CONTRIBUTION AGREEMENT by and among Merlin Media, LLC, Emmis Operating Company, Emmis Radio, LLC, Emmis Radio License, LLC, Emmis Radio Holding Corporation and Emmis Radio Holding II Corporation Dated as of June 20, 2011 TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

 

 

 

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Schedule 1.2(a)(i)	FCC Licenses
Schedule 1.2(a)(ii)	Permits
Schedule 1.2(b)	Leased Real Property
Schedule 1.2(c)	Personal Property
Schedule 1.2(d)	Assumed Contracts
Schedule 1.2(e) Schedule 1.2(h)	Station Intellectual Property Certain Included Assets
Schedule 1.3(j)	Other Excluded Assets
Schedule 11.1(a)	Permitted Liens
Exhibit A	Restructuring and Contribution Agreement
Exhibit B	Initial LLC Agreement
Exhibit C	Form of First Amended and Restated Merlin LLC Agreement
Exhibit 7.2(d)(i)	Form of FCC Licenses Assignment 1
Exhibit 7.2(d)(ii)	Form of Bill of Sale and Assumption Agreement
Exhibit 7.2(d)(iv)	Form of Registration Agreement
Exhibit 7.3(a)(i)	Form of FCC Licenses Assignment 2
Annex A	Contributor Units to be Issued at Closing

 

 

 

 

This CONTRIBUTION AGREEMENT, dated as of June 20, 2011 (this “Agreement”), is entered into by and among Merlin Media, LLC, a Delaware limited liability company (the “Company”), Emmis Operating Company, an Indiana corporation (“Emmis”), Emmis Radio, LLC, an Indiana limited liability company and a wholly owned subsidiary of Emmis (“Emmis Asset Holder”), Emmis Radio License, LLC, an Indiana limited liability company and a wholly owned subsidiary of Emmis (“Emmis License Holder”),  Emmis Radio Holding Corporation, an Indiana corporation and wholly owned subsidiary of Emmis Asset Holder (“Emmis Radio 1”), Emmis Radio Holding II Corporation, an Indiana Corporation and wholly owned subsidiary of Emmis Asset Holder (“Emmis Radio 2”), and, together with Emmis, the Emmis Asset Holder the Emmis License Holder, and Emmis Radio 1 the “Contributors”).  Reference herein to the “Parties” shall refer to the Company and the Contributors, and reference herein to a “Party” shall refer to any of the Parties, individually.  Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to them in Article 11 of this Agreement and, if not otherwise defined herein, shall have respective meanings ascribed to them in the Purchase Agreement.

 

 

WHEREAS, the Emmis License Holder is the holder of the licenses and authorizations issued by the Federal Communications Commission (the “FCC”) for the operation of the following radio stations (each, a “Station”, and collectively, the “Stations”): (i) WKQX-FM, 101.1 MHz, Channel 266, Chicago, IL (FIN 19525), (ii) WRXP-FM, 101.9 MHz, Channel 270, New York, NY (FIN 67846) and (iii) WLUP-FM , 97.9 MHz, Channel 250, Chicago, IL (FIN 73233);

 

WHEREAS, prior to the execution and delivery of this Agreement, each Contributor other than License Holder has contributed all right, title and interest held in certain assets related to the Stations other than the FCC Licenses to the Company,  and the Company has assumed certain specified liabilities from such parties, in each case pursuant to a Restructuring and Contribution Agreement a copy of which is attached as Exhibit A hereto (the “Restructuring and Contribution Agreement” and the transactions consummated thereunder, the “Push-Down Contribution”).

 

WHEREAS, in connection with the Push-Down Contribution the Company was formed pursuant to a Certificate of Formation filed on June 17, 2011, and is governed by that certain Limited Liability Company Agreement of the Company, by and between Emmis Radio 1 and Emmis Radio 2, a copy of which is attached as Exhibit B hereto (the “Initial LLC Agreement”);

 

WHEREAS, subject to the terms and conditions of this Agreement, at Closing (i) the Emmis License Holder desires to contribute the FCC Licenses and, with respect to the Specified Stations only, associated call letters, to the Company, subject to the assumption of the Assumed Liabilities by the Company from Emmis License Holder and (ii) the Contributors desire to contribute all right, title and interest to any Assets acquired after the date hereof, including in the case of any assets beneficially transferred under the Restructuring and

 

 

 

 

WHEREAS, the Company desires to acquire all of the Assets from the Contributors on the terms and conditions set forth herein, in exchange for the issuance by the Company of the Units and the assumption by the Company of the Assumed Liabilities;

 

WHEREAS, Emmis Radio 1, Emmis Radio 2 and Emmis License Holder desire to recapitalize the Company with the Contribution at Closing and to execute and deliver the First Amended and Restated Limited Liability Company Agreement, in the form attached as Exhibit C  hereto (the “First Amended LLC Agreement”); and

 

WHEREAS, immediately upon consummation of the transactions contemplated by this Agreement, (i) Emmis License Holder will distribute to Emmis the Units it receives for contribution of the FCC Licenses and (ii) the Company will contribute the FCC Licenses to a newly formed limited liability company that is wholly owned by the Company (the “Merlin License Holder”).

 

 

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth in this Agreement and intending to be legally bound hereby, the Parties agree as follows:

 

 

 

(a)           the Contributors shall, contribute, transfer, assign, convey and deliver to the Company, and the Company shall accept from the Contributors, the FCC Licenses and any and all other Assets,  free and clear of all Liens (other than Permitted Liens);

 

(b)           the Company shall assume and agree to pay, discharge and perform when due all of the Assumed Liabilities;

 

(c)           the Company shall contribute, transfer, assign, convey and deliver to the Merlin License Holder, the FCC Licenses received from Emmis License Holder pursuant to Section 1.1(a), free and clear of all Liens (other than Permitted Liens); and

 

(d)           the Merlin License Holder shall assume and agree to pay, discharge and perform when due all of the Assumed Liabilities assumed from Emmis License Holder.

 

 

(a)           to the extent transferable:

 

(i)           all licenses, permits and other authorizations, applications and approvals issued to the Contributors or any of their Affiliates by, or pending before, the FCC relating to the Stations in accordance with the Communications Act and all FCC Rules and Policies, including those licenses, permits and other authorizations and approvals, and any assignable pending applications with respect to the Stations, including those listed on Schedule 1.2(a)(i) attached hereto, together with renewals, modifications or extension thereof between the date hereof and the Closing Date (collectively, the “FCC Licenses”); and

 

(ii)           all other licenses, authorizations, franchises, immunities, approvals, consents, registrations, permits or other governmental authorizations with respect to the Stations required by Governmental Authorities or under applicable Laws to permit the applicable Contributors or their Affiliates to own, operate, use and maintain the tangible Assets in the manner in which they are now operated and maintained and to conduct the business of the Stations as currently conducted, including those listed on Schedule 1.2(a)(ii) attached hereto, together with renewals, modifications or extension thereof between the date hereof and the Closing Date (collectively, “Permits”);

 

(b)           all right, title and interest held by the Contributors or their Affiliates in and to the leases and other leasehold interests, easements, rights to access, rights of way, real property licenses and options and other interests used by the Stations and listed and described on Schedule 1.2(b) (collectively, the “Leased Real Property”), including any Contributor’s interest, if any, in (i) all buildings, structures, and improvements on any and all such Leased Real Property, (ii) all easements or other appurtenances for the benefit of such Leased Real Property, and (iii) such additional buildings, structures, improvements and interests in the Leased Real Property made or acquired between the date of this Agreement and the Closing Date and used or held for use by the Contributors or their Affiliates in the operation of the Stations;

 

(c)           all studio equipment, office equipment, office furniture, fixtures, materials and supplies, fixed assets, production equipment, computers (including traffic and accounting computers), computer servers, telephone systems, cell phones, personal data assistants, personal computers and similar devices, leasehold improvements, inventories, vehicles, and other tangible personal property used by the Stations’ studios, including towers, transmitters, antennas, receivers, spare parts and other tangible personal property owned by the Contributors or their Affiliates, including the property listed on Schedule 1.2(c), together with replacements thereof and additions thereto made between the date hereof and the Closing Date, but excluding (i) any such items that are leased or operated collectively with other broadcasters and (ii) any such property disposed of in the Ordinary Course of Business of the Stations (collectively, the “Personal Property”);

 

(d)           all rights in and to any Contracts relating exclusively to any Station or the Stations and used or useful in such Station’s or Stations’ business to which the Contributors or

 

 

 

 

(e)           all of the Contributors’ and their Affiliates’ right, title and interest in and to all Intellectual Property, and the other intangible assets owned by the Contributors or such Affiliates and used exclusively in the operation of the business of the Specified Station, including those items listed on Schedule 1.2(e) hereto, and all claims against third parties for past, present and future unauthorized use, infringement and misappropriation with respect to any of the foregoing, but excluding any Intellectual Property identified in Section 1.3 below, including the name “Emmis” or any derivation thereof (the “Station Intellectual Property”);

 

(f)            a copy or original of each Station’s public inspection file, filings with the FCC relating to the Stations, all records required by the FCC to be kept by the Stations, and to the extent maintained by the Contributors, all records relating to the Real Property and the Personal Property, and such technical information, engineering data, and, to the extent transferable, rights under manufacturers’ warranties as they exist at the Closing and directly related to the Assets being conveyed hereunder;

 

(g)           to the extent maintained by the Contributors, originals or copies of all books and records used by the Stations, including proprietary information, financial data and information, technical information and data, operating manuals, data, studies, records, reports, ledgers, files, correspondence, computer files, plans, diagrams, blueprints and schematics for the Stations and including computer readable disk or tape copies of any items stored on computer files;

 

(h)           telephone numbers, websites, domain names and e-mail addresses owned by the Contributors and used exclusively in the business of the Specified Stations, and such additional assets specified in Schedule 1.2(h) hereto;

 

(i)             all goodwill, if any, associated with the Assets and the business of the Specified Stations;

 

(j)            all claims, counterclaims, credits, causes of action, rights of recovery and rights of indemnification or set-off of the Contributors or their Affiliates, whether mature, contingent or otherwise, arising out of the business of the Stations as and to the extent attributable to any Assumed Liabilities for any period after the Closing Date; and

 

(k)            all Social Media Accounts held in the name of the Specified Stations.

 

 

(a)            any insurance policies, and any cash surrender value in regard thereto, of any of the Contributors;

 

(b)           any employee benefit plan or arrangement of any of the Contributors (including, without limitation, any Contributors Plan), and the assets thereof;

 

 

 

(c)            the “Emmis” tradename and any derivations thereof and related trade and service marks;

 

(d)           the corporate records of each of the Contributors, including transfer books;

 

(e)           any and all assets exclusively relating to, or used exclusively by, radio stations other than the Stations (“Retained Stations”) or by Emmis Communications Corporation and its controlled Affiliates that are not related to the Stations;

 

(f)            programming that originates from the Retained Stations;

 

(g)           any rights of the Contributors as Contributor Indemnified Parties under this Agreement or as an indemnified party under any Related Documents;

 

(h)           all accounts receivable, prepaid expenses and similar items of working capital held by the Stations;

 

(i)             assets that will be retained by the Contributors and made available to the Company pursuant to the Transition and Shared Services Agreement (collectively, the “Shared Assets”); and

 

(j)             any other assets identified on Schedule 1.3(j).

 

In the event of any disagreement or inconsistency between Section 1.2 above and this Section 1.3, this Section 1.3 shall control.

 

 

(a)            “Assumed Liabilities” mean the following Liabilities and obligations of the Contributors (other than the Excluded Liabilities):

 

(i)           those Liabilities and obligations of the Contributors or any of their Affiliates related to future performance to be discharged or performed after the Closing Date under the Assumed Contracts;

 

(ii)          those Liabilities and obligations of the Emmis License Holder and its Affiliates related to future performance to be discharged or performed after the Closing Date under the FCC Licenses;

 

(iii)         those Liabilities and obligations of the Contributors or any of their Affiliates related to future performance to be discharged or performed after the Closing Date under the Permits;

 

(iv)         those Liabilities and obligations of the Contributors or any of their Affiliates related to future performance to be discharged or performed after the Closing Date under the Leased Real Property; and

 

 

 

(v)          all Liabilities for Transfer Taxes that would be the responsibility of the Contributors but for Section 6.2(a); and

 

(vi)         all Liabilities incurred after Closing relating to the conduct of the business by the Stations or the operation of the Assets.

 

(b)           The Company shall not and does not assume or agree to become liable for or successor to any Liabilities (other than Assumed Liabilities) of or relating to the Contributors, their predecessors, successors or any of their Affiliates, or with respect to the Retained Stations (collectively, the “Excluded Liabilities”).  For the avoidance of doubt, and notwithstanding anything to the contrary in this Agreement or any Related Document, the Parties agree that the following constitute Excluded Liabilities: (i) any breach or default under any Assumed Contract occurring on or prior to the Closing Date, (ii) any violation of Laws occurring on or prior to the Closing Date, (iii) any breach of warranty, tort or infringement occurring on or prior to the Closing Date, (iv) (A) all Liabilities of the Contributors or any Affiliate of any Contributor in respect of any Tax for any Tax period (other than any Tax that is the responsibility of the Company pursuant to this Agreement, the Purchase Agreement or any Related Document) and (B) all Liabilities for any Tax otherwise imposed relating to the Assets or the Stations for any Pre-Closing Tax Period, in each case including any obligation to indemnify or otherwise assume or succeed to the Tax Liability of any other Person, (v) all employment or employee benefits-related Liabilities of the Contributors, their predecessors, successors or any of their Affiliates (including all Liabilities with respect to the Contributors Plans and all employment or employee-benefits related Liabilities with respect to the Retained Stations), (vi) any charge, complaint, action, suit, proceeding, hearing, investigation, claim or demand to the extent that it relates to the foregoing subsections (i), (ii), (iii) and (iv).  Notwithstanding anything to the contrary in this Agreement or the Related Documents, all Excluded Liabilities shall be and remain the sole obligation of the Contributors and the Company shall not be obligated in any respect therefor.  In the event of any inconsistency between Section 1.4(a) and Section 1.4(b), this Section 1.4(b) shall control.

 

 

 

 

Subject to the terms and conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the “Closing”) shall take place at the offices of Latham & Watkins LLP, 555 11th St., NW, Washington, D.C. 20004, at 10:00 a.m., local time, on the date which is one (1) Business Day after the date on which all conditions set forth in Article 7 shall have been satisfied or waived (other than those conditions that by their terms are to be satisfied at the Closing) or such other time and place as the Parties may mutually agree (the “Closing Date”); provided, that in no event shall the Closing Date be on or after the Closing Date under the Purchase Agreement (the “Purchase Closing Date”).

 

 

The Contributors, jointly and severally (except as otherwise specifically set forth below), hereby represent and warrant to the Company as follows:

 

 

 

 

(a)           Such Contributor is acquiring the Units acquired pursuant hereto for its own account with the present intention of holding such Units for purposes of investment (other than as contemplated by the Purchase Agreement), and that it has no intention of selling such securities in a public distribution in violation of the federal securities laws or any applicable state securities laws.

 

(b)           Such Contributor is an “Accredited Investor” as such term is defined in Regulation D promulgated under the Securities Act and is a sophisticated investor for purposes of applicable Law.

 

 

 

(c)           Such Contributor’s Units were not offered to such Contributor by any means of general solicitation or general advertising.

 

(d)           Such Contributor believes that it has such knowledge and experience in financial and business matters that such Contributor is capable of evaluating the merits and risks of an investment in the Company.

 

(e)           Such Contributor is able to bear the economic risks of an investment in the Units and could afford a complete loss of such investment.

 

 

 

The Company represents and warrants to the Contributors as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a)           Transfer Taxes shall be paid by the Company.  The Party required by applicable Law to file Tax Returns required in connection with Transfer Taxes shall file such Tax Returns and, subject to receipt of payment from the other Party of the amount of Transfer Taxes for which such other Party is liable pursuant to this Section 6.2(a), shall pay the amount of Transfer Taxes due with such Tax Returns.  Each Party shall use its commercially reasonable efforts to minimize the amount of such Transfer Taxes and to cooperate in the preparation, execution and filing of all Tax Returns and other documents required in connection with such Transfer Taxes.

 

(b)           The Contributors shall be responsible for and shall promptly pay when due all Property Taxes levied with respect to the Assets attributable to the Pre-Closing Tax Period.  All Property Taxes levied with respect to the Assets for the Straddle Period shall be apportioned between the Contributors, on the one hand, and the Company, on the other hand, based on the number of days of such Straddle Period included in the Pre-Closing Tax Period and the number of days of such Straddle Period included in the Post-Closing Tax Period.  Subject to applicable provisions of the Local Marketing Agreement, the Contributors shall be liable for the proportionate amount of such Property Taxes that is attributable to the Pre-Closing Tax Period, and the Company shall be liable for the proportionate amount of such Property Taxes that is attributable to the Post-Closing Tax Period.  Upon receipt of any bill for such Property Taxes, the Contributors or the Company, as applicable, shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 6.2(b) together with such supporting evidence as is reasonably necessary to calculate the proration amount.  The proration amount shall be paid by the Party owing it to the other within ten (10) days after delivery of such statement.  In the event that the Contributors or the Company make any payment for which it is entitled to reimbursement under this Section 6.2(b) or the Local Marketing Agreement, the applicable Party shall make (or cause to be made) such reimbursement promptly but in no event later than ten (10) days after the presentation of a statement setting forth the amount of reimbursement to which the presenting Party is entitled along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement.  To the extent the provisions of this Section 6.2(b) conflict with the Local Marketing Agreement, the Local Marketing Agreement shall control.

 

(c)           The Contributors shall promptly notify the Company in writing upon receipt by any Contributor of notice of any pending or threatened Tax audit or assessment relating to the income, properties or operations of any Contributor that reasonably may be expected to relate to or give rise to a Lien on any Asset or Station.

 

 

 

 

(a)           The Contributors and the Company each shall use commercially reasonable efforts after the Closing Date to obtain any consents, approvals or authorizations of any third parties that are not obtained prior to the Closing Date and that are required in connection with the transactions contemplated by this Agreement.

 

(b)           From the date hereof through the Closing Date, the GTCR Investor may, by written notice to the Contributors, cause any Contract relating exclusively to any Station or the Stations and used in such Station’s or Stations’ business to which the Contributors are party or to which any of them are bound (other than any Excluded Asset), to be an Assumed Contract for purposes of Section 1.2(d) and transferred and assumed at the Closing (subject to the provisions of this Section 6.3).

 

(c)           Notwithstanding anything to the contrary contained in this Agreement, to the extent that any Assumed Contract is not capable of being transferred by the Contributors to the Company pursuant to this Agreement without the consent, approval or authorization of a landlord or other third party, and such consent, approval or authorization is not obtained prior to the Closing, or if such transfer or attempted transfer would constitute a breach or a violation of the Assumed Contract or any Law (each a “Specified Consent”), nothing in this Agreement shall constitute an assignment or transfer or an attempted assignment or transfer thereof.

 

(d)           In the event that (i) any such Specified Consent is not obtained on or prior to the Closing Date or (ii) the GTCR Investor so request with respect to any Shared Contract, the Contributors shall use commercially reasonable efforts to, or to cause one of their Affiliates to use commercially reasonable efforts to: (A) provide to the Company all of the benefits of the applicable Assumed Contract or Shared Contract; (B) cooperate in any reasonable and lawful arrangement designed to provide such benefits to the Company, including accepting such reasonable direction as the Company shall request of such Contributor; and (C) enforce at the request and expense of the Company, any rights of the Contributors arising from any such Assumed Contract or Shared Contract. No Party shall be obligated to pay any fee to any landlord or other third party to obtain any Specified Consent.

 

(e)           If the Company is provided the benefits received by the Contributors under any Assumed Contract or Shared Contract pursuant to Section 6.3(d), the Company shall perform and discharge when due those obligations, and assume those liabilities, of the Contributors under such Assumed Contract or Shared Contract to the extent arising out of or relating to the Stations, for the benefit of the Contributors and the other party or parties thereto, in each case as reasonably determined by the applicable Contributor and the Company.

 

(f)            Once a Specified Consent is obtained, the applicable Assumed Contract shall be deemed to have been automatically assigned and/or transferred to the Company on the terms set forth in this Agreement with respect to the other Assumed Contracts transferred and assumed at the Closing, and without limiting the generality of the foregoing, the obligations and liabilities of the Contributors under such Assumed Contracts shall be deemed to be Assumed Liabilities, and the rights of the Contributors under such Assumed Contracts shall be deemed to be Assets.  Once the Company has entered into a Contract replacing an Shared Contract, the rights and obligations of the Parties under this Section 6.3 shall cease with respect to such Shared Contract.

 

 

 

(g)           Without limiting the generality of the foregoing, with respect to any Assumed Contract for which a Specified Consent is not obtained on or prior to the Closing Date and that is a lease of Leased Real Property, the Company shall enter into a sublease containing the same terms and conditions as such lease (unless the lease by its terms prohibits such subleasing arrangement), and entry into and compliance with such sublease shall satisfy the obligations of the Parties under Section 6.3(d) until the Specified Consent is obtained and the Assumed Contract assigned and/or transferred in accordance with Section 6.3(f).

 

 

(a)           At the Company’s request, subject to obtaining any necessary landlord consent, the Contributors shall provide the Company a non-exclusive license to use and access at any time the New York shared transmission facilities and the back-up tower facilities leased by the Contributors or their Affiliates pursuant to the Empire State Lease 1 and the West Orange Lease (each, a “Transmission Facility”) (for purposes of conducting the Company’s business with respect to the Stations and for no other purpose), upon prior notice to and with a representative of the Contributors.  The Contributors shall have no obligation to provide security services to Company-specific areas of any Transmission Facility.

 

(b)           When using the Transmission Facilities, neither the Company nor the Contributors or their Affiliates shall act contrary to the terms of the lease for such premises or unreasonably interfere with the Contributors use of such premises under the lease for such premises.  Each of the Company and the Contributors and their Affiliates shall comply with the terms of the lease for such facilities and with all Laws applicable to its operations from the facilities, including those relating to environmental and workplace safety and with the Contributors’ applicable site rules and procedures, to the extent provided to the Contributors.  The Company shall maintain commercially reasonable and customary property and liability insurance with respect to their operations.  The Company, the Contributors and their Affiliates shall permit only their authorized representatives, contractors, employees, invitees and licensees to use the Transmission Facilities.  The Company shall not make any alterations or improvements to the Transmission Facilities without the Contributors’ consent, which may not be unreasonably withheld.  Nothing in this Agreement shall be construed as an assignment or grant of any right, title or interest in any Transmission Facility.  The Contributors shall have reasonable access to Company-specific areas of the Transmission Facilities from time to time as necessary for the security and maintenance thereof.

 

(c)           At the earlier of any termination the applicable lease or cessation of use of a Transmission Facility by the Contributors or the Company, as applicable, the Company shall vacate the provided space, move all of its assets and employees from such site (and repair any material damage due to such removal), surrender the space in the condition existing on the date hereof (ordinary wear and tear excepted) and return all office keys and other means of entry to the Contributors.  The shared use pursuant to this Agreement is subordinate to the relevant Contributor’s lease for the facilities.  This Section 6.4  is subject and subordinate to the real estate leases for such Transmission Facilities and does not constitute a grant of any real property interest, and if either such lease expires or is terminated for any reason, then the Contributors shall give the Company prompt notice of such termination, and the Company’s

 

 

 

 

 

7.1             Conditions to Obligations of the Contributors and the Company.  The obligations of the Contributors and the Company to consummate, or cause to be consummated, the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions, any one or more of which may be waived in writing by all of such parties:

 

 

7.2             Conditions to Obligations of the Company.  The obligations of the Company to consummate, or cause to be consummated, the transactions contemplated by this Agreement are subject to the satisfaction of the following additional conditions, any one or more of which may be waived in writing by the Company:

 

(a)            (i) Each of the representations and warranties of the Contributors contained in this Agreement shall be true and correct in all respects as of the Closing Date, as if made anew at and as of that time, except with respect to representations and warranties which speak as to an earlier date, which representations and warranties shall be true and correct in all respects at and as of such date.

 

(i)           an assignment by the Emmis License Holder to the Company of the FCC Licenses, in the form attached hereto as Exhibit 7.2(d)(i) (the “FCC Licenses Assignment 1”);

 

(ii)          counterparts of the Bill of Sale and Assignment and Assumption Agreement, from each of the Contributors for all Assets held by such Contributor, and assignments of the Contributors’ rights and the assumption of the Contributor’s obligations under the Assumed Contracts, in the form attached hereto as Exhibit 7.2(d)(ii) (the “Bill of Sale and Assumption Agreement”);

 

 

 

(iii)         duly executed counterparts of the First Amended LLC Agreement; and

 

(iv)         a duly executed counterpart of the Registration Rights Agreement, in the form attached hereto as Exhibit 7.2(d)(iv) (the “Registration Agreement”).

 

7.3             Condition to Obligations of the Contributors.  The obligation of the Contributors to consummate, or cause to be consummated, the transactions contemplated by this Agreement is subject to the satisfaction of the following additional condition, which may be waived in writing by the Contributors:

 

(a)           The Company shall have delivered to the Contributors:

 

(i)           duly executed counterparts of the FCC Licenses Assignment 1 and an assignment by the Company to the Merlin License Holder of the FCC Licenses, in the form attached hereto as Exhibit 7.3(a)(i) (the “FCC Licenses Assignment 2”);

 

(ii)          a duly executed counterpart of the Bill of Sale and Assumption Agreement;

 

(iii)         a duly executed counterpart of the First Amended LLC Agreement; and

 

(iv)         a duly executed counterpart of the Registration Agreement.

 

(b)           The Merlin License Holder shall have delivered to the Contributors a duly executed counterpart of the FCC Licenses Assignment 2.

 

 

 

 

(a)           any breach of any warranty or the inaccuracy of any representation of any of the Contributors contained in this Agreement or referred to in any certificate delivered by or on behalf of the Contributors pursuant hereto, it being agreed hereby that in determining whether

 

 

 

 

(b)           any breach by any of the Contributors of any of their respective covenants or agreements, or any failure of any Contributor to perform any of its obligations in this Agreement;

 

(c)           any Third-Party Claim brought against any Company Indemnified Parties to the extent attributable to the Contributors’ operation of the Stations or other business prior to the Closing;

 

(d)           any Excluded Liabilities;

 

(e)           any Restructuring Assumed Liability incurred by any Company Indemnified Party on or prior to the Closing Date (it being understood that Liabilities arising under Assumed Contracts that are related to future performance to be discharged or performed after the Closing Date shall be deemed for this purpose to be incurred after the Closing Date); or

 

(f)           any Restructuring Excluded Liability.

 

 

(a)           any breach by the Company after the Closing Date of its covenants or agreements to be performed after the Closing Date, or any failure of the Company to perform any of its respective obligations in this Agreement;

 

(b)           any Third-Party Claim brought against any Contributor Indemnified Parties to the extent attributable to the Company’s operation of the Stations or other business after the Closing;

 

(c)           any Assumed Liabilities;

 

(d)           any Restructuring Assumed Liability incurred by any Contributor Indemnified Party after the Closing Date.

 

 

 

 

 

 

(b)           In the event that any legal proceedings are instituted or any claim or demand is asserted by any third party in respect of which payment may be sought under Section 8.2 or Section 8.3 hereof (any such third-party claim, a “Third-Party Claim”), the Indemnified Party shall promptly cause written notice of the assertion of any Third-Party Claim of which it has knowledge which is covered by this indemnity to be forwarded to the Indemnifying Party.  The failure of the Indemnified Party to give reasonably prompt notice of any Third-Party Claim shall not release, waive or otherwise affect the Indemnifying Party’s obligations with respect thereto except to the extent that the Indemnifying Party is materially prejudiced as a result of such failure.  The Indemnifying Party shall have the right, at its sole expense, to be represented by counsel of its choice, which must be reasonably satisfactory to the Indemnified Party, and, except with respect to any Tax matter, to assume the defense and control of any such Third-Party Claim which relates to any Losses indemnified against hereunder.  If the Indemnifying Party has assumed such defense, the Indemnified Party shall be entitled to participate in the defense of such claim and to employ counsel of its choice for such purpose, provided that the Indemnifying Party shall not be liable for any legal expenses incurred by any Indemnified Party in connection with the defense of such Third-Party Claim while the Indemnifying Party is controlling such defense.  The parties agree to cooperate fully with each other in connection with the defense, negotiation or settlement of any such Third-Party Claim, and the Indemnified Party shall furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested by the Indemnifying Party in connection therewith.  No Indemnified Party may settle or compromise or permit a default or consent to the entry of any judgment with respect to any Third-Party Claim without the consent of the Indemnifying Party (which consent shall not be unreasonably withheld, denied, conditioned or delayed).  If the Indemnifying Party shall assume the defense of any Third-Party Claim, the Indemnifying Party shall be entitled to (subject to the immediately following sentence) settle or compromise such Third-Party Claim only upon the prior written consent of the Indemnified Party (which shall not be unreasonably withheld, denied, conditioned or delayed).

 

(c)           Notwithstanding the foregoing, the Indemnifying Party shall not be entitled to assume control of a Third Party Claim, if (i) the Indemnifying Party shall have failed, within twenty (20) Business Days after receipt of notice in respect of the applicable Third Party Claim, to assume the defense of such claim or to notify the Indemnified Party in writing that it will assume the defense of such claim or (ii) the named parties to any such action (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party and such

 

 

 

 

(d)           In determining the amount of any Losses for which the Indemnified Parties are entitled to assert a claim for indemnification hereunder, the amount of any such Losses will be determined after deducting therefrom the amount of any insurance proceeds from a third-party insurer actually received by such Indemnified Parties in respect of such Losses, in each case net of costs and expenses incurred by such Indemnified Parties or their Affiliates, including any increases in premiums (whether retroactive or prospective).  All Indemnified Parties shall use commercially reasonable efforts to mitigate Losses and Expenses for which such Indemnified Parties are entitled or may be entitled to indemnification under this Article 8 upon and after becoming aware of any fact, event, circumstance or condition that has given rise to or would reasonably be expected to give rise to any such Losses or Expenses.  In the event that an Indemnified Party is entitled to any insurance with respect to any Losses for which such Indemnified Party seeks indemnification, such Indemnified Party shall use commercially reasonable efforts to obtain any such indemnification or recovery.  In the event that any insurance proceeds are actually recovered or realized by an Indemnified Party subsequent to receipt by such Indemnified Party of any indemnification payment hereunder in respect of the claims to which such insurance proceeds relate, a portion of such indemnification payment equal to the amounts so recovered or realized shall promptly be refunded to the Indemnifying Party.

 

 

 

 

(a)           If the Contributors or the Company transfer all right, title and interest in any Assets to LMA Newco prior to Closing, then, upon such transfer, the Contributors’ obligation to contribute such Assets to the Company pursuant to this Agreement shall be deemed satisfied,

 

 

 

 

(b)           If any items are prorated, paid or reimbursed in performing pursuant to the Local Marketing Agreement prior to Closing, then the appropriate party’s obligation to prorate the same at or after Closing under this Agreement shall be deemed to have been satisfied.

 

 

 

 

 

 

 

If to any of the Contributors, addressed to such Contributor:

 

c/o Emmis Operating Company

One Emmis Plaza

40 Monument Circle

Suite 700

 

 

 

Indianapolis, Indiana 46204

Attn: Scott Enright

Tel: (317) 684-6565

Facsimile: (317) 684-5583

 

with a copy (which shall not constitute notice) to:

 

Paul, Weiss, Rifkind, Wharton & Garrison

1285 Avenue of the Americas

New York, New York 10019-6064

Attn: James M. Dubin and Kelley D. Parker

Tel: (212) 373-3000

Facsimile: (212) 757-3990

 

 

 

Merlin Media, LLC

c/o Emmis Radio Holding Corporation

One Emmis Plaza

40 Monument Circle

Suite 700

Indianapolis, IN 46204

Attn: J. Scott Enright

Tel: (317) 684-6565

Facsimile: (317) 684-5583

 

 

GTCR LLC

300 N. LaSalle Street

Suite 5600

Chicago, IL 60654

Attn: Christian McGrath

Tel: (312) 382-2200

Facsimile: (312) 382-2201

 

 

 

 

Latham & Watkins LLP

885 Third Avenue

New York, NY 10022

Attn:  Edward Sonnenschein

Tel: (212) 906-1200

Facsimile.:  (212)  ###-###-####

 

and

 

Latham & Watkins LLP

555 11th St. NW

Suite 1000

Washington, DC 20004

Attn: Eric Bernthal and Nicholas P. Luongo

Tel: (202) 637-2200

Facsimile: (202) 637-2201

 

or to such other address or addresses as the Parties may from time to time designate in writing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(i)           submits for itself and its property in any Action relating to this Agreement, or for recognition and enforcement of any judgment in respect thereof, to the exclusive jurisdiction of the Courts of the State of New York sitting in the County of New York, the court of the United States of America for the Southern District of New York, and appellate courts having jurisdiction of appeals from any of the foregoing, and agrees that all claims in respect of any such Action shall be heard and determined in such New York State court or, to the extent permitted by Law, in such federal court;

 

(ii)           consents that any such Action may and shall be brought in such courts and waives any objection that it may now or hereafter have to the venue or jurisdiction of any such Action in any such court or that such Action was brought in an inconvenient court and agrees not to plead or claim the same;

 

(iii)          agrees that service of process in any such Action 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 at its address as provided in Section 10.2; and

 

(iv)         agrees that nothing in this Agreement, or any Related Document shall affect the right to effect service of process in any other manner permitted by the Laws of the State of New York.

 

 

 

 

 

 

 

 

 

 

 

 

“Assets” shall have the meaning set forth in Section 1.2.

 

“Assumed Contracts” shall have the meaning set forth in Section 1.2(d).

 

“Assumed Liabilities” shall have the meaning set forth in Section 1.4(a).

 

“Bill of Sale and Assumption Agreement” shall have the meaning set forth in Section 7.2(d)(ii).

 

“Claim Notice” shall have the meaning set forth in Section 8.4.

 

“Class A Unit” shall mean a Class A Unit of the Company, as defined in the First Amended LLC Agreement.

 

 

 

“Class B Unit” shall mean a Class B Unit of the Company, as defined in the First Amended LLC Agreement.

 

“Class C Unit” shall mean a Class C Unit of the Company, as defined in the First Amended LLC Agreement.

 

“Class D Unit” shall mean a Class D Unit of the Company, as defined in the First Amended LLC Agreement.

 

“Closing” and “Closing Date” shall have the meaning set forth in Article 2.

 

“Company” shall have the meaning set forth in the preamble to this Agreement.

 

“Company Indemnified Parties” shall have the meaning set forth in Section 8.2.

 

“Contribution” shall have the meaning set forth in the recitals to this Agreement.

 

“Contribution Price” shall have the meaning set forth in Section 1.6.

 

“Contributor Indemnified Parties” shall have the meaning set forth in Section 8.3.

 

“Contributors” shall have the meaning set forth in the preamble to this Agreement.

 

“Election Notice” shall have the meaning set forth in Section 1.6.

 

“Emmis” shall have the meaning set forth in the preamble to this Agreement.

 

“Emmis Asset Holder” shall have the meaning set forth in the preamble to this Agreement.

 

“Emmis License Holder” shall have the meaning set forth in the preamble to this Agreement.

 

“Emmis Radio 1” shall have the meaning set forth in the preamble to this Agreement.

 

“Emmis Radio 2” shall have the meaning set forth in the preamble to this Agreement.

 

 “Excluded Assets” shall have the meaning set forth in Section 1.3.

 

“Excluded Liabilities” shall have the meaning set forth in Section 1.4(b).

 

“Expenses” shall mean any and all reasonable out-of-pocket expenses reasonably incurred in connection with investigating, defending or asserting any Action incident to any matter indemnified against hereunder (including court filing fees, court costs, arbitration fees or costs, witness fees and reasonable fees and disbursements of legal counsel, investigators, expert witnesses, consultants, accountants and other professionals).

 

“FCC Licenses Assignment 1” shall have the meaning set forth in Section 7.2(d)(i).

 

 

 

 

“FCC Licenses Assignment 2” shall have the meaning set forth in Section 7.3(a)(i).

 

“First Amended LLC Agreement” shall have the meaning set forth in the recitals to this Agreement.

 

“GTCR Investor” shall mean GTCR Merlin Holdings, LLC, a Delaware limited liability company.

 

“Indemnified Party” shall mean the Person or Persons entitled to indemnification pursuant to the provisions of Sections 8.2, or 8.3, as the case may be.

 

“Indemnifying Party” shall mean the Person or Persons having the obligation to indemnify another Person or Persons pursuant to the provisions of Sections 8.2 or 8.3, as the case may be.

 

“Initial LLC Agreement” shall have the meaning set forth in the recitals to this Agreement.

 

“Intellectual Property” shall mean all worldwide intellectual property rights and embodiments thereof, including (i) copyrights and copyrightable works, whether registered or unregistered, and pending applications to register the same, including all forms of software and firmware and any other types of works of authorship; (ii) patents, provisional patent applications, patent applications, continuations, continuations-in-part, divisions, reissues, patent disclosures, industrial designs, inventions (whether or not patentable or reduced to practice) or improvements thereto; (iii) confidential and proprietary ideas, trade secrets, know-how, concepts, methods, processes, formulae, technology, algorithms, models, reports, data, customer lists, supplier lists, mailing lists, business plans, marketing materials and plans, advertiser lists, sales lists, sponsor lists, or other confidential or proprietary information; and (iv) trademarks, service marks, trade names, Internet domain names, call letters, designs, logos, slogans and general intangibles of like nature, whether registered or unregistered, and pending registrations and applications to register the foregoing, all in whatever form or media.

 

“Leased Real Property” shall have the meaning set forth in Section 1.2(b).

 

“Merlin License Holder” shall have the meaning set forth in the recitals to this Agreement.

 

“Mr. Homel” means Benjamin L. Homel, an individual.

 

“Ordinary Course of Business” shall mean an action taken by a Person will be deemed to have been taken in the “Ordinary Course of Business” only if such action is taken in the ordinary course of business of such Person and is consistent with the past practices of such Person.

 

“Party” or “Parties” shall have the meaning set forth in the preamble to this Agreement.

 

“Permit” shall have the meaning set forth in Section 1.2(a)(ii).

 

“Permitted Liens” shall mean Liens set forth on Schedule 11.1(a).

 

 

 

“Personal Property” shall have the meaning set forth in Section 1.2(c).

 

“Post-Closing Tax Period” shall mean any Tax period beginning after the Closing Date and that portion of a Straddle Period beginning after the Closing Date.

 

“Pre-Closing Tax Period” shall mean any Tax period ending on or before the Closing Date and that portion of any Straddle Period ending on the Closing Date.

 

“Property Taxes” shall mean all real property Taxes, personal property Taxes and similar ad valorem Taxes.

 

“Purchase Agreement” shall mean that certain Purchase Agreement dated as of the date hereof, by and between the Contributors, the GTCR Investor and Benjamin L. Homel.

 

“Purchase Closing” shall mean the “Closing” as defined in the Purchase Agreement.

 

“Purchase Closing Date” shall have the meaning set forth in ARTICLE 2.

 

“Push-Down Contribution” shall have the meaning set forth in the preamble to this Agreement.

 

“Real Property” shall have the meaning set forth in Section 1.2(b).

 

“Restructuring and Contribution Agreement” shall have the meaning set forth in the preamble to this Agreement.

 

“Restructuring Assumed Liabilities” means the Assumed Liabilities specified and defined in the Restructuring and Contribution Agreement.

 

“Restructuring Excluded Liabilities” means the Excluded Liabilities specified and defined in the Restructuring and Contribution Agreement.

 

“Retained Stations” shall have the meaning set forth in Section 1.3(f).

 

“Shared Assets” shall have the meaning set forth in Section 1.3(i).

 

“Shared Contract” shall mean any Contract relating to, or used by or useful in the business of any of the Stations, other than an Assumed Contract.

 

“Social Media Accounts” shall mean accounts with social media websites, including Facebook, Twitter, MySpace and YouTube, and content posted by the holder of such accounts thereon.

 

“Specified Consent” shall have the meaning set forth in Section 6.3(b).

 

“Station” and “Stations” shall have the meaning set forth in the recitals to this Agreement.

 

“Station Intellectual Property” shall have the meaning set forth in Section 1.2(e).

 

 

 

 

“Straddle Period” shall mean any Tax period beginning before or on and ending after the Closing Date.

 

“Third-Party Claim” shall have the meaning set forth in Section 8.4(b).

 

“Trademarks” shall mean United States, state and non-U.S. trademarks, service marks, trade names, Internet domain names, moral rights, designs, logos, slogans and general intangibles of like nature, whether registered or unregistered, and pending registrations and applications to register the foregoing, and all goodwill of the business associated therewith.

 

“Trade Secrets” shall mean confidential ideas, trade secrets, know-how, concepts, methods, processes, formulae, technology, algorithms, models, reports, data, customer lists, supplier lists, mailing lists, business plans or other proprietary information.

 

“Transfer Taxes” shall mean all transfer, sales, use, documentary and stamp Taxes, and all conveyance fees and recording charges, and all other similar Taxes, fees and charges, incurred in connection with the Contribution.

 

“Units” shall mean the authorized equity securities of the Company, constituting the Class A Units, Class B Units, Class C Units and Class D Units.

 

 

(a)           Unless the context of this Agreement otherwise requires, (i) words of any gender include each other gender; (ii) words using the singular or plural number also include the plural or singular number, respectively; (iii) the terms “hereof,” “herein,” “hereby,” “hereto” and derivative or similar words refer to this entire Agreement, including the Schedules and Annexes hereto; (iv) the terms “Article,” “Exhibit,” “Section”, “paragraph,” “clause” and “Annex” refer to the specified Article, Exhibit, Section, paragraph, clause or Annex of this Agreement; (v) the word “including” shall mean “including, without limitation” and (vi) the word “or” shall be disjunctive but not exclusive.

 

(b)           References to agreements and other documents shall be deemed to include all subsequent amendments and other modifications thereto.

 

(c)           References to statutes shall include all regulations promulgated thereunder and references to statutes or regulations shall be construed as including all statutory and regulatory provisions consolidating, amending or replacing the statute or regulation.

 

(d)           The language used in this Agreement shall be deemed to be the language chosen by the parties to express their mutual intent and no rule of strict construction shall be applied against any party.

 

(e)           Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

 

(f)           All accounting terms used herein and not expressly defined herein shall have the meanings given to them under GAAP.

 

 

 

 

(g)           References to “$” shall mean U.S. dollars.

 

(h)           Provisions shall apply, when appropriate, to successive events and transactions.

 

(i)           A reference to any Person includes such Person’s successors and permitted assigns.

 

(j)           When calculating the period of time before which, within which or following which any act is to be done or step taken pursuant to this Agreement, the date that is the reference date in calculating such period shall be excluded, and if the last day of such period is not a Business Day, the period shall end on the next succeeding Business Day.

 

[Signature page follows]

 

 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Contribution Agreement to be duly executed as of the date first written above.

 

The Contributors:
	EMMIS OPERATING COMPANY
	By:	/s/ J. Scott Enright
		Name:	J. Scott Enright
		Title:	Executive Vice President
	EMMIS RADIO, LLC
	By:      Emmis Operating Company, its manager
	By:	/s/ J. Scott Enright
		Name:	J. Scott Enright
		Title:	Executive Vice President
	EMMIS RADIO LICENSE, LLC
	By:  Emmis Operating Company, its manager
	By:	/s/ J. Scott Enright
		Name:	J. Scott Enright
		Title:	Executive Vice President
	EMMIS RADIO HOLDING CORPORATION
	By:	/s/ J. Scott Enright
		Name:	J. Scott Enright
		Title:	Executive Vice President
	EMMIS RADIO HOLDING II CORPORATION
	By:	/s/ J. Scott Enright
		Name:	J. Scott Enright
		Title:	Executive Vice President