certificate (giving effect to any adjustments to the number of shares of Common Stock obtainable upon exercise of such Warrants, as the case may be, that occur or would occur prior to such deemed exercise in accordance with the terms of this Warrant Agreement and the Warrant Certificates). Any Optional Redemption shall include a waiver of any Exercise Price otherwise payable upon the exercise of such Warrants. Upon making an election for an Optional Redemption, the Board shall provide the Holders with written notice of the effectiveness of such Optional Redemption, and within twenty (20) Business Days after providing such notice, the Company shall issue to each Holder the aggregate number of shares of Common Stock issuable upon such election to each such Holder.
Article IV
ADJUSTMENTS
Section 4.1 Adjustments . The number of shares of Common Stock for which each Warrant is exercisable shall be subject to adjustment from time to time as follows:
(a) Upon Dividends, Subdivisions or Splits . If, at any time after the date hereof, the number of shares of Common Stock outstanding is increased by a dividend or pro rata distribution, in each case payable in shares of Common Stock, or by a subdivision or split-up of Common Stock, following the record date for the determination of holders of Common Stock entitled to receive such dividend or distribution, or in the cases of a subdivision or split-up, on the day following the effective date thereof, the number of shares of Common Stock obtainable upon exercise of the Warrants shall be increased in proportion to such increase in outstanding shares of Common Stock. The adjustment made pursuant to this Section 4.1(a) shall become effective (i) in the case of any such dividend or distribution, immediately after the close of business on the record date for the determination of holders of Common Stock entitled to receive such dividend or distribution or (ii) in the case of such subdivision or split-up, at the time when such subdivision or split-up becomes effective with respect to all holders of Common Stock.
(b) Upon Combinations or Reverse Splits . If, at any time after the date hereof, the number of shares of Common Stock outstanding is decreased by a combination or reverse split of the outstanding shares of Common Stock into a smaller number of shares of Common Stock, then the number of shares of Common Stock obtainable upon exercise of the Warrants immediately prior to the date of such combination or reverse split shall be decreased in
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proportion to such decrease in outstanding shares of Common Stock. The adjustment made pursuant to this Section 4.1(b) shall become effective at the time when such combination or reverse split becomes effective with respect to all holders of Common Stock.
(c) Organic Change . Prior to the consummation of any Organic Change, unless the Company intends to cause an Optional Redemption in connection with such transaction, the Company shall make appropriate provision to insure that each Holder of the Warrants shall thereafter have the right to acquire and receive, in lieu of or addition to (as the case may be) the Common Stock immediately theretofore acquirable and receivable upon the exercise of such Holder’s Warrants, such cash, interests, securities or other assets or property as would have been issued or payable in such Organic Change (if the Holder had exercised such Holder’s Warrants immediately prior to such Organic Change) with respect to or in exchange for the Common Stock immediately theretofore acquirable and receivable upon exercise of such Holder’s Warrants had such Organic Change not taken place.
(d) No Exercise Price Adjustment . Except as the Company may determine is appropriate in connection with an adjustment pursuant to Section 4.1(c), the Exercise Price payable upon exercise of the Warrant is not subject to adjustment in connection with the provisions of this Section 4.1.
(e) Treasury Shares . Shares of Common Stock at any time owned by the Company or its subsidiaries shall not be deemed to be outstanding for the purposes of any computation under this Section 4.1.
Section 4.2 Notice of Adjustment . Whenever the number of shares of Common Stock or other securities or property, as applicable, obtainable upon exercise of each Warrant is required to be adjusted pursuant to Section 4.1, the Company shall deliver to the Holder of such Warrant a certificate setting forth (a) the number of shares of Common Stock or other securities or property, as applicable, obtainable upon exercise of each such Warrant and the Exercise Price therefor after such adjustment, (b) a brief statement of the facts requiring such adjustment and (c) the computation by which such adjustment was made. Such certificate shall be conclusive evidence of the correctness of such adjustment absent manifest error.
Section 4.3 Statement on Warrants . The form of Warrant Certificate need not be changed because of any adjustment made pursuant to Section 4.1, and Warrant Certificates issued after such adjustment may state the same number and kind of shares of Common Stock as are stated in the Warrant Certificates initially issued pursuant to this Agreement. The Company may, however, at any time in its sole discretion (which shall be conclusive), make any change in the form of Warrant Certificate that it may deem appropriate to reflect any such adjustment and that does not affect the substance thereof and any Warrant Certificate thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in the form so changed.
Section 4.4 Notice of Organic Change. In the event that, at any time after the date hereof and prior to 5:00 p.m., Los Angeles time, on the Expiration Date, (a) the Company consummates an Organic Change or (b) the Company dissolves, liquidates or winds up its operations, and in each such case unless the Company intends to cause an Optional Redemption
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in connection with such transaction, the Company shall cause to be mailed to the Holders notice of the date on which such Organic Change, dissolution, liquidation or winding up shall or did take place, as the case may be. Such notice shall also set forth such facts as shall indicate the effect of such action (to the extent such effect may be known at the date of such notice), if any, on the kind and amount of shares of Common Stock and other securities, money and other property deliverable upon exercise of the Warrants after giving effect to such transaction.
Section 4.5 Concerning All Adjustments . Notwithstanding anything to the contrary contained in this Agreement, if an adjustment is made under any provision of ARTICLE IV on account of any event, transaction, circumstance, condition or happening, no additional adjustment shall be made under any other provision of ARTICLE IV on account of such event, transaction, circumstance, condition or happening (i.e, there shall be no “double credit” given for a single event, transaction, circumstance, condition or happening). Unless otherwise expressly provided in this ARTICLE IV, all determinations and calculations required or permitted under this ARTICLE IV shall be made by the Company or its Board, as appropriate, and all such calculations and determinations shall be conclusive and binding in the absence of manifest error.
Article V
LOSS, THEFT, DESTRUCTION OR MUTILATION OF WARRANT CERTIFICATES
Section 5.1 Loss, Theft, Destruction or Mutilation . Upon receipt by the Company of evidence satisfactory to it of the ownership and the loss, theft, destruction or mutilation of any Warrant Certificate, and an indemnity bond in form and amount and with corporate surety satisfactory to it, and (in the case of mutilation) upon surrender and cancellation thereof, then, in the absence of notice to the Company that the Warrants represented thereby have been acquired by a bona fide purchaser, the Company shall issue, execute and deliver to the Holder of the lost, stolen, destroyed or mutilated Warrant Certificate, in exchange and substitution for or in lieu thereof, a new Warrant Certificate of the same tenor and representing an equivalent number of Warrants. Upon the issuance of any new Warrant Certificate under this ARTICLE V, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and other expenses (including the fees and expenses of the Company) in connection therewith. The provisions of this ARTICLE V are exclusive and shall preclude (to the extent lawful) all other rights or remedies with respect to the replacement of lost, stolen, destroyed or mutilated Warrant Certificates.
Article VI
AUTHORIZATION OF SHARES; PURCHASE OF WARRANTS
Section 6.1 Authorization of Shares . The Company covenants that all Common Stock issuable upon exercise of the Warrants will, upon issuance, be duly and validly issued, fully paid and nonassessable and will be free from all taxes, liens and charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously or otherwise specified herein). The Company shall take all such actions as may be necessary to ensure that all such Common Stock may be so issued without violation of any applicable law or governmental regulation.
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Article VII
WARRANT HOLDER RIGHTS
Section 7.1 Rights Generally. The Holders shall be entitled to the rights applicable to the holders of Warrants, if any, set forth in the Registration Agreement.
Section 7.2 Dividends and Distributions. If the Company declares or pays a dividend or makes any other distribution upon shares of Common Stock, except for a dividend payable in Common Stock (which will be addressed by Section 4.1) (a “ Dividend ”), then the Company shall pay to each Holder at the time of the Dividend the amount which would have been paid to such Holder on the shares of Common Stock which such Holder would have held had the Warrants held by such Holder been fully exercised immediately prior to the date on which a record is taken for such Dividend, or, if no record is taken, the date as of which the record holders of Common Stock entitled to such Dividend are to be determined.
Article VIII
MISCELLANEOUS
Section 8.1 Payment of Taxes . The Company shall pay any and all taxes (other than income taxes) that may be payable in respect of the issue or delivery of shares of Common Stock on exercise of Warrants pursuant hereto. The Company shall not be required, however, to pay any tax or other charge imposed in respect of any transfer involved in the issue and delivery of any shares of Common Stock or payment of cash or other property to any recipient other than the Holder of the Warrant Certificate surrendered upon the exercise of a Warrant, and in case of such transfer or payment, the Company shall not be required to issue or deliver any shares or pay any cash until (a) such tax or charge has been paid or an amount sufficient for the payment thereof has been delivered to the Company or (b) it has been established to the Company’s satisfaction that any such tax or other charge that is or may become due has been paid.
Section 8.2 Notices.
(a) Any notice, request, demand or report (each, a “ Communication ”) required or permitted to be given or made by this Agreement shall be in writing.
(b) Any Communication authorized by this Agreement to be given or made by the Holders to or on the Company shall be sufficiently given or made if sent by registered or certified overnight mail or by a nationally recognized overnight delivery service for next day delivery and shall be deemed given upon receipt, or by facsimile or electronic mail, addressed as follows:
Townsquare Media, Inc.
240 Greenwich Avenue
Greenwich, CT 06830
Attention: Chief Executive Officer
Facsimile: (203) 861-0920
(c) Any Communication authorized by this Agreement to be given or made by the Company to any Holder shall be sufficiently given or made if sent by first-class mail, postage
11 |
prepaid, or by facsimile or electronic mail, addressed to such Holder at the address of such Holder as shown on the registry books of the Company.
Section 8.3 Submission to Jurisdiction; Waiver of Jury Trial.
(a) Submission to Jurisdiction . Any action, suit or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall only be brought in any federal court located in the State of Delaware or any Delaware state court, and each party consents to the exclusive jurisdiction and venue of such courts (and of the appropriate appellate courts therefrom) in any such action, suit or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such, action, suit or proceeding in any such court or that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum; provided, however, that any action, suit or proceeding, seeking to enforce a final judgment rendered in such court may be brought in any court of competent jurisdiction. Process in any such action, suit or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, service of process on such party as provided in Section 8.2 shall be deemed effective service of process on such party.
(b) Waiver of Jury Trial . EACH PARTY ACKNOWLEDGES THAT ANY DISPUTE THAT MAY ARISE OUT OF OR RELATING TO THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE SUCH PARTY HEREBY EXPRESSLY WAIVES ITS RIGHT TO JURY TRIAL OF ANY DISPUTE BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OTHER AGREEMENTS RELATING HERETO OR ANY DEALINGS AMONG THEM RELATING TO THE TRANSACTIONS CONTEMPLATED HEREBY. THE SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL ACTIONS, SUITS AND PROCEEDINGS THAT RELATE TO THE SUBJECT MATTER OF THE TRANSACTIONS CONTEMPLATED HEREBY, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY REPRESENTS THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT IN THE EVENT OF ANY ACTION, SUIT OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) SUCH PARTY UNDERSTANDS AND WITH THE ADVICE OF COUNSEL HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY AND (iv) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND REPRESENTATIONS IN THIS SECTION 8.3(b).
Section 8.4 Governin g Law . This Agreement will be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice of law principles.
Section 8.5 Binding Effect . This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and the Holders from time to time party
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hereto. Nothing in this Agreement is intended or shall be construed to confer upon any Person, other than the Company and the Holders, any right, remedy or claim under or by reason of this Agreement or any part hereof.
Section 8.6 Counterparts . This Agreement may be executed manually or by facsimile in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.
Section 8.7 Amendments.
(a) The Company may, without the consent or concurrence of the Holders, amend this Agreement for the purpose of (i) amending provisions in regard to matters or questions arising under this Agreement which shall not materially adversely affect the interest of the Holders or (ii) adding further covenants and agreements of the Company in this Agreement or surrendering any rights or power reserved to or conferred upon the Company in this Agreement.
(b) All amendments or modifications other than those described in Section 8.7(a) shall require the written consent of each of the Holders of a majority of the Warrants and the Company.
Section 8.8 Third Party Beneficiaries . This Agreement is intended for the benefit of the parties hereto, and no other Person shall be entitled to any rights or benefits hereunder.
Section 8.9 Waivers . The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
Section 8.10 Inspection . The Company shall cause a copy of this Agreement to be available at all reasonable times at the office of the Company for inspection by the Holders. The Company may require any of the Holders to submit his, her or its Warrant Certificate for inspection by it.
Section 8.11 Headings . The descriptive headings of the several Sections of this Agreement are inserted for convenience and shall not control or affect the meaning or construction of any of the provisions hereof.
Section 8.12 Construction . This Agreement has been freely and fairly negotiated among the parties. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties and no presumption or burden of proof will arise favoring or disfavoring any party because of the authorship of any provision of this Agreement.
Section 8.13 Severability . In the event that any one or more of the provisions, paragraphs, words, clauses, phrases or sentences contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision, paragraph, word, clause, phrase or
13 |
sentence in every other respect and of the other remaining provisions, paragraphs, words, clauses, phrases or sentences hereof shall not be in any way impaired, it being intended that all rights, powers and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law; provided that this Section 8.13 shall not cause this Agreement or the Warrants to differ materially from the intent of the parties as herein expressed.
Section 8.14 Entire Agreement . This Agreement and the Warrant Certificate set forth the entire agreement of the parties hereto as to the subject matter hereof and supersedes all previous agreements among all or some of the parties hereto with respect thereto, whether written, oral or otherwise.
* * * * *
14 |
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
TOWNSQUARE MEDIA, INC. | |||
By: | |||
Name: | |||
Title: |
Signature Page - Warrant Agreement
[Signature blocks of Warrant holders to come]
Signature Page - Warrant Agreement
Schedule I
Holders of Warrants
As of [__________] , 2014
Holder Name |
Warrants Exercisable
for Class A
Common Stock |
|
[To come] | ||
TOTAL |
ANNEX A
FORM OF WARRANT CERTIFICATE
TOWNSQUARE MEDIA, INC.
No.______
_________ Warrants
WARRANTS TO PURCHASE COMMON STOCK
“THIS WARRANT, AND THE CLASS A COMMON STOCK OF THE COMPANY WHICH MAY BE PURCHASED PURSUANT TO THE EXERCISE OF THIS WARRANT (COLLECTIVELY, THE “ WARRANT SHARES ,” AND TOGETHER WITH THIS WARRANT, THE “ SECURITIES ”), HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, PLEDGE OR OTHER TRANSFER OF ANY INTEREST IN ANY OF THE WARRANT SHARES REPRESENTED BY THIS WARRANT.
THE WARRANT SHARES REPRESENTED BY THIS WARRANT ARE SUBJECT TO THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS, SPECIFIED IN THE CERTIFICATE OF INCORPORATION OF THE COMPANY, AS AMENDED FROM TIME TO TIME. A COPY OF SUCH CERTIFICATE OF INCORPORATION SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
THE SECURITIES ARE SUBJECT TO CERTAIN RESTRICTIONS ON EXERCISE, TRANSFER, SALE, ASSIGNMENT, PLEDGE, ENCUMBRANCE OR OTHER SIMILAR TRANSFER AS SET FORTH IN A REGISTRATION AGREEMENT AMONG THE COMPANY AND THE PERSONS PARTY THERETO, AND A WARRANT AGREEMENT AMONG THE COMPANY AND THE ORIGINAL HOLDER OF THIS WARRANT, COPIES OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE COMPANY.”
This certifies that _____________, or its registered assigns, is the owner of the number of Warrants set forth above, each of which represents the right to purchase, commencing on the date of execution of the Warrant Agreement hereinafter referred to, from TOWNSQUARE MEDIA, INC., a Delaware corporation (the “ Company ”), one share of Class A Common Stock,
A- 1 |
par value $0.01 per share, of the Company (the “ Common Stock ”) (subject to adjustment as provided in the Warrant Agreement hereinafter referred to) at the purchase price (the “ Exercise Price ”) of $0.0001 per one share of Common Stock by: (a) surrendering this Warrant Certificate at the principal office of the Company, (b) delivering to the Company the Exercise Form attached hereto as Exhibit A-1 , (c) delivering to the Company the Ownership Certification attached hereto as Exhibit A-2 completed and duly executed and (d) delivering to the Company payment in full of the Exercise Price by certified bank check or official bank check in funds payable to the order of the Company, all subject to the terms and conditions hereof and of the Warrant Agreement. This Warrant Certificate may be exercised as to all or any whole number of the Warrants evidenced hereby.
Each outstanding Warrant may be exercised on any Business Day which is on or after the date of execution of the Warrant Agreement and on or before the Expiration Date, but only if the Holder has delivered to the Company an Ownership Certification and such exercise otherwise satisfies the FCC Restrictions. Any Warrants not exercised by 5:00 p.m., Los Angeles time, on the Expiration Date of the Warrant Agreement shall expire and all rights thereunder and all rights in respect thereof under this Warrant and the Warrant Agreement shall automatically terminate at such time.
This Warrant Certificate is issued under and in accordance with a Warrant Agreement dated as of [___________] , 2014 (as amended or modified from time to time, the “ Warrant Agreement ”) by and among the Company, the original Holder of this Warrant Certificate and the other holders party thereto and is subject to the terms and provisions contained therein, all of which terms and provisions the Holder of this Warrant Certificate consents to by acceptance hereof. The Warrant Agreement is hereby incorporated herein by reference and made a part hereof. Reference is hereby made to the Warrant Agreement for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Company and the Holder. The summary of the terms of the Warrant Agreement contained in this Warrant Certificate is qualified in its entirety by express reference to the Warrant Agreement. All capitalized terms used in this Warrant Certificate that are defined in the Warrant Agreement shall have the meanings assigned to them in the Warrant Agreement.
Copies of the Warrant Agreement are on file at the office of the Company and may be obtained by writing to the Company at the following address:
Townsquare Media, Inc.
240 Greenwich Avenue
Greenwich, CT 06830
Attention: Chief Executive Officer
Facsimile: (203) 861-0920
The number of shares of Common Stock obtainable upon the exercise of each Warrant is subject to adjustment as provided in the Warrant Agreement.
The Company shall pay any and all taxes (other than income taxes) that may be payable in respect of the issue or delivery of shares of Common Stock on exercise of Warrants pursuant hereto. The Company shall not be required, however, to pay any tax or other charge imposed in
A- 2 |
respect of any transfer involved in the issue and delivery of any shares of Common Stock or payment of cash or other property to any recipient other than the Holder of the Warrant Certificate surrendered upon the exercise of a Warrant, and in case of such transfer or payment, the Company shall not be required to issue or deliver any shares or pay any cash until (a) such tax or charge has been paid or an amount sufficient for the payment thereof has been delivered to the Company or (b) it has been established to the Company’s satisfaction that any such tax or other charge that is or may become due has been paid.
Subject to Section 2.3 of the Warrant Agreement, this Warrant Certificate and all rights hereunder are transferable by the registered Holder hereof, in any whole number of Warrants, in accordance with the provisions of the Warrant Agreement, upon surrender of this Warrant Certificate, along with (a) an Assignment Form in the form of Exhibit B-1 attached hereto duly executed and completed, (b) a Joinder to the Registration Agreement in the form of Exhibit B-2 attached hereto duly executed and completed and (c) payment of any necessary transfer tax or other governmental charge imposed upon such transfer. Upon any partial transfer, the Company will issue and deliver to such Holder a new Warrant Certificate with respect to any portion not so transferred. Each taker and Holder of this Warrant Certificate, by taking and holding the same, consents and agrees that prior to the registration of transfer as provided in the Warrant Agreement, the Company may treat the Person in whose name the Warrants are registered as the absolute owner hereof for any purpose and as the Person entitled to exercise the rights represented hereby, any notice to the contrary notwithstanding. Each taker and Holder of a Warrant and each taker and holder of Common Stock issued pursuant to a Warrant agrees to be bound by the terms and conditions of this Warrant and the Warrant Agreement.
This Warrant Certificate may be exchanged, in accordance with the terms of the Warrant Agreement, at the Company’s offices for Warrant Certificates representing the same aggregate number of Warrants, with each new Warrant Certificate to represent such number of Warrants as the Holder hereof shall designate at the time of such exchange.
Prior to the exercise of the Warrants represented hereby, the Holder of this Warrant Certificate shall be entitled to the rights, and subject to the obligations, set forth in the Registration Agreement, and shall be bound by the terms of each such agreement as a party thereto. In the event the Holder exercises any Warrant and completes and duly executes the Ownership Certification and the Exercise Form, the Company shall issue to the Holder such shares of Common Stock as the Holder shall be entitled to under such Warrant and the Company shall record or cause to be recorded such ownership on its books.
A- 3 |
This Warrant Certificate shall be void and all rights evidenced hereby shall cease on the Expiration Date.
TOWNSQUARE MEDIA, INC. | |||
By: | |||
Name: | |||
Title: |
Dated: |
A- 4 |
Countersigned:
[HOLDER]
By: | ||
Name: | ||
Title: |
Dated: |
A- 5 |
EXHIBIT A-1
EXERCISE FORM
(to be executed only upon exercise of Warrants)
To: TOWNSQUARE MEDIA, INC.
The undersigned hereby irrevocably exercises the Warrants represented by the Warrant Certificate to obtain Class A Common Stock (subject to adjustment) of TOWNSQUARE MEDIA, INC., a Delaware corporation (the “ Company ”), for each Warrant exercised, and makes payment of $______________ (such payment being by certified bank check or official bank check in funds payable to the order of the Company equal to the Exercise Price of the Warrants being exercised), on the terms and conditions specified in the Warrant Certificate and the Warrant Agreement therein referred to, and hereby surrenders this Warrant Certificate and all right, title and interest therein to and directs that the Class A Common Stock due upon the exercise of such Warrants be registered or placed in the name and the address specified below.
HOLDER INFORMATION:
Name of Holder: _____________________________________
Signature of Holder: _____________________________________
Dated: _____________________________________
Street Address: _____________________________________
City, State, Zip Code: _____________________________________
RECIPIENT INFORMATION:
Securities and/or check to be issued to: _____________________________________
Signature of Recipient: _____________________________________
Dated: _____________________________________
Recipient social security or taxpayer ID number:____________________________
Street Address (if different from above): ______________________________
City, State, Zip Code (if different from above): ______________________________
A- 6 |
EXHIBIT A-2
OWNERSHIP CERTIFICATION
1
(to be executed only upon exercise of Warrants)
______________________________ (the “ Holder ”) hereby represents and certifies that the Holder is either (a) a citizen of the United States (“ U.S. Citizen ”) or (b) an entity organized under the laws of the United States (“ U.S. Entity ”). To the extent the Holder is a U.S. Entity, the Holder represents and certifies that U.S. Citizens and U.S. Entities hold one hundred percent (100%) of the direct and indirect voting interests of Holder and one hundred percent (100%) of the direct and indirect ownership interests of Holder. The Holder further represents and certifies that, for purposes of this Ownership Certification, it has determined its level of direct and indirect voting and ownership interests in accordance with 47 U.S.C. § 310(b)(4), as interpreted, calculated and applied by the FCC.
Name of Holder: _____________________________________
Signature of Holder: _____________________________________
Dated: _____________________________________
1 The Company may, in its sole discretion, require the Holder to provide (a) documentation in support of this Ownership Certification and (b) such other information necessary for the Company to make a determination that the exercise of the Warrants by the Holder otherwise satisfies the FCC Restrictions. Capitalized terms not otherwise defined herein shall have the meanings set forth in the Warrant Agreement.
A- 7 |
EXHIBIT B-1
ASSIGNMENT
FORM
(to be executed only upon assignment of Warrants)
FOR VALUE RECEIVED, the undersigned registered holder of Warrant Certificate No. _____________ issued by Townsquare Media, Inc., a Delaware corporation (the “ Company ”), hereby sells, assigns and transfers unto the Assignee(s) named below (including the undersigned with respect to any Warrants constituting a part of the Warrants evidenced by the within Warrant Certificate not being assigned hereby) all of the rights of the undersigned under the Warrant Certificate, with respect to the whole number of Warrants set forth below:
Name(s) of Assignee(s):
No. of Warrants:
The undersigned does hereby irrevocably constitute and appoint the Company as the undersigned’s attorney to make such transfer on the books of the Company maintained for such purposes, with full power of substitution in the premises.
Name of Assignor: _____________________________________
Signature of Assignor: _____________________________________
Dated: _____________________________________
Street Address: _____________________________________
City, State, Zip Code: _____________________________________
The Assignee has received and reviewed the Warrant Certificate and the Warrant Agreement, and agrees for the benefit of the Company to accept the assignment of the Warrant set forth herein and be bound by the terms and conditions thereof.
Name of Assignee: _____________________________________
Signature of Assignee: _____________________________________
Dated: _____________________________________
Assignee social security or taxpayer ID number:____________________________
Street Address: ______________________________
City, State, Zip Code: ______________________________
A- 8 |
EXHIBIT B-2
JOINDER TO
REGISTRATION AGREEMENT
THIS JOINDER to the Second Amended and Restated Registration Agreement, dated as of ________ __, 2014 (the “ Registration Agreement ”) of Townsquare Media, Inc., a Delaware corporation (the “ Company ”), as amended or restated from time to time, is made and entered into as of ________ __, _________, by and between the Company and ________________ (“ Holder ”).
WHEREAS, on the date hereof, Holder has acquired ______ warrants exercisable for ______ shares of Class A Common Stock (the “ Warrants ”) and the Registration Agreement and the Company require Holder, as a holder of the Warrants, to become a party to the Registration Agreement, and Holder agrees to do so in accordance with the terms hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:
a. Agreement to be Bound . Holder hereby (i) acknowledges that it has received and reviewed a complete copy of the Registration Agreement and (ii) agrees that upon execution of this Joinder it shall become a party to the Registration Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Registration Agreement as though an original party thereto and shall be deemed [an Other Securityholder] to the Registration Agreement for all purposes thereof and entitled to all the rights incidental thereto.
b. Members Schedule . For purposes of the Schedule of Securityholders to the Registration Agreement, the address of the Holder is as follows:
[Name]
[Address]
c. Governing Law . This Agreement and the rights of the parties hereunder shall be interpreted in accordance with the laws of the State of Delaware, and all rights and remedies shall be governed by such laws without regard to principles of conflicts of laws.
d. Counterparts . This Joinder may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.
e. Descriptive Headings . The descriptive headings of this Joinder are inserted for convenience only and do not constitute a part of this Joinder.
* * * * *
A- 9 |
IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of the date set forth in the introductory paragraph hereof.
TOWNSQUARE MEDIA, INC. | ||
By: | ||
Name: | ||
Title: |
[HOLDER] | ||
By: | ||
Name: | ||
Title: |
A- 10 |
Exhibit 4.4
Logo | Townsquare Media, Inc. | Logo |
CLASS A COMMONCSTOCK |
INCORPORATED UNDER THE LAWS | CUSIP10 5 | |
OF THE STATE OF DELAWARE | SEE REVERSE FOR CERTAIN DEFINITIONS |
THIS CERTIFIES THAT |
IS THE RECORD HOLDER OF |
FULLY PAID AND NON-ASSESSABLE SHARES OF THE CLASS A COMMON STOCK, $0.01 PAR VALUE PER SHARE, OF
Townsquare Media, Inc.
transferable
on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate, properly
endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of its duly authorized officers.
Dated:
Sig1 | Sig2 | |
EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL | ||
OFFICER AND SECRETARY | CHAIRMAN AND CHIEF EXECUTIVE OFFICER |
COUNTERSIGNED AND REGISTERED: | |
AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC | |
(Brooklyn, NY) | |
TRANSFER AGENT AND REGISTRAR | |
By | |
AUTHORIZED SIGNATURE |
TOWNSQUARE MEDIA, INC
CORPORATE
SEAL
DELAWARE
© SECURITY-COLUMBIAN UNITED STATES BANKNOTE CORPORATION
ABnote North America | ||
711 ARMSTRONG LANE | PROOF OF: JULY 11, 2014 | |
COLUMBIA, TENNESSEE 38401 | ||
(931) 388-3003 | TOWNSQUARE MEDIA, INC. WO- 8802 FACE | |
SALES: HOLLYCGRONER 931-490-7660 | OPERATOR: DKS | |
NEW |
Colors Selected for Printing: Intaglio prints in SC-15 Maroon.
COLOR: This proof was printed from a digital file or artwork on a graphics quality, color laser printer. It is a good representation of the color as it will appear on the final product.
However, it is not an exact color rendition, and the final printed product may appear slightly different from the proof due to the difference between the dyes and printing ink.
NOTE: TEXT RECEIVED BY MODEM OR E-MAIL IS NOT PROOFREAD WORD FOR WORD.
PLEASE INITIAL THE APPROPRIATE SELECTION FOR THIS PROOF: OK AS IS OK WITH CHANGES MAKE CHANGES AND SEND ANOTHER PROOF
The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:
TEN COM | – | as tenants in common | UNIF GIFT MIN ACT– | __________________ Custodian_______________ | ||
TEN ENT | – | as tenants by the entireties | (Cust) | (Minor) | ||
JT TEN | – | as joint tenants with right | under Uniform Gifts to Minors | |||
of survivorship and not as | Act _________________ | |||||
tenants in common | (State) |
Additional abbreviations may also be used though not in the above list.
For value received, __________________________________________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER | ||
IDENTIFYING NUMBER OF ASSIGNEE | ||
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING ZIP CODE OF ASSIGNEE | ||
Shares | ||
of the CLASS A common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint | ||
Attorney | ||
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises. | ||
Dated |
NOTICE: | THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER. |
SIGNATURE(S) GUARANTEED: | |
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15. |
ABnote North America | ||
711 ARMSTRONG LANE | PROOF OF: JULY 11, 2014 | |
COLUMBIA, TENNESSEE 38401 | TOWNSQUARE MEDIA, INC. | |
(931) 388-3003 | WO- 8802 BACK | |
HOLLY GRONER 931-490-7660 | OPERATOR: DKS | |
NEW |
PLEASE INITIAL THE APPROPRIATE SELECTION FOR THIS PROOF: ¨ OK AS IS ¨ OK WITH CHANGES ¨ MAKE CHANGES AND SEND ANOTHER PROOF
NOTE: TEXT RECEIVED BY MODEM OR E-MAIL IS NOT PROOFREAD WORD FOR WORD.
Exhibit 10.4
EXECUTION VERSION
AMENDMENT NO. 3 TO THE CREDIT AGREEMENT
THIS AMENDMENT NO. 3 TO THE CREDIT AGREEMENT (this “ Amendment ”), dated as of July 11, 2014, is made by and among TOWNSQUARE RADIO, LLC, a Delaware limited liability company (the “ Borrower ”), TOWNSQUARE RADIO HOLDINGS, LLC, a Delaware limited liability company (“ Holdings ”), each of the other Loan Parties signatory hereto, each of the undersigned banks and other financial institutions party hereto as lenders (in such capacity, the “ Lenders ”) and GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders under, and as defined in, the Credit Agreement (as defined below).
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower, Holdings, the Administrative Agent, the other agents party thereto, and the lenders from time to time party thereto are parties to a Credit Agreement, dated as of April 4, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”). Capitalized terms not otherwise defined in this Amendment have the same meanings as specified in the Credit Agreement;
WHEREAS, the Borrower, Holdings, the Administrative Agent and the Lenders signatory hereto have agreed to amend certain provisions of the Credit Agreement, in a manner, and on the terms and conditions, provided for herein.
NOW THEREFORE, in consideration of the premises and for good and valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, Borrower, Holdings, the Administrative Agent and the Lenders hereby agree as follows:
1. | Amendments . |
a) Section 1.1 of the Credit Agreement is hereby amended by amending and restating the defined term “Revolving Credit Commitment” to read in its entirety as follows:
““ Revolving Credit Commitment ” means, with respect to each Revolving Credit Lender, the commitment of such Lender to make Revolving Loans and acquire interests in other Revolving Credit Outstandings, which commitment is in the amount set forth opposite such Lender’s name on Schedule I under the caption “ Revolving Credit Commitment ”, as amended to reflect Assignments and as such amount may be reduced pursuant to this Agreement. The aggregate amount of the Revolving Credit Commitments on the Closing Date was $10,000,000 and the aggregate amount of the Revolving Credit Commitments was increased to $25,000,000 on the Third Amendment Closing Date.”
b) Section 1.1 of the Credit Agreement is hereby amended by adding the following defined terms in the appropriate alphabetical order:
“ Third Amendment ” means that certain Amendment No. 3 to the Credit Agreement, dated as of July 11, 2014, by and among the Administrative Agent, the Borrower, Holdings, the other Loan Parties signatory thereto and the Lenders signatory thereto.
“ Third Amendment Closing Date ” means the first date on which all of the conditions precedent to effectiveness of the Third Amendment set forth in Section 2 of the Third Amendment have been satisfied or duly waived.
c) Schedule I of the Credit Agreement is hereby amended and restated to read in its entirety as set forth on Schedule I attached hereto.
2. Conditions to Effectiveness . This Amendment shall become effective upon the satisfaction of the following conditions precedent:
a) The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Amendment signed on behalf of such party, or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment.
b) The Administrative Agent (or its counsel) shall have received from MIHI LLC and the Borrower a fully-executed joinder agreement, in form and substance satisfactory to the Administrative Agent.
c) The Administrative Agent shall have received each of the items referred to below:
i. a copy of the Borrower’s certificate of incorporation, including all amendments thereto, certified as of a recent date by the Secretary of State of the jurisdiction of its incorporation, and accompanied by a certificate as to the good standing of the Borrower as of a recent date from such Secretary of State;
ii. a certificate of the Secretary or Assistant Secretary of the Borrower, dated as of the Third Amendment Closing Date and certifying (A) the names and signatures of each officer of the Borrower authorized to execute this Amendment and any other document delivered in connection herewith, (B) the Constituent Documents of the Borrower attached to such certificate are complete and correct copies of such Constituent Documents as in effect on the date of such certification and (C) the resolutions of the Borrower’s board of directors or other appropriate governing body approving and authorizing the execution, delivery and performance of this Amendment and any other document delivered in connection herewith; and
iii. a solvency certificate executed by the Chief Financial Officer of the Borrower in substantially the form of the solvency certificate previously delivered by the Borrower on the Closing Date.
d) There shall have been paid to the Administrative Agent, for the account of the Administrative Agent, its Related Persons or any Lender, as the case may be, all fees and all reimbursements of costs or expenses (including reasonable fees, charges and disbursements of Latham & Watkins LLP), in each case, to the extent (i) an invoice has been received by the Borrower at least one (1) Business Day prior to the Third Amendment Closing Date and (ii) due and payable under this Amendment on or before Third Amendment Effective Date.
e) The representations and warranties specified in Section 3 below shall be true and correct.
f) Borrower shall have paid to the Administrative Agent, for the ratable benefit of each Revolving Credit Lender increasing its Revolving Credit Commitment pursuant to this Amendment (based on the amount of such Revolving Credit Lender’s increased Revolving Credit Commitment), a closing fee in an amount equal to the product of (a) 0.005 multiplied by (b) the amount the aggregate Revolving Credit Commitments are increased on the Third Amendment Closing Date (the “ Closing Fee ”), which Closing Fee shall be earned and due and payable on the Third Amendment Closing Date.
3. Representations and Warranties . In order to induce the Administrative Agent and the Lenders to enter into this Amendment, each Loan Party, jointly and severally, represents and warrants to the Administrative Agent and each Lender that the following are, and after giving effect to this Amendment will be, true, correct and complete:
a) the execution, delivery and performance of this Amendment by each Loan Party have been duly authorized by all necessary action, and do not and will not:
i. contravene the terms of any of that Person’s Constituent Documents;
ii. conflict with or result in any material breach or contravention of, or result in the creation of any Lien under, any document evidencing any material Contractual Obligation to which such Person is a party or any order, injunction, writ or decree of any Governmental Authority to which such Person or its property is subject; or
iii. violate any material Requirement of Law in any material respect.
b) this Amendment constitutes the legal, valid and binding obligation of each Loan Party party hereto, enforceable against such Person in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability;
c) upon the effectiveness of this Amendment, all of the representations and warranties by each Loan Party contained in the Credit Agreement or in any other Loan Document are true and correct in all material respects (without duplication of any materiality qualifier contained therein) on and as of the date of the effectiveness of this Amendment, except to the extent that such representation or warranty expressly relates to an earlier date (in which event such representations and warranties were true and correct in all material respects (without duplication of any materiality qualifier contained therein) as of such earlier date); and
d) no Default or Event of Default has occurred and is continuing or would result after giving effect to this Amendment.
4. Reaffirmation . Each Loan Party hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party, (ii) ratifies and reaffirms each grant of a lien on, or security interest in, its property made pursuant to the Loan Documents (including, without limitation, the grant of security made by such Loan Party pursuant to the Guaranty and Security Agreement) and confirms that such liens and security interests continue to secure the Obligations under the Loan Documents, including, without limitation, all Obligations resulting from or incurred pursuant to the increased Revolving Credit Commitments made pursuant to this Amendment, in each case subject to the terms thereof and (iii) in the case of each Guarantor, ratifies and reaffirms its guaranty of the Obligations pursuant to the Guaranty and Security Agreement.
5. Effect . Each Loan Party acknowledges and agrees that the amendments set forth herein are effective solely for the purposes set forth herein and that the execution and delivery by Administrative Agent and Lenders of this Amendment shall not be deemed (i) except as expressly provided in this Amendment, to be a consent to any amendment, waiver or modification of any term or condition of the Credit Agreement or of any other Loan Document, (ii) to create a course of dealing or otherwise obligate Administrative Agent or Lenders to forbear, waive, consent or execute similar amendments under the same or similar circumstances in the future, or (iii) to amend, prejudice, relinquish or impair any right of Administrative Agent or Lenders to receive any indemnity or similar payment from any Person or entity as a result of any matter arising from or relating to this Amendment. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof’, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby. Without limiting the generality of the foregoing, the Loan Documents (including the Guaranty and Security Agreement) and all of the Collateral described therein do and shall continue to secure the payment of all Obligations of the Loan Parties under the Loan Documents, as amended by, and after giving effect to, this Amendment, in each case subject to the terms thereof.
6. Costs, Expenses . The Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment and the other instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent) in accordance with the terms of Section 11.3 of the Credit Agreement.
7. Execution in Counterparts . This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute but one and the same agreement. Delivery of an executed counterpart of a signature page to this Amendment by telecopier (or other electronic transmission including a signed copy in PDF format) shall be effective as delivery of a manually executed counterpart of this Amendment.
8. Governing Law . This Amendment and the rights and obligations of the parties hereto (including any claims in contract law or tort law arising out of the subject matter hereof) shall be governed by, and construed and interpreted in accordance with, the law of the State of New York (without respect to the principles of conflicts of laws that would result in the application of any law other than the law of the State of New York).
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.
TOWNSQUARE RADIO, LLC | |||
By: | /s/ Stuart Rosenstein | ||
Name: | Stuart Rosenstein | ||
Title: | Executive Vice President and | ||
Chief Financial Officer | |||
TOWNSQUARE RADIO HOLDINGS, LLC | |||
By: | /s/ Stuart Rosenstein | ||
Name: | Stuart Rosenstein | ||
Title: | Executive Vice President and | ||
Chief Financial Officer |
Signature Page to Amendment No. 3 to Credit Agreement
GUARANTORS: | |
GAP BROADCASTING BURLINGTON LICENSE, LLC | |
GAP BROADCASTING BURLINGTON, LLC | |
GAP BROADCASTING MIDLAND-ODESSA LICENSE, LLC | |
GAP BROADCASTING MIDLAND-ODESSA, LLC | |
LIVINGSTON COUNTY BROADCASTERS, INC. | |
MILLENNIUM ATLANTIC CITY II HOLDCO, LLC | |
REGENT BROADCASTING OF CHICO, INC. | |
REGENT BROADCASTING OF DULUTH, INC. | |
REGENT BROADCASTING OF ERIE, INC. | |
REGENT BROADCASTING OF FLAGSTAFF, INC. | |
REGENT BROADCASTING OF KINGMAN, INC. | |
REGENT BROADCASTING OF LAKE TAHOE, INC. | |
REGENT BROADCASTING OF LANCASTER, INC. | |
REGENT BROADCASTING OF LEXINGTON, INC. | |
REGENT BROADCASTING OF PALMDALE, INC. | |
REGENT BROADCASTING OF REDDING, INC. | |
REGENT BROADCASTING OF SAN DIEGO, INC. | |
REGENT BROADCASTING OF SOUTH CAROLINA, INC. | |
REGENT BROADCASTING OF ST. CLOUD II, INC. | |
REGENT BROADCASTING OF WATERTOWN, INC. | |
REGENT LICENSEE OF CHICO, INC. | |
REGENT LICENSEE OF ERIE, INC. | |
REGENT LICENSEE OF FLAGSTAFF, INC. | |
REGENT LICENSEE OF KINGMAN, INC. | |
REGENT LICENSEE OF LAKE TAHOE, INC. | |
REGENT LICENSEE OF LEXINGTON, INC. | |
REGENT LICENSEE OF PALMDALE, INC. | |
REGENT LICENSEE OF REDDING, INC. | |
REGENT LICENSEE OF SAN DIEGO, INC. | |
REGENT LICENSEE OF SOUTH CAROLINA, INC. | |
REGENT LICENSEE OF WATERTOWN, INC. | |
SPECIAL EVENTS MANAGEMENT, LLC | |
TOWNSQUARE LIVE EVENTS, LLC | |
TOWNSQUARE MEDIA ABILENE LICENSE, LLC | |
TOWNSQUARE MEDIA ABILENE, LLC | |
TOWNSQUARE MEDIA ACQUISITION III, LLC | |
TOWNSQUARE MEDIA ACQUISITION IV, LLC | |
TOWNSQUARE MEDIA AMARILLO LICENSE, LLC | |
TOWNSQUARE MEDIA AMARILLO, LLC |
Signature Page to Amendment No. 3 to Credit Agreement
TOWNSQUARE MEDIA ATLANTIC CITY II LICENSE, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY II, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY III HOLDCO, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY III LICENSE, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY III, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY LICENSE, LLC | |
TOWNSQUARE MEDIA ATLANTIC CITY, LLC | |
TOWNSQUARE MEDIA BILLINGS LICENSE, LLC | |
TOWNSQUARE MEDIA BILLINGS, LLC | |
TOWNSQUARE MEDIA BOZEMAN LICENSE, LLC | |
TOWNSQUARE MEDIA BOZEMAN, LLC | |
TOWNSQUARE MEDIA BROADCASTING, LLC | |
TOWNSQUARE MEDIA CASPER LICENSE, LLC | |
TOWNSQUARE MEDIA CASPER, LLC | |
TOWNSQUARE MEDIA CHEYENNE LICENSE, LLC | |
TOWNSQUARE MEDIA CHEYENNE, LLC | |
TOWNSQUARE MEDIA DULUTH LICENSE, LLC | |
TOWNSQUARE MEDIA DULUTH, LLC | |
TOWNSQUARE MEDIA LAKE CHARLES LICENSE, LLC | |
TOWNSQUARE MEDIA LAKE CHARLES, LLC | |
TOWNSQUARE MEDIA LARAMIE LICENSE, LLC | |
TOWNSQUARE MEDIA LARAMIE, LLC | |
TOWNSQUARE MEDIA LAWTON LICENSE, LLC | |
TOWNSQUARE MEDIA LAWTON, LLC | |
TOWNSQUARE MEDIA LICENSEE OF ALBANY AND LAFAYETTE, INC. | |
TOWNSQUARE MEDIA LICENSEE OF PEORIA, INC. | |
TOWNSQUARE MEDIA LICENSEE OF ST. CLOUD, INC. | |
TOWNSQUARE MEDIA LICENSEE OF UTICA/ROME, INC. | |
TOWNSQUARE MEDIA LUBBOCK LICENSE, LLC | |
TOWNSQUARE MEDIA LUBBOCK, LLC | |
TOWNSQUARE MEDIA LUFKIN LICENSE, LLC | |
TOWNSQUARE MEDIA LUFKIN, LLC | |
TOWNSQUARE MEDIA MISSOULA LICENSE, LLC | |
TOWNSQUARE MEDIA MISSOULA, LLC | |
TOWNSQUARE MEDIA MONMOUTH-OCEAN LICENSE, LLC |
Signature Page to Amendment No. 3 to Credit Agreement
TOWNSQUARE MEDIA MONMOUTH-OCEAN, LLC | |
TOWNSQUARE MEDIA ODESSA-MIDLAND LICENSE, LLC | |
TOWNSQUARE MEDIA ODESSA-MIDLAND, LLC | |
TOWNSQUARE MEDIA OF ALBANY AND LAFAYETTE, INC. | |
TOWNSQUARE MEDIA OF ALBANY, INC. | |
TOWNSQUARE MEDIA OF KILLEEN-TEMPLE, INC. | |
TOWNSQUARE MEDIA OF BUFFALO, INC. | |
TOWNSQUARE MEDIA OF EL PASO, INC. | |
TOWNSQUARE MEDIA OF EVANSVILLE /OWENSBORO, INC. | |
TOWNSQUARE MEDIA OF FLINT, INC. | |
TOWNSQUARE MEDIA OF FT. COLLINS, INC. | |
TOWNSQUARE MEDIA OF FT. COLLINS AND GRAND RAPIDS, LLC | |
TOWNSQUARE MEDIA OF GRAND RAPIDS, INC. | |
TOWNSQUARE MEDIA OF LAFAYETTE, LLC | |
TOWNSQUARE MEDIA OF MIDWEST, LLC | |
TOWNSQUARE MEDIA OF PRESQUE ISLE, INC. | |
TOWNSQUARE MEDIA OF ST. CLOUD, INC. | |
TOWNSQUARE MEDIA OF UTICA/ROME, INC. | |
TOWNSQUARE MEDIA ONEONTA LICENSE, LLC | |
TOWNSQUARE MEDIA ONEONTA, LLC | |
TOWNSQUARE MEDIA POCATELLO LICENSE, LLC | |
TOWNSQUARE MEDIA POCATELLO, LLC | |
TOWNSQUARE MEDIA QUINCY-HANNIBAL LICENSE, LLC | |
TOWNSQUARE MEDIA QUINCY-HANNIBAL, LLC | |
TOWNSQUARE MEDIA SAN ANGELO LICENSE, LLC | |
TOWNSQUARE MEDIA SAN ANGELO, LLC | |
TOWNSQUARE MEDIA SEDALIA LICENSE, LLC | |
TOWNSQUARE MEDIA SEDALIA, LLC | |
TOWNSQUARE MEDIA SHELBY LICENSE, LLC | |
TOWNSQUARE MEDIA SHELBY, LLC | |
TOWNSQUARE MEDIA SHREVEPORT LICENSE, LLC | |
TOWNSQUARE MEDIA SHREVEPORT, LLC | |
TOWNSQUARE MEDIA TEXARKANA LICENSE, LLC | |
TOWNSQUARE MEDIA TEXARKANA, LLC | |
TOWNSQUARE MEDIA TRENTON LICENSE, LLC |
Signature Page to Amendment No. 3 to Credit Agreement
TOWNSQUARE MEDIA TRENTON, LLC | |
TOWNSQUARE MEDIA TRI-CITIES LICENSE, LLC | |
TOWNSQUARE MEDIA TRI-CITIES, LLC | |
TOWNSQUARE MEDIA TWIN FALLS LICENSE, LLC | |
TOWNSQUARE MEDIA TWIN FALLS, LLC | |
TOWNSQUARE MEDIA TYLER LICENSE, LLC | |
TOWNSQUARE MEDIA TYLER, LLC | |
TOWNSQUARE MEDIA VICTORIA LICENSE, LLC | |
TOWNSQUARE MEDIA VICTORIA, LLC | |
TOWNSQUARE MEDIA WEST CENTRAL HOLDINGS, LLC | |
TOWNSQUARE MEDIA WEST CENTRAL INTERMEDIATE HOLDINGS, LLC | |
TOWNSQUARE MEDIA WEST CENTRAL RADIO BROADCASTING, LLC | |
TOWNSQUARE MEDIA WICHITA FALLS LICENSE, LLC | |
TOWNSQUARE MEDIA WICHITA FALLS, LLC | |
TOWNSQUARE MEDIA YAKIMA LICENSE, LLC | |
TOWNSQUARE MEDIA YAKIMA, LLC | |
TOWNSQUARE MEDIA, INC. | |
TOWNSQUARE NEW JERSEY HOLDCO, LLC | |
TOWNSQUARE RADIO, INC. | |
BRYTON ACQUISITION COMPANY, LLC | |
TOWNSQUARE MEDIA AUGUSTA WATERVILLE LICENSE, LLC | |
TOWNSQUARE MEDIA AUGUSTA WATERVILLE, LLC | |
TOWNSQUARE MEDIA BANGOR LICENSE, LLC | |
TOWNSQUARE MEDIA BANGOR, LLC | |
TOWNSQUARE MEDIA BINGHAMTON LICENSE, LLC | |
TOWNSQUARE MEDIA BINGHAMTON, LLC | |
TOWNSQUARE MEDIA BISMARCK LICENSE, LLC | |
TOWNSQUARE MEDIA BISMARCK, LLC | |
TOWNSQUARE MEDIA KILLEEN-TEMPLE LICENSE, LLC | |
TOWNSQUARE MEDIA GRAND JUNCTION LICENSE, LLC | |
TOWNSQUARE MEDIA GRAND JUNCTION, LLC | |
TOWNSQUARE MEDIA NEW BEDFORD LICENSE, LLC | |
TOWNSQUARE MEDIA NEW BEDFORD, LLC | |
TOWNSQUARE MEDIA ODESSA-MIDLAND II LICENSE, LLC |
Signature Page to Amendment No. 3 to Credit Agreement
TOWNSQUARE MEDIA ODESSA-MIDLAND II, LLC | |
TOWNSQUARE MEDIA PRESQUE ISLE LICENSE, LLC | |
TOWNSQUARE MEDIA SIOUX FALLS LICENSE, LLC | |
TOWNSQUARE MEDIA SIOUX FALLS, LLC | |
TOWNSQUARE MEDIA TUSCALOOSA LICENSE, LLC | |
TOWNSQUARE MEDIA TUSCALOOSA, LLC |
By: | /s/ Stuart Rosenstein | ||
Name: | Stuart Rosenstein | ||
Title: | Executive Vice President and | ||
Chief Financial Officer |
LYLA ACQUISITION COMPANY, LLC | |
LYLA INTERMEDIATE HOLDING, LLC | |
TOWNSQUARE MEDIA BATTLE CREEK, LLC | |
TOWNSQUARE MEDIA BATTLE CREEK LICENSE, LLC | |
TOWNSQUARE MEDIA BOISE, LLC | |
TOWNSQUARE MEDIA BOISE LICENSE, LLC | |
TOWNSQUARE MEDIA CEDAR RAPIDS LLC | |
TOWNSQUARE MEDIA CEDAR RAPIDS LICENSE LLC | |
TOWNSQUARE MEDIA DANBURY LLC | |
TOWNSQUARE MEDIA DANBURY LICENSE LLC | |
TOWNSQUARE MEDIA DUBUQUE, LLC | |
TOWNSQUARE MEDIA DUBUQUE LICENSE, LLC | |
TOWNSQUARE MEDIA FARIBAULT LLC | |
TOWNSQUARE MEDIA FARIBAULT LICENSE LLC | |
TOWNSQUARE MEDIA KALAMAZOO LLC | |
TOWNSQUARE MEDIA KALAMAZOO LICENSE LLC | |
TOWNSQUARE MEDIA LANSING LLC | |
TOWNSQUARE MEDIA LANSING LICENSE LLC | |
TOWNSQUARE MEDIA PORTLAND LLC | |
TOWNSQUARE MEDIA PORTLAND LICENSE LLC | |
TOWNSQUARE MEDIA PORTSMOUTH LLC | |
TOWNSQUARE MEDIA PORTSMOUTH LICENSE LLC |
Signature Page to Amendment No. 3 to Credit Agreement
TOWNSQUARE MEDIA POUGHKEEPSIE, LLC | |
TOWNSQUARE MEDIA POUGHKEEPSIE LICENSE, LLC | |
TOWNSQUARE MEDIA QUAD CITIES LLC | |
TOWNSQUARE MEDIA QUAD CITIES LICENSE LLC | |
TOWNSQUARE MEDIA ROCHESTER LLC | |
TOWNSQUARE MEDIA ROCHESTER LICENSE LLC | |
TOWNSQUARE MEDIA ROCKFORD LLC | |
TOWNSQUARE MEDIA ROCKFORD LICENSE LLC | |
TOWNSQUARE MEDIA WATERLOO LLC | |
TOWNSQUARE MEDIA WATERLOO LICENSE LLC | |
ZADER ACQUISITION COMPANY LLC |
By: | /s/ Stuart Rosenstein | ||
Name: | Stuart Rosenstein | ||
Title: | Executive Vice President, Chief | ||
Financial Officer and Secretary |
Signature Page to Amendment No. 3 to Credit Agreement
GENERAL ELECTRIC CAPITAL CORPORATION ,
as Administrative Agent, L/C Issuer,
|
||
By: | /s/ Steven J. Heise | |
Name: Steven J. Heise | ||
Title: Duly Authorized Signatory |
Signature Page to Amendment No. 3 to Credit Agreement
BANK OF AMERICA, N.A. , | ||
as a Lender | ||
By: | /s/ Gregory Roetting | |
Name: Gregory Roetting | ||
Title: Vice President |
Signature Page to Amendment No. 3 to Credit Agreement
ROYAL BANK OF CANADA , | ||
as a Lender | ||
By: | /s/ Alfonse Simone | |
Name: Alfonse Simone | ||
Title: Authorized Signatory |
Signature Page to Amendment No. 3 to Credit Agreement
MIHI LLC , | ||
as a Lender | ||
By: | /s/ Ayesha Farooqi | |
Name: Ayesha Farooqi | ||
Title: Authorized Signatory | ||
By: | /s/ T. Morgan Edwards II | |
Name: T. Morgan Edwards II | ||
Title: Authorized Signatory |
Signature Page to Amendment No. 3 to Credit Agreement
SunTrust Bank, | ||
as a Lender | ||
By: | /s/ Brian Guffin | |
Name: Brian Guffin | ||
Title: Director |
Signature Page to Amendment No. 3 to Credit Agreement
Schedule I
Third Amendment Closing Date Revolving Credit Commitments
Lender | Revolving Credit Commitment | |||
GENERAL ELECTRIC CAPITAL CORPORATION | $ | 500,000 | ||
BANK OF AMERICA, N.A. | $ | 9,500,000 | ||
ING CAPITAL LLC | $ | 1,000,000 | ||
MIHI LLC | $ | 5,000,000 | ||
ROYAL BANK OF CANADA | $ | 7,000,000 | ||
SUNTRUST BANK | $ | 2,000,000 | ||
TOTAL | $ | 25,000,000 |
EXECUTION VERSION
JOINDER AGREEMENT
This JOINDER AGREEMENT dated as of July 11, 2014 (this “ Agreement ”) is entered into by MIHI LLC (the “ New Lender ”), TOWNSQUARE RADIO, LLC, a Delaware limited liability company (the “ Borrower ”), and GENERAL ELECTRIC CAPITAL CORPORATION, as administrative agent (in such capacity, the “ Administrative Agent ”) for the Lenders under, and as defined in, the Credit Agreement (as defined below).
RECITALS:
WHEREAS, the Borrower, the other Loan Parties party thereto, the Administrative Agent, the other agents party thereto, and the Lenders from time to time party thereto are parties to a Credit Agreement, dated as of April 4, 2012 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time, the “ Credit Agreement ”). Capitalized terms not otherwise defined in this Agreement have the same meanings as specified in the Credit Agreement;
WHEREAS, the Borrower, the other Loan Parties party thereto, the Administrative Agent and the Lenders signatory thereto have agreed to amend certain provisions of the Credit Agreement, in a manner, and on the terms and conditions, provided for in that certain Amendment No. 3 to the Credit Agreement, dated as of the date hereof (the “ Amendment ”);
WHEREAS, pursuant to the Amendment and subject to the terms and conditions of the Credit Agreement and the other Loan Documents, the Borrower desires that New Lender provide additional Revolving Credit Commitments and New Lender desires to provide new Revolving Credit Commitments to the Borrower and to become a Lender under, and subject to the terms and conditions of, the Credit Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the premises and agreements, provisions and covenants herein contained, the parties hereto agree as follows:
1. Revolving Credit Commitment . The New Lender hereby agrees to commit to provide its Revolving Credit Commitment as set forth on Schedule I hereto, on the terms and subject to the conditions set forth in the Credit Agreement and the other Loan Documents.
2. Representations, Warranties and Covenants of New Lender . The New Lender (a) represents and warrants to the Borrower and the Administrative Agent that (i) it has full power and authority, and has taken all actions necessary for the New Lender, to execute and deliver this Agreement and to consummate the transactions contemplated hereby, (ii) it is sophisticated with respect to the decisions to provide the Revolving Credit Commitments pursuant to the Credit Agreement and the other Loan Documents and either the New Lender or the Person exercising discretion in making such decisions is experienced in making such decisions, and (iii) by executing,
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signing and delivering this Agreement via ClearPar®, SyndTrak® or any other electronic settlement system designated by the Administrative Agent, the Person executing, signing and delivering this Agreement on behalf of the New Lender is an authorized signer for the New Lender and is authorized to execute, sign and deliver this Agreement, (b) appoints and authorizes the Administrative Agent to take such action as administrative agent and collateral agent on its behalf and to exercise such powers under the Loan Documents as are delegated to the Administrative Agent by the terms thereof, together with such powers as are reasonably incidental thereto, (c) shall perform in accordance with their terms all obligations that, by the terms of the Loan Documents, are required to be performed by it as a Lender, (d) confirms it has received such documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Agreement and shall continue to make its own credit decisions in taking or not taking any action under any Loan Document independently and without reliance upon any Secured Party and based on such documents and information as it shall deem appropriate at the time, (e) acknowledges and agrees that, as a Lender, it may receive material non-public information and confidential information concerning the Loan Parties and their Affiliates and Securities and agrees to use such information in accordance with Section 11.20 of the Credit Agreement, (f) specifies as its applicable lending offices (and addresses for notices) the offices at the addresses set forth beneath its name on the signature pages hereof and (g) to the extent required pursuant to Section 2.17(f) of the Credit Agreement, attaches two completed originals of Forms W-8ECI, W-8BEN or W-9.
3. Determination of Effective Date; Register . Following the due execution and delivery of this Agreement by the Administrative Agent, the Borrower and the New Lender, this Agreement (including its attachments) will be delivered to the Administrative Agent for its acceptance and recording in the Register. The effective date of this Agreement (the “ Effective Date ”) shall be the Third Amendment Closing Date.
4. Effect . As of the Effective Date, the New Lender shall be a party to the Credit Agreement as a Lender and as a Revolving Credit Lender and shall have the rights and obligations of a Lender and a Revolving Credit Lender under the Credit Agreement.
5. Miscellaneous . Sections 1.5 ( Interpretation ), 11.14(a) ( Submission to Jurisdiction ) and 11.15 ( Waiver of Jury Trial ) of the Credit Agreement are hereby incorporated by reference. On and after the Effective Date, this Agreement shall be binding upon, and inure to the benefit of, the Borrower, the New Lender, the Administrative Agent and their Related Persons and their successors and assigns. This Agreement shall be governed by, and be construed and interpreted in accordance with, the law of the State of New York (without respect to the principles of conflicts of laws that would result in the application of any law other than the law of the State of New York). This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart. Delivery of an executed signature page of this Agreement by facsimile transmission or Electronic Transmission shall be as effective as delivery of a manually executed counterpart of this Agreement.
[Signature Pages Follow]
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In witness whereof , the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized, as of the date first above written.
MIHI LLC, | |||
as the New Lender | |||
By: | /s/ Ayesha Farooqi | ||
Name: | Ayesha Farooqi | ||
Title: | Authorized Signatory | ||
By: | /s/ T. Morgan Edwards II | ||
Name: | T. Morgan Edwards II | ||
Title: | Authorized Signatory |
Lending Office for Eurodollar Rate Loans :
MIHI LLC
Lending Office (and address for notices) for any other purpose :
MIHI LLC
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[Signature Page to Joinder Agreement]
Accepted and Agreed | |||
this 11th day of July 2014: | |||
GENERAL ELECTRIC CAPITAL CORPORATION, | |||
as Administrative Agent | |||
By: | /s/ Steven J. Heise | ||
Name: | Steven J. Heise | ||
Title: | Duly Authorized Signatory | ||
TOWNSQUARE RADIO, LLC | |||
By: | /s/ Stuart Rosenstein | ||
Name: | Stuart Rosenstein | ||
Title: | Executive Vice President and | ||
Chief Financial Officer |
[Signature Page to Joinder Agreement]
Schedule I
Third Amendment Closing Date Revolving Credit Commitments
Lender | Revolving Credit Commitment | |||
MIHI LLC | $ | 5,000,000 |
Exhibit 10.5
SECOND AMENDED AND RESTATED
REGISTRATION AGREEMENT
THIS SECOND AMENDED AND RESTATED REGISTRATION AGREEMENT (this “ Agreement ”), dated as of [ ], 2014, is made by and among (i) Townsquare Media, Inc., a Delaware corporation (the “ Company ”), (ii) OCM POF IV AIF GAP Holdings, L.P., a Delaware limited partnership (“ OCM POF Fund ”), (iii) OCM PF/FF Radio Holdings PT, L.P, a Delaware limited partnership (“ OCM PF/FF Fund ” and, together with OCM POF Fund and any other investment vehicle or fund managed, directly or indirectly, by Oaktree Capital Management, L.P. that at any time executes a counterpart to, or otherwise agrees to be bound by, this Agreement, “ OCM ”), and (iv) each of the other Persons signatory hereto and each other Person who, at any time, acquires securities of the Company and, with the written consent of OCM, executes a counterpart of this Agreement or otherwise agrees to be bound by this Agreement (such Persons, together with each other Person identified as an “Other Securityholder” on the Schedule of Securityholders attached hereto, the “ Other Securityholders ”). OCM and the Other Securityholders are collectively referred to herein as the “ Securityholders .” Capitalized terms used but not defined herein have the meanings set forth in Section 9 below.
This Agreement amends and restates in its entirety the Amended and Restated Registration Agreement of the Townsquare Media, LLC (of which the Company is the corporate successor), effective as of August 12, 2010 (the “ Original Agreement ”), in accordance with Section 10(e) of the Original Agreement.
In consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Demand Registrations .
(a) Requests for Registration . At any time and from time to time, the holders of a majority of the OCM Registrable Securities may request registration under the Securities Act of all or part of their Registrable Securities on Form S-1 or any similar long-form registration (“ Long-Form Registrations ”) or, if available, on Form S-3 (including pursuant to Rule 415 under the Securities Act) or any similar short-form registration (“ Short-Form Registrations ”). All registrations requested pursuant to this Section 1(a) are referred to herein as “ Demand Registrations .” Each request for a Demand Registration shall specify the approximate number of Registrable Securities requested to be registered and the anticipated per share price range for such offering. Within five (5) days after receipt of any such request, the Company shall give written notice of such requested registration to all other holders of Registrable Securities and, subject to Section 1(d) , will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein from such Persons within fifteen (15) days after the receipt of the Company’s notice.
(b) Long-Form Registrations . The holders of a majority of the OCM Registrable Securities shall be entitled to request an unlimited number of Long-Form
Registrations in which the Company shall pay all Registration Expenses (as defined below in Section 5 ). All Long-Form Registrations shall be underwritten registrations.
(c) Short-Form Registrations . In addition to the Long-Form Registrations provided pursuant to Section 1(b) , the holders of a majority of the OCM Registrable Securities shall be entitled to request an unlimited number of Short-Form Registrations in which the Company shall pay all Registration Expenses. Demand Registrations will be Short-Form Registrations whenever the Company is permitted to use any applicable short form. After the Company has become subject to the reporting requirements of the Securities Exchange Act, the Company shall use its best efforts to make Short-Form Registrations on Form S-3 available for the sale of Registrable Securities. All Short-Form Registrations shall be underwritten registrations, unless otherwise agreed to by the holders of a majority of OCM Registrable Securities included in such registration. If the Company, pursuant to the request of the holder(s) of a majority of OCM Registrable Securities, is qualified to and has filed with the Securities and Exchange Commission a registration statement under the Securities Act on Form S-3 pursuant to Rule 415 under the Securities Act (the “ Required Registration ”), then the Company shall use reasonable best efforts to cause the Required Registration to be declared effective under the Securities Act as soon as practicable after filing, and, once effective, the Company shall cause such Required Registration to remain effective until the date on which all OCM Registrable Securities included in such registration have been sold pursuant to the Required Registration.
(d) Priority on Demand Registrations . The Company shall not include in any Demand Registration any securities which are not Registrable Securities without the prior written consent of the holders of a majority of the OCM Registrable Securities included in such registration. If a Demand Registration is an underwritten offering and the managing underwriters advise the Company in writing that, in their opinion, the number of Registrable Securities and, if permitted hereunder, other securities requested to be included in such offering exceeds the number of Registrable Securities and other securities, if any, which can be sold in an orderly manner in such offering within the price range acceptable to the holders of a majority of the Registrable Securities initially requesting such registration, the Company will include in such registration, (i) first , the Registrable Securities requested to be included in such registration that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, pro rata among the respective holders thereof on the basis of the number of Registrable Securities owned by each such holder, and (ii) second , other securities requested (and permitted) to be included in such registration, if any, that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, pro rata among the holders of such securities on the basis of the number of such securities owned by each such holder.
(e) Restrictions on Demand Registrations . The Company shall not be obligated to effect any Long-Form Registration within 90 days after the effective date of a previous Long-Form Registration or a previous registration in which the holders of Registrable Securities were given piggyback rights pursuant to Section 2 and in which there was no reduction in the number of Registrable Securities requested to be included. The Company may postpone for up to six months the filing or the effectiveness of, or suspend the use of, a registration statement for a Demand Registration if the Company determines in good faith (after consultation with legal counsel) that such Demand Registration would reasonably be expected to have a material adverse effect on the Company or its business or on any proposal or plan by the
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Company or any of its Subsidiaries to acquire financing, engage in any acquisition of assets (other than in the ordinary course of business) or engage in any merger, consolidation, tender offer, reorganization or similar transaction; provided that, in such event, the Company shall pay all Registration Expenses in connection with such registration. The Company may delay a Demand Registration hereunder only twice in any twelve-month period, provided that the aggregate length of time that such a Demand Registration may be delayed hereunder shall not exceed six months.
(f) Selection of Underwriters . The holders of a majority of the OCM Registrable Securities included in any Demand Registration shall have the right to select the investment banker(s) and managing underwriter(s) to administer the offering.
2. Piggyback Registrations .
(a) Right to Piggyback . Whenever the Company proposes to register any of its equity securities (including any proposed registration of the Company’s securities by any third party) under the Securities Act (other than (i) pursuant to a Demand Registration, which is governed by Section 1 or (ii) pursuant to a registration on Form S-4 or S-8 or any successor or similar forms, or (iii) in connection with the Company’s initial public offering of equity securities), whether or not for sale for its own account, and the registration form to be used may be used for the registration of Registrable Securities (a “ Piggyback Registration ”), the Company shall give prompt written notice to all holders of Registrable Securities of its intention to effect such a registration and will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein from such Persons within fifteen (15) days after the receipt of the Company’s notice.
(b) Piggyback Expenses . The Registration Expenses of the holders of Registrable Securities shall be paid by the Company in all Piggyback Registrations, whether or not such registration is consummated.
(c) Priority on Primary Registrations . If a Piggyback Registration is an underwritten primary registration on behalf of the Company, and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such offering exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the Company, then the Company shall include in such registration (i) first , the securities the Company proposes to sell that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, (ii) second , the Registrable Securities requested to be included in such registration, if any, that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, pro rata among the respective holders thereof on the basis of the number of Registrable Securities owned by each such holder, and (iii) third , other securities requested (and permitted) to be included in such registration, if any, that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, pro rata among the holders of such securities on the basis of the number of such securities owned by each such holder.
(d) Priority on Secondary Registrations . If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Company’s securities other than
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holders of Registrable Securities (it being understood that secondary registrations on behalf of holders of Registrable Securities are addressed in Section 1 rather than this Section 2(d) ), and the managing underwriters advise the Company in writing that, in their opinion, the number of securities requested to be included in such registration exceeds the number which can be sold in an orderly manner in such offering within a price range acceptable to the holders of a majority of the securities initially requested to be included in such registration, then the Company shall include in such registration (i) first , the securities requested to be included therein by the holders requesting such registration and the Registrable Securities requested to be included in such registration, in each case that, in the opinion of such underwriters, can be sold in an orderly manner within such price range, pro rata among the holders of such securities and the holders of such Registrable Securities on the basis of the number of securities owned by each such holder, and (ii) second , other securities requested (and permitted) to be included in such registration, if any, that, in the opinion of such underwriters, can be sold in an orderly manner within such price range.
(e) Selection of Underwriters . If any Piggyback Registration is an underwritten offering, the selection of the investment banker(s) and managing underwriter(s) for the offering must be approved by the holders of a majority of the Registrable Securities included in such Piggyback Registration, which approval shall not be unreasonably withheld.
(f) Other Registrations . If the Company has previously filed a registration statement with respect to Registrable Securities pursuant to Section 1 or pursuant to this Section 2 , and if such previous registration has not been withdrawn or abandoned, then, unless such previous registration statement is a Required Registration, the Company shall not file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act (except on Form S-4 or S-8 or any successor form), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least six months has elapsed from the effective date of such previous registration.
3. Holdback Agreements .
(a) Each holder of Registrable Securities agrees that in connection with the Company’s initial public offering of the Company’s equity securities and any Demand Registration or Piggyback Registration that is an underwritten public offering of the Company’s equity securities, he, she or it shall not (i) offer, sell, contract to sell, pledge or otherwise dispose of (including sales pursuant to Rule 144), directly or indirectly, any equity securities of the Company (“ Securities ”) (including Securities which may be deemed to be owned beneficially by such holder in accordance with the rules and regulations of the Securities and Exchange Commission), or any securities, options, or rights convertible into or exchangeable or exercisable for Securities (“ Other Securities ”), (ii) enter into a transaction which would have the same effect as described in clause (i) of this Section 3(a) , (iii) enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences or ownership of any Securities or Other Securities, whether such transaction is to be settled by delivery of such Securities or Other Securities, in cash or otherwise, or (iv) publicly disclose the intention to enter into any transaction described in clause (i), (ii) or (iii) above, from the date on which the Company gives notice to the holders of Registrable Securities that a preliminary prospectus has
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been circulated for the underwritten public offering to the date that is (A) 180-days following the date of the final prospectus for such underwritten public offering, if such public offering is the Company’s initial public offering, or (B) 90 days following the date of the final prospectus for such underwritten public offering, if such public offering is not the Company’s initial public offering (in each case, or such longer period as agreed to by the underwriters designated as “book-runners” managing such registered public offering), unless such book-runners otherwise agree in writing (such period, the “ Holdback Period ”); provided that the holdback obligations set forth in this Section 3(a) shall not be effective or shall be reduced, as applicable, if, in any underwritten offering, the managing underwriter indicates in writing to the Company that such holdback obligations are not necessary or may be shortened in the applicable initial public offering, Demand Registration or Piggyback Registration. If (x) the Company issues an earnings release or other material news or a material event relating to the Company and its Subsidiaries occurs during the last 17 days of the Holdback Period or (y) prior to the expiration of the Holdback Period, the Company announces that it will release earnings results during the 16-day period beginning upon the expiration of the Holdback Period, then to the extent necessary for a managing or co-managing underwriter of a registered offering required hereunder to comply with FINRA Rule 2711(f)(4), the Holdback Period shall be extended until 18 days after the earnings release or the occurrence of the material news or event, as the case may be (such period referred to herein as the “ Holdback Extension ”). The Company may impose stop-transfer instructions with respect to its securities that are subject to the foregoing restriction until the end of such period, including any period of Holdback Extension. The holdback obligations set forth in this Section 3(a) will automatically terminate upon any release or termination of such holdback obligations for the holders of a majority of the OCM Registrable Securities.
(b) In addition to the holdback obligations provided for in Section 3(a) above, in connection with any underwritten public offering of the Company’s equity securities, each holder of Registrable Securities agrees to enter into any lockup or similar agreement requested by the underwriters managing the registered public offering that the holders of a majority of the OCM Registrable Securities agree to enter into; provided , that such lockup or similar arrangement will automatically terminate upon any release or termination of the lockup or similar arrangement entered into by the holders of a majority of the OCM Registrable Securities; provided , further , that in no event shall such lockup or similar agreement provide for a holdback period that is longer than the duration of the Holdback Period (including any Holdback Extension) as determined pursuant to Section 3(a) above.
(c) The Company (i) agrees not to effect any Public Sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and during the 90-day period beginning on the effective date of any Demand Registration or any underwritten Piggyback Registration (except as part of such underwritten registration or pursuant to registrations on Form S-4 or S-8 or any successor form) or, in the event of a Holdback Extension, for such longer period until the end of such period of Holdback Extension, unless the underwriters managing the registered public offering otherwise agree, and (ii) to the extent not inconsistent with applicable law, except as otherwise permitted by the holders of a majority of the OCM Registrable Securities, shall cause each other holder of its Class A Common Stock, or any securities convertible into or exchangeable or exercisable for Class A Common Stock, purchased from the Company at any time after the date of this Agreement (other than in a registered public offering) and who is not party to this
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Agreement to agree not to effect any Public Sale or distribution (including sales pursuant to Rule 144) of any such securities during such period (as extended by any Holdback Extension) except as part of such underwritten registration, if otherwise permitted, unless the underwriters managing the registered public offering otherwise agree.
(d) Notwithstanding any other provision contained in this Agreement, the Company shall not include in any underwritten Demand Registration or underwritten Piggyback Registration any portion of Registrable Securities held by any officers or employees of the Company or any of its Subsidiaries the inclusion of which the underwriter of such Demand Registration or Piggyback Registration, as the case may be, determines is likely to adversely affect such offering.
(e) Notwithstanding anything to the contrary herein, except in the case of (i) a transfer to the Company or (ii) a Public Sale which does not violate Sections 3(a) or 3(b) (clauses (i) through (ii), a “ Permitted Transfer ”), prior to transferring any Registrable Securities to any Person not already a party to this Agreement (including by operation of law), the transferring Securityholder shall cause the prospective transferee to execute and deliver to the Company a counterpart of this Agreement thereby agreeing to be bound by the terms hereof. Any transfer or attempted transfer of any Registrable Securities in violation of any provision of this Agreement shall be void ab initio , and the Company shall not record such transfer on its books or treat any purported transferee of such securities as the owner of such securities for any purpose. Other than in the case of a Permitted Transfer, whether or not any such transferee has executed a counterpart hereto, such transferee shall be subject to the obligations of the transferor hereunder.
(f) Each certificate evidencing any Securities or Other Securities held by a Securityholder and each certificate issued in exchange for or upon the transfer of any such securities (unless such securities are permitted to be transferred pursuant to this Agreement and, if such securities were Registrable Securities, would no longer be Registrable Securities after such transfer) shall be stamped or otherwise imprinted with a legend in substantially the following form (together with any other legend that may be required pursuant to applicable law or the Company’s certificate of incorporation or other organizational documents):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON _____________ AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY OTHER APPLICABLE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF EFFECTIVE REGISTRATION UNDER SUCH ACT AND LAWS OR EXEMPTION THEREFROM.
IN ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER AND OTHER PROVISIONS SET FORTH IN THE SECOND AMENDED AND RESTATED REGISTRATION AGREEMENT DATED AS OF [ ], 2014, AMONG THE COMPANY AND CERTAIN OF THE COMPANY’S
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SECURITYHOLDERS, AS AMENDED AND MODIFIED FROM TIME TO TIME PURSUANT TO ITS TERMS. A COPY OF SUCH REGISTRATION AGREEMENT WILL BE FURNISHED WITHOUT CHARGE BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
The Company shall imprint such legend on certificates evidencing Securities and Other Securities outstanding prior to the date hereof. The legend set forth above shall be removed from the certificates evidencing any securities which are transferred pursuant to a Permitted Transfer.
4. Registration Procedures . Whenever the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof and pursuant thereto the Company will as expeditiously as possible:
(a) in accordance with the Securities Act and all applicable rules and regulations promulgated thereunder, prepare and (within sixty (60) days after the end of the period within which requests for registration may be given to the Company) file with the Securities and Exchange Commission a registration statement with respect to such Registrable Securities and thereafter use its reasonable best efforts to cause such registration statement to become effective as soon as practicable thereafter (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Company shall furnish to the counsel selected by the holders of a majority of the OCM Registrable Securities covered by such registration statement copies of all such documents proposed to be filed, which documents shall be subject to the review and comment of such counsel);
(b) notify in writing each holder of Registrable Securities of the effectiveness of each registration statement filed hereunder and prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of either (i) not less than six months (subject to extension pursuant to Section 7(b) ) or, if such registration statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer or (ii) such shorter period as will terminate when all of the securities covered by such registration statement have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement (but in any event not before the expiration of any longer period required under the Securities Act), and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement;
(c) furnish to each seller of Registrable Securities thereunder such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus), each Free
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Writing Prospectus and such other documents as such seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such seller;
(d) use its reasonable best efforts to register or qualify such Registrable Securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the Registrable Securities owned by such seller (provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 4(d) , (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction);
(e) notify in writing each seller of such Registrable Securities (i) promptly after it receives notice thereof, of the date and time when such registration statement and each post-effective amendment thereto has become effective or a prospectus or supplement to any prospectus relating to a registration statement has been filed and when any registration or qualification has become effective under a state securities or blue sky law or any exemption thereunder has been obtained, (ii) promptly after receipt thereof, of any request by the Securities and Exchange Commission for the amendment or supplementing of such registration statement or prospectus or for additional information, and (iii) at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of any event as a result of which the prospectus included in such registration statement (x) contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading in light of the circumstances under which they were made or (y) is otherwise not legally available to support sales of Registrable Securities;
(f) prepare and file promptly with the Securities and Exchange Commission, and notify such holders of Registrable Securities prior to the filing of, such amendments or supplements to such registration statement or prospectus as may be necessary to correct any statements or omissions if, at the time when a prospectus relating to such securities is required to be delivered under the Securities Act, any event has occurred as the result of which any such prospectus or any other prospectus as then in effect would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, in case any of such holders of Registrable Securities or any underwriter for any such holders is required to deliver a prospectus at a time when the prospectus then in circulation is not in compliance with the Securities Act or the rules and regulations promulgated thereunder, the Company shall use its best efforts to prepare promptly upon request of any such holder or underwriter such amendments or supplements to such registration statement and prospectus as may be necessary in order for such prospectus to comply with the requirements of the Securities Act and such rules and regulations;
(g) cause all such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed;
(h) provide a transfer agent and registrar for all such Registrable Securities not later than the effective date of such registration statement;
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(i) enter into and perform such customary agreements (including underwriting agreements in customary form) and take all such other actions as the holders of a majority of the OCM Registrable Securities being included in such registration or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such Registrable Securities (including participation in “road shows”, investor presentations and marketing events and effecting a share or unit split or a combination of shares or units);
(j) make available for inspection by any underwriter participating in any disposition pursuant to such registration statement, and any attorney, accountant, or other agent retained by any such underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause the Company’s officers, directors, employees, and independent accountants to supply all information reasonably requested by any such underwriter, attorney, accountant, or agent in connection with such registration statement and assist and, at the request of any participating underwriter, use reasonable best efforts to cause such officers or directors to participate in presentations to prospective purchasers;
(k) take all reasonable actions to ensure that any Free-Writing Prospectus utilized in connection with any Demand Registration or Piggyback Registration hereunder complies in all material respects with the Securities Act, is filed in accordance with the Securities Act to the extent required thereby, is retained in accordance with the Securities Act to the extent required thereby and, when taken together with the related prospectus, will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;
(l) otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months beginning with the first day of the Company’s first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder;
(m) use its reasonable best efforts to prevent the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any securities included in such registration statement for sale in any jurisdiction, and in the event of the issuance of any such stop order or other such order the Company shall advise such holders of Registrable Securities of such stop order or other such order promptly after it shall receive notice or obtain knowledge thereof and shall use its best efforts promptly to obtain the withdrawal of such order;
(n) obtain one or more cold comfort letters, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement and addressed to the underwriters), from the Company’s independent public accountants in customary form and covering such matters of the type customarily covered by cold comfort letters as the holders of a majority of the OCM Registrable Securities included in such registration reasonably request; and
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(o) provide a legal opinion of the Company’s outside counsel, dated the effective date of such registration statement (or, if such registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), with respect to the registration statement, each amendment and supplement thereto, the prospectus included therein (including the preliminary prospectus) and such other documents relating thereto in customary form and covering such matters of the type customarily covered by such opinions, which opinions shall be addressed to the underwriters. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing.
5. Registration Expenses .
(a) All expenses incident to the Company’s performance of or compliance with this Agreement, including all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, travel expenses, filing expenses, messenger and delivery expenses, fees and disbursements of custodians, and fees and disbursements of counsel for the Company and of all independent certified public accountants, underwriters including, if necessary, a “qualified independent underwriter” within the meaning of the rules of the Financial Industry Regulatory Authority, Inc. (in each case, excluding discounts and commissions), and other Persons retained by the Company or by the holders of OCM Registrable Securities or their Affiliates on behalf of the Company (all such expenses being herein called “ Registration Expenses ”), shall be borne as provided in this Agreement, except that the Company shall, in any event, pay its internal expenses (including all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed. Each Person that sells securities pursuant to a Demand Registration or Piggyback Registration hereunder shall bear and pay all underwriting discounts and commissions applicable to the securities sold for such Person’s account.
(b) In connection with each Demand Registration and each Piggyback Registration, the Company shall reimburse the holders of Registrable Securities included in such registration for the reasonable fees and disbursements of one counsel chosen by the holders of a majority of the OCM Registrable Securities included in such registration.
(c) To the extent Registration Expenses are not required to be paid by the Company, each holder of securities included in any registration hereunder shall pay those Registration Expenses allocable hereunder to the registration of such holder’s securities so included, and any Registration Expenses not so allocable shall be borne by all sellers of securities included in such registration in proportion to the aggregate selling price of each seller’s securities to be so registered.
6. Indemnification .
(a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each holder of Registrable Securities, its officers, directors, managers, agents,
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and employees and each Person who controls such holder (within the meaning of the Securities Act) (each an “ Indemnitee ” and, collectively, the “ Indemnitees ”) against any losses, claims, damages or liabilities, joint or several, together with reasonable costs and expenses (including reasonable attorneys’ fees), to which such Indemnitee may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of, are based upon, are caused by or result from (i) any untrue or alleged untrue statement of material fact contained (A) in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or (B) in any application or other document or communication (in this Section 6 collectively called an “ application ”) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify any securities covered by such registration statement under the “blue sky” or securities laws thereof, or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse each such Indemnitee for any legal or any other expenses incurred by him, her or it in connection with investigating or defending any such loss, claim, damage, expense, liability, action or proceeding; provided, however, that the Company shall not be liable in any such case to any such Person to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of, is based upon, is caused by or results from an untrue statement or alleged untrue statement, or omission or alleged omission, made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, written information prepared and furnished to the Company by such holder expressly for use therein. In connection with an underwritten offering, the Company shall indemnify the underwriters, their officers and directors and each Person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities.
(b) In connection with any registration statement in which a holder of Registrable Securities is participating, each such holder shall furnish to the Company in writing such information and affidavits as the Company reasonably requests for use in connection with any such registration statement or prospectus and, to the fullest extent permitted by law, shall indemnify and hold harmless the other holders of Registrable Securities and the Company, and their respective directors, officers, managers, agents and employees and each other Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages or liabilities, joint or several, together with reasonable costs and expenses (including reasonable attorney’s fees), to which such indemnified party may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of, are based upon, are caused by or result from (i) any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or in any application or (ii) any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is made in such registration statement, any such prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in each case, in reliance upon and in conformity with written information prepared and furnished to the Company by such holder expressly for use therein; provided, however, that the obligation to
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indemnify will be several and not joint, as to each holder and will be limited to the net amount of proceeds received by such holder from the sale of Registrable Securities pursuant to such registration statement.
(c) Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent will not be unreasonably withheld, conditioned or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim.
(d) The indemnifying party shall not, except with the approval of each indemnified party, consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to each indemnified party of a release from all liability in respect to such claim or litigation without any payment or consideration provided by such indemnified party.
(e) If the indemnification provided for in this Section 6 is unavailable to or is insufficient to hold harmless an indemnified party under the provisions above in respect to any losses, claims, damages or liabilities referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the sellers of Registrable Securities and any other sellers participating in the registration statement on the other hand or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative faults referred to in clause (i) above but also the relative benefit of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other in connection with the registration statement or omissions which resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the sellers of Registrable Securities and any other sellers participating in the registration statement on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) to the Company bear to the total net proceeds from the offering (before deducting expenses) to the sellers of Registrable Securities and any other sellers participating in the registration statement. The relative fault of the Company on the one hand and of the sellers of Registrable Securities and any other sellers participating in the registration statement on the other shall be determined by reference to, among other things, whether the untrue statement or alleged omission to state a material fact
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relates to information supplied by the Company or by the sellers of Registrable Securities or other sellers participating in the registration statement and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.
(f) The Company and the sellers of Registrable Securities agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation (even if the sellers of Registrable Securities were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6 , no seller of Registrable Securities shall be required to contribute any amount in excess of the net proceeds received by such seller from the sale of Registrable Securities covered by the registration statement filed pursuant hereto. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.
(g) The indemnification and contribution by any such party provided for under this Agreement shall be in addition to any other rights to indemnification or contribution which any indemnified party may have pursuant to law or contract and will remain in full force and effect regardless of any investigation made or omitted by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and will survive the transfer of securities.
7. Participation in Underwritten Registrations .
(a) No Person may participate in any registration hereunder which is underwritten unless such Person (i) agrees to sell such Person’s securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve such arrangements (including pursuant to the terms of any over-allotment or “green shoe” option requested by the managing underwriter(s), provided that no holder of Registrable Securities will be required to sell more than the number of Registrable Securities that such holder has requested the Company to include in any registration) and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements; provided that no holder of Registrable Securities included in any underwritten registration shall be required to make any representations or warranties to the Company or the underwriters (other than representations and warranties regarding such holder and such holder’s intended method of distribution) or to undertake any indemnification obligations to the Company or the underwriters with respect thereto, except as otherwise provided in Section 6 hereof.
(b) Each Person that is participating in any registration hereunder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(e) , such Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the registration statement until such Person’s receipt of the
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copies of a supplemented or amended prospectus as contemplated by Section 4(e) ; provided that the Company shall cause the period from and including the date of the giving of such notice pursuant to this Section 7 to and including the date when each seller of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 4(e) (the “ Suspension Period ”) not to exceed 180 days in any twelve-month period. In the event the Company shall give any such notice, the applicable time period mentioned in Section 4(b) during which a Registration Statement is to remain effective shall be extended by the number of days during the Suspension Period.
8. Current Public Information . At all times after the Company has filed a registration statement with the Securities and Exchange Commission pursuant to the requirements of either the Securities Act or the Securities Exchange Act, the Company shall file all reports required to be filed by it under the Securities Act and the Securities Exchange Act and the rules and regulations adopted by the Securities and Exchange Commission thereunder, and will take such further action as any holder or holders of Registrable Securities may reasonably request, all to the extent required to enable such holders to sell Registrable Securities pursuant to Rule 144 adopted by the Securities and Exchange Commission under the Securities Act (as such rule may be amended from time to time, “ Rule 144 ”) or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission. At all times after the Company has filed a registration statement with the Securities and Exchange Commission pursuant to the requirements of either the Securities Act or the Securities Exchange Act, if requested by any holder of Registrable Securities, the Company shall deliver to such holder of Registrable Securities a written statement that the Company has complied with all Rule 144 filing requirements.
9. Definitions .
“ Affiliate ” means, with respect to any Person, any other Person that controls, is controlled by, or is under common control with such Person; the term “control,” as used in this definition, means the power to direct or cause the direction of the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and “controlled” and “controlling” have meanings correlative to the foregoing.
“ Agreement ” has the meaning set forth in the preamble.
“ application ” has the meaning set forth in Section 6 .
“ Class A Common Stock ” means the Class A Common Stock, $0.01 par value per share, of the Company.
“ Class B Common Stock ” means the Class B Common Stock, $0.01 par value per share, of the Company.
“ Class C Common Stock ” means the Class C Common Stock, $0.01 par value per share, of the Company.
“ Company ” has the meaning set forth in the preamble .
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“ Demand Registrations ” has the meaning set forth in Section 1(a) .
“ Designated Securityholder ” means each of GE Capital Equity Holdings, Inc., GE Business Financial Services Inc., Antares Capital Corporation, SOF Investments, L.P., and SOF Investments, L.P. - Private V, and each of their respective Affiliates.
“ Free Writing Prospectus ” means a free-writing prospectus, as defined in Rule 405 of the Securities Act.
“ Holdback Extension ” has the meaning set forth in Section 3(a) .
“ Holdback Period ” has the meaning set forth in Section 3(a) .
“ Indemnittee ” and “ Indemnitees ” have the meanings set forth in Section 6(a) .
“ Long-Form Registrations ” has the meaning set forth in Section 1(a) .
“ OCM ” has the meaning set forth in the preamble.
“ OCM Registrable Securities ” means (i) Class A Common Stock held by OCM, (ii) Class A Common Stock issued or issuable upon the conversion of Class B Common Stock or upon the conversion of Class C Common Stock, in each case held by OCM, (iii) Class A Common Stock issued or issuable in respect of warrants held by OCM that are exercisable for shares of Class A Common Stock, and (iv) common equity securities of the Company issued or issuable with respect to the securities referred to in clause (i), (ii) or (iii) above by way of dividend, distribution, split or combination of securities, or any recapitalization, merger, consolidation or other reorganization,. As to any particular OCM Registrable Securities, such securities shall cease to be OCM Registrable Securities when they (a) have been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) have been sold to the public through a broker, dealer or market maker in compliance with Rule 144 under the Securities Act (or any similar rule then in force), (c) have been purchased or otherwise acquired by any employee of the Company or any of its Subsidiaries or (d) have been repurchased by the Company or any Subsidiary. For purposes of this Agreement, a Person shall be deemed to be a holder of OCM Registrable Securities, and the OCM Registrable Securities shall be deemed to be in existence, whenever such Person has the right to acquire directly or indirectly such OCM Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person shall be entitled to exercise the rights of a holder of OCM Registrable Securities hereunder.
“ Other Registrable Securities ” means (i) Class A Common Stock held by the Other Securityholders, and (ii) Class A Common Stock issued or issuable upon the conversion of Class B Common Stock or upon the conversion of Class C Common Stock, in each case held by the Other Securityholders, (iii) Class A Common Stock issued or issuable in respect of warrants held by the Other Securityholders that are exercisable for shares of Class A Common Stock, and (iv) common equity securities of the Company issued or issuable with respect to the securities referred to in clause (i), (ii) or (iii) above by way of dividend, distribution, split or combination
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of securities, or any recapitalization, merger, consolidation or other reorganization. As to any particular Other Registrable Securities, such securities shall cease to be Other Registrable Securities when they (a) have been effectively registered under the Securities Act and disposed of in accordance with the registration statement covering them, (b) have been purchased or otherwise acquired by OCM, (c) have been sold to the public through a broker, dealer or market maker in compliance with Rule 144 under the Securities Act (or any similar rule then in force), (d) except with respect to Registrable Securities held by a Designated Securityholder, have become eligible to be sold to the public through a broker, dealer, or market maker pursuant to Rule 144 (or any similar provision then in force), during a single 90-day period or (e) have been repurchased by the Company or any Subsidiary. For purposes of this Agreement, a Person shall be deemed to be a holder of Other Registrable Securities, and the Other Registrable Securities shall be deemed to be in existence, whenever such Person has the right to acquire directly or indirectly such Other Registrable Securities (upon conversion or exercise in connection with a transfer of securities or otherwise, but disregarding any restrictions or limitations upon the exercise of such right), whether or not such acquisition has actually been effected, and such Person shall be entitled to exercise the rights of a holder of Other Registrable Securities hereunder.
“ Other Securities ” has the meaning set forth in Section 3(a) .
“ Other Securityholders ” has the meaning set forth in the preamble.
“ Permitted Transfer ” has the meaning set forth in Section 3(e) .
“ Person ” means an individual, a partnership, a joint venture, an association, a joint stock company, a corporation, a limited liability company, a trust, an unincorporated organization, an investment fund, any other business entity or a governmental entity or any department, agency or political subdivision thereof.
“ Piggyback Registration ” has the meaning set forth in Section 2(a) .
“ Public Sale ” means any sale of Registrable Securities to the public (i) pursuant to an offering effectively registered under the Securities Act or (ii) through a broker, dealer or market maker pursuant to the provisions of Rule 144 (or any similar provision then in effect) adopted under the Securities Act after an initial public offering and sale of equity securities of the Company.
“ Registration Expenses ” has the meaning set forth in Section 5(a) .
“ Registrable Securities ” means, collectively, the OCM Registrable Securities and the Other Registrable Securities.
“ Required Registration ” has the meaning set forth in Section 1(c) .
“ Rule 144 ” has the meaning set forth in Section 8 .
“ Securities ” has the meaning set forth in Section 3(a) .
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“ Securities Act ” means the Securities Act of 1933, as amended, or any similar federal law then in force.
“ Securities and Exchange Commission ” means the United States Securities and Exchange Commission and includes any governmental body or agency succeeding to the functions thereof.
“ Securities Exchange Act ” means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force.
“ Securityholders ” has the meaning set forth in the preamble.
“ Short-Form Registrations ” has the meaning set forth in Section 1(a) .
“ Subsidiary ” means, with respect to any Person, any corporation, limited liability company, partnership, association, or business entity of which (i) if a corporation, a majority of the total voting power of shares of stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers, or trustees thereof is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof, or (ii) if a limited liability company, partnership, association, or other business entity (other than a corporation), a majority of partnership or other similar ownership interest thereof is at the time owned or controlled, directly or indirectly, by any Person or one or more Subsidiaries of that Person or a combination thereof. For purposes hereof, a Person or Persons shall be deemed to have a majority ownership interest in a limited liability company, partnership, association, or other business entity (other than a corporation) if such Person or Persons shall be allocated a majority of limited liability company, partnership, association, or other business entity gains or losses or shall be or control any managing member, board of managers or general partner of such limited liability company, partnership, association, or other business entity.
“ Suspension Period ” has the meaning set forth in Section 7(b) .
10. Miscellaneous .
(a) Notices . All notices, demands, or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been given or made (a) when delivered personally to the recipient, (b) when telecopied to the recipient (with hard copy sent to the recipient by reputable overnight courier service (charges prepaid) that same day) if telecopied before 5:00 p.m. local time of the recipient on a business day, and otherwise on the next business day, or (c) one business day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands, and other communications shall be sent to the Company at the address set forth below and to any other recipient at the address indicated on the Schedule of Securityholders attached hereto or to such other address or to the attention of such other Person as the recipient party has specified by prior written notice to the sending party. The Company’s address is as follows:
Townsquare Media, Inc.
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60 Arch Street
Greenwich, CT 06830
Attention: Chief Executive Officer
Facsimile: (203) 861-0920
with copies (which shall
not constitute notice) to:
Oaktree Capital Management, L.P.
333 S. Grand Ave., 28th Floor
Los Angeles, California 90071
Attention: Andrew Salter
Facsimile: (213) 830-6394
and
Kirkland & Ellis LLP
333 South Hope Street
Los Angeles, California 90071
Attention: John A. Weissenbach
Tana M. Ryan
Facsimile: (213) 680-8500
and
Kirkland & Ellis LLP
300 North LaSalle
Chicago, Illinois 60654
Attention: Christopher J. Greeno
Facsimile: (312) 862-2200
(b) No Inconsistent Agreements . The Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement. Except as provided in this Agreement, the Company shall not grant to any Persons the right to request the Company to register any equity securities of the Company, or any securities, options, or rights convertible or exchangeable into or exercisable for such securities, which rights are inconsistent with the rights granted hereunder.
(c) Adjustments Affecting Registrable Securities . The Company will not take any action, or permit any change to occur, with respect to its securities which would materially and adversely affect the ability of the holders of Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this Agreement or which would adversely affect the marketability of such Registrable Securities in any such registration (including effecting a stock split, combination of shares or other recapitalization).
(d) Remedies . Any Person having rights under any provision of this Agreement shall be entitled to enforce such rights specifically to recover damages caused by
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reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party may in its sole discretion apply to any court of law or equity of competent jurisdiction (without posting any bond or other security) for specific performance and for other injunctive relief in order to enforce or prevent violation of the provisions of this Agreement.
(e) Amendments and Waivers . Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Company or the holders of Registrable Securities unless such modification, amendment or waiver is set forth in writing and approved in writing by the the Company and holders of a majority of the OCM Registrable Securities; provided that no such amendment or modification that would adversely affect the rights, preferences or privileges of any class or group of Other Registrable Securities in a manner disproportionate to the effect of such amendment or modification on the rights, preferences or privileges of holders of OCM Registrable Securities (without regard to any effect resulting from the individual circumstances of any holder of such class or group of Other Registrable Securities) shall be effective against any holder whose rights, preferences or privileges are so affected thereby without the prior written consent of the holders of a majority of each class or group of Other Registrable Securities so affected; provided further , that no amendment or modification of any provision of this Agreement that materially increases the obligations of any holder of Registrable Securities shall be effective against such holder unless such modification or amendment is approved in writing by such holder. Notwithstanding the foregoing, Section 6 (Indemnification) and this Section 10(e) (Amendments and Waivers) may only be amended, modified or waived by a written instrument signed by holders of at least sixty-six and two thirds percent (66 2/3%) of the Registrable Securities (except (i) for the first proviso in the immediately preceding sentence, which would require the written consent of the holders of a majority of each class or group of Other Registrable Securities so affected, and (ii) for the second proviso in the immediately preceding sentence, which would require the written consent of each such affected holder). No failure by any party to insist upon the strict performance of any covenant, duty, agreement, or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute a waiver of any such breach or any other covenant, duty, agreement, or condition. Notwithstanding the foregoing, an amendment or modification of this Agreement to add a party hereto and to grant such party registration rights will be effective against the Company and all holders of Registrable Securities if such modification, amendment or waiver is approved in writing by the Company (as applicable) and the holders of a majority of the OCM Registrable Securities. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision in accordance with its terms.
(f) Securityholder Status . Notwithstanding anything to the contrary that may be set forth herein, at such time as any Securityholder ceases to hold any Registrable Securities, such Securityholder shall be deemed to no longer be a Securityholder for purposes of this Agreement and shall no longer be entitled to the rights or subject to the obligations of a Securityholder as set forth herein.
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(g) Successors and Assigns; Third-Party Beneficiaries . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto (and the Persons specifically identified in Section 6 ) and their respective successors and assigns. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the holders of Registrable Securities (or any portion thereof) as such shall be for the benefit of and enforceable by any subsequent holder of any Registrable Securities (or of such portion thereof); provided , that such subsequent holder of Registrable Securities shall be required to execute a joinder to this Agreement agreeing to be bound by its terms.
(h) Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
(i) Entire Agreement . Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including without limitation the Original Agreement.
(j) Counterparts; Facsimile Signature . This Agreement may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement may be executed by facsimile signature.
(k) Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
(l) Governing Law . All issues and questions concerning the relative rights and obligations of the Company and the Securityholders under this Agreement and the construction, validity, interpretation and enforceability of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
(m) Consent to Jurisdiction . Each of the parties hereto irrevocably submits to the exclusive jurisdiction of the United States District Court for the State of Delaware and the state courts of the State of Delaware for the purposes of any suit, action or other proceeding arising out of or relating to this Agreement or any transaction contemplated hereby. Each of the parties hereto further agrees that service of any process, summons, notice or document by United States certified or registered mail to such party’s respective address set forth in Section 10(a) and the Schedule of Securityholders attached hereto, or such other address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party, shall
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be effective service of process in any action, suit or proceeding in the State of Delaware with respect to any matters to which it has submitted to jurisdiction as set forth above in the immediately preceding sentence. Each of the parties hereto irrevocably and unconditionally waives any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in the United States District Court for the State of Delaware or the state courts of the State of Delaware and hereby irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum.
(n) Mutual Waiver of Jury Trial . Because disputes arising in connection with complex transactions are most quickly and economically resolved by an experienced and expert person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws. Therefore, to achieve the best combination of the benefits of the judicial system and of arbitration, each party to this Agreement hereby waives all rights to trial by jury in any action, suit or proceeding brought to resolve any dispute between or among any of the parties hereto, whether arising in contract, tort or otherwise, arising out of, connected with, related or incidental to this Agreement or the transactions contemplated hereby.
(o) Business Days . If any time period for giving notice or taking action hereunder expires on a day which is a Saturday, Sunday or legal holiday in the state in which the Company’s chief-executive office is located, the time period shall automatically be extended to the business day immediately following such Saturday, Sunday or legal holiday.
* * * * *
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IN WITNESS WHEREOF, the parties
hereto have executed this Second Amended and Restated Registration Agreement as of the day and year first above written.
TOWNSQUARE MEDIA, INC. | |||
By: | |||
Name: | |||
Its: |
Signature Page - Second Amended and Restated Registration Agreement
OCM POF IV AIF GAP HOLDINGS, L.P. | ||
By: OCM/GAP Holdings IV, Inc. | ||
Its: General Partner | ||
By: | ||
Name: | ||
Its: | ||
By: | ||
Name: | ||
Its: | ||
OCM PF/FF RADIO HOLDINGS PT, L.P | ||
By: | ||
Its: | ||
By: | ||
Name: | ||
Its: | ||
By: | ||
Name: | ||
Its: |
Signature Page - Second Amended and Restated Registration Agreement
[Other Securityholder] | ||
By: | ||
Name: | ||
Its: |
Signature Page - Second Amended and Restated Registration Agreement
SCHEDULE OF SECURITYHOLDERS
ON FILE WITH THE COMPANY
Exhibit 10.6
STOCKHOLDERS AGREEMENT
AMONG
TOWNSQUARE MEDIA, INC.
AND
CERTAIN STOCKHOLDERS OF TOWNSQUARE MEDIA, INC.
DATED AS OF [ ], 2014
Table of Contents
Page | |||
1. | EFFECTIVENESS; DEFINITIONS. | 1 | |
1.1 | Closing | 1 | |
1.2 | Definitions | 1 | |
2. | GOVERNANCE | 1 | |
2.1 | Board of Directors | 1 | |
2.2 | Termination of Governance Provisions | 2 | |
3. | REMEDIES. | 2 | |
3.1 | Generally | 2 | |
4. | AMENDMENT, TERMINATION, ETC. | 2 | |
4.1 | Written Modifications | 2 | |
4.2 | Effect of Termination | 2 | |
5. | DEFINITIONS. For purposes of this Agreement: | 3 | |
5.1 | Certain Matters of Construction | 3 | |
5.2 | Definitions | 3 | |
6. | MISCELLANEOUS. | 4 | |
6.1 | Authority; Effect | 4 | |
6.2 | Notices | 4 | |
6.3 | Binding Effect, Etc | 5 | |
6.4 | Descriptive Headings | 5 | |
6.5 | Counterparts | 5 | |
6.6 | Severability | 5 | |
7. | GOVERNING LAW. | 5 | |
7.1 | Governing Law | 5 | |
7.2 | Consent to Jurisdiction | 5 | |
7.3 | WAIVER OF JURY TRIAL | 5 | |
7.4 | Exercise of Rights and Remedies | 6 |
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STOCKHOLDERS AGREEMENT
This Stockholders Agreement (the “ Agreement ”) is made as of [ ], 2014 by and among:
(i) Townsquare Media, Inc., a Delaware corporation (the “ Company ”);
(ii) each of OCM POF IV AIF GAP Holdings, L.P., a Delaware limited partnership, and OCM PF/FF Radio Holdings PT, L.P, a Delaware limited partnership (collectively, “ Oaktree ”); and
(iii) each of FiveWire Media Ventures, LLC, Steven Price, Stuart Rosenstein, Alex Berkett, Scott Schatz and Dhruv Prasad (collectively, the “ FiveWire Holders ”).
RECITALS
1. | On or about the date hereof, the Company is consummating an Initial Public Offering. |
2. | The Company and certain other parties previously entered into an Amended and Restated Securityholders Agreement dated August 12, 2010, which will be terminated in connection with an Initial Public Offering. |
3. | The parties believe that it is in the best interests of the Company, Oaktree and the FiveWire Holders to set forth their agreements on certain matters. |
AGREEMENT
Therefore, the parties hereto hereby agree as follows:
1. | EFFECTIVENESS; DEFINITIONS. |
1.1 Closing . This Agreement shall become effective upon the closing of the Initial Public Offering (referred to herein as the “ Closing ”).
1.2 Definitions . Certain terms are used in this Agreement as specifically defined herein. These definitions are set forth or referred to in Section 6 hereof.
2. | GOVERNANCE |
2.1 Board of Directors .
(a) Concurrently with the effectiveness of this Agreement, the Company, Oaktree and the FiveWire Holders shall take all Necessary Action to cause the board of directors of the Company (the “ Board of Directors ”) to be comprised of seven (7) directors, (i) three (3) of whom shall be designated by Oaktree (each such director, an “ Oaktree Director ”), (ii) one (1) of whom shall be the Chief Executive Officer (or equivalent) of the Company (the “ Company Director ”) and (iii) three (3) of whom shall be nominated by the Company’s Nominating and Corporate Governance Committee and shall initially be David Lebow, Gary Ginsberg and Amy Miles. Each of the foregoing directors shall be divided into three classes of directors, each of whose members shall serve for staggered three-year terms as follows:
· | the class I directors shall be B. James Ford and David Lebow, and their term will expire at the annual meeting of stockholders to be held in 2015; |
· | the class II directors shall be the Chief Executive Officer, Steven Price, Gary Ginsberg and David Quick, and their term will expire at the annual meeting of stockholders to be held in 2016; and |
· | the class III directors shall be Stephen Kaplan and Amy Miles, and their term will expire at the annual meeting of stockholders to be held in 2017. |
(b) For so long as Oaktree Beneficially Owns (directly or indirectly) at least one-third (1/3) of the number of shares of Common Stock it Beneficially Owned as of the Closing, the Company hereby agrees to
include in the slate of nominees recommended by the Board of Directors for election as directors at each applicable annual or special meeting of shareholders at which directors are to be elected that number of individuals designated by Oaktree that, if elected, will result in three (3) Oaktree Directors each serving in a separate class of directors on the Board of Directors. For so long as Oaktree Beneficially Owns (directly or indirectly) at least one-third (1/3) of the number of shares of Common Stock it Beneficially Owned (directly or indirectly) as of the Closing, each FiveWire Holder hereby agrees to take all Necessary Action tocause the election of such Oaktree Directors to the Board of Directors.
(c) For the avoidance of doubt, each Oaktree Director shall constitute an “Oaktree Director” for purposes of, and as such term is used in, the Company’s Certificate of Incorporation, and shall be entitled to cast the number of votes as set forth therein.
(d) In the event that a vacancy is created at any time by the death, disability, retirement, resignation or removal of any Oaktree Director, the Company and each FiveWire Holder hereby agrees to take all Necessary Action to cause the vacancy created thereby to be filled as soon as practicable by an Oaktree Director.
(e) The Company shall reimburse the members of the Board of Directors for all reasonable out-of-pocket expenses incurred in connection with their attendance at meetings of the Board of Directors and any committees thereof, including without limitation travel, lodging and meal expenses.
(f) The Company shall obtain customary director and officer liability insurance on commercially reasonable terms.
2.2 Termination of Governance Provisions . The provisions of this Section 2 shall terminate upon the written consent of Oaktree.
3. | VOTING PROXY. |
3.1 Grant of Proxy. Each FiveWire Holder hereby grants to Oaktree a proxy that is irrevocable and coupled with an interest to vote their shares of Class B Common Stock, including in any action by written consent, which proxy shall be valid and remain in effect for so long Oaktree Beneficially Owns (directly or indirectly) at least fifty percent (50.0%) of the number of shares of Common Stock it Beneficially Owned as of the Closing. Oaktree may exercise the irrevocable proxy granted to it hereunder at any time that the vote, consent or approval of any holder of Class B Common Stock may be required. This proxy shall be assignable by Oaktree to any transferee of all of the shares of Common Stock Beneficially Owned (directly or indirectly) by Oaktree as of the Closing, without any further action required by any FiveWire Holder.
4. | REMEDIES. |
4.1 Generally . The Company and each party hereto shall have all remedies available at law, in equity or otherwise in the event of any breach or violation of this Agreement or any default hereunder by the Company or any party hereto. The parties acknowledge and agree that in the event of any breach of this Agreement, in addition to any other remedies which may be available, each of the parties hereto shall be entitled to specific performance of the obligations of the other parties hereto and, in addition, to such other equitable remedies (including, without limitation, preliminary or temporary relief) as may be appropriate in the circumstances.
5. | AMENDMENT, TERMINATION, ETC. |
5.1 Written Modifications . This Agreement may be amended, modified or extended, and the provisions hereof may be waived, only by an agreement in writing signed by Oaktree; provided, however, that the consent of the FiveWire Majority Holders shall be required for any amendment, modification, extension or waiver which has an adverse effect on the rights of the FiveWire Holders under this Agreement. Each such amendment, modification, extension and waiver shall be binding upon each party hereto. In addition, each party hereto may waive any right hereunder by an instrument in writing signed by such party or holder.
5.2 Effect of Termination . No termination under this Agreement shall relieve any Person of liability for breach prior to termination.
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6. | DEFINITIONS. For purposes of this Agreement: |
6.1 Certain Matters of Construction . In addition to the definitions referred to or set forth below in this Section 6:
(a) The words “hereof,” “herein,” “hereunder” and words of similar import shall refer to this Agreement as a whole and not to any particular Section or provision of this Agreement;
(b) Definitions shall be equally applicable to both nouns and verbs and the singular and plural forms of the terms defined;
(c) The masculine, feminine and neuter genders shall each include the other; and
(d) References to Sections, unless otherwise specified, shall refer to Sections of this Agreement.
6.2 Definitions . The following terms shall have the following meanings:
“ Agreement ” has the meaning set forth in the Preamble.
“ Beneficial Ownership ” means beneficial ownership within the meaning of Rule 13d-3 under the Exchange Act, or any successor provision. The term “ Beneficially Own ” shall have a correlative meaning. For the avoidance of doubt, a Person shall be deemed to Beneficially Own shares of Common Stock underlying warrants to purchase such shares, which warrants were owned by such Person as of the Closing.
“ Board of Directors ” has the meaning set forth in Section 2.1.
“ Class B Common Stock ” has the meaning set forth in the Certificate of Incorporation of the Company, as it may be amended from time to time.
“ Closing ” has the meaning set forth in Section 1.1.
“ Common Stock ” means the capital stock of the Company that is designated as “Common Stock” pursuant to the Certificate of Incorporation of the Company, as it may be amended from time to time.
“ Company ” has the meaning set forth in the Preamble.
“ Company Director ” has the meaning set forth in Section 2.1.
“ Exchange Act ” means the Securities Exchange Act of 1934, as in effect from time to time.
“ FiveWire Holders ” has the meaning set forth in the Preamble.
“ FiveWire Majority Holders ” means FiveWire Holders that collectively beneficially own a majority of the voting power of the shares of capital stock of the Company that are then beneficially owned by the FiveWire Holders in the aggregate.
“ Initial Public Offering ” means the initial underwritten public offering registered on Form S-1 (or any successor form under the Securities Act), after which a class of the Common Stock is listed on a national securities exchange.
“ Necessary Action ” means, with respect to a specified result, all actions permitted by law necessary to cause such result, including (i) in the case of a stockholder of the Company, to vote or provide a written consent or proxy with respect to the Common Stock, (ii) causing members of the Board of Directors (to the extent such members were nominated or designated by the Person obligated to undertake the Necessary Action, and subject to any fiduciary duties that such members may have as directors of the Company) to act in a certain manner or causing them to be removed in the event they do not act in such a manner and to adopt resolutions consistent with the foregoing, (iii) executing agreements and instruments, and (iv) making, or causing to be made, with governmental, administrative or regulatory authorities, all filings, registrations or similar actions that are required to achieve such result.
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“ Oaktree ” has the meaning set forth in the Preamble.
“ Oaktree Director ” has the meaning set forth in Section 2.1.
“ Oaktree Supplemental Director ” has the meaning set forth in Section 2.1.
“ Person ” means any individual, partnership, corporation, company, association, trust, joint venture, limited liability company, unincorporated organization, entity or division, or any government, governmental department or agency or political subdivision thereof.
“ Securities Act ” means the Securities Act of 1933, as in effect from time to time.
7. | MISCELLANEOUS. |
7.1 Authority; Effect . Each party hereto represents and warrants to, and agrees with each other party that, the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized on behalf of such party and do not violate any agreement or other instrument applicable to such party or by which its assets are bound. This Agreement does not, and shall not be construed to, give rise to the creation of a partnership among any of the parties hereto, or to constitute any of such parties members of a joint venture or other association.
7.2 Notices . All notices, requests, demands, claims and other communications required or permitted to be delivered, given or otherwise provided under this Agreement must be in writing and must be delivered, given or otherwise provided to the address (or facsimile number) listed below.
If to the Company, to:
Townsquare Media, Inc.
240 Greenwich Avenue
Greenwich, CT 06830
Facsimile: (203) 861-0920
Attention: Steven Price
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Facsimile: (212) 446-4943
Attention: | Joshua Korff |
Christopher Kitchen |
If to Oaktree, to:
Oaktree Capital Management, L.P.
333 S. Grand Ave., 28th Floor
Los Angeles, CA 90071
Facsimile: (213) 830-6394
Attention: Andrew Salter
with a copy to:
Kirkland & Ellis LLP
333 South Hope Street
Los Angeles, CA 90071
Facsimile: (213) 680-8500
Attention: | John Weissenbach |
Tana Ryan |
If to the FiveWire Holders, to:
c/o FiveWire Media Ventures LLC
240 Greenwich Avenue
Greenwich, Connecticut 06830
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Facsimile: (203) 861-0920
Attention: Steven Price
with a copy to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Facsimile: (212) 446-6460
Attention: Joshua N. Korff
Each of the parties hereto shall be entitled to specify a different address by giving notice as aforesaid to each of the other parties hereto.
7.3 Binding Effect, Etc . This Agreement constitutes the entire agreement of the parties with respect to its subject matter, supersedes all prior or contemporaneous oral or written agreements or discussions with respect to such subject matter and shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, representatives, successors and assigns.
7.4 Descriptive Headings . The descriptive headings of this Agreement are for convenience of reference only, are not to be considered a part hereof and shall not be construed to define or limit any of the terms or provisions hereof.
7.5 Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one instrument.
7.6 Severability . In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, the parties hereto will negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner, to the end that the transactions and relationships contemplated hereby are fulfilled to the fullest possible extent.
8. | GOVERNING LAW. |
8.1 Governing Law . This Agreement shall be governed by and construed in accordance with the domestic substantive laws of the State of Delaware without giving effect to any choice or conflict of laws provision or rule that would cause the application of the domestic substantive laws of any other jurisdiction.
8.2 Consent to Jurisdiction . Each party to this Agreement, by its execution hereof, (a) hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of Delaware for the purpose of any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement or relating to the subject matter hereof, (b) hereby waives to the extent not prohibited by applicable law, and agrees not to assert, and agrees not to allow any of its subsidiaries to assert, by way of motion, as a defense or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that any such proceeding brought in one of the above-named courts is improper or that this Agreement or the subject matter hereof or thereof may not be enforced in or by such court and (c) hereby agrees neither to commence or maintain any action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation arising out of or based upon this Agreement, or relating to the subject matter hereof or thereof, other than before one of the above-named courts, nor to make any motion or take any other action seeking or intending to cause the transfer or removal of any such action, claim, cause of action or suit (in contract, tort or otherwise), inquiry, proceeding or investigation to any court other than one of the above-named courts, whether on the grounds of inconvenient forum or otherwise. Notwithstanding the foregoing, to the extent that any party hereto is or becomes a party in any litigation in connection with which it may assert indemnification rights set forth in this agreement, the court in which such litigation is being heard shall be deemed to be included in clause (a) above. Each party hereto hereby consents to service of process in any such proceeding in any manner permitted by Delaware law, and agrees that service of process by registered or certified mail, return receipt requested, at its address specified pursuant to Section 7.2 hereof is reasonably calculated to give actual notice.
8.3 WAIVER OF JURY TRIAL . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES AND COVENANTS
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THAT IT WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE OR ACTION, CLAIM, CAUSE OF ACTION OR SUIT (IN CONTRACT, TORT OR OTHERWISE), INQUIRY, PROCEEDING OR INVESTIGATION ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE TRANSACTIONS CONTEMPLATED HEREBY, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING. EACH PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED BY THE OTHER PARTIES HERETO THAT THIS SECTION 8.3 CONSTITUTES A MATERIAL INDUCEMENT UPON WHICH THEY ARE RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT. ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 8.3 WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF EACH SUCH PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
8.4 Exercise of Rights and Remedies . No delay of or omission in the exercise of any right, power or remedy accruing to any party as a result of any breach or default by any other party under this Agreement shall impair any such right, power or remedy, nor shall it be construed as a waiver of or acquiescence in any such breach or default, or of any similar breach or default occurring later; nor shall any such delay, omission nor waiver of any single breach or default be deemed a waiver of any other breach or default occurring before or after that waiver.
[The remainder of this page is intentionally left blank.]
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IN WITNESS WHEREOF, each of the undersigned has duly executed this Agreement (or caused this Agreement to be executed on its behalf by its officer or representative thereunto duly authorized) under seal as of the date first above written.
THE COMPANY: | TOWNSQUARE MEDIA, INC. | |
By: | ||
Name: | ||
Title: |
[Townsquare Media – Stockholders’ Agreement]
Oaktree: | OCM POF IV AIF GAP HOLDINGS, L.P. | |
By: OCM/GAP Holdings IV, Inc. | ||
Its: General Partner | ||
By: | ||
Name: | ||
Its: | ||
By: | ||
Name: | ||
Its: | ||
OCM PF/FF RADIO HOLDINGS PT, L.P | ||
By: | ||
Its: | ||
By: | ||
Name: | ||
Its: | ||
By: | ||
Name: | ||
Its: |
[Townsquare Media– Stockholders’ Agreement]
FiveWire Holders: | FIVEWIRE MEDIA VENTURES LLC | |
By: | ||
Name: | ||
Title: | ||
STEVEN PRICE | ||
STUART ROSENSTEIN | ||
ALEX BERKETT | ||
SCOTT SCHATZ | ||
DHRUV PRASAD | ||
[Townsquare Media – Stockholders’ Agreement]
Exhibit 10.7
TOWNSQUARE MEDIA, LLC
SELLDOWN AGREEMENT
This SELLDOWN AGREEMENT (this " Agreement "), dated as of [___________], 2014, is made by and among Townsquare Media, LLC, a Delaware limited liability company (including any corporate successor thereto, the " Company "), OCM POF IV AIF GAP Holdings, L.P. and OCM PF/FF Radio Holdings PT, L.P. (the " Investors "), and certain unitholders of the Company as set forth on Schedule A hereto (the " Management Holders "). The Investors and the Management Holders are referred to herein collectively as the " Holders " and individually as a " Holder ." Except as otherwise provided herein, capitalized terms used herein are defined in Section 4(a) hereof.
WHEREAS, the Company has filed a registration statement with the Securities and Exchange Commission in connection with its initial public offering (the " IPO ");
WHEREAS, prior to the closing of the IPO, the Company will convert into Townsquare Media, Inc., a Delaware corporation (the " Conversion "); and
WHEREAS, the Company and the Holders are entering into this Agreement to, among other things, set forth their agreement regarding the sale of shares of Common Stock of the Company held by the Management Holders following the Conversion and the IPO.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows:
1. Representations and Warranties . Each Holder represents and warrants that (a) prior to the Conversion such Holder is the owner of the number of Class A Preferred Units, Class A Common Units, Class B Common Units, warrants exercisable for Class A Preferred Units and/or warrants exercisable for Class A Common Units of the Company set forth opposite such Holder's name on Schedule A hereto, (b) this Agreement has been duly authorized, executed and delivered by such Holder and constitutes the valid and binding obligation of such Holder, enforceable in accordance with its terms, and (c) such Holder has not granted and is not a party to any proxy, voting trust or other agreement which is inconsistent with, conflicts with, or violates any provision of this Agreement.
2. Restrictions on Transfer of Common Stock .
(a) General Restrictions on Transfer . Except as otherwise expressly provided in this Section 2 , a Management Holder may Transfer shares of Restricted Common Stock only at such time as one or both of the Investors are also selling Common Stock (and/or warrants exercisable for Common Stock) in a Sale Transaction and then only up to a number of shares of Restricted Common Stock (a " Transfer Amount ") equal to the product of (1) the aggregate number of shares of Restricted Common Stock held by such Management Holder immediately prior to such Sale Transaction (excluding for this purpose shares of Restricted Common Stock that are already transferable by such Management Holder as a result of one or more Transfer Amounts available to such Management Holder as a result of the application of the next occurring proviso
below) multiplied by (2) a fraction, the numerator of which is the aggregate number of shares of Common Stock (and/or warrants exercisable for Common Stock) being sold by the Investors in such Sale Transaction and the denominator of which is the total number of shares of Common Stock and warrants exercisable for Common Stock held by all Investors immediately prior to such Sale Transaction; provided that, if at the time of any Sale Transaction by the Investors, a Management Holder chooses not to Transfer any Transfer Amount or is otherwise restricted from Transferring or not permitted to Transfer all or any portion of any Transfer Amount at such time (including as part of the IPO), such Management Holder shall retain the right to Transfer an aggregate number of shares of Restricted Common Stock in connection with a future Sale Transaction by the Investors (in addition to any rights to Transfer shares of Restricted Common Stock in accordance with this Section 2 in connection with such future Sale Transaction by the Investors) equal to such prior Transfer Amount(s) not sold by such Management Holder. Upon the written request from time to time of any Management Holder, the Company shall inform such Management Holder of the number of shares of Restricted Common Stock that such Management Holder may transfer in reliance on this Section 2 subject to the terms and conditions hereof. In the event of a conflict between the provisions of this Section 2(a) and the cutback provisions contained in the Registration Agreement, the provisions of this Section 2(a) shall control and the Investors agree that the cutbacks requested by the underwriters in a registered offering under the Registration Agreement may be made on a non-pro rata basis as between the Management Holders and the Investors to accommodate such Transfer Amount(s).
(b) Notification of Planned Sale Transactions . In the event that any Investor plans to sell Common Stock (and/or warrants exercisable for Common Stock) in a Sale Transaction, then, unless the Registration Agreement provides for different procedures applicable to such particular Sale Transaction (in which case, such procedures set forth in the Registration Agreement shall control), such Investor will notify the Company in writing as promptly as practicable in advance of such Sale Transaction, and the Company will, within three days after receiving such notice from such Investor, notify each Management Holder in writing of the proposed Sale Transaction, which written notice shall set forth (i) such Management Holder's Transfer Amount as a result of such Sale Transaction and (ii) the number of shares of Restricted Common Stock, if any, that are already transferable by such Management Holder as a result of one or more Transfer Amounts available to such Management Holder as a result of the application of the proviso in the first sentence of Section 2(a) ). The Management Holder shall be permitted to Transfer such shares of Restricted Common Stock pursuant to this Section 2 at any time following the date of the Sale Transaction by the Investor(s).
(c) Permitted Transfers . The restrictions on transfer set forth in Section 2(a) shall not apply to any Transfer of Restricted Common Stock by a Management Holder who is a natural person (i) in the event of such Management Holder's death, pursuant to will or applicable laws of descent or distribution, (ii) to his or her legal guardian (in case of any mental incapacity), (iii) to a bona fide charitable organization or (iv) to or among his or her Family Group; provided that the restrictions contained in this Agreement will continue to be applicable to such Restricted Common Stock after any Transfer pursuant to this Section 2(c) . At least 15 days prior to the Transfer of Restricted Common Stock pursuant to this Section 2(c) (other than in the case of Transfers pursuant clauses (i) or (ii) above, in which case as promptly as practical following such Transfer), the transferee(s) will deliver a written notice to the Company, which notice shall disclose in reasonable detail the identity of such transferee(s). Notwithstanding the foregoing, no
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Management Holder hereto shall avoid the provisions of Section 2(a) by (A) making one or more Transfers to one or more Permitted Transferees and then disposing of all or any portion of such party's interest in any such Permitted Transferee or (B) Transferring the securities of any entity holding (directly or indirectly) Restricted Common Stock.
(d) Applicability of Restrictions on Transfer . The restrictions on transfer set forth in this Section 2 shall begin on the date of the Conversion and continue until the termination of this Agreement in accordance with Section 6 hereof; provided that, notwithstanding anything in this Agreement to the contrary (i) for any Management Holder who is an individual person, the restrictions on transfer set forth in this Section 2 shall no longer apply to Restricted Common Stock that was originally issued to a Management Holder pursuant to the Conversion once such Management Holder is no longer employed by the Company or any of its subsidiaries, and (ii) the restrictions on transfer set forth in this Section 2 shall not apply to any shares of Common Stock acquired or received by a Management Holder after the closing of the IPO and not issued in the Conversion (other than shares of Common Stock acquired upon the conversion or exchange of Restricted Common Stock received by such Management Holder in connection with the Conversion).
3. Effectiveness . This Agreement is being executed on the date hereof and shall automatically become effective upon, but only upon, the consummation of the Conversion. Notwithstanding the foregoing, if the Conversion occurs but the IPO subsequently does not close, this Agreement shall be void and of no further force or effect.
4. Definitions .
(a) The following terms, as used in this Agreement, have the following meanings:
" Affiliate " means, with respect to a Person, another Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person, where "control" means the possession, directly or indirectly, of the power to direct the management and policies of a Person whether through the ownership of voting securities, by contract or otherwise.
" Common Stock " means shares of the Company's Class A Common Stock, par value $0.01 per share, the Company's Class B Common Stock, par value $0.01 per share, and the Company's Class C Common Stock, par value $0.01 per share.
" Family Group " means, with respect to a Person who is an individual, such Person's spouse and descendants (whether natural or adopted), and any trust, family limited partnership, limited liability company or other entity wholly owned, directly or indirectly, by such Person or such Person's spouse and/or descendants that is and remains solely for the benefit of such Person and/or such Person's spouse and/or descendants and any retirement plan for such Person.
" Management Holder " means a Management Holder and its Permitted Transferees.
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" Permitted Transferees " means (i) in the case of a Management Holder, a transferee of Common Stock permitted in accordance with Section 2(c) herein, and (ii) in the case of an Investor and FiveWire Media Investors LLC, any Affiliate thereof.
" Person " means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.
" Public Sale " means any sale of Common Stock (i) to the public pursuant to an offering registered under the Securities Act, and (ii) to the public pursuant to Rule 144 under the Securities Act (or any similar rule then in effect) effected through a broker, dealer or market maker.
" Registration Agreement " means the Second Amended and Restated Registration Agreement of the Company, dated as of [__________], 2014, as amended from time to time.
" Restricted Common Stock " means a number of shares of each class of Common Stock held by a Management Holder equal to (a) the total number of shares of such class of Common Stock held by such Management Holder as of immediately after the Conversion, multiplied by (b) the "Restricted Stock Percentage" set forth opposite such Management Holder's name on Schedule A hereto. If any shares of Restricted Common Stock are converted into or exchanged for another class of Common Stock, the restrictions set forth in this Agreement shall continue to apply to the shares of Common Stock into which such shares of Restricted Common Stock are converted or for which they are exchanged.
" Sale Transaction " means a Public Sale or in any other transaction in which an Investor Transfers shares of Common Stock to a party other than a Permitted Transferee.
" Securities Act " means the Securities Act of 1933, as amended from time to time.
" Transfer " means to sell, transfer, assign, pledge or otherwise, directly or indirectly, dispose of (whether with or without consideration and whether voluntarily or involuntarily or by operation of law).
(b) Whenever this Agreement requires a calculation of shares of Common Stock held by the Investors, such calculation shall aggregate the number of shares of Common Stock and warrants exercisable for Common Stock held by the Investors and their Permitted Transferees.
5. Transfers in Violation of Agreement . Any Transfer or attempted Transfer of any Common Stock in violation of any provision of this Agreement shall be void, and the Company shall not record such Transfer on its books or treat any purported transferee of such Common Stock as the owner of such Common Stock for any purpose.
6. Termination . Subject to the provisions of Section 3 above, this Agreement shall terminate upon the earlier of (i) such time as the Investors no longer hold at least 10% of the shares of Common Stock and warrants exercisable for Common Stock collectively held by the Investors immediately following the consummation of the IPO and (ii) the third anniversary of the closing of the IPO.
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7. Severability . Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of any other provision of this Agreement in such jurisdiction or affect the validity, legality or enforceability of any provision in any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.
8. Entire Agreement . Except as otherwise expressly set forth herein, this Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. For the avoidance of doubt, this Agreement shall not supersede or preempt any obligations of any Holder under any "lock up" agreement executed by any Holder in connection with any registered offering of Common Stock from time to time during the term of this Agreement. This Agreement supersedes, with respect to the subject matter hereof, each Restricted Unit Grant Agreement pursuant to which the Company granted Class A Preferred Units and Class A Common Units to a Management Holder, and such Restricted Unit Grant Agreements shall automatically be terminated in full effective upon the consummation of the IPO.
9. Counterparts . This Agreement may be executed in multiple counterparts, each of which shall be an original and all of which taken together shall constitute one and the same agreement.
10. Remedies . The Company and the Holders shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages alone would not be an adequate remedy for any breach of the provisions of this Agreement and that the Company or any Holder may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement either as an exclusive remedy or in combination with claims for monetary damages.
11. Notices . Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, given by facsimile to the facsimile number set forth below, or mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the Company and the Investors at the addresses and facsimile numbers set forth below and to any Management Holder at the address for such Management Holder in the Company's records and to any subsequent holder of Common Stock subject to this Agreement at such facsimile number or address as indicated by the Company's records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices shall be deemed to have been given hereunder when delivered personally, when confirmation of facsimile has been received by the sender, three days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service.
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Notices to the Company :
Townsquare Media, LLC
240 Greenwich Avenue
Greenwich, Connecticut 06830
Facsimile: (203) 861-0920
Attention: Chief Executive Officer
with copies (which shall not constitute
notice) to
:
Oaktree Capital Management, L.P.
333 S. Grand Avenue, 28th Floor
Los Angeles, CA 90071
Facsimile: (213) 830-6394
Attention: David Quick
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Facsimile: (212) 446-4943
Attention: Joshua Korff
Christopher Kitchen
Kirkland & Ellis LLP
333 South Hope Street
Los Angeles, CA 90071
Facsimile: (213) 680-8500
Attention: Tana M. Ryan
Notices to the Investors :
c/o Oaktree Capital Management, L.P.
333 S. Grand Avenue, 28th Floor
Los Angeles, CA 90071
Facsimile: (213) 830-6394
Attention: David Quick
with copies (which shall not constitute
notice) to
:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Facsimile: (212) 446-4943
Attention: Joshua Korff
Christopher Kitchen
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Kirkland & Ellis LLP
333 South Hope Street
Los Angeles, CA 90071
Facsimile: (213) 680-8500
Attention: Tana M. Ryan
12. Governing Law . All issues and questions concerning the construction, validity, interpretation and enforceability of this Agreement and the schedules hereto shall be governed by, and construed in accordance with, the laws of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.
13. Waiver of Jury Trial . As a specifically bargained for inducement for each of the parties hereto to enter into this Agreement (after having the opportunity to consult with counsel), each party hereto expressly waives the right to trial by jury in any lawsuit or proceeding relating to or arising in any way from this Agreement or the matters contemplated hereby.
14. No Strict Construction . The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement.
15. Descriptive Headings . The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Selldown Agreement on the day and year first written above.
TOWNSQUARE MEDIA, LLC | |||
By: | |||
Name: | |||
Its: |
Signature page to Selldown Agreement
OCM POF IV AIF GAP HOLDINGS, L.P. | ||
By: OCM/GAP Holdings IV, Inc. | ||
Its: General Partner | ||
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
OCM PF/FF RADIO HOLDINGS PT, L.P. | ||
By: | Oaktree Fund AIF Series, L.P. – Series D and | |
Oaktree Fund AIF Series, L.P. – Series I | ||
Its: | General Partners | |
By: | Oaktree Fund GP AIF, LLC | |
Its: | General Partner | |
By: | Oaktree Fund GP III, L.P. | |
Its: | Managing Member |
By: | ||
Name: | ||
Title: | ||
By: | ||
Name: | ||
Title: |
Signature page to Selldown Agreement
FIVEWIRE MEDIA VENTURES LLC | ||
By: | ||
Name: | ||
Title: |
Signature page to Selldown Agreement
Steven Price | ||
Stuart Rosenstein | ||
Alex Berkett | ||
Dhruv Prasad | ||
Scott Schatz | ||
William Wilson | ||
Jared Willig | ||
Sun Sachs | ||
Erik Hellum | ||
Bob McCuin | ||
Mark Stewart | ||
Mike Josephs | ||
Claire Messner |
Signature page to Selldown Agreement
Schedule A
On file with the Company.
Exhibit 10.8
TOWNSQUARE MEDIA, INC.
2014 OMNIBUS INCENTIVE PLAN
Article
I
PURPOSE
The purpose of this Townsquare Media, Inc. 2014 Omnibus Incentive Plan is to enhance the profitability and value of the Company for the benefit of its stockholders by enabling the Company to offer Eligible Individuals cash and stock-based incentives in order to attract, retain and reward such individuals and strengthen the mutuality of interests between such individuals and the Company’s stockholders. The Plan is effective as of the date set forth in Article XV.
Article
II
DEFINITIONS
For purposes of the Plan, the following terms shall have the following meanings:
2.1 “ Affiliate ” means each of the following: (a) any Subsidiary; (b) any Parent; (c) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company or one of its Affiliates; (d) any trade or business (including, without limitation, a partnership or limited liability company) which directly or indirectly controls 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) of the Company; and (e) any other entity in which the Company or any of its Affiliates has a material equity interest and which is designated as an “Affiliate” by resolution of the Committee; provided that, unless otherwise determined by the Committee, the Common Stock subject to any Award constitutes “service recipient stock” for purposes of Section 409A of the Code or otherwise does not subject the Award to Section 409A of the Code.
2.2 “ Award ” means any award under the Plan of any Stock Option, Stock Appreciation Right, Restricted Stock Award, Performance Award, Other Stock-Based Award or Other Cash-Based Award. All Awards shall be granted by, confirmed by, and subject to the terms of, a written agreement executed by the Company and the Participant.
2.3 “ Award Agreement ” means the written or electronic agreement setting forth the terms and conditions applicable to an Award.
2.4 “ Board ” means the Board of Directors of the Company.
2.5 “ Cause ” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination of Employment or Termination of
Consultancy, the following: (a) in the case where there is no employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “cause” (or words of like import)), termination due to a Participant’s insubordination, dishonesty, fraud, incompetence, moral turpitude, willful misconduct, refusal to perform the Participant’s duties or responsibilities for any reason other than illness or incapacity, repeated or material violation of any employment policy, violation or breach of any confidentiality agreement, work product agreement or other agreement between the Participant and the Company, or materially unsatisfactory performance of the Participant’s duties for the Company or an Affiliate, as determined by the Committee in its good faith discretion; or (b) in the case where there is an employment agreement, consulting agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “cause” (or words of like import), “cause” as defined under such agreement; provided, however, that with regard to any agreement under which the definition of “cause” only applies on occurrence of a change in control, such definition of “cause” shall not apply until a change in control actually takes place and then only with regard to a termination thereafter. With respect to a Participant’s Termination of Directorship, “cause” means an act or failure to act that constitutes cause for removal of a director under applicable Delaware law.
2.6 “ Change in Control ” has the meaning set forth in 11.2.
2.7 “ Change in Control Price ” has the meaning set forth in Section 11.1.
2.8 “ Class A Common Stock ” means the Class A common stock, $0.01 par value per share, of the Company.
2.9 “ Class B Common Stock ” means the Class A common stock, $0.01 par value per share, of the Company.
2.10 “ Class C Common Stock ” means the Class A common stock, $0.01 par value per share, of the Company.
2.11 “ Code ” means the Internal Revenue Code of 1986, as amended. Any reference to any section of the Code shall also be a reference to any successor provision and any treasury regulation promulgated thereunder.
2.12 “ Committee ” means any committee of the Board duly authorized by the Board to administer the Plan. If no committee is duly authorized by the Board to administer the Plan, the term “Committee” shall be deemed to refer to the Board for all purposes under the Plan.
2.13 “ Common Stock ” means, collectively, the Class A Common Stock, the Class B Common Stock, and the Class C Common Stock.
2.14 “ Company ” means Townsquare Media, Inc., a Delaware corporation, and its successors by operation of law.
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2.15 “ Consultant ” means any natural person who is an advisor or consultant to the Company or its Affiliates.
2.16 “ Disability ” means, unless otherwise determined by the Committee in the applicable Award Agreement, with respect to a Participant’s Termination, a permanent and total disability as defined in Section 22(e)(3) of the Code. A Disability shall only be deemed to occur at the time of the determination by the Committee of the Disability. Notwithstanding the foregoing, for Awards that are subject to Section 409A of the Code, Disability shall mean that a Participant is disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.
2.17 “ Effective Date ” means the effective date of the Plan as defined in Article XV.
2.18 “ Eligible Employees ” means each employee of the Company or an Affiliate.
2.19 “ Eligible Individual ” means an Eligible Employee, Non-Employee Director or Consultant who is designated by the Committee in its discretion as eligible to receive Awards subject to the conditions set forth herein.
2.20 “ Exchange Act ” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the Exchange Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.21 “ Fair Market Value ” means, for purposes of the Plan, unless otherwise provided in an Award Agreement or required by any applicable provision of the Code or any regulations issued thereunder, as of any date and except as provided below, the last sales price reported for the Common Stock on the applicable date: (a) as reported on the principal national securities exchange in the United States on which it is then traded or (b) if the Common Stock is not traded, listed or otherwise reported or quoted, the Committee shall determine in good faith the Fair Market Value in whatever manner it considers appropriate taking into account the requirements of Section 409A of the Code. For purposes of the grant of any Award, the applicable date shall be the trading day immediately prior to the date on which the Award is granted. For purposes of the exercise of any Award, the applicable date shall be the date a notice of exercise is received by the Committee or, if not a day on which the applicable market is open, the next day that it is open.
2.22 “ Family Member ” means “family member” as defined in Section A.1.(a)(5) of the general instructions of Form S-8.
2.23 “ Good Reason ” means, with respect to a Participant’s Termination of Employment: (a) in the case where there is no employment agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award (or where there is such an agreement but it does not define “good reason” (or words or a concept of like import)), a voluntary termination due to good reason, as the Committee, in its sole discretion, decides to treat as a Good Reason termination; or (b) in the case where there is an employment agreement, change in control agreement or similar agreement in effect between the Company or an Affiliate and the Participant at the time of the grant of the Award that defines “good reason” (or words or a concept of like import), a
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termination due to good reason (or words or a concept of like import), as defined in such agreement at the time of the grant of the Award.
2.24 “ Incentive Stock Option ” means any Stock Option awarded to an Eligible Employee of the Company, its Subsidiaries and its Parents (if any) under the Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422 of the Code.
2.25 “ Lead Underwriter ” has the meaning set forth in Section 14.20.
2.26 “ Lock-Up Period ” has the meaning set forth in Section 14.20.
2.27 “ Non-Employee Director ” means a director or a member of the Board of the Company or any Affiliate who is not an active employee of the Company or any Affiliate.
2.28 “ Non-Qualified Stock Option ” means any Stock Option awarded under the Plan that is not an Incentive Stock Option.
2.29 “ Non-Tandem Stock Appreciation Right ” shall mean the right to receive an amount in cash and/or stock equal to the difference between (x) the Fair Market Value of a share of Common Stock on the date such right is exercised, and (y) the aggregate exercise price of such right, otherwise than on surrender of a Stock Option.
2.30 “ Other Cash-Based Award ” means an Award granted pursuant to Section 10.3 of the Plan and payable in cash at such time or times and subject to such terms and conditions as determined by the Committee in its sole discretion.
2.31 “ Other Stock-Based Award ” means an Award under Article X of the Plan that is valued in whole or in part by reference to, or is payable in or otherwise based on, Common Stock, including, without limitation, an Award valued by reference to an Affiliate.
2.32 “ Parent ” means any parent corporation of the Company within the meaning of Section 424(e) of the Code.
2.33 “ Participant ” means an Eligible Individual to whom an Award has been granted pursuant to the Plan.
2.34 “ Performance Award ” means an Award granted to a Participant pursuant to Article IX hereof contingent upon achieving certain Performance Goals.
2.35 “ Performance Goals ” means goals established by the Committee as contingencies for Awards to vest and/or become exercisable or distributable, which may be based on one or more of the performance goals set forth in Exhibit A hereto.
2.36 “ Performance Period ” means the designated period during which the Performance Goals must be satisfied with respect to the Award to which the Performance Goals relate.
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2.37 “ Plan ” means this Townsquare Media, Inc. 2014 Omnibus Incentive Plan, as amended from time to time.
2.38 “ Proceeding ” has the meaning set forth in Section 14.9.
2.39 “ Reference Stock Option ” has the meaning set forth in Section 7.1.
2.40 “ Registration Date ” means the date on which the Company sells its Common Stock in a bona fide, firm commitment underwriting pursuant to a registration statement under the Securities Act.
2.41 “ Reorganization ” has the meaning set forth in Section 4.2(b)(ii).
2.42 “ Restricted Stock ” means an Award of shares of Common Stock under the Plan that is subject to restrictions under Article VIII.
2.43 “ Restriction Period ” has the meaning set forth in Section 8.3(a) with respect to Restricted Stock.
2.44 “ Rule 16b-3 ” means Rule 16b-3 under Section 16(b) of the Exchange Act as then in effect or any successor provision.
2.45 “ Section 409A of the Code ” means the nonqualified deferred compensation rules under Section 409A of the Code and any applicable treasury regulations and other official guidance thereunder.
2.46 “ Securities Act ” means the Securities Act of 1933, as amended and all rules and regulations promulgated thereunder. Reference to a specific section of the Securities Act or regulation thereunder shall include such section or regulation, any valid regulation or interpretation promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
2.47 “ Stock Appreciation Right ” shall mean the right pursuant to an Award granted under Article VII.
2.48 “ Stock Option ” or “ Option ” means any option to purchase shares of Common Stock granted to Eligible Individuals granted pursuant to Article VI.
2.49 “ Subsidiary ” means any subsidiary corporation of the Company within the meaning of Section 424(f) of the Code.
2.50 “ Tandem Stock Appreciation Right ” shall mean the right to surrender to the Company all (or a portion) of a Stock Option in exchange for an amount in cash and/or stock equal to the difference between (i) the Fair Market Value on the date such Stock Option (or such portion thereof) is surrendered, of the Common Stock covered by such Stock Option (or such portion thereof), and (ii) the aggregate exercise price of such Stock Option (or such portion thereof).
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2.51 “ Ten Percent Stockholder ” means a person owning stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, its Subsidiaries or its Parent.
2.52 “ Termination ” means a Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.
2.53 “ Termination of Consultancy ” means: (a) that the Consultant is no longer acting as a consultant to the Company or an Affiliate; or (b) when an entity which is retaining a Participant as a Consultant ceases to be an Affiliate unless the Participant otherwise is, or thereupon becomes, a Consultant to the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that a Consultant becomes an Eligible Employee or a Non-Employee Director upon the termination of such Consultant’s consultancy, unless otherwise determined by the Committee, in its sole discretion, no Termination of Consultancy shall be deemed to occur until such time as such Consultant is no longer a Consultant, an Eligible Employee or a Non-Employee Director. Notwithstanding the foregoing, the Committee may otherwise define Termination of Consultancy in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Consultancy thereafter, provided that any such change to the definition of the term “Termination of Consultancy” does not subject the applicable Award to Section 409A of the Code.
2.54 “ Termination of Directorship ” means that the Non-Employee Director has ceased to be a director of the Company; except that if a Non-Employee Director becomes an Eligible Employee or a Consultant upon the termination of such Non-Employee Director’s directorship, such Non-Employee Director’s ceasing to be a director of the Company shall not be treated as a Termination of Directorship unless and until the Participant has a Termination of Employment or Termination of Consultancy, as the case may be.
2.55 “ Termination of Employment ” means: (a) a termination of employment (for reasons other than a military or personal leave of absence granted by the Company) of a Participant from the Company and its Affiliates; or (b) when an entity which is employing a Participant ceases to be an Affiliate, unless the Participant otherwise is, or thereupon becomes, employed by the Company or another Affiliate at the time the entity ceases to be an Affiliate. In the event that an Eligible Employee becomes a Consultant or a Non-Employee Director upon the termination of such Eligible Employee’s employment, unless otherwise determined by the Committee, in its sole discretion, no Termination of Employment shall be deemed to occur until such time as such Eligible Employee is no longer an Eligible Employee, a Consultant or a Non-Employee Director. Notwithstanding the foregoing, the Committee may otherwise define Termination of Employment in the Award Agreement or, if no rights of a Participant are reduced, may otherwise define Termination of Employment thereafter, provided that any such change to the definition of the term “Termination of Employment” does not subject the applicable Award to Section 409A of the Code.
2.56 “ Transfer ” means: (a) when used as a noun, any direct or indirect transfer, sale, assignment, pledge, hypothecation, encumbrance or other disposition (including the issuance of equity in any entity), whether for value or no value and whether voluntary or involuntary (including by operation of law), and (b) when used as a verb, to directly or indirectly transfer, sell,
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assign, pledge, encumber, charge, hypothecate or otherwise dispose of (including the issuance of equity in any entity) whether for value or for no value and whether voluntarily or involuntarily (including by operation of law). “Transferred” and “Transferable” shall have a correlative meaning.
2.57 “ Transition Period ” means the period beginning with the Registration Date and ending as of the earlier of: (i) the date of the first annual meeting of stockholders of the Company at which directors are to be elected that occurs after the close of the third calendar year following the calendar year in which the Registration Date occurs; and (ii) the expiration of the “reliance period” under Treasury Regulation Section 1.162-27(f)(2).
Article
III
ADMINISTRATION
3.1 The Committee . The Plan shall be administered and interpreted by the Committee. To the extent required by applicable law, rule or regulation, it is intended that each member of the Committee shall qualify as (a) a “non-employee director” under Rule 16b-3, and (b) an “independent director” under the rules of any national securities exchange or national securities association, as applicable. If it is later determined that one or more members of the Committee do not so qualify, actions taken by the Committee prior to such determination shall be valid despite such failure to qualify.
3.2 Grants of Awards . The Committee shall have full authority to grant, pursuant to the terms of the Plan, to Eligible Individuals: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock Awards, (iv) Performance Awards; (v) Other Stock-Based Awards; and (vi) Other Cash-Based Awards. In particular, the Committee shall have the authority:
(a) to select the Eligible Individuals to whom Awards may from time to time be granted hereunder;
(b) to determine whether and to what extent Awards, or any combination thereof, are to be granted hereunder to one or more Eligible Individuals;
(c) to determine the number of shares of Common Stock to be covered by each Award granted hereunder;
(d) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder (including, but not limited to, the exercise or purchase price (if any), any restriction or limitation, any vesting schedule or acceleration thereof, or any forfeiture restrictions or waiver thereof, regarding any Award and the shares of Common Stock relating thereto, based on such factors, if any, as the Committee shall determine, in its sole discretion);
(e) to determine the amount of cash to be covered by each Award granted hereunder;
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(f) to determine whether, to what extent and under what circumstances grants of Options and other Awards under the Plan are to operate on a tandem basis and/or in conjunction with or apart from other awards made by the Company outside of the Plan;
(g) to determine whether and under what circumstances a Stock Option may be settled in cash, Common Stock and/or Restricted Stock under Section 6.4(d);
(h) to determine whether a Stock Option is an Incentive Stock Option or Non-Qualified Stock Option;
(i) to determine whether to require a Participant, as a condition of the granting of any Award, to not sell or otherwise dispose of shares acquired pursuant to the exercise of an Award for a period of time as determined by the Committee, in its sole discretion, following the date of the acquisition of such Award;
(j) to modify, extend or renew an Award, subject to Article XII and Section 6.4(l), provided, however, that such action does not subject the Award to Section 409A of the Code without the consent of the Participant; and
(k) solely to the extent permitted by applicable law, to determine whether, to what extent and under what circumstances to provide loans (which may be on a recourse basis and shall bear interest at the rate the Committee shall provide) to Participants in order to exercise Options under the Plan.
3.3 Guidelines . Subject to Article XII hereof, the Committee shall have the authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the Plan and perform all acts, including the delegation of its responsibilities (to the extent permitted by applicable law and applicable stock exchange rules), as it shall, from time to time, deem advisable; to construe and interpret the terms and provisions of the Plan and any Award issued under the Plan (and any agreements relating thereto); and to otherwise supervise the administration of the Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan or in any agreement relating thereto in the manner and to the extent it shall deem necessary to effectuate the purpose and intent of the Plan. The Committee may adopt special guidelines and provisions for persons who are residing in or employed in, or subject to, the taxes of, any domestic or foreign jurisdictions to comply with applicable tax and securities laws of such domestic or foreign jurisdictions. Notwithstanding the foregoing, no action of the Committee under this Section 3.3 shall impair the rights of any Participant without the Participant’s consent. To the extent applicable, the Plan is intended to comply with the applicable requirements of Rule 16b-3, and the Plan shall be limited, construed and interpreted in a manner so as to comply therewith.
3.4 Decisions Final . Any decision, interpretation or other action made or taken in good faith by or at the direction of the Company, the Board or the Committee (or any of its members) arising out of or in connection with the Plan shall be within the absolute discretion of all and each of them, as the case may be, and shall be final, binding and conclusive on the Company and all employees and Participants and their respective heirs, executors, administrators, successors and assigns.
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3.5 Procedures . If the Committee is appointed, the Board shall designate one of the members of the Committee as chairman and the Committee shall hold meetings, subject to the By-Laws of the Company, at such times and places as it shall deem advisable, including, without limitation, by telephone conference or by written consent to the extent permitted by applicable law. A majority of the Committee members shall constitute a quorum. All determinations of the Committee shall be made by a majority of its members. Any decision or determination reduced to writing and signed by all of the Committee members in accordance with the By-Laws of the Company, shall be fully effective as if it had been made by a vote at a meeting duly called and held. The Committee shall keep minutes of its meetings and shall make such rules and regulations for the conduct of its business as it shall deem advisable.
3.6 Designation of Consultants/Liability .
(a) The Committee may designate employees of the Company and professional advisors to assist the Committee in the administration of the Plan and (to the extent permitted by applicable law and applicable exchange rules) may grant authority to officers to grant Awards and/or execute agreements or other documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and agents as it may deem desirable for the administration of the Plan and may rely upon any opinion received from any such counsel or consultant and any computation received from any such consultant or agent. Expenses incurred by the Committee or the Board in the engagement of any such counsel, consultant or agent shall be paid by the Company. The Committee, its members and any person designated pursuant to sub-section (a) above shall not be liable for any action or determination made in good faith with respect to the Plan. To the maximum extent permitted by applicable law, no officer of the Company or member or former member of the Committee or of the Board shall be liable for any action or determination made in good faith with respect to the Plan or any Award granted under it.
3.7 Indemnification . To the maximum extent permitted by applicable law and the Certificate of Incorporation and By-Laws of the Company and to the extent not covered by insurance directly insuring such person, each officer or employee of the Company or any Affiliate and member or former member of the Committee or the Board shall be indemnified and held harmless by the Company against any cost or expense (including reasonable fees of counsel reasonably acceptable to the Committee) or liability (including any sum paid in settlement of a claim with the approval of the Committee), and advanced amounts necessary to pay the foregoing at the earliest time and to the fullest extent permitted, arising out of any act or omission to act in connection with the administration of the Plan, except to the extent arising out of such officer’s, employee’s, member’s or former member’s own fraud or bad faith. Such indemnification shall be in addition to any right of indemnification the employees, officers, directors or members or former officers, directors or members may have under applicable law or under the Certificate of Incorporation or By-Laws of the Company or any Affiliate. Notwithstanding anything else herein, this indemnification will not apply to the actions or determinations made by an individual with regard to Awards granted to such individual under the Plan.
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Article
IV
SHARE LIMITATION
4.1 Shares . The aggregate number of shares of Common Stock that may be issued or used for reference purposes or with respect to which Awards may be granted under the Plan shall not exceed 12,000,000 (subject to any increase or decrease pursuant to Section 4.2) (the “ Share Reserve ”), which may be either authorized and unissued Common Stock or Common Stock held in or acquired for the treasury of the Company or both. The maximum number of shares of Common Stock with respect to which Incentive Stock Options may be granted under the Plan shall be equal to the Share Reserve. With respect to Stock Appreciation Rights settled in Common Stock, upon settlement, only the number of shares of Common Stock delivered to a Participant (based on the difference between the Fair Market Value of the shares of Common Stock subject to such Stock Appreciation Right on the date such Stock Appreciation Right is exercised and the exercise price of each Stock Appreciation Right on the date such Stock Appreciation Right was awarded) shall reduce the shares of Common Stock available for issuance under the Plan. If any Option, Stock Appreciation Right or Other Stock-Based Awards granted under the Plan expires, terminates or is canceled for any reason without having been exercised in full, the number of shares of Common Stock underlying any unexercised Award shall again be available for the purpose of Awards under the Plan. If any shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock awarded under the Plan to a Participant are forfeited for any reason, the number of forfeited shares of Restricted Stock, Performance Awards or Other Stock-Based Awards denominated in shares of Common Stock shall again be available for purposes of Awards under the Plan. If a Tandem Stock Appreciation Right or a Limited Stock Appreciation Right is granted in tandem with an Option, such grant shall only apply once against the maximum number of shares of Common Stock which may be issued under the Plan. Any Award under the Plan settled in cash or withheld to satisfy tax liabilities shall not reduce the shares of Common Stock available for issuance under the Plan. The maximum grant date fair value of any Award granted to any non-employee director during any calendar year shall not exceed $500,000.
4.2 Changes .
(a) The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Board or the stockholders of the Company to make or authorize (i) any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, (ii) any merger or consolidation of the Company or any Affiliate, (iii) any issuance of bonds, debentures, preferred or prior preference stock ahead of or affecting the Common Stock, (iv) the dissolution or liquidation of the Company or any Affiliate, (v) any sale or transfer of all or part of the assets or business of the Company or any Affiliate or (vi) any other corporate act or proceeding.
(b) Subject to the provisions of Section 11.1:
(i) If the Company at any time subdivides (by any split, recapitalization or otherwise) the outstanding Common Stock into a greater number of shares of Common Stock, or combines (by reverse split, combination or otherwise) its outstanding Common Stock into a lesser number of shares of Common Stock, then the respective exercise
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prices for outstanding Awards that provide for a Participant elected exercise and the number of shares of Common Stock covered by outstanding Awards shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.
(ii) Excepting transactions covered by Section 4.2(b)(i), if the Company effects any merger, consolidation, statutory exchange, spin-off, reorganization, sale or transfer of all or substantially all the Company’s assets or business, or other corporate transaction or event in such a manner that the Company’s outstanding shares of Common Stock are converted into the right to receive (or the holders of Common Stock are entitled to receive in exchange therefor), either immediately or upon liquidation of the Company, securities or other property of the Company or other entity (each, a “ Reorganization ” ), then, subject to the provisions of Section 11.1, (A) the aggregate number or kind of securities that thereafter may be issued under the Plan, (B) the number or kind of securities or other property (including cash) to be issued pursuant to Awards granted under the Plan (including as a result of the assumption of the Plan and the obligations hereunder by a successor entity, as applicable), or (C) the purchase price thereof, shall be appropriately adjusted by the Committee to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.
(iii) If there shall occur any change in the capital structure of the Company other than those covered by Section 4.2(b)(i) or 4.2(b)(ii), including by reason of any extraordinary dividend (whether cash or equity), any conversion, any adjustment, any issuance of any class of securities convertible or exercisable into, or exercisable for, any class of equity securities of the Company, then the Committee may adjust any Award and make such other adjustments to the Plan to prevent dilution or enlargement of the rights granted to, or available for, Participants under the Plan.
(iv) Any such adjustment determined by the Committee pursuant to this Section 4.2(b) shall be final, binding and conclusive on the Company and all Participants and their respective heirs, executors, administrators, successors and permitted assigns. Any adjustment to, or assumption or substitution of, an Award under this Section 4.2(b) shall be intended to comply with the requirements of Section 409A of the Code and Treasury Regulation §1.424-1 (and any amendments thereto), to the extent applicable. Except as expressly provided in this Section 4.2 or in the applicable Award Agreement, a Participant shall have no additional rights under the Plan by reason of any transaction or event described in this Section 4.2.
(v) Fractional shares of Common Stock resulting from any adjustment in Awards pursuant to Section 4.2(a) or this Section 4.2(b) shall be aggregated until, and eliminated at, the time of exercise or payment by rounding-down for fractions less than one-half and rounding-up for fractions equal to or greater than one-half. No cash settlements shall be required with respect to fractional shares eliminated by rounding. Notice of any adjustment shall be given by the Committee to each Participant whose Award has been adjusted and such adjustment (whether or not such notice is given) shall be effective and binding for all purposes of the Plan.
4.3 Minimum Purchase Price . Notwithstanding any provision of the Plan to the contrary, if authorized but previously unissued shares of Common Stock are issued under the Plan,
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such shares shall not be issued for a consideration that is less than as permitted under applicable law.
Article
V
ELIGIBILITY
5.1 General Eligibility . All current and prospective Eligible Individuals are eligible to be granted Awards. Eligibility for the grant of Awards and actual participation in the Plan shall be determined by the Committee in its sole discretion.
5.2 Incentive Stock Options . Notwithstanding the foregoing, only Eligible Employees of the Company, its Subsidiaries and its Parent (if any) are eligible to be granted Incentive Stock Options under the Plan. Eligibility for the grant of an Incentive Stock Option and actual participation in the Plan shall be determined by the Committee in its sole discretion.
5.3 General Requirement . The vesting and exercise of Awards granted to a prospective Eligible Individual are conditioned upon such individual actually becoming an Eligible Employee, Consultant or Non-Employee Director, respectively.
Article
VI
STOCK OPTIONS
6.1 Options . Stock Options may be granted alone or in addition to other Awards granted under the Plan. Each Stock Option granted under the Plan shall be of one of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.
6.2 Grants . The Committee shall have the authority to grant to any Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or both types of Stock Options. The Committee shall have the authority to grant any Consultant or Non-Employee Director one or more Non-Qualified Stock Options. To the extent that any Stock Option does not qualify as an Incentive Stock Option (whether because of its provisions or the time or manner of its exercise or otherwise), such Stock Option or the portion thereof which does not so qualify shall constitute a separate Non-Qualified Stock Option.
6.3 Incentive Stock Options . The grant of an Incentive Stock Option shall not limit or restrict the powers and authority of the Committee or the Company, even if the exercise of any such powers or authority would disqualify such Incentive Stock Option under Section 422.
6.4 Terms of Options . Options granted under the Plan shall be subject to the following terms and conditions and shall be in such form and contain such additional terms and conditions, not inconsistent with the terms of the Plan, as the Committee shall deem desirable:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Stock Option shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Stock Option shall not be less than 100% (or, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, 110%) of the Fair Market Value of the Common Stock at the time of grant.
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(b) Stock Option Term . The term of each Stock Option shall be fixed by the Committee, provided that no Stock Option shall be exercisable more than 10 years after the date the Option is granted; and provided further that the term of an Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed five years.
(c) Exercisability . Unless otherwise provided by the Committee in accordance with the provisions of this Section 6.4, Stock Options granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant. If the Committee provides, in its discretion, that any Stock Option is exercisable subject to certain limitations (including, without limitation, that such Stock Option is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after the time of grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such Stock Option may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.
(d) Method of Exercise . Subject to whatever installment exercise and waiting period provisions apply under Section 6.4(c), to the extent vested, Stock Options may be exercised in whole or in part at any time during the Option term, by giving written notice of exercise to the Company specifying the number of shares of Common Stock to be purchased. Such notice shall be accompanied by payment in full of the purchase price as follows: (i) in cash or by check, bank draft or money order payable to the order of the Company; (ii) solely to the extent permitted by applicable law, if the Common Stock is traded on a national securities exchange, and the Committee authorizes, through a procedure whereby the Participant delivers irrevocable instructions to a broker reasonably acceptable to the Committee to deliver promptly to the Company an amount equal to the purchase price; or (iii) on such other terms and conditions as may be acceptable to the Committee (including, without limitation, with the consent of the Committee, having the Company withhold shares of Common Stock issuable upon exercise of the Stock Option, or by payment in full or in part in the form of Common Stock owned by the Participant, based on the Fair Market Value of the Common Stock on the payment date as determined by the Committee). No shares of Common Stock shall be issued until payment therefor, as provided herein, has been made or provided for.
(e) Non-Transferability of Options . No Stock Option shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all Stock Options shall be exercisable, during the Participant’s lifetime, only by the Participant. Notwithstanding the foregoing, the Committee may determine, in its sole discretion, at the time of grant or thereafter that a Non-Qualified Stock Option that is otherwise not Transferable pursuant to this Section is Transferable to a Family Member in whole or in part and in such circumstances, and under such conditions, as specified by the Committee. A Non-Qualified Stock Option that is Transferred to a Family Member pursuant to the preceding sentence (i) may not be subsequently Transferred other than by will or by the laws of descent and distribution and (ii) remains subject to the terms of the Plan and the applicable Award Agreement. Any shares of Common Stock acquired upon the exercise of a Non-Qualified Stock Option by a permissible transferee of a Non-Qualified Stock Option or a permissible transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock Option shall be subject to the terms of the Plan and the applicable Award Agreement.
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(f) Termination by Death or Disability . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by reason of death or Disability, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant (or in the case of the Participant’s death, by the legal representative of the Participant’s estate) at any time within a period of one (1) year from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options; provided, however, that, in the event of a Participant’s Termination by reason of Disability, if the Participant dies within such exercise period, all unexercised Stock Options held by such Participant shall thereafter be exercisable, to the extent to which they were exercisable at the time of death, for a period of one (1) year from the date of such death, but in no event beyond the expiration of the stated term of such Stock Options.
(g) Involuntary Termination Without Cause or for Good Reason . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is by involuntary termination by the Company without Cause or by the Participant with Good Reason, all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within ninety (90) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.
(h) Voluntary Resignation . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination is voluntary (other than a voluntary termination described in Section 6.4(i)(y) hereof), all Stock Options that are held by such Participant that are vested and exercisable at the time of the Participant’s Termination may be exercised by the Participant at any time within a period of thirty (30) days from the date of such Termination, but in no event beyond the expiration of the stated term of such Stock Options.
(i) Termination for Cause . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, if a Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as provided in Section 6.4(h)) after the occurrence of an event that would be grounds for a Termination for Cause, all Stock Options, whether vested or not vested, that are held by such Participant shall thereupon terminate and expire as of the date of such Termination.
(j) Unvested Stock Options . Unless otherwise determined by the Committee at the time of grant, or if no rights of the Participant are reduced, thereafter, Stock Options that are not vested as of the date of a Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.
(k) Incentive Stock Option Limitations . To the extent that the aggregate Fair Market Value (determined as of the time of grant) of the Common Stock with respect to which Incentive Stock Options are exercisable for the first time by an Eligible Employee during any calendar year under the Plan and/or any other stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. In addition, if an Eligible Employee does not remain employed by the Company, any Subsidiary or
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any Parent at all times from the time an Incentive Stock Option is granted until three months prior to the date of exercise thereof (or such other period as required by applicable law), such Stock Option shall be treated as a Non-Qualified Stock Option. Should any provision of the Plan not be necessary in order for the Stock Options to qualify as Incentive Stock Options, or should any additional provisions be required, the Committee may amend the Plan accordingly, without the necessity of obtaining the approval of the stockholders of the Company.
(l) Form, Modification, Extension and Renewal of Stock Options . Subject to the terms and conditions and within the limitations of the Plan, Stock Options shall be evidenced by such form of agreement or grant as is approved by the Committee, and the Committee may (i) modify, extend or renew outstanding Stock Options granted under the Plan (provided that the rights of a Participant are not reduced without such Participant’s consent and provided further that such action does not subject the Stock Options to Section 409A of the Code without the consent of the Participant), and (ii) accept the surrender of outstanding Stock Options (to the extent not theretofore exercised) and authorize the granting of new Stock Options in substitution therefor (to the extent not theretofore exercised). Notwithstanding the foregoing, an outstanding Option may not be modified to reduce the exercise price thereof nor may a new Option at a lower price be substituted for a surrendered Option (other than adjustments or substitutions in accordance with Section 4.2), unless such action is approved by the stockholders of the Company.
(m) Deferred Delivery of Common Stock . The Committee may in its discretion permit Participants to defer delivery of Common Stock acquired pursuant to a Participant’s exercise of an Option in accordance with the terms and conditions established by the Committee in the applicable Award Agreement, which shall be intended to comply with the requirements of Section 409A of the Code.
(n) Early Exercise . The Committee may provide that a Stock Option include a provision whereby the Participant may elect at any time before the Participant’s Termination to exercise the Stock Option as to any part or all of the shares of Common Stock subject to the Stock Option prior to the full vesting of the Stock Option and such shares shall be subject to the provisions of Article VIII and be treated as Restricted Stock. Unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Committee determines to be appropriate.
(o) Other Terms and Conditions . The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Non-Qualified Stock Option on a cashless basis on the last day of the term of such Option if the Participant has failed to exercise the Non-Qualified Stock Option as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Non-Qualified Stock Option exceeds the exercise price of such Non-Qualified Stock Option on the date of expiration of such Option, subject to Section 14.4. Stock Options may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.
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Article
VII
STOCK APPRECIATION RIGHTS
7.1 Tandem Stock Appreciation Rights . Stock Appreciation Rights may be granted in conjunction with all or part of any Stock Option (a “ Reference Stock Option ”) granted under the Plan (“ Tandem Stock Appreciation Rights ”). In the case of a Non-Qualified Stock Option, such rights may be granted either at or after the time of the grant of such Reference Stock Option. In the case of an Incentive Stock Option, such rights may be granted only at the time of the grant of such Reference Stock Option.
7.2 Terms and Conditions of Tandem Stock Appreciation Rights . Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.
(b) Term . A Tandem Stock Appreciation Right or applicable portion thereof granted with respect to a Reference Stock Option shall terminate and no longer be exercisable upon the termination or exercise of the Reference Stock Option, except that, unless otherwise determined by the Committee, in its sole discretion, at the time of grant, a Tandem Stock Appreciation Right granted with respect to less than the full number of shares covered by the Reference Stock Option shall not be reduced until, and then only to the extent that the exercise or termination of the Reference Stock Option causes, the number of shares covered by the Tandem Stock Appreciation Right to exceed the number of shares remaining available and unexercised under the Reference Stock Option.
(c) Exercisability . Tandem Stock Appreciation Rights shall be exercisable only at such time or times and to the extent that the Reference Stock Options to which they relate shall be exercisable in accordance with the provisions of Article VI, and shall be subject to the provisions of Section 6.4(c).
(d) Method of Exercise . A Tandem Stock Appreciation Right may be exercised by the Participant by surrendering the applicable portion of the Reference Stock Option. Upon such exercise and surrender, the Participant shall be entitled to receive an amount determined in the manner prescribed in this Section 7.2. Stock Options which have been so surrendered, in whole or in part, shall no longer be exercisable to the extent that the related Tandem Stock Appreciation Rights have been exercised.
(e) Payment . Upon the exercise of a Tandem Stock Appreciation Right, a Participant shall be entitled to receive up to, but no more than, an amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock over the Option exercise price per share specified in the Reference Stock Option agreement multiplied by the number of shares of Common Stock in
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respect of which the Tandem Stock Appreciation Right shall have been exercised, with the Committee having the right to determine the form of payment.
(f) Deemed Exercise of Reference Stock Option . Upon the exercise of a Tandem Stock Appreciation Right, the Reference Stock Option or part thereof to which such Stock Appreciation Right is related shall be deemed to have been exercised for the purpose of the limitation set forth in Article IV of the Plan on the number of shares of Common Stock to be issued under the Plan.
(g) Non-Transferability . Tandem Stock Appreciation Rights shall be Transferable only when and to the extent that the underlying Stock Option would be Transferable under Section 6.4(e) of the Plan.
7.3 Non-Tandem Stock Appreciation Rights . Non-Tandem Stock Appreciation Rights may also be granted without reference to any Stock Options granted under the Plan.
7.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights . Non-Tandem Stock Appreciation Rights granted hereunder shall be subject to such terms and conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to time by the Committee, and the following:
(a) Exercise Price . The exercise price per share of Common Stock subject to a Non-Tandem Stock Appreciation Right shall be determined by the Committee at the time of grant, provided that the per share exercise price of a Non-Tandem Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Common Stock at the time of grant.
(b) Term . The term of each Non-Tandem Stock Appreciation Right shall be fixed by the Committee, but shall not be greater than 10 years after the date the right is granted.
(c) Exercisability . Unless otherwise provided by the Committee in accordance with the provisions of this Section 7.4, Non-Tandem Stock Appreciation Rights granted under the Plan shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee at the time of grant. If the Committee provides, in its discretion, that any such right is exercisable subject to certain limitations (including, without limitation, that it is exercisable only in installments or within certain time periods), the Committee may waive such limitations on the exercisability at any time at or after grant in whole or in part (including, without limitation, waiver of the installment exercise provisions or acceleration of the time at which such right may be exercised), based on such factors, if any, as the Committee shall determine, in its sole discretion.
(d) Method of Exercise . Subject to whatever installment exercise and waiting period provisions apply under Section 7.4(c), Non-Tandem Stock Appreciation Rights may be exercised in whole or in part at any time in accordance with the applicable Award Agreement, by giving written notice of exercise to the Company specifying the number of Non-Tandem Stock Appreciation Rights to be exercised.
(e) Payment . Upon the exercise of a Non-Tandem Stock Appreciation Right a Participant shall be entitled to receive, for each right exercised, up to, but no more than, an
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amount in cash and/or Common Stock (as chosen by the Committee in its sole discretion) equal in value to the excess of the Fair Market Value of one share of Common Stock on the date that the right is exercised over the Fair Market Value of one share of Common Stock on the date that the right was awarded to the Participant.
(f) Termination . Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the provisions of the applicable Award Agreement and the Plan, upon a Participant’s Termination for any reason, Non-Tandem Stock Appreciation Rights will remain exercisable following a Participant’s Termination on the same basis as Stock Options would be exercisable following a Participant’s Termination in accordance with the provisions of Sections 6.4(f) through 6.4(j).
(g) Non-Transferability . No Non-Tandem Stock Appreciation Rights shall be Transferable by the Participant other than by will or by the laws of descent and distribution, and all such rights shall be exercisable, during the Participant’s lifetime, only by the Participant.
7.5 Limited Stock Appreciation Rights . The Committee may, in its sole discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a general Stock Appreciation Right or as a Limited Stock Appreciation Right. Limited Stock Appreciation Rights may be exercised only upon the occurrence of a Change in Control or such other event as the Committee may, in its sole discretion, designate at the time of grant or thereafter. Upon the exercise of Limited Stock Appreciation Rights, except as otherwise provided in an Award Agreement, the Participant shall receive in cash and/or Common Stock, as determined by the Committee, an amount equal to the amount (i) set forth in Section 7.2(e) with respect to Tandem Stock Appreciation Rights, or (ii) set forth in Section 7.4(e) with respect to Non-Tandem Stock Appreciation Rights.
7.6 Other Terms and Conditions . The Committee may include a provision in an Award Agreement providing for the automatic exercise of a Stock Appreciation Right on a cashless basis on the last day of the term of such Stock Appreciation Right if the Participant has failed to exercise the Stock Appreciation Right as of such date, with respect to which the Fair Market Value of the shares of Common Stock underlying the Stock Appreciation Right exceeds the exercise price of such Stock Appreciation Right on the date of expiration of such Stock Appreciation Right, subject to Section 14.4. Stock Appreciation Rights may contain such other provisions, which shall not be inconsistent with any of the terms of the Plan, as the Committee shall deem appropriate.
Article
VIII
RESTRICTED STOCK
8.1 Awards of Restricted Stock . Shares of Restricted Stock may be issued either alone or in addition to other Awards granted under the Plan. The Committee shall determine the Eligible Individuals, to whom, and the time or times at which, grants of Restricted Stock shall be made, the number of shares to be awarded, the price (if any) to be paid by the Participant (subject to Section 8.2), the time or times within which such Awards may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of the Awards.
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The Committee may condition the grant or vesting of Restricted Stock upon the attainment of specified performance targets (including, the Performance Goals) or such other factor as the Committee may determine in its sole discretion.
8.2 Awards and Certificates . Eligible Individuals selected to receive Restricted Stock shall not have any right with respect to such Award, unless and until such Participant has delivered a fully executed copy of the agreement evidencing the Award to the Company, to the extent required by the Committee, and has otherwise complied with the applicable terms and conditions of such Award. Further, such Award shall be subject to the following conditions:
(a) Purchase Price . The purchase price of Restricted Stock shall be fixed by the Committee. Subject to Section 4.3, the purchase price for shares of Restricted Stock may be zero to the extent permitted by applicable law, and, to the extent not so permitted, such purchase price may not be less than par value.
(b) Acceptance . Awards of Restricted Stock must be accepted within a period of 60 days (or such shorter period as the Committee may specify at grant) after the grant date, by executing a Restricted Stock agreement and by paying whatever price (if any) the Committee has designated thereunder.
(c) Legend . Each Participant receiving Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, unless the Committee elects to use another system, such as book entries by the transfer agent, as evidencing ownership of shares of Restricted Stock. Such certificate shall be registered in the name of such Participant, and shall, in addition to such legends required by applicable securities laws, bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Award, substantially in the following form:
“The anticipation, alienation, attachment, sale, transfer, assignment, pledge, encumbrance or charge of the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Townsquare Media, Inc. (the “Company”) 2014 Omnibus Incentive Plan (the “Plan”) and an Agreement entered into between the registered owner and the Company dated __________. Copies of such Plan and Agreement are on file at the principal office of the Company.”
(d) Custody . If stock certificates are issued in respect of shares of Restricted Stock, the Committee may require that any stock certificates evidencing such shares be held in custody by the Company until the restrictions thereon shall have lapsed, and that, as a condition of any grant of Restricted Stock, the Participant shall have delivered a duly signed stock power or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate by the Company, which would permit transfer to the Company of all or a portion of the shares subject to the Restricted Stock Award in the event that such Award is forfeited in whole or part.
8.3 Restrictions and Conditions . The shares of Restricted Stock awarded pursuant to the Plan shall be subject to the following restrictions and conditions:
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(a) Restriction Period . (i) The Participant shall not be permitted to Transfer shares of Restricted Stock awarded under the Plan during the period or periods set by the Committee (the “ Restriction Period ”) commencing on the date of such Award, as set forth in the Restricted Stock Award Agreement and such agreement shall set forth a vesting schedule and any event that would accelerate vesting of the shares of Restricted Stock. Within these limits, based on service, attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other factors or criteria as the Committee may determine in its sole discretion, the Committee may condition the grant or provide for the lapse of such restrictions in installments in whole or in part, or may accelerate the vesting of all or any part of any Restricted Stock Award and/or waive the deferral limitations for all or any part of any Restricted Stock Award.
(i) If the grant of shares of Restricted Stock or the lapse of restrictions is based on the attainment of Performance Goals, the Committee shall establish the objective Performance Goals and the applicable vesting percentage of the Restricted Stock applicable to each Participant or class of Participants in writing prior to the beginning of the applicable fiscal year or at such later date as otherwise determined by the Committee and while the outcome of the Performance Goals are substantially uncertain. Such Performance Goals may incorporate provisions for disregarding (or adjusting for) changes in accounting methods, corporate transactions (including, without limitation, dispositions and acquisitions) and other similar type events or circumstances.
(b) Rights as a Stockholder . Except as provided in Section 8.3(a) and this Section 8.3(b) or as otherwise determined by the Committee in an Award Agreement, the Participant shall have, with respect to the shares of Restricted Stock, all of the rights of a holder of shares of Common Stock of the Company, including, without limitation, the right to receive dividends, the right to vote such shares and, subject to and conditioned upon the full vesting of shares of Restricted Stock, the right to tender such shares. The Committee may, in its sole discretion, determine at the time of grant that the payment of dividends shall be deferred until, and conditioned upon, the expiration of the applicable Restriction Period.
(c) Termination . Unless otherwise determined by the Committee at grant or, if no rights of the Participant are reduced, thereafter, subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the relevant Restriction Period, all Restricted Stock still subject to restriction will be forfeited in accordance with the terms and conditions established by the Committee at grant or thereafter.
(d) Lapse of Restrictions . If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock, the certificates for such shares shall be delivered to the Participant. All legends shall be removed from said certificates at the time of delivery to the Participant, except as otherwise required by applicable law or other limitations imposed by the Committee.
Article
IX
PERFORMANCE AWARDS
9.1 Performance Awards . The Committee may grant a Performance Award to a Participant payable upon the attainment of specific Performance Goals. If the Performance Award
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is payable in shares of Restricted Stock, such shares shall be transferable to the Participant only upon attainment of the relevant Performance Goal in accordance with Article VIII. If the Performance Award is payable in cash, it may be paid upon the attainment of the relevant Performance Goals either in cash or in shares of Restricted Stock (based on the then current Fair Market Value of such shares), as determined by the Committee, in its sole and absolute discretion. Each Performance Award shall be evidenced by an Award Agreement in such form that is not inconsistent with the Plan and that the Committee may from time to time approve.
9.2 Terms and Conditions . Performance Awards awarded pursuant to this Article IX shall be subject to the following terms and conditions:
(a) Earning of Performance Award . At the expiration of the applicable Performance Period, the Committee shall determine the extent to which the Performance Goals established pursuant to Section 9.2(c) are achieved and the percentage of each Performance Award that has been earned.
(b) Non-Transferability . Subject to the applicable provisions of the Award Agreement and the Plan, Performance Awards may not be Transferred during the Performance Period.
(c) Dividends . Unless otherwise determined by the Committee at the time of grant, amounts equal to dividends declared during the Performance Period with respect to the number of shares of Common Stock covered by a Performance Award will not be paid to the Participant.
(d) Payment . Following the Committee’s determination in accordance with Section 9.2(a), the Company shall settle Performance Awards, in such form (including, without limitation, in shares of Common Stock or in cash) as determined by the Committee, in an amount equal to such Participant’s earned Performance Awards. Notwithstanding the foregoing, the Committee may, in its sole discretion, award an amount less than the earned Performance Awards and/or subject the payment of all or part of any Performance Award to additional vesting, forfeiture and deferral conditions as it deems appropriate.
(e) Termination . Subject to the applicable provisions of the Award Agreement and the Plan, upon a Participant’s Termination for any reason during the Performance Period for a given Performance Award, the Performance Award in question will vest or be forfeited in accordance with the terms and conditions established by the Committee at grant.
(f) Accelerated Vesting . Based on service, performance and/or such other factors or criteria, if any, as the Committee may determine, the Committee may, at or after grant, accelerate the vesting of all or any part of any Performance Award.
Article
X
OTHER STOCK-BASED AND CASH-BASED AWARDS
10.1 Other Stock-Based Awards . The Committee is authorized to grant to Eligible Individuals Other Stock-Based Awards that are payable in, valued in whole or in part by reference to, or otherwise based on or related to shares of Common Stock, including but not limited to, shares of Common Stock awarded purely as a bonus and not subject to restrictions or conditions,
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shares of Common Stock in payment of the amounts due under an incentive or performance plan sponsored or maintained by the Company or an Affiliate, stock equivalent units, restricted stock units, and Awards valued by reference to book value of shares of Common Stock. Other Stock-Based Awards may be granted either alone or in addition to or in tandem with other Awards granted under the Plan.
Subject to the provisions of the Plan, the Committee shall have authority to determine the Eligible Individuals, to whom, and the time or times at which, such Awards shall be made, the number of shares of Common Stock to be awarded pursuant to such Awards, and all other conditions of the Awards. The Committee may also provide for the grant of Common Stock under such Awards upon the completion of a specified Performance Period.
The Committee may condition the grant or vesting of Other Stock-Based Awards upon the attainment of specified Performance Goals as the Committee may determine, in its sole discretion.
10.2 Terms and Conditions . Other Stock-Based Awards made pursuant to this Article X shall be subject to the following terms and conditions:
(a) Non-Transferability . Subject to the applicable provisions of the Award Agreement and the Plan, shares of Common Stock subject to Awards made under this Article X may not be Transferred prior to the date on which the shares are issued, or, if later, the date on which any applicable restriction, performance or deferral period lapses.
(b) Dividends . Unless otherwise determined by the Committee at the time of Award, subject to the provisions of the Award Agreement and the Plan, the recipient of an Award under this Article X shall not be entitled to receive, currently or on a deferred basis, dividends or dividend equivalents in respect of the number of shares of Common Stock covered by the Award.
(c) Vesting . Any Award under this Article X and any Common Stock covered by any such Award shall vest or be forfeited to the extent so provided in the Award Agreement, as determined by the Committee, in its sole discretion.
(d) Price . Common Stock issued on a bonus basis under this Article X may be issued for no cash consideration. Common Stock purchased pursuant to a purchase right awarded under this Article X shall be priced, as determined by the Committee in its sole discretion.
10.3 Other Cash-Based Awards . The Committee may from time to time grant Other Cash-Based Awards to Eligible Individuals in such amounts, on such terms and conditions, and for such consideration, including no consideration or such minimum consideration as may be required by applicable law, as it shall determine in its sole discretion. Other Cash-Based Awards may be granted subject to the satisfaction of vesting conditions or may be awarded purely as a bonus and not subject to restrictions or conditions, and if subject to vesting conditions, the Committee may accelerate the vesting of such Awards at any time in its sole discretion. The grant of an Other Cash-Based Award shall not require a segregation of any of the Company’s assets for satisfaction of the Company’s payment obligation thereunder.
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Article
XI
CHANGE IN CONTROL PROVISIONS
11.1 Benefits . In the event of a Change in Control of the Company (as defined below), and except as otherwise provided by the Committee in an Award Agreement, a Participant’s unvested Awards shall not vest automatically and a Participant’s Awards shall be treated in accordance with one or more of the following methods as determined by the Committee:
(a) Awards, whether or not then vested, shall be continued, assumed, or have new rights substituted therefor, as determined by the Committee in a manner consistent with the requirements of Section 409A of the Code, and restrictions to which shares of Restricted Stock or any other Award granted prior to the Change in Control are subject shall not lapse upon a Change in Control and the Restricted Stock or other Award shall, where appropriate in the sole discretion of the Committee, receive the same distribution as other Common Stock on such terms as determined by the Committee; provided that the Committee may decide to award additional Restricted Stock or other Awards in lieu of any cash distribution. Notwithstanding anything to the contrary herein, for purposes of Incentive Stock Options, any assumed or substituted Stock Option shall comply with the requirements of Treasury Regulation Section 1.424-1 (and any amendment thereto).
(b) The Committee, in its sole discretion, may provide for the purchase of any Awards by the Company or an Affiliate for an amount of cash equal to the excess (if any) of the Change in Control Price (as defined below) of the shares of Common Stock covered by such Awards, over the aggregate exercise price of such Awards. For purposes hereof, “ Change in Control Price ” shall mean the highest price per share of Common Stock paid in any transaction related to a Change in Control of the Company.
(c) The Committee may, in its sole discretion, terminate all outstanding and unexercised Stock Options, Stock Appreciation Rights, or any Other Stock-Based Award that provides for a Participant elected exercise, effective as of the date of the Change in Control, by delivering notice of termination to each Participant at least twenty (20) days prior to the date of consummation of the Change in Control, in which case during the period from the date on which such notice of termination is delivered to the consummation of the Change in Control, each such Participant shall have the right to exercise in full all of such Participant’s Awards that are then outstanding (without regard to any limitations on exercisability otherwise contained in the Award Agreements), but any such exercise shall be contingent on the occurrence of the Change in Control, and, provided that, if the Change in Control does not take place within a specified period after giving such notice for any reason whatsoever, the notice and exercise pursuant thereto shall be null and void.
(d) Notwithstanding any other provision herein to the contrary, the Committee may, in its sole discretion, provide for accelerated vesting or lapse of restrictions, of an Award at any time.
11.2 Change in Control . Unless otherwise determined by the Committee in the applicable Award Agreement or other written agreement with a Participant approved by the Committee, a “Change in Control” shall be deemed to occur if:
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(a) any “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, Oaktree Capital Management, L.P., or their affiliates, or any company owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company), becoming the beneficial owner (as defined in Rule 13d 3 under the Exchange Act), directly or indirectly, of securities of the Company representing 50% or more of the combined voting power of the Company’s then outstanding securities, other than pursuant to Business Transaction (defined below) that does not constitute a “Change in Control” thereunder;
(b) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in paragraph (a), (c), or (d) of this Section 11.2 or a director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such term is used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person other than the Board) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two thirds of the directors then still in office who either were directors at the beginning of the two year period or whose election or nomination for election was previously so approved, cease for any reason to constitute at least a majority of the Board;
(c) a merger or consolidation of the Company or any direct or indirect Subsidiary of the Company (a “ Business Transaction ”) with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 50% of the combined voting power of the voting securities of the Company or its successor (or the ultimate parent company of the Company or its successor) outstanding immediately after such merger or consolidation; provided, however, that a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no person (other than those covered by the exceptions in Section 11.2(a)) acquires more than 50% of the combined voting power of the Company’s then outstanding securities shall not constitute a Change in Control of the Company; or
(d) a complete liquidation or dissolution of the Company or the consummation of a sale or disposition by the Company of all or substantially all of the Company’s assets other than the sale or disposition of all or substantially all of the assets of the Company to a person or persons who beneficially own, directly or indirectly, 50% or more of the combined voting power of the outstanding voting securities of the Company at the time of the sale (or to an entity controlled by such person or persons).
Notwithstanding the foregoing, with respect to any Award that is characterized as “nonqualified deferred compensation” within the meaning of Section 409A of the Code, an event shall not be considered to be a Change in Control under the Plan for purposes of payment of such Award unless such event is also a “change in ownership,” a “change in effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A of the Code.
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11.3 Initial Public Offering not a Change in Control . Notwithstanding the foregoing, for purposes of the Plan, the occurrence of the Registration Date or any change in the composition of the Board within one year following the Registration Date shall not be considered a Change in Control.
Article
XII
TERMINATION OR AMENDMENT OF PLAN
Notwithstanding any other provision of the Plan, the Board may at any time, and from time to time, amend, in whole or in part, any or all of the provisions of the Plan (including any amendment deemed necessary to ensure that the Company may comply with any regulatory requirement referred to in Article XIV or Section 409A of the Code), or suspend or terminate it entirely, retroactively or otherwise; provided, however, that, unless otherwise required by law or specifically provided herein, the rights of a Participant with respect to Awards granted prior to such amendment, suspension or termination, may not be impaired without the consent of such Participant and, provided further, that without the approval of the holders of the Company’s Common Stock entitled to vote in accordance with applicable law, no amendment may be made that would (i) increase the aggregate number of shares of Common Stock that may be issued under the Plan (except by operation of Section 4.2); (ii) increase the maximum individual Participant limitations for a fiscal year under Section 4.1(b) (except by operation of Section 4.2); (iii) change the classification of individuals eligible to receive Awards under the Plan; (iv) decrease the minimum option price of any Stock Option or Stock Appreciation Right; (v) extend the maximum option period under Section 6.4; (vi) alter the Performance Goals for Restricted Stock, Performance Awards or Other Stock-Based Awards as set forth in Exhibit A hereto; or (vii) award any Stock Option or Stock Appreciation Right in replacement of a canceled Stock Option or Stock Appreciation Right with a higher exercise price than the replacement award. In no event may the Plan be amended without the approval of the stockholders of the Company in accordance with the applicable laws of the State of Delaware to increase the aggregate number of shares of Common Stock that may be issued under the Plan, decrease the minimum exercise price of any Award, or to make any other amendment that would require stockholder approval under Financial Industry Regulatory Authority (FINRA) rules and regulations or the rules of any exchange or system on which the Company’s securities are listed or traded at the request of the Company. Notwithstanding anything herein to the contrary, the Board may amend the Plan or any Award Agreement at any time without a Participant’s consent to comply with applicable law including Section 409A of the Code. The Committee may amend the terms of any Award theretofore granted, prospectively or retroactively, but, subject to Article IV or as otherwise specifically provided herein, no such amendment or other action by the Committee shall impair the rights of any holder without the holder’s consent.
Article
XIII
UNFUNDED STATUS OF PLAN
The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payment as to which a Participant has a fixed and vested interest but which are not yet made to a Participant by the Company, nothing contained herein shall give any such Participant any right that is greater than those of a general unsecured creditor of the Company.
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Article
XIV
GENERAL PROVISIONS
14.1 Legend . The Committee may require each person receiving shares of Common Stock pursuant to a Stock Option or other Award under the Plan to represent to and agree with the Company in writing that the Participant is acquiring the shares without a view to distribution thereof. In addition to any legend required by the Plan, the certificates for such shares may include any legend that the Committee deems appropriate to reflect any restrictions on Transfer. All certificates for shares of Common Stock delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed or any national securities exchange system upon whose system the Common Stock is then quoted, any applicable federal or state securities law, and any applicable corporate law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
14.2 Other Plans . Nothing contained in the Plan shall prevent the Board from adopting other or additional compensation arrangements, subject to stockholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases.
14.3 No Right to Employment/Directorship/Consultancy . Neither the Plan nor the grant of any Option or other Award hereunder shall give any Participant or other employee, Consultant or Non-Employee Director any right with respect to continuance of employment, consultancy or directorship by the Company or any Affiliate, nor shall there be a limitation in any way on the right of the Company or any Affiliate by which an employee is employed or a Consultant or Non-Employee Director is retained to terminate such employment, consultancy or directorship at any time.
14.4 Withholding of Taxes . The Company shall have the right to deduct from any payment to be made pursuant to the Plan, or to otherwise require, prior to the issuance or delivery of shares of Common Stock or the payment of any cash hereunder, payment by the Participant of, any federal, state or local taxes required by law to be withheld. Upon the vesting of Restricted Stock (or other Award that is taxable upon vesting), or upon making an election under Section 83(b) of the Code, a Participant shall pay all required withholding to the Company. Any minimum statutorily required withholding obligation with regard to any Participant may be satisfied, subject to the consent of the Committee, by reducing the number of shares of Common Stock otherwise deliverable or by delivering shares of Common Stock already owned. Any fraction of a share of Common Stock required to satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash by the Participant.
14.5 No Assignment of Benefits . No Award or other benefit payable under the Plan shall, except as otherwise specifically provided by law or permitted by the Committee, be Transferable in any manner, and any attempt to Transfer any such benefit shall be void, and any such benefit shall not in any manner be liable for or subject to the debts, contracts, liabilities, engagements or torts of any person who shall be entitled to such benefit, nor shall it be subject to attachment or legal process for or against such person.
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14.6 Listing and Other Conditions .
(a) Unless otherwise determined by the Committee, as long as the Common Stock is listed on a national securities exchange or system sponsored by a national securities association, the issuance of shares of Common Stock pursuant to an Award shall be conditioned upon such shares being listed on such exchange or system. The Company shall have no obligation to issue such shares unless and until such shares are so listed, and the right to exercise any Option or other Award with respect to such shares shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion that any sale or delivery of shares of Common Stock pursuant to an Option or other Award is or may in the circumstances be unlawful or result in the imposition of excise taxes on the Company under the statutes, rules or regulations of any applicable jurisdiction, the Company shall have no obligation to make such sale or delivery, or to make any application or to effect or to maintain any qualification or registration under the Securities Act or otherwise, with respect to shares of Common Stock or Awards, and the right to exercise any Option or other Award shall be suspended until, in the opinion of said counsel, such sale or delivery shall be lawful or will not result in the imposition of excise taxes on the Company.
(c) Upon termination of any period of suspension under this Section 14.6, any Award affected by such suspension which shall not then have expired or terminated shall be reinstated as to all shares available before such suspension and as to shares which would otherwise have become available during the period of such suspension, but no such suspension shall extend the term of any Award.
(d) A Participant shall be required to supply the Company with certificates, representations and information that the Company requests and otherwise cooperate with the Company in obtaining any listing, registration, qualification, exemption, consent or approval the Company deems necessary or appropriate.
14.7 Stockholders Agreement and Other Requirements . Notwithstanding anything herein to the contrary, as a condition to the receipt of shares of Common Stock pursuant to an Award under the Plan, to the extent required by the Committee, the Participant shall execute and deliver a stockholder’s agreement or such other documentation that shall set forth certain restrictions on transferability of the shares of Common Stock acquired upon exercise or purchase, and such other terms as the Board or Committee shall from time to time establish. Such stockholder’s agreement or other documentation shall apply to the Common Stock acquired under the Plan and covered by such stockholder’s agreement or other documentation. The Company may require, as a condition of exercise, the Participant to become a party to any other existing stockholder agreement (or other agreement).
14.8 Governing Law . The Plan and actions taken in connection herewith shall be governed and construed in accordance with the laws of the State of Delaware (regardless of the law that might otherwise govern under applicable Delaware principles of conflict of laws).
14.9 Jurisdiction; Waiver of Jury Trial . Any suit, action or proceeding with respect to the Plan or any Award Agreement, or any judgment entered by any court of competent
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jurisdiction in respect of any thereof, shall be resolved only in the courts of the State of Delaware or the United States District Court for the District of Delaware and the appellate courts having jurisdiction of appeals in such courts. In that context, and without limiting the generality of the foregoing, the Company and each Participant shall irrevocably and unconditionally (a) submit in any proceeding relating to the Plan or any Award Agreement, or for the recognition and enforcement of any judgment in respect thereof (a “ Proceeding ”), to the exclusive jurisdiction of the courts of the State of Delaware, the court of the United States of America for the District of Delaware, and appellate courts having jurisdiction of appeals from any of the foregoing, and agree that all claims in respect of any such Proceeding shall be heard and determined in such Delaware State court or, to the extent permitted by law, in such federal court, (b) consent that any such Proceeding may and shall be brought in such courts and waives any objection that the Company and each Participant may now or thereafter have to the venue or jurisdiction of any such Proceeding in any such court or that such Proceeding was brought in an inconvenient court and agree not to plead or claim the same, (c) waive all right to trial by jury in any Proceeding (whether based on contract, tort or otherwise) arising out of or relating to the Plan or any Award Agreement, (d) agree that service of process in any such Proceeding may be effected by mailing a copy of such process by registered or certified mail (or any substantially similar form of mail), postage prepaid, to such party, in the case of a Participant, at the Participant’s address shown in the books and records of the Company or, in the case of the Company, at the Company’s principal offices, attention General Counsel, and (e) agree that nothing in the Plan shall affect the right to effect service of process in any other manner permitted by the laws of the State of Delaware.
14.10 Construction . Wherever any words are used in the Plan in the masculine gender they shall be construed as though they were also used in the feminine gender in all cases where they would so apply, and wherever words are used herein in the singular form they shall be construed as though they were also used in the plural form in all cases where they would so apply.
14.11 Other Benefits . No Award granted or paid out under the Plan shall be deemed compensation for purposes of computing benefits under any retirement plan of the Company or its Affiliates nor affect any benefit under any other benefit plan now or subsequently in effect under which the availability or amount of benefits is related to the level of compensation.
14.12 Costs . The Company shall bear all expenses associated with administering the Plan, including expenses of issuing Common Stock pursuant to Awards hereunder.
14.13 No Right to Same Benefits . The provisions of Awards need not be the same with respect to each Participant, and such Awards to individual Participants need not be the same in subsequent years.
14.14 Death/Disability . The Committee may in its discretion require the transferee of a Participant to supply it with written notice of the Participant’s death or Disability and to supply it with a copy of the will (in the case of the Participant’s death) or such other evidence as the Committee deems necessary to establish the validity of the transfer of an Award. The Committee may also require that the agreement of the transferee to be bound by all of the terms and conditions of the Plan.
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14.15 Section 16(b) of the Exchange Act . All elections and transactions under the Plan by persons subject to Section 16 of the Exchange Act involving shares of Common Stock are intended to comply with any applicable exemptive condition under Rule 16b-3. The Committee may establish and adopt written administrative guidelines, designed to facilitate compliance with Section 16(b) of the Exchange Act, as it may deem necessary or proper for the administration and operation of the Plan and the transaction of business thereunder.
14.16 Section 409A of the Code . The Plan is intended to comply with the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent. To the extent that any Award is subject to Section 409A of the Code, it shall be paid in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding anything herein to the contrary, any provision in the Plan that is inconsistent with Section 409A of the Code shall be deemed to be amended to comply with Section 409A of the Code and to the extent such provision cannot be amended to comply therewith, such provision shall be null and void. The Company shall have no liability to a Participant, or any other party, if an Award that is intended to be exempt from, or compliant with, Section 409A of the Code is not so exempt or compliant or for any action taken by the Committee or the Company and, in the event that any amount or benefit under the Plan becomes subject to penalties under Section 409A of the Code, responsibility for payment of such penalties shall rest solely with the affected Participants and not with the Company. Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of “nonqualified deferred compensation” (within the meaning of Section 409A of the Code) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A of the Code) as a result of such employee’s separation from service (other than a payment that is not subject to Section 409A of the Code) shall be delayed for the first six (6) months following such separation from service (or, if earlier, the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) upon expiration of such delay period.
14.17 Successor and Assigns . The Plan shall be binding on all successors and permitted assigns of a Participant, including, without limitation, the estate of such Participant and the executor, administrator or trustee of such estate.
14.18 Severability of Provisions . If any provision of the Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof, and the Plan shall be construed and enforced as if such provisions had not been included.
14.19 Payments to Minors, Etc . Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of receipt thereof shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Committee, the Board, the Company, its Affiliates and their employees, agents and representatives with respect thereto.
14.20 Lock-Up Agreement . As a condition to the grant of an Award, if requested by the Company and the lead underwriter of any public offering of the Common Stock (the “ Lead Underwriter ” ), a Participant shall irrevocably agree not to sell, contract to sell, grant any option to
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purchase, transfer the economic risk of ownership in, make any short sale of, pledge or otherwise transfer or dispose of, any interest in any Common Stock or any securities convertible into, derivative of, or exchangeable or exercisable for, or any other rights to purchase or acquire Common Stock (except Common Stock included in such public offering or acquired on the public market after such offering) during such period of time following the effective date of a registration statement of the Company filed under the Securities Act that the Lead Underwriter shall specify (the “ Lock-Up Period ”). The Participant shall further agree to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and agree that the Company may impose stop-transfer instructions with respect to Common Stock acquired pursuant to an Award until the end of such Lock-Up Period.
14.21 Headings and Captions . The headings and captions herein are provided for reference and convenience only, shall not be considered part of the Plan, and shall not be employed in the construction of the Plan.
14.22 Post-Transition Period . Following the Transition Period, any Award granted under the Plan that is intended to be “performance-based compensation” under Section 162(m) of the Code, shall be subject to the approval of the material terms of the Plan by a majority of the stockholders of the Company in accordance with Section 162(m) of the Code and the treasury regulations promulgated thereunder.
14.23 Company Recoupment of Awards . A Participant’s rights with respect to any Award hereunder shall in all events be subject to (i) any right that the Company may have under any Company recoupment policy or other agreement or arrangement with a Participant, or (ii) any right or obligation that the Company may have regarding the clawback of “incentive-based compensation” under Section 10D of the Exchange Act and any applicable rules and regulations promulgated thereunder from time to time by the U.S. Securities and Exchange Commission.
Article
XV
EFFECTIVE DATE OF PLAN
The Plan shall become effective on [____], 2014, which is the date of its adoption by the Board, subject to the approval of the Plan by the stockholders of the Company in accordance with the requirements of the laws of the State of Delaware.
Article
XVI
TERM OF PLAN
No Award shall be granted pursuant to the Plan on or after the tenth anniversary of the earlier of the date that the Plan is adopted or the date of stockholder approval, but Awards granted prior to such tenth anniversary may extend beyond that date.
Article
XVII
NAME OF PLAN
The Plan shall be known as the “Townsquare Media Inc. 2014 Omnibus Incentive Plan.”
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EXHIBIT A
PERFORMANCE GOALS
Performance goals established for purposes of Awards intended to be Performance Awards under Article IX of the Plan may be based on the attainment of certain target levels of, or a specified increase or decrease (as applicable) in one or more of the following performance goals:
· | earnings per share; |
· | operating income; |
· | gross income; |
· | net income (before or after taxes); |
· | cash flow; |
· | gross profit; |
· | gross profit return on investment; |
· | gross margin return on investment; |
· | gross margin; |
· | operating margin; |
· | working capital; |
· | earnings before interest and taxes; |
· | earnings before interest, tax, depreciation and amortization; |
· | return on equity; |
· | return on assets; |
· | return on capital; |
· | return on invested capital; |
· | net revenues; |
· | gross revenues; |
· | revenue growth; |
· | annual recurring revenues; |
· | recurring revenues; |
· | license revenues; |
· | sales or market share; |
· | total shareholder return; |
· | economic value added; |
· | specified objectives with regard to limiting the level of increase in all or a portion of the Company’s bank debt or other long-term or short-term public or private debt or other similar financial obligations of the Company, which may be calculated net of cash balances and/or other offsets and adjustments as may be established by the Committee in its sole discretion; |
· | the fair market value of a share of Common Stock; |
· | the growth in the value of an investment in the Common Stock assuming the reinvestment of dividends; or |
· | reduction in operating expenses. |
A- 1 |
The Committee may, in its sole discretion, also exclude, or adjust to reflect, the impact of an event or occurrence that the Committee determines should be appropriately excluded or adjusted, including:
(a) restructurings, discontinued operations, extraordinary items or events, and other unusual or non-recurring charges as described in Accounting Standards Codification 225-20, “Extraordinary and Unusual Items,” and/or management’s discussion and analysis of financial condition and results of operations appearing or incorporated by reference in the Company’s Form 10-K for the applicable year;
(b) an event either not directly related to the operations of the Company or not within the reasonable control of the Company’s management; or
(c) a change in tax law or accounting standards required by generally accepted accounting principles.
Performance goals may also be based upon individual participant performance goals, as determined by the Committee, in its sole discretion.
In addition, such performance goals may be based upon the attainment of specified levels of Company (or subsidiary, division, other operational unit, administrative department or product category of the Company) performance under one or more of the measures described above relative to the performance of other corporations.
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Exhibit 10.9
NONQUALIFIED STOCK OPTION AWARD AGREEMENT
PURSUANT TO THE
TOWNSQUARE MEDIA, INC. 2014 OMNIBUS INCENTIVE PLAN
* * * * *
Participant: | ||
Grant Date: |
Per Share Exercise Price: $_____
Number of Shares subject to this Option:
* * * * *
THIS NON-QUALIFIED STOCK OPTION AWARD AGREEMENT (this “ Agreement ”), dated as of the Grant Date specified above, is entered into by and between Townsquare Media, Inc., a Delaware corporation (the “ Company ”), and the Participant specified above, pursuant to the Townsquare Media, Inc. 2014 Omnibus Incentive Plan (the “ Plan ”), which is administered by the Committee; and
WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Non-Qualified Stock Option provided for herein to the Participant.
NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, the parties hereto hereby mutually covenant and agree as follows:
1. Incorporation By Reference; Plan Document Receipt . This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the Award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were each expressly set forth herein. Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control. No part of the Option granted hereby is intended to qualify as an “incentive stock option” under Section 422 of the Code.
2. Grant of Option . The Company hereby grants to the Participant, as of the Grant Date specified above, a Non-Qualified Stock Option (this “ Option ”) to acquire from the Company at the Per Share Exercise Price specified above, the aggregate number of shares of Common Stock specified above (the “ Option Shares ”). Except as otherwise provided by the Plan,
the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason. The Participant shall have no rights as a stockholder with respect to any shares of Common Stock covered by the Option unless and until the Participant has become the holder of record of such shares, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of any such shares, except as otherwise specifically provided for in the Plan or this Agreement.
3. Vesting and Exercise .
(a) Vesting . Subject to the provisions of Sections 3(b) through 3(d) hereof, the Option shall vest and become exercisable as follows: ________. Upon expiration of the Option, the Option shall be cancelled and no longer exercisable.
(b) Committee Discretion to Accelerate Vesting . Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of the Option at any time and for any reason
(c) Change in Control . In the event of a Change in Control, the Option shall become fully vested.
(d) Expiration . Unless earlier terminated in accordance with the terms and provisions of the Plan and/or this Agreement, all portions of the Option (whether vested or not vested) shall expire and shall no longer be exercisable after the expiration of ten (10) years from the Grant Date.
4. Termination . Subject to the terms of the Plan and this Agreement, the Option, to the extent vested at the time of the Participant’s Termination, shall remain exercisable as follows:
(a) Termination due to Death or Disability . In the event of the Participant’s Termination by reason of death or Disability, the vested portion of the Option shall remain exercisable until the earlier of (i) one (1) year from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof; provided , however , that in the case of a Termination due to Disability, if the Participant dies within such one (1) year exercise period, any unexercised Option held by the Participant shall thereafter be exercisable by the legal representative of the Participant’s estate, to the extent to which it was exercisable at the time of death, for a period of one (1) year from the date of death, but in no event beyond the expiration of the stated term of the Option pursuant to Section 3(d) hereof.
(b) Involuntary Termination Without Cause; Voluntary Termination by Participant . In the event of the Participant’s involuntary Termination by the Company without Cause or a voluntary Termination by the Participant, the vested portion of the Option shall remain exercisable until the earlier of (i) ninety (90) days from the date of such Termination, and (ii) the expiration of the stated term of the Option pursuant to Section 3(d) hereof.
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(c) Termination for Cause . In the event of the Participant’s Termination for Cause, the Participant’s entire Option (whether or not vested) shall terminate and expire upon such Termination.
(d) Treatment of Unvested Options upon Termination . Any portion of the Option that is not vested as of the date of the Participant’s Termination for any reason shall terminate and expire as of the date of such Termination.
5. Method of Exercise and Payment . Subject to Section 8 hereof, to the extent that the Option has become vested and exercisable with respect to a number of shares of Common Stock as provided herein, the Option may thereafter be exercised by the Participant, in whole or in part, at any time or from time to time prior to the expiration of the Option as provided herein and in accordance with Sections 6.4(c) and 6.4(d) of the Plan, including, without limitation, by the filing of any written form of exercise notice as may be required by the Committee and payment in full of the Per Share Exercise Price specified above multiplied by the number of shares of Common Stock underlying the portion of the Option exercised.
6. Non-Transferability . The Option, and any rights and interests with respect thereto, issued under this Agreement and the Plan shall not be sold, exchanged, transferred, assigned or otherwise disposed of in any way by the Participant (or any beneficiary of the Participant), other than by testamentary disposition by the Participant or the laws of descent and distribution. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the Option to be Transferred to a Family Member for no value, provided that such Transfer shall only be valid upon execution of a written instrument in form and substance acceptable to the Committee in its sole discretion evidencing such Transfer and the transferee’s acceptance thereof signed by the Participant and the transferee, and provided, further, that the Option may not be subsequently Transferred other than by will or by the laws of descent and distribution or to another Family Member (as permitted by the Committee in its sole discretion) in accordance with the terms of the Plan and this Agreement, and shall remain subject to the terms of the Plan and this Agreement. Any attempt to sell, exchange, transfer, assign, pledge, encumber or otherwise dispose of or hypothecate in any way the Option, or the levy of any execution, attachment or similar legal process upon the Option, contrary to the terms and provisions of this Agreement and/or the Plan shall be null and void and without legal force or effect.
7. Governing Law . All questions concerning the construction, validity and interpretation of this Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to the choice of law principles thereof.
8. Withholding of Tax . The Company shall have the power and the right to deduct or withhold, or require the Participant to remit to the Company, an amount sufficient to satisfy any federal, state, local and foreign taxes of any kind (including, but not limited to, the Participant’s FICA and SDI obligations) which the Company, in its sole discretion, deems necessary to be withheld or remitted to comply with the Code and/or any other applicable law, rule or regulation with respect to the Option and, if the Participant fails to do so, the Company may otherwise refuse to issue or transfer any shares of Common Stock otherwise required to be issued pursuant to this Agreement. Any minimum statutorily required withholding obligation with regard
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to the Participant may, with the consent of the Committee, be satisfied by reducing the amount of shares of Common Stock otherwise deliverable upon exercise of the Option.
9. Entire Agreement; Amendment . This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.
10. Notices . Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.
11. No Right to Employment . Any questions as to whether and when there has been a Termination and the cause of such Termination shall be determined in the sole discretion of the Committee except with respect to instances where the Participant is covered by an employment, consulting, change in control agreement with the Company or an Affiliate, in which case the characterization of such termination shall be governed by the applicable agreement. Nothing in this Agreement shall interfere with or limit in any way the right of the Company, its Subsidiaries or its Affiliates to terminate the Participant’s employment or service at any time, for any reason and with or without Cause.
12. Transfer of Personal Data . The Participant authorizes, agrees and unambiguously consents to the transmission by the Company (or any Subsidiary) of any personal data information related to the Option awarded under this Agreement for legitimate business purposes (including, without limitation, the administration of the Plan). This authorization and consent is freely given by the Participant.
13. Compliance with Laws . The issuance of the Option (and the Option Shares upon exercise of the Option) pursuant to this Agreement shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law or regulation applicable thereto. The Company shall not be obligated to issue the Option or any of the Option Shares pursuant to this Agreement if any such issuance would violate any such requirements.
14. Section 409A . Notwithstanding anything herein or in the Plan to the contrary, the Option is intended to be exempt from the applicable requirements of Section 409A of the Code and shall be limited, construed and interpreted in accordance with such intent.
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15. Binding Agreement; Assignment . This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign (except in accordance with Section 6 hereof) any part of this Agreement without the prior express written consent of the Company.
16. Headings . The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.
17. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.
18. Further Assurances . Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.
19. Severability . The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.
20. Acquired Rights . The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of the Option made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the Option awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
TOWNSQUARE MEDIA, INC. | ||
By: | ||
Name: | ||
Title: | ||
PARTICIPANT | ||
Name: |
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Exhibit 10.11
INDEMNIFICATION AGREEMENT
This Indemnification Agreement (this “ Agreement ”) is made as of [__________], 2014, by and between Townsquare Media, Inc., a Delaware corporation (the “ Corporation ”), in its own name and on behalf of its direct and indirect subsidiaries, and [__________], an individual (“ Indemnitee ”).
RECITALS :
WHEREAS , directors, officers, employees, controlling persons, fiduciaries and other agents (“ Representatives ”) in service to corporations or business enterprises are being increasingly subjected to expensive and time-consuming litigation relating to, among other things, matters that traditionally would have been brought only against the corporation or business enterprise itself;
WHEREAS , highly competent persons have become more reluctant to serve as Representative unless they are provided with adequate protection through insurance and adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation or business enterprise;
WHEREAS , the Board of Directors of the Corporation (the “ Board ”) has determined that the increased difficulty in attracting and retaining highly competent persons is detrimental to the best interests of the Corporation and its stockholders and that the Corporation should act to assure such persons that there will be increased certainty of protection against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the Corporation;
WHEREAS , (a) the Amended and Restated Certificate of Incorporation of the Corporation (the “ Certificate of Incorporation ”) requires indemnification of the officers and directors of the Corporation, (b) Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“ DGCL ”) and (c) the Certificate of Incorporation and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive and thereby contemplate that contracts may be entered into between the Corporation and its Representatives with respect to indemnification;
WHEREAS , this Agreement is a supplement to and in furtherance of the Certificate of Incorporation and the Bylaws and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder, and
WHEREAS , (a) Indemnitee does not regard the protection available under the Certificate of Incorporation, Bylaws and insurance as adequate in the present circumstances, (b) Indemnitee may not be willing to serve or continue to serve as a Representative without adequate protection, (c) the Corporation desires Indemnitee to serve in such capacity and (d) Indemnitee is willing to serve, continue to serve and to take on additional service for or on behalf of the Corporation on the condition that [he/she] be so indemnified.
AGREEMENT :
NOW, THEREFORE , in consideration of the premises and the covenants contained herein, the Corporation and Indemnitee do hereby covenant and agree as follows:
Section 1. Definition s.
(a) As used in this Agreement:
“ Agreement ” shall have the meaning ascribed to such term in the Preamble hereto.
“ Board ” shall have the meaning ascribed to such term in the Recitals hereto.
“ Bylaws ” shall mean the Amended and Restated Bylaws of the Corporation.
“ Certificate of Incorporation ” shall have the meaning ascribed to such term in the Recitals hereto.
“ Corporate Status ” describes the status of an individual who is or was a Representative of an Enterprise.
“ Corporation ” shall have the meaning ascribed to such term in the Preamble hereto.
“ DGCL ” shall have the meaning ascribed to such term in the Recitals hereto.
“ Enterprise ” shall mean the Corporation and any other Person, employee benefit plan, joint venture or other enterprise of which Indemnitee is or was serving at the request of the Corporation as a Representative.
“ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
“ Expenses ” shall mean all reasonable costs, expenses, fees and charges, including, without limitation, attorneys' fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 11(d) only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement (on a grossed up basis) and (iv) any interest, assessments or other charges in respect of the foregoing.
“ Indemnitee ” shall have the meaning ascribed to such term in the Preamble hereto.
“ Indemnity Obligations ” shall mean all obligations of the Corporation to Indemnitee under this Agreement, including, without limitation, the Corporation’s obligations to provide indemnification to Indemnitee and advance Expenses to Indemnitee under this Agreement.
“ Independent Counsel ” shall mean a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five (5) years has been, retained to represent: (i) the Corporation or Indemnitee in any matter
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material to either such party (other than with respect to matters concerning Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements) or (ii) any other party to the Proceeding giving rise to a claim for indemnification; provided , however , that the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Corporation or Indemnitee in an action to determine Indemnitee's rights under this Agreement.
“ Liabilities ” shall mean all claims, liabilities, damages, losses, judgments, orders, fines, penalties and other amounts payable in connection with, arising out of, in respect of or relating to or occurring as a direct or indirect consequence of any Proceeding, including, without limitation, amounts paid in whole or partial settlement of any Proceeding, all Expenses in complying with any judgment, order or decree issued or entered in connection with any Proceeding or any settlement agreement, stipulation or consent decree entered into or issued in settlement of any Proceeding, and any consequential damages resulting from any Proceeding or the settlement, judgment, or result thereof.
“ Person ” shall mean any individual, corporation, partnership, limited partnership, limited liability company, trust, governmental agency or body or any other legal entity.
“ Proceeding ” shall mean any threatened, pending or completed action, claim, suit, arbitration, alternate dispute resolution mechanism, formal or informal hearing, inquiry or investigation, litigation, administrative hearing or any other actual, threatened or completed judicial, administrative or arbitration proceeding (including, without limitation, any such proceeding under the Securities Act of 1933, as amended, or the Exchange Act or any other federal law, state law, statute or regulation), whether brought in the right of the Corporation or otherwise, and whether of a civil, criminal, administrative or investigative nature, in which Indemnitee was, is or will be, or is threatened to be, involved as a party or witness or otherwise involved, affected or injured (i) by reason of the fact that Indemnitee is or was a Representative of the Corporation, (ii) by reason of any actual or alleged action taken by Indemnitee or of any action on Indemnitee’s part while acting as Representative of the Corporation or (iii) by reason of the fact that Indemnitee is or was serving at the request of the Corporation as a Representative of another Person, whether or not serving in such capacity at the time any liability or Expense is incurred for which indemnification, reimbursement, or advancement of Expenses can be provided under this Agreement.
“ Representative ” shall have the meaning ascribed to such term in the Preamble hereto.
“ Shareholder Entities ” shall mean the funds managed by Oaktree Capital Management, L.P. (“Oaktree”) or any other Person controlling, controlled by or under common control with Oaktree; provided , however , that neither the Corporation nor any of its subsidiaries shall be considered Shareholder Entities hereunder.
“ Submission Date ” shall have the meaning ascribed to such term in Section 9(b).
(b) For the purpose hereof, references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Corporation” shall include, without limitation, any service as a Representative of the Corporation which imposes duties on, or involves services by, such Representative with respect to an employee benefit plan, its participants or beneficiaries; and a Person who acted in good faith and
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in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Corporation” as referred to in this Agreement.
Section 2. Indemnity in Third-Party Proceedings. The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with or as a consequence of any Proceeding (other than any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor which shall be governed by the provisions set forth in Section 3 below) or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation and, in the case of a criminal proceeding, had no reasonable cause to believe that his conduct was unlawful. For the avoidance of doubt, a finding, admission or stipulation that an Indemnitee has acted with gross negligence or recklessness shall not, of itself, create a presumption that such Indemnitee has failed to meet the standard or conduct required for indemnification in this Section 2.
Section 3. Indemnity in Proceedings by or in the Right of the Corporation. The Corporation shall indemnify and hold harmless Indemnitee, to the fullest extent permitted by applicable law, from and against all Liabilities and Expenses suffered or incurred by Indemnitee or on Indemnitee’s behalf in connection with or as a consequence of any Proceeding brought by or in the right of the Corporation to procure a judgment in its favor, or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in, or not opposed, to the best interests of the Corporation. No indemnification for Liabilities and Expenses shall be made under this Section 3 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Corporation, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability, but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification. For the avoidance of doubt, a finding, admission or stipulation that an Indemnitee has acted with gross negligence or recklessness shall not, of itself, create a presumption that such Indemnitee has failed to meet the standard or conduct required for indemnification in this Section 3.
Section 4. Indemnification for Expenses of a Party Who is Wholly or Partly Successful. Notwithstanding any other provisions of this Agreement, and without limiting the rights of Indemnitee under any other provision hereof, to the extent that (a) Indemnitee is a party to (or a participant in) any Proceeding, (b) the Corporation is not permitted by applicable law to indemnify Indemnitee with respect to any claim brought in such Proceeding if such claim is asserted successfully against Indemnitee and (c) Indemnitee is not wholly successful in such Proceeding, but is successful, on the merits or otherwise (including, without limitation, settlement thereof), as to one or more but less than all claims, issues or matters in such Proceeding, then the Corporation shall indemnify Indemnitee, to the fullest extent permitted by applicable law, against all Liabilities and Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf, in connection with or as a consequence of each successfully resolved claim, issue or matter. For purposes of this Section 4 and without limitation, the termination of any claim, issue or matter in such a Proceeding by settlement, entry of a plea of nolo contendere or by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.
Section 5. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, Indemnitee shall be indemnified to the fullest extent permitted by applicable law against all Liabilities and Expenses suffered or incurred by him or on his behalf in connection therewith.
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Section 6. Additional Indemnification. Notwithstanding any limitation in Sections 2, 3 or 4, the Corporation shall indemnify Indemnitee to the fullest extent permitted by applicable law if Indemnitee is a party to, or threatened to be made a party to, any Proceeding (including, without limitation, a Proceeding by or in the right of the Corporation to procure a judgment in its favor), against all Liabilities and Expenses suffered or incurred by Indemnitee in connection with such Proceeding:
(a) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to, or replacement of, the DGCL, and
(b) to the fullest extent authorized or permitted by any amendments to, or replacements of, the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.
Section 7. Advances of Expenses. In furtherance of the requirement of Article Eight of the Bylaws and notwithstanding any provision of this Agreement to the contrary, the Corporation shall advance, to the fullest extent permitted by law, Expenses incurred by Indemnitee in connection with any Proceeding, and such advancement shall be made within ten (10) days after the receipt by the Corporation of a statement or statements requesting such advances from time to time, whether prior to, or after, final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee's ability to repay Expenses and without regard to Indemnitee's ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all Expenses incurred pursuing an action to enforce this right of advancement, including, without limitation, Expenses incurred preparing and forwarding statements to the Corporation to support the advances claimed. Indemnitee shall qualify for advances upon the execution and delivery to the Corporation of this Agreement, which shall constitute an undertaking, providing that Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Corporation.
Section 8. Procedure for Notification and Defense of Claim.
(a) Indemnitee shall notify the Corporation in writing of any Proceeding with respect to which Indemnitee intends to seek indemnification or advancement of Expenses hereunder as soon as reasonably practicable following the receipt by Indemnitee of written notice thereof. The written notification to the Corporation shall include a description of the nature of the Proceeding and the facts underlying the Proceeding. To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification following the final disposition of such Proceeding. Any delay or failure by Indemnitee to notify the Corporation hereunder will not relieve the Corporation from any liability which it may have to Indemnitee hereunder or otherwise than under this Agreement, and any delay or failure in so notifying the Corporation shall not constitute a waiver by Indemnitee of any rights under this Agreement.
(b) In the event Indemnitee is entitled to indemnification and/or advancement of Expenses with respect to any Proceeding, Indemnitee may, at Indemnitee’s option, (i) retain legal counsel selected by Indemnitee and approved by the Corporation (which approval shall not to be unreasonably withheld, conditioned or delayed) to defend Indemnitee in such Proceeding, at the sole expense of the Corporation or (ii) have the Corporation assume the defense of Indemnitee in the Proceeding, in which case the Corporation shall assume the defense of such Proceeding with
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legal counsel selected by the Corporation and approved by Indemnitee (which approval shall not be unreasonably withheld, conditioned or delayed) within ten (10) days of the Corporation’s receipt of written notice of Indemnitee’s election to cause the Corporation to do so. If the Corporation is required to assume the defense of any such Proceeding, it shall engage legal counsel for such defense, and shall be solely responsible for all Expenses of such legal counsel and otherwise of such defense. Such legal counsel may represent both Indemnitee and the Corporation (and/or any other party or parties entitled to be indemnified by the Corporation with respect to such matter) unless, in the reasonable opinion of legal counsel to Indemnitee, there is a conflict of interest between Indemnitee and the Corporation (or any other such party or parties) or there are legal defenses available to Indemnitee that are not available to the Corporation (or any such other party or parties). Notwithstanding either party’s assumption of responsibility for defense of a Proceeding, each party shall have the right to engage separate legal counsel at its own expense. The party having responsibility for defense of a Proceeding shall provide the other party and its legal counsel with all copies of pleadings and material correspondence relating to the Proceeding. Indemnitee and the Corporation shall reasonably cooperate in the defense of any Proceeding with respect to which indemnification is sought hereunder, regardless of whether the Corporation or Indemnitee assumes the defense thereof. Indemnitee may not settle or compromise any Proceeding without the prior written consent of the Corporation (which consent shall not be unreasonably withheld, conditioned or delayed). The Corporation may not settle or compromise any proceeding without the prior written consent of Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed).
Section 9. Procedure Upon Application for Indemnification.
(a) Upon written request by Indemnitee for indemnification pursuant to Section 8(a), the Corporation shall advance Expenses necessary to defend against a Claim pursuant to Section 7 hereof. If any determination by the Corporation is required by applicable law with respect to Indemnitee's ultimate entitlement to indemnification, such determination shall be made (i) if Indemnitee shall request such determination be made by the Independent Counsel, by the Independent Counsel and (ii) in all other circumstances in any manner permitted by the DGCL. Indemnitee shall cooperate with the Person(s) making such determination with respect to Indemnitee's entitlement to indemnification, including, without limitation, providing to such Person(s), upon reasonable advance request, any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any Expenses incurred by Indemnitee in so cooperating with the Person(s) making such determination shall be borne by the Corporation (irrespective of the determination as to Indemnitee's entitlement to indemnification) and the Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom. The Corporation will not deny any written request for indemnification hereunder made in good faith by Indemnitee unless a determination as to Indemnitee’s entitlement to such indemnification described in this Section 9(a) has been made. The Corporation agrees to pay Expenses of the Independent Counsel referred to above and to fully indemnify the Independent Counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.
(b) In the event that the determination of entitlement to indemnification is to be made by the Independent Counsel pursuant to Section 9(a) hereof, (i) the Independent Counsel shall be selected by the Corporation within ten (10) days of the Submission Date, (ii) the Corporation shall give written notice to Indemnitee advising it of the identity of the Independent Counsel so selected and (iii) Indemnitee may, within ten (10) days after such written notice of selection shall have been given, deliver to the Corporation Indemnitee’s written objection to such
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selection. Absent a timely objection, the Person so selected shall act as the Independent Counsel. If a timely objection is made by Indemnitee, the Person so selected may not serve as the Independent Counsel unless and until such objection is withdrawn. If no Independent Counsel shall have been selected (whether due to a failure of the Corporation to appoint such Independent Counsel, an un-withdrawn objection from Indemnitee with respect to the person so appointed or otherwise) before the later of (i) thirty (30) days after the submission by Indemnitee of a written request for indemnification pursuant to Section 9(a) hereof (the date of such submission, the “ Submission Date ”) and (ii) ten (10) days after the final disposition of the Proceeding for which indemnity is sought, then (x) each of the Corporation and Indemnitee shall select a Person meeting the qualifications to serve as the Independent Counsel and (y) such Persons shall (collectively) select the Independent Counsel. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 11(a) of this Agreement, the Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).
Section 10. Presumptions and Effect of Certain Proceedings.
(a) In making a determination with respect to entitlement to indemnification hereunder, the Person(s) making such determination shall, to the fullest extent permitted by law, presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 8(a) of this Agreement, and the Corporation shall, to the fullest extent permitted by law, have the burden of proof to overcome that presumption in connection with the making by any Person(s) of any determination contrary to that presumption. Neither the failure of the Corporation (including, without limitation, by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation (including, without limitation, by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.
(b) Subject to Section 11(e), if the Person(s) empowered or selected under Section 9 hereof to determine whether Indemnitee is entitled to indemnification shall not have made a determination within sixty (60) days after receipt by the Corporation of the request therefore, the requisite determination of entitlement to indemnification shall, to the fullest extent permitted by law, be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent a prohibition of such indemnification under applicable law; provided , however , that such sixty (60) day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if (i) the determination is to be made by the Independent Counsel and Indemnitee objects to the Corporation’s selection of the Independent Counsel and (ii) the Independent Counsel ultimately selected requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto.
(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in, or not opposed to, the best interests of the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that Indemnitee’s conduct was unlawful.
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(d) Effect of Settlement . To the fullest extent permitted by law, settlement of any Proceeding without any finding of responsibility, wrongdoing or guilt on the part of Indemnitee with respect to claims asserted in such Proceeding shall constitute a conclusive determination that Indemnitee is entitled to indemnification hereunder with respect to such Proceeding.
(e) Reliance as Safe Harbor . For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee's action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise, or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. The provisions of this Section 10(e) shall not be deemed to be exclusive or to limit in any way the other circumstances in which Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.
(f) Actions of Others . The knowledge and/or actions, or failure to act, of any Representative (other than Indemnitee) of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.
Section 11. Remedies of Indemnitee.
(a) Subject to Section 11(e), in the event that (i) a determination is made pursuant to Section 10 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 7 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 9(a) of this Agreement within ninety (90) days after the Submission Date, (iv) payment of indemnification is not made pursuant to Section 4, 5 or 9(a) of this Agreement within ten (10) days after receipt by the Corporation of a written request therefore, (v) payment of indemnification pursuant to Section 2, 3 or 6 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification or (vi) in the event that the Corporation or any other person takes or threatens to take any action to declare this Agreement void or unenforceable, or institutes any litigation or other action or Proceeding designed to deny, or to recover from, Indemnitee, the benefits provided or intended to be provided to Indemnitee hereunder, Indemnitee shall be entitled to an adjudication by a court of Indemnitee’s entitlement to such indemnification and/or advancement of Expenses. Alternatively, Indemnitee, at Indemnitee’s option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. The Corporation shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 11 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 11, the Corporation shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made pursuant to Section 9(a) of this Agreement that Indemnitee is entitled to indemnification, the Corporation shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 11,
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absent (i) a misstatement by the Indemnitee of a material fact, or an omission by the Indemnitee of a material fact necessary to make the Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.
(d) The Corporation shall, to the fullest extent permitted by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 11 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Corporation is bound by all the provisions of this Agreement. It is the intent of the Corporation that Indemnitee not be required to incur legal fees or other Expenses associated with the interpretation, enforcement or defense of Indemnitee's rights under this Agreement by litigation or otherwise because the cost and expense thereof would substantially detract from the benefits intended to be extended to Indemnitee hereunder. In addition, the Corporation shall indemnify Indemnitee against any and all such Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Corporation of a written request therefore) advance, to the fullest extent permitted by law, such Expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Corporation under this Agreement or under any directors' and officers' liability insurance policies maintained by the Corporation, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.
(e) Notwithstanding anything in this Agreement to the contrary, no determination as to entitlement to indemnification under this Agreement shall be required to be made prior to the final disposition of the Proceeding; provided that , in absence of any such determination with respect to such Proceeding, the Corporation shall pay Liabilities and advance Expenses with respect to such Proceeding as if Indemnitee had been determined to be entitled to indemnification and advancement of Expenses with respect to such Proceeding.
Section 12. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.
(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Certificate of Incorporation, the Bylaws, any agreement, a vote of stockholders, a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in applicable law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Certificate of Incorporation, the Bylaws and/or this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.
(b) The Corporation hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of Expenses and/or insurance provided by one or more Persons with whom or which Indemnitee may be associated (including, without limitation, any
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Shareholder Entity). The Corporation hereby acknowledges and agrees that (i) the Corporation shall be the indemnitor of first resort with respect to any Proceeding, Expense, Liability or matter that is the subject of the Indemnity Obligations, (ii) the Corporation shall be primarily liable for all Indemnity Obligations and any indemnification afforded to Indemnitee in respect of any Proceeding, Expense, Liability or matter that is the subject of Indemnity Obligations, whether created by law, organizational or constituent documents, contract (including, without limitation, this Agreement) or otherwise, (iii) any obligation of any other Persons with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) to indemnify Indemnitee and/or advance Expenses to Indemnitee in respect of any proceeding shall be secondary to the obligations of the Corporation hereunder, (iv) the Corporation shall be required to indemnify Indemnitee and advance Expenses to Indemnitee hereunder to the fullest extent provided herein without regard to any rights Indemnitee may have against any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) or insurer of any such Person and (v) the Corporation irrevocably waives, relinquishes and releases any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) from any claim of contribution, subrogation or any other recovery of any kind in respect of amounts paid by the Corporation hereunder. In the event that any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) or their insurers advances or extinguishes any liability or loss which is the subject of any Indemnity Obligation owed by the Corporation or payable under any insurance policy provided under this Agreement, the payor shall have a right of subrogation against the Corporation or its insurer or insurers for all amounts so paid which would otherwise be payable by the Corporation or its insurer or insurers under this Agreement. In no event will payment of an Indemnity Obligation of the Corporation under this Agreement by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) or their insurers, affect the obligations of the Corporation hereunder or shift primary liability for any Indemnity Obligation to any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity). Any indemnification and/or insurance or advancement of Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity), with respect to any liability arising as a result of Indemnitee’s Corporate Status or capacity as an officer or director of any Person, is specifically in excess of any Indemnity Obligation of the Corporation or valid and any collectible insurance (including, without limitation, any malpractice insurance or professional errors and omissions insurance) provided by the Corporation under this Agreement, and any obligation to provide indemnification and/or insurance or advance Expenses provided by any other Person with whom or which Indemnitee may be associated (including, without limitation, any Shareholder Entity) shall be reduced by any amount that Indemnitee collects from the Corporation as an indemnification payment or advancement of Expenses pursuant to this Agreement.
(c) To the extent that the Corporation maintains an insurance policy or policies providing liability insurance for Representatives of the Corporation or of any other Enterprise, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such Representative under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Corporation maintains an insurance policy or policies providing liability insurance for Representatives of the Corporation or of any other Enterprise, the Corporation shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policy or policies. The Corporation shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.
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(d) In the event of any payment under this Agreement, the Corporation shall not be subrogated to, and hereby waives any rights to be subrogated to, any rights of recovery of Indemnitee, including, without limitation, rights of indemnification provided to Indemnitee from any other Person or entity with whom Indemnitee may be associated (including, without limitation, any Shareholder Entity) as well as any rights to contribution that might otherwise exist; provided , however , that the Corporation shall be subrogated to the extent of any such payment of all rights of recovery of Indemnitee under insurance policies of the Corporation or any of its subsidiaries.
(e) The indemnification and contribution provided for in this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of Indemnitee.
Section 13. Duration of Agreement; Not Employment Contract. This Agreement shall continue until and terminate upon the latest of: (a) ten (10) years after the date that Indemnitee shall have ceased to serve as a Representative of the Corporation or any other Enterprise and (b) one (1) year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 11 of this Agreement relating thereto. This Agreement shall be binding upon the Corporation and its successors and assigns and shall inure to the benefit of Indemnitee and Indemnitee’s heirs, executors and administrators. This Agreement shall not be deemed an employment contract between the Corporation (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee's employment with the Corporation (or any of its subsidiaries or any Enterprise), if any, is at will, and Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Corporation (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a Representative of the Corporation, by the Certificate of Incorporation, Bylaws and the DGCL.
Section 14. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.
Section 15. Enforcement.
(a) The Corporation expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve as a Representative of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon this Agreement in serving as a Representative of the Corporation.
(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof; provided , however , that this Agreement is a supplement to and in furtherance of the Certificate of
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Incorporation, the Bylaws and applicable law, and shall not be deemed a substitute therefore, nor to diminish or abrogate any rights of Indemnitee thereunder.
Section 16. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms.
Section 17. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed, (c) mailed by reputable overnight courier and receipted for by the party to whom said notice or other communication shall have been directed or (d) sent by facsimile transmission, with receipt of oral confirmation that such transmission has been received:
(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Corporation.
(b) If to the Corporation to:
Townsquare Media, Inc.
240 Greenwich Avenue
Greenwich, Connecticut
Fax: (203) 861-0920
Attention: Chief Executive Officer
with copies to (which shall not constitute notice to the Corporation):
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
United States of America
Fax: (212) 446-6460
Attention: Joshua N. Korff, Esq. and
Christopher A. Kitchen, Esq.
or to any other address as may have been furnished to Indemnitee by the Corporation.
Section 18. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of the Proceeding in order to reflect (a) the relative benefits received by the Corporation and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (b) the relative fault of the Corporation (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).
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Section 19. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. The Corporation and Indemnitee hereby irrevocably and unconditionally (a) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Delaware Court of Chancery, and not in any other state or federal court in the United States of America or any court in any other country, (b) consent to submit to the exclusive jurisdiction of the Delaware Court of Chancery for purposes of any action or proceeding arising out of or in connection with this Agreement, (c) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court of Chancery and (d) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court of Chancery has been brought in an improper or inconvenient forum.
Section 20. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.
Section 21. Third-Party Beneficiaries. The Shareholder Entities are intended third-party beneficiaries of this Agreement.
Section 22. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.
TOWNSQUARE MEDIA, INC. | ||
Name: | ||
Title: | ||
INDEMNITEE: | ||
Kevin Miles | ||
Address: |
[Signature Page to Indemnification Agreement]
Exhibit 21.1
Subsidiaries of Townsquare Media, LLC
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Townsquare Live Events International, LLC | Delaware | |
Townsquare Next, LLC | Delaware | |
Townsquare Live Productions, LLC | Delaware | |
Townsquare Interactive, LLC | Delaware | |
Townsquare Cares, Inc. | Connecticut | |
Townsquare MMN, LLC | Delaware | |
Townsquare-Check Up Productions, LLC | Delaware | |
Seize the Deal, LLC | Delaware | |
Townsquare Management Company, LLC | Delaware | |
Townsquare Radio Holdings, LLC | Delaware | |
Townsquare Radio, LLC | Delaware | |
Zader Acquisition Company, LLC | Delaware | |
Townsquare Media Battle Creek, LLC | Delaware | |
Townsquare Media Battle Creek License, LLC | Delaware | |
Townsquare Media Cedar Rapids, LLC | Delaware | |
Townsquare Media Cedar Rapids License, LLC | Delaware | |
Townsquare Media Danbury, LLC | Delaware | |
Townsquare Media Danbury License, LLC | Delaware | |
Townsquare Media Faribault, LLC | Delaware | |
Townsquare Media Faribault License, LLC | Delaware | |
Townsquare Media Kalamazoo, LLC | Delaware | |
Townsquare Media Kalamazoo License, LLC | Delaware | |
Townsquare Media Lansing, LLC | Delaware | |
Townsquare Media Lansing License, LLC | Delaware | |
Townsquare Media Portland, LLC | Delaware | |
Townsquare Media Portland License, LLC | Delaware | |
Townsquare Media Portsmouth, LLC | Delaware | |
Townsquare Media Portsmouth License, LLC | Delaware | |
Townsquare Media Quad Cities, LLC | Delaware | |
Townsquare Media Quad Cities License, LLC | Delaware | |
Townsquare Media Rochester, LLC | Delaware | |
Townsquare Media Rochester License, LLC | Delaware | |
Townsquare Media Rockford, LLC | Delaware | |
Townsquare Media Rockford License, LLC | Delaware | |
Townsquare Media Waterloo, LLC | Delaware | |
Townsquare Media Waterloo License, LLC | Delaware |
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Lyla Acquisition Company, LLC | Delaware | |
Lyla Intermediate Holding, LLC | Delaware | |
Townsquare Media Boise, LLC | Delaware | |
Townsquare Media Boise Licenses, LLC | Delaware | |
Townsquare Media Poughkeepsie, LLC | Delaware | |
Townsquare Media Poughkeepsie License, LLC | Delaware | |
Townsquare Media Dubuque, LLC | Delaware | |
Townsquare Media Dubuque License, LLC | Delaware | |
Townsquare Radio, Inc. | Delaware | |
Townsquare Media, Inc. | Delaware | |
Special Events Management, LLC | Delaware | |
Townsquare Media Broadcasting, LLC | Delaware | |
Townsquare Media of Midwest, LLC | Delaware | |
Townsquare Media of Evansville/Owensboro, Inc. | Delaware | |
Townsquare Media of Flint, Inc. | Delaware | |
Regent Broadcasting of Duluth, Inc. | Delaware | |
Townsquare Media of Albany and Lafayette, Inc. | Delaware | |
Townsquare Media Licensee of Albany and Lafayette, Inc. | Delaware | |
Townsquare Media of Albany, Inc. | Delaware | |
Townsquare Media of Lafayette, LLC | Delaware | |
Townsquare Media of Buffalo, Inc. | Delaware | |
Townsquare Media of El Paso, Inc. | Delaware | |
Regent Broadcasting of South Carolina, Inc. | Delaware | |
Regent Licensee of South Carolina, Inc. | Delaware | |
Regent Broadcasting of San Diego, Inc. | Delaware | |
Regent Licensee of San Diego, Inc. | Delaware | |
Regent Broadcasting of Lexington, Inc. | Delaware | |
Regent Licensee of Lexington, Inc. | Delaware | |
Regent Broadcasting of St. Cloud II, Inc. | Minnesota | |
Townsquare Media of Ft. Collins, Inc. | Delaware | |
Townsquare Media of Utica/Rome, Inc. | Delaware | |
Townsquare Media Licensee of Utica/Rome, Inc. | Delaware | |
Townsquare Media of St. Cloud, Inc. | Delaware | |
Townsquare Media Licensee of St. Cloud, Inc. | Delaware | |
Regent Broadcasting of Lancaster, Inc. | Delaware | |
Livingston County Broadcasters, Inc. | Delaware | |
Regent Broadcasting of Watertown, Inc. | Delaware | |
Regent Licensee of Watertown, Inc. | Delaware |
2 |
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Townsquare Media of Ft. Collins and Grand Rapids, LLC | California | |
Townsquare Media of Presque Isle, Inc. | Delaware | |
Townsquare Media Licensee of Peoria, Inc. | Delaware | |
Townsquare Media of Presque Isle Licensee, LLC | Delaware | |
Regent Broadcasting of Kingman, Inc. | Delaware | |
Regent Licensee of Kingman, Inc. | Delaware | |
Regent Broadcasting of Palmdale, Inc. | Delaware | |
Regent Licensee of Palmdale, Inc. | Delaware | |
Regent Broadcasting of Flagstaff, Inc. | Delaware | |
Regent Licensee of Flagstaff, Inc. | Delaware | |
Regent Broadcasting of Lake Tahoe, Inc. | Delaware | |
Regent Licensee of Lake Tahoe, Inc. | Delaware | |
Regent Broadcasting of Chico, Inc. | Delaware | |
Regent Licensee of Chico, Inc. | Delaware | |
Townsquare Media of Grand Rapids, Inc. | Delaware | |
Regent Broadcasting of Redding, Inc. | Delaware | |
Regent Licensee of Redding, Inc. | Delaware | |
Regent Broadcasting of Erie, Inc. | Delaware | |
Regent Licensee of Erie, Inc. | Delaware | |
Townsquare Media of Killeen-Temple, Inc. | Delaware | |
Townsquare Media of Killeen-Temple Licensee, LLC | Delaware | |
Townsquare Media West Central Holdings, LLC | Delaware | |
Townsquare Media West Central Intermediate Holdings, LLC | Delaware | |
Townsquare Media West Central Radio Broadcasting, LLC | Delaware | |
Townsquare Media Abilene, LLC | Delaware | |
Townsquare Media Abilene License, LLC | Delaware | |
Townsquare Media Amarillo, LLC | Delaware | |
Townsquare Media Amarillo License, LLC | Delaware | |
Townsquare Media Lake Charles, LLC | Delaware | |
Townsquare Media Lake Charles License, LLC | Delaware | |
Townsquare Media Lawton, LLC | Delaware | |
Townsquare Media Lawton License, LLC | Delaware | |
Townsquare Media Lubbock, LLC | Delaware | |
Townsquare Media Lubbock License, LLC | Delaware | |
Townsquare Media Lufkin, LLC | Delaware | |
Townsquare Media Lufkin License, LLC | Delaware | |
GAP Broadcasting Midland-Odessa, LLC | Delaware | |
GAP Broadcasting Midland-Odessa License, LLC | Delaware |
3 |
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Townsquare Media Shreveport, LLC | Delaware | |
Townsquare Media Shreveport License, LLC | Delaware | |
Townsquare Media Texarkana, LLC | Delaware | |
Townsquare Media Texarkana License, LLC | Delaware | |
Townsquare Media Tyler, LLC | Delaware | |
Townsquare Media Tyler License, LLC | Delaware | |
Townsquare Media Victoria, LLC | Delaware | |
Townsquare Media Victoria License, LLC | Delaware | |
Townsquare Media Wichita Falls, LLC | Delaware | |
Townsquare Media Wichita Falls License, LLC | Delaware | |
Townsquare Media Billings, LLC | Delaware | |
Townsquare Media Billings License, LLC | Delaware | |
Townsquare Media Bozeman, LLC | Delaware | |
Townsquare Media Bozeman License, LLC | Delaware | |
GAP Broadcasting Burlington, LLC | Delaware | |
GAP Broadcasting Burlington License, LLC | Delaware | |
Townsquare Media Casper, LLC | Delaware | |
Townsquare Media Casper License, LLC | Delaware | |
Townsquare Media Cheyenne, LLC | Delaware | |
Townsquare Media Cheyenne License, LLC | Delaware | |
Townsquare Media Duluth, LLC | Delaware | |
Townsquare Media Duluth License, LLC | Delaware | |
Townsquare Media Laramie, LLC | Delaware | |
Townsquare Media Laramie License, LLC | Delaware | |
Townsquare Media Missoula, LLC | Delaware | |
Townsquare Media Missoula License, LLC | Delaware | |
Townsquare Media Pocatello, LLC | Delaware | |
Townsquare Media Pocatello License, LLC | Delaware | |
Townsquare Media Shelby, LLC | Delaware | |
Townsquare Media Shelby License, LLC | Delaware | |
Townsquare Media Tri-Cities, LLC | Delaware | |
Townsquare Media Tri-Cities License, LLC | Delaware | |
Townsquare Media Twin Falls, LLC | Delaware | |
Townsquare Media Twin Falls License, LLC | Delaware | |
Townsquare Media Yakima, LLC | Delaware | |
Townsquare Media Yakima License, LLC | Delaware | |
Townsquare Media Acquisition III, LLC | Delaware | |
Townsquare Media Oneonta, LLC | Delaware |
4 |
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Townsquare Media Oneonta License, LLC | Delaware | |
Townsquare Media Quincy-Hannibal, LLC | Delaware | |
Townsquare Media Quincy-Hannibal License, LLC | Delaware | |
Townsquare Media Sedalia, LLC | Delaware | |
Townsquare Media Sedalia License, LLC | Delaware | |
Townsquare Media San Angelo, LLC | Delaware | |
Townsquare Media San Angelo License, LLC | Delaware | |
Townsquare Media Odessa-Midland, LLC | Delaware | |
Townsquare Media Odessa-Midland License, LLC | Delaware | |
Townsquare Media Acquisition IV, LLC | Delaware | |
Townsquare New Jersey Holdco, LLC | Delaware | |
Millennium Atlantic City II Holdco, LLC | Delaware | |
Townsquare Media Atlantic City II, LLC | Delaware | |
Townsquare Media Atlantic City II License, LLC | Delaware | |
Townsquare Media Trenton, LLC | Delaware | |
Townsquare Media Trenton License, LLC | Delaware | |
Townsquare Media Atlantic City, LLC | Delaware | |
Townsquare Media Atlantic City License, LLC | Delaware | |
Townsquare Media Monmouth-Ocean, LLC | Delaware | |
Townsquare Media Monmouth-Ocean License, LLC | Delaware | |
Townsquare Media Atlantic City III Holdco, LLC | Delaware | |
Townsquare Media Atlantic City III, LLC | Delaware | |
Townsquare Media Atlantic City III License, LLC | Delaware | |
Bryton Acquisition Company, LLC | Delaware | |
Townsquare Media Augusta/Waterville, LLC | Delaware | |
Townsquare Media Augusta/Waterville License, LLC | Delaware | |
Townsquare Media Bangor, LLC | Delaware | |
Townsquare Media Bangor License, LLC | Delaware | |
Townsquare Media Binghamton, LLC | Delaware | |
Townsquare Media Binghamton License, LLC | Delaware | |
Townsquare Media Bismarck, LLC | Delaware | |
Townsquare Media Bismarck License, LLC | Delaware | |
Townsquare Media Grand Junction, LLC | Delaware | |
Townsquare Media Grand Junction License, LLC | Delaware | |
Townsquare Media New Bedford, LLC | Delaware | |
Townsquare Media New Bedford License, LLC | Delaware | |
Townsquare Media Odessa-Midland II, LLC | Delaware | |
Townsquare Media Odessa-Midland II License, LLC | Delaware |
5 |
Exact Name of Subsidiaries of Registrant |
Jurisdiction
of
Incorporation or Organization |
|
Townsquare Media Sioux Falls, LLC | Delaware | |
Townsquare Media Sioux Falls License, LLC | Delaware | |
Townsquare Media Tuscaloosa, LLC | Delaware | |
Townsquare Media Tuscaloosa License, LLC | Delaware | |
Townsquare Live Events, LLC | Delaware | |
Townsquare Expos, LLC | Delaware | |
Townsquare Live Events Colorado, LLC | Delaware | |
Townsquare Live Events Montana, LLC | Delaware | |
Townsquare Lifestyle Events, LLC | Delaware | |
Taste of Country Productions, LLC | Delaware | |
Mountain Jam, LLC | Delaware |
6 |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use in Amendment No. 2 to Registration Statement (No. 333-197002) on Form S-1 of Townsquare Media, LLC and Subsidiaries of our report dated May 9, 2014, relating to our audits of the consolidated financial statements, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the caption "Experts" in such Prospectus.
/s/ McGladrey LLP
New York, New York
July 14, 2014
Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in Amendment No. 2 to Registration Statement (No. 333-197002) on Form S-1 of selected Cumulus Media, Inc. markets (collectively, the “Cumulus I Markets”) of our report dated May 9, 2014, relating to our audit of the combined financial statements, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the caption "Experts" in such Prospectus.
/s/ McGladrey LLP
New York, New York
July 14, 2014
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the use in Amendment No. 2 to Registration Statement (No. 333-197002) on Form S-1 of selected Cumulus Media, Inc. markets (collectively, the “Cumulus II Markets”) of our report dated May 9, 2014, relating to our audit of the combined financial statements, appearing in the Prospectus, which is part of this Registration Statement.
We also consent to the reference to our firm under the caption "Experts" in such Prospectus.
/s/ McGladrey LLP
New York, New York
July 14, 2014
Exhibit 23.4
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the use in Amendment No. 2 to Registration Statement (No. 333-197002) on Form S-1 of Townsquare Media, LLC of our report dated October 11, 2013 relating to the financial statements as of and for the year then ended December 31, 2012 of fourteen Cumulus markets, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Atlanta, GA
July 14, 2014