ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated November 19, 1996, by and
between American Radio Systems Corporation, a Delaware corporation ("Buyer"),
and New Generation Broadcasting, Inc., a Delaware corporation ("Seller").
P R E M I S E S:
A. Seller is the licensee of and operates radio stations WXEG(FM),
Beavercreek, Ohio (the "Station") pursuant to licenses issued by the Federal
Communications Commission (the "FCC").
B. Buyer has been programming the Stations pursuant to a Time Brokerage
Agreement dated as of April 1, 1996 (the "TBA").
C. Seller desires to sell, and Buyer wishes to buy, substantially all
of Seller's assets used or useful in the operation of the Stations and the
broadcast business made possible thereby for the price and on the terms and
conditions hereafter set forth.
AGREEMENTS:
In consideration of the above premises and the covenants and agreements
contained herein, Buyer and Seller agree as follows:
Section 1
DEFINED TERMS
The following terms shall have the following meanings in this
Agreement:
1.1 "Assets" means the tangible and intangible assets of Seller being
sold, transferred, or otherwise conveyed to Buyer hereunder, as specified in
detail in Section 2.1.
1.2 "Assumed Contracts" means (i) all Contracts listed in Schedule 3.7,
(ii) any Contracts entered into by Seller in the ordinary course of business
between the date hereof and the Closing Date which would have been listed on
Schedule 3.7 had they been in existence on the date hereof and which Buyer
agrees in writing to assume, (iii) all Contracts, in existence on the Closing
Date which meet the criteria set forth in Section 3.7 (i) - (iii) for exclusion
from Schedule 3.7, and (iv) all Contracts with advertisers for the sale of time
on one or both of the Stations for cash entered into in the ordinary course of
business.
1.3 "Closing" means the consummation of the transaction contemplated by
this Agreement in accordance with the provisions of Section 8.
1.4 "Closing Date" means the date of the Closing specified in Section
8.1.
1.5 "Consents" means all of the consents, permits or approvals of
government authorities and other third parties necessary to transfer the Assets
to Buyer or otherwise to consummate the transaction contemplated hereby,
including without limitation the consents of the parties to those Contracts
designated in Schedule 3.7 with an asterisk.
1.6 "Contracts" means all agreements and leases, written or oral
(including any amendments and other modifications thereto) to which Seller is a
party or which are binding upon Seller and, in each case, affect the assets or
the business or operations of one or both of the the Stations, and (i) which are
in effect on the date hereof and remain in effect on the Closing Date or (ii)
which are entered into by Seller in the ordinary course of business between the
date hereto and the Closing Date.
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1.7 "Excluded Assets" shall mean those assets described or set forth in
Section 2.2 herein or on Schedule 2.2 hereto.
1.8 "FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
1.9 "FCC Licenses" means all of the licenses, permits and other
authorizations issued by the FCC to Seller in connection with the conduct of the
business or operations of the Stations.
1.10 "Licenses" means all of the licenses, permits and other
authorizations, including the FCC Licenses, issued by the FCC, the Federal
Aviation Administration ("FAA"), and any other federal, state or local
governmental authorities to Seller in connection with the conduct of the
business or operations of the Stations.
1.11 "Personal Property" means all of the machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, spare
parts, and other tangible personal property which are owned or leased by Seller
and used or useful as of the date hereof in the conduct of the business or
operations of one or both of the Stations, subject to change in the ordinary
course of business between the date hereof and the Closing Date.
1.12 "Purchase Price" means the purchase price specified in Section
2.3.
1.13 "Real Property" means all of the fee estates and buildings and
other improvements thereon, leasehold interests, easements, licenses, rights to
access, rights-of-way, and other real property interest owned by Seller and
identified on Schedule 3.5 hereto.
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SECTION 2
SALE AND PURCHASE OF ASSETS
2.1 Agreement to Sell and Buy. Subject to the terms and conditions set
forth in this Agreement, Seller hereby agrees to transfer and deliver to Buyer
on the Closing Date, and Buyer agrees to purchase, all of the Assets, free and
clear of any claims, liabilities, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for those permitted in
accordance with Section 2.4, 3.5 or 3.6 below), more specifically described as
follows:
(a) The Personal Property;
(b) The Real Property;
(c) The Licenses;
(d) The Assumed Contracts;
(e) All trademarks, trade names, service marks, copyrights and
all other intellectual property and similar intangible assets relating
to either of the Stations, including those listed in Schedule 3.9
hereto;
(f) All of the Seller's proprietary information that relates
to either of the Stations, including without limitation, technical
information and data, machinery and equipment warranties, maps,
computer discs and tapes, plans, diagrams, blueprints, and schematics,
including, without limitation, filings with the FCC which relate to
either of the Stations, if any;
(g) All choses in action and rights under warranties of Seller
relating to the Assets, if any;
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(h) All books and records relating exclusively to the business
or operations of either or both of the Stations, including executed
copies of the Assumed Contracts, and all records required by the FCC to
be kept, subject to the right of Seller to have such books and records
made available to Seller for a reasonable period, not to exceed three
(3) years; and
(i) All intangible assets of Seller relating to the Station
not specifically described above.
2.2 Excluded Assets. The Assets shall exclude all other assets of
Seller, including, without limitation the following assets, and the assets
listed on Schedule 2.2:
(a) Seller's cash on hand as of the Closing Date and all other
cash in any of Seller's bank or savings accounts; any and all insurance
policies, letters of credit, or other similar items and any cash
surrender value in regard thereto; and any stocks, bonds, certificates
of deposit and similar investments.
(b) All books and records of Seller, subject to the right of
Buyer to have access and to copy for a period of three (3) years from
the Closing Date, and Seller's corporate records and other books and
records related to internal corporate matters and financial
relationships with Seller's lenders;
(c) Any claims, rights and interest in and to any refunds of
federal, state or local franchise, income or other taxes or fees of any
nature whatsoever for periods prior to the Closing Date (subject to
funding under the Note Purchase Agreement discribed in Section 2.3
below);
(d) Any pension, profit-sharing or employee benefit plans, and
any employment or collective bargaining agreement.
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2.3 Purchase Price. The Purchase Price shall be equal to the amount of
principal outstanding and interest accrued and outstanding as of the Closing
Date under that the 12% Secured Note Due 2006 dated December 20, 1995, made by
Seller in the principal amount of $2,206,633 and the 12% Convertible
Subordinated Notes due 2003 dated December 20, 1995 made by Seller in the
principal amount of $1,140,705 issued pursuant to that certain Note Purchase
Agreement dated as of December 20, 1996 by and between Buyer and Seller (the
"Notes").
2.4 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall pay, discharge and perform (i) all of the obligations and
liabilities of Seller under the Licenses and the Assumed Contracts insofar as
they relate to the time period on and after the Closing Date, and arising out of
events occurring on or after the Closing Date, (ii) all obligations and
liabilities arising out of events occurring on or after the Closing Date related
to Buyer's ownership of the Assets or its conduct of the business or operations
of the Stations, and (iii) all obligations and liabilities for which Buyer
receives a proration adjustment hereunder. Except to the extent otherwise
provided for in the TBA, all other obligations and liabilities of Seller,
including (i) any obligations under any Contract not included in the Assumed
Contracts, (ii) any obligations under the Assumed Contracts relating to the time
period prior to the Closing Date, (iii) any claims or pending litigation or
proceedings relating to the operation of either of the Stations prior to the
Closing Date, and (iv) those related to Seller's employees who do not become
employees of Buyer upon the Closing shall remain and be the obligations and
liabilities solely of Seller.
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing and Authority. Seller is a corporation duly
formed, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to conduct its business in the State of Ohio,
which is the only jurisdiction where the conduct of the businesses and
operations of the Stations requires such qualification. Seller has all requisite
corporate power and authority (i) to own, lease, and use the Assets as presently
owned, leased, and used, and (ii) to conduct the business or operations of the
Stations as presently conducted. Seller has all requisite corporate power and
authority to execute and deliver this Agreement and the documents contemplated
hereby, and to perform and comply with all of the terms, covenants and
conditions to be performed and complied with by Seller, hereunder and
thereunder.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement by Seller have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement has been duly
executed and delivered by Seller and constitutes the legal, valid, and binding
obligation of Seller, enforceable against Seller in accordance with its terms
except as the enforceability hereof may be affected by bankruptcy, insolvency,
or similar laws affecting creditors' rights generally, or by court-applied
equitable remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance of this Agreement and the
documents
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contemplated hereby (with or without the giving of notice, the lapse of time, or
both): (i) will not conflict with any provision of the Certificate of
Incorporation or By Laws of Seller; (ii) will not conflict with, result in a
material breach of, or constitute a material default under, any law, judgment,
order, ordinance, decree, rule, regulation or ruling of any court or
governmental instrumentality, which is applicable to Seller; (iii) will not
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 either Seller is a party or by which either may be
bound; or (iv) will not create any material claim, liability, mortgage, lien,
pledge, condition, charge, or encumbrance of any nature whatsoever upon the
Assets.
3.4 Licenses. Schedule 3.4 includes a true and complete list of the
Licenses. Seller has delivered to Buyer true and complete copies of the Licenses
(including any and all amendments and other modifications thereto). Seller is
the authorized legal holder of the Licenses. The Licenses comprise all of the
licenses, permits and other authorizations required from any governmental or
regulatory authority for the lawful conduct of the business or operations of
each of the Stations as presently operated.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains
descriptions of all the Real Property (including the location of all
improvements thereon), which comprises all real property interest necessary to
conduct the business or operations of one or both of the Stations, as now
conducted. Seller has good and marketable fee simple title, insurable at
standard rates, to all of the fee estates (including the improvements thereof)
listed in said Schedule free and clear of all liens, mortgages,
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pledges, covenants, easements, restrictions, encroachments, leases, charges, and
other claims and encumbrances of any nature whatsoever, and without reservation
or exclusion of any mineral, timber, or other rights or interests, except for
(i) liens for real estate taxes not yet due and payable, (ii) easements,
rights-of-way and restrictions of record, none of which materially affects the
use of such property, and (iii) liens in favor of Seller's lenders set forth in
Schedule 3.5, and any other claims or encumbrances which are described in
Schedule 3.5 and annotated to indicate that such claims or encumbrances shall be
removed prior to or at Closing. To Seller's knowledge, all towers, guy anchors,
and buildings and other improvements, included in the owned Assets are located
entirely on the Real Property listed in Schedule 3.5 or easement rights set
forth at Schedule 3.5. Seller has delivered to Buyer true and complete copies of
all deeds, leases, Title Insurance Policies or other material instruments
pertaining to the Real Property (including any and all amendments and other
modifications of such instruments), all of which instruments are valid, binding
and enforceable in accordance with their terms. Seller is not in material
breach, nor to Seller's knowledge is any other party in material breach, of the
terms of any of such deeds, leases, or other instruments.
3.6 Title to and Condition of Personal Property. Schedule 3.6 contains
descriptions of all material items of the Personal Property, which comprises all
personal property used to conduct the business or operations of the Station as
now conducted. Except as described in Schedule 3.6, Seller owns and has good
title to all Personal Property. None of the Personal Property owned by Seller is
subject to any security interest, mortgage, pledge, conditional sales agreement,
or other lien or encumbrance, except for (i) liens for current taxes not yet due
and payable, and (ii) any other claims or
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encumbrances which are described in Schedule 3.6 and annotated to indicate that
such claims or encumbrances shall be removed prior to or at Closing.
3.7 Contracts. Schedule 3.7 contains descriptions of all the Contracts
except for: (i) contracts with advertisers for the sale of time on one or both
the Stations for cash, entered into in the ordinary course of business, (ii)
those employment contracts and miscellaneous service contracts which are
terminable on 60 days notice or less, without penalty, and (iii) other contracts
not involving either aggregate liabilities under all such contacts exceeding
Five Thousand Dollars ($5,000) or any material nonmonetary obligation. Seller
has delivered to Buyer true and complete copies of all written Contracts, and
true and complete memoranda of all oral Contracts (including any and all
amendments and other modifications to such Contracts). All of the Assumed
Contracts are in full force and effect, and are valid, binding and enforceable
in accordance with their terms, except as the enforceability thereof may be
affected by bankruptcy, insolvency or similar laws affecting creditors' rights
generally, or by court-applied equitable remedies. Seller is not in material
breach, nor to Seller's knowledge is any other party in material breach, of the
terms of any such Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the Consents indicated in Schedule 3.7, no consent, approval, permit or
authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required (i) to consummate
this Agreement and the transactions contemplated hereby or (ii) to permit Seller
to assign or transfer the Assets to Buyer. .
3.9 Trademarks, Trade Names and Copyrights. Schedule 3.9 is a true and
complete list of all copyrights, trademarks, trade names, licenses, patents,
permits,
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jingles, privileges and other similar intangible property rights and interests
(exclusive of the FCC Licenses applied for, issued to or owned by Seller, or
under which Seller is licensed or franchised, and used or useful in the conduct
of the business or operations of one or both of the Stations,
3.10 Insurance. In Seller's reasonable judgment, all of the tangible
property included in the Assets is insured under policies covering risks
customarily insured by business similar to the Stations. Seller has heretofore
provided to Buyer a true and complete list of all insurance policies of Seller
which insure any part of the Assets.
3.11 Reports. Except where failure to do so would not have a material
adverse effect on the ownership of the FCC Licenses or operation of the
Stations: (a) all returns, reports and statements which the Station is currently
required to file with the FCC or with any other governmental agency have been
filed, and (b) all reporting requirements of the FCC and other governmental
authorities having jurisdiction thereof have been complied with. All of such
reports, returns and statements are substantially complete and correct as filed.
The public inspection file of each Station is located within its principal
community contour and is maintained, in each case in compliance with the FCC's
rules and regulations.
3.12 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to the Stations except as
described in Schedule 3.12 hereto. Seller has no written or oral contracts of
employment with any employee of the Station, other than those listed in Schedule
3.12.
3.13 Claims, Legal Actions. Except as set forth in Schedule 3.16, and
except for any investigations and rule-making proceedings generally affecting
the broadcasting
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industry, there is no claim, legal action, counterclaim, suit, arbitration,
governmental investigation or other legal, administrative or tax proceeding, nor
any order, decree or judgment, in progress or pending, or to the knowledge of
Seller threatened, against or relating to Seller, the Assets, or the business or
operations of the Stations of a material nature.. Seller knows of no claim or
litigation pending or threatened which seeks to prevent the transaction
contemplated by this Agreement.
3.14 Compliance with Laws. To the knowledge of Seller, Seller has
complied in all material respects with (i) the Licenses, and (ii) all applicable
federal, state and local laws, rules, regulations and ordinances. To the
knowledge of Seller, neither the ownership or use, nor the conduct of the
business or operations, of the Station conflicts with rights of any other
person, firm or corporation.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing and Authority. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, and is qualified to conduct business in the State of Ohio. Buyer has
all requisite corporate power and authority to execute and deliver this
Agreement and the documents contemplated hereby, to perform and comply with all
of the terms, covenants, and conditions to be performed and complied with by
Buyer hereunder and thereunder, and to operate the Stations and to own the
Assets, subject to obtaining the Consents at or prior to Closing.
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4.2 Authorization and Binding Obligation. The execution, delivery and
performance of this Agreement by Buyer have been duly authorized by all
necessary corporate action on the part of Buyer. This Agreement has been duly
executed and delivered by Buyer and constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms
except as the enforceability hereof may be affected by bankruptcy, insolvency,
or similar laws affecting creditors' rights generally, or by court-applied
equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the
Consents, the execution, delivery, and performance of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) will not conflict with any provision of the Certificate
of Incorporation or Bylaws of Buyer; (ii) will not conflict with, result in
material breach of, or constitute a material default under any laws, judgment,
order, ordinance, decree, rule, regulation or ruling of any court or
governmental instrumentality, which is applicable to Buyer; and (iii) will not
conflict with, constitute grounds for termination of, result in a material
breach of, constitute a default under or accelerate or permit the acceleration
of any performance required by the terms of, any material agreement, instrument,
licenses, or permit to which Buyer is a party or by which Buyer may be bound.
4.4 FCC Qualification. Buyer has no knowledge of any facts which would,
under present law (including the Communications Act of 1934, as amended) and
present rules, regulations and practices of the FCC, disqualify Buyer as an
assignee of the Licenses listed on Schedule 3.4 hereto, or as an owner of the
Assets and/or the operator of either of the Stations
4.5 Consents. Except for the FCC Consent provided for in Section 6.1,
and the Consents indicated in Schedule 4.5, no consent, approval, permit or
authorization of, or declaration to or filing with any governmental or
regulatory authority, or any other third party is required to consummate this
Agreement and the transactions contemplated hereby.
4.6 Litigation. Buyer knows of no claim or litigation pending or
threatened which seeks to prevent the transaction contemplated by this
Agreement.
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SECTION 5
COVENANTS OF SELLER
5.1 Pre-Closing Covenants. Except as contemplated by this Agreement or
with the prior written consent of Buyer, not to be unreasonably withheld or
delayed, between the date hereof and the Closing Date, and subject to the
provisions of the TBA, Seller shall operate the Station in the ordinary course
of business in accordance with its past practices (except where such would
conflict with the following covenants or with Seller's other obligations
hereunder), and abide by the following negative and affirmative covenants:
A. Negative Covenants. Seller shall not do any of the
following:
(1) Disposition of Assets. Sell, assign, lease, or otherwise
transfer or dispose of any of the Assets, except for assets consumed or
disposed of in the ordinary course of business, where no longer used or
useful in the business or operations of the Station or in connection
with the acquisition of replacement property of equivalent kind and
value;
(2) Encumbrances. Create, assume or permit to exist any claim,
liability, mortgage, lien, pledge, condition, charge, or encumbrance of
any nature whatsoever upon the Assets, except for (i) those in
existence on the date of this Agreement, disclosed in Schedules 3.5 and
3.6, or permitted by Section 2.4, 3.5 or 3.6 and (ii) mechanics' liens
and other similar liens which will be removed prior to the Closing
Date;
(3) No Inconsistent Action. Knowingly take any action which is
inconsistent with its obligations hereunder or which could hinder or
delay the consummation of the transaction contemplated by this
Agreement.
B. Affirmative Covenants. Seller shall do the following:
(1) Access to Information. Upon prior notice, 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
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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 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; provided that 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 of
information or any investigation;
(2) Maintenance of Assets. Subject to Buyer's
obligations under the TBA, maintain all of the Assets or replacements
thereof and improvements thereon in current condition (ordinary wear
and tear excepted), and use, operate and maintain all of the Assets in
a reasonable manner, with inventories or spare parts and expendable
supplies being maintained at levels consistent with past practices;
(3) Insurance. Maintain the existing insurance
policies on the Station and the Assets provided they can be so
maintained on a reasonable cost basis;
(4) Consents. Subject to Section 6.1, use its
reasonable efforts to obtain the Consents;
(5) Notification. Promptly notify Buyer in writing of
any unusual or material developments with respect to the assets of the
Station, and of any material change in any of the information contained
in Seller's representations and warranties contained in Section 3
hereof or in the schedules hereto, provided that such notification
shall not relieve Seller of any obligations hereunder;
(6) Compliance with Laws. Comply in all material
respects with all rules and regulations of the FCC, and all other laws,
rules and regulations to which Seller, the Station and the Assets are
subject.
5.2 Post-Closing Covenants. After the Closing, Seller will take such
actions, and execute and deliver to Buyer such further deeds, bills of sale, or
other transfer documents as, in the reasonable opinion of counsel for Buyer and
Seller, may be necessary to ensure complete and evidence the full and effective
transfer of the Assets to Buyer pursuant to this Agreement.
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SECTION 6
SPECIAL COVENANTS AND AGREEMENTS
6.1 FCC Consent. The assignment of the FCC Licenses as contemplated by
this Agreement is subject to the prior consent and approval of the FCC.
A. Within ten (10) days after the execution of this Agreement,
Buyer and Seller shall file with the FCC an appropriate application for purposes
of obtaining the FCC Consent. The parties shall prosecute said application with
all reasonable diligence and otherwise use their best efforts to obtain the
grant of such application as expeditiously as practicable. If the FCC Consent
imposes any condition on any party hereto, such party shall use its best efforts
to comply with such condition unless compliance would be unduly burdensome or
would have a material adverse effect upon it. If reconsideration or judicial
review is sought with respect to the FCC Consent, Buyer and Seller shall oppose
such efforts to obtain reconsideration or judicial review (but nothing herein
shall be construed to limit any party's right to terminate this Agreement
pursuant to Section 9 of this Agreement).
B. The transfer of the Assets hereunder is expressly
conditioned upon (i) the grant of the FCC Consent without any materially adverse
conditions on Buyer, and (ii) compliance by the parties hereto with the
conditions (if any) imposed in the FCC Consent.
6.2 Control of the Station. Subject to Buyer's obligations under the
TBA, Buyer shall not, directly or indirectly, control, supervise, direct, or
attempt to control, supervise or direct, the operations of either of the
Stations prior to the Closing. Such
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operations, including complete control and supervision of all of the Stations'
programs, employees, and policies, shall be the sole responsibility of Seller
until the completion of the Closing hereunder, subject to Buyer's rights under
the TBA.
6.3 Taxes, Fees and Expenses. Buyer shall pay all sales, transfer and
similar taxes and fees, if any, arising out of the transfer of the Assets
pursuant to this Agreement. Except as otherwise provided in this Agreement, each
party shall pay its own expenses incurred in connection with the authorization,
preparation, execution, and performance of this Agreement, including all fees
and expenses of counsel, accountants, agents, and other representatives.
6.4 Brokers. Buyer and Seller each represents and warrants that neither
it nor any person or entity acting on its behalf has incurred any liability for
any finders' or brokers' fees or commissions in connection with the transaction
contemplated by this Agreement.
6.5 Confidentiality. Except as necessary for the consummation of the
transaction contemplated hereby, including Buyer's obtaining financing in any
form or means of its choosing related hereto, each party hereto will keep
confidential any information which is obtained from the other party in
connection with the transaction contemplated hereby and which is not readily
available to members of the general public, and will not use such information
for any purpose other than in furtherance of the transactions contemplated
hereby. In the event this Agreement is terminated and the purchase and sale
contemplated hereby abandoned, each party will return to the other party
originals and all copies of all documents, work papers and other written
material obtained by it in connection with the transaction contemplated hereby.
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6.6 Cooperation. Buyer and Seller shall cooperate fully with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary or reasonably desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations hereunder. Notwithstanding
the foregoing, except as otherwise set forth herein, Buyer shall have no
obligation (i) to expend funds to obtain the Consents (other than with respect
to the filing and pursuance of the application to obtain the FCC Consent), or
(ii) to agree to any adverse change in any License or Assumed Contract to obtain
a Consent required with respect thereto.
6.7 Risk of Loss.
A. The risk of loss, damage or impairment, confiscation or
condemnation of any of the Assets from any cause whatsoever shall be borne by
Seller at all times prior to the completion of the Closing.
B. If any damage or destruction of the Assets or any other
event occurs which prevents signal transmission by the Station in the normal and
usual manner and Seller cannot restore or replace the Assets so that the
conditions are cured and normal and usual transmission is resumed before the
date on which the Closing would otherwise have to take place pursuant to Section
8.1 hereof, the Closing shall be postponed, for a period of up to one hundred
and twenty (120) days, to permit the repair or replacement of the damage or
loss.
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C. In the event of any damage or destruction of the Assets
described above, if such Assets have not been restored or replaced and the
Station's normal and usual transmission resumed within the one hundred and
twenty (120) day period specified above, Buyer may terminate this Agreement
forthwith without any further obligation hereunder by written notice to Seller.
Alternatively, Buyer may, at its option, proceed to close this Agreement and
complete the restoration and replacement of such damaged Assets after the
Closing Date, in which event Seller shall deliver to Buyer all insurance
proceeds received in connection with such damage or destruction of the Assets to
the extent not already expended by Seller arising in connection with such
restoration and replacement.
D. Notwithstanding any of the foregoing, Buyer may terminate
this Agreement forthwith without any further obligation hereunder by written
notice to Seller if any event occurs which prevents signal transmission by the
Station in a manner generally equivalent to its current operations for a
consecutive period of five (5) or a cumulative period of fourteen (14) days
after the date hereof.
6.8 Audit Cooperation. Seller agrees to fully cooperate, and use
reasonable efforts to cause its accounting firms to reasonably cooperate with
Buyer and at Buyer's expense, to the extent required for the Buyer to prepare
audited financial statements for the Stations for the period of Seller's
ownership thereof.
6.9 Disqualification. Buyer will not take, or unreasonably fail to
take, any action which Buyer knows or has reason to know would cause its
disqualification as an assignee of the Licenses listed on Schedule 3.4 or as an
owner of the Assets and/or the
19
operator of either of the Stations (it being understood that Buyer has an active
duty to attempt to ascertain what would cause such disqualification). Should
Buyer become aware of any such facts, it will promptly notify Seller in writing
thereof and use its best efforts to prevent any such disqualification.
SECTION 7
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions of Obligations to Buyer. All obligations of Buyer at the
Closing hereunder are subject to the fulfillment prior to and at the Closing
Date of each of the following conditions, any or all of which may be waived by
Buyer, in its sole discretion, in writing:
A. Representations and Warranties. The representations and
warranties of Seller in this Agreement shall be true and correct in all material
respects at and as of the Closing Date, except for changes contemplated by this
Agreement, as though such representations and warranties were made at and as of
such date.
B. Covenants and Conditions. Seller shall have in all material
respects performed and complied with the covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
C. Consents. Each of the Consents marked by an asterisk on
Schedule 3.7 and the FCC Consent shall have been duly obtained and delivered to
Buyer with no material adverse change to the terms of the License or Assumed
Contract with respect to which such Consent is obtained.
20
D. Licenses. Seller shall be the holder of the Licenses, and
there shall not have been any modification of any of such Licenses which has an
adverse effect on the relevant Station or the conduct of its business or
operations. No proceeding shall be pending the effect of which would be to
revoke, cancel, fail to renew, suspend or modify adversely any of the Licenses.
E. Deliveries. Seller shall have made or stand willing and
able to make all the deliveries to Buyer set forth in Section 8.2
7.2 Conditions to Obligations of Seller. The obligations of Seller at
the Closing hereunder are subject to the fulfillment prior to and at the Closing
Date of each of the following conditions, any or all of which may be waived by
Seller, in its sole discretion, in writing:
A. Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and correct in all
material respects at and as of the Closing Date, except for changes contemplated
by this Agreement, as though such representations and warranties were made at
and as of such date
B. Covenants and Conditions. Buyer shall have in all material
respects performed and complied with the covenants, agreements, and conditions
required by this Agreement to be performed or complied with by it prior to or on
the Closing Date.
C. Deliveries. Buyer shall have made or stand willing and able
to make all the deliveries set forth in Section 8.3
D. FCC Consent. The FCC Consent shall have been obtained.
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SECTION 8
CLOSING AND CLOSING DELIVERIES
8.1 Closing. The Closing shall take place at 10:00am on a date, to be
set by Buyer, upon five (5) days written notice to Seller, no later than ten
(10) days following the date upon which the FCC Consent has been issued (the
"Closing Date"), subject to Section 6.7 hereof. Closing shall be held at the
offices of Buyer in Boston, Massachusetts or such other place as shall be
mutually agreed to by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
(a) Transfer Documents. Duly executed warranty deeds, bills of
sale, motor vehicle titles, assignments and other transfer documents
which shall be sufficient to vest good and marketable title to the
Assets in the name of Buyer or its permitted assignees, free and clear
of any claims, liabilities, mortgages, liens, pledges, conditions,
charges, or encumbrances of any nature whatsoever (except for those
permitted in accordance with Sections 2.5, 3.5 or 3.6 hereof);
(b) Consents. The original of each Consent marked with an
asterisk on Schedule 3.7;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed by a duly authorized officer of Seller,
certifying: (i) that the representations and warranties of Seller
contained in this Agreement are true and complete in all material
respects as of the Closing Date, except for changes contemplated by
this Agreement, as though made on and as of that date; and (ii) that
Seller has, in all material respects, performed its obligations and
complied with its covenants set forth in this Agreement to be performed
and complied with prior to or on the Closing Date;
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(d) Secretary's Certificate. A certificate, dated as of the
Closing Date, executed by Seller's Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by such
Seller's Board of Directors, authorizing and approving the execution of
this Agreement by Seller and the consummation of the transaction
contemplated hereby and that such resolutions remain in full force and
effect; and (ii) providing, as attachments thereto, a certificate of
legal existence certified by appropriate state officials; as of a date
not more than fifteen (15) days before the Closing Date and by Seller's
Secretary as of the Closing Date, and a copy of Seller's Certificate of
Incorporation and By Laws as in effect on the date hereof, certified by
Seller's Secretary as of the Closing Date;
(e) Opinions of Counsel. Opinions of Seller's counsel and
communications counsel dated as of the Closing Date, and addressed to
Buyer and at Buyer's directions, to Buyer's lenders, substantially in
the form of Schedule 8.2 hereto.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Seller the following, in form and substance reasonably satisfactory
to Seller and its counsel:
(a) Purchase Price. The Buyer shall deliver to Seller the
Notes marked "Paid -- Satisfied in Full";
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations as provided in Section 2.4;
(c) Officer's Certificate. A certificate, dated as of the
Closing Date, executed by the President or Vice President of Buyer,
certifying (i) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material
respects as of the Closing Date, except for changes contemplated by
this Agreement, as though made on and as of that date, and (ii) that
Buyer has, 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 Closing Date;
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(d) Secretary's Certificate. A certificate, dated as of the
Closing Date, executed by Buyer's Secretary: (i) certifying that the
resolutions, as attached to such certificate, were duly adopted by
Buyer's Board of Directors, authorizing and approving the execution of
this Agreement and the consummation of the transaction contemplated
hereby and that such resolutions remain in full force and effect; and
(ii) a copy of the corporate charter, articles of incorporation and
Bylaws of Buyer as in effect on the Closing date, certified by Buyer's
secretary as of the Closing Date;
(e) Opinion of Counsel. An opinion of Buyer's General Counsel
dated as of the Closing Date, substantially in the form of Schedule 8.3
hereto.
SECTION 9
RIGHTS OF BUYER AND SELLER
ON TERMINATION OR BREACH
9.1 Termination Rights. This Agreement may be terminated by either
Buyer or Seller if the terminating party is not then in breach of any material
provision of this Agreement, upon written notice to the other party, upon the
occurrence of any of the following:
(a) If on the Closing Date (i) any of the conditions precedent
to the obligations of the terminating party set forth in Section 7 of
this Agreement shall not have been materially satisfied, and (ii)
satisfaction of such condition shall not have been waived by the
terminating party;
(b) If the application for FCC Consent shall be set for
hearing by the FCC for any reason;
(c) If the Closing shall not have occurred on or before
December 31, 1997; or.
(d) As provided in Section 6.7(c) and Section 6.7(d) hereof.
24
Upon termination: (i) if neither party hereto is in breach of any material
provision of this Agreement, the parties hereto shall not have any further
liability to each other; (ii) if Seller shall be in breach of any material
provision of this Agreement, Buyer shall have only the rights and remedies
provided in Section 9.3 or (iii) if Buyer shall be in breach of any material
provision of this Agreement, Seller shall be entitled only to actual damages
incurred as a result of such breach.
9.2 Specific Performance. The parties recognize that in the event
Seller should refuse to perform under the provisions of this Agreement, monetary
damages alone will not be adequate. Buyer shall therefore be entitled to obtain
specific performance of the terms of this Agreement. In the event specific
performance is not available or granted to Buyer, Buyer shall be entitled to
seek, in the alternative, money damages.
9.3 Expenses Upon Default. In the event of any action to enforce this
Agreement, Seller hereby waives the defense that there is an adequate remedy at
law. In the event of a default by a party hereto (the "Defaulting Party") which
results in the filing of a lawsuit for damages, specific performance, or other
remedy the other party (the "Nondefaulting Party") shall be entitled to
reimbursement by the Defaulting Party of reasonable legal fees and expenses
incurred by the Nondefaulting Party in the event the Nondefaulting Party
prevails.
SECTION 10
SURVIVAL OF REPRESENTATIONS AND WARRANTS,
AND INDEMNIFICATION
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties. Any investigations by or on behalf of any party hereto shall not
constitute a waiver as to enforcement of any representation or warranty
contained herein, except that insofar as any party has knowledge of any
misrepresentation or breach of warranty at Closing and such knowledge is
documented in writing at Closing, such party shall be deemed to have waived such
misrepresentation or breach.
25
10.2 Indemnification by Seller. Subject to the terms and understandings
provided for in the TBA, Seller shall indemnify and hold Buyer harmless against
and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities or damages resulting from
any untrue representation, breach of warranty or nonfulfillment of any
covenants by Seller contained herein or in any certificate, delivered
to Buyer hereunder.
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to the terms hereof;
(c) Any and all losses, liabilities or damages resulting from
Seller's operation or ownership of the Station prior to the Closing
Date, including, without limitation, any and all liabilities arising
under the Licenses or the Assumed Contracts which relate to events
occurring prior to the Closing Date; and
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, and reasonable costs and expenses, incident to
any of the foregoing or incurred in investigating or attempting to
avoid the same or to oppose the imposition thereof.
10.3 Indemnification by Buyer. Buyer shall indemnify and hold Seller
harmless against and with respect to, and shall reimburse Seller for:
26
(a) Any and all losses, liabilities or damages resulting from
any untrue representation, breach of warranty or nonfulfillment of any
covenants by Buyer contained herein or in any certificate delivered to
Seller hereunder;
(b) Any and all obligations assumed by Buyer pursuant to the
terms hereof;
(c) Any and all losses, liabilities or damages resulting from
Buyer's operation or ownership of the Station on or after the Closing
Date, including, without limitation, any and all liabilities or
obligations arising under the Licenses or the Assumed Contracts which
relate to events occurring after the Closing Date or otherwise assumed
by Buyer under this Agreement; and
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, and reasonable costs and expenses, including
reasonable legal fees and expenses, incident to any of the foregoing or
incurred in investigating or attempting to avoid the same or to oppose
the imposition thereof.
10.4 Procedures for Indemnification. The procedures for
indemnification shall be as follows:
27
A. The party claiming the indemnification (the "Claimant")
shall promptly give notice to the party from whom indemnification is claimed
(the "Indemnifying Party") of any claim, whether between the parties or brought
by a third party, specifying in reasonable detail, to the extent known (i) the
factual basis for such claim, and (ii) the amount of the claim. If the claim
relates to an action, suit or proceeding filed by a third party against
Claimant, such notice shall be given by Claimant within five (5) days after
written notice of such action, suit or proceeding was given to Claimant.
Notwithstanding the foregoing, any delay in providing such notice shall not
affect the Claimant's rights hereunder except to the extent the Indemnifying
Party is actually prejudiced by such delay.
B. Following receipt of notice from the Claimant of a claim,
the Indemnifying Party shall have thirty (30) days to make such investigation of
the claim as the Indemnifying Party deems necessary or desirable. For the
purposes of such investigation, the Claimant agrees to make available to the
Indemnifying Party and/or its authorized representative(s) the information
relied upon by the Claimant to substantiate the claim. If the Claimant and the
Indemnifying Party agree at or prior to the expiration of said thirty (30) day
period (or any mutually agreed upon extension thereof) to the validity and
amount of such claim, or if the Indemnifying Party does not respond to such
notice, the Indemnifying Party shall immediately pay to the Claimant the full
amount of the claim. If the Claimant and the Indemnifying Party do not agree
within said period (or any mutually agreed upon extension thereof), the Claimant
may seek appropriate legal remedy.
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C. With respect to any claim by a third party as to which the
Claimant is entitled to indemnification hereunder, the Indemnifying Party shall
have the right at its own expense, to participate in or assume control of the
defense of such claim, and the Claimant shall cooperate fully with the
Indemnifying Party, subject to reimbursement for reasonable actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense.
D. If a claim, whether between the parties or by a third
party, requires immediate action, the parties will make all reasonable efforts
to reach a decision with respect thereto as expeditiously as possible.
E. If the Indemnifying Party does not elect to assume control
or otherwise participate in the defense of any third party claim, it shall be
bound by the results obtained in good faith by the Claimant with respect to such
claim.
F. The indemnification rights provided in Sections 10.2 and
10.3 shall extend to the shareholders, directors, officers, partners employees
and representatives of the Claimant although for the purpose of the procedures
set forth in this Section 10.4, any indemnification claims by such parties shall
be made by and through the Claimant.
10.5 Effect of the TBA. Notwithstanding anything in this Agreement to
the contrary, Seller shall not be obligated to indemnify and hold harmless Buyer
and its shareholders, directors, officers, partners, employees and
representatives from and against, or to reimburse Buyer and its shareholders,
directors, officers, partners, employees and representatives for, any losses,
liabilities or damages arising out of, based
29
upon, or resulting from (I) the inaccuracy of any representation or warrant of
Seller which is contained herein or made pursuant to the terms hereof, if Buyer
has or obtains Knowledge (as hereinafter defined) of such inaccuracy (a) as of
the date hereof or (b) between the date hereof and the Closing Date or (ii)
Seller's breach of or failure to perform any of its covenants or agreements
contained herein or made pursuant to the terms hereof, if Buyer's obligations
under the TBA require Buyer to take the action which would serve as a basis for
a claim by Buyer that Seller had breached or failed to perform any of such
covenants or agreements. In addition to the foregoing, and not in limitation
thereof, to the extent that the TBA and this Agreement are inconsistent with
each other as to the liability and obligations of Buyer and Seller with respect
to the business and operation of the Stations and the Assets, the terms of the
TBA shall govern. As used in this section, Buyer shall be deemed to have
"Knowledge" of a particular fact or other matter if any individual who is
serving as a director, officer or employee of Buyer is actually aware or
reasonably should be aware of such fact or other matter by virtue of the
performance of his duties for Buyer in connection with the TBA.
SECTION 11
MISCELLANEOUS
11.1 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (i) in writing, (ii)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, or by facsimile
transmission, with receipt confirmation, (iii)
30
deemed to have been given on the date of personal delivery or the date set forth
in the records of the delivery service or on the return receipt, and (iv)
addressed as follows:
If to Seller: New Generation Broadcasting, Inc.
Attn:
with a copy ▇▇▇▇▇ ▇. ▇▇▇▇, Co., LPA
(which shall not ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
constitute notice) to: ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: American Radio Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy
(which shall not
constitute notice) to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Vice President & General Counsel
American Radio Systems Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other or additional persons and addresses as the parties may from
time to time designate in a writing delivered in accordance with this Section
11.1.
11.2 Benefit and Binding Effect. Neither party hereto may assign this
Agreement without the prior written consent of the other party hereto,. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
11.3 Governing Law. This Agreement shall be governed, construed, and
enforced in accordance with the laws of the Commonwealth of Massachusetts.
31
11.4 Headings. The headings herein are included for ease of reference
only and shall not control or affect the meaning or construction of the
provisions of this Agreement.
11.5 Gender and Number. Words used herein, regardless of the gender and
number specifically used, shall be deemed and construed to include any other
gender, masculine, feminine or neuter, and any other number, singular or plural,
as the context required.
11.6 Entire Agreement. This Agreement, all schedules hereto, and all
documents and certificates to be delivered by the parties pursuant hereto
collectively represent the entire understanding and agreement between Buyer and
Seller with respect to the subject matter hereof. All schedules attached to this
Agreement shall be deemed part of this Agreement and incorporated herein, where
applicable, as if fully set forth herein. This Agreement supersedes all prior
negotiations between Buyer and Seller, and all letters of intent and other
writings related to such negotiations, and cannot be amended, supplemented or
modified except by an agreement in writing which makes specific reference to
this Agreement or an agreement delivered pursuant hereto, as the case may be,
and which is signed by the party against which enforcement of any such
amendment, supplement or modification is sought.
11.7 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with
32
such obligation, representation, warranty, covenant, agreement or condition
shall not operate as a waiver of, or estoppel with respect to, any subsequent or
other failure. Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 11.7.
11.8 Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable or any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected
thereby and shall be enforced to the greater extent permitted by law.
11.9 Counterparts. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were upon the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed by Buyer and
Seller as of the date first above written.
SELLER: NEW GENERATION BROADCASTING, INC.
By: ________________________________
BUYER: AMERICAN RADIO SYSTEMS CORPORATION
By: ________________________________
Title:
ASSTWXEG.DOC
33
SCHEDULES TO ASSET PURCHASE AGREEMENT
2.2 Excluded Assets
3.4 Licenses
3.5 Real Property
3.6 Personal property
3.7 Assumed Contracts
3.9 Trademarks; trade names; copyrights
3.16 Claims; legal actions
8.2 Opinion of Seller's General and FCC Counsels
8.3 Opinion of Buyer's General Counsel
34
