AGREEMENT AND PLAN OF MERGER
By and Between
AMERICAN RADIO SYSTEMS CORPORATION
and
TSUNAMI COMMUNICATIONS OF CINCINNATI, INC.
Dated as of
January 2, 1997
TABLE OF CONTENTS
ARTICLE 1 THE MERGER......................................................................................2
SECTION 1.1 The Merger..................................................................................2
SECTION 1.2 Closing.....................................................................................2
SECTION 1.3 Effective Time..............................................................................2
SECTION 1.4 Effect of the Merger........................................................................2
SECTION 1.5 Certificate of Incorporation................................................................2
SECTION 1.6 Bylaws......................................................................................2
SECTION 1.7 Directors and Officers......................................................................2
ARTICLE 2 CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES..................................................3
SECTION 2.1 Conversion of Capital Stock.................................................................3
SECTION 2.2 Exchange of Certificates....................................................................4
SECTION 2.3 Stock Transfer Books........................................................................4
SECTION 2.4 Option Securities and Convertible Securities; Payment Rights................................4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................4
SECTION 3.1 Organization and Business; Power and Authority; Effect of Transaction.......................4
SECTION 3.2 Business, Assets and Liabilities............................................................6
SECTION 3.3 Authorized and Outstanding Capital Stock....................................................7
SECTION 3.4 Broker or Finder............................................................................7
SECTION 3.5 Continuing Representation and Warranty......................................................7
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF AMERICAN......................................................7
SECTION 4.1 Organization and Business; Power and Authority; Effect of Transaction.......................7
SECTION 4.2 Financial and Other Information.............................................................8
SECTION 4.3 Broker or Finder............................................................................8
SECTION 4.4 Continuing Representation and Warranty......................................................8
ARTICLE 5 COVENANTS.......................................................................................9
SECTION 5.1 Access to Information; Confidentiality; Cooperation.........................................9
SECTION 5.2 Public Announcements........................................................................9
SECTION 5.3 Notification of Certain Matters............................................................10
ARTICLE 6 CLOSING CONDITIONS.............................................................................10
SECTION 6.1 Conditions to Obligations of Each Party to Effect the Merger...............................10
SECTION 6.2 Conditions to Obligations of American......................................................11
SECTION 6.3 Conditions to Obligations of the Company...................................................12
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..............................................................13
SECTION 7.1 Termination................................................................................13
ARTICLE 8 INDEMNIFICATION................................................................................14
SECTION 8.1 Survival...................................................................................14
SECTION 8.2 Indemnification............................................................................14
SECTION 8.3 Limitation of Liability; Disposition of Escrow Indemnity Funds.............................15
SECTION 8.4 Notice of Claims...........................................................................15
SECTION 8.5 Defense of Third Party Claims..............................................................15
SECTION 8.6 Exclusive Remedy...........................................................................15
ARTICLE 9 GENERAL PROVISIONS.............................................................................16
SECTION 9.1 Amendment..................................................................................16
SECTION 9.2 Waiver.....................................................................................16
SECTION 9.3 Fees, Expenses and Other Payments..........................................................16
SECTION 9.4 Notices....................................................................................16
SECTION 9.5 Specific Performance; Other Rights and Remedies............................................17
SECTION 9.6 Severability...............................................................................18
SECTION 9.7 Counterparts...............................................................................18
SECTION 9.8 Section Headings...........................................................................18
SECTION 9.9 Governing Law..............................................................................18
SECTION 9.10 Further Acts..............................................................................18
SECTION 9.11 Entire Agreement..........................................................................18
SECTION 9.12 Assignment................................................................................19
SECTION 9.13 Parties in Interest.......................................................................19
SECTION 9.14 Mutual Drafting...........................................................................19
APPENDIX A Definitions
EXHIBITS:
EXHIBIT A: Terms of WGRR Amendments (Section 6.2(e))
EXHIBIT B: Form of Investment Letter (Section 6.2(f))
EXHIBIT C: Form of Registration Rights Agreement (Section 6.2(g))
-ii-
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as of
January 2, 1997, is made by and between American Radio Systems Corporation, a
Delaware corporation ("American"), and Tsunami Communications of Cincinnati,
Inc., an Ohio corporation (the "Company" and, together with American, the
"parties").
RECITALS
WHEREAS, upon the terms and subject to the conditions of this
Agreement, in accordance with the general corporation laws of the State of
Delaware (the "DGCL") and of the State of Ohio (the "OGCL"), the Company and
American will carry out a business combination transaction pursuant to which the
Company will merge with and into American (the "Merger") and Xxxxxxx X.
Xxxxxxxx, the sole stockholder of the Company (the "Company Stockholder"), will
receive shares (the "American Shares") of Class A Common Stock, par value $.01
per share, of American (the "American Class A Stock") with a Current Market
Price (as hereinafter defined) of $500,000; and
WHEREAS, the Board of Directors of each of the Company and American (a)
has unanimously determined that the Merger is advisable and fair to, and in the
best interests of, it and its respective stockholders and has approved and
adopted this Agreement as a plan of reorganization within the provisions of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended, and (b)
has approved this Agreement and the Merger; and
WHEREAS, the Company Stockholder has approved and adopted this
Agreement, the Merger and the Transactions; and
WHEREAS, (i) Tsunami Communications, Inc., a Colorado corporation
("Tsunami"), WGRR Limited Partnership, a Delaware limited partnership ("WGRR"),
and The Xxxxxx Group, Inc., a Delaware corporation and the general partner of
WGRR ("Xxxxxx"), are parties to an Asset Purchase Agreement dated August 27,
1996 (the "WGRR Agreement"); (ii) Tsunami, WGRR and Media Ventures Partners,
Ltd. are parties to an Escrow Agreement dated August 29, 1996 (the "WGRR Escrow
Agreement"); and (iii) the Company and Tsunami are parties to an Assignment and
Assumption Agreement, dated September 30, 1996, relating to the WGRR Agreement
and the WGRR Escrow Agreement (the "WGRR Assignment" and, collectively with the
WGRR Agreement and the WGRR Escrow Agreement, the "WGRR Documents" or, any of
the foregoing, individually, a "WGRR Document"); and
WHEREAS, capitalized terms used in this Agreement without definition
shall have the meanings given to such terms in Appendix A attached hereto and
made a part hereof;
NOW, THEREFORE, in consideration of the foregoing Recitals and the
mutual representations, warranties, covenants and agreements set forth herein,
the parties hereto, intending to be legally bound, do hereby covenant and agree
as follows:
ARTICLE 1
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the conditions
set forth in this Agreement, and in accordance with the DGCL and the OGCL, at
the Effective Time the Company shall be merged with and into American. As a
result of the Merger, the separate existence of the Company shall cease and
American shall continue as the surviving corporation of the Merger (the
"Surviving Corporation").
SECTION 1.2 Closing. Unless this Agreement shall have been terminated
pursuant to Section 8.1 and the Merger and the Transactions shall have been
abandoned, the closing of the Merger (the "Closing") will take place at the
offices of Xxxxxxxx & Worcester LLP, Xxx Xxxx Xxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, on such date, not later than the Termination Date, within ten
(10) days following the satisfaction or, if permissible, waiver of the
conditions set forth in Article 6, other than those conditions which can be
satisfied only at the Closing, unless another date, time or place is agreed to
in writing by the parties (the "Closing Date").
SECTION 1.3 Effective Time. As promptly as practicable after the
satisfaction or, if permissible, waiver of the conditions set forth in Article 6
(but subject to the provisions of Section 1.2), the parties hereto shall cause
the Merger to be consummated by filing a Certificate of Merger and any related
filings required under the DGCL with the Secretary of State of Delaware and a
Certificate of Merger and any related filings required under the OGCL with the
Secretary of State of Ohio. The Merger shall become effective at such time (but
not prior to the Closing Date) as such documents are duly filed with the
Secretary of State of Delaware and the Secretary of State of Ohio or at such
later time as is specified in such documents (the "Effective Time").
SECTION 1.4 Effect of the Merger. From and after the Effective Time,
the Surviving Corporation shall possess all the rights, privileges, powers and
franchises and be subject to all of the restrictions, disabilities and duties of
the Company and American, and the Merger shall otherwise have the effects
provided for under the DGCL and the OGCL.
SECTION 1.5 Certificate of Incorporation. The Certificate of
Incorporation of American in effect at the Effective Time shall be the
Certificate of Incorporation of the Surviving Corporation unless amended in
accordance with Applicable Law.
SECTION 1.6 Bylaws. The bylaws of American in effect at the Effective
Time shall be the bylaws of the Surviving Corporation unless amended in
accordance with Applicable Law.
SECTION 1.7 Directors and Officers. From and after the Effective Time,
until successors are duly elected or appointed and qualified (or earlier
resignation or removal) in accordance with Applicable Law, (a) the directors of
American 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-
ARTICLE 2
CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
SECTION 2.1 Conversion of Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the Company, American
or the holders of any of the following securities:
(a) Each share of American Class A Stock, each share of Class B Common
Stock, par value $.01 per share, of American and each share of Class C Common
Stock, par value $.01 per share, of American, and all Convertible Securities and
Option Securities of American issued and outstanding immediately prior to the
Effective Time shall remain outstanding.
(b) Each share of Common Stock, with no par value, of the Company (the
"Company Common Stock") issued and outstanding immediately prior to the
Effective Time (other than shares held in the treasury of the Company or by any
of its Subsidiaries) shall, by virtue of the Merger and without any action on
the part of the holder thereof, be converted into the right to receive its
pro-rata share of 18,341 shares of American Shares (being a number of American
Shares with a Current Market Price of $500,000) (the "Merger Consideration").
The term "Per Share Merger Consideration" shall mean an amount equal to the
Merger Consideration divided by the aggregate number of shares of Company Common
Stock (the "Company Shares") issued and outstanding at the Effective Time.
At the Effective Time, all Company Shares shall no longer be
outstanding and shall automatically be canceled and retired and shall cease to
exist, and certificates previously evidencing any such Company Shares (each, a
"Certificate") shall thereafter represent the right to receive, upon the
surrender of such Certificate in accordance with the provisions of Section 3.2,
the Per Share Merger Consideration multiplied by the number of Company Shares
represented by such Certificate, together with cash in lieu of fractional shares
in accordance with the provisions of Section 2.1(d). A holder of more than one
Certificate shall have the right to receive the Per Share Merger Consideration
multiplied by the number of Company Shares represented by all such Certificates.
The holders of such Certificates previously evidencing Company Shares
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Company Shares except as otherwise provided herein
or by Applicable Law.
For purposes of this Agreement, the term "Current Market Price" shall
mean, with respect to the American Shares on any date specified herein, the
average of the daily Fair Market Value for each of the most recent five (5)
trading days prior to the date of this Agreement, determined by (a) multiplying
each such daily Fair Market Value by the number of shares of American Class A
Stock traded each such day, (b) adding the products of the foregoing
multiplications, and (c) dividing the sum by the total number of shares of
American Class A Stock traded during such period, and the term "Fair Market
Value" shall mean, with respect to the American Class A Stock, the last reported
sales price, regular way, or, in the event that no sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in either
case as reported on the Nasdaq National Market System.
-3-
(c) Each Company Share held in the treasury of the Company or by any of
its Subsidiaries and each Company Share owned by American 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.
(d) In lieu of issuing fractional shares, American shall convert the
holder's right to receive American Shares pursuant to Section 2.1(b) into a
right to receive the highest whole number of American Shares constituting the
Per Share Merger Consideration plus cash equal to the fraction of a share of
American Class A Stock to which the holder would otherwise be entitled
multiplied by the Current Market Price.
SECTION 2.2 Exchange of Certificates. At and after the Effective Time,
each Company Stockholder, upon surrender of each of his Certificates, shall be
issued a certificate of American Class A Stock and cash representing the Per
Share Merger Consideration with respect to the Company Shares represented by
such Certificate, plus cash in amount sufficient to make payment for fractional
shares.
SECTION 2.3 Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
transfer of shares of Company Common Stock thereafter on the records of the
Company. Any Certificates presented after the Effective Time for transfer shall
be canceled and exchanged for the amount to which the Shares represented thereby
shall be entitled pursuant to Sections 2.1 and 2.2.
SECTION 2.4 Option Securities and Convertible Securities; Payment
Rights. At the Effective Time, each outstanding Option Security and each
Convertible Security, whether or not then exercisable for or convertible into
Company Shares, outstanding immediately prior to the Effective Time, shall be
canceled and retired and shall cease to exist, and the holder thereof shall not
be entitled to receive any consideration therefor.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents, warrants and covenants to, and agrees
with, American as follows:
SECTION 3.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) Each of the Company and Tsunami is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation; and the Company 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.
(b) The Company has all requisite power and authority (corporate and
other), and has in full force and effect all Governmental Authorizations and
Private Authorizations in order to enable it
-4-
to execute and deliver, and to perform its obligations under, this Agreement and
each Collateral Document executed or required to be executed by the Company
pursuant hereto or thereto and to consummate the Merger; and the execution,
delivery and performance of this Agreement and each Collateral Document executed
or required to be executed by the Company pursuant hereto or thereto have been
duly authorized by all requisite corporate or other action on the part of the
Company, including without limitation the approval of the Company Stockholder.
This Agreement has been duly executed and delivered by the Company and
constitutes, and each Collateral Document executed or required to be executed
pursuant hereto or thereto or to consummate the Merger, when executed and
delivered by the Company, will constitute, legal, valid and binding obligations
of the Company, 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 the obligations
of debtors generally and by general principles of equity.
(c) Except as set forth in Schedule 3.1 to the Company Disclosure
Schedule, neither the execution and delivery of this Agreement nor any
Collateral Document executed or required to be executed pursuant hereto or
thereto, nor compliance with the terms, conditions and provisions hereof or
thereof by the Company:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Applicable Law on the part of the
Company or will conflict with, or result in a breach or violation of,
or constitute a default under, or permit the acceleration of any
obligation or liability under, or but for any requirement of 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
acceleration under, any Contractual Obligation of the Company; or
(ii) will require the Company to make or obtain any
Governmental Authorization, Governmental Filing or Private
Authorization, except for the filing requirements under Applicable Law
in connection with the Merger.
(d) The Company does not have any direct or indirect Subsidiaries.
(e) Each of the Company and Tsunami had, as of the date of execution of
each of the WGRR Documents to which it is a party, all requisite power and
authority (corporate and other) in order to enable it to execute and deliver,
and to perform its obligations under, each of the WGRR Documents to which it is
a party or by which it is bound, and the execution, delivery and performance of
each of the WGRR Documents to which it is a party by the Company and Tsunami
have been duly authorized by all requisite corporate or other action on the part
of the Company and Tsunami, including without limitation its stockholders to the
extent required. Each of the WGRR Documents to which it is a party has been duly
executed and delivered by the Company and each constitutes the legal, valid and
binding obligation of the Company and Tsunami, 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 the obligations of debtors generally and by general
principles of equity.
(f) To the Company's knowledge:
-5-
(i) as of the date of execution of the WGRR Agreement, WGRR
was a limited partnership duly organized and existing under the laws of
the jurisdiction of its organization, had all requisite power and
authority (partnership and other) in order to enable it to execute and
deliver, and to perform its obligations under, the WGRR Agreement;
(ii) the execution, delivery and performance of the WGRR
Agreement by WGRR had been duly authorized by all requisite partnership
or other action on the part of WGRR, including without limitation its
partners to the extent required; and
(iii) The WGRR Agreement has been duly executed and delivered
by WGRR and constitutes the legal, valid and binding obligation of
WGRR, enforceable in accordance with its respective terms, except as
such enforceability may be limited by bankruptcy, moratorium,
insolvency and similar laws affecting the rights and remedies of
creditors and the obligations of debtors generally and by general
principles of equity.
SECTION 3.2 Business, Assets and Liabilities. The Company is a newly
organized corporation, has not conducted and prior to the Closing Date will not
conduct any business and does not have any assets or property or any obligations
or liabilities, past, present or deferred, accrued or unaccrued, fixed,
absolute, contingent or other, except pursuant to the WGRR Documents and the
Financing Documents to which it is a party or by which it is bound and for
nonmaterial obligations and liabilities arising in connection with its
organization and the WGRR Documents. Other than as set forth on Schedule 3.2 to
the Company Disclosure Schedule, no financing statements under the Uniform
Commercial Code and no other filing which names the Company as debtor or which
covers or purports to cover any of the asset or property of the Company is on
file in any state or other jurisdiction, and the Company has not signed or
agreed to sign any such financing statement or filing or any agreement
authorizing any secured party thereunder to file any such financing statement or
filing. The Company is solvent within the meaning of applicable bankruptcy and
fraudulent conveyance Laws. There is no Event known to the Company which
Materially Adversely Affects, or (so far as the Company can now reasonably
foresee) in the future is likely to Materially Adversely Affect, the Company,
except for matters applicable to the economy or the radio broadcast industry
generally.
Without limiting the generality of the foregoing, except as set forth
on Schedule 3.2, (a) the Company is not a party to or bound by, nor are any of
its assets or property subject to, any Governmental Authorization, Private
Authorization, Lease or other Contractual Obligation, other than the WGRR
Documents; (b) there is not pending or, to the Company's knowledge, threatened
any Legal Action or other Claim against the Company or which otherwise involves
the Company; (c) the Company is not a party to any transaction with any of its
officers, directors or employees, the Company Stockholder, or any Affiliate of
any thereof (other than the WGRR Assignment); (d) the Company does not have any
Plans, Benefit Arrangements or Employment Arrangements; and (e) except as set
forth on the Company Disclosure Schedule, there are not, and on or prior to the
Closing there will not be, (i) any banks, trust companies, savings and loan
associations and brokerage firms in which the Company has an account or a safe
deposit box or (ii) Persons authorized to draw thereon, to have access thereto,
or to authorize transactions therein, or (iii) any powers of attorney from the
Company.
-6-
SECTION 3.3 Authorized and Outstanding Capital Stock. The authorized
and outstanding capital stock of the Company is as set forth in the Company
Disclosure Schedule. 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. Except as set forth in the Company
Disclosure Schedule, (a) there is not currently, and on the Closing Date there
will not be, outstanding (nor has the Company agreed to grant or issue nor will
the Company on or prior to the Closing Date agree to grant or issue) any other
shares of its capital stock or any Option Security or Convertible Security, and
(b) the Company is not (and on or prior to the Closing Date will not be) a party
to or bound by any agreement, put or commitment pursuant to which it is or will
be obligated to purchase, redeem or otherwise acquire any shares of capital
stock or any Option Security or Convertible Security. All of the outstanding
capital stock of the Company is owned as of the date of this Agreement by the
Company Stockholder, free and clear of all Liens.
SECTION 3.4 Broker or Finder. No Person assisted in or brought about
the negotiation of this Agreement or the Merger or the subject matter of this
Agreement in the capacity of broker, agent or finder or in any similar capacity
on behalf of the Company.
SECTION 3.5 Continuing Representation and Warranty. Except for those
representations and warranties which speak as of a specific date, all of the
representations and warranties of the Company set forth in this Article shall be
true and correct on the Closing Date with the same force and effect as though
made on and as of that date and those, if any, which speak as of a specific date
shall be true and correct on the Closing Date.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF AMERICAN
American represents, warrants and covenants to, and agrees with, the
Company as follows:
SECTION 4.1 Organization and Business; Power and Authority; Effect of
Transaction.
(a) American (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation; and (ii)
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.
(b) American has all requisite power and authority (corporate and
other), and has in full force and effect all Governmental Authorizations and
Private Authorizations in order to enable it to execute and deliver, and to
perform its obligations under, this Agreement and each Collateral Document
executed or required to be executed pursuant hereto or thereto and to consummate
the Merger; and the execution, delivery and performance of this Agreement and
each Collateral Document executed or required to be executed pursuant hereto or
thereto by American have been duly authorized by all requisite corporate or
other action on the part of American. No action or approval on the part of the
American stockholders is required in connection with the execution, delivery and
performance of this Agreement or any Collateral Document or the consummation of
the Merger. This Agreement has been duly executed and delivered by American and
constitutes,
-7-
and each Collateral Document executed or required to be executed pursuant hereto
or thereto by American or to consummate the Merger, when executed and delivered
by American, will constitute, legal, valid and binding obligations of American
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 the obligations of
debtors generally and by general principles of equity.
(c) Neither the execution and delivery of this Agreement or any
Collateral Document executed or required to be executed pursuant hereto or
thereto, nor compliance with the terms, conditions and provisions hereof or
thereof by American:
(i) will conflict with, or result in a breach or violation of,
or constitute a default under, any Applicable Law on the part of
American or will conflict with, or result in a breach or violation of,
or constitute a default under, or permit the acceleration of any
obligation or liability in, or but for any requirement of 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
acceleration in, any Contractual Obligation of American; or
(ii) will require American to make or obtain any Governmental
Authorization, Governmental Filing or Private Authorization, except for
the filing requirements under Applicable Law in connection with the
Merger.
SECTION 4.2 Financial and Other Information. The documents
(collectively, the "American SEC Documents") that American has filed pursuant to
the provisions of the Securities Act or the Exchange Act, as of the date of the
filing thereof, did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated herein or necessary to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading. Since the date of the most recent financial
statements forming part of the American SEC Documents, there has been no
Material Adverse Change in American. Except as set forth in the SEC Documents,
there is no Event known to American which Materially Adversely Affects, or (so
far as American can now reasonably foresee) in the future is likely to
Materially Adversely Affect, American, except for matters applicable to the
economy or the radio broadcast industry generally.
SECTION 4.3 Broker or Finder. No Person assisted in or brought about
the negotiation of this Agreement or the Merger or the subject matter of this
Agreement in the capacity of broker, agent or finder or in any similar capacity
on behalf of American.
SECTION 4.4 Continuing Representation and Warranty. Except for those
representations and warranties which speak as of a specific date, all of the
representations and warranties of American set forth in this Article shall be
true and correct on the Closing Date with the same force and effect as though
made on and as of that date and those, if any, which speak as of a specific date
shall be true and correct on the Closing Date.
-8-
ARTICLE 5
COVENANTS
SECTION 5.1 Access to Information; Confidentiality; Cooperation.
(a) Each party shall afford to the other party and its accountants,
counsel, financial advisors and other representatives (the "Representatives")
full access during normal business hours throughout the period prior to the
Effective Time to all of its (and its Subsidiaries') properties, books,
contracts, commitments and records. All non-public information furnished
pursuant to the provisions of this Agreement, including without limitation this
Section, will be kept confidential and shall not, without the prior written
consent of the party disclosing such information, be disclosed by the other
party in any manner whatsoever, in whole or in part, and shall not be used for
any purposes, other than in connection with the Merger. In no event shall either
party or any of its Representatives use such information to the detriment of the
other party. Each party agrees to reveal such information only to those of its
Representatives who need to know such information for the purpose of evaluating
the Merger, who are informed of the confidential nature of such information and
who shall undertake in writing (a copy of which, if requested, will be furnished
to the disclosing party) to act in accordance with the terms and conditions of
this Agreement. From and after the Closing, the Company Stockholder shall not,
without the prior written consent of American, disclose any information
remaining in his possession with respect to the Company, and no such information
shall be used for any purposes, other than in connection with the Merger or to
the extent required by Applicable Law.
(b) Notwithstanding the provisions of Section 5.1(a), each party may
disclose such information as may be required by Applicable Law to be disclosed.
In the event that this Agreement is terminated in accordance with its terms,
each party shall promptly redeliver all non-public written material provided
pursuant to this Section or any other provision of this Agreement or otherwise
in connection with the Merger and shall not retain any copies, extracts or other
reproductions in whole or in part of such written material other than one copy
thereof, which shall be delivered to independent counsel for such party.
(c) No investigation pursuant to this Section or otherwise shall affect
any representation or warranty in this Agreement of either party or any
condition to the obligations of the parties hereto.
(d) Each of the parties hereto shall use reasonable business efforts to
take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under Applicable Law to consummate the
Merger.
SECTION 5.2 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, the Merger or any Transaction 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 Company acknowledges and agrees that
American may, without the prior consent of the Company, issue such press
releases or make such public statements as may be required by Applicable Law, in
which case, to the extent practicable, American
-9-
will consult with, and exercise in good faith, all reasonable business efforts
to agree with the Company regarding the nature, extent and form of such press
release or public statement, and, in any event, with prior notice to the
Company.
SECTION 5.3 Notification of Certain Matters. Each party shall give
prompt notice to the other, of (a) the occurrence or non-occurrence of any Event
the occurrence or non-occurrence of which would be likely to cause (i) any
representation or warranty made by it contained in this Agreement to be untrue
or inaccurate in any respect such that one or more of the conditions of Closing
might not be satisfied, or (ii) any covenant, condition or agreement made by it
contained in this Agreement not to be complied with or satisfied, or (iii) in
the case of the Company, any change to be made in the Company Disclosure
Schedule or in the case of American, any change to be made in the American
Disclosure Schedule, as the case may be, in any respect such that one or more of
the conditions of Closing might not be satisfied, and (b) any failure made by it
to comply with or satisfy, or be able to comply with or satisfy, any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that the delivery of any notice pursuant to this Section
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice, except as provided in paragraph (b) below.
ARTICLE 6
CLOSING CONDITIONS
SECTION 6.1 Conditions to Obligations of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time 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 American Shares constituting the Merger Consideration
shall have been approved for trading on the Nasdaq National Market,
subject to official notice of issuance;
(b) As of the Closing Date, no Legal Action shall be pending
before or threatened in writing by any Authority or other Person
seeking to restrain, prohibit or make illegal the consummation of the
Merger, it being understood and agreed that one or more written
requests by any Authority for information or additional information
with respect to the Merger, which information could be used in
connection with such Legal Action, may not be deemed to be a threat of
Legal Action; and
(c) Other than the filing of merger documents in accordance
with the DGCL and the OGCL, all authorizations, consents, waivers,
orders or approvals required to be obtained from all Authorities, and
all filings, submissions, registrations, notices or declarations
required to be made by American and the Company with any Authority,
prior to the consummation of the Merger shall have been obtained from,
and made with, the all required Authorities, except for such
authorizations, consents, waivers, orders, approvals, filings,
registrations, notices or declarations the failure to obtain or make
would not, in the
-10-
reasonable business judgment of American, assuming consummation of the
Merger, have a Material Adverse Effect on the Company.
SECTION 6.2 Conditions to Obligations of American. The obligation of
American to effect the Merger shall be subject to the satisfaction at or prior
to the Effective Time 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 Company shall have delivered or cause to be delivered
to American all of the Collateral Documents required to be delivered by
the Company to American at or prior to the Closing pursuant to the
terms of this Agreement; such Collateral Documents shall be reasonably
satisfactory in form, scope and substance to American and its counsel;
and American and its counsel shall have received all information and
copies of all documents, including without limitation lien searches and
records of corporate proceedings, which they may reasonably request in
connection therewith, such documents where appropriate to be certified
by proper corporate officers;
(b) The Company shall have furnished American and, at
American's request, any bank or other financial institution providing
credit to American or any Subsidiary, with favorable opinions, dated
the Closing Date of Holme, Xxxxxxx & Xxxx, counsel for the Company and
Tsunami, with respect to the matters set forth in Sections 3.1(a), (b),
(c) (other than as to Private Authorizations and as to the Company's
and Tsunami's Contractual Obligations, limited to such counsel's
knowledge) and (e) and 3.3 and with respect to such other matters
arising after the date of this Agreement incident to the Merger, as
American or its counsel or American or its counsel may reasonably
request or which may be reasonably requested by any such bank or
financial institution or their respective counsel;
(c) The representations, warranties, covenants and agreements
of the Company contained in this Agreement or otherwise made in writing
by it or on its behalf pursuant hereto or otherwise made in connection
with the Merger shall be true and correct in all respects Material to
the Company at and as of the Closing Date with the same force and
effect as though made on and as of such date, except those which speak
as of a certain date which shall continue to be true and correct as of
such date on the Closing Date (including without limitation giving
effect to any later obtained knowledge, information or belief of the
Company or American); each and all of the agreements and conditions to
be performed or satisfied by the Company hereunder at or prior to the
Closing Date shall have been duly performed or satisfied in all
material respects; and the Company shall have furnished American with
such certificates and other documents evidencing the truth of such
representations, warranties, covenants and agreements and the
performance of such agreements or conditions as American or its counsel
shall have reasonably requested;
(d) All consents and approvals of all Persons (other than
Authorities) having a relationship with the Company and whose consents
and approvals are required in order to vest in American all of the
Company's right, title and interest in and to the WGRR Agreement and
the WGRR Escrow Agreement and its other assets and property (including
without limitation the unqualified consent of WGRR) without the
imposition, individually
-11-
or in the aggregate, of any condition or requirement which could
Materially Adversely Affect the Company shall have been delivered to
American;
(e) The WGRR Agreement shall be in full force and effect,
shall not have been amended, modified or changed, except with respect
to the matters set forth in Exhibit A attached hereto and made a part
hereof (the "WGRR Amendments"); neither Tsunami nor the Company nor
WGRR shall have given notice of any breach or alleged breach of any
warranty, covenant or agreement or any misrepresentation or alleged
misrepresentation therein, and neither Tsunami or the Company shall
have waived any of its rights or remedies thereunder;
(f) The Company Stockholder shall have executed and delivered
an investment letter substantially in the form of Exhibit B attached
hereto and made a part hereof (the "Investment Letter");
(g) The Company Stockholder shall have executed and delivered
a registration rights agreement substantially in the form of Exhibit C
attached hereto and made a part hereof (the "Registration Rights
Agreement");
(h) No Legal Action (other than the investigation of the
Department of Justice referred to in Schedule 3.1 of the Company
Disclosure Schedule) shall have been instituted or threatened by any
Authority or by any other Person that could materially and adversely
affect the Company or WGRR-FM (the radio station which is the subject
of the WGRR Agreement); and
(i) The Financing Documents shall have been terminated,
effective prior to or as of the Closing, and the lender pursuant to the
Financing Documents shall have delivered UCC-3 Termination Statements
and any other instruments necessary to release and record the release
of the security interests granted under the Financing Documents and to
terminate all of the filings set forth on Schedule 3.2.
SECTION 6.3 Conditions to Obligations of the Company. The obligation of
the Company to effect the Merger shall be subject to the satisfaction at or
prior to the Effective Time 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 delivered or cause to be delivered to
the Company all of the Collateral Documents required to be delivered by
American to the Company at or prior to the Closing pursuant to the
terms of this Agreement; such Collateral Documents shall be reasonably
satisfactory in form, scope and substance to the Company and its
counsel, and the Company and its counsel shall have received all
information and copies of all documents, including records of corporate
proceedings, which they may reasonably request in connection therewith,
such documents where appropriate to be certified by proper corporate
officers;
-12-
(b) American shall have furnished the Company with favorable
opinions, dated the Closing Date of Xxxxxxxx & Worcester LLP, counsel
for American, with respect to the matters set forth in Sections 4.1(a),
(b) and (c) (other than as to Private Authorizations and as to
American's Contractual Obligations, limited to such counsel's
knowledge) and with respect to such other matters arising after the
date of this Agreement incident to the Merger, as the Company or its
counsel may reasonably request or which may be reasonably requested by
any such bank or financial institution or their respective counsel;
(c) The representations, warranties, covenants and agreements
of American contained in this Agreement or otherwise made in writing by
it or on its behalf pursuant hereto or otherwise made in connection
with the Merger shall be true and correct in all material respects at
and as of the Closing Date with the same force and effect as though
made on and as of such date, except those which speak as of a certain
date which shall continue to be true and correct as of such date on the
Closing Date (including without limitation giving effect to any later
obtained knowledge, information or belief of American or the Company);
each and all of the agreements and conditions to be performed or
satisfied by American hereunder at or prior to the Closing Date shall
have been duly performed or satisfied in all material respects; and
American shall have furnished the Company with such certificates and
other documents evidencing the truth of such representations,
warranties, covenants and agreements and the performance of such
agreements or conditions as the Company or its counsel shall have
reasonably requested; and
(d) American shall have executed and delivered the
Registration Rights Agreement; and
(e) American shall have paid, or made arrangements to pay on
the Closing Date, the outstanding principal and interest due under the
Note comprising part of the Financing Documents, up to an amount not to
exceed $3,050,000 plus accrued interest thereon through the Closing
Date to the lender thereunder.
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement shall terminate if the Merger
is not effective on or prior to the Termination Date and may be terminated at
any time prior to the Effective Time:
(a) by mutual consent of the Company and American;
(b) by either American or the Company if any Legal Action
(other than the investigation of the Department of Justice referred to
on Schedule 3.1 of the Company Disclosure Schedule) has been instituted
or threatened by any Authority or by any other Person seeking to enjoin
or otherwise prohibit the consummation of the Merger (it being
understood and agreed that one or more written requests by any
Authority for information
-13-
or additional information with respect to the Merger, which could be
used in connection with any Legal Action, shall not be deemed a threat
of Legal Action); or
(c) by the Company in the event the Company is not in material
breach of this Agreement and none of its representations or warranties
shall have become and continue to be untrue in any material respect,
and either (i) the Merger has not been consummated prior to the
Termination Date; or (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 material respect, and such breach or
untruth is not capable of being cured by the Termination Date; or
(d) by American in the event (i) the WGRR Agreement shall have
been terminated, whether by WGRR or Tsunami or the Company, (ii)
American is not in material breach of this Agreement and none of its
representations or warranties shall have become and continue to be
untrue in any material respect, and either (A) the Merger has not been
consummated prior to the Termination Date or (B) the Company is in
material breach of this Agreement or any of its representations or
warranties shall have become and continue to be untrue in any material
respect, and such breach or untruth is not capable of being cured by
the Termination Date, or (iii) if any Legal Action has been instituted
or threatened by any Authority or by any other Person seeking to enjoin
or otherwise prohibit the acquisition by American of WGRR-FM pursuant
to the provisions of the WGRR Agreement (it being understood and agreed
that one or more written requests by any Authority for information or
additional information with respect to such acquisition, which could be
used in connection with any Legal Action, shall not be deemed a threat
of Legal Action).
The term "Termination Date" shall mean June 30, 1997 or such other date
as the parties may, from time to time, mutually agree.
The right of either party 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.
SECTION 7.2 Effect of Termination. Except as provided in Sections 5.1
(with respect to confidentiality), Section 5.2, this Section and Section 9.3, in
the event of the termination of this Agreement pursuant to Section 7.1, this
Agreement shall forthwith become void, there shall be no liability on the part
of either party, or any of their respective officers or directors, to the other
and all rights and obligations of either party shall cease; provided, however,
that such termination shall not relieve either party from liability for any
misrepresentation or breach of any of its warranties, covenants or agreements
set forth in this Agreement.
-14-
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 Survival. The representations and warranties of the Company
and American contained in or made pursuant to this Agreement or any Collateral
Document shall survive the Closing and shall remain operative and in full force
and effect for a period of two (2) years after the Closing Date, regardless of
any investigation or statement as to the results thereof made by or on behalf of
any party hereto, except that, representations and warranties referred to in
Sections 3.1, 3.8 and 4.1 shall extend until the expiration of any applicable
statute of limitations (the "Indemnity Period"). No claim for indemnification
may be asserted after the expiration of the Indemnity Period. Notwithstanding
anything herein to the contrary, any representation or warranty that is the
subject of a Claim which is asserted in writing prior to the expiration of the
Indemnity Period shall survive with respect to such Claim or any dispute with
respect thereto until the final resolution thereof.
SECTION 8.2 Indemnification. Subject to the provisions of Section 8.3,
the Company Stockholder agrees that on and after the Closing he shall indemnify
American and hold American harmless from and against any and all damages,
claims, losses, expenses, costs, obligations and liabilities, including, without
limitation, liabilities for all reasonable attorneys', accountants, and experts'
fees and expenses including those incurred to enforce the terms of this
Agreement or any Collateral Document (collectively, "Loss and Expense"),
suffered, directly or indirectly, by American by reason of, or arising out of:
(a) any breach of representation or warranty made by the Company
pursuant to this Agreement or any Collateral Document or any
failure by the Company to perform or fulfill any of its
covenants or agreements set forth in this Agreement or any
Collateral Document; or
(b) any Legal Action or other Claim by any third party relating to
the Company to the extent such Legal Action or other Claim has
also resulted in a breach of representation or warranty by the
Company pursuant to this Agreement or any Collateral Document.
SECTION 8.3 Limitation of Liability; Disposition of Escrow Indemnity
Funds. Notwithstanding the provisions of Section 8.2, after the Closing,
American shall be entitled to recover its Loss and Expense in respect of any
Claim only to the extent that the aggregate Loss and Expense for all Claims (i)
exceeds, in the aggregate, $5,000 at which time it shall be entitled to recover
such $5,000 and any amounts in excess thereof and (ii) does not exceed, in the
aggregate, $500,000.
SECTION 8.4 Notice of Claims. If American believes that it has suffered
or incurred any Loss and Expense, it shall notify the Company Stockholder
promptly in writing, and in any event within the applicable time period
specified in Section 8.1, describing such Loss and Expense, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such Loss and Expense shall have occurred. If any Legal Action
is instituted by a third party with respect to which American intends to claim
any liability or expense as Loss and
-15-
Expense under this Article, American shall promptly notify the indemnifying
party of such Legal Action, but the failure to so notify the indemnifying party
shall not relieve it of its obligations under this Article, except to the extent
such failure to notify prejudices its ability to defend against such Claim.
SECTION 8.5 Defense of Third Party Claims. The Company Stockholder
shall have the right to conduct and control, through counsel of its own
choosing, reasonably acceptable to American, any third party Legal Action or
other Claim, but American may, at its election, participate in the defense
thereof at its sole cost and expense; provided, however, that if the Company
Stockholder shall fail to defend any such Legal Action or other Claim, then
American may defend, through counsel of its own choosing, such Legal Action or
other Claim, and (so long as it gives the Company Stockholder at least fifteen
(15) days' notice of the terms of the proposed settlement thereof and permits
the Company Stockholder to then undertake the defense thereof) settle such Legal
Action or other Claim, and to recover the amount of such settlement or of any
judgment and the costs and expenses of such defense. The Company Stockholder
shall not compromise or settle any such Legal Action or other Claim without the
prior written consent of American.
SECTION 8.6 Exclusive Remedy. The indemnification provided in this
Article shall be the sole and exclusive post-Closing remedy available to
American against the Company Stockholder for any Claim under this Agreement
absent a showing of fraud on the part of the Company or any of the Company
Stockholder.
ARTICLE 9
GENERAL PROVISIONS
SECTION 9.1 Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, no amendment,
which under Applicable Law may not be made without the approval of the Company
Stockholder, may be made without such approval. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 9.2 Waiver. At any time prior to the Effective Time, except to
the extent not permitted by Applicable Law, American or the Company may (a)
extend the time for the performance of any of the obligations or other acts of
the other, subject, however, to the provisions of Section 7.1, (b) waive any
inaccuracies in the representations and warranties of the other contained herein
or in any document delivered pursuant hereto, and (c) waive compliance by the
other with any of the agreements, covenants or conditions 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.
SECTION 9.3 Fees, Expenses and Other Payments. All costs and expenses
incurred in connection with any filing fees, transfer taxes, sales taxes,
document stamps or other charges levied by any Governmental Authority in
connection with this Agreement and the Merger shall be borne by American. All
other costs and expenses incurred in connection with this Agreement and the
-16-
Merger, and in compliance with Applicable Law and Contractual Obligations as a
consequence hereof and thereof, including without limitation fees and
disbursements of counsel, financial advisors and accountants incurred by the
parties hereto shall be borne solely and entirely by the party which has
incurred such costs and expenses, except that, in the case of the Company, all
such costs and expenses shall be borne by the Company Stockholder.
SECTION 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, or by
recognized courier service, postage prepaid, (b) sent by telex, telegram,
telecopy or other form of rapid transmission, confirmed by mailing (by first
class or express mail, or by recognized courier service, postage prepaid)
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 American:
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: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
(b) If to the Company:
00000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Chief Executive Officer
Telecopier No.: (000) 000-0000
-17-
with a copy to:
Holme, Xxxxxxx & Xxxx
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
Wiley, Rein & Fielding
0000 X Xxxxxx X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxxxx X. Xxxxxx, 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.
SECTION 9.5 Specific Performance; Other Rights and Remedies. Each party
recognizes and agrees that in the event the Company should refuse to perform any
of its obligations under this Agreement or any Collateral Document, American's
remedy at law would be inadequate and agrees that for breach of such provisions,
American 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 posting 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 any party from
pursuing any other remedies available to it pursuant to the provisions of, and
subject to the limitations contained in, this Agreement for such breach or
threatened breach, including without limitation the recovery of damages.
SECTION 9.6 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, 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 effect of which is to Affect Materially and
Adversely either party, 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
-18-
fullest extent permitted by Applicable Law in an acceptable manner to the end
that the Merger is consummated to the maximum extent possible.
SECTION 9.7 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.
SECTION 9.8 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.
SECTION 9.9 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 Commonwealth of Massachusetts 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 that
the provisions of the DGCL and the OGCL apply to the Merger.
SECTION 9.10 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 any 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.
SECTION 9.11 Entire Agreement. This Agreement (together with the
Company Disclosure Schedule and the other Collateral Documents delivered in
connection herewith), constitutes the entire agreement of the parties and
supersedes all prior agreements and undertakings, both written and oral, between
the parties, with respect to the subject matter hereof.
SECTION 9.12 Assignment. This Agreement shall not be assignable by
either party and any such assignment shall be null and void, except that it
shall inure to the benefit of and by binding upon any successor to American by
operation of law, including by way of merger, consolidation or sale of all or
substantially all of its assets and may be assigned by American as security to
its senior lending banks and other financial institutions without relieving
American of any of its obligations hereunder.
SECTION 9.13 Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party, and nothing in this Agreement,
express or implied (other than the provisions of Article 8, which are intended
to be binding upon the Company Stockholder), 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.
-19-
SECTION 9.14 Mutual Drafting. This Agreement is the result of the joint
efforts of American and the Company, 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.
-20-
IN WITNESS WHEREOF, American and the Company have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
American Radio Systems Corporation
By:_____________________________________
Name:
Title:
Tsunami Communications of Cincinnati, Inc.
By:______________________________________
Name:
Title:
NOW, THEREFORE, in consideration of the benefits that are intended to
accrue to the undersigned as a result of the consummation of the Merger (as
defined in the above Agreement), and intending to be legally bound, Xxxxxxx X.
Xxxxxxxx, the sole stockholder of the Company, does hereby covenant and agree,
on behalf of himself and his heirs, executives, legal representatives, assigns
and designees, to be bound by the provisions of the above Agreement that relate
to him, including without limitation the provisions of Section 8.2 and those
other provisions which are referenced or encompassed by such Section.
IN WITNESS WHEREOF, Xxxxxxx X. Xxxxxxxx has executed this Agreement as
of the date first written above.
--------------------------------------
Xxxxxxx X. Xxxxxxxx
-21-
APPENDIX A
DEFINITIONS
As used in this Agreement, unless the context otherwise requires, the
following terms (or any variant in the form thereof) have the following
respective meanings. 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 herein shall
have such meanings when used in the Company 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 this
Agreement as a whole and not a particular section, and references to "this
Section" are intended to refer to the entire section and not a particular
subsection thereof.
Adverse, Adversely, when used alone or in conjunction with other terms
(including without limitation "Affect," "Change" and "Effect") shall mean any
Event of which American or the Company, as the case may be, becomes aware after
the date hereof which is reasonably likely, in the reasonable business judgment
of American or the Company, as the case may be, be expected to (a) adversely
affect the validity or enforceability of this Agreement or the likelihood of
consummation of the Merger, or (b) adversely affect the business, operation,
management or properties of the Company and its Subsidiaries taken as a whole or
American and its Subsidiaries taken as a whole, as the case may be, or (c)
impair the Company's or American's, as the case may be, ability to fulfill its
obligations under the terms of this Agreement, or (d) adversely affect the
aggregate rights and remedies of American or the Company, as the case may be,
under this Agreement. Notwithstanding the foregoing, neither an Event affecting
the radio broadcasting industry generally nor a decline in the financial
condition or results of operations of the Company and its Subsidiaries taken as
a whole or American and its Subsidiaries taken as a whole, as the case may be,
shall be deemed to constitute an Adverse Change, have an Adverse Effect or to
Adversely Affect or Effect.
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, (b) 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 mean this Agreement as originally in effect, including
unless the context otherwise specifically requires, this Appendix A, all
schedules, including the Company Disclosure Schedule and all exhibits hereto,
and as any of the same may from time to time be supplemented, amended, modified
or restated in the manner herein or therein provided.
American shall have the meaning given to it in the Preamble.
American SEC Documents shall have the meaning given to it in Section
5.2(b).
American Shares shall have the meaning given to it in the First
Recital.
American Class A Stock shall have the meaning given to it in the First
Recital.
American's Knowledge (including the term "to the knowledge of
American") means the knowledge of any American director or executive officer,
and that such director or executive officer, after reasonable inquiry of
appropriate American executives and reasonable review of appropriate American
records, to the degree customary in connection with transactions such as the
Merger, shall have reason to believe and shall believe that the subject
representation of warranty is true and accurate as stated.
Applicable Law shall mean any Law of any Authority, whether domestic or
foreign, including without limitation all federal and state securities and
Environmental Laws, to which a 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.
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 any material benefit arrangement that is
not a Plan, including (a) any employment 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, (f) any deferred compensation plan, and (g) any compensation
policy and practice maintained by the Company with respect to employees or
directors of the Company or the beneficiaries of any such Persons.
Certificate shall have the meaning given to it in Section 3.1(b).
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.
Closing shall have the meaning given to it in Section 1.2.
-2-
Closing Date shall mean the date on which the transactions contemplated
by this Agreement are consummated and the Merger becomes effective.
Collateral Document shall mean any agreement, certificate, contract,
instrument, notice, opinion or other document delivered pursuant to the
provisions of this Agreement or any Collateral Document, including without
limitation the Investment Letter, the Registration Rights Agreement and the WGRR
Amendments.
Common Stock shall have the meaning given to it in the First Recital.
Company shall have the meaning given to it in the Preamble.
Company Common Stock shall have the meaning given to it in Section
2.1(b).
Company Disclosure Schedule shall mean the Company Disclosure Schedule
dated as of the date of this Agreement heretofore delivered by the Company to
American.
the Company's knowledge (including the term "to the knowledge of the
Company") means the knowledge of any Company director or executive officer, and
that such director or executive officer, after reasonable inquiry of appropriate
Company executives and reasonable review of appropriate Company records, to the
extent customary in transactions such as the Merger, shall have reason to
believe and shall believe that the subject representation or warranty is true
and accurate as stated.
Company Shares shall have the meaning given to it in Section 2.1(b).
Company Stockholder shall have the meaning given to it in the First
Recital.
Contract, Contractual Obligation shall mean any agreement, arrangement,
commitment, contract, covenant, indemnity, undertaking or other obligation or
liability which involves the ownership or operation of any of the assets or
properties of the Company or the conduct of the business of the Company,
including without limitation the prospective ownership or operation of WGRR-FM.
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 common stock, whether
or not the right to convert or exchange thereunder is
-3-
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.
Current Market Price shall have the meaning given to it in Section
2.1(b).
Xxxxxx shall have the meaning given to it in the Fourth Recital.
DGCL shall have the meaning given to it in the First Recital.
Effective Time shall have the meaning given to it in Section 1.3.
Employment Arrangement shall mean, with respect to any Person, any
employment, consulting, retainer, severance or similar contract, agreement,
plan, arrangement or policy (exclusive of any which is terminable within thirty
(30) days without liability, penalty or payment of any kind by such Person or
any Affiliate), or providing for severance, termination payments, insurance
coverage (including any self-insured arrangements), workers compensation,
disability benefits, life, health, medical, dental or hospitalization benefits,
supplemental unemployment benefits, vacation or sick leave benefits, pension or
retirement benefits or for deferred compensation, profit-sharing, bonuses, stock
options, stock purchase or appreciation rights or other forms of incentive
compensation or post-retirement insurance, compensation or post-retirement
insurance, compensation or benefits, or any collective bargaining or other labor
agreement, whether or not any of the foregoing is subject to the provisions of
ERISA.
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.
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 of the SEC 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.
Fair Market Value shall have the meaning given to it in Section 2.1(b).
Financing Documents shall mean the WGRR Loan and Security Agreement
entered into on September 5, 1996 by and between Tsunami and Broadcast Finance,
Inc. and the WGRR Acquisition Revolving Note dated September 5, 1996 in the
amount of $3,050,000 made by Tsunami to Broadcast Finance, Inc. and all the
financing statements filed or recorded in connection therewith and any other
related documents, instruments, and agreements
-4-
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 the business or the operations 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.
Indemnity Period shall have the meaning given to it in Section 8.1.
Investment Letter shall have the meaning given to it in Section 6.2(f).
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,
policy statement, proclamation, promulgation, regulation, requirement, rule,
rule of law, rule of public policy, settlement agreement, statute, or writ or
any Authority, domestic or foreign; (b) the common law, or other legal or
quasi-legal precedent; or (c) arbitrator's, mediator's or referee's award,
decision, finding or recommendation; including, in each such case or instance,
any interpretation, directive, guideline or request, whether or not having the
force of law including, in all cases, without limitation any particular section,
part or provision thereof.
Lease shall mean any lease of property, whether real, personal or
mixed, and all amendments thereto.
Legal Action shall mean, with respect to any Person, any litigation or
legal or other actions, arbitrations, counterclaims, investigations,
proceedings, requests for material information by or pursuant to the order of
any Authority or suits, at law or in arbitration, equity or admiralty, whether
or not purported to be brought on behalf of such Person affecting such Person or
any of such Person's business, property or assets.
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; preemptive or similar right; 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; restriction on sale, transfer, assignment, disposition or
other alienation; or any option, equity, claim or right of or obligation to, any
other Person, of whatever kind and character.
Loss and Expense shall have the meaning given to it in Section 8.2(a).
-5-
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.
Merger shall have the meaning given to it in the First Recital.
Merger Consideration shall have the meaning given to it in Section
2.1(b).
OGCL shall have the meaning given to it in the First Recital.
Option Securities shall mean all rights, options and warrants, and
calls or commitments evidencing the right to subscribe for, purchase or
otherwise acquire shares of capital stock or Convertible Securities, whether or
not the right to subscribe for, purchase or otherwise acquire 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.
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).
parties shall have the meaning given to it in the Preamble.
Per Share Merger Consideration shall have the meaning given to it in
Section 2.1(b).
Person shall mean any natural individual or any Entity.
Plan shall mean, with respect to the Company and at a particular time,
any employee benefit plan which is covered by ERISA and in respect of which the
Company 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.
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.
Registration Rights Agreement shall have the meaning given to it in
Section 6.2(g).
Representatives shall have the meaning given to it in Section 5.1(a).
SEC shall mean the United States Securities and Exchange Commission, or
any successor Authority.
-6-
Securities Act shall mean the Securities Act of 1933, and the rules and
regulations of the SEC 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.
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 1.1
Tax (and "Taxable", which shall mean subject to Tax), shall mean, with
respect to the Company, (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 the Company or
any of its Subsidiaries, 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,
addition to tax or additional amount imposed by any Taxing Authority, (b) any
joint or several liability of the Company or any of its Subsidiaries with any
other Person for the payment of any amounts of the type described in (a) and (c)
any liability of the Company or any of its Subsidiaries 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.
Termination Date shall have the meaning given to it in Section 7.1.
Tsunami shall have the meaning given to it in the Fourth Recital.
WGRR shall have the meaning given to it in the Fourth Recital.
WGRR Agreement shall have the meaning given to it in the Fourth
Recital.
WGRR Assignment shall have the meaning given to it in the Fourth
Recital.
WGRR Amendments shall have the meaning given to it in Section 6.2(e).
WGRR Escrow Agreement shall have the meaning given to it in the Fourth
Recital.
WGRR Documents and WGRR Documents shall have the meaning given to them
in the Fourth Recital.
-7-
