EXHIBIT 10.9
ASSET PURCHASE AGREEMENT
between
GREATER BOSTON RADIO, INC.
and
AMERICAN RADIO SYSTEMS CORPORATION
Dated as of May 14, 1997
TABLE OF CONTENTS
Page
ARTICLE ONE.......................................................................................................1
1.1. "Affiliate"............................................................................................1
1.2. "Ancillary Agreements".................................................................................1
1.3. "Closing Date".........................................................................................1
1.4. "Code".................................................................................................1
1.5. "Communications Act"...................................................................................1
1.6. "Environmental Laws"...................................................................................1
1.7. "Equipment"............................................................................................1
1.8. "Escrow Agreement".....................................................................................2
1.9. "FCC Application"......................................................................................2
1.10. "FCC Licenses"........................................................................................2
1.11. "Final Order".........................................................................................2
1.12. "Governmental Authorizations".........................................................................2
1.13. "Hazardous Substance".................................................................................2
1.14. "HSR Act".............................................................................................2
1.15. "Intellectual Properties".............................................................................2
1.16. "Liens"...............................................................................................3
1.17. "LMA".................................................................................................3
1.18. "Material Adverse Effect".............................................................................3
1.19. "Permitted Liens".....................................................................................3
1.20. "Station".............................................................................................3
1.21. "Tax".................................................................................................3
1.22. "Transfer Taxes"......................................................................................3
ARTICLE TWO
Purchase and Sale of Assets; Assumption of Liabilities.......................................................4
2.1. Transfer of Assets.....................................................................................4
(a) FCC Licenses and Other Governmental Authorizations.............................................4
(b) Personal Property..............................................................................4
(c) Real Property..................................................................................4
(d) Agreements.....................................................................................4
(e) Records........................................................................................4
(f) Accounts and Notes Receivable..................................................................4
(g) Prepaid Expenses...............................................................................4
i
Page
2.2. Excluded Assets...............................................................................5
2.3. Instruments of Conveyance and Transfer........................................................5
2.4. Further Assurances............................................................................6
2.5. Assumption of Liabilities.....................................................................6
ARTICLE THREE
Closing; Payment of Purchase Price..................................................................6
3.1. Closing Date..................................................................................6
3.2. Purchase Price and Payment....................................................................6
3.3. Appraisal, Purchase Price Allocation and Tax Reporting.........................................7
ARTICLE FOUR
Representations and Warranties......................................................................7
4.1. Representations and Warranties of Seller......................................................7
(a) Due Organization; Good Standing and Power.............................................8
(b) Authorization and Validity of Agreement...............................................8
(c) Governmental Approvals; Conflicts.....................................................8
(d) Title to Properties; Absence of Liens.................................................9
(e) Delivery and Validity of Contracts....................................................9
(f) Equipment.............................................................................9
(g) Legal Proceedings....................................................................10
(h) Insurance............................................................................10
(i) Intellectual Properties..............................................................10
(j) FCC Licenses and Other Governmental Authorizations...................................10
(k) Conduct of Business in Compliance with Regulatory Requirements.......................11
(l) Taxes................................................................................11
(m) Personnel Information................................................................11
(n) Environmental Matters................................................................11
(o) Certain Fees.........................................................................11
(p) Transactions with Affiliates.........................................................12
(q) Conduct in the Ordinary Course.......................................................12
(r) Disclosure...........................................................................12
4.2. Representations and Warranties of Buyer......................................................12
(a) Due Organization; Good Standing and Power............................................12
(b) Authorization and Validity of Agreement..............................................12
(c) Governmental Approvals; Conflicts....................................................13
(d) Legal Proceedings....................................................................13
(e) Financial Capacity...................................................................13
(f) Qualification........................................................................14
(g) Certain Fees.........................................................................14
ii
Page
4.3. Acknowledgment of Buyer......................................................................14
4.4. Expiration of Representations and Warranties.................................................14
ARTICLE FIVE
Covenants Prior to Closing.........................................................................15
5.1. Access to Information Concerning Properties and Records......................................15
5.2. Conduct of the Business of the Station Pending the Closing...................................15
5.3. Further Actions..............................................................................16
5.4. FCC Licenses.................................................................................17
5.5. Buyer Qualification..........................................................................17
5.6. Station's Employees..........................................................................17
5.7. Environmental Due Diligence..................................................................18
5.8. Supplements to Disclosure....................................................................18
ARTICLE SIX
Conditions Precedent...............................................................................18
6.1. Conditions Precedent to Obligations of Both Parties..........................................18
(a) No Injunction, etc...................................................................18
(b) Antitrust Matters....................................................................18
(c) FCC Matters..........................................................................19
6.2. Conditions Precedent to Obligations of Buyer.................................................19
(a) Accuracy of Representations and Warranties of Seller.................................19
(b) Performance of Agreements............................................................19
(c) No Adverse Modification of FCC Licenses..............................................19
(d) Officer's Certificate................................................................20
(e) Opinions.............................................................................20
(f) Actions and Proceedings..............................................................20
(g) Third-Party Consents.................................................................20
(h) Payment of Indebtedness; Financing Statements........................................20
(i) Deliveries...........................................................................20
6.3. Conditions Precedent to Obligations of Seller................................................21
(a) Accuracy of Representations and Warranties of Buyer..................................21
(b) Performance of Agreements............................................................21
(c) Officer's Certificate................................................................21
(d) Instruments of Assumption............................................................21
(e) Opinion..............................................................................22
(f) Actions and Proceedings..............................................................22
(g) Deliveries...........................................................................22
iii
Page
ARTICLE SEVEN
Indemnification....................................................................................22
7.1. Indemnification by Seller....................................................................22
(a) General..............................................................................22
(b) Limitation on Indemnification........................................................23
(c) Exclusive Remedy.....................................................................23
7.2. Indemnification by Buyer.....................................................................23
(a) General..............................................................................23
(b) Limitation on Indemnification........................................................24
(c) Exclusive Remedy.....................................................................24
7.3. Indemnification Procedures...................................................................24
ARTICLE EIGHT
Termination........................................................................................25
8.1. General......................................................................................25
8.2. No Liabilities in Event of Termination.......................................................26
ARTICLE NINE
Post-Closing Covenants.............................................................................27
9.1. Access to Books and Records..................................................................27
9.2. Further Agreements...........................................................................27
9.3. Financial Statements.........................................................................27
ARTICLE TEN
Miscellaneous......................................................................................27
10.1. Public Announcements........................................................................27
10.2. Expenses....................................................................................28
10.3. Transfer Taxes..............................................................................28
10.4. Notices.....................................................................................28
10.5. Entire Agreement............................................................................29
10.6. Assignment..................................................................................29
10.7. No Third-Party Beneficiaries................................................................30
10.8. Amendment; Waiver...........................................................................30
10.9. Interpretation..............................................................................30
10.10. Severability...............................................................................30
10.11. Counterparts...............................................................................31
10.12. Governing Law; Jurisdiction................................................................31
iv
LIST OF EXHIBITS AND SCHEDULES
Exhibit A - Opinion of Xxxxxxx Xxxxx
Exhibit B - Opinion of Xxxxxxxx, Xxxxx & Xxxxxx
Exhibit C - Opinion of Xxxxxxx X. Xxxxxx
Schedule 2.1(a)(i) - FCC Licenses
Schedule 2.1(a)(ii) - Governmental Authorizations
Schedule 2.1(b) - Equipment
Schedule 2.1(c) - Real Property
Schedule 2.1(d) - Contracts and Agreements
Schedule 2.2(h) - Excluded Assets
Schedule 4.1(c) - Filings, Consents and Approvals
Schedule 4.1(d) - Liens
Schedule 4.1(e) - Validity of Contracts and Agreements
Schedule 4.1(f) - Equipment Not in Satisfactory Condition
Schedule 4.1(g) - Legal Proceedings
Schedule 4.1(h) - Insurance
Schedule 4.1(j) - Proceedings Against the FCC Licenses
Schedule 4.1(m) - Personnel Information
Schedule 4.1(p) - Affiliate Transactions
Schedule 4.1(q) - Certain Changes
Schedule 6.2(g) - Material Contracts
ASSET PURCHASE AGREEMENT
ASSET PURCHASE AGREEMENT, dated as of May 14, 1997, between
Greater Boston Radio, Inc., a Delaware corporation ("Seller"), and American
Radio Systems Corporation, a Delaware corporation ("Buyer").
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
ARTICLE ONE
1.1. "Affiliate" shall mean a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified.
1.2. "Ancillary Agreements" shall mean the LMA and the Escrow
Agreement.
1.3. "Closing Date" shall mean the actual time and date of the
Closing.
1.4. "Code" shall mean the Internal Revenue Code of 1986, as
amended, together with all regulations and rulings issued thereunder by any
govern mental authority.
1.5. "Communications Act" shall mean the Communications Act of
1934, as amended, and the published rules and regulations thereunder.
1.6. "Environmental Laws" shall mean all applicable federal,
state and local laws and regulations relating to the pollution or protection of
the environment, including laws and regulations relating to emissions,
discharges, releases or threatened releases of pollutants, contaminants or
hazardous or toxic materials or wastes into ambient air, surface water,
groundwater or lands or otherwise relating to the manu facture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants or hazardous or toxic materials or waste.
1.7. "Equipment" shall mean all equipment, furniture,
furnishings, fixtures and other tangible personal property listed on Schedule
2.1(b) hereto, together
with any replacements thereof or additions thereto made between the date hereof
and the Closing Date, less any items used, consumed, or expended in the ordinary
course of business consistent with past practice between the date hereof and the
Closing Date.
1.8. "Escrow Agreement" shall mean the Escrow Agreement, dated
as of the date hereof, among Buyer, Seller and the Escrow Agent.
1.9. "FCC Application" shall mean the application or
applications that Seller and Buyer must file with the Federal Communications
Commission (the "FCC") requesting its written consent to the assignment of the
FCC Licenses from Seller to Buyer.
1.10. "FCC Licenses" shall mean licenses, permits and
authorizations that have been issued by the FCC for use by the Station listed on
Schedule 2.1(a)(i) hereto.
1.11. "Final Order" shall mean action which shall have been
taken by the FCC (including action duly taken by the FCC's staff, pursuant to
delegated authority) (i) which shall not have been reversed, stayed, enjoined,
set aside, annulled or suspended, (ii) with respect to which no timely request
for stay, petition for re hearing, appeal or certiorari or sua sponte action of
the FCC with comparable effect shall be pending, and (iii) as to which the time
for filing any such request, petition, appeal, certiorari or for the taking of
any such sua sponte action by the FCC shall have expired or otherwise
terminated.
1.12. "Governmental Authorizations" shall mean all other
licenses, permits, consents, approvals, authorizations, qualifications and
orders of governmental authorities listed on Schedule 2.1(a)(ii) hereto.
1.13. "Hazardous Substance" shall mean any toxic or hazardous
substance that is regulated by or under authority of any Environmental Law,
including any asbestos or polychlorinated biphenyls.
1.14. "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Im
provement Act of 1976, as amended, and the rules and regulations thereunder.
1.15. "Intellectual Properties" shall mean all trademarks,
tradenames, service marks, copyrights, patents, jingles, slogans, visual
materials, logos and existing promotional materials registered with the United
States Patent and Trademark Office or the United States Copyright Office, as the
case may be, or any similar state
2
trademark office, or any application therefor, in connection with the business
and operation of the Station.
1.16. "Liens" shall mean all claims, liens, security
interests, charges, leases, encumbrances, licenses or sublicenses and other
restrictions of any kind and nature.
1.17. "LMA" shall mean the Time Brokerage Agreement, dated as
of the date hereof, between Seller and Buyer.
1.18. "Material Adverse Effect" shall mean a material adverse
effect on the business, financial condition or results of operations of the
Station or the ability of Seller to consummate the transactions contemplated
hereby or by the Ancillary Agreements.
1.19. "Permitted Liens" shall mean Liens for Taxes not yet due
and payable or being contested in good faith by appropriate proceedings, Liens
of landlords, carriers, warehousemen, mechanics and materialmen incurred in the
ordinary course of business for sums not yet due, Liens incurred or deposits
made in the ordinary course of business in connection with workers'
compensation, un employment insurance and other types of social security, or to
secure the performance of statutory obligations, surety bonds, leases and
similar obligations and such other Liens, imperfections of title, easements and
pledges, if any, as do not materially interfere with the present use of the
Assets encumbered thereby.
1.20. "Station" shall mean radio station WNFT(AM), Boston
Massachusetts.
1.21. "Tax" shall mean any tax, duty, fee, levy, impost,
charge or assessment imposed by any governmental authority (including all
interest and penalties thereon and additions thereto, whether disputed or not).
1.22. "Transfer Taxes" shall mean any sales, use, value added,
documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes.
3
ARTICLE TWO
Purchase and Sale of Assets; Assumption of Liabilities
2.1. Transfer of Assets. Upon the terms and subject to the
conditions of this Agreement, on the Closing Date, Seller shall sell, convey,
assign, transfer and deliver to Buyer, and Buyer shall purchase and acquire from
Seller, all of the assets of Seller relating to the Station free and clear of
all Liens, except for Permitted Liens, except as provided in Section 2.2 hereof,
including, but not limited to, the following (collectively, the "Assets"):
(a) FCC Licenses and Other Governmental Authorizations. (i)
Subject to prior FCC approval, the FCC Licenses and (ii) the
Governmental Author izations;
(b) Personal Property. The Equipment, and all warranties and
guar antees, if any, express or implied, existing for the benefit of
Seller in connec tion with the Equipment to the extent assignable;
(c) Real Property. The real property described on Schedule
2.1(c) hereto;
(d) Agreements. All contracts, commitments and other
agreements listed on Schedule 2.1(d) hereto and all other contracts,
commitments and other agreements entered into by Seller between the
date hereof and the Closing Date in accordance with Section 5.2 hereof
or the LMA;
(e) Records. An original or a copy of all files, records, logs
and program materials maintained by Seller at the Station and all
proprietary information, technical information and data, maps, computer
discs and tapes, plans, diagrams, blueprints and schematics, including
filings with the FCC;
(f) Accounts and Notes Receivable. All accounts and notes
receivable of Seller arising out of or relating to the Station after
12:01 a.m., local time, on the date of the effectiveness of the LMA;
and
(g) Prepaid Expenses. All prepaid operating expenses,
deposits, and warranty rights of Seller arising out of or relating to
the Station after 12:01 a.m., local time, on the date of the
effectiveness of the LMA.
4
2.2. Excluded Assets. Notwithstanding Section 2.1 hereof,
Buyer and Seller expressly understand and agree that Seller shall not sell,
convey, assign, transfer or deliver to Buyer the following assets (collectively,
the "Excluded Assets"):
(a) All cash, cash equivalents, bank deposits and securities
owned by or for the benefit of Seller;
(b) All accounts and notes receivable of Seller arising out of
or relating to the business and operation of the Station prior to 12:01
a.m., local time, on the date of the effectiveness of the LMA;
(c) All prepaid operating expenses, deposits, and warranty
rights of Seller arising out of or relating to the business and
operation of the Station prior to 12:01 a.m., local time, on the date
of the effectiveness of the LMA;
(d) Any rights of Seller to any refunds (and interest thereon)
of Taxes and any deposits of Seller with any governmental authority
relating to Taxes;
(e) All insurance policies of Seller relating to the Assets or
the business or operations of the Station;
(f) All books and records pertaining to the organization,
existence or capitalization of Seller and all books and records Seller
is required by law to retain;
(g) The names and marks "Greater Media", "Greater Boston" and
the "G" logo, whether alone or in combination with one or more words,
in any case including any related or similar trade names, trademarks,
service marks, call letters or logos to the extent the same may
incorporate such names, marks, logos, words or initials or any
variation thereof and all goodwill associated with the foregoing; and
(h) (i) Any contracts, commitments or other agreements of
Seller not expressly assumed by Buyer and (ii) all other assets listed
on Schedule 2.2(h) hereto.
2.3. Instruments of Conveyance and Transfer. On the Closing
Date, Seller shall: (a) deliver to Buyer such quitclaim deeds, bills of sale,
endorsements, consents, assignments, and other good and sufficient instruments
of conveyance and assignment as shall be effective to vest in Buyer all right,
title and interest of Seller in and to the Assets free and clear of all Liens,
except Permitted Liens, and (b) deliver
5
to Buyer (or cause to be filed at the Station) copies of all the contracts,
commitments, agreements, files, records, books and other data included in the
Assets.
2.4. Further Assurances. From time to time after the Closing
Date, Seller shall execute and deliver such other instruments of conveyance and
assignment and take such other actions as Buyer reasonably may request in order
to convey, assign, transfer and deliver to Buyer any of the Assets.
2.5. Assumption of Liabilities. Buyer shall not assume or
undertake to pay, satisfy or discharge any liabilities (including any
liabilities arising in connection with any litigation), obligations, commitments
or responsibilities of Seller except for those arising under the contracts,
commitments and other agreements referred to in Section 2.1(d) hereof, and other
contracts, commitments and agreements assumed under the LMA, and then with
respect to any such contract, commitment or agreement only those liabilities,
obligations, commitments and responsibilities accruing after the date on which
such contract, commitment or agreement is assumed (collectively, the "Assumed
Liabilities").
ARTICLE THREE
Closing; Payment of Purchase Price
3.1. Closing Date. The closing with respect to the
transactions pro vided for in this Agreement (the "Closing") shall take place at
the offices of Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at
10:00 a.m., local time, no later than the fifth business day following the later
to occur of (a) the day on which the action by the FCC granting the FCC
Application shall have become a Final Order, (b) the expiration or termination
of the waiting period under the HSR Act and (c) the satisfaction of each of the
conditions specified in Article Six hereof (unless waived by the party entitled
to waive such condition), except as otherwise agreed by Buyer and Seller and
subject to the termination provisions of Article Seven hereof.
3.2. Purchase Price and Payment. In consideration for the
Assets, and subject to the terms and conditions of this Agreement, Buyer shall
assume the Assumed Liabilities on the Closing Date as provided in Section 2.5
hereof and pay an aggregate amount of $4,500,000 (the "Purchase Price") as
follows:
6
(a) Deposit. Upon execution of this Agreement, Buyer shall
deposit the sum of $450,000 (the "Deposit") with Xxxxxxx Bros., Inc.
(the "Escrow Agent"), to be held in escrow pursuant to the terms of the
Escrow Agreement.
(b) Cash at Closing. On the Closing Date, Buyer and Seller
shall cause the Escrow Agent to deliver the Deposit, and all interest
accrued thereon, to Seller, which shall be credited to the Purchase
Price, and Buyer shall pay to Seller the excess of the Purchase Price
over the Deposit and all interest accrued thereon by wire transfers of
immediately available funds to such accounts of Seller as Seller shall
have designated to Buyer at least two business days before the Closing.
3.3. Appraisal, Purchase Price Allocation and Tax Reporting.
(a) Within 90 days of the Closing Date, Buyer shall have an appraisal of the
Assets prepared (the "Appraisal"), the fees and expenses of which shall be borne
by Buyer. Buyer shall cause a copy of the Appraisal to be delivered to Seller.
(b) If and to the extent that Buyer and Seller agree on an
allocation of the aggregate amount of the Purchase Price and the Assumed
Liabilities among the Assets (the "Purchase Price Allocation"), Buyer and Seller
shall, and shall cause each of their Affiliates to, (i) prepare and file all
statements or other information required to be furnished to any taxing authority
pursuant to section 1060 of the Code or other applicable tax law (including IRS
Form 8594) in a manner consistent with the Purchase Price Allocation, (ii)
prepare all tax returns and reports required to be filed by them in a manner
consistent with the Purchase Price Allocation, and (iii) not take any position
contrary to the Purchase Price Allocation with any government agency or taxing
authority.
(c) Notwithstanding any other provision of this Agreement, the
provisions of this Section 3.3 shall survive the Closing without limitation.
ARTICLE FOUR
Representations and Warranties
4.1. Representations and Warranties of Seller. Seller
represents and warrants to Buyer as follows:
(a) Due Organization; Good Standing and Power. Seller is a cor
poration duly organized, validly existing and in good standing under
the laws
7
of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its assets and properties and to
conduct the business and operation of the Station as now conducted by
it. Seller has all requisite power and authority to enter into this
Agreement and the Ancillary Agreements and to perform its obligations
hereunder and thereunder. Seller is duly qualified to do business as a
foreign corporation and is in good standing in each of the
jurisdictions in which the conduct of its business requires such
qualification, except where the failure to so qualify or to be in good
standing would not reasonably be expected to have a Material Adverse
Effect.
(b) Authorization and Validity of Agreement. The execution and
delivery of this Agreement and the Ancillary Agreements by Seller and
the consummation by Seller of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on
the part of Seller. This Agreement and the Ancillary Agreements have
been duly executed and delivered by Seller and constitute valid and
legally binding obligations of Seller, enforceable against Seller in
accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium, receivership or similar laws
affecting creditors' rights or remedies generally and by general
principles of equity (whether considered in a proceeding at law or in
equity).
(c) Governmental Approvals; Conflicts. Except as set forth on
Schedule 4.1(c) hereto, the execution and delivery of this Agreement
and the Ancillary Agreements by Seller and the consummation by Seller
of the trans actions contemplated hereby and thereby (i) will not
violate (with or without the giving of notice or the lapse of time or
both), or require any consent, approval, filing or notice under, any
provision of any law, rule or regulation, court order, judgment or
decree applicable to Seller and (ii) will not conflict with, or result
in the breach or termination of any provision of, or constitute a
default under, or result in the acceleration of the performance of the
obligations of Seller under, or result in the creation of a lien,
charge or encumbrance upon any portion of the Assets, or under the
articles of incorporation or by-laws of Seller or any indenture,
mortgage, deed of trust, lease, licensing agreement, contract,
instrument or other agreement to which Seller is a party or by which
Seller or any of the Assets is bound.
(d) Title to Properties; Absence of Liens. Seller (i) is the
owner of marketable fee title to the fee property listed on Schedule
2.1(c) hereto and (ii) has good title to all material Equipment
relating to the business and operation of the Station included as
Assets listed on Schedule 2.1(b) hereto.
8
Such Assets are in good operating condition and repair, ordinary wear
and tear excepted. Such title is free and clear of all Liens, except
for Permitted Liens or as specifically set forth on Schedule 4.1(d)
hereto. The transmitters and towers owned by the Station, and all other
items of transmitting and studio equipment listed on Schedule 2.1(b)
hereto, (x) have been maintained in a manner consistent with generally
accepted standards of good engineering practice, (y) will permit
operation of the Station in accordance with the terms of the FCC
Licenses, the published rules and regulations of the FCC and, to the
best of Seller's knowledge, all other applicable laws and (z) are
located on real property owned by Seller.
(e) Delivery and Validity of Contracts. (i) True and complete
copies of all contracts, commitments and other agreements relating to
the business and operation of the Station (including all amendments
thereto) referred to on Schedule 2.1(d) hereto either have been
delivered or made available to Buyer, (ii) except as set forth on
Schedule 4.1(e) hereto, all contracts, commitments and other agreements
relating to the business and operation of the Station referred to in
such Schedules are in full force and effect in all material respects
and (iii) except as set forth on Schedule 4.1(e) hereto, Seller is not
in breach or default in the performance of any material obligation
thereunder and, to Seller's knowledge, no other contracting party is in
breach or default in the performance of any material obligation
thereunder. Schedule 2.1(d) hereto sets forth all contracts, leases of
personal property and commitments which involve payment to or from the
Station during the term of such contract, lease or commitment. There
are no trade or barter agreement as of the date hereof relating to the
business and operation of the Station.
(f) Equipment. Except as described on Schedule 4.1(f) hereto,
the Equipment is in good operating condition and repair, except for
equipment temporarily under repair or out of service in the ordinary
course of the business of the Station. EXCEPT AS OTHERWISE SPECIFICALLY
SET FORTH IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS ANY IMPLIED
WARRANTY OR REPRESENTATION AS TO CONDITION, MERCHANTABILITY OR
SUITABILITY AS TO ANY OF THE ASSETS.
(g) Legal Proceedings. Except as described on Schedule 4.1(g)
hereto, there is no litigation, proceeding or governmental
investigation to which Seller is a party pending or, to the knowledge
of Seller, threatened against Seller relating to the Assets or the
business and operation of the Station or the trans actions contemplated
by this Agreement or the Ancillary Agreements which would reasonably be
expected to have a Material Adverse Effect.
9
(h) Insurance. Schedule 4.1(h) hereto sets forth a complete
and correct list, as of the date hereof, of the policies of insurance
currently maintained by Seller with respect to the Station.
(i) Intellectual Properties. Seller has no right or title to
or interest in any Intellectual Properties.
(j) FCC Licenses and Other Governmental Authorizations. Seller
has and is the authorized legal holder of all FCC Licenses and
Governmental Authorizations set forth on Schedules 2.1(a)(i) and
2.1(a)(ii) hereto, re spectively. The FCC Licenses and Governmental
Authorizations are all of the licenses, permits and authorizations
required for the operation of the Station as it is now operated. The
FCC Licenses and the Governmental Authorizations are valid and in full
force and effect, are unimpaired by any acts or omissions of Seller,
are free and clear of any restrictions which would reasonably be
expected to limit the present operation of the Station, and are valid
for the balance of their respective license terms. Except as set forth
on Schedule 4.1(j) hereto, no application, action or proceeding is
pending for the renewal or modification of any of the FCC Licenses and,
to the knowledge of Seller, there is not now issued or outstanding any
investigation, proceeding, notice of violation or complaint against
Seller at the FCC as of the date hereof relating to the Station. The
Station is being operated in all material respects in accordance with
the terms and conditions of the FCC Licenses and Governmental
Authorizations and the published rules and regulations of the FCC. All
ownership reports, renewal applications and other reports and documents
required to be filed with the FCC by or on behalf of Seller with
respect to the Station have been timely filed with the FCC, and all
such reports, applications and other documents are true and complete.
Seller maintains an appropriate public inspection file at the Station's
studio in accordance with the published rules and regulations of the
FCC. To the knowledge of Seller, Seller has no reason to believe that
the FCC will not renew the FCC Licenses in the ordinary course for a
full term without any material qualifications.
(k) Conduct of Business in Compliance with Regulatory
Requirements. Seller is conducting the business and operation of the
Station so as to comply with all applicable laws, ordinances,
regulations and licenses in all material respects.
(l) Taxes. No event has occurred or condition exists that
could result in any liability being imposed on Buyer by any taxing
authority for any Taxes
10
of Seller for any taxable period, or imposed with respect to the Assets
for any taxable period or portion thereof ending on or before the
Closing Date.
(m) Personnel Information. Except as set forth on Schedule
4.1(m) hereto, there are no employees of Seller relating to the
business of the Station ("Station's Employees").
(n) Environmental Matters. (i) Seller has all permits,
licenses and other authorizations required under Environmental Laws,
except where the failure to hold such permits, licenses and
authorizations would not reasonably be expected to have a Material
Adverse Effect. Seller is in compliance with all terms and conditions
of such permits, licenses and authorizations, except where the failure
to so comply would not reasonably be expected to have a Material
Adverse Effect.
(ii) Except as would not reasonably be expected to have a
Material Adverse Effect: (A) to the knowledge of Seller, no real
property currently or formerly owned or operated by Seller relating to
the Station is contaminated with any Hazardous Substance, (B) Seller
has not disposed or arranged for the disposal of Hazardous Substances
so as to give rise to liability for any off-site disposal or
contamination and (C) Seller has not received any claims or notices
alleging liability under any Environmental Law, and Seller has no
knowledge of any circumstances that could result in such claims.
(iii) No other representations or warranties in
this Agreement, including, but not limited to, those set forth in
Sections 4.1(c), 4.1(g) and 4.1(k) hereof, made by Seller shall be
deemed to relate to environmental matters.
(o) Certain Fees. With the exception of fees and expenses
payable to Xxxxxxx Bros., Inc., which will be paid by Seller, neither
Seller nor any of its officers, directors or employees, on behalf of
Seller, has employed any broker or finder or incurred any other
liability for any brokerage fees, commissions or finders' fees in
connection with the transactions contemplated hereby or by the
Ancillary Agreements.
(p) Transactions with Affiliates. Except as set forth on
Schedule 4.1(p) hereto, all real property, Equipment and contracts,
commitments and other agreements to be assumed by Buyer are owned or
held by Seller, and no Affiliate of Seller owns or leases property or
is a party to any contract affecting or relating to the operations of
the Station.
11
(q) Conduct in the Ordinary Course. Except as described on
Schedule 4.1(q) hereto, since December 31, 1996, the operations and
business of the Station have been conducted in all material respects
only in the ordinary course.
(r) Disclosure. None of this Agreement or any certificate or
other document delivered in connection with the transactions
contemplated by this Agreement contains any untrue statement of a
material fact or omits any statement of a material fact necessary to
make any statement contained herein or therein not misleading.
4.2. Representations and Warranties of Buyer. Buyer represents
and warrants to Seller as follows:
(a) Due Organization; Good Standing and Power. Buyer is a cor
poration duly organized, validly existing and in good standing under
the laws of the State of Delaware. Buyer has all requisite corporate
power and authority to enter into this Agreement and the Ancillary
Agreements and to perform its obligations hereunder and thereunder.
Buyer is duly qualified to do business as a foreign corporation, and is
in good standing, in each of the jurisdictions in which the conduct of
its business requires such qualification, except where the failure to
so qualify or to be in good standing would not reasonably be expected
to have a material adverse effect on the ability of Buyer to perform
its obligations hereunder or under the Ancillary Agreements.
(b) Authorization and Validity of Agreement. The execution and
delivery of this Agreement and the Ancillary Agreements by Buyer and
the consummation by Buyer of the transactions contemplated hereby and
thereby have been duly authorized by all necessary corporate action on
the part of Buyer. This Agreement and the Ancillary Agreements have
been duly executed and delivered by Buyer and constitute valid and
legally binding obligations of Buyer, enforceable in accordance with
their respective terms, except as the same may be limited by applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium, receivership or similar laws affecting creditors' rights or
remedies generally and by general principles of equity (whether
considered at law or in equity).
(c) Governmental Approvals; Conflicts. The execution and
delivery of this Agreement and the Ancillary Agreements by Buyer and
the consummation by it of the transactions contemplated hereby and
thereby (i) will not violate (with or without the giving of notice or
the lapse of time or both), or require
12
any consent, approval, filing or notice under any provision of any law,
rule or regulation, court order, judgment or decree applicable to
Buyer, except for such consents, approvals, filings and notices which
may be required under the HSR Act or the Communications Act (including
the FCC Consent) and except for such violations, the occurrence of
which, and such consents, approvals, filings or notices, the failure of
which to obtain or make, would not reasonably be expected to materially
adversely affect the ability of Buyer to consummate the transactions
contemplated hereby or by the Ancillary Agreements, and (ii) will not
conflict with, or result in the breach or termination of any pro vision
of, or constitute a default under, or result in the acceleration of the
performance of the obligations of Buyer under, the articles of
incorporation or by-laws of Buyer or any indenture, mortgage, deed of
trust, lease, licensing agreement, contract, instrument or other
agreement to which Buyer is a party or by which Buyer or any of its
assets or properties is bound, except for such conflicts, breaches,
terminations, defaults or accelerations which would not reasonably be
expected to materially adversely affect the ability of Buyer to
consummate the transactions contemplated hereby or by the Ancillary
Agreements.
(d) Legal Proceedings. There is no litigation, proceeding or
govern mental investigation to which Buyer is a party pending or, to
the knowledge of Buyer, threatened against it relating to the
transactions contemplated by this Agreement or the Ancillary Agreements
which would reasonably be expected to materially adversely affect the
ability of Buyer to consummate the trans actions contemplated hereby or
by the Ancillary Agreements.
(e) Financial Capacity. Buyer has, or will have as of the
Closing Date, all funds necessary to enable Buyer to perform this
Agreement and the Ancillary Agreements in accordance with their
respective terms.
(f) Qualification. As of the date hereof, under the
Communications Act and the present rules, regulations and practices of
the FCC, (i) Buyer is legally and technically qualified to become the
licensee of the Station and is financially qualified to consummate the
transactions contemplated hereby and by the Ancillary Agreements and
(ii) will not require any special waiver or exemption from any FCC
rule, regulation or policy to enable the FCC to find it qualified to
become the licensee of the Station. Buyer will take no action that
Buyer knows, or has reason to know, would disqualify Buyer from being
the assignee of the FCC Licenses and Governmental Authorizations or the
owner or operator of the Station under the Communications Act and the
13
present rules, regulations and practices of the FCC, and will take
prompt commercially reasonable action to remove any such
disqualification.
(g) Certain Fees. Neither Buyer nor any of its officers,
directors or employees, on behalf of Buyer, has employed any broker or
finder or incurred any other liability for any brokerage fees,
commissions or finders' fees in connection with the transactions
contemplated hereby.
4.3. Acknowledgment of Buyer. Buyer has conducted to its
satisfaction an independent investigation and verification of the financial
condition, results of operations, assets, liabilities and properties of the
Station and in making its determination to proceed with the transactions
contemplated hereby, Buyer has relied on the results of such investigation;
provided, however, that such investigation shall not be deemed to constitute a
waiver of any of Buyer's rights or remedies hereunder. The representations and
warranties of Seller set forth in Section 4.1 hereof constitute the sole and
exclusive representations and warranties of Seller to Buyer in connection with
the transactions contemplated hereby, and Buyer understands, acknowledges and
agrees that all other representations and warranties of any kind or nature,
express or implied, written or oral (including, but not limited to, any relating
to the future or historical financial condition, results of operations, assets
or liabilities of the Station) are specifically disclaimed by Seller.
4.4. Expiration of Representations and Warranties. Except for
the specific representations and warranties referred to in Sections 7.1 and 7.2
hereof, all representations and warranties of Seller and Buyer shall expire
with, and be terminated and extinguished by, the Closing and thereafter Seller,
Buyer and any of their respective Affiliates, officers or directors, as the case
may be, shall have no liability whatsoever with respect to any such
representation or warranty.
ARTICLE FIVE
Covenants Prior to Closing
5.1. Access to Information Concerning Properties and Records.
Seller agrees that, during the period commencing on the date hereof and ending
on the Closing Date, (a) Seller will give or cause to be given to Buyer and its
representatives such access, during normal business hours, to the properties,
books and records of Seller relating solely to the Assets or business and
operation of the Station, as Buyer shall from time to time reasonably request
and (b) Seller will furnish or cause to be furnished to Buyer such financial and
operating data and other information which
14
relates solely to the business and operation of the Station, as Buyer shall from
time to time reasonably request. Buyer and its representatives shall be
entitled, in consultation with Seller, to such access to the representatives and
employees of Seller involved in the business and operation of the Station as
Buyer may reasonably request.
5.2. Conduct of the Business of the Station Pending the
Closing. Seller agrees that, except as required or contemplated by this
Agreement or the Ancillary Agreements, or otherwise consented to or approved by
Buyer, during the period commencing on the date hereof and ending on the Closing
Date, it will:
(a) conduct the business and operations of the Station in all
material respects only in the ordinary course;
(b) upon the effectiveness of the LMA, conduct the business
and operation of the Station in accordance with Seller's obligations
under the LMA;
(c) (i) maintain the books, accounts and records relating to
the business and operation of the Station in the usual, regular and
ordinary manner and (ii) comply in all material respects with all laws
and contractual obligations applicable to the Station or to the conduct
of the business and operation of the Station;
(d) (i) operate the Station in all material respects in
accordance with the FCC Licenses and the rules and regulations of the
FCC and with all other material laws, rules, regulations and orders,
(ii) not fail to prosecute with due diligence any pending application
to the FCC, (iii) not cause or permit by any act, or failure to act,
any of the FCC Licenses to expire, be surrendered, adversely modified,
or otherwise terminated and (iv) if the Closing has not occurred by
December 31, 1997, file an application for renewal of the FCC Licenses
and use its commercially reasonable best efforts and take all steps as
may be necessary or proper to prosecute such application diligently and
expeditiously, including opposing any petition to deny or informal
objection and furnishing the FCC with whatever information it may
request. If reconsideration or judicial review of the grant is sought,
Seller shall oppose such efforts for reconsideration or judicial
review;
(e) not sell, convey, assign, transfer, deliver or otherwise
dispose of any of the Assets, except for Assets used, consumed or
expended in the or dinary course of business consistent with past
practice;
15
(f) maintain the Assets in customary repair, maintenance and
condition, replace all items of Equipment at customary time intervals,
and repair or replace any Asset that may be damaged or destroyed with
items of equal or greater value and utility unless Seller determines in
good faith that such repair or replacement is not necessary for the
continued operation of the Station in substantially the same manner as
heretofore;
(g) maintain the insurance policies on the Station and the
Assets listed in Schedule 4.1(h) hereto or their equivalent;
(h) (i) not modify or change in any material respect any
material contract, lease, commitment or other agreement relating to the
business and operation of the Station, except in the ordinary course of
business consistent with past practice, and (ii) not waive any material
claims or rights relating to the business and operation of the Station,
except in the ordinary course of business consistent with past
practice; and
(i) not enter into any material contract, lease, commitment or
other agreement relating to the business and operation of the Station
except in accordance with Section 1.3 or 2.4 of the LMA, provided that
any such contract, lease, commitment or other agreement shall terminate
on or prior to the Closing Date.
5.3. Further Actions. Subject to the terms and conditions
hereof, Buyer and Seller agree to use their commercially reasonable best efforts
to take, or cause to be taken, all appropriate action, and to do, or cause to be
done, all things necessary, proper or advisable to consummate and make effective
the transactions contemplated hereby and by the Ancillary Agreements in the most
expeditious manner practicable. Without limiting the generality of the
foregoing, Buyer and Seller shall use their commercially reasonable best efforts
(i) to obtain prior to the Closing Date, all consents, authorizations and
approvals from such governmental authorities and other third parties as shall be
necessary to permit the consummation of the transactions contemplated hereby and
by the Ancillary Agreements, (ii) to oppose, lift or rescind any injunction or
restraining order or other order adversely affecting the ability of the parties
to consummate the transactions contemplated hereby and by the Ancillary
Agreements and (iii) to furnish to each other such information and assistance as
reasonably may be requested in connection with the foregoing. Where the consent
of any third party is required under the terms of any of the contracts, leases,
commitments or other agreements to be assumed by Buyer hereunder or under the
LMA, Buyer and Seller shall use their commercially reasonable best efforts to
obtain such consent on terms and conditions not materially less favorable than
as in
16
effect on the date hereof. Subject to the terms of the LMA, Seller shall
promptly notify Buyer of all material changes in the business and operation of
the Station.
5.4. FCC Licenses. Buyer and Seller acknowledge that
assignment of the FCC Licenses by Seller to Buyer requires the prior written
consent of the FCC. Buyer and Seller shall use their commercially reasonable
best efforts and cooperate in promptly filing or causing to be filed the FCC
Application within 10 business days after the date hereof. Buyer and Seller
shall use their commercially reasonable best efforts and take all steps as may
be necessary or proper to prosecute the FCC Application diligently and
expeditiously to a favorable conclusion, including opposing any petition to deny
or informal objection to the FCC Application. Buyer and Seller mutually agree to
provide whatever additional information the FCC may reasonably request in
processing the FCC Application, and to furnish such information within the time
established by the FCC in its request and any reasonable and necessary extension
thereof. If reconsideration or judicial review is sought with respect to the
consent of the assignment of the FCC Licenses, Buyer and Seller shall oppose
such efforts for reconsideration or judicial review.
5.5. Buyer Qualification. Prior to the Closing, Buyer shall
exercise its commercially reasonable best efforts to refrain from doing any act
which would disqualify it from being the licensee of the Station.
5.6. Station's Employees. Seller agrees to be responsible for
the salary, benefits and other compensation payable to, or severance or other
termination benefits, including any benefits under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended, and any other liabilities
relating to the Station's Employees alleged by the Station's Employees. Buyer
shall not hire any of the Station's Employees.
5.7. Environmental Due Diligence. At Buyer's option, Buyer, at
its sole expense, shall have completed within 10 days of the date hereof an
environmental due diligence review relating to the fee property set forth on
Schedule 2.1(c) hereto, including, a Phase I environmental assessment (the
"Phase I"), and notified Seller in writing of the results of such due diligence
review within such 10-day period. If a further environmental assessment (a
"Phase II") is recommended by the Phase I, Buyer, at its sole expense, shall
have completed such Phase II within 14 days after the end of such 10-day period.
Buyer may not perform or cause to be performed any invasive review of such fee
property without giving prior written notice to Seller and affording Seller the
opportunity to observe such review, and Seller shall not delay such review by
Buyer.
17
5.8. Supplements to Disclosure. From time to time prior to the
Closing, Seller may amend or supplement the Schedules attached to this Agreement
with respect to any matter that, if existing or occurring at or prior to the
Closing Date, would have been required to be set forth or described on such a
Schedule or that is necessary to complete or correct any information in any
representation or warranty contained in Section 4.1 hereof, unless Buyer objects
to any such amendment or supplement in writing within five business days of
receipt thereof.
ARTICLE SIX
Conditions Precedent
6.1. Conditions Precedent to Obligations of Both Parties. The
respec tive obligations of Buyer and Seller to consummate the transactions
contemplated by this Agreement shall be subject to the satisfaction (or waiver
by both Buyer and Seller) at or prior to the Closing Date of the following
conditions:
(a) No Injunction, etc. No preliminary or permanent injunction
or other order issued by any federal or state court of competent
jurisdiction in the United States or by any United States federal or
state governmental or regu latory body nor any statute, rule,
regulation or executive order promulgated or enacted by any United
States federal or state governmental authority which restrains, enjoins
or otherwise prohibits the transactions contemplated hereby shall be in
effect.
(b) Antitrust Matters. The waiting period under the HSR Act,
if applicable, shall have expired or shall have been terminated.
(c) FCC Matters. The FCC shall have released a public notice
or other written notification, including notice on FCC Form 732,
satisfactory to Buyer and Seller announcing its grant of consent to the
FCC Application and such grant shall have become a Final Order. In the
event Buyer and Seller both waive the requirement of a Final Order,
then Buyer and Seller will jointly execute a mutually acceptable unwind
agreement at Closing, which will provide that, if the grant of consent
to the FCC Application is rescinded, by the FCC or otherwise, prior to
the grant becoming a Final Order, Buyer and Seller will unwind the
Closing, the Purchase Price will be returned to Buyer, and this
Agreement will be terminated.
18
6.2. Conditions Precedent to Obligations of Buyer. The
obligations of Buyer under this Agreement are subject to the satisfaction (or
waiver by Buyer) at or prior to the Closing Date of each of the following
conditions:
(a) Accuracy of Representations and Warranties of Seller. All
repre sentations and warranties in Section 4.1 hereof shall be true and
correct in all material respects on and as of the Closing Date, as if
made on and as of the Closing Date, except to the extent that any such
representation or warranty is made as of a specified date, in which
case such representation or warranty shall have been true and correct
as of such date.
(b) Performance of Agreements. Seller shall in all material
respects have performed all obligations and agreements, and complied
with all coven ants and conditions, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(c) No Adverse Modification of FCC Licenses. Seller shall be
the holder of the FCC Licenses and there shall not have been any
modification of any of such FCC Licenses which has a material adverse
effect on the business or operation of the Station as operated on the
date hereof. In the event that the FCC has not issued its consent to
the FCC Application by December 1, 1997, then by the Closing Date the
FCC shall have granted Seller's application for renewal of the FCC
Licenses for a full license term, such grant shall not impose on Seller
or the FCC Licenses any condition that would have a material adverse
effect after the Closing on the business or operations of the Station
as operated on the date hereof, except that routine EEO reporting
conditions shall not be construed as having a material adverse effect
on the business or operations of the Station, and such grant shall have
become a Final Order.
(d) Officer's Certificate. Buyer shall have received a
certificate, dated the Closing Date, of the President or a
Vice-President of Seller to the effect that, to the knowledge of such
officer, the conditions specified in subsections (a), (b) and (c) above
have been satisfied.
(e) Opinions. Buyer shall have received (i) an opinion of
Xxxxxxx Xxxxx, Vice-President and General Counsel of Greater Media,
Inc., the sole stockholder of Greater Media Holdings, Inc. which is, in
turn, the sole stock holder of Greater Media Radio, Inc., the sole
stockholder of Seller, and (ii) an opinion of Xxxxxxxx, Xxxxx & Xxxxxx,
special FCC counsel for Seller, each
19
dated the Closing Date, substantially in the form attached hereto as
Exhibits A and B, respectively.
(f) Actions and Proceedings. All corporate actions,
proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement or incidental thereto and
all other related legal matters shall be reasonably satisfactory to
Buyer.
(g) Third-Party Consents. Seller shall have obtained and shall
have delivered to Buyer the third-party consents required for
assignment of the contracts, commitments and other agreements set forth
on Schedule 6.2(g) hereto.
(h) Payment of Indebtedness; Financing Statements. Subject to
payment of the Purchase Price to Seller, Seller shall have delivered
releases or terminations under the Uniform Commercial Code and any
other applicable federal, state or local statutes or regulations of any
financing or similar statements, including mortgages, filed against any
of the Assets, except for Permitted Liens.
(i) Deliveries. Seller shall have made the following
deliveries:
(i) instruments of conveyance and transfer pursuant
to Section 2.3 hereof, effecting the sale, conveyance,
assignment and transfer of the Assets to Buyer, including, but
not limited to, the following:
(1) bargain and sale deed with guarantor's
covenants for the fee property set forth on Schedule
2.1(c) hereto, together with necessary transfer
declarations or affidavits;
(2) assignments of the FCC Licenses;
(3) bills of sale for all Equipment;
(4) assignments of the contracts,
commitments and other agreements set forth on
Schedule 2.1(d) hereto, together with any consents
obtained related thereto; and
20
(ii) certified resolutions of the board of directors
of Seller, authorizing the execution, delivery and performance
of this Agreement and the Ancillary Agreements.
6.3. Conditions Precedent to Obligations of Seller. The
obligations of Seller under this Agreement are subject to the satisfaction (or
waiver by Seller) at or prior to the Closing Date of each of the following
conditions:
(a) Accuracy of Representations and Warranties of Buyer. All
repre sentations and warranties in Section 4.2 hereof shall be true and
correct in all material respects on and as of the Closing Date, as if
made on and as of the Closing Date, except to the extent that any such
representation or warranty is made as of a specified date, in which
case such representation or warranty shall have been true and correct
as of such date.
(b) Performance of Agreements. Buyer shall in all material
respects have performed all obligations and agreements, and complied
with all coven ants and conditions, contained in this Agreement to be
performed or complied with by it prior to or on the Closing Date.
(c) Officer's Certificate. Seller shall have received a
certificate, dated the Closing Date, of the President or a Vice
President of Buyer to the effect that, to the knowledge of such
officer, the conditions specified in subsections (a) and (b) above have
been satisfied.
(d) Instruments of Assumption. Buyer shall have executed and
de livered to Seller such instruments, in form and substance reasonably
satisfactory to counsel to Seller, pursuant to which Buyer assumes the
Assumed Liabilities as set forth in Section 2.5 hereof.
(e) Opinion. Seller shall have received an opinion of Xxxxxxx
X. Xxxxxx, Vice President and General Counsel of Buyer, dated the
Closing Date, substantially in the form attached hereto as Exhibit C.
(f) Actions and Proceedings. All corporate actions,
proceedings, instruments and documents required to carry out the
transactions contemplated by this Agreement or incidental thereto and
all other related legal matters shall be reasonably satisfactory to
Seller.
(g) Deliveries. Buyer shall have made the following
deliveries:
21
(i) the Purchase Price in accordance with Section
3.2 hereof;
(ii) certified resolutions of the board of directors
of Buyer, authorizing the execution, delivery and performance
of this Agreement and the Ancillary Agreements; and
(iii) instruments, in form and substance reasonably
satisfactory to Seller and its counsel, pursuant to which
Buyer assumes the Assumed Liabilities as provided in Section
2.5 hereof.
ARTICLE SEVEN
Indemnification
7.1. Indemnification by Seller. (a) General. Seller agrees to
defend, indemnify and hold harmless Buyer, its Affiliates and the stockholders,
officers, directors, employees, agents, advisers and representatives of each
such person ("Buyer Indemnitees") from and against, and pay or reimburse each
Buyer Indemnitee for, any and all claims, liabilities, obligations, losses,
fines, costs, royalties, proceedings, deficiencies or damages (whether absolute,
accrued, conditional or otherwise and whether or not resulting from third party
claims), including out-of- pocket expenses and reasonable attorneys' and
accountants fees incurred in the investigation or defense of any of the same or
in asserting any of their respective rights hereunder (collectively, "Losses"),
resulting from or arising out of:
(i) any inaccuracy of any representation or warranty made by
Seller in Section 4.1(b), (j) or (l) hereof or the first sentence of
Section 4.1(d) hereof;
(ii) the ownership of the Assets or the operation of the
Station prior to the date hereof; and
(iii) any liability of Seller or the Station not assumed by
Buyer hereunder or under the LMA.
(b) Limitation on Indemnification. Notwithstanding anything in
this Agreement to the contrary, Seller's obligation to indemnify Buyer
Indemnitees shall be subject to all of the following limitations:
(i) The amount of any Losses incurred by any Buyer Indemnitee
shall be reduced by the net amount any Buyer Indemnitee recovers (after
deducting
22
all attorneys' fees, expenses and other out-of-pocket costs of
recovery) from any insurer or other party liable for such Losses, and
Buyer Indemnitees shall use commercially reasonable best efforts to
effect any such recovery.
(ii) Buyer Indemnitees shall be entitled to indemnification
only for Losses as to which Buyer Indemnitees have given Seller written
notice describing in reasonable detail the nature and basis for such
indemnification (a "Notice of Claim") on or prior to the first
anniversary of the Closing Date.
(iii) Seller shall not be required to make any indemnification
under Section 7.1(a) hereof until the aggregate amount of Losses
resulting from or arising out of the matters referred to in Section
7.1(a) hereof exceeds $45,000; provided that if the aggregate amount of
such Losses exceeds such amount, Seller shall be required to indemnify
Buyer Indemnitees for all Losses indemnifiable under Section 7.1(a)
hereof without regard to such $45,000 limitation.
(c) Exclusive Remedy. Except as provided in Article Eight,
subsequent to the Closing, indemnification under this Section 7.1 shall be the
exclusive remedy of Buyer Indemnitees with respect to any legal, equitable or
other claim for relief based upon this Agreement or arising hereunder.
7.2. Indemnification by Buyer. (a) General. Buyer agrees to
defend, indemnify and hold harmless Seller, its Affiliates and the stockholders,
officers, directors, employees, agents, advisers and representatives of each
such person ("Seller Indemnitees") from and against, any pay or reimburse each
Seller Indemnitee for, any and all Losses resulting from or arising out of:
(i) any inaccuracy in any representation or warranty made by
Buyer in Sections 4.2(b) or (f) hereof;
(ii) any Assumed Liability; and
(iii) the ownership of the Assets or the operation of the
Station subsequent to the Closing Date.
(b) Limitation on Indemnification. Notwithstanding anything in
this Agreement to the contrary, Buyer's obligation to indemnify Seller
Indemnitees shall be subject to all of the following limitations:
23
(i) The amount of any Losses incurred by any Seller Indemnitee
shall be reduced by the net amount any Seller Indemnitee recovers
(after deducting all attorneys' fees, expenses and other out-of-pocket
costs of recovery) from any insurer or other party liable for such
Losses, and Seller Indemnitees shall use commercially reasonable best
efforts to effect any such recovery.
(ii) Seller Indemnitees shall be entitled to indemnification
only for Losses as to which Seller Indemnitees have given Buyer a
Notice of Claim on or prior to the first anniversary of the Closing
Date.
(iii) Buyer shall not be required to make any indemnification
under Section 7.2(a) hereof until the aggregate amount of Losses
resulting from or arising out of the matters referred to in Section
7.2(a) hereof exceeds $45,000; provided that if the aggregate amount of
such Losses exceeds such amount, Buyer shall be required to indemnify
Seller Indemnitees for all Losses indemnifiable under Section 7.2(a)
hereof without regard to such $45,000 limitation.
(c) Exclusive Remedy. Except as provided in Article Eight,
subsequent to the Closing indemnification under this Section 7.2 shall be the
exclusive remedy of Seller Indemnitees with respect to any legal, equitable or
other claim for relief based upon this Agreement or arising hereunder.
7.3. Indemnification Procedures. In the case of any claim
asserted by a third party against a party entitled to indemnification under this
Agreement (the "Indemnified Party"), a Notice of Claim shall be given by the
Indemnified Party to the party required to provide indemnification (the
"Indemnifying Party") promptly after such Indemnified Party has actual knowledge
of any claim as to which indemnity may be sought, and the Indemnified Party
shall permit the Indemnifying Party (at the expense of such Indemnifying Party)
to assume the defense of any claim or any litigation resulting therefrom,
provided that the Indemnified Party may participate in such defense at such
Indemnified Party's expense and the omission by any Indemnified Party to give a
Notice of Claim shall not relieve the Indemnifying Party of its indemnification
obligation under this Agreement except to the extent that such Indemnifying
Party is materially damaged as a result of such failure to give notice. Except
with the prior written consent of the Indemnified Party, no Indemnifying Party,
in the defense of any such claim or litigation, shall consent to entry of any
judgment or order, interim or otherwise, or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting the Indemnified
Party or that does not include as an unconditional term thereof the giving by
each claimant or plaintiff to such Indemnified Party of a release from all
liability with respect to such claim or
24
litigation. In the event the Indemnifying Party elects to assume the defense of
such claim or litigation, the Indemnifying Party shall not be liable to the
Indemnified Party under this Article Seven for any legal or other expenses
subsequently incurred by the Indemnified Party in connection with the defense
thereof, provided that the Indemnified Party shall have the right to employ
counsel to represent it if either (a) such claim or litigation involves remedies
other than monetary damages and such remedies, in the Indemnified Party's
reasonable judgment, could have a material adverse effect on such Indemnified
Party or (b) the Indemnified Party may have avail able to it one or more
defenses or counterclaims which are inconsistent with one or more of those
claims alleged by the Indemnifying Party. If the Indemnifying Party does not
elect to assume the defense of such claim or litigation, the Indemnified Party
shall act reasonably and in accordance with its good faith business judgment
with respect thereto, and shall not settle or compromise any such claim or
litigation without the consent of the Indemnifying Party, which consent shall
not be unreasonably withheld. The parties hereto agree to render to each other
such assistance as may reasonably be requested in order to insure the proper and
adequate defense of any such claim or litigation.
ARTICLE EIGHT
Termination
8.1. General. This Agreement may be terminated and the
transactions contemplated herein may be abandoned (a) by mutual written consent
of Buyer and Seller, (b) by any non-defaulting party if consent to the
assignment of the FCC Licenses is denied by Final Order (unless the requirement
for a Final Order is waived by Buyer and Seller), (c) by any non-defaulting
party if the other party shall have materially breached any of its material
covenants herein and such breach is not cured within 10 business days of such
party's receipt of written notice from the non-de faulting party that such
breach exists or has occurred or if such party shall have made a material
misrepresentation herein and such misrepresentation is not cured within 10
business days of such party's receipt of written notice from the non-defaulting
party that such misrepresentation has been made, (d) by any non-defaulting party
by notice to the other party if the Closing Date shall not have occurred on or
before the first anniversary of the date of this Agreement, provided, however,
that if the FCC has not issued written consent to the FCC Application by
December 1, 1997, the term of this Agreement shall be extended by an additional
nine month period following the acceptance by the FCC of the Station's license
renewal application or (e) by Buyer, if, (i) based on the results of either the
Phase I or Phase II conducted pursuant to Section 5.7 hereof, Buyer reasonably
believes that the actions required to implement
25
any recommendations resulting from either such Phase I or Phase II, if any,
shall exceed $50,000 (exclusive of the costs of such Phase I and Phase II) and
(ii) Buyer gives written notice of such belief to Seller within either the
10-day or 14-day period specified in Section 5.7 hereof, as the case may be.
8.2. No Liabilities in Event of Termination. In the event of
any termination of this Agreement as provided in Section 8.1 hereof, (a) this
Agreement shall forthwith become void and of no further force and effect, (b)
the Deposit, and all interest accrued thereon, shall be delivered in accordance
with the terms of the Escrow Agreement and (c) there shall be no liability on
the part of Buyer, Seller or their respective Affiliates, officers or directors,
as the case may be; provided, however, (i) Article Eight and Sections 10.1, 10.2
and 10.12 hereof shall survive any such termination, (ii) in the event of a
termination of this Agreement pursuant to Section 8.1(c) hereof by Buyer, Seller
shall be liable for any damages sustained by Buyer and (iii) in the event of a
termination of this Agreement pursuant to Section 8.1(c) hereof by Seller, the
Deposit, and all interest accrued thereon, shall be released to Seller in
accordance with the terms of the Escrow Agreement (such amount to be liquidated
damages for any damages sustained by Seller as the nature of this transaction
being such as will not permit an exact determination of the damages which may be
suffered by Seller by reason of such default by Buyer). In the event Buyer shall
be entitled to terminate this Agreement pursuant to Section 8.1(c) hereof, Buyer
may, in lieu of exercising such right to terminate this Agreement, obtain
specific performance of the terms of this Agreement.
ARTICLE NINE
Post-Closing Covenants
9.1. Access to Books and Records. For a period of six years
following the Closing Date, Buyer shall afford, and shall cause its Affiliates
to afford, to Seller and its counsel and accountants, during normal business
hours, reasonable access to the books, records and other data of the Station
with respect to the period prior to the Closing Date to the extent that such
access may be reasonably required by Seller in connection with matters relating
to or affected by the operations of the Station prior to the Closing Date. Buyer
will not dispose of, alter or destroy any such books, records and other data
without giving 30 days' prior notice to Seller to permit it, at its expense, to
examine, duplicate or repossess such records, files, documents and
correspondence.
26
9.2. Further Agreements. Seller shall promptly deliver to
Buyer any mail or other communication received by it after the Closing Date
pertaining to the business and operation of the Station or the Assets and any
cash, checks or other instruments of payment to which Buyer is entitled. Buyer
shall promptly deliver to Seller any mail or other communication received by it
after the Closing Date pertaining to the Excluded Assets, and any cash, checks
or other instruments of payment in respect of such Excluded Assets.
9.3. Financial Statements. After the date hereof and until the
sixth anniversary of the Closing Date, promptly upon request from Buyer and to
the extent reasonably available, Seller shall deliver to Buyer copies of
unaudited income and expense statements of the Station for each of the periods
ended September 30, 1996 and 1997 as prepared by Seller or an Affiliate of
Seller.
ARTICLE TEN
Miscellaneous
10.1. Public Announcements. So long as this Agreement is in
effect, Buyer and Seller agree to use their commercially reasonable best efforts
to consult with each other and obtain the prior written consent of the other
party before issuing any press release or otherwise making any public statement
with respect to the transactions contemplated hereby or by the Ancillary
Agreements unless such disclosure is required by applicable law.
10.2. Expenses. Subject to Section 10.3 hereof, whether or not
the transactions contemplated by this Agreement are consummated, Buyer and
Seller shall pay the fees and expenses incurred by it in connection with the
negotiation, preparation, execution and performance of this Agreement,
including, without limi tation, attorneys' fees and accountants' fees; provided,
however, Buyer and Seller shall share equally the cost of the FCC filing fee for
the FCC Application.
10.3. Transfer Taxes. Buyer and Seller shall share equally and
cooperate in the timely payment of all Transfer Taxes arising out of or in
connection with or attributable to the transactions effected pursuant to this
Agreement and each party shall indemnify and hold harmless the other party and
its Affiliates against the payment of its portion of Transfer Taxes. As between
Buyer and Seller, the party that has the primary responsibility under applicable
law for filing any return in respect of Transfer Taxes shall prepare such
return, subject to the other party's approval, which approval shall not be
unreasonably withheld, and timely file such return.
27
10.4. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given or made as follows: (a) if sent by registered or certified mail in
the United States return receipt requested, upon receipt; (b) if sent by
reputable overnight air courier (such as DHL or Federal Express), two business
days after mailing; (c) if sent by fax, with a copy mailed on the same day in
the manner provided in (a) or (b) above, when transmitted and receipt is
confirmed by telephone; or (d) if otherwise actually personally delivered, when
delivered, and shall be delivered as follows:
(a) If to Seller:
Greater Boston Radio, Inc.
x/x Xxxxxxx Xxxxx, Xxx.
X.X. Xxx 0000
Two Xxxxxxx Boulevard
East Brunswick, New Jersey 08816
Attention: Xxxxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
(b) If to Buyer:
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
28
with a copy to:
Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxx X. Xxxxxx, Xx.
Phone: (000) 000-0000
Fax: (000) 000-0000
or to such other address or to such other person as the party to whom notice is
given may have previously furnished to the other in writing in the manner set
forth above.
10.5. Entire Agreement. This Agreement (including the
Schedules hereto) together with the Ancillary Agreements constitute the entire
agreement between Buyer and Seller with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral and written, between
Buyer and Seller with respect to the subject matter hereof.
10.6. Assignment. (a) Neither this Agreement nor any rights or
obligations hereunder may be assigned by Seller or Buyer without the written
consent of the other party hereto, except (i) to the extent permitted under
subsection (b) of this Section 10.6, (ii) that after the Closing Date, Seller
may assign any of its rights and obligations to any Affiliate or successor in
interest of Seller and (iii) (x) that after the Closing Date, Buyer may assign
its obligations hereunder to any Affiliate or successor in interest and (y) that
Buyer may assign its rights hereunder to acquire the FCC Licenses to an
Affiliate.
(b) Buyer acknowledges that Seller may desire to effect this
transaction as an exchange of the Assets for other property of like kind and
qualifying use within the meaning of section 1031 of the Code. Seller may assign
its rights hereunder to a qualified intermediary as provided under Treasury
Regulations section 1.1031(k)- 1(g)(4) on or before the Closing Date, provided
that such assignment shall be made without any cost or expense to Buyer and
without Buyer otherwise incurring any liability thereby and provided, further,
that any such assignment shall not relieve Seller from any of its obligations
under this Agreement. Buyer shall cooperate with Seller to effectuate any such
exchange, provided that such cooperation would not result in any additional cost
or expense to Buyer and Buyer would not otherwise incur any liability thereby.
10.7. No Third-Party Beneficiaries. Except as provided in Sec
tion 10.6 hereof, nothing in this Agreement shall confer any rights upon any
person or entity other than the parties hereto and their respective permitted
successors and assigns.
29
10.8. Amendment; Waiver. No amendment, waiver of compliance
with any provision or condition hereof, or consent pursuant to this Agreement
shall be effective unless evidenced by an instrument in writing signed by the
party against whom enforcement of any amendment, waiver or consent is sought.
10.9. Interpretation. The section headings in this Agreement
are for convenience of reference only and shall not be deemed to alter or affect
the meaning or interpretation of any provision hereof. Any references to
Seller's knowledge or the knowledge of Seller shall mean the actual knowledge of
Xxxxxx X. Xxxxxxxx after due inquiry of the Station's manager.
10.10. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, and if any provision of this Agreement is interpreted by a
court of competent jurisdiction and found to be invalid or unenforceable,
neither the enforceability nor the validity of such provisions with respect to
any other facts or under any other circumstances shall thereby be impaired. The
unenforceability or invalidity of any provision shall not result in the
interpretation of the remainder of this Agreement, or any Section hereof, in a
manner inconsistent with intent of the parties as evidenced by the terms of this
Agreement, or such Section, as a whole.
10.11. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed to be an original and both of which
together shall be deemed to be one and the same agreement.
10.12. Governing Law; Jurisdiction. The construction and
perfor xxxxx of this Agreement shall be governed by the laws of the State of New
York without regard to its principles of conflict of laws, and the state and
federal courts of New York shall have exclusive jurisdiction over any
controversy or claim arising out of or relating to this Agreement.
30
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
GREATER BOSTON RADIO, INC.
By:
Name:
Title:
AMERICAN RADIO SYSTEMS
CORPORATION
By:
Name:
Title:
31