OPTION AGREEMENT
OPTION AGREEMENT (this "Agreement"), dated as of September 20, 1996, by
and between Jupiter Radio Partners, a Florida partnership ("Seller"), and
American Radio Systems Corporation, a Delaware corporation ("Buyer").
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE 1. ASSET PURCHASE OPTION
Section 1.1 Option. Seller hereby grants to Buyer an exclusive and
irrevocable option (the "Option") to purchase for the Purchase Price (as defined
in Section 1.03 below) all of the tangible and intangible assets (the "Assets")
owned by Seller or used by Seller in connection with the business of Station
WTPX(FM), Jupiter, Florida (the "Station"), except for (i) Seller's cash or cash
equivalents on hand or on deposit and (ii) Seller's accounts receivable.
Notwithstanding anything to the contrary contained herein, no rights in the
Assets shall transfer until (a) the Station has begun to operate pursuant to
Program Test Authority under the rules of the Federal Communications Commission
("FCC"), (b) Buyer and Seller shall have entered into a definitive Asset
Purchase Agreement for the purchase of the Assets for the Purchase Price (the
"Purchase Agreement") and (c) the FCC has approved the assignment to Buyer of
Seller's construction permit and/or licenses relating to the Station.
Section 1.2 Option Period. The Option shall remain effective from the
date Buyer has received notification from Seller that the Station is operating
pursuant to Program Test Authority through and including the 90th day after such
date (the "Option Period").
Section 1.3 Option Exercise Notice. Buyer may notify Seller pursuant to
Section 7.02 hereof of its exercise of the Option (the "Notice") at any time
during the Option Period. Within 10 business days of Seller's deemed receipt of
the Notice pursuant to Section 7.02 hereof, Buyer and Seller shall execute the
Purchase Agreement. The Purchase Agreement shall provide that (i) Seller shall
sell, transfer, assign and deliver to Buyer the Assets free and clear of any
claims, liabilities, mortgages, liens, pledges, conditions, charges or
encumbrances of any nature whatsoever, except as to any obligation or liability
of Seller that Buyer agrees to assume pursuant to the Purchase Agreement, (ii)
the purchase price for the Assets (the "Purchase Price") shall be payable at the
closing of the transactions contemplated by the Purchase Agreement and shall be
as specified on Schedule 1.03 hereto, (iii) shall include the terms set forth on
Schedule 1.03 hereto and (iv) shall contain such other representations,
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warranties and covenants and such other terms and conditions as
are customary in similar transactions.
Section 1.4 Escrow Account; Distribution of Escrow Fund. Concurrently
with the execution of this Agreement, Buyer is placing in an escrow account the
sum of One Million Dollars ($1,000,000), pursuant to an Escrow Agreement of even
date herewith among the parties hereto and Xxxxxxxxx & Company, as escrow agent
(the "Escrow Agreement"). The proceeds of the Escrow Account shall be
distributed as follows:
(a) subject to Section 1.04(b) hereof, if Buyer fails to give
the Notice within the Option Period, or, having given the Notice, fails
to enter into the Purchase Agreement within the time provided herein,
Seller shall be entitled to the Escrow Fund (as defined in the Escrow
Agreement) upon request therefor pursuant to Section 3 of the Escrow
Agreement; and
(b) if Buyer does not exercise the Option or, having given the
Notice, fails to enter into the Purchase Agreement within the time
provided herein, due to the failure of any or all of the conditions set
forth in Section 5.01 of this Agreement, Buyer shall be entitled to the
Escrow Fund upon request therefor pursuant to Section 3 of the Escrow
Agreement.
Buyer shall not object to a Demand (as defined in the Escrow Agreement) made by
Seller and Seller shall not object to a Demand made by Buyer if the Claimant (as
defined in the Escrow Agreement) is entitled to the Escrow Fund pursuant to this
Section 1.04.
Section 1.5 Conduct of Business. From the date hereof until the earlier
of the execution of the Purchase Agreement or the expiration of the Option
Period, Seller shall conduct its business in the ordinary course and the
warranties, representations and covenants of Seller contained herein shall
continue to be applicable until such date.
Section 1.6 Breach. In the event Seller breaches any of its warranties,
representations or covenants hereunder in any material respect, Buyer shall be
entitled to obtain specific performance of the terms of this Agreement, in
addition to any other remedies which may be available, including money damages.
In the event of any action to enforce this Agreement, Seller hereby waives the
defense that there is an adequate remedy at law.
ARTICLE 2. REPRESENTATIONS AND WARRANTIES OF SELLER
Section 2.1 Representations and Warranties of Seller.
Seller represents and warrants to Buyer that:
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(a) Seller is a partnership duly organized, validly existing
and in good standing under the laws of the State of Florida. Seller has
the partnership power and authority to conduct all of the activities
conducted by it and to own or lease all of the assets owned or leased
by it and is duly licensed or qualified to do business and is in good
standing as a foreign partnership in all jurisdictions in which the
nature of the activities conducted by it and/or the character of the
assets owned and leased by it makes such qualification or license
necessary. Seller does not own any shares of stock or any other
securities of any corporation nor has any interest in any firm,
partnership, association or other entity. A complete and correct copy
of the Certificate of Partnership and the Partnership Agreement of
Seller, each as amended to the date hereof, was heretofore delivered to
Buyer. Except as set forth on Schedule 2.01(a) hereto, Seller does not
have outstanding any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or
any contracts or commitments to issue or sell partnership interests or
any such warrants, convertible securities or obligations. The Assets
are owned by or licensed or otherwise issued to Seller, and Buyer will
acquire, pursuant to and subject to the provisions of the Purchase
Agreement, good and valid title to the Assets, free and clear of all
mortgages, pledges, liens, security interests, conditional sale
agreements, charges, encumbrances, claims and restrictions of every
kind and nature whatsoever.
(b) Seller has the partnership power, authority and legal
capacity to execute and deliver this Agreement, to consummate the
transactions contemplated hereby and to take all other actions required
to be taken by it pursuant to the provisions hereof. This Agreement is
a legal, valid and binding obligation of Seller, enforceable against it
in accordance with its terms.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby by Seller will
(with or without the giving of notice thereof, the lapse of time or
both): (i) conflict with any provision of Seller's Certificate of
Partnership or Partnership Agreement; (ii) conflict with, result in a
breach of, or constitute a default under, any law, judgment, order,
ordinance, decree, rule, regulation or ruling of any court or
governmental instrumentality which is applicable to Seller; (iii)
conflict with, constitute grounds for termination of, result in a
breach of, constitute a default under, or accelerate or permit the
acceleration of any performance required by the terms of, any material
agreement, instrument, license or permit to which Seller is a party or
by which it may be bound; or (iv) create any claim, liability,
mortgage, lien, pledge, condition, charge or encumbrance of any nature
whatsoever upon the Assets.
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(d) Seller has filed or caused to be filed, within the times
and in the manner prescribed by law, all federal, state, local and
foreign tax returns and tax reports which are required to be filed by,
or with respect to Seller. Such returns and reports reflect accurately
all liability for taxes of any nature whatsoever of Seller for the
periods covered thereby. All taxes of any nature whatsoever, together
with any related penalties and interest (all of the foregoing being
referred to herein as "Taxes") that are shown on such Tax returns as
due and required to be paid on or before the date hereof have been
fully paid and all Taxes not yet due are adequately disclosed and fully
provided for in the books and records and the financial statements of
Seller. There are no claims or assessments pending against Seller for
any alleged deficiency in the payment of any Taxes, and there are no
agreements in effect with respect to Seller to extend the period of
limitations for the assessment, payment or collection of any Taxes.
(e) Seller has provided to Buyer complete and correct copies
of all leases, agreements, contracts and other commitments of Seller
whether written or oral. All such agreements are in full force and
effect and neither Seller nor, to Seller's "Knowledge" (as hereinafter
defined), any other signatory is in material breach thereof. No consent
of any signatory to any agreement other than Seller is required for the
consummation of the transactions contemplated by this Agreement. For
purposes of this Agreement, a party hereto will be deemed to have
"Knowledge" of a particular matter or fact if an individual serving,
directly or indirectly, as an officer, a director, a partner or in a
similar capacity of such party is actually aware or reasonably should
be aware of such fact or other matter, but does not imply that any
independent investigation was conducted by such individual or party.
(f) Seller has good title to all of the Assets free and clear
of all mortgages, pledges, liens, security interests, conditional sale
agreements, charges, encumbrances, claims and restrictions of every
kind and nature, except liens for Taxes not yet due and payable. Seller
has provided to Buyer an inventory of all physical assets of Seller.
Such physical assets are in good condition, reasonable wear and tear
due to proper use excepted.
(g) Except as specified on Schedule 2.01(g) hereto, there is
no action, suit, proceeding or investigation pending or threatened
against or affecting Seller or any of its Assets Seller is not in
default under or with respect to any judgment, order, writ, injunction
or decree of any court or any federal, state, municipal, or other
governmental authority, department, commission, board, agency or other
instrumentality. Seller is not involved in any labor
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dispute or disturbance. Seller has complied in all material
respects with all laws, regulations and orders applicable to
it or its business.
(h) Neither this Agreement nor any statement, list or
certificate furnished to Seller pursuant hereto or in connection with
this Agreement or any of the transactions hereby contemplated contains
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein and
therein, in light of the circumstances in which they are made, not
misleading.
(i) Seller has no knowledge of any facts which would, under
present law (including, but not limited to, the Communications Act of
1934, as amended, and the rules, regulations and policies of the FCC)
disqualify Seller as a licensee or permittee of the licenses, permits
and other authorizations issued by the FCC relating to the Station, or
as owner and/or operator of the Station or the Assets or constitute a
material violation of said rules, regulations and policies.
ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller that:
(a) Buyer is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and is
qualified to do business in the State of Florida.
(b) The Board of Directors of Buyer has authorized the
execution and delivery of this Agreement and the transactions
contemplated hereby. Buyer has the corporate power, authority and legal
capacity to execute and deliver this Agreement, to consummate the
transactions hereby contemplated and to take all other actions required
to be taken by it pursuant to the provisions hereof. This Agreement is
a legal, valid, and binding obligation of Buyer, enforceable against it
in accordance with its terms.
(c) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby by Buyer will
(with or without the giving of notice thereof, the lapse of time or
both) constitute any violation or breach of the Articles of
Incorporation or by-laws of Buyer or any material provision of any
material contract or instrument to which Buyer is a party or by which
Buyer is bound, or any order, writ, injunction, decree, statute,
regulation.
(d) Buyer has no knowledge of any facts which would, under
present law (including, but not limited to, the
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Communications Act of 1934, as amended, and the rules, regulations and
policies of the FCC) disqualify Buyer as an assignee of the licenses,
permits and other authorizations issued by the FCC relating to the
Station, or as owner and/or operator of the Station or the Assets or
constitute a material violation of said rules, regulations and
policies.
Other than as provided for in this Agreement, Buyer makes no warranties
or representations hereunder, express or implied.
ARTICLE 4. COVENANTS
Section 4.1 Negative Covenants of Seller. From the date hereof until
the earlier of the execution of the Purchase Agreement or the expiration of the
Option Period, Seller covenants and agrees that it will not, without Buyer's
prior written consent:
(a) directly or indirectly, through representatives or any
other person or otherwise, solicit or entertain offers from, negotiate
with, or in any manner encourage, discuss, consider or accept any
proposal from any other person or entity relating to the acquisition of
any of Seller's partnership interests or the acquisition of Seller or
the Assets, in whole or in part, whether through direct purchase,
merger, consolidation or other business combination;
(b) dispose of any of the Assets, except in the ordinary
course of business;
(c) admit any additional partners or issue any options,
warrants, rights or convertible securities or equity equivalents;
(d) pay any dividends, redeem any securities or otherwise
cause any of the Assets to be distributed to its partners;
(e) make loans to any partners;
(f) borrow any money under any existing credit agreement or
otherwise (other than from Buyer pursuant to the Construction Loan
Agreement referred to in Section 4.04 hereof), or suffer to exist any
lien on any Asset;
(g) amend or propose to amend its Partnership Agreement;
(h) increase compensation of any of Seller's employees which
Buyer would employ if Buyer were to acquire the Assets;
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(i) cancel insurance policies covering the Assets or the
Station;
(j) except as specified in Section 4.04 hereof, enter into any
agreement except in the ordinary course of business and upon reasonable
terms; or
(k) do anything to jeopardize its status as a permittee of the
FCC, including, but not limited to, allowing the construction permit
(BPH-8909140E) (as modified from time to time) for the Station to
expire.
Section 4.2 Affirmative Covenants of Seller. From the date hereof until
the earlier of the execution of the Purchase Agreement and the expiration of the
Option Period, Seller covenants and agrees, unless Buyer agrees in writing to
the contrary:
(a) to maintain the Station's business in the ordinary course;
(b) to timely pay all of Seller's obligations and perform all
duties, whether contractual, by statute or regulation or otherwise;
(c) to maintain Seller's books and records in a prudent manner
at a standard appropriate to Seller's business and industry;
(d) subject to the resolution of Item 1 of the FCC matters
specified in Schedule 2.01(g), to construct promptly the Station in
accordance with the terms of its construction permit;
(e) to comply in all material respects with (i) the rules,
regulations and policies of the FCC including, but not limited to,
timely filing all reports, applications and fees with the FCC, and (ii)
all other laws, rules and regulations which Seller, the Station and the
Assets are subject;
(f) to use its best efforts to obtain FCC consent to the grant
of a Class C2 channel to Hobe Sound, Florida or to Jupiter, Florida
through a rulemaking petition or application proceeding, whichever
occurs first, which authorizes the Station's operation thereon (the
"Upgrade"); and
(g) to allow Buyer and its authorized representatives
reasonable access at mutually agreeable times at Buyer's expense during
normal business hours to the Assets and to all other properties,
equipment, books, records, contracts and documents relating to the
Station for the purpose of audit and inspection, and furnish or cause
to be furnished to Buyer or its authorized representatives all
information
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with respect to the affairs and business of the Station as Buyer may
reasonably request, it being understood that the rights of Buyer
hereunder shall not be exercised in such a manner as to interfere with
the operations of the business of Seller. Neither the furnishing of
such information to Buyer or its representatives nor any investigation
made heretofore or hereafter by Buyer shall affect Buyer's rights to
rely on any representation or warranty made by Seller in this
Agreement, each of which shall survive any furnishing or information or
any investigation.
Section 4.3 Covenant of Buyer. From the date hereof until the earlier
of the execution of the Purchase Agreement or the expiration of the Option
Period, Buyer covenants and agrees that it will not, without Seller's prior
written consent, take any action to impede the Upgrade.
Section 4.4 Joint Covenants. (a) Each of the parties hereto covenants
and agrees from the date hereof until the earlier of the execution of the
Purchase Agreement and the expiration of the Option Period to notify each other
of (i) any proceeding pending or threatened against the party sending the notice
which challenges or seeks to restrain or enjoin the consummation of any of the
transactions contemplated hereunder or under the Purchase Agreement, (ii) any
event which has had or is reasonably likely to have a material adverse effect on
the party sending the notice or its ability to consummate any of the
transactions contemplated hereunder or under the Purchase Agreement or (iii) any
material developments with respect to the Station or any material change in any
of the information contained in the notifying party's representations and
warranties set forth in this Agreement. No such notification shall relieve the
notifying party of its obligations hereunder.
(b) If the Option is exercised in accordance with Section 1.03 hereof,
Buyer and Seller hereby agree to negotiate in good faith the Purchase Agreement
and to enter into the same within 10 business days of Seller's deemed receipt of
the Notice In addition, Buyer and Seller shall, as soon as practicable after the
date hereof, proceed in good faith and as expeditiously as possible to enter
into a Time Brokerage Agreement, Construction Loan Agreement, Tower Lease
Agreement and Studio Lease Agreement, each consistent with the terms specified
in Schedule 4.04 hereto and each containing such representations, warranties and
covenants and such other terms and conditions, as are reasonable in these
circumstances.
(c) Each of the parties hereto covenants and agrees from the date
hereof until the earlier of the execution of the Purchase Agreement and the
expiration of the Option Period to (i) use their respective commercially
reasonable efforts to take all actions and to do all things necessary, proper or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement; and (ii) not knowingly take any action or omit
to take any action which will result in the
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material violation by such party of any law applicable to this transaction or
cause a material breach by it or any of its respective representations and
warranties set forth in this Agreement.
ARTICLE 5. CONDITIONS TO THE EXERCISE OF THE OPTION
Section 5.1 Buyer's exercise of the Option is conditioned upon (unless
Buyer, in its sole discretion, waives such conditions) (a) Seller's prior
execution and delivery of the Tower Lease Agreement described on Schedule 4.04
hereto, (b) the Program Test Authority for the Station being granted on terms
which are not materially different from those set forth in the construction
permit for the Station as modified by Seller's application to relocate the
Station's transmitter to Hobe Sound, Florida, (c) the representations and
warranties of Seller set forth herein shall be true and correct in all material
respects and Seller shall have, in all material respects, performed its
obligations and complied with its covenants set forth in this Agreement to be
performed or complied with on or prior to the end of the Option Period and (d)
there shall not exist a condition at the Station which would permit Buyer to
terminate the Time Brokerage Agreement described on Schedule 4.04 hereto. If
Buyer does not exercise the Option due to the failure of either or both of such
conditions, Buyer shall be entitled to all proceeds of the Escrow Account.
ARTICLE 6. INDEMNIFICATION
Section 6.1 Indemnification. (a) Seller agrees to indemnify and hold
harmless Buyer from and against, and to reimburse Buyer with respect to, any and
all loss, damage, liability, cost and expense, including reasonable attorneys,
fees, incurred by Buyer by reason of or arising out of or in connection with (i)
a material breach by Seller of any representation or warranty contained in this
Agreement, (ii) the failure of Seller to perform any agreement required by this
Agreement to be performed by Seller, unless such performance was or is
prohibited by law or by court order or such failure to perform is permitted by
the terms of such agreement, (iii) any claims, actions, suits, proceedings or
investigations involving Seller arising out of any matter, or (iv) any Taxes of
Seller of any nature whatsoever (including, without limitation, all federal,
state, county, local, foreign and other income taxes, estimated taxes, excise
taxes, sales taxes, use taxes, transfer taxes, gross receipts taxes, franchise
taxes, employment and payroll related taxes, property taxes and import duties
assessable against or payable by Seller, whether or not measured in whole or in
part by net income), together with any related penalties and interest. Seller
also agrees to file or cause to be filed all reports, returns or other
information required to be supplied to a taxing authority (or the partners of
Seller) with respect to taxable periods of Seller ending on or before the date
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hereof. Seller also agrees to pay Buyer interest on any amount owed by Seller to
Buyer pursuant to this Section 6.01 from the date of the event giving rise to
Seller's indemnification obligation pursuant to this Section 6.01, at a rate per
annum equal to the so-called "prime rate" as announced from time to time by The
Bank of New York, but not higher than the maximum interest rate legally payable
under the laws of the State of Florida. Buyer agrees to give prompt notice to
Seller of the existence of any claim for indemnification, and Seller shall have
the right to participate in and, with the consent of Buyer, which consent shall
not be unreasonably withheld or delayed, to control the contest and defense of
any such claim at its own cost and expense, including the cost and expense of
attorneys' fees in connection with such contest and defense.
(b) Buyer agrees to indemnify and hold harmless Seller from and against
and to reimburse Seller with respect to, any and all loss, damage, liability,
cost and expense, including reasonable attorneys' fees, incurred by Seller by
reason of or in connection with (i) a material breach by Buyer of any
representation or warranty contained in this Agreement, (ii) the failure of
Buyer to perform any agreement required by this Agreement to be performed by
Buyer, unless such performance was or is prohibited by law or by court order, or
such failure to perform is permitted by the terms of such agreement, (iii) any
claims, actions, suits, proceedings or investigations involving Buyer arising
out of any matter, or (iv) any Taxes of Buyer of any nature whatsoever
(including, without limitation, all federal, state, county, local, foreign and
other income taxes, estimated taxes, excise taxes, sales taxes, use taxes,
transfer taxes, gross receipts taxes, franchise taxes, employment and payroll
related taxes, property taxes and import duties assessable against or payable by
Buyer, whether or not measured in whole or in part by net income), together with
any related penalties and interest. Buyer also agrees to pay to Seller interest
on any amount owed by Buyer to Seller pursuant to this Section 6.01 from the
date of the event giving rise to Buyer's indemnification obligation pursuant to
this Section 6.01, at a rate per annum equal to the so-called "prime rate" as
announced from time to time by The Bank of New York, but not higher than the
maximum interest legally payable under the laws of the State of Florida. Seller
agrees to give prompt notice to Buyer of the existence of any claim for
indemnification, and Buyer shall have the right to participate in and, with the
consent of Seller, which consent shall not be unreasonably withheld or delayed,
to control the contest and defense of any such claim at its own cost and
expense, including the cost and expense of attorneys' fees in connection with
such contest and defense.
ARTICLE 7. MISCELLANEOUS
Section 7.1 Survival. All statements, certifications,
indemnifications, representations and warranties made herein by
the parties to this Agreement, and their respective obligations
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to be performed pursuant to the terms hereof, shall survive for a period of 15
months from the end of the Option Period, notwithstanding any examination by or
on behalf of any party hereto, notwithstanding any notice of a breach or of a
failure to perform not waived in writing and notwithstanding the consummation of
the transactions hereby contemplated with knowledge of such breach or failure.
Section 7.2 Notices. All notices and other communications hereunder
shall be in writing, including by facsimile, and shall be deemed to have been
duly delivered and received (i) on the date of personal delivery; (ii) on the
fifth day after deposit in the U.S. mail if mailed by registered or certified
mail, postage prepaid and return receipt requested; (iii) on the day after
delivery to a nationally recognized overnight courier service if sent for next
morning delivery; or (iv) when dispatched by facsimile transmission (with the
facsimile transmission confirmation being deemed conclusive evidence of such
dispatch); if intended for Buyer, shall be addressed as follows:
American Radio Systems Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx, Esq.
Vice President & General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Rosenman & Colin LLP
0000 x0xx Xxxxxx, XX
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
or at such other address of which Buyer shall have given notice to Seller in the
manner herein provided; if intended for Seller, shall be addressed as follows:
Jupiter Radio Partners
c/o Xx. Xxxxxx Xxxxxx
Vice President/Controller
InterMart Broadcasting
0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxx, Esq.
Mullin, Rhyne, Xxxxxx & Xxxxx, P.C.
0000 Xxxxxxxxxxx Xxxxxx, XX
Xxxxx 000
Xxxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
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or at such other address of which Seller shall have given notice to Buyer in the
manner herein provided.
Section 7.3 Merger; Waiver and Modification. All prior or
contemporaneous agreements, contracts, promises, representations and statements,
if any, between the parties hereto, or their representative, are merged into
this Agreement and this Agreement, together with the schedules and exhibits
hereto, constitute the entire agreement between them. No waiver or modification
of the terms hereof shall be valid unless in writing signed by the party to be
charged and only to the extent therein set forth.
Section 7.4 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto, their respective heirs,
administrators, executors, successors and assigns. No party may assign its
rights and interest under this Agreement without the prior written consent of
the other party hereto; provided, however, that Buyer may assign its rights
under this Agreement to a third party provided further, however that Buyer
agrees to remain liable to Seller for the satisfactory performance of the
assignee's obligations (and the obligations of any future assignee) under this
Agreement and the Purchase Agreement.
Section 7.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which taken
together shall constitute a single agreement.
Section 7.6 Captions. The captions appearing in this Agreement are
inserted only as a matter of convenience and for reference and in no way define,
limit or describe the scope and intent of this Agreement or any of the
provisions hereof.
Section 7.7 Choice of Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida
applicable to contracts made and to be performed wholly within said State
without giving effect to conflict of laws principles thereof.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement the day and year first above written.
AMERICAN RADIO SYSTEMS CORPORATION
By:________________________________
Name:
Title:
JUPITER RADIO PARTNERS
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By:________________________________
Name:
Title: Partner
Schedule 1.03
1. Purchase Price. Subject to adjustments to reflect proration of all
taxes and assessments, utility bills, and all other ongoing costs of operating
the Station, the Purchase Price shall be the C2 Purchase Price or the C3
Purchase Price (as such terms are defined below), determined as follows:
(a) If, as of the date (the "Closing Date") of the closing
(the "Closing") of the transactions contemplated under the Purchase
Agreement, the FCC shall have approved an application or other filing
granting, on the terms and conditions requested, the allocation of a
Class C2 channel to Hobe Sound or Jupiter, Florida for the operation of
the Station (the "Upgrade Event") and such approval is not subject to
administrative or judicial review (a "Final Consent"), the purchase
price shall be Eleven Million Dollars ($11,000,000.00) or the appraised
value of the Station operating pursuant to Program Test Authority or-a
License as a Class C2 facility (the "C2 Appraised Value"), whichever is
less (the "C2 Purchase Price"), payable at the Closing.
(b) If, as of the Closing Date, a Final Consent approving the
Upgrade Event has not been granted, Buyer shall pay at the Closing,
subject to delivery of the Escrow Fund, Seven Million Dollars
($7,000,000.00) or the appraised value of the Station operating
pursuant to Program Test Authority or a License as a Class C3 facility
(the "C3 Appraised Value"), whichever is less (the "C3 Purchase
Price"). Within five business days after a Final Consent approving the
Upgrade Event, Buyer shall make an additional payment to Seller (the
"Upgrade Payment") in the amount of the difference between the C2
Purchase Price and the C3 Purchase Price. If a Final Consent approving
the Upgrade Event is not granted, the Purchase Price shall be deemed to
be the C3 Purchase Price and Buyer shall have no obligation to pay any
additional amounts with respect thereto.
(c) The C2 Appraised Value and the C3 Appraised Value shall be
the fair market value of the Station (exclusive of debt or other
discounts) operating as a Class C2 facility or a Class C3 facility,
respectively, as determined by an appraiser selected by Seller, upon
the consent of the Buyer, which consent shall not be unreasonably
withheld or delayed. The appraisal to determine the value of the
Station as a Class C2 or Class C3 facility shall be performed prior to
the filing of the application to approve Seller's assignment of its FCC
permits or licenses to Buyer. If a Final Consent approving the Upgrade
Event shall not have been granted at the time of the filing of said
application, Seller shall cause the appraiser selected in accordance
with this
-2-
paragraph (c) to establish both a C2 Appraised Value and a
C3 Appraised Value.
2. Closing. The closing under the Purchase Agreement shall occur on a
mutually acceptable date within 10 days after the FCC's consent to the
assignment of the Station's license from Seller to Buyer has become final, i.e.,
no longer subject to administrative or judicial appeal, reconsideration, review,
recall, or stay.
3. Expenses; Fees. Each party shall bear the cost of its own legal and
accounting fees in connection with the Purchase Agreement. FCC filing fees shall
be divided equally between the parties. Buyer shall be responsible for the
brokerage fee of Xxxxxxxxx & Company, and shall hold Seller harmless from any
claims of brokerage fees from any other parties.
4. FCC Application. Seller shall have filed an application with the FCC
(or an amendment to any pending application, as may be required) to operate its
broadcasting facilities from the American Tower Systems tower at Hobe Sound,
Florida as a Class C3 FM Station, authorized to serve Jupiter, Florida.
Schedule 2.01(a)
Seller's Partnership Agreement contains provisions relating to (i) the
relative interests of each Partner in the Partnership including, but not limited
to, dilution and augmentation of partnership interests, and (ii) a right of
first refusal among the partners to acquire partnership interests in the
Partnership.
Schedule 2.01(g)
1. Seller has pending with the FCC an application for modification of the
Station's construction permit (FCC File No. XXXX-000000XX). An informal
objection to this application was filed on May 9, 1996, to which Seller
filed an opposition on June 10, 1996.
Following execution of the Agreement, Seller will amend its pending
application to specify the American Tower Systems tower at Hobe Sound,
Florida, which will remove the grounds for the informal objection to
the application.
2. Seller has pending with the FCC a Petition for Rulemaking, filed July
29, 1996, to delete Channel 288C3 from Jupiter, Florida, and to allot
Channel 288C2 to Hobe Sound, Florida.
Schedule 4.04
Ancillary Agreements
1. Tower Lease Agreement. Seller shall enter into an agreement with
American Tower Systems, Inc. ("ATS") to lease space on ATS's Hobe Sound Tower
(and sufficient space in ATS's building at the tower site) for the installation,
operation and maintenance of Seller's antenna at a height of Eight Hundred (800)
feet above mean sea level for a Class C2 operation or at One Thousand (1,000)
feet above mean sea level for a Class C3 operation, a studio-transmitter-link
antenna, and related equipment at the rate of Eight Thousand Dollars ($8,000)
per month, with annual escalations of Five Percent (5%). The initial term of the
lease shall commence on the date the Station begins operation pursuant to
program test authority and shall be for a period of ten (10) years, renewable at
Seller's written request for successive additional ten (10) year terms.
2. Construction Loan Agreement. Seller and Buyer (or its designee)
shall enter into a construction loan agreement, pursuant to which Buyer (or its
designee) will provide debt financing to Seller for the amount of Seller's
Construction Costs. Subject to waiver by Buyer, Seller shall expend no less than
One Hundred Fifty Thousand Dollars ($150,000) to construct the Station. The
amount actually expended by Seller shall be known as "Seller's Construction
Costs." Buyer shall be responsible for reasonable costs in excess of the
Seller's Construction Costs required to construct the Station.
3. Studio Lease Agreements. Seller and Buyer (or its designee) shall
enter into a lease agreement, pursuant to which Buyer (or its designee) shall
lease to Seller studio and office space (not to exceed 500 square feet) in West
Palm Beach, Florida at a monthly rental at the same rate currently paid by Buyer
in the West Palm Beach market but not to exceed Twelve Dollars ($12.00) per
square foot per year. Buyer will provide Seller with space for a main studio
within the Station's 3.16 mV/m predicted contour.
