Exhbibit 10.84
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated October 10,
1996, by and between
American Radio Systems Corporation, a Delaware corporation ("Buyer"), and CBC of
Baltimore, Inc., a North Carolina corporation ("Seller").
P R E M I S E S:
A. Seller is the licensee of and operates radio station WOCT (FM),
Baltimore, Maryland (the "Station") and pursuant to licenses issued by the
Federal Communications Commission (the "FCC").
B. Seller desires to sell, and Buyer wishes to buy, substantially all
of Seller's assets used or useful in the operation of the Station and the
broadcast business made possible thereby for the price and on the terms and
conditions hereafter set forth.
C. Seller and Buyer have contemporaneously entered into a certain Asset
Purchase Agreement concerning the sale of WWMX (FM), Baltimore, Maryland (the
"WWMX Agreements") and intend to close on WWMX and WOCT at the same time.
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 "Accounts Receivable" means the rights of Seller to payment for
services rendered (including sale of time or talent on the Station for cash) by
Seller prior to the TBA Date as reflected on the billing records of Seller
relating to the Station.
1.2 "Assets" means the tangible and intangible assets owned and used or
useful in connection with the conduct of the business or operations of the
Station, which assets are being sold, transferred, or otherwise conveyed to
Buyer hereunder, as specified in detail in Section 2.1.
1.3 "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
or talent on the Station for cash entered into in the ordinary course of
business.
1.4 "Closing" means the consummation of the transaction contemplated by
this Agreement in accordance with the provisions of Section 8.
1.5 "Closing Date" means the date of the Closing specified in Section
8.1.
1.6 "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.
1.7 "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
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upon Seller and directly affect the assets or the business or operations of the
Station, and (i) which are in effect on the date hereof, or (ii) which are
entered into by Seller in the ordinary course of business between the date
hereto and the Closing Date.
1.8 "Escrow Deposit" shall mean the sum of One Million Five Hundred
Thousand Dollars ($1,500,000) held by First Union National Bank as Escrow Agent
pursuant to an Escrow Agreement of even date, by and among Buyer, Seller, and
Escrow Agent.
1.9 "Excluded Assets" shall mean those assets described or set forth in
Section 2.2 herein and on Schedule 2.2 hereto.
1.10 "FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
1.11 "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 Station.
1.12 "Final Order" means a written action, order or public notice
issued by the FCC, setting forth the FCC Consent and (a) which has not been
reversed, stayed, enjoined, set aside, annulled or suspended, and (b) with
respect to which (i) no requests have been filed for administrative or judicial
review, reconsideration, appeal or stay, and the time for filing any such
requests and for the FCC to review the action on its own motion has expired, or
(ii) in the event of review, reconsideration or appeal that does not result in
the FCC consent being reversed, stayed, enjoined, set aside, annulled or
suspended, the time for further review, reconsideration or appeal has expired.
1.13 "Licenses" means all of the licenses and other authorizations,
including the FCC Licenses, and "Permits" means all construction permits and
other permits, 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 Station.
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1.14 "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 the Station, plus such additions thereto and deletions therefrom
arising in the ordinary course of business between the date hereof and the
Closing Date.
1.15 "Purchase Price" means the purchase price specified in Section
2.3.
1.16 "Real Property" means all of the fee estates and other
improvements thereon, leasehold interests, easements, licenses, rights to
access, right-of-way, and other real property interest owned by Seller and
identified on Schedule 3.5 hereof plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
1.17 "TBA Date" means the date of commencement of effectiveness of the
Time Brokerage Agreement.
1.18 "Time Brokerage Agreement" means the Time Brokerage Agreement
entered into by Seller and Buyer in substantially the form set forth in Schedule
6.1 hereto.
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
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permitted in accordance with Section 2.5, 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 and all other
intellectual property and similar intangible assets relating to the Station,
including those listed in Schedule 3.9 hereto;
(f) All of the Seller's proprietary information, which relate
to the Station, including without limitation, technical information and data,
machinery and equipment warranties, maps, computer discs and tapes, plans,
diagrams, blueprints, and schematics, including filings with the FCC which
relate to the Station, if any;
(g) All choices in action and rights under warranties of
Seller relating to the Station or the Assets, if any;
(h) All books and records relating exclusively to the business
or operations of the Station, 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 the following assets, in
addition to those listed on Schedule 2.2:
(a) Seller's cash on hand as of the Closing Date and all other
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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) Any Contracts other than the Assumed Contracts;
(c) 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;
(d) 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;
(e) Any pension, profit-sharing or employee benefit plans, and
any employment or collective bargaining agreement, except to the extent
specifically assumed in Section 2.4, 2.5 or 6.10 of this Agreement.
(f) The Accounts Receivable.
(g) Any other asset of Seller not located at either the
studio/office or transmitter site of Seller, or otherwise herein defined as an
Asset.
2.3 Purchase Price. The Purchase Price shall be Thirty Million Dollars
($30,000,000). The Purchase Price shall be adjusted to reflect (i) any
adjustments or prorations made and agreed to as of the TBA Date as provided in
Section 2.4 herein, (ii) to the extent the parties agree on a specific
allocation of such amount to the Noncompetition Agreement set forth on Section
6.5 herein, and (iii) the increase, if applicable, provided for in Section 6.12
herein.
2.4 Adjustments and Prorations. All revenues arising from the Station
up until midnight on the day prior to the TBA Date, and all expenses arising
from the Station up until
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midnight on the day prior to the TBA Date, including business and license fees
(including any retroactive adjustments thereof), utility charges, real and
personal property taxes and assessments levied against the Assets, accrued
employee benefits such as vacation time and sick time, property and equipment
rentals, applicable copyright or other fees, sales and service charges, taxes
(except for taxes arising from the transfer of the Assets hereunder), and
similar prepaid and deferred items, shall be prorated between Buyer and Seller
in accordance with the principle that Seller shall receive all revenues, and all
refunds to Seller and deposits of Seller held by third parties, and shall be
responsible for all expenses, costs and liabilities allocable to the conduct of
the business or operations of the Station for the period prior to the TBA Date,
and Buyer shall receive all revenues and shall be responsible for all expenses,
costs and obligations allocable to the conduct of the business or operations of
the Station on the TBA Date and for the period thereafter. Buyer shall receive
credit to the extent of the value (as calculated in Seller's financial
statements consistent with past practice) of any and all advertising time to be
run following the TBA Date for which trade or barter consideration has been
received by the Seller prior to the TBA Date.
Notwithstanding the foregoing, there shall be no adjustment for, and
Seller shall remain solely liable with respect to, any Contracts not included in
the Assumed Contracts, or any other obligation or liability not being assumed by
Buyer in accordance with Section 2.5.
A. Any adjustments or prorations will, insofar as feasible, be
determined and paid on the TBA Date, with final settlement and payment being
made in accordance with the procedures set forth in Section 2.4B.
B. Within sixty (60) days after the TBA Date, Buyer shall
deliver to Seller a certificate (the "Adjustment Certificate"), signed by a
senior officer of Buyer after due inquiry by such officer but without any
personal liability to such officer, providing a compilation of the
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adjustments and prorations to be made pursuant to this Section 2.4, including
any adjustments and prorations made at the TBA Date, together with a copy of any
working papers relating to such Adjustment Certificate and such other supporting
evidence as Seller may reasonably request. If Seller shall conclude that the
Adjustment Certificate does not accurately reflect the adjustments and
prorations to be made pursuant to this Section 2.4, Seller shall, within thirty
(30) days after its receipt of the Adjustment Certificate, provide to Buyer its
written statement of any discrepancies believed to exist. ▇▇▇▇▇▇ ▇. ▇▇▇▇ on
behalf of Buyer, and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ on behalf of Seller, or their respective
designees, shall attempt jointly to resolve the discrepancies within fifteen
(15) days after receipt of Seller's discrepancy statement, which resolution, if
achieved, shall be binding upon all parties to this Agreement and not subject to
dispute or review. If such representatives cannot resolve the discrepancy to
their mutual satisfaction within such fifteen (15) day period, Buyer and Seller
shall, within the following ten (10) days, jointly designate a nationally known
independent public accounting firm to be retained to review the Adjustment
Certificate together with Seller's discrepancy statement and any other relevant
documents. The cost of retaining such independent public accounting firm shall
be borne equally by Buyer and Seller. Such firm shall report its conclusions as
to adjustments pursuant to this Section 2.4, which report shall be conclusive on
all parties to this Agreement and not subject to dispute or review. If, after
adjustment as appropriate with respect to the amount of the aforesaid
adjustments paid or credited at the TBA Date, Buyer is determined to owe an
amount to Seller, Buyer shall pay such amount to Seller, and if Seller is
determined to owe an amount to Buyer, Seller shall pay such amount thereof to
Buyer, in each case within ten (10) days of such determination.
2.5 Assumption of Liabilities and Obligations. Except to the extent
otherwise provided for in the Time Brokerage Agreement, Buyer shall pay,
discharge and perform as of the
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Closing Date (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 Station on or after
the Closing Date, and (iii) all obligations and liabilities for which Buyer
receives a proration adjustment hereunder. 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 the Station prior to the
Closing Date, and (iv) those related to employees as set forth in Section 6.9
herein shall remain and be the obligations and liabilities solely of Seller.
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
North Carolina and is duly qualified to conduct its business in the State of
Maryland, which is the only jurisdiction where the conduct of the business or
operations of the Station 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
Station as presently conducted. Seller has all requisite corporate power and
authority to execute and deliver this
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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. Seller is not a participant in any joint
venture or partnership with any other person or entity with respect to any part
of the Station's operations or the Assets.
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 contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) does not require the consent of any third party; (ii)
will not conflict with any provision of the Articles of Incorporation and
By-Laws of Seller; (iii) will not 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; (iv) 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 Seller is a party or
by which may be bound; or (v) will not create any claim, liability, mortgage,
lien, pledge, condition, charge, or encumbrance of any nature whatsoever upon
the Assets.
3.4 Licenses and Permits. Schedule 3.4 includes a true and complete
list of the Licenses and Permits. Seller has delivered to Buyer true and
complete copies of the Licenses
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and Permits (including any and all amendments and other modifications thereto).
As described in Schedule 3.4, the Licenses were validly issued with the Seller
designated thereon being the authorized legal holder thereof. 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 the Station as presently operated. Seller has no reason to believe
that the Licenses will not be renewed by the FCC or other granting authority in
the ordinary course.
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 the Station 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, 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 of 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 all of which are listed
in Schedule 3.5, (iii) liens in favor of Seller's lenders set forth in Schedule
3.5, and (iv) 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 the best of 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 or other material instruments pertaining to the Real
Property (including any and all amendments and
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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. All Real
Property (including the improvements thereof) (i) is in good condition and
repair consistent with its present use reasonable wear and tear excepted, (ii)
is available for immediate use in the conduct of the business or operations of
the Station, and (iii) to Seller's best knowledge materially complies as
described in Schedule 3.5 with all applicable building, electrical and zoning
codes and all regulations of any governmental authority having jurisdiction.
Seller has full legal and practical access to the Real Property.
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 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. Except as shown in Schedule 3.6, the Personal
Property taken as a whole is in good operating condition and repair (ordinary
wear and tear excepted), and is available for immediate use in the business or
operations of the Station, and the transmitting and studio equipment included in
the Personal Property (i) has been maintained consistent with FCC rules and
regulations, and (ii) will permit the Station and any unit auxiliaries thereto
to operate in accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC, and with all other applicable federal, state and local
statutes, ordinances, rules and regulations.
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3.7 Contracts. Schedule 3.7 contains descriptions of all the Contracts
except for: (i) contracts with advertisers for the sale of time or talent on the
Station for cash and substantially at rate card and which are not prepaid and
which may be cancelled by the Station without penalty on not more than thirty
(30) days notice, (ii) employment contracts and miscellaneous service contracts
terminable at will without penalty, and (iii) other contracts not involving
either aggregate liabilities under all such contacts exceeding Twenty Thousand
Dollars ($20,000) 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). Other than the Contracts, the Seller
requires no contract or agreement to enable it to carry on its business as
presently conducted. 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. Except as
expressly set forth in Schedule 3.7, the Seller is not aware of any intention by
any party to any Assumed Contract (i) to terminate such contract or amend the
terms thereof, (ii) to refuse to renew the same upon expiration of its term, or
(iii) to renew the same upon expiration only on terms and conditions which are
more onerous than those pertaining to such existing contract. Except for the
Consents, Seller has full legal power and authority to assign its rights under
the Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability and continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in Section 6.1
and the other Consents indicated in Schedule 3.7 or described in Schedule 3.8,
no consent, approval, permit or
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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 transaction contemplated hereby, (ii) to permit Seller to
assign or transfer the Assets to Buyer, or (iii) to enable Buyer to conduct the
business or operations of the Station in essentially the same manner as such
business or operations are presently conducted.
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, jingles, privileges and other similar intangible property rights and
interests (exclusive of those required to be listed in Schedule 3.4) 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
the Station, all of which are valid and in good standing and uncontested. Seller
has delivered to Buyer copies of all documents establishing such rights,
licenses, or other authority. Seller is not aware that it is infringing upon or
otherwise acting adversely to any trademarks, trade names, copyrights, patents,
patent applications, know-how, methods, or processes owned by any other person
or persons, and there is no claim or action pending, or to the knowledge of
Seller threatened, with respect thereto.
3.10 Financial Statements. True and complete copies of unaudited
financial statements of the Station containing balance sheets and statements of
income as at and for Seller's fiscal years ended December 31, 1993, 1994 and
1995 (collectively, the "Financial Statements") have been supplied to Buyer. The
Financial Statements are prepared in accordance with generally accepted
accounting principles consistently applied, except for the absence of footnotes,
are true and correct in all material respects, and present fairly the operating
income and financial condition of the Station as at their respective dates and
the results of operations for the periods then ended.
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3.11 Insurance. All of the tangible property included in the Assets is
insured against loss or damage in amounts generally customary in the broadcast
industry. Schedule 3.11 comprises a true and complete list of all insurance
policies of Seller which insure any part of the Assets. All policies of
insurance listed in Schedule 3.11 are in full force and effect. During the
three-year period ending on the date hereof, no insurance policy of Seller on
the Assets or the Station has been cancelled by the insurer and no application
of Seller for insurance has been rejected by any insurer.
3.12 Reports. Except where failure to do so would not have a material
adverse effect on the ownership or operation of the Station: 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 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; and the Station's public inspection
file is located at the main studio and is in compliance with the FCC's rules and
regulations.
3.13 Employee Benefit Plans. Schedule 3.7 or Schedule 3.13 contains a
true and complete list as of the date of this Agreement of all employee benefit
plans or arrangements applicable to the employees of Seller employed at the
Stations, and all fixed or contingent liabilities or obligations of Seller with
respect to any person now or formerly employed by Seller at the Station,
including pension or thrift plans, individual or supplemental pension or accrued
compensation arrangements, contributions to hospitalization or other health or
life insurance programs, incentive plans, bonus arrangements and vacation, sick
leave, disability and termination arrangements or policies, including workers'
compensation policies. Seller has furnished or made available to Buyer true and
complete copies of all written documents or information with respect to employee
matters and arrangements at the Station, including without
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limitation, all employee handbooks, rules and policies, plan documents, trust
agreements, employment agreements, summary plan descriptions, and descriptions
of any unwritten plans listed in Schedule 3.13. Any employee benefits and
welfare plans or arrangements listed in Schedule 3.13 were established and have
been executed, managed and administered without material exception in accordance
with all applicable requirements of the Internal Revenue Code of 1986, as
amended, of the Employee Retirement Income Security Act of 1974, as amended, and
of other applicable laws. Seller is not aware of the existence of any
governmental audit or examination of any of such plans or arrangements or of any
facts which would lead it to believe that any such audit or examination is
pending or threatened. There exists no action, suit or claim (other than routine
claims for benefits) with respect to any of such plans or arrangements pending
or, to the knowledge of Seller, threatened against any of such plans or
arrangements, and Seller possesses no knowledge of any facts which could give
rise to any such action, suit or claim.
3.14 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to the Station except as described
in Schedule 3.7 hereto. Seller has no written or oral contracts of employment
with any employee of the Station, other than those listed in Schedule 3.7.
Seller has provided Buyer with true and complete copies of all such written
contracts of employment and true and complete memoranda of any such oral
contracts. Seller, in the operation of the Station, has complied in all material
respects with all applicable laws, rules and regulations relating to the
employment of labor, including those related to wages, hours, collective
bargaining, occupational safety, discrimination, and the payment of social
security and other payroll related taxes, and it has not received any notice
alleging that it has failed to comply in any material respect with any such
laws, rules or regulations. No controversies, disputes, or proceedings are
pending or, to the best of its knowledge, threatened, between it and employees
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(collectively) of the Station. No labor union or other collective bargaining
unit represents any of the employees of the Station. To the best knowledge of
Seller, there is no union campaign being conducted to solicit cards from
employees to authorize a union to request a National Labor Relations Board
certification election with respect to any of Seller's employees at the Station.
3.15 Taxes. Seller has filed or caused to be filed all federal income
tax returns and all other federal, state, county, local or city tax returns
which are required to be filed, and it has paid or caused to be paid all taxes
shown on said returns or on any tax assessment received by it to the extent that
such taxes have become due, or has set aside on its books reserves (segregated
to the extent required by sound accounting practice) deemed by it to be adequate
with respect thereto. No events have occurred which could impose on Buyer any
transferee liability for any taxes, penalties or interest due or to become due
from Seller.
3.16 Claims, Legal Actions. Except as set forth in Schedule 3.16, and
except for any investigations and rule-making proceedings generally affecting
the broadcasting 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 Station, nor does Seller know of any basis for
the same. In particular, except as set forth in Schedule 3.16, but without
limiting the generality of the foregoing, there are no applications, complaints
or proceedings pending or, to the best of its knowledge, threatened (i) before
the FCC relating to the business or operations of the Station other than
applications, complaints or proceedings which affect the radio industry
generally, (ii) before any federal or state agency involving charges of illegal
discrimination by the Station under any federal or state employment laws or
regulations, or (iii) against Seller or the Station before any federal, state or
local agency involving environmental or zoning laws or regulations.
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3.17 Compliance with Laws. To the best 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 relating to the
Station. To the best 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.
3.18 Environmental Matters.
(a) During Seller's period of ownership and, to the best
knowledge of Seller, during those of its Predecessor, there has been no
production, storage, treatment, recycling, disposal, use, generation, discharge,
release or other handling or disposition of any kind by Seller or any such
predecessor (collectively, "Handling") of any toxic or hazardous wastes,
substances, products, pollutants or materials of any kind, including, without
limitation, petroleum and petroleum products and asbestos, or any other wastes,
substances, products, pollutants or material regulated under any Environmental
Laws (as defined below) (collectively, "Hazardous Materials") at, in, on, from
or under the Real Property or any structure or improvement on the Real Property
which in any event is in material violation of environmental law. The operations
of Seller and, to Seller's best knowledge, those of its Predecessor, are and
have been conducted, as the case may be, in material compliance with all
applicable environmental laws. There are no pending or threatened actions,
suits, claims, demands, legal proceedings, administrative proceedings, requests
for information, or other notices, proceedings or requests (collectively,
Claims") against or upon Seller based on or relating to any Pre-Closing
Environmental Matters (as defined below) and Seller has no knowledge that any
such claims will be asserted. Environmental Laws means any and all Federal,
state or local laws, statutes, rules, regulations, plans, ordinances, codes,
licenses or other restrictions relating to health, safety or the environment,
including without limitation the Comprehensive Environmental Response,
18
Compensation and Liability Act, the Clean Air Act, the Safe Drinking Water Act,
the Toxic Substances Control Act and the Occupational Health and Safety Act.
Pre-Closing Environmental Matters means (i) the Handling of Hazardous Materials
on, at, in, from or under the Real Property prior to the Closing Date, including
without limitation, the effects of any Handling of Hazardous Materials within or
outside the boundaries of Real Property, the presence of any Hazardous Materials
in, on or under the Real Property or any improvements or structures thereon
regardless of how such Hazardous Materials came to rest there, (ii) the failure
of Seller to be in compliance with Environmental Law or (iii) any other act,
omission, event or condition which could give rise to liability or potential
liability under any Environmental Law with respect to the Real Property or the
present or prior business of Seller.
(b) Buyer shall be entitled to order and have undertaken on
its behalf prior to closing a Phase I Environmental Assessment of the Real
Property, and shall be granted all cooperation and access by Seller reasonably
necessary to complete such Assessment. If the report of such Assessment
demonstrates or recommends remediation in order to cause the Real Property to
comply with Environmental Laws, Seller shall immediately undertake to arrange,
at its own expense, such remediation prior to Closing. Notwithstanding the
foregoing, in the event such remediation costs or is estimated to cost in excess
of Fifty Thousand Dollars ($50,000), Seller shall not be obligated to expend
such excess, but in such event Buyer may thereafter, at its option, (i) accept
the condition of the Real Property at Closing as so remediated, or (ii)
terminate its obligations to purchase the Station under this Agreement.
3.19 Full Disclosure. No representation or warranty made by Seller
herein nor any certificate, document or other instrument furnished or to be
furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact made intentionally or in bad faith,
19
or intentionally or in bad faith omits or will omit to state any material fact
known to Seller and required to make the statements herein or therein not
misleading.
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 shall be, at Closing, qualified to conduct business in the State
of Maryland. Buyer 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 Buyer hereunder and thereunder.
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) does not require the consent of any third party; (ii)
will not conflict with the Certificate of Incorporation or Bylaws of Buyer;
(iii) will not conflict with, result in a breach of, or constitute a default
under, or accelerate or
20
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, permits and authorizations listed on Schedule 3.4
hereto, or as an owner and/or operator of the Station's Assets, and Buyer will
not take, or unreasonably fail to take, any action which Buyer knows or has
reason to know would cause such disqualification (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. Buyer further represents and warrants that it is financially
qualified to meet all terms, conditions and undertakings contemplated by this
Agreement.
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,
between the date hereof and the Closing Date, Seller shall, subject to the terms
of the Time Brokerage Agreement, 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:
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(1) Compensation. Increase the compensation, bonuses
or other benefits payable or to be payable to any person employed in connection
with the conduct of the business or operations of the Station, except in
accordance with past practices;
(2) Contracts. Enter into any new Contracts except
with prior notice to Buyer if any one such Contract exceeds Five Thousand
Dollars ($5,000) in value or payments, or if such Contracts in the aggregate
exceed Twenty Thousand Dollars ($20,000) in value or payment;
(3) 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;
(4) 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 2.5, 3.5 or 3.6 and (ii) mechanics' liens and other similar liens which
will be removed prior to the Closing Date;
(5) Licenses. Do any act or fail to do any act which
resulted in the expiration, revocation, suspension or modification of any of the
Licenses, or fail to prosecute with due diligence any applications to any
governmental authority in connection with the operation of the Station;
(6) Rights. Waive any material right relating to the
Station or the Assets; or
(7) 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 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;
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(2) Maintenance of Assets. 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 above 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;
(4) Consents. 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) Contracts. Prior to the Closing Date, deliver to
Buyer a list of all Contracts entered into between the date hereof and the
Closing Date of the type required to be listed in Schedule 3.7, together with
the copies of such Contracts; and
(7) 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.
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 FCC
Consent. The parties shall prosecute said application with all reasonable
diligence and otherwise use their best efforts to
23
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, (ii) compliance by the parties hereto with the condition
(if any) imposed in the FCC Consent, and (iii) the FCC Consent, through the
passage of time or otherwise, becoming a Final Order, provided, though, that the
condition that the FCC Consent shall have become a Final Order may be waived by
Buyer, in its sole discretion.
6.2 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. All filing fees required by the FCC and the FTC (for
the HSR Filing) shall be paid equally by Seller and Buyer. 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.
6.3 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.
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6.4 Time Brokerage Agreement. Buyer and Seller have entered into a Time
Brokerage Agreement attached hereto in Schedule 6.4.
6.5 Noncompetition Agreement. Buyer and Seller shall enter into at
Closing a Noncompetition Agreement in the form set forth in Schedule 6.5.
6.6 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 all
documents, work papers and other written material obtained by it in connection
with the transaction contemplated hereby.
6.7 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 and 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, or (ii) to agree to any
adverse change in any License or Assumed Contract to obtain a Consent required
with respect thereto.
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6.8 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
Closing Date, the Closing Date 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.
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.
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6.9 Employee Matters.
A. Prior to or simultaneously with the execution of this
Agreement, Seller shall have provided to Buyer an accurate list of all current
employees of the Station together with a description of the terms and conditions
of their respective employment (including salary, bonus and other benefit
arrangements) and their duties as of the date of this Agreement, as well as the
annual salaries thereof. Seller shall promptly notify Buyer of any changes that
occur prior to Closing with respect to such information.
B. Nothing contained in this Agreement shall confer upon any
employee of Seller any right with respect to continued employment by Buyer, nor
shall anything herein interfere with any right the Buyer may have after the TBA
Date to (i) terminate the employment of any of the employees then of Buyer at
any time, with or without cause, or (ii) establish or modify any of the terms
and conditions of the employment of the Buyer's employees in the exercise of its
independent business judgment.
C. Except as otherwise set forth herein, Buyer will not incur
any liability on account of Seller's employees in connection with the
transaction, including, without limitation, any liability on account of
unemployment insurance contributions, termination payments, retirement, pension,
profit-sharing, bonus, severance pay, disability, health, accrued vacation,
accrued sick lease (unless a pro-rated adjustment is made as to vacation or sick
leave) or other employee benefit plans, practices, agreements, or
understandings.
6.10 Accounts Receivable. At the TBA Date, Seller shall assign to Buyer
for collection purposes only all Accounts Receivable. Seller shall deliver to
Buyer on or as soon as practicable after the TBA Date a complete and detailed
statement showing the name, amount and age of each Account Receivable. Subject
to and limited by the following, collections of the Accounts Receivable will be
for the account of Seller. Buyer shall endeavor in the ordinary
27
course of business to collect the Accounts Receivable for a period ending upon
the later of (i) ninety (90) days after the TBA Date or (ii) the Closing Date
(the "Collection Period"). Any payment received by Buyer during the Collection
Period from any customer with an account which is an Account Receivable shall
first be applied in reduction of the Account Receivable. During the Collection
Period, Buyer shall furnish Seller with a list of, and pay over to Seller, the
amounts collected during such calendar month with respect to the Accounts
Receivable on a monthly basis. Buyer shall provide Seller with a final
accounting on or before the fifteenth (15th) day following the end of the
Collection Period. Upon the request of either party at and after such time,
Buyer and Seller shall meet to mutually and in good faith analyze any
uncollected Account Receivable to determine if the same, in their reasonable
business judgment, are deemed to be collectable and if Buyer desires to retain
such Account in the interest of maintaining an advertising relationship. As to
each such Account, Buyer and Seller shall negotiate a good faith value of such
Account, which Buyer shall pay to Seller if Buyer, in its sole discretion,
chooses to retain such Account. Seller shall retain the right to collect any
Account as to which the parties are unable to reach agreement as to a good faith
value, and Buyer agrees to turn over to Seller any payments received against any
such Account. As Seller's agent, Buyer shall not be obligated to use any
extraordinary efforts or expend any sums to collect any of the Accounts
Receivable assigned to it for collection hereunder or to refer any of such
Accounts Receivable to a collection agency or to any attorney for collection,
and Buyer shall not make any such referral or compromise, nor settle or adjust
the amount of any such Account Receivable, except with the approval of Seller.
Buyer shall incur no liability to Seller for any uncollected account unless
Buyer shall have engaged in willful misconduct or gross negligence in the
collection of such account. During and after the Collection Period, without
specific agreement with Buyer to the contrary, neither Seller nor its agents
shall make any direct solicitation of the
28
Accounts Receivable for collection purposes except for Accounts retained by
Seller after the Collection Period.
6.11 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 Station for the period of Seller's
ownership thereof. Seller further agrees to authorize the disclosure of such
audited financial information is required by applicable law, regulations or
rules of any administrative or governmental agency, stock exchange or
self-regulatory agency.
6.12 HSR Filing. Buyer and Seller agree to fully cooperate in the
timely preparation and filing of all forms, documents and applications required
under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act in conjunction with the transaction contemplated
hereunder (the "HSR Filing") in order to obtain necessary clearance thereunder.
Buyer and Seller further agree to diligently prosecute such application, and to
promptly respond to all inquiries and requests for further information
associated with such application.
6.13 Sale of WWMX(FM). Buyer and Seller specifically acknowledge their
intent that WOCT(FM) and WWMX(FM) be sold together and the Seller shall have no
obligation to sell either station unless Buyer purchases both. All provisions of
this Agreement and all other agreements shall be construed to effectuate this
intent.
SECTION 7
CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER
7.1 Conditions of Obligations of 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
29
conditions any of which may be waived by Buyer in whole or in part in its sole
discretion in writing:
A. Representations and Warranties. The representations and
warranties of Seller in this Agreement shall be true and complete in all
material respects at and as of the Closing Date, except for changes contemplated
by this Agreement or as contemplated by the TBA, as though such representations
and warranties were made at and as of such time.
B. Covenants and Conditions. Seller shall have in all material
respects performed and complied with the covenants, agreements, and conditions
required by this Agreement or as contemplated by the TBA to be performed or
complied with by it prior to or on the Closing Date.
C. Consents. Each of the Consents marked as "material" on
Schedule 3.7 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.
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 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
F. Financial Results. Seller shall have achieved Broadcast
Cash Flow at the Station, when combined with that of WWMX, of no less than Five
Million Dollars ($5,000,000) during the twelve month period ended June 30, 1996.
For this purpose, Broadcast Cash Flow shall mean net income from advertising
time sales excluding non-cash barter or trade transactions, if any, and after
restoring thereto amounts previously deducted for depreciation,
30
amortization, interest, management fees, retirement benefits and any other home
office allocations.
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 of which may be waived by Seller in
whole or in part in its sole discretion in writing:
A. Representations and Warranties. The representations and
warranties of Buyer contained in this Agreement shall be true and complete 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 time.
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. Buyer shall have closed upon the purchase of substantially all
of the assets of station WWMX(FM).
C. Deliveries. Buyer shall have made or stand willing and able
to make all the deliveries set forth in Section 8.3
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 no less than five (5) and no more than fifteen (15) business
days written notice to Seller, upon the later of (i) the day upon which the FCC
Consent has become a Final Order, and (ii) January 1, 1997 (the "Closing Date"),
provided, though, that Buyer may waive the requirement for a Final Order and
schedule the Closing Date, with five (5) days written notice to Seller, at
31
any time after the receipt of FCC Consent. The closing of stations WWMX and WOCT
shall occur simultaneously. Closing shall be held at the offices of Buyer 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 as
"material" 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 or the TBA, 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;
(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 good standing certified by an appropriate Maryland
state official; 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
Articles of Incorporation and By Laws as in effect on the date hereof, certified
by Seller's Secretary as of the Closing Date;
(e) Tax, Lien and Judgment Searches. A search for UCC, lien
and judgment filings in the Secretary of State's records of the State of
Maryland, and in the records of those towns or cities where the Assets are
located, such searches having been made no earlier than fifteen (15) days prior
to the Closing Date;
(f) Licenses, Contracts, Business Records, Etc. Copies, if
available, of all licenses, Assumed Contracts, blueprints, schematics, working
drawings, plans, projections,
32
statistics, engineering records, and all files and records used by Seller in
connection with its operations of the Station;
(g) Noncompetition Agreement. The Noncompetition Agreement as
set forth in Schedule 6.5; and
(h) 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.
(i) Escrow Instructions. Joint instructions with Buyer to
Escrow Agent with respect to payment of Escrow Deposit to Seller as a portion of
the Purchase Price.
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 Purchase Price as provided in Section
2.3;
(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations under the Licenses and Assumed Contracts arising on or after the
Closing Date;
(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;
(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 date hereof,
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.
(f) Noncompetition Agreement. The Noncompetition Agreement as
set forth in Section 6.5.
33
(g) Escrow Instructions. Joint instructions with Seller to
Escrow Agent with respect to payment of Escrow Deposit to Seller as a portion of
the Purchase Price.
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; or
(c) If the Closing shall not have occurred on or before
January 1, 1998.
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 liquidated damages
as provided in Section 9.2 hereof. If, upon termination, Buyer shall not be in
breach of any material provision of this Agreement, the Escrow Deposit, plus all
interest or other proceeds from the investment thereof, less any compensation
due the Escrow Agent, shall be paid to Buyer.
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9.2 Liquidated Damages. In the event this Agreement is terminated by
Seller due to a material breach by Buyer of its representations, warranties,
covenants and other obligations under this Agreement, then the Escrow Deposit
shall be paid to Seller as liquidated damages, it being agreed that the Escrow
Deposit shall constitute full payment for any and all damages suffered by Seller
by reason of Buyer's failure to close this Agreement. Buyer and Seller agree in
advance that actual damages would be difficult to ascertain and that the amount
of the Escrow Deposit is a fair and equitable amount to reimburse Seller for
damages sustained due to Buyer's failure to consummate this Agreement for the
above-stated reason. All interest or other proceeds from the investment of the
Escrow Deposit, less any compensation due the Escrow Agent, shall be paid to
Seller.
9.3 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, in
addition to any other remedies which may be available, including money damages,
to obtain specific performance of the terms of this Agreement. In the event of
any action to enforce this Agreement, Seller hereby waives the defense that
there is an adequate remedy at law.
9.4 Expenses Upon Default. 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.
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SECTION 10
SURVIVAL OF REPRESENTATIONS AND WARRANTIES,
AND INDEMNIFICATION
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties, and shall survive to the Closing Date, together with the covenants
contained herein, for a period of fifteen (15) months (the "Survival Period").
No claim for indemnification may be made under this Section 10 (except for
section 10.3(a) or related claims under Section 10.3(c)) after the expiration of
the Survival Period. 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.
10.2 Indemnification by Seller. Seller and Seller's parent, Capital
Broadcasting Company, Inc. shall jointly and severally 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 any and all liabilities arising under the Licenses or the Assumed
Contracts which relate to events occurring prior to the Closing Date; and
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(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:
(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 losses, liabilities or damages resulting from
Buyer's operation or ownership of the Station on or after the Closing Date,
including 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
(c) 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:
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 (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.
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
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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. Buyer shall be entitled to apply any
or all of the Accounts Receivable collected on behalf of Seller to a claim as to
which Buyer is entitled to indemnification hereunder. 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.
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
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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.
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) 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: Capitol Broadcasting Company, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy
(which shall not
constitute notice) to: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. Vice President
Capitol Broadcasting Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer: American Radio Systems
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy
(which shall not
39
constitute notice) to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President & General Counsel
American Radio Systems, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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, except
that Buyer may assign its rights and obligations under this Agreement to any
affiliated or unaffiliated entity, provided, however, that following which
assignment Buyer shall remain liable to Seller for all of Buyer's obligations
hereunder. 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 State of Maryland.
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, the Time
Brokerage Agreement, and the WWMX Agreements, 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
40
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 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 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: CBC OF BALTIMORE, INC.
By:_________________________________
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BUYER: AMERICAN RADIO SYSTEMS CORPORATION
By:_________________________________
Title:
FOR THE PURPOSES OF
SECTION 10 ONLY:
CAPITOL BROADCASTING COMPANY, INC.
By:_____________________________________
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