EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
By and Among
AMERICAN RADIO SYSTEMS CORPORATION,
WESTINGHOUSE ELECTRIC CORPORATION
and
R ACQUISITION CORP.
Dated as of
September 19, 1997
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINED TERMS..........................................................................................2
ARTICLE 2 THE MERGER.............................................................................................2
2.1 The Merger.............................................................................2
2.2 Closing................................................................................2
2.3 Effective Time.........................................................................2
2.4 Effect of the Merger...................................................................2
2.5 Certificate of Incorporation...........................................................2
2.6 Bylaws.................................................................................3
2.7 Directors and Officers.................................................................3
2.8 Tower Distribution/Tower Merger........................................................3
ARTICLE 3 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES.........................................................3
3.1 Conversion of Capital Stock............................................................3
3.2 Exchange of Certificates. ............................................................4
3.3 Closing of American's Transfer Books...................................................5
3.4 Dissenting Shares......................................................................5
3.5 Tower Common Stock.....................................................................6
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AMERICAN.............................................................6
4.1 Organization and Business; Power and Authority; Effect of Transaction..................6
4.2 Financial and Other Information. .....................................................8
4.3 Changes in Condition...................................................................8
4.4 Properties.............................................................................9
4.5 Compliance with Private Authorizations.................................................9
4.6 Compliance with Governmental Authorizations and Applicable
Law; Litigation.......................................................................9
4.7 Related Transactions..................................................................11
4.8 Taxes and Tax Matters.................................................................11
4.9 Employee Retirement Income Security Act of 1974.......................................12
4.10 Insurance.............................................................................14
4.11 Authorized Capital Stock..............................................................15
4.12 Employment Arrangements...............................................................15
4.13 Voting Requirements...................................................................15
4.14 Brokers...............................................................................16
4.15 Information Supplied..................................................................16
4.16 Ordinary Course of Business...........................................................16
4.17 Environmental Matters.................................................................17
4.18 State Takeover Statutes...............................................................17
4.19 Opinion of Financial Advisor..........................................................17
4.20 Contracts; Debt Instruments...........................................................17
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF MERGEPARTY..........................................................18
5.1 Organization and Business; Power and Authority; Effect of Transaction.................18
5.2 Compliance with Governmental Authorizations and Applicable
Law; Litigation......................................................................19
5.3 Opinion of Financial Advisor..........................................................20
5.4 Mergeparty Financing..................................................................20
ARTICLE 6 COVENANTS.............................................................................................20
6.1 Access to Information; Confidentiality................................................20
6.2 Agreement to Cooperate................................................................21
6.3 Public Announcements..................................................................23
6.4 Notification of Certain Matters.......................................................23
6.5 Stockholder Approval. ...............................................................23
6.6 Information Statement. ..............................................................24
6.7 Miscellaneous.........................................................................24
6.8 Option Plans..........................................................................24
6.9 Conduct of Business by Mergeparty Pending the Merger..................................26
6.10 Conduct of Business by American Pending the Merger....................................26
6.11 Control of Operations.................................................................28
6.12 Directors', Officers' and Employees' Indemnification and Insurance....................28
6.13 Solicitation of Employees.............................................................30
6.14 Change of Name........................................................................30
6.15 Benefit Plans.........................................................................30
6.16 American Cumulative Preferred Stock...................................................30
6.17 American Tower Transaction............................................................31
6.18 Purchase Price Adjustment.............................................................36
6.19 Tower Leases..........................................................................39
ARTICLE 7 CLOSING CONDITIONS....................................................................................40
7.1 Conditions to Obligations of Each Party to Effect the Merger..........................40
7.2 Conditions to Obligations of Mergeparty...............................................41
7.3 Conditions to Obligations of American.................................................42
ARTICLE 8 TERMINATION, AMENDMENT AND WAIVER....................................................................42
8.1 Termination...........................................................................42
8.2 Effect of Termination. ............................................................43
ARTICLE 9 GENERAL PROVISIONS...................................................................................44
9.1 Amendment.............................................................................44
9.2 Waiver................................................................................44
9.3 Fees, Expenses and Other Payments.....................................................44
9.4 Notices...............................................................................44
9.5 Specific Performance; Other Rights and Remedies.......................................45
9.6 Survival of Representations, Warranties, Covenants and Agreements.....................46
9.7 Severability..........................................................................46
9.8 Counterparts..........................................................................46
9.9 Section Headings......................................................................46
9.10 Governing Law.........................................................................46
9.11 Further Acts..........................................................................46
9.12 Entire Agreement; No Other Representations or Agreements..............................47
9.13 Assignment............................................................................47
9.14 Parties in Interest...................................................................47
9.15 Mutual Drafting.......................................................................47
9.16 Obligations of American and of Mergeparty.............................................47
9.17 Mergeparty Agent for Mergeparty Subsidiary............................................48
ii
APPENDIX A: Definitions
EXHIBITS:
EXHIBIT A: Restated Certificate of Incorporation (Section 2.5)
EXHIBIT B: Market Fee Schedule
EXHIBIT C: Form of Opinion of FCC Counsel to American
iii
AGREEMENT AND PLAN OF MERGER
Agreement and Plan of Merger, dated as of September 19, 1997, by and
among American Radio Systems Corporation, a Delaware corporation ("American"),
Westinghouse Electric Corporation, a Pennsylvania corporation ("Mergeparty"),
and R Acquisition Corp., a Delaware corporation ("Mergeparty Subsidiary").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of American, Mergeparty and
Mergeparty Subsidiary have approved the merger (the "Merger") of Mergeparty
Subsidiary into American on the terms and conditions set forth in this Agreement
and Plan of Merger (this "Agreement") and have approved this Agreement; and
WHEREAS, the Board of Directors of American has determined that the
sale of American Tower Systems Holding Corporation ("American Tower") at this
time is not in the best interest of American and its stockholders, and that the
distribution of all of the common stock of American Tower through a pro rata
distribution of the common stock of American Tower to the holders of American
common stock (the "Tower Distribution"), on the terms and conditions set forth
in this Agreement, is fair to and in the best interests of, American and its
stockholders, the Board of Directors of American has approved the Tower
Distribution and has directed that the Tower Distribution be submitted to the
stockholders of American for their approval; and
WHEREAS, the Board of Directors of Mergeparty has approved and adopted
this Agreement as the sole stockholder of Mergeparty Subsidiary, and the Board
of Directors of American has directed that this Agreement be submitted to the
stockholders of American for their approval and adoption; and
WHEREAS, this Agreement provides that Mergeparty Subsidiary shall be
merged into American, and American shall be the surviving corporation; and
WHEREAS, the parties agree that, subject to certain conditions
contained in this Agreement, the consummation of the Tower Distribution is a
condition of the consummation of the Merger; and
WHEREAS, as a condition of the willingness of Mergeparty to enter into
this Agreement, and as an inducement thereto Mergeparty and certain of the
stockholders of American who are entitled to cast votes in favor of approval and
adoption of the Merger Agreement sufficient to constitute the Required Vote are
delivering written consents of stockholders approving and adopting the Merger
Agreement and approving the Tower Distribution.
NOW, THEREFORE, in consideration of the premises and the
representations, warranties, covenants and agreements herein contained and other
valuable consideration, the receipt and adequacy whereof are hereby
acknowledged, the parties hereto hereby, intending to be legally bound,
represent, warrant, covenant and agree as follows:
ARTICLE 1
DEFINED TERMS
As used herein, unless the context otherwise requires, the terms
defined in Appendix A shall have the respective meanings set forth therein.
Terms defined in the singular shall have a comparable meaning when used in the
plural, and vice versa, and the reference to any gender shall be deemed to
include all genders. Unless otherwise defined or the context otherwise clearly
requires, terms for which meanings are provided in this Agreement shall have
such meanings when used in either Disclosure Schedule and each Collateral
Document executed or required to be executed pursuant hereto or thereto or
otherwise delivered, from time to time, pursuant hereto or thereto. References
to "hereof," "herein" or similar terms are intended to refer to the Agreement as
a whole and not a particular section, and references to "this Section" or "this
Article" are intended to refer to the entire section or article and not a
particular subsection thereof. The term "either party" shall, unless the context
otherwise requires, refer to American, on the one hand, and Mergeparty and
Mergeparty Subsidiary, on the other hand.
ARTICLE 2
THE MERGER
2.1 The Merger. (a) Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DCL"), at the Effective Time, Mergeparty Subsidiary shall be merged
with and into American. As a result of the Merger, the separate corporate
existence of Mergeparty Subsidiary shall cease and American shall continue as
the surviving corporation in the Merger (sometimes referred to, as such, as the
"Surviving Corporation").
2.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1 and subject to the satisfaction or, to the extent permitted by
Applicable Law, waiver of the conditions set forth in Article 7, the closing of
the Merger (the "Closing") will take place, at 10:00 a.m., on the Closing Date,
at the offices of Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, on the date that is the second (2nd) day after the date on which all of
the conditions set forth in Article 7 (other than those which require delivery
of opinions or documents at the Closing) shall have been satisfied or waived,
unless another date, time or place is agreed to in writing by the parties. The
date on which the Closing occurs is herein referred to as the "Closing Date."
2.3 Effective Time. Subject to the provisions of this Agreement, as
promptly as practicable after the Closing, the parties hereto shall cause the
Merger to be consummated by filing a Certificate of Merger and any related
filings required under the DCL with the Secretary of State of the State of
Delaware. The Mer ger shall become effective at such time as such documents are
duly filed with the Secretary of State of the State of Delaware, or at such
later time as is specified in such documents (the "Effective Time").
2.4 Effect of the Merger. The Merger shall have the effects provided
for under the DCL.
2.5 Certificate of Incorporation. The Certificate of Incorporation of
American, as in effect immediately prior to the Effective Time, shall be amended
as of the Effective Time as described in Exhibit A and, as so amended, such
Certificate of Incorporation, together with the certificates of designation for
the American Cumulative Preferred Stock and the American Convertible Preferred
Stock, shall be the Certificate of Incorporation of the Surviving Corporation
until thereafter changed or amended as provided therein or by
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Applicable Law. Such amendment shall not be deemed to affect in any manner the
Certificates of Designation of (i) the 113/8% Series B Cumulative Exchangeable
Preferred Stock, par value $.01 per share, of American (the "American Cumulative
Preferred Stock") or (ii) the 7% Convertible Exchangeable Preferred Stock, par
value $.01 per share, of American (the "American Convertible Preferred Stock"
and, collectively with the American Cumulative Preferred Stock, the "American
Preferred Stock").
2.6 Bylaws. The bylaws of American in effect at the Effective Time
shall be the bylaws of the Surviving Corporation until amended in accordance
with Applicable Law and the Organic Documents of American.
2.7 Directors and Officers. From and after the Effective Time, until
successors are duly elected or appointed and qualified, or upon their earlier
resignation or removal, in accordance with Applicable Law and the Organic
Documents of Mergeparty Subsidiary and American, as applicable, (a) the
directors of Mergeparty Subsidiary at the Effective Time shall be the directors
of the Surviving Corporation, and (b) the officers of American at the Effective
Time shall be the officers of the Surviving Corporation.
2.8 Tower Distribution/Tower Merger. The Board of Directors of American
in its sole and absolute discretion may abandon the Tower Distribution and, in
lieu thereof, effect the distribution of all of the common stock of American
Tower Sub to the holders of American Common Stock through a merger of American
Tower with and into American (the "Tower Merger"); provided that the Tower
Distribution shall not be abandoned unless an agreement of merger relating to
the Tower Merger shall be approved by the Board of Directors of American and
approved and adopted by the stockholders of American; provided further, that the
Board of Directors of American in its sole and absolute discretion may abandon
the Tower Distribution and the Tower Merger by delivering written notice to such
effect to Mergeparty (the "Notice of Abandonment").
ARTICLE 3
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
3.1 Conversion of Capital Stock. At the Effective Time, by virtue of
the Merger and without any action on the part of Mergeparty, Mergeparty
Subsidiary or American or their respective stockholders:
(a) Each share of Common Stock, par value $1.00 per share, of
Mergeparty Subsidiary issued and outstanding immediately prior to the Effective
Time shall be converted into and become one validly issued, fully paid and
nonassessable share of Common Stock, par value $.01 per share, of the Surviving
Corporation;
(b) Each share of the American Cumulative Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(c) Each share of the American Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time shall remain outstanding;
(d) Subject to paragraph (e) below, each share of Class A Common Stock,
par value $.01 per share ("Class A Common"), each share of Class B Common Stock,
par value $.01 per share ("Class B Common"), and each share of Class C Common
Stock, par value $.01 per share, of American (collectively, the "American Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than
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Dissenting Shares) shall, by virtue of the Merger and without any action on the
part of the holder thereof, be converted into the right to receive $44.00 (the
"Merger Consideration"); and
(e) Each share of American Common Stock owned by American or any of its
Subsidiaries or Mergeparty or any of its Subsidiaries immediately prior to the
Effective Time shall automatically be canceled and extinguished without any
conversion thereof and no payment shall be made with respect thereto.
As a result of the Merger and without any action on the part of the
holder thereof, at the Effective Time all shares of American Common Stock shall
cease to be outstanding and shall be canceled and retired and shall cease to
exist, and each holder of any certificates formerly representing such shares
shall thereafter cease to have any rights with respect to such shares, except,
subject to paragraph (e) above, the right to receive, without interest, the
Merger Consideration, or, in the case of a holder of Dissenting Shares, the
right to perfect the right to receive payment for Dissenting Shares pursuant to
Section 262 of the DCL.
3.2 Exchange of Certificates.
(a) From time to time, on or prior to or after the Effective Time,
Mergeparty shall deposit or cause to be deposited with an exchange agent
selected by Mergeparty and not reasonably disapproved of by American (the
"Exchange Agent") in trust for the benefit of the American stockholders cash in
amounts and at times necessary for the prompt payment of the Merger
Consideration upon the surrender of Certificates.
(b) Not more than five (5) business days subsequent to the Effective
Time, the Exchange Agent shall mail to each holder of record of a certificate or
certificates that immediately prior to the Effective Time represented
outstanding shares of American Common Stock (the "Certificates") (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon actual delivery of the
Certificates to the Exchange Agent and shall be in such form and have such other
provisions as American and Mergeparty may agree) and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for the Merger
Consideration. Upon surrender of Certificates for cancellation to the Exchange
Agent, together with a duly executed letter of transmittal and such other
documents as the Exchange Agent shall reasonably require, the holder of such
Certificate shall receive in exchange therefor the Merger Consideration
multiplied by the number of shares of American Common Stock formerly represented
by such Certificates. The amount paid to the holder of Certificates shall be in
the form of a wire transfer of immediately available funds if so requested by
any holder entitled to receive not less than $500,000 in cash, and the cost of
such wire transfers shall be borne by the Surviving Corporation. Such letter of
transmittal and instructions shall be available at the Closing for holders of
American Common Stock. Notwithstanding the foregoing, neither the Exchange Agent
nor any party hereto shall be liable to a holder of shares of American Common
Stock for any Merger Consideration delivered to a public official pursuant to
applicable abandoned property, escheat or similar Laws.
(c) Promptly following the date which is six (6) months after the
Closing Date, the Exchange Agent shall deliver to Mergeparty all cash in its
possession relating to the transactions described in this Agreement that remain
unclaimed, and the Exchange Agent's duties shall terminate. Thereafter, each
holder of a Certificate may surrender such Certificate to the Surviving
Corporation and (subject to applicable abandoned property, escheat and similar
Laws) receive in exchange therefor the aggregate Merger Consideration to which
such holder is entitled, without any interest thereon.
(d) If the Merger Consideration (or any portion thereof) is to be paid
to a Person other than the Person in whose name the Certificate surrendered in
exchange therefor is registered, it shall be a condition to the payment of the
Merger Consideration that the Certificate so surrendered shall be properly
endorsed or
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accompanied by appropriate stock powers (with signatures guaranteed in
accordance with the transmittal letter) and otherwise in proper form for
transfer, that such transfer otherwise be proper and that the Person requesting
such transfer pay to the Exchange Agent any transfer or other Taxes payable by
reason of the foregoing or establish to the satisfaction of the Exchange Agent
that such Taxes have been paid or are not required to be paid.
(e) In the event any Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Certificate to be lost, stolen or destroyed and subject to such other
reasonable conditions as the Exchange Agent may impose, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificate the Merger
Consideration (to the extent applicable) deliverable in respect thereof as
determined in accordance with this Article. When authorizing such issue of the
Merger Consideration in exchange therefor, the Exchange Agent may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificate (if other than a recognized
financial institution) to give the Exchange Agent a bond or other surety in such
sum as it may reasonably direct as indemnity against any Claim that may be made
against the Exchange Agent with respect to the Certificate alleged to have been
lost, stolen or destroyed.
(f) At and after the Effective Time, the holder of a Certificate shall
cease to have any rights as an American stockholder, except for the right to
surrender Certificates in the manner prescribed by Section 3.2 in exchange for
payment of the Merger Consideration, or, in the case of a holder of Dissenting
Shares, the right to perfect the right to receive payment for Dissenting Shares
pursuant to Section 262 of the DCL.
(g) The Surviving Corporation shall be entitled to, or shall be
entitled to cause the Exchange Agent to, deduct and withhold from the
consideration otherwise payable pursuant to this Agreement to any holder of
shares of American Common Stock such amounts as are required to be deducted and
withheld with respect to the making of such payment under the Code, or any
provision of state, local or foreign Tax Law. To the extent that amounts are so
withheld by the Surviving Corporation or the Exchange Agent, as the case may be,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of American Common Stock in respect
of which such deduction and withholding was made by the Surviving Corporation or
the Exchange Agent.
(h) The Exchange Agent shall invest any funds held by it for purposes
of this Section 3.2 as directed by Mergeparty, on a daily basis. Any interest
and other income resulting from such investments shall be paid to Mergeparty and
any risk of loss resulting from such investments shall be borne by Mergeparty.
3.3 Closing of American's Transfer Books. At the Effective Time, the
stock transfer books of American shall be closed and no transfer of shares of
American Common Stock which were outstanding immediately prior to the Effective
Time shall thereafter be made. If, after the Effective Time, subject to the
terms and conditions of this Agreement, Certificates formerly representing
American Common Stock are presented to the Surviving Corporation, they shall be
canceled and exchanged for the Merger Consideration in accordance with the
provisions of this Article.
3.4 Dissenting Shares.
(a) Notwithstanding any other provision of this Agreement to the
contrary, shares of American Common Stock that are outstanding immediately prior
to the Effective Time and which are held by American stockholders who shall have
not voted in favor of the Merger or consented thereto in writing and who shall
be entitled to and shall have demanded properly in writing appraisal rights for
such shares of American Common Stock in accordance with Section 262 of the DCL
and who shall not have withdrawn such demand
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or otherwise have forfeited appraisal rights (collectively, the "Dissenting
Shares"), shall not be converted into or represent the right to receive the
Merger Consideration payable in respect of each share of American Common Stock
represented thereby. Such American stockholders shall be entitled to receive
payment of the appraised value of such shares of American Common Stock held by
them in accordance with the provisions of the DCL; provided, however, that all
Dissenting Shares held by American stockholders who shall have failed to perfect
or who effectively shall have withdrawn, forfeited or lost their appraisal
rights with respect to such shares of American Common Stock under the DCL shall
thereupon be deemed to have been converted into and to have become exchangeable
for, as of the Effective Time, the right to receive, without any interest
thereon, the Merger Consideration upon surrender, in the manner provided in
Section 3.2, of the Certificates with respect to such shares.
(b) American shall give Mergeparty prompt notice of any demands for
appraisal rights received by it, withdrawals of such demands, and any other
instruments served pursuant to the DCL and received by American and relating
thereto. American shall give Mergeparty the opportunity to direct all
negotiations and proceedings with respect to demands for appraisal rights under
the provisions of the DCL. American shall not, except with the prior written
consent of Mergeparty, make any payment with respect to any demands for
appraisal rights, or offer to settle, or settle, any such demands.
3.5 Tower Common Stock. In the event that prior to the Effective Time,
the Tower Common Stock distributable upon the Tower Distribution or issuable in
the Tower Merger shall not have been distributed or issued, American and
Mergeparty shall cooperate with each other so that the Exchange Agent may effect
such issuance or distribution simultaneously with the exchange of Certificates
for Merger Consideration as provided in this Article 3, together with any cash
in lieu of a fractional share and any dividends or other distributions which may
be payable to a holder of Tower Common Stock following the Effective Time.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AMERICAN
Except as set forth with respect to specifically identified
representations and warranties in the American Disclosure Schedule, American
hereby represents and warrants to Mergeparty and Mergeparty Subsidiary as
follows:
4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) American is a corporation duly incorporated, validly existing and
in good standing under the laws of the State of Delaware and has all requisite
power and authority (corporate and other) to own or hold under lease its
properties and to conduct its business as now conducted and as presently
proposed to be conducted. American is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 4.1(a) of
the American Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified or in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
American.
(b) Each of American and its Subsidiaries has all requisite power and
authority (corporate and other) to execute, deliver and perform its obligations
under this Agreement and each Collateral Document
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executed or required to be executed by such party pursuant hereto or thereto and
to consummate the Merger and the other transactions contemplated hereby and
thereby, and the execution, delivery and performance of this Agreement and each
Collateral Document executed or required to be executed pursuant hereto or
thereto have been duly authorized by all requisite corporate or other action on
the part of American and its Subsidiaries, other than the approval of the
American stockholders contemplated by Section 4.13 of this Agreement, and no
other corporate proceedings on the part of American or any of its Subsidiaries
are necessary to authorize this Agreement or the transactions contemplated
hereby or to consummate the Merger or the other transactions so contemplated
(other than, with respect to the Merger, the Required Vote). This Agreement has
been duly executed and delivered by American and constitutes, and each
Collateral Document executed or required to be executed by American and its
Subsidiaries pursuant hereto or to consummate the Merger when executed and
delivered by American and its Subsidiaries, as applicable, will constitute, a
valid and binding obligation of American and its Subsidiaries, as applicable,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by bankruptcy, moratorium, insolvency and similar
laws affecting the rights and remedies of creditors and obligations of debtors
generally and by general principles of equity. The provisions of Section 203 of
the DCL will not apply to this Agreement or the Merger. As of the date hereof,
the Board of Directors of American, at a meeting duly called and held at which a
quorum was present throughout, has approved the Merger and this Agreement, and
has recommended that the American stockholders approve and adopt this Agreement
and the transactions contemplated hereby, including without limitation the
Merger.
(c) The execution, delivery and performance by American and its
Subsidiaries, as applicable, of this Agreement and any Collateral Document
executed or required to be executed by such parties pursuant hereto or thereto
do not, and the consummation by American of the Merger and the other
transactions contemplated hereby and thereby, and compliance with the terms,
conditions and provisions hereof or thereof by such parties will not:
(i) (A) Except as set forth in Section 4.1(c) of the American
Disclosure Schedule, conflict with, or result in a breach or violation
of, or constitute a default under, any Organic Document of American or
its Subsidiaries, as applicable, or (B) conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or
passage of time or both would constitute such a conflict with, breach
or violation of, or default under, or permit any such termination,
cancellation or acceleration of, any agreement, arrangement, contract,
undertaking, understanding, Applicable Law or other obligation or
Private Authorization of American or its Subsidiaries, as applicable,
except, in the case of clause (B), for such conflicts, breaches,
violations, terminations, cancellations, defaults or accelerations that
would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on American; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by American except for such
Liens that would not, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
Xxxx-Xxxxx-Xxxxxx Act, (C) the filing with the Commission of (I) the
Information Statement and (II) such reports under Section 13(a) or
15(d) of the Exchange Act as may be required in connection with this
Agreement and the transactions contemplated by this Agreement, (D) the
filing of the Certificate of Merger with the Delaware Secretary of
State and appropriate documents with the relevant authorities of other
states in which American is qualified to do business and (E) such other
Governmental Authorizations and Governmental Filings the failure
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of which to be made or obtained would not be individually or in the
aggregate, reasonably likely to have a Material Adverse Effect on
American.
(d) American does not have any direct or indirect Subsidiaries other
than those set forth on Section 4.1(d) of the American Disclosure Schedule; each
of such Subsidiaries is (i) wholly-owned unless noted otherwise in Section
4.1(d) of the American Disclosure Schedule, (ii) a corporation which is duly
organized, validly existing and in good standing under the laws of the
respective state of incorporation set forth opposite its name on Section 4.1(d)
of the American Disclosure Schedule, and (iii) duly qualified and in good
standing as a foreign corporation in each other jurisdiction (as shown on
Section 4.1(d) of the American Disclosure Schedule) in which the character of
the property owned or leased by it or the nature of its business or operations
requires such qualification, with full power and authority (corporate and other)
to carry on the business in which it is engaged, except where the failure to be
so qualified or in good standing, individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on American. As of the date
hereof, American owns, directly or indirectly, all of the outstanding capital
stock and equity interests (as shown in Section 4.1(d) of the American
Disclosure Schedule) of such Subsidiaries, free and clear of all Liens (except
as set forth in the American Financial Statements or Section 4.1(d) of the
American Disclosure Schedule), and all such stock has been duly authorized and
validly issued and is fully paid and nonassessable. There are no outstanding
Option Securities or Convertible Securities, or agreements or understandings of
any nature whatsoever, relating to the authorized and unissued or outstanding
capital stock of such Subsidiaries (except as set forth in the American
Financial Statements or Section 4.1(d) of the American Disclosure Schedule).
4.2 Financial and Other Information. American has heretofore furnished
to Mergeparty copies of the audited consolidated financial statements of
American and its Subsidiaries set forth in its Annual Report on Form 10-K (the
"American 10-K") for the fiscal year ended December 31, 1996 and the unaudited
consolidated financial statements of American and its Subsidiaries set forth in
its Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1997
(collectively, the "American Financial Statements"). The American Financial
Statements, including in each case the notes thereto, comply as to form, in all
material respects, with applicable accounting requirements and the published
rules and regulations of the Commission with respect thereto, have been prepared
in accordance with GAAP applied on a consistent basis throughout the periods
covered thereby, except as otherwise noted therein, and fairly present in all
material respects the financial condition, results of operations and cash flows
of American and its Subsidiaries on the bases therein stated, as of the
respective dates thereof, and for the respective periods covered thereby
subject, in the case of unaudited financial statements, to normal year-end audit
adjustments and accruals. American has filed all required reports and other
documents with the Commission since July 1, 1995 (the "American SEC Documents").
Except as set forth in the American SEC Documents filed and publicly available
prior to the date hereof (the "Filed American SEC Documents"), neither American
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which, individually or in
the aggregate, would be reasonably likely to have a Material Adverse Effect on
American. None of the American Disclosure Schedule or the American SEC Documents
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact required to be stated herein or therein or
necessary in order to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading.
4.3 Changes in Condition. Except as set forth in Section 4.3 of the
American Disclosure Schedule, between June 30, 1997 and the date hereof, there
has been no Material Adverse Change in American.
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4.4 Properties. (a) American and each of its Subsidiaries (other than
the Tower Subsidiaries) has good and marketable title to all material parcels of
real property owned by it and good and merchantable title to all material items
of property and assets, tangible and intangible, (i) reflected in the financial
statements of American as of June 30, 1997, and (ii) acquired after June 30,
1997, except in each case for those sold or otherwise disposed of since June 30,
1997, in each case free and clear of all Liens, except (x) Permitted Liens and
(y) Liens set forth in the American Financial Statements or Section 4.4 of the
American Disclosure Schedule.
(b) All of the assets of American and its Subsidiaries material to the
continued operation of their respective businesses are in good operating
condition, reasonable wear and tear excepted, and usable in the ordinary course
of business, except where the failure to be in such condition or so usable would
not, individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.5 Compliance with Private Authorizations. American and each of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Private
Authorizations which are necessary for the ownership and operation by American
or its Subsidiaries of the business of American and its Subsidiaries, taken as a
whole, and the conduct of business thereof as now conducted and which, if not
obtained and maintained, would, individually or in the aggregate, be reasonably
likely to have a Material Adverse Effect on American. All such Private
Authorizations are, to American's knowledge, in full force and effect, and
neither American nor any of its Subsidiaries (other than the Tower Subsidiaries)
is, to American's knowledge, in breach or violation of, or in default in the
performance, observance or fulfillment of, any such Private Authorization, and,
to American's knowledge, no Event exists or has occurred, which constitutes, or
but for any requirement of the giving of notice or passage of time or both would
constitute, such a breach, violation or default, under any such Private
Authorization, except for such defaults, breaches or violations as would not,
individually or in the aggregate, be reasonably likely to have a Material
Adverse Effect on American.
4.6 Compliance with Governmental Authorizations and Applicable Law;
Litigation.
(a) Section 4.6(a) of the American Disclosure Schedule contains a list
of each material Governmental Authorization (including without limitation all
material American FCC Licenses) required under Applicable Laws to own and
operate the business of American and its Subsidiaries (other than the Tower
Subsidiaries), including without limitation each of the American Stations, as
currently operated, all of which are in full force and effect, subject to such
qualifications and exceptions as may be set forth in Section 4.6(a) of the
American Disclosure Schedule. Certain of the Subsidiaries of American (other
than any of the Tower Subsidiaries) are the authorized legal holders of the
American FCC Licenses listed in Section 4.6(a) of the American Disclosure
Schedule, none of which is subject to any restriction or condition which would
limit in any material respect the operations of any of the American Stations as
currently conducted except as noted in Section 4.6(a) of the American Disclosure
Schedule. The American FCC Licenses listed in Section 4.6(a) of the American
Disclosure Schedule are valid and in full force and effect and are not impaired
in any material respect by any act or omission of American or any of its
Subsidiaries, subject to such qualifications and exceptions as may be set forth
in Section 4.6(a) of the American Disclosure Schedule; and the operation of each
of the American Stations is in accordance with such American FCC Licenses in all
material respects, except to the extent so listed in Sections 4.6(a) and (b) of
the American Disclosure Schedule. American is fully qualified to be the
transferor of control of the American FCC Licenses. All material reports, forms
and statements required to be filed by American or any of its Subsidiaries with
the FCC with respect to each of the American Stations have been filed and are
true, complete and accurate in all material respects. American or one of its
Subsidiaries (other than the Tower Subsidiaries) has obtained all Governmental
Authorizations in addition to the American FCC Licenses listed in Section 4.6(a)
of the American Disclosure Schedule which are necessary for the ownership or
operations or the conduct of the
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business of American and its Subsidiaries, taken as a whole (except with respect
to the American Brokered Stations), as now conducted and which, if not obtained
and maintained, would, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect on American and American's performance with
respect thereto, and the operation of the American Brokered Stations is in
accordance with all applicable Governmental Authorizations except where the
failure to be so in accordance would not be reasonably likely to have a Material
Adverse Effect on American. As of the date hereof, except as noted in Section
4.6(a) of the American Disclosure Schedule, no application, action or proceeding
is pending for the renewal or material modification of any of the American FCC
Licenses and, to American's knowledge, except as noted in Section 4.6(b) of the
American Disclosure Schedule, there is not now before the FCC any material
investigation, proceeding, notice of violation, order of forfeiture or complaint
against American or any of its Subsidiaries relating to any of the American
Stations or other FCC licensed facilities that, if adversely decided, would be
reasonably likely to have a Material Adverse Effect on American (and as of the
date hereof American does not have knowledge of any basis that would cause the
FCC not to renew any of the American FCC Licenses). Except as noted in Schedule
4.6(b) of the American Disclosure Schedule, as of the date hereof, there is not
now pending and, to American's knowledge, there is not threatened, any action by
or before the FCC to revoke, suspend, cancel, rescind or modify in any material
respect any of the American FCC Licenses that, if adversely decided, would be
reasonably likely to have a Material Adverse Effect on American (other than
proceedings to amend FCC rules of general applicability to the radio industry).
(b) Except as otherwise specifically set forth in Section 4.6(b) of the
American Disclosure Schedule, since January 1, 1996, American and its
Subsidiaries (other than the Tower Subsidiaries) have conducted its and each of
their respective businesses and owned and operated its and each of their
respective properties in accordance with all Applicable Laws (excluding
Environmental Laws) and Governmental Authorizations, except for such breaches,
violations and defaults as, individually or in the aggregate, have not had and
are not reasonably likely to have a Material Adverse Effect on American. Except
as otherwise specifically described in Section 4.6(b) of the American Disclosure
Schedule and except with respect to Environmental Laws, neither American nor any
of its Subsidiaries is in or is charged in writing by any Authority with, or, to
American's knowledge, is threatened or under investigation by any Authority with
respect to, any breach or violation of, or default in the performance,
observance or fulfillment of, any Applicable Law relating to the ownership and
operation of American's and its Subsidiaries' properties or the conduct of
American's and its Subsidiaries' business which will, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on American.
Except as otherwise specifically described in Section 4.6(b) of the American
Disclosure Schedule and except with respect to Environmental Laws, no Event
exists or has occurred, which constitutes, or but for any requirement of giving
of notice or passage of time or both would constitute, such a breach, violation
or default, under any Governmental Authorization or any Applicable Law, except
for such breaches, violations or defaults as, individually or in the aggregate,
have not had and would not be reasonably likely to have a Material Adverse
Effect on American. With respect to matters, if any, of a nature referred to in
Section 4.6(b) of the American Disclosure Schedule, except as otherwise
specifically described in Section 4.6(b) of the American Disclosure Schedule,
all such information and matters set forth in the American Disclosure Schedule,
if adversely determined against American or one of its Subsidiaries (other than
the Tower Subsidiaries), individually or in the aggregate, would not be
reasonably likely to have a Material Adverse Effect on American.
(c) Except as disclosed in the Filed American SEC Documents or in
Section 4.6(c) of the American Disclosure Schedule, there are no Legal Actions
pending or, to the knowledge of American, threatened against or affecting
American or any of its Subsidiaries (other than the Tower Subsidiaries)
including any action by or before the FCC to revoke, suspend, cancel, rescind or
modify in any material respect any of the American FCC Licenses, except for
Legal Actions that, individually or in the aggregate, would not be reasonably
likely to have a Material Adverse Effect on American.
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4.7 Related Transactions. Except as set forth in Section 4.7 of the
American Disclosure Schedule, as contemplated herein or as disclosed in the
Filed American SEC Documents, no director, officer, Affiliate or "associate" (as
such term is defined in Rule 12b-2 under the Exchange Act) of American or any of
its Subsidiaries is currently a party to any transaction which would be required
to be disclosed under Item 404 of Regulation S-K of the Securities Act.
4.8 Taxes and Tax Matters. Except as provided in Section 4.8 of the
American Disclosure Schedule:
(a) American has filed completely and correctly in all material
respects all Tax Returns which are required by all Applicable Laws to be filed
by it, and has paid, or made adequate provision for the payment of, all material
Taxes which have or may become due and payable pursuant to said Tax Returns and
all other Taxes, governmental charges and assessments received to date other
than those Taxes being contested in good faith for which adequate provision has
been made on the most recent balance sheet forming part of the American
Financial Statements. The Tax Returns of American have been prepared, in all
material respects, in accordance with all Applicable Laws and generally accepted
principles applicable to taxation consistently applied;
(b) all material Taxes which American is required by law to withhold
and collect have been duly withheld and collected, and have been paid over, in a
timely manner, to the proper Taxing Authorities to the extent due and payable;
(c) American has not executed any waiver to extend, or otherwise taken
or failed to take any action that would have the effect of extending, the
applicable statute of limitations in respect of any Tax liabilities of American
for the fiscal years prior to and including the most recent fiscal year;
(d) American is not a "consenting corporation" within the meaning of
Section 341(f) of the Code. American has at all times been taxable as a
Subchapter C corporation under the Code;
(e) American has never been a member of any consolidated group (other
than with American and its Subsidiaries) for Tax purposes. American is not a
party to any tax sharing agreement or arrangement, other than with its
Subsidiaries;
(f) no Liens for Taxes exist with respect to any of the assets or
properties of American, except for statutory Liens for Taxes not yet due or
payable or that are being contested in good faith;
(g) all of the U.S. Federal income Tax Returns filed by or on behalf of
each of American and its Subsidiaries have been examined by and settled with the
Internal Revenue Service, or the statute of limitations with respect to the
relevant Tax liability expired, for all taxable periods through and including
the period ending on the date on which the Effective Time occurs;
(h) all Taxes due with respect to any completed and settled audit,
examination or deficiency litigation with any Taxing Authority have been paid in
full;
(i) there is no audit, examination, deficiency, or refund litigation
pending with respect to any Taxes and during the past three years no Taxing
Authority has given written notice of the commencement of any audit, examination
or deficiency litigation, with respect to any Taxes;
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(j) American is not bound by any currently effective private ruling,
closing agreement or similar agreement with any Taxing Authority relating to a
material amount of Taxes;
(k) Except with respect to like-kind exchanges pursuant to Section 1031
of the Code, American shall not be required to include in a taxable period
ending after the Effective Time, any taxable income attributable to income that
economically accrued in a prior taxable period as a result of Section 481 of the
Code, the installment method of accounting or any comparable provision of state
or local Tax law;
(l) (A) no material amount of property of American is "tax exempt
property" within the meaning of Section 168(h) of the Code, (B) no material
amount of assets of American is subject to a lease under Section 7701(h) of the
Code, and (C) American is not a party to any material lease made pursuant to
Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect
prior to the date of enactment of the Tax Equity and Fiscal Responsibility Act
of 1982; and
(m) immediately following the Merger, American will not have any
material amount of income or gain that has been deferred under Treasury
Regulation Section 1.1502-13, or any material excess loss account in a
Subsidiary under Treasury Regulation Section 1.1502-19.
4.9 Employee Retirement Income Security Act of 1974.
(a) American (which for purposes of this Section 4.9 shall include any
ERISA Affiliate) currently sponsors, maintains and contributes only to the Plans
and Benefit Arrangements set forth in Section 4.9(a) of the American Disclosure
Schedule. American has delivered or made available to Mergeparty true, complete
and correct copies of (1) each Plan and Benefit Arrangement (or, in the case of
any unwritten Plans or Benefit Arrangements, reasonable descriptions thereof),
(2) the two most recent annual reports on Form 5500 (including all schedules and
attachments thereto) filed with the Internal Revenue Service with respect to
each Plan (if any such report was required by Applicable Law), (3) the most
recent summary plan description (or similar document) for each Plan for which
such a summary plan description is required by Applicable Law or was otherwise
provided to plan participants or beneficiaries and (4) each trust agreement and
insurance or annuity contract or other funding or financing arrangement relating
to any Plan. To the knowledge of American, each such Form 5500 and each such
summary plan description (or similar document) does not, as of the date hereof,
contain any material misstatements. Except as set forth in Section 4.9(a) of the
American Disclosure Schedule, as to all Plans and Benefit Arrangements listed in
Section 4.9(a) of the American Disclosure Schedule:
(i) all such Plans and Benefit Arrangements comply and have
been administered in form and in operation in accordance with their
respective terms, and with all Applicable Laws, in all material
respects, and American has not received any notice from any Authority
disputing or investigating such compliance;
(ii) all such Plans maintained by American that are intended
to comply with Sections 401 and 501 of the Code comply in all material
respects with all applicable requirements of such sections, and no
Event has occurred which is known to American which will give rise to
disqualification of any such Plan under such sections or to a tax under
Section 511 of the Code and each such Plan has been the subject of a
determination letter from the Internal Revenue Service to the effect
that such Plan and related trust is qualified and exempt from Federal
income Taxes under Sections 401(a) and 501(a), respectively, of the
Code; no such determination letter has been revoked, and, to the
knowledge of American, revocation has not been threatened. American has
delivered or made available to Mergeparty a copy of the most recent
determination letter received with respect
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to each Plan for which such a letter has been issued, as well as a copy
of any pending application for a determination letter. American has
also provided or made available to Mergeparty a list of all Plan
amendments as to which a favorable determination letter has not yet
been received;
(iii) none of the assets of any such Plan are invested in
employer securities or employer real property;
(iv) there are no Claims (other than routine Claims for
benefits or actions seeking quali fied domestic relations orders)
pending or, to American's knowledge, threatened involving such Plans or
the assets of such Plans, and, to American's knowledge, no facts exist
which are reasonably likely to give rise to any such Claims (other than
routine Claims for benefits or actions seeking qualified domestic
relations orders);
(v) no such Plan is subject to Title IV of ERISA, and American
has no actual or potential liability thereunder;
(vi) all group health Plans of American have been operated in
compliance in all material respects with the group health plan
continuation coverage requirements of COBRA;
(vii) neither American nor, to its knowledge, any of its
directors, officers, employees or any other fiduciary has committed any
breach of fiduciary responsibility imposed by ERISA or any similar
Applicable Law that would subject American or any of its respective
directors, officers or employees to liability under ERISA or any
similar Applicable Law;
(viii) American is not and never has been a party to any
Multiemployer Plan or made contributions to any such Plan;
(ix) except as set forth in the American Financial Statements
and pursuant to the provisions of COBRA, American does not maintain any
Plan that provides for post-retirement medical or life insurance
benefits, and American does not have any obligation or liability with
respect to any such Plan previously maintained by it, except as the
provisions of COBRA may apply to any former employees or retirees of
American;
(x) all material contributions to, and material payments from,
the Plans and Benefit Arrangements that may have been required to be
made in accordance with the terms of the Plans and Benefit
Arrangements, and any applicable collective bargaining agreement, have
been made. All such contributions to, and payments from, the Plans and
Benefit Arrangements, except those payments to be made from a trust
qualified under Section 401(a) of the Code, for any period ending
before the Closing Date that are not yet, but will be, required to be
made, will be properly accrued and reflected in the Closing Balance
Sheet;
(xi) (1) no "prohibited transaction" (as defined in Section
4975 of the Code or Section 406 of ERISA) has occurred that involves
the assets of any Plan; (2) no prohibited transaction has occurred that
could subject American, any of its employees, or, to the knowledge of
American, a trustee, administrator or other fiduciary of any trust
created under any Plan to the tax or sanctions on prohibited
transactions imposed by Section 4975 of the Code or Title I of ERISA;
(3) none of American, any of its ERISA Affiliates or, to the knowledge
of American, any trustee, administrator or other fiduciary of any Plan
or any agent of any of the foregoing has engaged in any transaction or
acted in a manner that could, or has failed to act so as to, subject
American or any trustee,
- 13 -
administrator or other fiduciary to any liability for breach of
fiduciary duty under ERISA or any other Applicable Law;
(xii) American has not incurred any material liability to a
Plan (other than for contributions not yet due) which liability has not
been fully paid or accrued for payment as of the date hereof;
(xiii) except as otherwise contemplated by this Agreement, no
current or former employee of American will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any Plan or Benefit Arrangement as a
result of the transactions contemplated by this Agreement;
(xiv) no compensation payable by American to any of its
employees under any existing Plan, Benefit Arrangement (including by
reason of the transactions contemplated hereby) will be subject to
disallowance under Section 162(m) of the Code;
(xv) any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the
transactions contemplated by this Agreement by any employee, officer,
director or independent contractor of American who is a "disqualified
individual" (as such term is defined in proposed Treasury Regulation
Section 1.280G-1) under any employment arrangement would not be
characterized as an "excess parachute payment" (as such term is defined
in Section 280G(b)(1) of the Code);
(xvi) no Plan which is an employee stock ownership plan (an
"ESOP") constitutes a leveraged employee stock ownership plan within
the meaning of Section 4975(e)(7) of the Code and there are no
unallocated shares of stock of American currently held under any such
ESOP in a suspense account; and
(xvii) there are no outstanding options (or contractual
obligations to issue options) to acquire American Common Stock or other
American securities other than options held by employees or directors
of American and issued under Benefit Arrangements (the aggregate number
of which are as set forth in Section 4.11 of the American Disclosure
Schedule).
(b) The execution, delivery and performance by American of this
Agreement and the Collateral Documents executed or required to be executed by
American pursuant hereto and thereto will not involve any prohibited transaction
within the meaning of ERISA or Section 4975 of the Code.
4.10 Insurance. All material fire and casualty, general liability,
business interruption, product liability, and sprinkler and water damage
insurance policies maintained by American or any of its Subsidiaries (other than
the Tower Subsidiaries) are with reputable insurance carriers, provide full and
adequate coverage, for American and such Subsidiaries (other than the Tower
Subsidiaries) and their respective properties and assets, and are in character
and amount at least equivalent to that carried by Persons engaged in similar
businesses and subject to the same or similar perils or hazards, except where
the failure to maintain such insurance policies, either individually or in the
aggregate, would not be reasonably likely to have a Material Adverse Effect on
American.
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4.11 Authorized Capital Stock. The authorized and outstanding capital
stock, Option Securities and Convertible Securities of American, as of September
18, 1997, are as set forth in Section 4.11 of the American Disclosure Schedule.
Except as set forth in Section 4.11 of the American Disclosure Schedule, since
September 18, 1997, American has not issued any shares of capital stock of any
class, any Option Securities or any Convertible Securities, except for the issue
of American Common Stock pursuant to the conversion of Convertible Securities or
the exercise of Option Securities outstanding on September 18, 1997 and in each
case in accordance with their present terms or as otherwise described or
contemplated by the Filed American SEC Documents. All of such outstanding
capital stock has been duly authorized and validly issued, is fully paid and
nonassessable and is not subject to any preemptive or similar rights. American
has, prior to the date hereof, made available to Mergeparty a true and correct
copy of the Restated Certificate of Incorporation of American (the "Restated
Certificate") as in effect on the date hereof. Except as set forth in Section
4.11 of the American Disclosure Schedule, there are no bonds, debentures, notes
or other indebtedness of American outstanding having the right to vote (or
convertible into, or exchangeable for, securities having the right to vote) on
any matters on which stockholders of American may vote. Except as set forth in
Section 4.11 of the American Disclosure Schedule, or, except as set forth in the
Restated Certificate, there are no contractual obligations of American or any of
its Subsidiaries outstanding to repurchase, redeem or otherwise acquire any
shares of capital stock of American or any of its Subsidiaries. Except as
contemplated by the provisions of Section 6.20 hereof or as set forth in Section
4.11 of the American Disclosure Schedule, there are no contractual obligations
of American to vote or to dispose of any shares of the capital stock of any of
its Subsidiaries.
4.12 Employment Arrangements. Except as described in the Filed American
SEC Documents or in Section 4.12 of the American Disclosure Schedule, as of the
date hereof (i) none of the employees of American or any of its Subsidiaries
(other than the Tower Subsidiaries) is now, or, to American's knowledge, since
November 1, 1993 and while an employee of American or any of its Subsidiaries
has been, represented by any labor union or other employee collective bargaining
organization, or are now, or, to American's knowledge, since November 1, 1993
have been, parties to any labor or other collective bargaining agreement, (ii)
there are, to American's knowledge, no pending labor strikes, work stoppages,
lockouts, slow downs, grievances (including unfair labor charges), disputes or
controversies with any union or any other employee or collective bargaining
organization of such employees, or threats of such labor strikes, work
stoppages, lockouts or slowdowns or any pending demands for collective
bargaining by any union or other such organization, and (iii) neither American
nor any of its Subsidiaries (other than the Tower Subsidiaries) nor any of its
or any of their employees is now, or, to American's knowledge, since November 1,
1993 has been, subject to or involved in or, to American's knowledge, threatened
with, any union elections, petitions therefor or other organizational or
recruiting activities. American and its Subsidiaries (other than the Tower
Subsidiaries) have performed all obligations required to be performed under all
Employment Arrangements and none of them is in breach or violation of or in
default or arrears under any of the terms, provisions or conditions thereof,
except for such breaches, violations, defaults and arrears, which either
individually or in the aggregate, have not had and are not reasonably likely to
have a Material Adverse Effect on American.
4.13 Voting Requirements. Section 4.13 of the American Disclosure
Schedule sets forth a list of certain stockholders of American and the number of
shares of Class A Common and Class B Common owned of record by each such
stockholder as of the date hereof and the number of outstanding shares of Class
A Common Stock and/or of Class B Common Stock as of September 18, 1997. The
affirmative vote of the holders of shares of American Common Stock, representing
a majority of the outstanding voting power of American Common Stock, voting as a
single class (the "Required Vote"), is the only vote necessary to approve and
adopt this Agreement and the transactions contemplated by this Agreement. As of
September 18, 1997, 31,408,544 votes constituted a majority of the outstanding
voting power of American Common Stock.
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4.14 Brokers. No broker, investment banker, financial advisor or other
person, other than Credit Suisse First Boston Corporation ("CSFB"), the fees and
expenses of which will be paid by American, is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission in connection
with the transactions contemplated by this Agreement. American has furnished to
Mergeparty true and complete copies of all agreements under which any such fees
or expenses may be payable and all indemnification and other agreements related
to the engagement of the persons to whom such fees may be payable.
4.15 Information Supplied. The Information Statement will not, at the
date it is first mailed to the American stockholders (and, in the event American
shall prepare a Proxy Statement pursuant to Section 6.6 hereof, at the time of
the American Stockholders Meeting, the Proxy Statement will not) contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they are made, not misleading. For
purposes of the foregoing, the truth of any information or the existence of any
omissions at the time of any American Stockholders Meeting shall be determined
with reference to the Proxy Statement as then amended or supplemented. The
Information Statement will comply as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder.
Notwithstanding the foregoing, no representation or warranty is made by American
with respect to statements made or incorporated by reference therein based on
information supplied by Mergeparty or Mergeparty Subsidiary including materials
of Mergeparty and Mergeparty Subsidiaries incorporated by reference in the
Information Statement.
4.16 Ordinary Course of Business. Except as may be described in the
Filed American SEC Documents or in Section 4.9(a) or Section 4.16 of the
American Disclosure Schedule and except for the Tower Merger or Tower
Distribution, as the case may be, since June 30, 1997 to the date hereof, (i)
each of American and its Subsidiaries (other than the Tower Subsidiaries) has
operated its business in the normal, usual and customary manner in the ordinary
and regular course of business, consistent with prior practice (it being
understood and agreed for purposes of this Section 4.16 by the parties that the
acquisition, disposition and exchange of radio stations is in the ordinary
course of business) and (ii) there has not been by American and its Subsidiaries
(other than the Tower Subsidiaries) (a) any declaration, setting aside or
payment of any dividend or other distribution payable in cash, stock, property
or otherwise except for (x) the payment of dividends or the making of
distributions by a direct or indirect wholly-owned Subsidiary of American and
(y) the payment of dividends on shares of American Preferred Stock in accordance
with their terms, (b) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (c) (I) any granting to any executive officer or other key
employee of American or any of its Subsidiaries of any increase in compensation,
except for normal increases in the ordinary course of business consistent with
past practice or as required under Benefit Arrangements, (II) any granting to
any such executive officer of any increase in severance or termination pay,
except as was required under any Benefit Arrangement, (III) except in the
ordinary course, any entering into, amendment in any material respect or
termination of any Governmental Authorization, Private Authorization or material
agreement, arrangement, contract, undertaking, understanding or other
obligation, or (IV) any adoption or amendment of any Plan or Benefit Arrangement
(including changing any actuarial or other assumption used to calculate funding
obligations with respect to any Plan, or changing the manner in which
contributions to any Plan are made or the basis on which such contributions are
determined) except as required to comply with changes in Applicable Law, (d)
except insofar as may have been disclosed in the Filed American SEC Documents or
required by a change in GAAP, any change in accounting methods, principles or
practices by American materially affecting its assets, liabilities or business,
(e) any sale, disposition or contract to dispose of any of its properties or
assets having a value in excess of $1,000,000 other than in the ordinary course,
and (f) any damage, destruction or loss, whether or not covered by insurance,
that has had a Material Adverse Effect on American.
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4.17 Environmental Matters. Except as set forth in the American SEC
Documents or Section 4.17 of the American Disclosure Schedule, American:
(a) (i) has not been notified in writing that it is potentially liable
and, has not received any written request for information or other
correspondence concerning its potential liability with respect to any site or
facility, under or pursuant to any Environmental Law, (ii) to the knowledge of
American, is not a potentially responsible party" under, the Comprehensive
Environmental Response, Compensation and "Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act, as amended, or any similar state Law,
and (iii) to the knowledge of American, is not the subject of or, to the
knowledge of American, threatened with any Legal Action involving a demand for
damages or other potential liability, including any Lien, with respect to
violations or breaches of any Environmental Law;
(b) to the knowledge of American, is in compliance with all
Environmental Laws and has obtained all Environmental Permits required under
Environmental Laws, except for such noncompliances and failures to obtain
Environmental Permits as, individually or in the aggregate, have not had and
would not be reasonably likely to have a Material Adverse Affect on American;
(c) (i) has not entered into or received any consent decree, compliance
order or administrative order issued pursuant to any Environmental Law, and (ii)
is not a party in interest or in default under any judgment, order, writ,
injunction or decree of any Final Order issued pursuant to any Environmental
Law; and
(d) to the knowledge of American, there have not been any releases,
spills or disposal activities of or involving Hazardous Materials, including
without limitation from underground storage tanks, on or from any property
owned, operated or leased by American which releases, spills or disposal
activities resulted or could reasonably be expected to result in investigation
and cleanup expenditures which upon payment of such expenditures would be
reasonably likely to have a Material Adverse Effect on American.
Notwithstanding anything to the contrary contained in this Agreement,
American makes no representation or warranty with respect to its compliance with
Environmental Laws or environmental matters generally, except as specifically
set forth in this Section 4.17.
4.18 State Takeover Statutes. Except for Section 203 of the DCL, to
American's knowledge, no other state takeover Law, statute or similar statute or
regulation applies or purports to apply to the Merger, this Agreement or any of
the transactions contemplated by this Agreement.
4.19 Opinion of Financial Advisor. American has received the opinion of
CSFB, dated the date of this Agreement, to the effect that, as of such date, the
Merger Consideration to be received by the holders of American Common Stock in
the Merger is fair from a financial point of view to the holders of American
Common Stock.
4.20 Contracts; Debt Instruments. (a) Except as set forth in Section
4.20 of the American Disclosure Schedule, neither American nor any of its
Subsidiaries is in violation of or in default under (nor does there exist any
condition which upon the passage of time or the giving of notice, or both, would
cause such a violation of or default under) any material agreement, arrangement,
contract, undertaking, understanding or other obligation, including the American
Preferred Stock ("Contracts"), to which it is a party or by which it or any of
its properties or assets is bound, except for violations or defaults, that
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individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect on American, and none of the Contracts prohibits
American from incurring an additional $1.00 of indebtedness.
(b) American has made available to Mergeparty (i) true and correct
copies of all Contracts to which any indebtedness of American or any of its
Subsidiaries (other than the Tower Subsidiaries) in an aggregate principal
amount in excess of $1,000,000 is outstanding or may be incurred and (ii)
accurate information regarding the respective principal amounts currently
outstanding as of the date hereof thereunder.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF MERGEPARTY
Except as set forth with respect to specifically identified
representations and warranties in the Mergeparty Disclosure Schedule, Mergeparty
represents and warrants to American as follows:
5.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of Mergeparty and Mergeparty Subsidiary is a corporation duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite power and authority
(corporate and other) to own or hold under lease its properties and to conduct
its business as now conducted and as presently proposed to be conducted. Each of
Mergeparty and Mergeparty Subsidiary is duly qualified and in good standing as a
foreign corporation in each other jurisdiction (as shown on Section 5.1(a) of
the Mergeparty Disclosure Schedule) in which the character of the property owned
or leased by it or the nature of its business or operations requires such
qualification, with full power and authority (corporate and other) to carry on
the business in which it is engaged, except in such jurisdictions where the
failure to be so qualified and in good standing, individually or in the
aggregate, is not reasonably likely to have a Material Adverse Effect on
Mergeparty.
(b) Each of Mergeparty and Mergeparty Subsidiary has all requisite
power and authority (corporate and other) to execute, deliver and perform its
obligations under this Agreement and each Collateral Document executed or
required to be executed by Mergeparty and/or Mergeparty Subsidiary pursuant
hereto or thereto or to consummate the Merger and the other transactions
contemplated hereby and thereby, and the execution, delivery and performance of
this Agreement and each Collateral Document executed or required to be executed
pursuant hereto have been duly authorized by all requisite corporate or other
action on the part of Mergeparty and/or Mergeparty Subsidiary, and no other
corporate proceedings on the part of Mergeparty and/or Mergeparty Subsidiary are
necessary to authorize this Agreement or the transactions contemplated hereby or
to consummate the Merger or the other transactions so contemplated. This
Agreement has been duly executed and delivered by each of Mergeparty and
Mergeparty Subsidiary and constitutes, and each Collateral Document executed or
required to be executed pursuant hereto or to consummate the Merger when
executed and delivered by Mergeparty and/or Mergeparty Subsidiary will
constitute, a valid and binding obligation of Mergeparty and/or Mergeparty
Subsidiary, enforceable in accordance with their respective terms, except as
such enforceability may be limited by bankruptcy, moratorium, insolvency and
similar laws affecting the rights and remedies of creditors and obligations of
debtors generally and by general principles of equity. As of the date hereof,
the Boards of Directors of each of Mergeparty and Mergeparty Subsidiary, at
meetings duly called and held at which a quorum was present throughout, have
unanimously approved the Merger and this Agreement. The Board of Directors of
Mergeparty has, as the sole stockholder of Mergeparty Subsidiary, approved and
adopted this Agreement and the Merger, and the transactions contemplated hereby.
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(c) At the time of execution of this Agreement, Mergeparty and all of
its Affiliates or "associates" (as defined in the Exchange Act) collectively
beneficially own less than 5% of the outstanding shares of American Common
Stock.
(d) The execution, delivery and performance by each of Mergeparty
and/or Mergeparty Subsidiary of this Agreement and any Collateral Document
executed or required to be executed by such party pursuant hereto or thereto, do
not, and the consummation by Mergeparty Subsidiary of the Merger and the other
transactions hereby and thereby and compliance with the terms, conditions and
provisions hereof or thereof by Mergeparty and/or Mergeparty Subsidiary will
not:
(i) (A) conflict with, or result in a breach or violation of,
or constitute a default under, any Organic Document of Mergeparty or
Mergeparty Subsidiary or (B) any Applicable Law applicable to
Mergeparty or Mergeparty Subsidiary, or conflict with, or result in a
breach or violation of, or constitute a default under, or permit the
termination, cancellation or acceleration of any obligation or
liability in, or but for any requirement of the giving of notice or
passage of time or both would constitute such a conflict with, breach
or violation of, or default under, or permit any such termination,
cancellation or acceleration of, any Contract or Private Authorization
of Mergeparty or Mergeparty Subsidiary, except, in the case of clause
(B), for such conflicts, breaches, violations, terminations,
cancellations or accelerations that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
Mergeparty; or
(ii) result in or permit the creation or imposition of any
Lien upon any property now owned or leased by Mergeparty or Mergeparty
Subsidiary except for such Liens that would not, individually or in the
aggregate, be reasonably likely to have a Material Adverse Effect on
Mergeparty or Mergeparty Subsidiary; or
(iii) require any Governmental Authorization or Governmental
Filing except for (A) the FCC Consents, (B) filings under the
Xxxx-Xxxxx-Xxxxxx Act, (C) the filing with the Commission of such
reports under Section 13(a) or 15(d) of the Exchange Act as may be
required in connection with this Agreement and the transactions
contemplated by this Agreement, (D) the filing of the Certificate of
Merger with the Delaware Secretary of State and appropriate documents
with the relevant authorities of other states in which American is
qualified to do business and (E) such other Governmental Authorizations
and Governmental Filings the failure of which to be made or obtained
would, individually or in the aggregate, not be reasonably likely to
have a Material Adverse Effect on American.
(e) Mergeparty Subsidiary was formed solely for the purpose of engaging
in the transactions contemplated by this Agreement and has not engaged in any
business activities or conducted any operations other than in connection with
the transactions contemplated by this Agreement.
5.2 Compliance with Governmental Authorizations and Applicable Law;
Litigation. Except as disclosed in any report or other document filed by
Mergeparty with the SEC prior to the date hereof or in Section 5.2 of the
Mergeparty Disclosure Schedule, there are no Legal Actions pending or, to the
knowledge of Mergeparty, threatened against Mergeparty or any of its
Subsidiaries, except for Legal Actions that, individually or in the aggregate,
would not be reasonably likely to have a Material Adverse Effect on Mergeparty
or prevent or materially burden or materially impair the ability of Mergeparty
to consummate the transactions contemplated by this Agreement. Except as set
forth in Section 5.2 of the Mergeparty Disclosure Schedule, there are not facts
relating to Mergeparty (or any Affiliate thereof) under the FCA that would
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disqualify it (or any Affiliate or assignee) from obtaining control of the
American FCC Licenses or that would prevent it (or any Affiliate or assignee)
from consummating the transactions contemplated by this Agreement or, to
Mergeparty's knowledge, materially delay the grant of the FCC Consents. Except
as may be set forth in Section 5.2 of the Mergeparty Disclosure Schedule, it is
not necessary for Mergeparty or any of its Subsidiaries or other Affiliates (or
assigns) to (a) seek or obtain any waiver from the FCC, (b) dispose of any
interest in any media or communications property or interest (including without
limitation any of the American Stations or the American Brokered Stations), (c)
terminate any venture or arrangement, or (d) effectuate any change or
restructuring of ownership (including without limitation the removal or
withdrawal of officers or directors or the conversion or repurchase of equity
securities in Mergeparty or any Affiliate) to obtain, or to avoid any delay in
obtaining, the FCC Consents. Mergeparty is able to certify on an FCC Form 315
that it is financially qualified.
5.3 Opinion of Financial Advisor. The Board of Directors of Mergeparty
has received the opinion of Chase Securities Inc., dated the date of this
Agreement, to the effect that, as of such date, the aggregate Merger
Consideration to be paid by Mergeparty is fair to Mergeparty from a financial
point of view.
5.4 Mergeparty Financing. On the Closing Date, Mergeparty will have
sufficient funds to consummate the transactions contemplated by this Agreement,
including without limitation the Merger, and to pay all related fees and
expenses.
ARTICLE 6
COVENANTS
6.1 Access to Information; Confidentiality. American shall afford to
Mergeparty and its accountants, counsel, investment bankers, financial advisors
and other agents and representatives (the "Representatives") full access during
normal business hours throughout the period prior to the Closing Date to all of
its (and its Subsidiaries', other than those of the Tower Subsidiaries)
properties, books, contracts, commitments and records (including without
limitation Tax Returns) and, during such period, shall furnish promptly upon
request (i) a copy of each report, schedule and other document filed or received
by it pursuant to the requirements of any Applicable Law (including without
limitation the FCA) or filed by it or any of its Subsidiaries (other than the
Tower Subsidiaries) with any Authority in connection with the Merger or which
may have a material effect on it or its business, financial condition or results
of operations, and (ii) such other information concerning any of the foregoing
as Mergeparty shall reasonably request; provided, however, that the foregoing
shall not require American to permit any disclosure or to disclose any
information, that in the reasonable judgment of American would result in the
disclosure of any trade secrets of third parties or violate any of its
obligations with respect to confidentiality if American shall have used its best
efforts to obtain the consent of such third party to such inspections or
disclosure. All requests for information shall be directed to an executive
officer of American or such other Persons as may be designated by American. All
information disclosed pursuant to this Section or otherwise shall be governed by
the terms of the Confidentiality Agreement, the terms and provisions of which
are incorporated herein by reference with the same force and effect as though
set forth here in their entirety. No investigation pursuant to this Section or
otherwise shall affect any representation or warranty of American in this
Agreement or any condition to the obligations of Mergeparty hereto.
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6.2 Agreement to Cooperate.
(a) Upon the terms and subject to the conditions set forth in this
Agreement, each of the parties hereto shall use best efforts (x) to 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 Merger and the Tower Merger or
Tower Disposition, as the case may be, and (y) to refrain from taking, or cause
to be taken, any action and to refrain from doing or causing to be done, any
thing which could impede or impair the consummation of the Merger and the Tower
Merger or Tower Distribution, as the case may be, including, in all cases,
without limitation using its best efforts (i) to prepare and file with the
applicable Authorities as promptly as practicable after the execution of this
Agreement all requisite applications and amendments thereto, together with
related information, data and exhibits, necessary to request issuance of orders
approving the Merger by all such applicable Authorities, (ii) to obtain all
necessary or appropriate waivers, consents and approvals, (iii) to effect all
necessary registrations, filings and submissions, (iv) to defend any suit,
action or proceeding, whether judicial or administrative, challenging the Merger
or any of the transactions contemplated by the Merger Agreement, including
seeking to lift any injunction or other legal bar to the Merger (and, in such
case, to proceed with the Merger as expeditiously as possible), and (v) to
obtain the satisfaction of the conditions specified in Article 7, including
without limitation the securing of all authorizations, consents, waivers,
modifications, order or approvals referred to in Sections 7.1(b) and 7.1(d).
(b) Without limiting the generality of the foregoing, the parties
acknowledge and agree that the transfer of control of the American FCC Licenses
as contemplated by this Agreement is subject to the prior consent and approval
of the FCC. Within twenty (20) business days following the date of this
Agreement, American and Mergeparty shall file with the FCC appropriate
applications requesting the FCC's written consent to the transfer of control of
the American FCC Licenses pursuant to this Agreement and have caused all
necessary persons to join in one or more such applications filed with the FCC
(the "Applications"). American and Mergeparty will use their best efforts to
take such steps as may be necessary (i) diligently to prosecute the Applications
and to prepare and file any further Applications or amendments as may be
necessary to obtain the consent for the transfer of control to Mergeparty of the
licenses held by the American Brokered Stations to be acquired by American and
(ii) to obtain the FCC Consents, including action by Mergeparty, at its sole
cost and expense (except as provided elsewhere in this Agreement), to satisfy or
cause to be removed all Divestiture Conditions, if any. The failure by American
or Mergeparty to use its best efforts to timely file or diligently prosecute its
portion of any Application or, in the case of Mergeparty, the failure to use its
best efforts to make any Required Divestiture or otherwise satisfy or cause to
be removed all Divestiture Conditions on or before the Termination Date, shall
be a material breach by American or Mergeparty, as the case may be, of this
Agreement. American agrees that any delay in prosecuting the Applications or
obtaining the FCC Consents resulting from Mergeparty's good faith negotiations,
subject to Applicable Law, with the FCC, Antitrust Division or FTC with respect
to the imposition of a Divestiture Condition shall not constitute a failure by
Mergeparty to use its best efforts diligently to prosecute the Applications or
obtain the FCC Consents and so long as such negotiations do not interfere with
satisfaction of all conditions to Closing prior to the Termination Date. If
reconsideration or judicial review is sought with respect to any FCC Consent,
American and Mergeparty shall (promptly and with all due efforts) oppose such
efforts to obtain reconsideration or judicial review.
(c) Without limiting the generality of Section 6.2(a), the parties
undertake and agree to file as soon as practicable after the date hereof, and in
any event within ten (10) business days hereof, a Notification and Report Form
under the Xxxx-Xxxxx-Xxxxxx Act with the Federal Trade Commission (the "FTC")
and the Antitrust Division of the Department of Justice (the "Antitrust
Division"). Each of the parties shall (i) use its best efforts to comply as
expeditiously as possible with all lawful requests of the FTC or the Antitrust
Division for additional information and documents and (ii) not extend any
waiting period under the Xxxx-
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Xxxxx-Xxxxxx Act or enter into any agreement with the FTC or the Antitrust
Division not to consummate the transactions contemplated by this Agreement,
except with the prior written consent of the other party hereto; provided,
however, that nothing shall limit the ability of Mergeparty to extend the 20-day
waiting period under the Xxxx-Xxxxx-Xxxxxx Act following substantial compliance
with any request for additional information that may be forthcoming, if such
extension is reasonably necessary to allow the continuation of good-faith
negotiations intended to remove any objection to the transaction that the FTC or
Antitrust Division may have asserted, and if such extension will expire not less
than 30 days prior to the Termination Date.
(d) Anything in this Agreement, including without limitation Section
6.2(b), to the contrary notwithstanding, Mergeparty shall obtain the FCC
Consents and clearances under the Xxxx-Xxxxx-Xxxxxx Act and the grant of any
waivers in connection therewith prior to the Termination Date in accordance with
this Agreement unless the failure to obtain such FCC Consents, clearances and
waivers is primarily the result of one or more Uncontrollable Events. For
purposes of this Agreement, the term "Uncontrollable Events" shall mean (i) acts
or omissions on the part of American or any of its Subsidiaries in conducting
its respective operations other than those relating to the number of American
FCC Licenses or amount of revenues in a particular market, (ii) an unremedied or
unwaived material breach by American of its obligations under this Agreement, or
(iii) any change in or enactment of Applicable Law by Congress and signed by the
President and which (A) has the effect of decreasing the number of radio
licenses which a Person may own nationally or locally or (B) materially and
adversely relates to the concentration of radio licenses which a Person may own
in a market, and as a result of the change or enactment referred to in either
clause (A) or (B) above, Mergeparty's performance of its obligations under this
Agreement would have a Material Adverse Effect on Mergeparty's radio and
television broadcasting business. Mergeparty shall file with the FCC, within
sufficient time to permit timely grant of the Applications, applications for
consent to assign or transfer, pursuant to trust arrangements satisfying the
FCC's local multiple ownership rules and policies, such radio broadcast stations
as Mergeparty may designate, so that the radio broadcast stations of Mergeparty
and American not designated for such trust arrangements may be held by the
Surviving Corporation in compliance with the FCC's local multiple ownership
rules and policies. Mergeparty shall, to the extent necessary to obtain grant of
the trust applications, thereafter promptly file or cause to be filed any
further applications (including applications to assign radio broadcast stations
to third party purchasers for value) that may be required by the FCC.
Notwithstanding the two preceding sentences, with regard to stations located in
the San Xxxx market, the obligations of Mergeparty to submit trust or sale
applications shall be excused for such stations to the extent and for the
duration of the period that Mergeparty is unable to identify the stations to be
placed in trust or sold because of the failure of American to notify Mergeparty
of the resolution of the Antitrust Division impediment impacting the American
transactions pending in the San Xxxx market.
(e) If Mergeparty or any of its Affiliates receives an administrative
or other order or notification relating to any violation or claimed violation of
the rules and regulations of the FCC, or of any other Authority (including
without limitation seeking or relating to a Divestiture Condition), that could
affect Mergeparty's or Mergeparty Subsidiary's ability to consummate the
transactions contemplated hereby, or if Mergeparty or any other Affiliate of
Mergeparty should become aware of any fact relating to the qualifications of
Mergeparty or any of its Affiliates that reasonably could be expected to cause
the FCC to withhold its consent to the assignment of the American FCC Licenses,
Mergeparty shall promptly notify American thereof and American shall do likewise
with Mergeparty and Mergeparty shall use its best efforts, and take such steps
as are necessary, in order to satisfy or remove the Divestiture Conditions to
enable the Closing to occur prior to the Termination Date. Mergeparty covenants
and agrees to keep American fully informed as to all matters concerning all
Required Divestitures and shall promptly notify American in writing of any and
all significant developments relating thereto and American agrees to do likewise
with Mergeparty.
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(f) Mergeparty acknowledges and agrees that certain of the American
Stations and American Brokered Stations may file applications for renewal of
license during the time that an application for the FCC Consents is pending
before the FCC. To the extent any such application for renewal may be filed,
Mergeparty agrees to amend the transferee's portion of any application for the
FCC Consents and, as may be required, to amend any license renewal applications
for all of the American Stations or American Brokered Stations, to confirm
Mergeparty's intention to consummate this Agreement during the pendency of such
license renewal application, and to agree to assume the consequences associated
with succeeding to the place of American in such license renewal applications.
The making of this statement shall not be deemed to limit or waive any other
rights that Mergeparty may otherwise have under this Agreement.
(g) The parties shall cooperate with one another in the preparation,
execution and filing of all Tax Returns, questionnaires, applications, or other
documents regarding any real property transfer or gains, sales, use, transfer,
value added, stock transfer and stamp Taxes, any transfer, recording,
registration and other fees, and any similar Taxes which become payable in
connection with the Merger that are required or permitted to be filed on or
before the Closing Date.
(h) Subject to Applicable Laws relating to the exchange of information,
American, on the one hand, and Mergeparty, on the other hand, shall have the
right to review in advance, and to the extent practicable each will consult the
other with respect to, all the information relating to American or Mergeparty,
as the case may be, and any of their respective Subsidiaries, that appear in any
filing made with, or written materials submitted to, any Authority and/or other
Person in connection with the Merger and the other transactions contemplated by
this Agreement. In exercising the foregoing right, each of American and
Mergeparty shall act reasonably and as promptly as practicable.
6.3 Public Announcements. Until the Closing, or in the event of
termination of this Agreement, each party shall consult with the other before
issuing any press release or otherwise making any public statements with respect
to this Agreement or the Merger and shall not issue any such press release or
make any such public statement without the prior consent of the other.
Notwithstanding the foregoing, the parties acknowledge and agree that they may,
without each other's prior consent, issue such press releases or make such
public statements as may be required by Applicable Law, in which case, to the
extent practicable, they will consult with the other regarding the nature,
content and form of such press release or public statement.
6.4 Notification of Certain Matters. Each party shall give prompt
notice to the other, of the occurrence or non-occurrence of any Event the
occurrence or non-occurrence of which would be reasonably likely to cause (i)
any representation or warranty made by it contained in this Agreement to be
untrue or inaccurate in any material respect or (ii) any failure made by it to
comply with or satisfy, or be able to comply with or satisfy, in any material
respect, any covenant, condition or agreement to be complied with or satisfied
by it under this Agreement in any material respect, such that, in any such case,
one or more of the conditions of Closing would not be satisfied; provided,
however, that the delivery of any notice pursuant to this Section shall not
limit or otherwise affect the rights and remedies available hereunder to the
party receiving such notice or the obligations of the party delivering such
notice and shall not, in any event, affect the representations, warranties,
covenants and agreements of the parties or the conditions to their respective
obligations under this Agreement..
6.5 Stockholder Approval. If, after the date hereof, approval and
adoption of this Agreement shall be required by the American stockholders under
Applicable Law (the "American Stockholder Approval"), American will, as soon as
practicable following the date thereof, establish a record date (which will be
as soon as practicable following the date hereof) for, duly call, give notice
of, convene and hold a meeting of its stockholders (the "American Stockholders
Meeting") for the purpose of obtaining the American
- 23 -
Stockholder Approval. American will, through its Board of Directors, recommend
to its stockholders approval and adoption of this Agreement, subject to the
fiduciary duties of the Board of Directors of American under Applicable Law.
American shall, if it desires in its sole and absolute discretion, also submit
for the approval of its stockholders at the meeting of stockholders referred to
in this Section 6.5, the Tower Merger, the Tower Distribution or an Alternative
Transaction, as the case may be, and, through its Board of Directors, recommend
to its stockholders approval of an agreement contemplating the Tower Merger, the
Tower Distribution or an Alternative Transaction, as the case may be, and
approval of such transaction.
6.6 Information Statement.
(a) In the event the American Stockholders Meeting is not required
because Mergeparty shall have delivered to American valid written consents of
stockholders constituting the Required Vote, then American shall prepare and
file with the Commission as soon as is reasonably practicable after the date
hereof an information statement (the "Information Statement") complying with
applicable rules and regulations of the Commission and the DCL. Mergeparty and
American shall promptly furnish to the other all information, and take such
other actions, as may reasonably be requested in connection with any action
taken to comply with the provisions of this Section 6.6.
(b) Each of American and Mergeparty shall correct promptly any
information provided by it to be used specifically in the Information Statement
that shall have become false or misleading in any material respect and shall
take all steps necessary to file with the Commission and have cleared by the
Commission any amendment or supplement to the Information Statement so as to
correct such Information Statement and cause it to be disseminated to the
stockholders of American, to the extent required by Applicable Law. Without
limiting the generality of the foregoing, American shall notify Mergeparty
promptly of the receipt of the comments of the Commission and of any request by
the Commission for amendments or supplements to the Information Statement, or
for additional information, and shall supply Mergeparty with copies of all
correspondence between it or its representatives, on the one hand, and the
Commission or members of its staff, on the other hand, with respect to the
Information Statement. Whenever any event occurs which should be described in an
amendment or a supplement to the Information Statement, American shall, upon
learning of such event, promptly prepare, file and clear with the Commission and
mail to the stockholders of American such amendment or supplement; provided,
however, that, prior to such mailing, (i) American shall consult with Mergeparty
with respect to such amendment or supplement, (ii) shall afford Mergeparty
reasonable opportunity to comment thereon, and (iii) each such amendment or
supplement shall be reasonably satisfactory to Mergeparty.
(c) In the event American shall be required to call the American
Stockholders Meeting pursuant to Section 6.5 hereof, all references to the
Information Statement in this Agreement shall be deemed to be references to the
Proxy Statement.
6.7 Miscellaneous. Nothing contained in this Agreement shall prohibit
American from (a) taking and disclosing to its stockholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act or
(b) making any disclosure to American's stockholders if, in the good faith
judgment of the majority of the members of the Board of Directors of American,
after consultation with independent counsel, failure to so disclose would be
inconsistent with Applicable Laws.
6.8 Option Plans.
(a) With respect to each unexpired option to purchase American Common
Stock that is outstanding immediately prior to the Tower Merger or Tower
Distribution, as applicable (each, an "American
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Option") which is held by employees or directors of American or any of its
Subsidiaries (each, an "Optionholder") immediately prior to the Tower Merger or
the Tower Distribution, as the case may be, American shall, or shall cause
American Tower to, hold in escrow the consideration that the Optionholder would
have received in connection with the Tower Merger or the Tower Distribution, as
applicable, had the Optionholder exercised such American Option and held the
American Common Stock received upon exercise thereof through the record date of
the Tower Merger or Tower Distribution, as applicable (the "Tower
Consideration"). The Tower Consideration shall be held in escrow by American or,
in its sole and absolute discretion, a reputable financial institution, pending
the consummation of the Merger. Notwithstanding the terms of any Benefit
Arrangement or any agreement evidencing the grant of an American Option to the
contrary, no adjustment will be made to the American Options (including, but not
limited to, the exercise price or number of shares of American Common Stock
subject to an American Option) in respect of the Tower Merger or Tower
Distribution, as applicable, except as provided in this Section 6.8.
(b) All American Options outstanding immediately prior to the Effective
Time, except as provided otherwise in this Section 6.8, will be canceled by
American and will be converted into the right to receive the Merger
Consideration. At the Effective Time, each Optionholder shall receive, with
respect to each unexpired American Option of the Optionholder so canceled by
American, solely (x) the Tower Consideration held in escrow pursuant to Section
6.8(a) above, plus (y) an amount in cash equal to the Merger Consideration
reduced by the exercise price of the American Option. Except as provided in the
preceding sentence, no other consideration will be paid by American to an
Optionholder in respect of his or her canceled American Options. If the Merger
is not consummated, the cancellation of the Optionholder's American Options
shall be rescinded and the Optionholder shall continue to hold such American
Options upon their original terms and conditions. At the election of any
Optionholder who is a "disqualified individual" (as such term is defined in
proposed Treasury Regulation Section 1.280G-1), this Section 6.8(b) will be
inoperative with respect to such American Options as he or she may specify to
the extent that the acceleration, vesting cancellation and cash-out of American
Options at the Effective Time as provided herein would constitute an "excess
parachute payment" (as such term is defined in Section 280G(b)(1) of the Code).
Any Optionholder who makes such election shall forfeit the American Options
which are subject to such election and shall receive no consideration therefor.
(c) With respect to American Options held by Tower Employees,
notwithstanding the foregoing provisions of this Section 6.8 and in lieu
thereof, and subject to the approval of the provisions of this Section 6.8 by
the Board of Directors of American and the Compensation Committee thereof, such
Tower Employees may elect to have their American Options assumed by American
Tower and converted into options to acquire Tower Common Stock as of the
effective time of the Tower Merger or Tower Distribution, as the case may be,
such conversion to be effectuated in a manner that will preserve the spread in
such American Options between the option exercise price and the fair market
value of American Common Stock and the ratio of the spread to the exercise price
prior to such conversion and, to the extent applicable, otherwise in conformity
with the rules under Section 424(a) of the Code and the regulations promulgated
thereunder.
(d) American will use its best efforts (including best efforts to
obtain any consents of Optionholders, if required) to cause the cancellation of
all of the American Options immediately prior to the Effective Time.
(e) Notwithstanding the foregoing provisions of this Section 6.8, in
the event that any amount payable under Section 6.8(b) to an Optionholder in
respect of his American Options would fail to be deductible by American (or any
successor thereto) solely by reason of ss.162(m) of the Code (after taking into
account all amounts paid or reasonably expected to be payable to the
Optionholder in the same taxable year in which the payments under Section 6.8(b)
are made to the Optionholder and which are not otherwise exempt
- 25 -
from Code ss.162(m) in determining whether any amount payable to the
Optionholder will fail to be deductible thereunder), then, with respect to such
portion of the Optionholder's American Options the cancellation and cash-out of
which would be nondeductible under said ss.162(m) (the "ss.162(m) Options"),
such ss.162(m) Options shall be canceled in accordance with the foregoing
provisions of this Section 6.8, but the payments of the Tower Consideration and
other cash consideration contemplated in Section 6.8(b) hereof in respect of the
Optionholder's ss.162(m) Options shall be made to the Optionholder on the 110th
day following the Effective Time. American shall use its best efforts to obtain
the written consent of each Optionholder affected by this Section 6.8(e) to the
foregoing provisions hereof.
(f) All amounts payable hereunder to an Optionholder shall be reduced
by any applicable withholding taxes.
Notwithstanding anything to the contrary in this Agreement,
American shall have the right, in its sole and absolute discretion, to
accelerate, on such terms and conditions as it shall determine, in whole or in
part, the vesting of any or all of the American Options outstanding on the date
hereof so that such American Options are exercisable in full prior to the
Effective Date.
6.9 Conduct of Business by Mergeparty Pending the Merger. Except as
otherwise contemplated by this Agreement, or as has been publicly disclosed
prior to the date hereof, after the date hereof and prior to the Closing Date or
earlier termination of this Agreement unless American shall otherwise agree in
writing, with respect to Mergeparty's media business, Mergeparty shall, and
shall cause its Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice, which
includes the acquisition of other radio broadcasting stations;
(ii) not amend or propose to amend its Organic Documents in
any manner materially adverse to the holders of the American Preferred
Stock;
(iii) use all best efforts to preserve intact their respective
business organizations and goodwill, keep available the services of
their respective present officers and key employees, and preserve the
goodwill and business relationships with customers and others having
business relationships with them and not engage in any action, directly
or indirectly, with the intent to adversely affect the transactions
contemplated by this Agreement; and
(iv) not authorize or enter into any agreement that would
violate any of the foregoing.
6.10 Conduct of Business by American Pending the Merger. Except as set
forth in Section 6.10 of the American Disclosure Schedule or as otherwise
contemplated by this Agreement, including without limitation the transactions
contemplated by the Tower Documentation and Section 6.19 hereof, after the date
hereof and prior to the Closing Date or earlier termination of this Agreement,
unless Mergeparty shall otherwise consent in writing, American shall, and shall
cause its Subsidiaries, to:
(i) conduct their respective businesses in the ordinary and
usual course of business and consistent with past practice;
(ii) not (A) amend or propose to amend their respective
Organic Documents, (B) split, combine or reclassify (whether by stock
dividend or otherwise) their outstanding capital stock or issue or
authorize the issuance of any other securities in respect of, in lieu
of, or in substitution for shares of its capital stock, or (C) declare,
set aside or pay any dividend or distribution payable in
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cash, stock, property or otherwise, except for (x) the payment of
dividends or the making of distributions by a direct or indirect
wholly-owned Subsidiary of American and (y) the payment of dividends on
shares of the American Preferred Stock in accordance with their terms;
(iii) not issue, sell, pledge or dispose of, or agree to
issue, sell, pledge or dispose of, any shares of American Stock,
Convertible Securities or Option Securities, except that American may
issue shares of American Common Stock upon conversion of Convertible
Securities and exercise of Option Securities outstanding on the date
hereof and in accordance with their present terms, including any
adjustment to the conversion price of Convertible Securities as a
result of the Tower Distribution or Tower Merger;
(iv) not (A) incur or become contingently liable with respect
to any indebtedness other than (x) short-term borrowings not to exceed
$25 million in the aggregate outstanding at any one time, (y)
borrowings to finance pending acquisitions of radio stations set forth
in Section 6.10 of the American Disclosure Schedule and, pursuant to
agreements in effect on the date hereof and (z) borrowings not to
exceed $120 million to finance a capital contribution by American to
Tower, (B) redeem, purchase, acquire or offer to purchase or acquire
any shares of its capital stock, Convertible Securities or Option
Securities, except pursuant to the conversion or exercise thereof, as
the case may be, or except to the extent required by the present terms
thereof, (C) sell, lease, license, pledge, dispose of or encumber any
properties or assets or sell any businesses other than pursuant to
agreements in effect on the date hereof and set forth in Section 6.10
of the American Disclosure Schedule or Liens arising in accordance with
the provisions of indebtedness in effect on the date hereof and in
accordance with their present terms, or (D) make any loans, advances or
capital contributions to, or investments in, any other Person, other
than to any direct or indirect wholly owned Subsidiary of American
(other than the Tower Subsidiaries) and, except as provided in clause
(z) above, or to officers and employees of American or any of its
Subsidiaries for travel, business or relocation expenses in the
ordinary course of business;
(v) use all reasonable efforts to preserve intact their
respective business organizations and goodwill, keep available the
services of their respective present officers and key employees, and
preserve the goodwill and business relationships with customers and
others having business relationships with them and not engage in any
action, directly or indirectly, with the intent to adversely impact the
transactions contemplated by this Agreement;
(vi) confer on a regular and frequent basis with one or more
representatives of Mergeparty to report material operational matters
and the general status of ongoing operations;
(vii) not adopt, enter into, amend or terminate any
employment, severance, special pay arrangement with respect to
termination of employment or other similar arrangements or agreements
with any directors, officers or key employees;
(viii) maintain with financially responsible insurance
companies insurance on their respective tangible assets and their
respective businesses in such amounts and against such risks and losses
as are consistent with past practice;
(ix) not make any Tax election that could reasonably be likely
to have a Material Adverse Effect on American or settle or compromise
any material income Tax liability;
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(x) except in the ordinary course of business or except as
would not reasonably be likely to have a Material Adverse Effect on
American, not modify, amend or terminate any Material Agreement to
which American or any Subsidiary is a party or waive, release or assign
any material rights or claims thereunder;
(xi) not make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xii) not acquire or agree to acquire (x) by merging or
consolidating with, or by purchasing a substantial portion of the
assets of, or by any other manner, any business or any Person or other
business organization or division thereof or (y) any assets that,
individually or in the aggregate, are material to American and its
Subsidiaries taken as a whole, in each case, other than pursuant to
agreements in effect on the date hereof and set forth in the Section
6.10 of the American Disclosure Schedule (Mergeparty agrees not to
unreasonably withhold, delay or condition a consent to any matters
described in this paragraph);
(xiii) except as set forth in Section 4.9(a) or Section 4.16
of the American Disclosure Schedule, (a) not grant to any executive
officer or other key employee of American or any of its Subsidiaries
any increase in compensation, except for normal increases in the
ordinary course of business consistent with past practice or as
required under Benefit Arrangements in effect as of June 30, 1997, (b)
not grant to any such executive officer any increase in severance or
termination pay, except as was required under any Benefit Arrangements
in effect as of June 30, 1997, or (c) not adopt or amend any Plan or
Benefit Arrangement (including change any actuarial or other assumption
used to calculate funding obligations with respect to any Plan, or
change the manner in which contributions to any Plan are made or the
basis on which such contributions are determined) and (d) except in the
ordinary course, not enter into, amend in any material respect or
terminate any Governmental Authorization (except as would not be
reasonably likely to have a Material Adverse Effect on American),
material Private Authorization or Contract; and
(xiv) not authorize or enter into any agreement that would
violate any of the foregoing.
Anything in this Section to the contrary notwithstanding, the provisions of this
Section shall not apply to any of the Tower Subsidiaries.
6.11 Control of Operations. Nothing contained in this Agreement shall
give to Mergeparty, directly or indirectly, rights to control or direct
American's operations prior to the Effective Time. Prior to the Effective Time,
American shall exercise, consistent with the terms and conditions of this
Agreement, complete control and supervision of its operations. Nothing contained
in this Agreement shall give to American, directly or indirectly, rights to
control or direct Mergeparty's operations prior to the Effective Time. Prior to
the Effective Time, Mergeparty shall exercise, consistent with the terms and
conditions of this Agreement, complete control and supervision of its
operations.
6.12 Directors', Officers' and Employees' Indemnification and
Insurance.
(a) The Organic Documents of the Surviving Corporation shall contain
provisions no less favorable with respect to indemnification than are set forth
in the Organic Documents of American, as in effect on the date hereof, which
provisions shall not be amended, repealed or otherwise modified for a period of
six (6) years from the Effective Time in any manner that would affect adversely
the rights thereunder of
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individuals who at any time prior to the Effective Time were directors, officers
or employees of American or any of its Subsidiaries, unless such modification
shall be required by Applicable Law.
(b) From and after the Effective Time, Mergeparty shall indemnify,
defend and hold harmless the present and former officers, directors and
employees of American or any of its Subsidiaries (collectively, the "Indemnified
Parties") against all losses, expenses, claims, damages, liabilities or amounts
that are paid in settlement of, or otherwise in connection with any claim,
action, suit, proceeding or investigation (as used in this Section, a "claim"),
based in whole or in part on the fact that the Indemnified Party (or the Person
controlled by the Indemnified Party) is or was a director, officer or employee
of American or any of its Subsidiaries and arising out of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, in
connection with this Agreement, the Merger, the Tower Merger or Tower
Distribution, as the case may be, and the transactions contemplated hereby),
whether asserted or claimed prior to, at or after the Effective Time, in each
case to the fullest extent permitted under the DCL (and shall pay any expenses,
as incurred, in advance of the final disposition of any such action or
proceeding to each Indemnified Party to the fullest extent permitted under the
DCL). Without limiting the foregoing, in the event any such claim is brought
against any of the Indemnified Parties, (i) such Indemnified Parties may retain
counsel (including local counsel) satisfactory to them and which shall be
reasonably satisfactory to Mergeparty and they shall pay all reasonable fees and
expenses of such counsel for such Indemnified Parties; and (ii) Mergeparty shall
use its best efforts to assist in the defense of any such claim; provided,
however, that Mergeparty shall not be liable for any settlement effected without
its written consent, which consent shall not be unreasonably withheld, delayed
or conditioned. Notwithstanding the foregoing, nothing contained in this Section
shall be deemed to grant any right to any Indemnified Party which is not
permitted to be granted to an officer, director or employee of Mergeparty under
the DCL, assuming for such purposes that Mergeparty's Organic Documents provide
for the maximum indemnification permitted by the DCL.
(c) Mergeparty will cause to be maintained for a period of not less
than six (6) years from the Effective Time American's current directors' and
officers' insurance and indemnification policy to the extent that it provides
coverage for events occurring prior to the Effective Time ("D&O Insurance") for
all Persons who are directors and officers of American on the date of this
Agreement, so long as the annual premium therefor would not be in excess of 200%
of the last annual premium therefor paid prior to the date of this Agreement
(the "Maximum Premium"); provided, however, that if the annual premiums of such
insurance coverage exceed such amount, Mergeparty shall only be obligated to
obtain the greatest coverage available under such policy for a cost not
exceeding such amount, provided further, however, that Mergeparty may, in lieu
of maintaining such existing D&O Insurance as provided above, cause coverage to
be provided under any policy maintained for the benefit of Mergeparty or any of
its Subsidiaries, so long as the terms thereof are no less advantageous to the
intended beneficiaries thereof than the existing D&O Insurance. If the existing
D&O Insurance expires, is terminated or canceled during such six-year period,
Mergeparty will use its best efforts to cause to be obtained as much D&O
Insurance as can be obtained for the remainder of such period for an annualized
premium not in excess of the Maximum Premium, on terms and conditions no less
advantageous to the covered Persons than the existing D&O Insurance. American
represents to Mergeparty that the Maximum Premium is not greater than $500,000.
(d) In the event Mergeparty or Mergeparty Subsidiary or any of their
respective successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person, then and in each such case, proper
provisions shall be made so that the successors and assigns of Mergeparty or
Mergeparty Subsidiary, as the case may be, shall assume the obligations set
forth in this Section.
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(e) This Section is intended to be for the benefit of, and shall be
enforceable by, the Indemnified Parties, their heirs and personal
representatives and shall be binding on Mergeparty, Mergeparty Subsidiary and
their respective successors and assigns.
6.13 Solicitation of Employees. If this Agreement is terminated,
Mergeparty agrees that neither it nor any of its Subsidiaries or other
Affiliates will, for a period of eighteen (18) months from the date of such
termination, solicit or actively seek to hire any key employees (including
without limitation any station manager, sales manager, program director or any
individual senior to any of such individuals) who during such period is employed
by American or any of its Subsidiaries, whether or not such individual would
commit breach of such individual's employment agreement or contact in leaving
such employment; provided, however, that the foregoing shall not prevent
Mergeparty from taking any action permitted by the Confidentiality Agreement.
6.14 Change of Name. Within ten (10) days after the Closing, Mergeparty
shall cause each of its Subsidiaries, if necessary, to file certificates of
amendment with the appropriate Secretary of State, amending such company's
Organic Documents to change the name of such company to any name which does not
include the words "American Radio". Immediately prior to the Closing, American
will assign to American Tower or its designee all right, title and interest,
including all the good will related thereto, in and for past infringements of
the name "American Radio" and related trademarks, service marks, logos and the
like. As soon as commercially practicable, but in no event later than six (6)
months from the Closing Date, Mergeparty Subsidiary and its Subsidiaries shall
cease all use of the name "American Radio" in all modes.
6.15 Benefit Plans. Mergeparty shall take such action as may be
necessary so that on and after the Effective Time and for one (1) year
thereafter, officers and employees of American and its Subsidiaries (other than
Tower Employees) shall be provided employee benefits, plans and programs
(excluding equity incentive arrangements) which are no less favorable in the
aggregate than those generally available to those employee benefit plans and
programs in effect for such officers and employees immediately prior to the
Effective Time; it being understood that Mergeparty shall determine the types
and levels of specific benefits to be so provided. For purposes of eligibility
to participate and vesting in all benefits provided to directors, officers and
employees of American and its Subsidiaries (other than Tower Employees), such
directors, officers and employees of American and its Subsidiaries will be
credited with their years of service with American and its Subsidiaries and
prior employers to the extent service with American and its Subsidiaries and
prior employers is taken into account under the applicable plans of American and
its Subsidiaries as in effect as of the date hereof. Upon termination of any
health plan of American or any of its Subsidiaries, individuals who were
directors, officers or employees of American or its Subsidiaries at the
Effective Time (other than Tower Employees) shall if employed by Mergeparty or
its Subsidiaries become eligible to participate in such health plans as may be
established or maintained by Mergeparty or its Subsidiaries to the extent that
such individuals were eligible to participate in the applicable health plan of
American or its Subsidiaries immediately prior to the Effective Time. Amounts
paid during the calendar year in which the Effective Time occurs, but before the
Effective Time, by directors, officers and employees of American and its
Subsidiaries (other than Tower Employees) under any health plans of American
shall after the Effective Time be taken into account in applying deductible and
out-of-pocket limits applicable under the health plans of Mergeparty or its
Subsidiaries provided during such calendar year to the same extent as if such
amounts had been paid under such health plans of Mergeparty or its Subsidiaries
and Mergeparty shall cause to be waived under its health plans any pre-existing
conditions as of the date of termination of the American health plan and
eligibility to participate in such health plan to the extent such conditions
would be waived under the applicable plans of American and its Subsidiaries as
in effect on the date hereof. Nothing in this Agreement shall be construed as
granting to any employee of American or its Subsidiaries any rights of
continuing employment.
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6.16 American Cumulative Preferred Stock. To the extent permitted under
Contracts, pursuant to which any indebtedness for money borrowed of American or
any of its Subsidiaries is outstanding as of the date hereof and by the American
Preferred Stock, American shall pay all interest in respect of the American
Cumulative Preferred Stock in cash.
6.17 American Tower Transaction. Prior to the Closing and subject to
Section 2.8 hereof, American shall consummate the Tower Merger or the Tower
Distribution pursuant to the Tower Documentation or, to the extent contemplated
hereby, the Alternative Transaction. As soon as practicable following the
execution of this Agreement and in any event prior to the consummation of the
Tower Merger or the Tower Distribution, as the case may be, American shall
prepare, in consultation with Mergeparty and its counsel, the definitive
documentation to be executed by American and American Tower to effect the Tower
Merger or the Tower Distribution, as the case may be; and submit such
documentation to Mergeparty for its approval, which approval shall not be
unreasonably withheld, delayed or conditioned (as approved, the "Tower
Documentation"), and American and American Tower shall execute and deliver the
Tower Documentation in the form so approved. Mergeparty and American agree that
the Tower Documentation shall include or be prepared on a basis consistent with
the following:
(a) American Tower or American Tower Sub, as applicable, shall
indemnify, defend and hold American and its Subsidiaries (other than the Tower
Subsidiaries, collectively in this Section the "American Tower Group") harmless
from and against any liabilities (other than income tax liabilities) to which
American or any of its Subsidiaries (other than the American Tower Group) may be
or become subject that relate to or arise from the assets, business, operations,
debts or liabilities of the American Tower Group, including without limitation
(i) the assets to be transferred to American Tower pursuant to Section 6.17(g),
(ii) liabilities to be assumed by any member of the American Tower Group as
contemplated herein, whether arising prior to, concurrent with or after the
Tower Merger or the Tower Distribution, as the case may be, (iii) liabilities
relating to or arising from any untrue statement or alleged untrue statements of
a material fact contained in the Information Statement or in any document filed
or required to be filed in connection with the Tower Merger or the Tower
Distribution, or any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, but in
each case only with respect to information provided by or relating to the
American Tower Group, (iv) any economic impact related to or arising from the
failure to obtain any Governmental Authorizations, Private Authorizations or
other third party consents, or to make any Governmental Filings, necessary to
consummate the Tower Merger or the Tower Distribution, as the case may be, and
(v) the rental and related expenses for the relevant portion of the leased
premises located at 000 Xxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx in the event of
the failure to obtain the landlord's consent to the assignment of the
obligations relating to, or sublease of, such relevant portion of such premises.
(b) American shall indemnify, defend and hold the American Tower Group
harmless from and against any liabilities (other than income tax liabilities) to
which the American Tower Group may be or become subject that relate to or arise
from the assets, business, operations, debts or liabilities of American or its
Subsidiaries (other than the American Tower Group) whether arising prior to,
concurrent with or after the Tower Merger or the Tower Distribution, as the case
may be.
(c) The Tower Documentation shall include an agreement that addresses
issues of the allocation of Tax liabilities and deconsolidation of American and
the American Tower Group which shall contain principles to the following effect:
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(i) The tax sharing agreement among members of the American
Tower Group and American and its other Subsidiaries shall be terminated
as of the effective date of the Tower Merger (the "Tower Merger Date")
or of the Tower Distribution (the "Tower Distribution Date"), as the
case may be, and will have no further effect for any taxable year
(whether the current year, a future year, or a past year).
(ii) American shall include the income of the American Tower
Group (including any deferred income triggered into income by Reg.
ss..1.1502-13 and Reg. ss..1.1502-14 and any excess loss accounts taken
into income under Reg. ss..1.1502-19) on American's consolidated
federal income Tax returns and consolidated or combined state and local
income Tax returns to the extent such income is properly includible
thereon for all periods through the Tower Merger Date or the Tower
Distribution Date, as the case may be, and pay any income Taxes
attributable to such income. American Tower shall reimburse American
for any such federal, state and local income Taxes payable by the
American Tax Group attributable to such income, as determined on a
separate company basis; provided, however, that American Tower shall
have no reimbursement obligation if American has no income Tax
liability on a consolidated basis as a result of a net operating loss
or to the extent that the income of the American Tower Group is offset
by a net operating loss under the principles of clause 6.17(c)(v). The
American Tower Group will furnish Tax information to American for
inclusion in American's federal consolidated income Tax return for the
period which includes the Tower Merger Date or the Tower Distribution
Date, as the case may be, in accordance with American Tower's past
custom and practice. The income of the American Tower Group will be
apportioned to the period up to and including the Tower Merger Date or
the Tower Distribution Date, as the case may be, and the period after
the Tower Merger Date or the Tower Distribution Date, as the case may
be, by closing the books of the American Tower Group as of the end of
such date.
(iii) American Tower shall indemnify the American Tax Group
and Mergeparty for all Taxes imposed by any Taxing Authority on any
member of the American Tax Group or on Mergeparty (or on any member of
its consolidated tax group) as a result of or in connection with the
sale or transfer of assets to the American Tower Group pursuant to
Section 6.17(g) (or between members of the American Tax Group prior to
the final transfer to a member of the American Tower Group), and the
Tower Merger or the Tower Distribution, as the case may be, including
without limitation any Taxes on any gain to any member of the American
Tax Group arising under Section 311 of the Code, any Taxes on any
deferred gain to any member of the American Tax Group triggered as a
result of or upon any such event, any gain attributable to any excess
loss account triggered upon any such event, any taxes arising as a
result of an election under Section 336(e) of the Code made at the
request of the American Tower Group as provided in clause 6.17(c)(xii),
and any transfer Taxes arising from any such event; provided that such
indemnity shall only apply to the extent that the additional liability
for such Taxes payable by the American Tax Group as a consequence of
such events (on a "but for" basis) exceeds $20,000,000.
(iv) If as a result of any payment by American Tower to any
member of the American Tax Group or to Mergeparty pursuant to this
Section 6.17(c) (including this clause (iv)) Mergeparty (or any member
of its consolidated group for Federal income tax purposes) or any
member of the American Tax Group becomes liable in any taxable year to
pay any Taxes in excess of the Taxes they would have owed in the
absence of any such payment by American Tower, American Tower will
indemnify such Person for such Tax liability and make such Person whole
on an after-tax basis for such Tax liability.
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(v) For the purposes of clauses 6.17(c)(ii) and (iii), net
operating losses of the American Tax Group shall be reduced and deemed
absorbed in the following order for each taxable year of the American
Tax Group: first, by all income unrelated to the transactions
contemplated by this Agreement of members of the American Tax Group
other than members of the American Tower Group for the entire
applicable taxable year of the American Tax Group; second, by income of
the American Tower Group described in clause 6.17(c)(ii); and third, by
income of the American Tax Group described in Section 6.17(c)(iii).
Mergeparty shall have no claim under either Section 6.17(c)(ii) or
(iii) for additional Tax liability arising in subsequent taxable years
solely as a result of the absorption of net operating losses of the
American Tax Group in this manner.
(vi) American shall control any audit or contest relating to
Taxes attributable to the American Tax Group. To the extent such audit
or contest relates to Taxes that American Tower is obligated to
reimburse or indemnify American under this agreement, American shall
(x) regularly consult with American Tower in connection with such audit
or contest; (y) provide American Tower with periodic reports on the
status of such audit or contest; and (z) not enter into a settlement
agreement relating to such audit or contest that materially prejudices
American Tower without American Tower's consent.
(vii) If pursuant to any Tax audit or contest there is an
adjustment to any Taxes that are reimbursable or indemnifiable by the
American Tower Group to any member of the American Tax Group under this
Agreement, including clauses 6.17(c)(ii), (iii) and (iv), then (x) any
additional Taxes imposed on the American Tax Group as a result of such
adjustment shall be indemnified by the American Tower Group; and (y)
any refund of Taxes paid to the American Tax Group as a result of such
adjustment of amounts previously indemnified by American Tower shall be
promptly paid over to American Tower (including additional amounts to
make American Tower whole on an after- Tax basis, not exceeding amounts
previously paid by American Tower Group with regard to such Taxes).
(viii) American Tower shall not have the right to any refund,
credit (or other reduction) of Taxes realized by the American Tax Group
resulting from a carry back of a post-acquisition Tax attribute of any
of the American Tower Group into a Tax Return filed by the American Tax
Group.
(ix) American Tower, American and Mergeparty agree to attempt
in good faith to mutually agree on such terms as promptly as
practicable after the date hereof. If American Tower, American and
Mergeparty cannot agree on such terms, then any disagreement shall be
resolved by an arbitrator jointly selected by American Tower, American
and Mergeparty. The arbitrator shall be a law or accounting firm
nationally recognized in tax matters. The costs of such arbitration
shall be shared equally by American Tower and American. The decision of
the arbitrator shall be binding on all parties.
(x) American shall not elect to retain any net operating loss
carryovers or capital loss carryovers of the American Tower Group.
(xi) The indemnities of the American Tower Group described in
this Section 6.17(c) shall apply to all applicable Taxes whenever they
shall arise.
(xii) At the request of any member of the American Tower
Group, American agrees that it shall, and shall cause its Subsidiaries
or other appropriate Affiliates to, make and/or cooperate with
- 33 -
members of the American Tower Group in making an election under Section
336(e) of the Code with respect to the Tower Merger or the Tower
Distribution, as the case may be.
(d) The Tower Documentation shall provide for the registration under
applicable federal and state securities laws of the securities of American Tower
Sub to be issued in the Tower Merger or the securities of American Tower to be
issued in the Tower Distribution, as the case may be, and upon the exercise of
the American Options if such registration is either required under Applicable
Law or would otherwise be required to cause such securities to be freely
transferable by Persons not Affiliates of American Tower, and customary
representations and warranties regarding information contained in filings made
with the Commission or any other Authority in connection with the Tower Merger
or the Tower Distribution, as the case may be. The Tower Documentation shall
provide for an amendment to the American Tower or American Tower Subsidiary
certificate of incorporation to establish an authorized capitalization and other
terms similar to American's and the authority of the Board of Directors of
American Tower or American Tower Subsidiary, as the case may be, to establish
stock plans or issue stock or other securities of such entities or rights
thereto.
(e) The Tower Documentation shall provide that American shall obtain
all Governmental Authorizations, Private Authorizations or other third party
consents, and make any necessary Governmental Filings, necessary to consummate
the Tower Merger or Tower Distribution, as the case may be, except where the
failure to obtain such consents, in the aggregate, would not (i) be reasonably
likely to have any adverse effect on American, (ii) materially impair the
ability of American to perform its obligations under this Agreement or the Tower
Documentation, or (iii) materially delay or prevent the consummation of the
Merger or the Tower Merger or the Tower Distribution, as the case may be. The
Tower Documentation shall provide that the Tower Merger or the Tower
Distribution, as the case may be, shall be done in compliance with American's
certificate of incorporation and by-laws and in material compliance with all
Applicable Laws.
(f) At the time of the Tower Merger or the Tower Distribution, as the
case may be, a member of the American Tower Group shall assume (i) to the extent
permitted by the landlord, the obligations under the lease of 000 Xxxxxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, with respect to the relevant portion of such
leased premises or, if such permission is not obtained, sublease such relevant
portion, and (ii) all liabilities with respect to which indemnification is
provided under Section 6.17(a). American shall cause all members of the American
Tower Group to be released from all other liabilities; provided, that, American
Tower agrees to reimburse American for any expenses incurred in obtaining such
Release. American and its Subsidiaries (other than the American Tower Group)
shall release the American Tower Group from all Claims by American or its
Subsidiaries (other than the American Tower Group), and the American Tower Group
shall release American and its other Subsidiaries from all Claims by the
American Tower Group, in each case except for Claims arising from or
attributable to the transactions contemplated by this Agreement or any
Collateral Document or otherwise asserted prior to the Effective Time.
(g) Except as otherwise provided by Section 6.19, American shall, or
shall cause its Subsidiaries to, as applicable, contribute, transfer or convey
to American Tower the assets described in Section 6.17 of the American
Disclosure Schedule, and American Tower shall assume all of American's and such
Subsidiaries' obligations with respect to such assets to the extent so set
forth.
(h) The Tower Documentation shall not include any representations or
warranties by American or American Tower relating to the business, operations,
assets, debts or liabilities of American and its Subsidiaries (other than the
American Tower Group) or the American Tower Group.
(i) On the Closing Date, the employees of American listed in Section
6.17 of the American Disclosure Schedule (the "Tower Employees") shall be
offered full-time employment by American Tower
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or one of its Subsidiaries. If the Tower Merger or Tower Distribution occurs
prior to the Closing Date, such employees shall continue to be employed by
American (at American's expense), but shall devote such time as deemed
reasonably necessary, consistent with their obligations to American, in support
of the conduct of the Tower Business by the American Tower Group on a basis
consistent with the time and scope of services that such employees devoted and
provided to the Tower Business prior to the Tower Merger or Tower Distribution,
as the case may be. Effective immediately prior to the Effective Time, American
Tower shall assume all obligations arising under any Plan or Benefit Arrangement
between American or any of its Subsidiaries and the Tower Employees other than
the rights, if any, of the Tower Employees with respect to the American Options
(which are being satisfied by American as provided in Section 6.8) and all
existing rights to indemnification. Such assumption agreement shall provide that
American and its Subsidiaries, effective as of the Effective Time (or effective
as of the Tower Merger Date or the Tower Distribution Date, as the case may be,
as to any member of the Tower Employees that devotes substantially all of his or
her business time to the Tower Business) shall be indemnified by American Tower
from all obligations arising under such employment agreements or arrangements
(except in respect of the American Options and all existing rights to
indemnification). For a period of eighteen (18) months following the
consummation of the Tower Merger or the Tower Distribution, as the case may be,
members of the American Tower Group shall not actively solicit or seek to hire
any employees of American or its Subsidiaries not currently engaged in the Tower
Business, other than the Tower Employees, it being understood and agreed that
such agreement shall not be deemed to prevent members of the American Tower
Group from placing general advertisements in publications or on the Internet or
soliciting any such employee who (i) initiates employment discussions with a
member of the American Tower Group or (ii) is not employed by American or
Mergeparty or any of their respective Subsidiaries on the date such a member
first solicits such employee.
(j) Anything in this Section or elsewhere in this Agreement to the
contrary notwithstanding, (i) any references in this Section or elsewhere in
this Agreement to Tower Merger shall in the event American elects to pursue the
Tower Distribution be deemed to refer to the Tower Distribution, and (ii) any
references in this Section or elsewhere in this Agreement to Tower Distribution
shall in the event American elects to pursue the Tower Merger be deemed to refer
to the Tower Merger.
(k) In the event that at any time prior to the Effective Time American
desires to effect a disposition of the American Tower Group (or all or
substantially all its assets), other than pursuant to the Tower Merger or the
Tower Distribution (an "Alternative Transaction"), Mergeparty agrees to
cooperate with American with respect thereto and to make any appropriate
modifications to this Agreement and any Collateral Documents relating to such
transaction, provided that such transaction does not adversely affect the net
economic benefits of the transactions contemplated hereby or by the Collateral
Documents to Mergeparty (or, if it does, the American Tower Group or the Entity
acquiring it (or all or substantially all its assets) indemnifies American with
respect thereto) and provided further that the American Tower Group or the
Entity acquiring the American Tower Group (or all or substantially all its
assets) will have substantially the same obligations to Mergeparty as American
Tower Group would have pursuant to the Merger Agreement and the Collateral
Documents and that such Entity shall be no less financially able to meet such
obligations than American Tower.
(l) At the request of American Tower and subject to the requirements
and restrictions imposed on American by any of its financing documents (as from
time to time amended), American shall, from time to time after the date hereof
and prior to the Tower Merger Date or the Tower Distribution Date, as the case
may be, permit American Tower to (i) acquire (whether by merger, stock or asset
acquisition or otherwise) additional businesses engaged in the business in which
American Tower is engaged, (ii) construct additional communication towers, or
(iii) make other capital improvements on assets owned or leased by American
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Tower or its Subsidiaries, and in each such case make additional capital
contributions in American Tower, or make loan to American Tower, of the funds.
(m) Notwithstanding anything in this Agreement to the contrary, the
consummation of the transactions contemplated by this Section and in the Tower
Documentation or any action or inaction taken in furtherance thereof shall not
be deemed to be a breach of any covenant, agreement, warrant or representation
of American contained in this Agreement.
(n) The indemnification obligations referred to in this Section shall
survive the Tower Merger Date or the Tower Distribution Date, as the case may
be.
(o) The Tower Documentation shall provide that prior to the Tower
Merger Date or the Tower Distribution Date, as the case may be, American shall
amend (i) its Section 401(k) Plan to permit a transfer of the assets held
thereunder for the benefit of the Tower Employees to a Section 401(k) Plan to be
established by American Tower and, prior to the Tower Merger or Tower
Distribution Date, as the case may be, such assets will be so transferred (along
with any outstanding qualified domestic relations orders and loans) and (ii) any
other Benefit Plan arrangements with respect to Tower Employees to reflect the
Tower Merger or the Tower Distribution, as the case may be.
(p) The Tower Documentation shall provide that prior to the Effective
Time American shall, to the extent requested by Mergeparty, cause the American
Tower Group to perform its obligations under the Tower Documentation.
(q) In the event the Tower Merger or Tower Distribution, as the case
may be, is to be consummated within 24 hours prior to the Effective Time,
Mergeparty shall, at the written request of American in its sole and absolute
discretion, immediately prior to the Tower Merger or Tower Distribution, as the
case may be, and subject to the satisfaction of all of the conditions to the
consummation of the transactions contemplated hereby, purchase, at their then
fair market value, shares of a new class of American preferred stock that
constitutes "Junior Securities" (as defined in the American Cumulative Preferred
Stock) in an amount (which shall not in the aggregate exceed $200,000,000)
necessary to enable American to consummate the Tower Merger or Tower
Distribution, as the case may be, without causing any conflict with, or breach
or violation of, or default under, or creating any right to accelerate any
obligation or liability in, or causing or creating any of the foregoing after
the giving of notice or passage of time or both with, of, under or in any
indebtedness of American or the American Cumulative Preferred Stock; provided,
however, that anything in this Section or elsewhere in this Agreement to the
contrary notwithstanding, in such event such preferred stock shall remain
outstanding immediately following the Effective Time.
In the event American desires, in its sole and absolute discretion, to
consummate the Tower Merger or Tower Distribution, as the case may be, more than
twenty-four (24) hours prior to the Effective Time, American shall be free to
sell preferred stock to a third party to enable it to consummate the Tower
Merger or the Tower Distribution, provided that the terms of such preferred
stock shall provide that it is redeemable, at the option of American, at par
immediately following the Effective Time and provided further that American
Tower shall hold American harmless against the net expenses incurred by it in
connection with such sale and issuance of preferred stock.
Notwithstanding anything to the contrary in this Agreement, American
will not consummate the Tower Merger or Tower Distribution if, on a pro forma
basis after giving effect thereto, the fair value and present fair saleable
value of American's assets would not exceed American's stated liabilities and
identified
- 36 -
contingent liabilities, American would not be able to pay its debts as they
become absolute and mature, or American's remaining capital would be
unreasonably small for the business in which it is engaged.
6.18 Purchase Price Adjustment. (a) Within 90 days after the Closing
Date, Mergeparty shall prepare and deliver to American Tower (in the event that
the Tower Distribution has been consummated) or American Tower Sub (in the event
that Tower Merger has been consummated), as applicable (the "Tower Entity") (i)
a consolidated balance sheet (the "Closing Balance Sheet") of American and its
Subsidiaries (other than the Tower Subsidiaries) (the "Post-Closing American
Group"), prepared from the books and records of the Post-Closing American Group,
and (ii) a statement (the "Closing Statement") setting forth (A) Working Capital
(as defined below) as of the Effective Time ("Closing Working Capital") and (B)
Net Debt (as defined below) as of the Effective Time ("Closing Net Debt"),
together with a certificate of Mergeparty's chief financial officer that the
Closing Statement has been prepared in accordance with this Section 6.18.
During the 45-day period following the Tower Entity's receipt of the
Closing Statement, the Tower Entity shall be permitted to review (and make
copies of) the working papers of Mergeparty relating to the Closing Statement.
The Closing Statement shall become final and binding upon the parties on the
forty-sixth day following delivery thereof, unless the Tower Entity gives
written notice of its disagreement with the Closing Statement ("Notice of
Disagreement") to Mergeparty prior to such date. Any Notice of Disagreement
shall (i) specify in reasonable detail the nature of any disagreement so
asserted, (ii) only include disagreements based on Closing Working Capital or
Closing Net Debt (or the components thereof) not being calculated in accordance
with this Section 6.18 and (iii) be accompanied by a certificate of the Tower
Entity's chief financial officer that he or she concurs with each of the
positions taken by the Tower Entity in the Notice of Disagreement. If a Notice
of Disagreement is received by Mergeparty in a timely manner, then the Closing
Statement (as revised in accordance with clause (A) or (B) below) shall become
final and binding on the earlier of (A) the date Mergeparty and the Tower Entity
resolve in writing any differences they have with respect to the matters
specified in the Notice of Disagreement or (B) the date any disputed matters are
finally resolved in writing by the Accounting Firm (as defined below).
During the 30-day period following delivery of a Notice of
Disagreement, Mergeparty and the Tower Entity shall seek in good faith to
resolve in writing any differences which they may have with respect to the
matters specified in the Notice of Disagreement. During such period Mergeparty
shall have access to (and shall be permitted to make copies of) the working
papers of the Tower Entity prepared in connection with the Notice of
Disagreement. At the end of such 30-day period, Mergeparty and the Tower Entity
shall submit to an independent accounting firm (the "Accounting Firm") for
review and resolution any and all matters which remain in dispute and which were
properly included in the Notice of Disagreement and each of Mergeparty and Tower
Entity shall submit a memorandum setting forth in reasonable detail the basis
for its positions. The Accounting Firm shall be a nationally recognized
independent public accounting firm agreed upon by Mergeparty and the Tower
Entity in writing. Mergeparty and the Tower Entity shall jointly use all
reasonable efforts to cause the Accounting Firm to render a decision within
thirty (30) days following submission or as promptly thereafter as is
practicable. Mergeparty and the Tower Entity agree that judgment may be entered
upon the determination of the Accounting Firm in any court having jurisdiction
over the party against which such determination is to be enforced. The cost of
any dispute resolution (including the fees and expenses of the Accounting Firm
and reasonable attorney fees and expenses of the parties) pursuant to this
Section 6.18 shall be borne by Mergeparty and the Tower Entity in inverse
proportion as they may prevail on matters resolved by the Accounting Firm, which
proportionate allocations shall also be determined by the Accounting Firm at the
time the determination of the Accounting Firm is rendered on the merits of the
matters submitted.
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(b) Subject to Section 6.18(d), if Closing Working Capital is less than
(i) $60,000,000 in the event the Closing Date is on or prior to March 31, 1998
or (ii) $70,000,000 in the event the Closing Date is after March 31, 1998 (the
"WC Amount"), the Tower Entity shall, and if Closing Working Capital is greater
than the WC Amount, Mergeparty shall, owe the other the amount of such
difference. The term "Working Capital" shall mean Current Assets minus
Liabilities (in each case as defined below). The terms "Current Assets" and
"Liabilities" shall mean the current assets and liabilities of the Post-Closing
American Group calculated in accordance with GAAP except that (i) outstanding
principal amount of indebtedness and liquidation preference of preferred stock
shall be excluded, (ii) cash shall be excluded, (iii) accruals for Taxes shall
be included except that (A) Tax liabilities relating to the Tower Merger or
Tower Distribution, Tax benefits arising from the exercise or cancellation of
options between the date of this Agreement and the Effective Time and deferred
income Tax assets and liabilities that exist or arise from differences in basis
for Tax and financial reporting purposes attributable to acquisitions, exchanges
and dispositions or attributable to depreciation and amortization shall not be
taken into account and (B) accruals for Taxes relating to acquisitions,
exchanges or dispositions shall be determined in accordance with American's past
accounting practices, (iv) Current Assets shall be increased by an amount equal
to the sum of (x) the amount derived by multiplying $44.00 by the number of
shares of American Common Stock held in its treasury as of the Effective Date
and (y) the aggregate amount of the spread of $44.00 over the exercise price of
each American Option outstanding on the date hereof terminated or cancelled
prior to the Effective Time or for which the holder has elected to receive an
option to acquire Tower Common Stock in lieu thereof, less the Tax benefit that
would have been received with respect to the exercise of such options, (v)
Current Assets shall be (A) increased (if the number of shares of American
Common Stock issuable upon conversion of the American Convertible Preferred
Stock is fewer than 3,750,000) by an amount equal to the amount derived by
multiplying $44.00 by the excess of (I) 3,750,000 less (II) the number of shares
of American Common Stock issuable upon conversion of the American Convertible
Preferred Stock or (B) decreased (if the number of shares of American Common
Stock issuable upon conversion of the American Convertible Preferred Stock is
greater than 3,750,000) by an amount equal to the amount derived by multiplying
$44.00 by the excess of (I) the number of shares of American Common Stock
issuable upon conversion of the American Convertible Preferred Stock less (II)
3,750,000 and (vi) liabilities from the radio broadcasting rights contracts for
St. Louis Rams games shall be limited to $3,300,000.
(c) Subject to Section 6.18(d), if Closing Net Debt is greater than the
Debt Amount (as defined below) minus $50,419,000, minus cash received by the
Post-Closing American Group in respect of options exercised between the date of
this Agreement and the Effective Time (the "CD Amount"), the Tower Entity shall,
and if Closing Net Debt is less than the CD Amount, Mergeparty shall, owe the
other the amount of such difference. "Debt Amount" shall mean $1,066,721,000,
minus the consideration that was expected to be paid (as set forth on Section
6.10(a) of the American Disclosure Schedule) with respect to all acquisitions
set forth in Section 6.10(a) of the American Disclosure Schedule which were not
consummated prior to the Closing Date, plus the consideration that was expected
to be received (as set forth in Section 6.10(a) of the American Disclosure
Schedule) with respect to all dispositions set forth in Section 6.10(a) of the
American Disclosure Schedule which were not consummated prior to the Closing
Date, plus the consideration paid in connection with acquisitions consummated
prior to the Closing Date which were not listed in Section 6.10(a) of the
American Disclosure Schedule, minus the consideration received in connection
with dispositions consummated prior to the Closing Date which were not listed in
Section 6.10(a) of the American Disclosure Schedule. The term "Net Debt" shall
mean outstanding principal amount of indebtedness (including, without
duplication, guarantees of indebtedness) plus outstanding liquidation preference
of all preferred stock (other than the American Convertible Preferred Stock)
minus cash.
(d) Amounts owed pursuant to the first sentence of Section 6.18(c) and
the first sentence of 6.18(c) shall be aggregated or netted, as appropriate (the
resulting amount, the "Adjustment Amount"). In
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the event that the Adjustment Amount minus $10,000,000 is greater than $0 (the
"Final Adjustment Amount"), the party that owes the Final Adjustment Amount
shall make payment by wire transfer of immediately available funds of the Final
Adjustment Amount together with interest thereon at a rate of interest equal to
the lesser of (i) 10% per annum and (ii) if the Tower Entity is being charged a
rate of interest by a financial institution, such rate, but in not event lower
than the prime rate as reported in the Wall Street Journal on the date the
Closing Statement becomes final and binding on the parties, calculated on the
basis of the actual number of days elapsed divided by 365, from the date of the
Effective Time to the date of actual payment.
(e) The scope of the disputes to be resolved by the Accounting Firm is
limited to whether the Closing Statement was prepared in compliance with the
requirements of this Section 6.18 and the allocation of the costs of dispute
resolution, and the Accounting Firm is not to make any other determination.
(f) During the period of time from and after the delivery of the
Closing Statement to the Tower Entity through the date the Closing Statement
becomes final and binding on Mergeparty, American and the Tower Entity,
Mergeparty shall cause the Post-Closing American Group to afford to the Tower
Entity and any accountants, counsel or financial advisors retained by the Tower
Entity in connection with the adjustment contemplated by this Section 6.18
reasonable access (with the right to make copies) during normal business hours
to the books and records of the Post-Closing American Group to the extent
relevant to the adjustment contemplated by this Section 6.18.
(g) Any adjustment pursuant to this Section 6.18 shall be taken into
account in the calculation of Tax liability pursuant to clause 6.17(c)(iii), and
any increase or decrease in the amount of Taxes that are reimbursable or
indemnifiable by the American Tower Group as a result of any such adjustment
shall be treated as an adjustment to Taxes for purposes of clause 6.17(c)(vii)
6.19 Tower Leases. In connection with the Tower Merger, Tower
Distribution or any Alternative Transaction, as the case may be, Mergeparty and
American shall agree on the definitive documentation ("Tower Leases") to be
executed by American and American Tower with respect to certain broadcasting
towers set forth in Section 6.17(i) the American Disclosure Schedules
("Towers"). The markets in which such Towers, are located and the annual "market
price" for each antenna are set forth in Exhibit "B." Except as set forth in
Section 6.17(I) of the American Disclosure Schedule, such Towers are now owned
or leased by American and shall become the property of American Tower. Each of
the Tower Leases shall contain standard and customary terms and conditions and
Mergeparty and American specifically agree to the inclusion of the following in
each of the Tower Leases:
(a) except as provided in clause (b) below with respect to those Tower
Leases set forth in Section 6.19 of the American Disclosure Schedule, each Tower
Lease shall be for a term of twenty (20) years with four (4) renewal periods of
five (5) years each; each such renewal to be upon the same terms and conditions
as the original Tower Lease.
(b) Prior to the Effective time, American shall use its best efforts to
extend the term of each lease set forth in Section 6.19 of the American
Disclosure Schedule ("Land Leases") to a minimum duration of twenty (20) years,
inclusive of renewal periods, if any, and provide Mergeparty with respect to the
Towers subject to the extended Land Leases, tower leases with the equivalent
benefits set forth in clauses (c), (d) and (e) and for a minimum duration of
twenty (20) years ("Extended Tower Leases"). With respect to any such Land Lease
that is not so extended (except with respect to the Land Lease for KUFX(FM),
which present term of approximately eighteen (18) remaining years shall be
deemed to satisfy the foregoing requirement of a minimum duration of twenty (20)
years), American, American Tower and Mergeparty shall negotiate in good
- 39 -
faith to agree upon definitive documentation to provide Mergeparty with respect
to the Towers subject to such Land Leases, tower leases with the benefits
equivalent of such Extended Tower Leases or mutually agreed to alternative
arrangements providing equivalent value to Mergeparty.
(c) each Tower Lease shall provide that no payments shall be payable by
Mergeparty for a period of three (3) years from the Effective Time; for the next
three (3) years the payments shall be as follows: one-third (1/3) of the market
price as set forth in Exhibit B corresponding to each FM antenna (or AM/FM
antenna) for year four (4); two-thirds (2/3) for year five (5) and full market
price for year six (6); thereafter, for the balance of the term and any renewals
thereof, the payments shall be the market price, together with an annual
increase every year, beginning for year seven (7), of the lesser of five percent
(5%) or the Consumer Price Index for all Urban Consumers over the previous
year's payments (except with respect to San Xxxx (KUFX) and Boston (WNFT) which
such payments shall begin at the Effective Time, with respect to Mergeparty, and
will begin on January 1, 1998 as between American and American Tower).
Notwithstanding the foregoing, Mergeparty acknowledges that Tower Lease payments
at the full "market price" indicated on Exhibit B by American to American tower
may commence upon such leases becoming the property of American Tower and shall
continue until the Effective Time.
(d) all expenses for taxes, insurance, maintenance and utilities in
respect of each Tower shall be paid by American Tower.
(e) American Tower will assume the obligation and responsibility for
complying with all Applicable Law with respect to the Towers.
ARTICLE 7
CLOSING CONDITIONS
7.1 Conditions to Obligations of Each Party to Effect the Merger. The
respective obligations of each party to effect the Merger shall, except as
hereinafter provided in this Section, be subject to the satisfaction at or prior
to the Closing Date of the following conditions, any or all of which may be
waived, in whole or in part, to the extent permitted by Applicable Law:
(a) in the event American shall be required to call the American
Stockholders Meeting pursuant to Section 6.5 hereof, the American Stockholder
Approval shall have been obtained;
(b) the FCC shall have issued the FCC Order (as defined below)
approving the applications for transfer of control of American's FCC Licenses in
connection with the transactions contemplated herein, and the FCC Order shall
have been obtained without the imposition of conditions that would have a
Material Adverse Effect on Mergeparty's television and radio broadcasting
business; provided that without triggering Mergeparty's right to approve such
conditions or restrictions, the FCC Order (i) may condition consummation of the
Merger on Mergeparty complying with the numerical limits on local multiple radio
ownership imposed by 47 C.F.R. ss. 73.3555(a) by affording Mergeparty a period
of at least six (6) months following the Effective Time within which to comply
with such rule through the use of divestiture trusts on terms and conditions
required by the FCC, provided further, however, that to the extent that the FCC
authority for such divestiture trusts provides for a period of less than six (6)
months, (A) American has the right to postpone the Effective Time (and, to the
extent necessary, the Termination Date), so that Mergeparty is afforded the six
(6) month divestiture period, whether before or after the Effective Time and (B)
if American exercises such right,
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Mergeparty's right to approve such condition shall not be triggered, and (ii)
may grant Mergeparty temporary, rather than permanent, waivers of the
"one-to-a-market" rule, 47 C.F.R. ss. 73.3555(c), so long as such temporary
waivers shall remain in effect until at least six (6) months following the
effective date of FCC action concluding the ongoing rulemaking proceeding in MM
Docket Nos. 91-221, 87-8 (FCC 94-322) or a successor rulemaking proceeding
pending at the time of the grant of the FCC Order, that considers the
"one-to-a-market" rule. The "FCC Order" shall be an action by the FCC approving
the transfer of the American FCC Licenses with respect to which, except as may
be waived in writing by Mergeparty in its sole discretion, (i) no timely request
for stay, petition for reconsideration or appeal or sua sponte action of the FCC
with comparable effect is pending, or (ii) if any of the foregoing is pending,
in the judgment of Mergeparty it lacks any substantial merit or is contrary to
established FCC precedent, or (iii) if it were to be so granted, it would not
have a Material Adverse Effect on Mergeparty's television and radio broadcasting
business; and as to which the thirty (30) day time period specified in 47 U.S.C.
ss. 405(a) for initiating a petition for reconsideration of the grant of the FCC
Order has expired;
(c) no Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law (whether temporary, preliminary or
permanent) that remains in effect and restrains, enjoins or otherwise prohibits
consummation of the Merger; and
(d) the waiting period applicable to the consummation of the Merger
under the Xxxx-Xxxxx- Xxxxxx Act shall have expired or been terminated.
7.2 Conditions to Obligations of Mergeparty. The obligation of
Mergeparty and Mergeparty Subsidiary to effect the Merger shall be subject to
the satisfaction of the following conditions, any or all of which may be waived,
in whole or in part, to the extent permitted by Applicable Law:
(a) American shall have furnished Mergeparty, with an opinion, dated
the Closing Date of Dow, Xxxxxx & Xxxxxxxxx, FCC counsel for American,
substantially in the form attached hereto as Exhibit C;
(b) (i) the representations and warranties of American set forth in
this Agreement (other than in Sections 4.11 and 4.13) shall be true and correct
as of the date of this Agreement and as of the Closing Date as though made on
and as of the Closing Date except (x) to the extent such representations and
warranties expressly speak as of an earlier date (in which case such
representations and warranties shall be true and correct as of such earlier
date) and (y) to the extent that the failure of such representations and
warranties to be true and correct, individually or in the aggregate, would not
have a Material Adverse Effect on American; provided, however, that for the
purpose of this clause (y), representations and warranties that are qualified as
to materiality (including by reference to "Material Adverse Effect") shall not
be deemed to be so qualified, and (ii) the representations and warranties of
American set forth in Sections 4.11 and 4.13 of this Agreement shall be true and
correct in all material respects;
(c) American shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date;
(d) between the date of this Agreement and the Closing Date, except as
contemplated by this Agreement, including without limitation the Tower Merger or
the Tower Distribution or an Alternative Transaction, as the case may be, and
except as set forth in Section 4.3 of the American Disclosure Schedule, there
shall not have occurred and be continuing any Material Adverse Change in
American; and
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(e) the Tower Merger, the Tower Distribution or an Alternative
Transaction shall have been consummated.
7.3 Conditions to Obligations of American. The obligation of American
to effect the Merger shall be subject to the satisfaction of the following
conditions, any or all of which may be waived, in whole or in part, to the
extent permitted by Applicable Law:
(a) the representations and warranties of Mergeparty set forth in this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing Date except (x) to the
extent such representations and warranties expressly speak as of an earlier date
(in which case such representations and warranties shall be true and correct as
of such earlier date) and (y) to the extent that the failure of such
representations and warranties to be true and correct, individually or in the
aggregate, would not have a Material Adverse Effect on Mergeparty; provided,
however, that for the purpose of this clause (y), representations and warranties
that are qualified as to materiality (including by reference to "Material
Adverse Effect") shall not be deemed to be so qualified.;
(b) Mergeparty shall have performed in all material respects all
obligations required to be performed by it under this Agreement at or prior to
the Closing Date; and
(c) the Tower Merger, Tower Distribution or an Alternative Transaction
shall have been consummated or a Notice of Abandonment shall have been received
by Mergeparty.
ARTICLE 8
TERMINATION, AMENDMENT AND WAIVER
8.1 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after approval by the stockholders of
American:
(a) by mutual written consent of American, Mergeparty and Mergeparty
Subsidiary;
(b) by either Mergeparty or American if any Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law that shall have become final and nonappealable and that restrains, enjoins
or otherwise prohibits consummation of the Merger, unless the party seeking such
restraint injunction or prohibition or any Affiliate thereof was the terminating
party;
(c) by either Mergeparty or American if the Merger shall not have been
consummated by the Termination Date for any reason; provided, however, that the
right to terminate this Agreement under this Section 8.1(c) shall not be
available to any party whose action or failure to act (or the action or failure
to act of any Affiliate) has been a principal cause of or resulted in the
failure of the Merger to occur on or before such date and such action or failure
to act constitutes a breach of this Agreement;
(d) by either Mergeparty or American if the American Stockholder
Approval shall not have been obtained at the American Stockholders Meeting duly
convened therefor or at any adjournment or postponement thereof or by written
consent;
(e) by American in the event (i) American is not in material breach of
this Agreement and none of its representations or warranties shall have been or
become and continue to be untrue in any material
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respect, and (ii) Mergeparty is in material breach of this Agreement or any of
its representations or warranties shall have become and continue to be untrue in
any manner that would cause the condition in Section 7.3(a) not to be satisfied,
and such a breach or untruth exists and is not capable of being cured by and
will prevent or delay consummation of the Merger by or beyond the Termination
Date; or
(f) by Mergeparty in the event (i) Mergeparty is not in material breach
of this Agreement and none of its representations or warranties shall have been
or become and continue to be untrue in any material respect, and (ii) American
is in material breach of this Agreement or any of its representations or
warranties shall have become and continue to be untrue in any manner that would
cause the condition in Section 7.2(b) not to be satisfied, and such a breach or
untruth exists and is not capable of being cured by and will prevent or delay
consummation of the Merger by or beyond the Termination Date.
The term "Termination Date" shall mean September 30, 1998, as such date may from
time to time be extended pursuant to the provisions of Section 7.1(b) or by
mutual agreement of the parties.
The right of Mergeparty or American to terminate this Agreement
pursuant to this Section shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of either party, any Person
controlling any such party or any of their respective Representatives, whether
prior to or after the execution of this Agreement.
8.2 Effect of Termination.
Except as provided in Sections 6.1 (Access to Information;
Confidentiality), 6.3 (Public Announcements), and 9.3 (Fees, Expenses and other
Payments) and this Section, in the event of the termination of this Agreement
pursuant to Section 8.1, or in the event the Merger shall not have become
effective prior to the end of business on the day prior to the Termination Date,
this Agreement shall forthwith become void and have no effect, without any
liability on the part of any party, or any of its respective stockholders,
officers or directors, to the other; provided, however, that such termination
shall not relieve any party from liability for any breach of any of its
warranties, covenants or agreements set forth in this Agreement and, provided,
however that such termination will not terminate the Confidentiality Agreement.
ARTICLE 9
GENERAL PROVISIONS
9.1 Amendment. This Agreement may be amended from time to time by the
parties hereto at any time prior to the Closing Date but only by an instrument
in writing signed by the parties hereto and, after receipt of the Required Vote
or the American Stockholder Approval, subject, in the case of American, to
Applicable Law.
9.2 Waiver. At any time prior to the Closing Date, except to the extent
not permitted by Applicable Law, Mergeparty or American may, either generally or
in a particular instance and either retroactively or prospectively, extend the
time for the performance of any of the obligations or other acts of the other,
subject, however, to the provisions of Section 8.1, waive any inaccuracies in
the representations and warranties of the other contained herein or in any
document delivered pursuant hereto, and waive compliance by the other with any
of the agreements, covenants, conditions or other provision contained herein.
Any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby.
- 43 -
9.3 Fees, Expenses and Other Payments. (a) All costs and expenses
incurred in connection with any filing fees (including without limitation
Xxxx-Xxxxx-Xxxxxx Act filings and FCC filing fees), transfer Taxes, sales Taxes,
document stamps or other charges levied by any Authority in connection with this
Agreement and the Merger shall be borne equally by Mergeparty and American. All
other costs and expenses incurred in connection with the negotiation,
preparation, performance and enforcement of this Agreement (including all fees
and expenses of counsel, financial advisors, accountants, and other consultants,
advisors and representatives for all activities of such persons undertaken
pursuant to this Agreement) incurred by the parties hereto, shall be borne
solely and entirely by the party which has incurred such costs and expenses,
except to the extent, if any, otherwise specifically set forth in this
Agreement.
(b) In the event that this Agreement is terminated by any party
pursuant to 8.1(d), American shall promptly, but in no event later than two (2)
days after the date of such termination, pay Mergeparty a fee equal to $35
million in immediately available funds plus Expenses. "Expenses" shall mean
reasonable and reasonably documented out-of-pocket fees and expenses incurred or
paid by or on behalf of Mergeparty in connection with the Merger or the
consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of counsel, commercial banks, investment banking
firms, accountants, experts and consultants to Mergeparty in an aggregate amount
not to exceed $5 million.
9.4 Notices. All notices and other communications which by any
provision of this Agreement are required or permitted to be given shall be given
in writing and shall be (a) mailed by first-class or express mail, postage
prepaid, or by recognized courier service, (b) sent by telecopy or other form of
rapid transmission, confirmed by mailing (by first class or express mail,
postage prepaid, or by recognized courier service) written confirmation at
substantially the same time as such rapid transmission, or (c) personally
delivered to the receiving party (which if, other than an individual, shall be
an officer or other responsible party of the receiving party). All such notices
and communications shall be mailed, sent or delivered as follows:
(a) If to Mergeparty:
Westinghouse Electric Corporation
00 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
000 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
- 44 -
(b) If to American:
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, President and
Chief Executive Officer
Telecopier No.: (000) 000-0000
with a copy to:
Xxxxxxxx & Worcester LLP
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
or to such other person(s), telex or facsimile number(s) or address(es) as the
party to receive any such communication or notice may have designated by written
notice to the other party.
9.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the other party should refuse to perform
any of its obligations under this Agreement or any Collateral Document, the
remedy at law would be inadequate and agrees that for breach of such provisions,
each party shall, in addition to such other remedies as may be available to it
at law or in equity or as provided in Article 8, be entitled to injunctive
relief and to enforce its rights by an action for specific performance to the
extent permitted by Applicable Law. Each party hereby waives any requirement for
security or the post ing of any bond or other surety in connection with any
temporary or permanent award of injunctive, mandatory or other equitable relief.
Nothing herein contained shall be construed as prohibiting each party from
pursuing any other remedies available to it under Applicable Law or pursuant to
the provisions of this Agreement for such breach or threatened breach, including
without limitation the recovery of damages, including, to the extent awarded in
any Legal Action, punitive, incidental and consequential damages (including
without limitation damages for diminution in value and loss of anticipated
profits) or any other measure of damages permitted by Applicable Law.
9.6 Survival of Representations, Warranties, Covenants and Agreements.
None of the representations and warranties in this Agreement shall survive the
Merger, and after effectiveness of the Merger neither Mergeparty, American or
their respective officers, directors or shareholders shall have any further
obligation with respect thereto. This Section 9.6 shall not limit any covenant
or agreement of the parties which by its terms contemplates performance after
the Effective Time.
9.7 Severability. If any term or provision of this Agreement shall be
held or deemed to be, or shall in fact be, invalid, inoperative, illegal or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the
conflicting of any provision with any constitution or statute or rule of public
policy or for any other reason, such circumstance shall not have the effect of
rendering the provision or provisions in question invalid, inoperative, illegal
or unenforceable in any other jurisdiction or in any other case or circumstance
or of rendering any other provision or provisions herein contained invalid,
inoperative, illegal or unenforceable to the extent that such other provisions
are not themselves actually in conflict with such constitution, statute or rule
of public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid,
- 45 -
inoperative, illegal or unenforceable provision had never been contained herein
and such provision reformed so that it would be valid, operative and enforceable
to the maximum extent permitted in such jurisdiction or in such case.
Notwithstanding the foregoing, in the event of any such determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible to the fullest extent
permitted by Applicable Law in an acceptable manner to the end that the Merger
is fulfilled and consummated to the maximum extent possible.
9.8 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument, binding upon all of the
parties. In pleading or proving any provision of this Agreement, it shall not be
necessary to produce more than one of such counterparts.
9.9 Section Headings. The headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
9.10 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by, and construed in accordance
with, the Applicable Laws of the United States of America and the laws of the
State of New York applicable to contracts made and performed in such State and,
in any event, without giving effect to any choice or conflict of laws provision
or rule that would cause the application of domestic substantive laws of any
other jurisdiction, except to the extent the corporate laws of the State of
Delaware are applicable. Anything in this Agreement to the contrary
notwithstanding, in the event of any dispute between the parties which results
in a Legal Action, the prevailing party shall be entitled to receive from the
non-prevailing party reimbursement for reasonable legal fees and expenses
incurred by such prevailing party in such Legal Action.
9.11 Further Acts. Each party agrees that at any time, and from time to
time, before and after the consummation of the transactions contemplated by this
Agreement, it will do all such things and execute and deliver all such
Collateral Documents and other assurances, as the other party or its counsel
reasonably deems necessary or desirable in order to carry out the terms and
conditions of this Agreement and the transactions contemplated hereby or to
facilitate the enjoyment of any of the rights created hereby or to be created
hereunder.
9.12 Entire Agreement; No Other Representations or Agreements. This
Agreement (together with the Disclosure Schedules and the Exhibits and the other
Collateral Documents delivered or to be delivered in connection herewith)
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements, arrangements, covenants,
promises, conditions, undertakings, inducements, representations, warranties and
negotiations, expressed or implied, oral or written, between the parties, with
respect to the subject matter hereof. Each of the parties is a sophisticated
legal entity that was advised by experienced counsel and, to the extent it
deemed necessary, other advisors in connection with this Agreement. Each of the
parties hereby acknowledges that (a) neither party has relied or will rely in
respect of this Agreement or the transactions contemplated hereby upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement (including the Exhibits and
the Disclosure Schedules and the other Collateral Documents) or such of the
foregoing as are delivered at the Closing, (b) there are no covenants or
agreements by or on behalf of either party hereto or any of its respective
Affiliates or representatives other than those expressly set forth in this
Agreement and the Collateral Documents, and (c) the parties' respective rights
and obligations with respect to this Agreement and the events giving rise
thereto will be solely as set forth in this Agreement and the Collateral
Documents. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY HERETO
AGREES THAT, EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS
- 46 -
AGREEMENT, NEITHER AMERICAN NOR MERGEPARTY MAKES ANY OTHER REPRESENTATIONS OR
WARRANTIES, AND EACH HEREBY DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES
MADE BY ITSELF OR ANY OF ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, FINANCIAL
AND LEGAL ADVISORS OR OTHER REPRESENTATIVES, WITH RESPECT TO THE EXECUTION AND
DELIVERY OF THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO THE OTHER OR THE OTHER'S
REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER INFORMATION WITH RESPECT TO ANY
ONE OR MORE OF THE FOREGOING.
9.13 Assignment. This Agreement shall not be assignable by any party
and any such assignment shall be null and void, except that it shall inure to
the benefit of and be binding upon any successor to each party by operation of
Law, including by way of merger, consolidation or sale of all or substantially
all of its assets, and each party may assign its rights and remedies hereunder
to any bank or other financial institution which has loaned funds or otherwise
extended credit to it.
9.14 Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party and their permitted successors and
assigns, and nothing in this Agreement, express or implied, is intended to or
shall confer upon any Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement, except as otherwise provided in
Articles 2 and 3 and Sections 6.8(e), 6.12 and 9.13.
9.15 Mutual Drafting. This Agreement is the result of the joint efforts
of Mergeparty and American, and each provision hereof has been subject to the
mutual consultation, negotiation and agreement of the parties and there shall be
no construction against either party based on any presumption of that party's
involvement in the drafting thereof.
9.16 Obligations of American and of Mergeparty. Whenever this Agreement
requires a Subsidiary of American to take any action, such requirement shall be
deemed to include an undertaking on the part of American to cause such
Subsidiary to take such action. Whenever this Agreement requires a Subsidiary of
Mergeparty to take any action, such requirement shall be deemed to include an
undertaking on the part of Mergeparty to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.17 Mergeparty Agent for Mergeparty Subsidiary. Anything in this
Agreement to the contrary notwithstanding, Mergeparty Subsidiary hereby grants
Mergeparty an irrevocably power of attorney and hereby irrevocably appoints
Mergeparty its agent for all purposes of this Agreement, including without
limitation for the purpose of executing and delivering extensions of the time
for the performance of any of the obligations or other acts of Mergeparty,
waivers, terminations or amendments, and any action taken by Mergeparty pursuant
to such power of attorney and agency, and any such extension, waiver,
termination or amendment executed and delivered by Mergeparty, shall be binding
upon Mergeparty Subsidiary whether or not it has specifically approved such
action or executed such extension, waiver, termination or amendment.
[SIGNATURE PAGE FOLLOWS]
- 47 -
IN WITNESS WHEREOF, American, Mergeparty and Mergeparty Subsidiary have
caused this Agreement and Plan of Merger to be executed, pursuant to the
authority and approval of each of their respective Boards of Directors, as of
the date first written above by their respective officers thereunto duly
authorized.
American Radio Systems Corporation
By: /s/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Chairman of the Board, President and
Chief Executive Officer
Westinghouse Electric Corporation
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and General Counsel
R Acquisition Corp.
By: /s/ Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Senior Vice President and General Counsel
- 48 -
APPENDIX A
DEFINITIONS
Accounting Firm shall have the meaning given to it in Section 6.18.
Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event that has adversely affected or is reasonably likely to adversely affect
(a) the validity or enforceability of this Agreement or the likelihood of
consummation of the Merger, (b) the business, properties, financial condition or
results of operations of American and its Subsidiaries, taken as a whole, or the
Mergeparty and its Subsidiaries, taken as a whole, as the case may be, or (c)
American's or Mergeparty's, as the case may be, ability to fulfill its
obligations under the terms of this Agreement. Notwithstanding the foregoing,
and anything in this Agreement to the contrary notwithstanding, neither (i) any
Event affecting the radio broadcasting industry or the national or any regional
or market economy generally nor (ii) the Tower Merger or Tower Distribution, as
the case may be, shall be deemed to constitute an Adverse Change, have an
Adverse Effect or to Adversely Affect within the meaning of any of the foregoing
clauses (a) through (c).
Affiliate, Affiliated shall mean, with respect to any Person, (a) any
other Person at the time directly or indirectly controlling, controlled by or
under direct or indirect common control with such Person, any other Person of
which such Person at the time owns, or has the right to acquire, directly or
indirectly, twenty percent (20%) or more of any class of the capital stock or
beneficial interest, (c) any other Person which at the time owns, or has the
right to acquire, directly or indirectly, twenty percent (20%) or more of any
class of the capital stock or beneficial interest of such Person, (d) any
executive officer or director of such Person, (e) with respect to any
partnership, joint venture or similar Entity, any general partner thereof, and
(f) when used with respect to an individual, shall include any member of such
individual's immediate family or a family trust.
Agreement shall have the meaning given to it in the first "Whereas"
paragraph and shall include any amendments executed and delivered by the parties
pursuant to the provisions of Section 9.1.
Alternative Transaction shall have the meaning given to it in Section
6.17(k).
American shall have the meaning given to it in the Preamble.
American Brokered Stations shall mean the radio broadcast stations
which American has the right to acquire, but which as of the date of this
Agreement it is operating pursuant to time brokerage, local marketing or other
similar agreements.
American Common Stock shall have the meaning given to it in Section
3.1(d).
American Convertible Preferred Stock shall have the meaning given to it
in Section 3.1(c).
American Cumulative Preferred Stock shall have the meaning given to it
in Section 3.1(b).
A-1
American Disclosure Schedule shall mean the American Disclosure
Schedule dated as of the date of this Agreement delivered by American to
Mergeparty simultaneously with the execution and delivery of this Agreement.
American Financial Statements shall have the meaning given to it in
Section 4.2.
American Options shall have the meaning given to it in Section 6.8.
American Preferred Stock shall have the meaning given to it in Section
3.1(c).
American FCC Licenses means all FCC Licenses issued to American or any
of its Subsidiaries and used in the business or operations of any of the
American Stations, including those listed on Section 4.6(a) of the American
Disclosure Schedule (other than those relating to the American Brokered
Stations, which shall be deemed American FCC Licenses only upon consummation of
the acquisition of the applicable American Brokered Station), and any additions
thereto between the date hereof and the Closing Date. Auxiliary broadcast
licenses issued pursuant to 47 C.F.R. Part 74 shall not be deemed to be material
American FCC Licenses.
American SEC Documents shall have the meaning given to it in Section
4.2.
American Stations means the radio broadcast stations owned by American,
or which it has the right to acquire (and acquires prior to the Closing Date but
only from and after such acquisition) as of the date of this Agreement;
provided, however, that American Stations shall not include any American Station
disposed of by American subsequent to the date of this Agreement not in
violation of the provisions of this Agreement; further, provided, that American
Stations shall include American Brokered Stations if the context so requires.
American Stock means the American Common Stock and the American
Preferred stock.
American Stockholder Approval shall have the meaning given to it in
Section 6.5.
American Stockholders Meeting shall have the meaning given to it in
Section 6.5.
American 10-K shall have the meaning given to it in Section 4.2.
American Tax Group shall mean American and those of its Subsidiaries as
are included in the consolidated Federal Income Tax Returns of American.
American Tower shall have the meaning given to it in the second
"Whereas" paragraph.
American Tower Group shall have the meaning given to it in Section
6.17.
American Tower Sub shall mean American Radio and Tower Corporation,
Delaware corporation to be organized in the event of the Tower Merger which will
be a wholly-owned subsidiary of American Tower.
American's knowledge (including the term "to the knowledge of
American") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of American, and that such Officer shall have reason to
believe and shall believe that the subject representation or warranty is true
and accurate as stated.
A-2
Antitrust Division shall have the meaning given to it in Section
6.2(c).
Applicable Law shall mean, with respect to any Person, any Law of any
Authority, whether domestic or foreign, to which such Person is subject or by
which it or any of its business or operations is subject or any of its property
or assets is bound.
Applications shall have the meaning given to it in Section 6.2(b).
Authority shall mean any governmental or quasi-governmental authority,
whether administrative, executive, judicial, legislative or other, or any
combination thereof, including without limitation any federal, state,
territorial, county, municipal or other government or governmental or
quasi-governmental agency, arbitrator, authority, board, body, branch, bureau,
central bank or comparable agency or Entity, commission, corporation, court,
department, instrumentality, master, mediator, panel, referee, system or other
political unit or subdivision or other Entity of any of the foregoing, whether
domestic or foreign.
Benefit Arrangement shall mean, with respect to any Person, any benefit
arrangement that is not a Plan, including (a) any employment, severance or
consulting agreement, (b) any arrangement providing for insurance coverage or
workers' compensation benefits, (c) any incentive bonus or deferred bonus
arrangement, (d) any arrangement providing termination allowance, severance or
similar benefits, (e) any equity compensation plan, and (f) any deferred
compensation plan which American or any ERISA Affiliate maintains, contributes
to or is required to contribute to for the benefit of any current or former
officers, employees, agents, directors or independent contractors of American or
any of its ERISA Affiliates.
Certificates shall have the meaning given to it in Section 3.2(b).
CD Amount shall have the meaning given to it in Section 6.18(c).
Claims shall mean any and all debts, liabilities, obligations, losses,
damages, deficiencies, assessments and penalties, together with all Legal
Actions, pending or threatened, claims and judgments of whatever kind and nature
relating thereto, and all fees, costs, expenses and disbursements (including
without limitation reasonable attorneys' and other legal fees, costs and
expenses) relating to any of the foregoing.
Class A Common shall have the meaning given to it in Section 3.1(d).
Class B Common shall have the meaning given to it in Section 3.1(d).
Closing shall have the meaning given to it in Section 2.2.
Closing Balance Sheet shall have the meaning given to it in Section
6.18.
Closing Date shall have the meaning given to it in Section 2.2.
Closing Net Debt shall have the meaning given to it in Section 6.18.
Closing Statement shall have the meaning given to it in Section 6.18.
Closing Working Capital shall have the meaning given to it in Section
6.18.
A-3
COBRA shall mean the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended, as set forth in Section 4980B of the Code and Part 6 of
Subtitle B of Title I of ERISA.
Code shall mean the Internal Revenue Code of 1986, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement, including without limitation, the Confidentiality
Agreement and the Tower Documentation.
Commission or SEC shall mean the Securities and Exchange Commission and
shall include any successor Authority.
Contracts shall have the meaning given to it in Section 4.20(a).
Confidentiality Agreement shall mean the letter agreement, dated August
21, 1997 between American and Mergeparty.
Control (including the terms "controlled," "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management or
policies of a Person, or the disposition of such Person's assets or properties,
whether through the ownership of stock, equity or other ownership, by contract,
arrangement or understanding, or as trustee or executor, by contract or credit
arrangement or otherwise.
Convertible Securities shall mean any evidences of indebtedness, shares
of capital stock (other than common stock) or other securities directly or
indirectly convertible into or exchangeable for shares of capital stock, whether
or not the right to convert or exchange thereunder is immediately exercisable or
is conditioned upon the passage of time, the occurrence or non-occurrence or
existence or non-existence of some other Event, or both.
CSFB shall have the meaning given to it in Section 4.14.
Current Assets shall have the meaning given to it in Section 6.18(b).
DCL shall have the meaning given to it in Section 2.1.
Debt Amount shall have the meaning given to it in Section 6.18(c).
Disclosure Schedule shall mean the Mergeparty Disclosure Schedule, if
any, or the American Disclosure Schedule, as the case may be.
Dissenting Shares shall have the meaning given to it in Section 3.4(a).
Divestiture Condition means any condition imposed or required by the
FCC (including conditions required by the FCC's multiple ownership rules or
policies), the Antitrust Division or the FTC as a condition to its consent to or
approval of the transfer of control of any of the American FCC Licenses or
otherwise to the transactions (or any of them) contemplated by this Agreement,
including without limitation the Merger,
A-4
or as a condition to its agreement not to institute any Legal Action to prevent
the transfer of control of any of the American FCC Licenses or otherwise to
prevent any of the transactions contemplated hereby, which would require
Mergeparty or any of its Subsidiaries or any of its other Affiliates to dispose
of one or more of the American Stations or American Brokered Stations, or in
Mergeparty's sole discretion, one or more of the radio broadcast stations owned
by Mergeparty and operating in the same Arbitron Survey area as any of the
American Stations or American Brokered Stations; provided, however, that with
respect to compliance with any condition imposed by the FCC, Mergeparty shall
have been afforded a period of six months, from Closing, through the use of
trusts or otherwise, within which to comply with the radio duopoly overlap rule,
47 C.F.R. ss. 73.3555(a), and Mergeparty shall have been afforded temporary,
rather than permanent, waivers of the one-to-a-market rule, 47 C.F.R. ss.
73.3555(c), so long as such temporary waivers shall remain in effect until at
least 6 months following the effective date of FCC action concluding the ongoing
proceeding in MM Docket Nos. 91-221, 87-8 (FCC 94-322) or a successor rulemaking
proceeding pending at the time of the grant of the FCC Order, that considers the
one-to-a-market rule.
D&O Insurance shall have the meaning given to it in Section 6.12(c).
Effective Time shall have the meaning given to it in Section 2.3.
Entity shall mean any corporation, firm, unincorporated organization,
association, partnership, limited liability company, trust (inter vivos or
testamentary), estate of a deceased, insane or incompetent individual, business
trust, joint stock company, joint venture or other organization, entity or
business, whether acting in an individual, fiduciary or other capacity, or any
Authority.
Environmental Law excluding any regulations issued by the FCC shall
mean any Law relating to or otherwise imposing liability or standards of conduct
concerning pollution or protection of the environment, including without
limitation, Laws relating to emissions, discharges, releases or threatened
releases of Hazardous Materials into the environment (including, without
limitation, ambient air, surface water, ground water, mining or reclamation of
mined land, land surface or subsurface strata) or otherwise that relate to the
manufacture, processing, generation, distribution, use, treatment, storage,
disposal, cleanup, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances, materials or wastes. Environmental
Laws shall include without limitation the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C. Section 6901 et seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act
(42 U.S.C. Section 7401 et seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et seq.), the Occupational Safety and Health Act (29 U.S.C. Section
651 et seq.), the Federal Insecticide, Fungicide and Rodenticide Act (7 U.S.C.
Section 136 et seq.), and the Surface Mining Control and Reclamation Act of 1977
(30 U.S.C. Section 1201 et seq.), and any analogous federal, state, local or
foreign Laws, and the rules and regulations promulgated thereunder, all as from
time to time in effect, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
Environmental Permit shall mean, with respect to any Person, any
Governmental Authorization required by or pursuant to any Environmental Law.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
and the rules and regulations thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference to any such statutory
or regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
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ERISA Affiliate shall mean any Person that is treated as a single
employer with American under Sections 414(b), (c), (m) or (o) of the Code or
Section 4001(b)(1) of ERISA.
ESOP shall have the meaning given to it in Section 4.9(a)(xvi).
Event shall mean the existence or occurrence of any act, action,
activity, circumstance, condition, event, fact, failure to act, omission,
incident or practice, or any set or combination of any of the foregoing.
Exchange Act shall mean the Securities Exchange Act of 1934, and the
rules and regulations thereunder, all as from time to time in effect, or any
successor law, rules or regulations, and any reference to any such statutory or
regulatory provision shall be deemed to be a reference to any successor
statutory or regulatory provision.
Exchange Agent shall have the meaning given to it in Section 3.2(a).
Expenses shall have the meaning given to it in Section 9.3.
FCA shall mean the Communication Act of 1934, and the rules and
regulations thereunder, all as from time to time in effect, or any successor
law, rules or regulations, and any reference to any such statutory or regulatory
provision shall be deemed to be a reference to any successor statutory or
regulatory provision.
FCC shall mean the Federal Communications Commission and shall include
any successor Authority.
FCC Consents means actions by the FCC (including the Chief, Mass Media
Bureau, acting under delegated authority) granting its consent to the transfer
of control of the American FCC Licenses for each of the American Stations to
Mergeparty as contemplated by this Agreement whether or not such consent has
become a Final Order.
FCC Licenses means all of the licenses, permits and other
authorizations issued by the FCC to an owner and operator of radio broadcast
stations.
FCC Order shall have the meaning given to it in Section 7.1(b).
Filed American SEC Documents shall have the meaning given to it in
Section 4.2.
Final Adjustment Amount shall have the meaning given to it in Section
6.18(d).
Final Order shall mean, with respect to any Authority, including
without limitation the FCC, a consent or approval with respect to which no
appeal, no stay, no petition or application for rehearing, reconsideration,
review or stay, whether on motion of the applicable Authority or other Person or
otherwise, and no other Legal Action contesting such consent or approval, is in
effect or pending and as to which the time or deadline for filing any such
appeal, petition or application or other Legal Action has expired or, if filed,
has been denied, dismissed or withdrawn, and the time or deadline for
instituting any further Legal Action has expired.
FTC shall have the meaning given to it in Section 6.2(c).
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GAAP shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
Governmental Authorizations shall mean all approvals, concessions,
consents, franchises, licenses, permits, plans, registrations and other
authorizations of all Authorities, including the FCC Licenses, issued by the
FCC, the Federal Aviation Administration and any other Authority in connection
with the conduct of business or operations of any of the Stations.
Governmental Filings shall mean all filings, including franchise and
similar Tax filings, and the payment of all fees, assessments, interest and
penalties associated with such filings, with all Authorities.
Xxxx-Xxxxx-Xxxxxx Act shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, and the rules and regulations thereunder, all as from
time to time in effect, or any successor law, rules or regulations, and any
reference to any such statutory or regulatory provision shall be deemed to be a
reference to any successor statutory or regulatory provision.
Hazardous Materials shall mean and include any substance, material,
waste, constituent, compound, chemical, natural or man-made element or force (in
whatever state of matter): (a) the presence of which requires investigation or
remediation under any Environmental Law; or (b) that is defined as a "hazardous
waste" or "hazardous substance" under any Environmental Law; or (c) that is
toxic, explosive, corrosive, etiologic, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous and is regulated by any
applicable Authority or subject to any Environmental Law; or (d) that poses or
threatens to pose a hazard to the health or safety of persons; or (e) that
contains gasoline, diesel fuel or other petroleum hydrocarbons, or any
by-products or fractions thereof, natural gas, polychlorinated biphenyls
("PCBs") and PCB-containing equipment, radon or other radioactive elements,
ionizing radiation, lead, asbestos or asbestos- containing materials, or urea
formaldehyde foam insulation.
indebtedness shall mean, with respect to any Person, without
duplication, (A) all obligations of such Person for borrowed money, or with
respect to deposits or advances of any kind to such Person, (B) all obligations
of such Person evidenced by bonds, debentures, notes or similar instruments, (C)
all obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person, (D) all obligations of
such Person issued or assumed as the deferred purchase price of property or
services (excluding obligations of such Person to creditors for raw materials,
inventory, services and supplies incurred in the ordinary course of such
Person's business), (E) all capitalized lease obligations of such Person, (F)
all obligations of others secured by any Lien on property or assets owned or
acquired by such Person, whether or not the obligations secured thereby have
been assumed, (G) all obligations of such Person under interest rate or currency
hedging transactions (valued at the termination value thereof), (H) all letters
of credit issued for the account of such Person and (I) all guarantees and
arrangements having the economic effect of a guarantee of such Person or any
indebtedness of any other Person.
Indemnified Parties shall have the meaning given to it in Section
6.12(b).
Information Statement shall have the meaning given to it in Section
6.6(a).
Law shall mean any (a) administrative, judicial, legislative or other
action, code, consent decree, constitution, decree, directive, enactment,
finding, guideline, law, injunction, interpretation, judgment, order, ordinance,
proclamation, promulgation, regulation, requirement, rule, rule of law, rule of
public policy, settlement agreement, statute, or writ of any Authority, domestic
or foreign; (b) the common law, or other
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legal or quasi-legal precedent; or (c) arbitrator's, mediator's or referee's
award, decision, finding or recommendation.
Legal Action shall mean, with respect to any Person, any and all
litigation or legal or other actions, arbitrations, counterclaims, hearings,
investigations, proceedings or suits, at law or in arbitration, equity or
admiralty, whether or not purported to be brought on behalf of such Person, by
or before any Authority, against such Person or involving any of such Person's
business or assets.
Liabilities shall have the meaning given to it in Section 6.18(b).
Lien shall mean any of the following: mortgage; lien (statutory or
other) or other security agreement, arrangement or interest; hypothecation,
pledge or other deposit arrangement; assignment; charge; levy; executory
seizure; attachment; garnishment; encumbrance (including any easement,
exception, reservation or limitation, right of way, and the like); conditional
sale, title retention or other similar agreement, arrangement, device or
restriction; any financing lease involving substantially the same economic
effect as any of the foregoing; the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction; or restriction on
sale, transfer, assignment, disposition or other alienation.
Material, Materially or materiality for the purposes of this Agreement,
shall, unless specifically stated to the contrary, be determined without regard
to the fact that various provisions of this Agreement set forth specific dollar
amounts.
Material Agreement shall mean, with respect to any Person, any
agreement, arrangement, contract, undertaking, understanding or other obligation
or liability which (a) was not entered into in the ordinary course of business,
it being understood and agreed by the parties that the acquisition, disposition
or exchange of radio stations is in the ordinary course of business, (b) was
entered into in the ordinary course of business which (i) involved the purchase,
sale or lease of goods or materials, or purchase of services, aggregating more
than $10,000,000 during any of the last three fiscal years of such Person, (ii)
extends for more than six (6) months from the date of this Agreement, or (iii)
is not terminable on thirty (30) days or less notice without material penalty or
other payment, (c) involves indebtedness aggregating more than $10,000,000, (d)
is or otherwise constitutes a written agency, broker, dealer, license,
distributorship, sales representative or similar written agreement, or (e)
accounted for more than ten percent (10%) of the revenues of Mergeparty or
American Stations, as the case may be, in the last fiscal year of such Person or
is likely to account for more than ten percent (10%) of revenues of Mergeparty
or American, as the case may be, during the current fiscal year of such Person.
Maximum Premium shall have the meaning given to it in Section 6.12(c).
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Mergeparty shall have the meaning given to it in the Preamble.
Mergeparty Brokered Stations shall mean the radio broadcast stations
which Mergeparty has the right to acquire but which as of the date of this
Agreement it is operating pursuant to time brokerage, local marketing or other
similar agreements.
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Mergeparty Disclosure Schedule shall mean the Mergeparty Disclosure
Schedule dated as of the date of this Agreement delivered by Mergeparty to
American simultaneously with the execution and delivery of this Agreement.
Mergeparty Stations means the radio broadcast stations owned by
Mergeparty, or which it has the right to acquire (and acquires prior to the
Closing Date but only from and after such acquisition) as of the date of this
Agreement; provided, however, that Mergeparty Stations shall not include any
Mergeparty Station disposed of by Mergeparty subsequent to the date of this
Agreement not in violation of the provisions of this Agreement; further,
provided, that the term Mergeparty Stations shall include Mergeparty Brokered
Stations if the context so requires.
Mergeparty Subsidiary shall have the meaning given to it in the
Preamble.
Mergeparty's knowledge (including the term "to the knowledge of
Mergeparty") means the actual knowledge of the Chief Executive Officer or the
Chief Financial Officer of Mergeparty, and that such Officer shall have reason
to believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Merger shall have the meaning given to it in the first "Whereas"
paragraph.
Merger Consideration shall have the meaning given to it in Section
3.1(d).
Multiemployer Plan shall mean a Plan which is a "multiemployer plan"
within the meaning of Section 4001(a)(3) of ERISA.
Net Debt shall have the meaning given to it in Section 6.18(c).
Notice of Abandonment shall have the meaning given to it in Section
2.8.
Notice of Disagreement shall have the meaning given to it in Section
6.18.
NYSE shall mean the New York Stock Exchange.
Option Securities shall mean all rights, options, calls, contracts,
agreements, warrants, understandings, restrictions, arrangements or commitments,
including without limitation, any rights plan or other anti-takeover agreement
or arrangement, evidencing the right to subscribe for, purchase or otherwise
acquire, or otherwise providing for the issuance of shares of capital stock,
voting securities or Convertible Securities, whether or not the right to
subscribe for, purchase or otherwise acquire, or otherwise providing for the
issuance, is immediately exercisable or is conditioned upon the passage of time,
the occurrence or non-occurrence or the existence or non-existence of some other
Event.
Optionholder shall have the meaning given to it in Section 6.8.
Organic Document shall mean, with respect to a Person which is a
corporation, its charter, its by-laws and all stockholder agreements, voting
trusts and similar arrangements applicable to any of its capital stock and, with
respect to a Person which is a partnership, its agreement and certificate of
partnership, any agreements among partners, and any management and similar
agreements between the partnership and any general partners (or any Affiliate
thereof).
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Permitted Liens shall mean (a) Liens for current Taxes not yet due and
payable, and (b) such imperfections of title, easements, encumbrances and
mortgages or other Liens, if any, as are not, individually or in the aggregate,
substantial in character, amount or extent and do not materially detract from
the value, or materially interfere with the present use, of the property subject
thereto or affected thereby, or otherwise materially impair the business or
operations of the American Stations or the Mergeparty Stations, as the case may
be.
Person shall mean any natural individual or any Entity.
Plan shall mean, with respect to any Person and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which such
Person or an ERISA Affiliate is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA, which American or any ERISA Affiliate maintains,
contributes to or is required to contribute to for the benefit of any current or
former officers, employees, agents, directors or independent contractors of
American or any of its ERISA Affiliates.
Post-Closing American Group shall have the meaning given to it in
Section 6.18
Private Authorizations shall mean all approvals, concessions, consents,
franchises, licenses, permits, and other authorizations of all Persons (other
than Authorities) including without limitation those with respect to copyrights,
computer software programs, patents, service marks, trademarks, trade names,
technology and know-how.
Proxy Statement shall mean the proxy statement to be filed with the
Commission by American in connection with the American Shareholders Meeting, if
any.
Regulations shall mean the federal income tax regulations promulgated
under the Code, as such Regulations may be amended from time to time. All
references herein to specific sections of the Regulations shall be deemed also
to refer to any corresponding provisions of succeeding Regulations, and all
references to temporary Regulations shall be deemed also to refer to any
corresponding provisions of final Regulations.
Representatives shall have the meaning given to it in Section 6.1.
Required Vote shall have the meaning given to it in Section 4.13.
Required Divestitures means all divestitures, terminations,
arrangements and restructurings identified in Section 5.2c) of the Mergeparty
Disclosure Schedule, if any, and all other divestitures, terminations,
arrangements or restructurings, if any, arising after the date of this Agreement
that would have been required to be listed on Section 5.2c) of the Mergeparty
Disclosure Schedule if known to be in existence as of such date or that are
necessary to satisfy any and all Divestiture Conditions.
Restated Certificate shall have the meaning given to it in Section
4.11.
ss.162(m) Options shall have the meaning given to it in Section 6.8(e).
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the Commission thereunder, all as from time to time in effect, or
any successor law, rules or regulations, and any reference
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to any such statutory or regulatory provision shall be deemed to be a reference
to any successor statutory or regulatory provision.
Stations shall mean, collectively, the American Stations and the
Mergeparty Stations.
Subsidiary shall mean, with respect to a Person, any Entity a majority
of the capital stock ordinarily entitled to vote for the election of directors
of which, or if no such voting stock is outstanding, a majority of the equity
interests of which, is owned directly or indirectly, legally or beneficially, by
such Person or any other Person controlled by such Person.
Surviving Corporation shall have the meaning given to it in Section
2.1.
Tax (and "Taxable," which shall mean subject to Tax), shall mean, with
respect to any Person, (a) all taxes (domestic or foreign), including without
limitation any income (net, gross or other, including recapture of any tax items
such as investment tax credits), alternative or add-on minimum tax, gross
income, gross receipts, gains, sales, use, leasing, lease, user, ad valorem,
transfer, recording, franchise, profits, property (real or personal, tangible or
intangible), fuel, license, withholding on amounts paid to or by such Person,
payroll, employment, unemployment, social security, excise, severance, stamp,
occupation, premium, environmental or windfall profit tax, custom, duty or other
tax, or other like assessment or charge of any kind whatsoever, together with
any interest, levies, assessments, charges, penalties, additions to tax or
additional amounts imposed by any Taxing Authority, (b) any joint or several
liability of such Person with any other Person for the payment of any amounts of
the type described in (a) of this definition, and (c) any liability of such
Person for the payment of any amounts of the type described in (a) as a result
of any express or implied obligation to indemnify any other Person.
Tax Claim shall mean any Claim which relates to Taxes.
Tax Return or Returns shall mean all returns, consolidated or otherwise
(including without limitation information returns), required to be filed with
any Authority with respect to Taxes.
Taxing Authority shall mean any Authority responsible for the
imposition of any Tax.
Termination Date shall have the meaning given to it in Section 8.1.
Tower Business shall mean the business conducted by the Tower
Subsidiaries.
Tower Common Stock shall mean, collectively, the Class A Common Stock,
par value $.01 per share (the "Tower Class A"), the Class B Common Stock, par
value $.01 per share (the "Tower Class B"), and the Class C Common Stock, par
value $.01 per share (the "Tower Class C"), of American Tower or American Tower
Sub, as applicable, or, where the context requires, one or more of such classes,
or, if the common stock of American Tower or American Tower Sub is not
classified, the common stock, par value $.01 per share, of American Tower or
American Tower Sub, as applicable.
Tower Consideration shall have the meaning given to it in Section 6.8.
Tower Distribution shall have the meaning given to it in the second
"Whereas" paragraph.
Tower Distribution Date shall have the meaning given to it in Section
6.17.
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Tower Documentation shall have the meaning given to it in Section 6.17.
Tower Employees shall have the meaning given to it in Section 6.17.
Tower Entity shall have the meaning given to it in Section 6.17.
Tower Leases shall have the meaning given to it in Section 6.19.
Tower Merger shall have the meaning given to it in Section 2.8.
Tower Merger Date shall have the meaning given to it in Section 6.17.
Towers shall have the meaning given to it in Section 6.19.
Tower Subsidiaries shall mean American Tower and its Subsidiaries.
Uncontrollable Events shall have the meaning given to it in Section
6.2(d).
WC Amount shall have the meaning given to it in Section 6.18(b).
Working Capital shall have the meaning given to it in Section 6.18(b).
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