EXHIBIT 10.06.03.01
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated March 28, 1996, by and between
American Radio Systems Corporation, a Delaware corporation ("Buyer"), and Common
Ground Broadcasting, Inc., an Oregon corporation ("Seller").
PREMISES:
A. Seller is the licensee of and operates radio station KDBX(FM), Banks,
Oregon (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.
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 Closing Date as reflected on the billing records of Seller relating
to the Station.
1
1.2 "Assets" means the tangible and intangible assets owned by Seller 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,
and which are specified in detail in Section 2.1.
1.3 "Back Bay" shall mean Back Bay Broadcasters, Inc., a Delaware
corporation, and shall include its successors and assigns.
1.4 "Back Bay Agreement" shall mean the Agreement, dated March 15, 1994, by
and between American and Back Bay, as from time to time amended.
1.5 "Assumed Contracts" means (i) all agreements listed in Schedule 3.6,
and (ii) any agreements entered into by Seller in the ordinary course of
business between the date hereof and the Closing Date which Buyer agrees in
writing to assume.
1.6 "Closing" means the consummation of the transaction contemplated by this
Agreement in accordance with the provisions of Section 8.
1.7 "Closing Date" means the date of the Closing specified in Section 8.1.
1.8 "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 agreements designated in
Schedule 3.6 with an asterisk.
1.9 "Escrow Deposit" shall mean the sum of Five Hundred Thousand Dollars
($500,000) held by Media Venture Partners as Escrow Agent pursuant to an Escrow
Agreement of even date, by and among Buyer, Seller, and Escrow Agent in the form
of Schedule 1.9 hereto.
1.10 "Excluded Assets" shall mean those assets described or set forth in
Section 2.2 herein and on Schedule 2.2 hereto.
1.11 "FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
2
1.12 "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.
1.13 "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.
1.14 "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 Station.
1.15 "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 by Seller and which
are set forth on Schedule 3.5, plus such additions thereto and deletions
therefrom arising in the ordinary course of business between the date hereof and
the Closing Date.
1.16 "Purchase Price" means the purchase price specified in Section 2.3.
3
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 2.5, 3.5 or 3.6 below), more specifically described as follows:
(a) The Personal Property;
(b) The Licenses;
(c) The Assumed Contracts;
(d) All trademarks, trade names, service marks and all other
information and similar intangible assets relating to the Station,
including those listed in Schedule 3.8 hereto;
(e) 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;
(f) All choses in action and rights under warranties of Seller relating
to the Station or the Assets, if any;
(g) 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
4
have such books and records made available to Seller for a reasonable
period, not to exceed three (3) years; and
(h) All intangible assets of Seller relating to the Station not
specifically described above.
2.2 Excluded Assets. The Assets shall exclude the following assets:
---------------
(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) Seller's Accounts Receivable
(c) Any agreements other than the Assumed Contracts;
(d) 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;
(e) Any and all claims of Seller with respect to transactions prior
to the Closing Date, including without limitation 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;
(f) Any pension, profit-sharing or employee benefit plans, and any
employment or collective bargaining agreement.
2.3 Purchase Price. The Purchase Price shall be Fourteen Million
--------------
Dollars - ($14,000,000). The Purchase Price shall be (i) adjusted to reflect any
adjustments or prorations made and agreed to at Closing as provided in Section
2.4 hereof, and (ii) shall be increased by the amount of payments, if any, made
prior to Closing by Seller to Combined Communications, Inc. pursuant to the
Assumed Contract relating to Combined Communications, Inc. described in Schedule
3.6.
5
2.4 Adjustments and Prorations. All revenues arising from the Station up
--------------------------
until midnight on the Closing Date, and all expenses arising from the Station up
until midnight on the Closing Date, including business and license fees
(including any retroactive adjustments thereof), utility charges, real and
personal property taxes and assessments levied against the Assets, 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 Closing 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 Closing Date and for the
period thereafter.
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 Closing 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 Closing Date, Buyer shall deliver to
Seller a certificate (the "Closing 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 adjustments and prorations to be
made pursuant to this Section 2.4, including any adjustments and prorations made
at Closing, together with a copy of any working papers relating to such Closing
Certificate and such other supporting evidence as
6
Seller may reasonably request. If Seller shall conclude that the Closing
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 Closing Certificate, provide to Buyer its written statement
of any discrepancies believed to exist. Joseph L. Winn on behalf of Buyer, and
Dirk Gastaldo 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 Closing 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 Closing, 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. 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
Station on or after the Closing Date, and (iii) all obligations and liabilities
for which
7
Buyer receives a proration adjustment hereunder. All other obligations and
liabilities of Seller, including (i) any obligations under any agreement 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) any liabilities or obligations to
Seller's employee (including obligations for accrued vacation or sick pay and
severance pay), 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
Oregon and is duly qualified to conduct its business in the state of Oregon,
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 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
8
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
either 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 either Seller is a party or by
which either 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. 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). 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.
9
3.5 Title to and Condition of Personal Property. Schedule 3.5 contains a
-------------------------------------------
description of the items of Personal Property of the Station which shall be
conveyed to Buyer at Closing. Except as described in Schedule 3.5, Seller owns
and has good title to all Personal Property. None of the Personal Property 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 3.5 and annotated to indicate that such claims or encumbrances shall be
removed prior to or at Closing. Except as shown in Schedule 3.5, 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
operation 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.
3.6 Assumed Contracts. Schedule 3.6 contains descriptions of all the Assumed
-----------------
Contracts. Seller has delivered to Buyer true and complete copies of all Assumed
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 Assumed Contracts. Except as expressly
set forth in Schedule 3.6, 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
10
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.
3.7 Consents. Except for the FCC Consent provided for in Section 6.1 and the
--------
other Consents indicated in Schedule 3.6 or described 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 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.
3.8 Trademarks, Trade Names and Copyrights. Schedule 3.8 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.
3.9 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 3.9 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 3.9 are in full force and effect. Since the date of
Seller's acquisitions of the Station, no insurance policy
11
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.
3.10 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 US National Bank in Banks, Oregon and is in compliance
with the FCC's rules and regulations.
3.11 Labor Relations. Seller is not a party to or subject to any collective
---------------
bargaining agreements with respect to the Station. 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 (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.
3.12 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
12
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.
3.13 Claims, Legal Actions. 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, 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.
3.14 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. 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.
3.15 Environmental Matters.
---------------------
(a) During Seller's period of ownership 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
13
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 Station's transmission site
(the "Site") or any structure or improvement on the Site which in any event is
in material violation of Environmental Law. The operations of Seller at the
Site, 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, 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 any
Hazardous Materials on, at, in, from or under the Site prior to the Closing
Date, including without limitation, the effects of any Handling of Hazardous
Materials within or outside the boundaries of the Site, the presence of any
Hazardous Materials in, on or under the Site or any improvements or structures
thereon regardless of how such Hazardous Materials came to
14
rest there, (ii) the failure of Seller to be in compliance with any
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 Site 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 at the Site, and shall be
granted all cooperation and access by Seller reasonably necessary to complete
such Assessment. If the report of such Assessment, which shall be completed and
furnished to Seller no later than forty (40) days following the date hereof,
demonstrates or recommends remediation in order to cause the Site 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 Site at Closing as so remediated, or (ii) terminate its obligations to
purchase the Station under this Agreement.
3.16 Conduct of Business in Ordinary Course. Since August 1, 1995, Seller
--------------------------------------
has conducted the business and operations of the Station only in the ordinary
course and has not:
(a) Suffered any material adverse change in the business assets or
properties, or condition of the Station, including without limitation any
damage, destruction or loss affecting the Assets;
(b) Made any sale, assignment, lease or other transfer of any of
Seller's properties other than in the normal and usual course of business
with suitable replacements being obtained therefor.
15
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 Oregon. 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 Articles of Incorporation or Bylaws of Buyer; (iii) will not
conflict with, result in a breach of, or 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.
16
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 and that all necessary amounts to or approvals of this transaction by
Buyer's lenders have been obtained.
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 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) Contracts. Modify or amend any of the Assumed Contracts;
---------
(2) 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;
17
(3) 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 Schedule 3.5, or permitted by Section
2.5 or 3.5 and (ii) mechanics' liens and other similar liens which will be
removed prior to the Closing Date;
(4) Programming. Make any material changes in the broadcast hours or
-----------
in the percentages of types of programming broadcast by the Station, or
make any other material changes in the Station's programming policies,
except such changes as in the good faith judgment of the Seller are
required by the public interest;
(5) Licenses. Do any act or fail to do any act which might result 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, agreements 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;
18
(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) Books and Records. Maintain its books and records in accordance
-----------------
with past practices;
(6) 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;
(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.
19
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 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 Signal Upgrade Application. Buyer shall afford Seller full permission
--------------------------
and cooperation to seek an upgrade of the Station's signal to Class C-1 under
FCC rules and proceedings. Without limitation, Buyer (i) shall be Framed full
access to the technical facilities and records of the Station in Seller's
possession, and (ii) shall be entitled to prepare and submit to the FCC such
filings and applications as it deems advisable in order to prosecute such signal
upgrade. Seller shall (i) continue using its best efforts to cause the licensee
of KLLR(FM), Redmond, Oregon to join in and file positive Joint Comments with
the FCC with respect to the such proceeding insofar as the change in frequency
of KLLR is required therefor, and (ii) consent to or execute on its behalf as
licensee any such filings or applications required in conjunction with the
signal upgrade application. All expenses and fees associated with such
application shall be borne solely by Buyer.
20
6.3 Control of the Station. Buyer shall not, directly or indirectly,
----------------------
control, supervise, direct, or attempt to control, supervise or direct, the
operations of the Station; such operations, including complete control and
supervision of all of the Station's programs, employees, and policies, shall be
the sole responsibility of Seller until the completion of the Closing hereunder.
6.4 Taxes, Fees and Expenses. Seller and Buyer shall each pay 50% of all
------------------------
sales, gains, 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 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.
6.5 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, except for Media Venture Partners, whose fee
shall be the responsibility of Seller, provided that Buyer shall contribute
thereto the amount of One Hundred Thousand Dollars ($100,000).
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
21
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.
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
22
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.
6.9 Audit Cooperation. Seller agrees to fully cooperate, and use reasonable
-----------------
efforts to cause their 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.
6.10 Back Bay Transaction. Buyer has heretofore delivered to Seller a true,
--------------------
correct and complete copy of the Back Bay Agreement as in effect on the date
hereof. Pursuant to the Back Bay Agreement, American has the freely assignable
right (a) at any time after August 31, 1998 to purchase (the "Purchase Right")
all of the business and assets of Back Bay, including without limitation the
WBNW Business (as defined in the Back Bay Agreement), and (b) of first refusal
(the "Right of First Refusal") in the event Back Bay desires to sell, transfer
or otherwise dispose of all or any material portion of the business and assets
of Back Bay, including without limitation the WBNW Business. Buyer hereby agrees
that Seller shall have the right (the "WBNW Purchase Right"), but not the
obligation, to purchase the WBNW Business for $6,000,000 by written notice (the
"Election Notice") given to and received by Buyer at any time prior to January
1, 1998. Anything herein to the contrary notwithstanding, if Buyer has not
received the Election
23
Notice prior to January 1, 1998, all rights of Seller to purchase the WBNW
Business shall cease and terminate and by of no further force and effect.
The Election Notice shall constitute a representation that Seller is ready,
willing and able, and has the financial resources, to purchase the WBNW Business
for $6,000,000 and that it will negotiate in good faith with respect to and
execute and deliver a purchase and sale agreement on terms and conditions
customary with respect to similar transactions with Buyer (or, at Buyer's
discretion, with Back Bay) to purchase the WBNW Business. Buyer agrees that it
will cooperate in all reasonable respects with Seller in order to enable it to
exercise the WBNW Purchase Right, including without limitation (a) advising
Seller promptly of buyer's receipt of any Asset Transfer Notice pursuant to the
provisions of Section 4.13 of the Back Bay Agreement, and (b) exercising any and
all of its rights under the Back Bay Agreement, including without limitation the
exercise by Buyer of the Right of First Refusal and the Purchase Right.
Seller acknowledges and agrees that (a) Buyer's rights with respect to the
Purchase Rights and the Right of First Refusal apply or may apply, as the case
may be, to all of the business and assets of Back Bay and, therefore, Buyer may
be required to acquire businesses and assets other than the WBNW Business in
order to enable Seller to exercise its WBNW Purchase Rights, and (b) the
purchase price to be paid by Buyer pursuant to the exercise of (i) the Purchase
Rights will be based on a formula set forth in the Back Bay Agreement and (ii)
the Right of First Refusal will be based on a third party offer. Accordingly,
Buyer and Seller acknowledge and agree that the amount required to be paid by
Buyer for the WBNW Business may be more or less than $6,000,000 and that Buyer
will, therefore, be required to pay any excess of the purchase price over
$6,000,000, and will be entitled to any excess of $6,000,000 over such purchase
price.
Buyer agrees that, in the event Seller purchases the WBNW Business pursuant
to the exercise of the WBNW Purchase Right, from and after the consummation of
such transaction, Buyer will assume, at no expense to Seller, fifty percent
(50%) of the base
24
rental fees payable under the WBNW tower site lease between Back Bay and
Fellsway Plaza Trust, dated December 14, 1987, as amended to the date hereof
(the "WBNW Tower Lease"), or any extension or renewal therefore. Seller agrees
that Buyer shall have the fight to manage, sublease and develop the tower site
covered by the WBNW Tower Lease so long as such activities do not disrupt or
interfere with, in either case in any material manner, with the operations of
the WBNW Business.
Buyer acknowledges its right of specific performance with respect to the
purchase of the WBNW Business pursuant to Section 11.13 of the Back Bay
Agreement and agrees to use its best efforts to enforce, and to assist Seller in
enforcing, such fights to purchase the WBNW Business. Buyer further agrees not
to take any action, and to use its best efforts not to allow any action to take
place, which would impair or abrogate its fight to purchase the WBNW Business
pursuant to the Back Bay Agreement.
The parties recognize that the WBNW Business is of a special, unique and
extraordinary character. Accordingly, if Seller is unable to acquire the WBNW
Business by reason of Buyer failing to have complied with its agreements under
this Section 6.10, Seller shall be entitled to bring an action against Buyer for
damages or, in lieu of, and in substitution for any damages, to obtain specific
performance of the terms of this Section 6.10. In the event of any action to
enforce the provisions of this Section 6.10, Seller hereby waives the defense
that there is an adequate remedy at law.
The provisions of this Section 6.10 shall survive the termination of this
Agreement if this Agreement is terminated by reason of the fault or default of
Buyer. If this Agreement is terminated for any reason other than the fault or
default of Buyer, the provisions of this Section 6.10 shall be of no force and
effect.
6.11 Cooperation Regarding Tax Free Exchange. The parties acknowledge that
---------------------------------------
Seller may desire to effectuate a tax-deferred exchange pursuant to Section 1031
of the Internal Revenue Code (which may include a nonsimultaneous exchange),
with respect to
25
the sale of the assets of the Station; however, such an exchange shall not be a
condition or obligation of Seller under this Agreement.
Buyer agrees to cooperate with Seller in connection therewith, provided:
(a) There is no additional cost or expense to Buyer, Seller shall
reimburse Buyer for the actual amount of reasonable attorneys' fees and
other expenses incurred by Buyer in the review of any documentation
presented to Buyer for its approval or execution in connection with a
particular exchange transaction; and
(b) The Closing is not delayed beyond the Closing Date. Seller will
agree to hold Buyer free and harmless of, and indemnify Buyer from, any
liabilities, claims, costs, damages, expenses and fees (including
attorney's fees) which may arise out of the property or properties forming
a part of such tax deferred exchange, including without limitation any
claims by the Internal Revenue Service.
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 conditions:
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, 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 to be performed or complied with by it prior to or on
the Closing Date.
26
C. Consents. Each of the Consents marked as "material" on Schedule
--------
3.6 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. Adverse Change. Between the date of this Agreement and the
--------------
Closing Date, there shall have been no material adverse change in the Assets.
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:
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.
C. Deliveries. Buyer shall have made or stand willing and able to
----------
make all the deliveries set forth in Section 8.3
27
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 become a Final Order (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 any time after the receipt of FCC Consent. Closing shall be held at
the offices of Seller's Portland, Oregon counsel 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 bills of sale, 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 or 3.5 hereof);
(b) Consents. The original of each Consent marked as "material" with
--------
an asterisk on Schedule 3.6;
(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;
(d) Secretary's Certificate. A certificate, dated as of the Closing
-----------------------
Date, executed by Seller's Secretary; certifying that the resolutions, as
attached to such certificate, were duly adopted by such Seller's sole
shareholder and Board of Directors, authorizing and approving the execution
of this Agreement by Seller
28
and the consummation of the transaction contemplated hereby and that such
resolutions remain in full force and effect.
(e) Licenses, Contracts, Business Records, Etc. Copies, if available,
------------------------------------------
of all licenses, Assumed Contracts, blueprints, schematics, working
drawings, plans, projections, statistics, engineering records, and all
files and records used by Seller in connection with its operations of the
Station;
(f) Opinions of Counsel. Opinions of Seller's General 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(f) 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 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, 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.
(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(e)
hereto.
29
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 October 31,
1996.
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 Sections 9.3 or 9.4 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, and its continued rights
pursuant to Section 6.10 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.
30
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 Monetary Damages. Notwithstanding any provision of this Agreement to the
----------------
contrary, but subject to the provisions of the following sentence, if this
Agreement is terminated pursuant to Section 9.1 by reason of Buyer being in
breach of any material provision of this Agreement, Buyer shall not be entitled
to any damages or indemnification from Seller. If, however, Seller attempts to
terminate this Agreement under circumstances where it is not entitled to do so,
or if Seller, by its own action, causes a breach of warranty or fails to satisfy
a condition (including without limitation a refusal to consummate the
transaction after Buyer has satisfied all conditions to Seller's obligation to
close and Buyer has demonstrated its willingness and ability to close on the
terms set forth in this Agreement and Buyer is not in default hereunder) of
whereby Buyer is entitled to terminate this Agreement and Buyer does so elect to
terminate, the monetary damages to which Buyer shall be entitled shall be
limited to direct and actual damages and shall in no event exceed $250,000 in
the aggregate.
31
9.4 Specific Performance. The parties recognize that the Station is of a
--------------------
special, unique and extraordinary character. Accordingly, if Seller shall be in
breach of any material provision of this Agreement, Buyer shall be entitled, in
lieu of, and in substitution for the damages described in Section 9.3, 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.
9.5 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.
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, and shall survive the Closing Date 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. Notwithstanding the
foregoing, the provision for survival and making of claims shall not apply to
any agreements whereby
32
Buyer assumes the obligations under any Assumed Contract, each of which
agreements shall be governed by its own terms to the extent longer periods of
performance are therein provided.
10.2 Indemnification by Seller. 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 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;
provided, however, that if Closing occurs, Seller shall not be obligated to
indemnify Buyer (i) for any amounts in excess of the Purchase Price in the
aggregate, or (ii) until the aggregate amount of such claims, liabilities,
damages, losses, costs and expenses exceeds Twenty Thousand Dollars ($20,000),
in which case Buyer shall then be entitled to indemnification of the entire
amount in excess of Twenty Thousand Dollars ($20,000).
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
33
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;
provided, however, that if Closing occurs, Buyer shall not be obligated to
indemnify Seller until the aggregate amount of such claims, liabilities,
damages, losses, costs and expenses exceeds Twenty Thousand Dollars ($20,000),
in which case Buyer shall then be entitled to indemnification of the entire
amount in excess of Twenty Thousand Dollars ($20,000).
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 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
34
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.
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 fight 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.
35
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: Common Ground Broadcasting, Inc.
c/o Salem Communications
4880 Santa Rosa Road, Suite 300
Camarillo, CA 93012
Attn: Eric H. Halvorson, Executive Vice President
Fax: (805) 482-8570
If to Buyer: American Radio Systems
116 Huntington Avenue
Boston, MA 02116
Attention: Steven B. Dodge, President
Fax: (617) 375-7575
with a copy
(which shall not
constitute notice) to: Michael B. Milsore, Vice President & General Counsel
American Radio Systems, Inc.
116 Huntington Avenue
Boston, MA 02116
Fax: (617) 375-7575
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.
36
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 entity; provided that following such assignment Buyer shall remain
liable for all of the obligations of the Buyer. 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 Oregon.
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.
37
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 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.
38
IN WITNESS WHEREOF, this Agreement has been executed by Buyer and Seller as
of the date first above written.
SELLER: COMMON GROUND BROADCASTING, INC.
By: /s/ Eric H. Halvorson
------------------------------
Eric H. Halvorson
Executive Vice President
BUYER: AMERICAN RADIO SYSTEMS CORPORATION
By: /s/ Steven B. Dodge
-----------------------------
Title: President and CEO
39
SCHEDULES TO ASSET PURCHASE AGREEMENT
1.9 Escrow Agreement
3.4 Licenses
3.5 Personal property
3.6 Assumed Contracts
3.7 Consents required
3.8 Trademarks; trade names; copyrights
3.9 Insurance policies
8.2(f) Opinion of Seller's General and FCC Counsels
8.3(e) Opinion of Buyer's General Counsel
40
Exhibit 1.9
MEDIA VENTURE PARTNERS
ESCROW AGREEMENT
AGREEMENT, effective as of the ___ day of ______, 19__, by and among:
BUYER: ____________________________________________
Address:___________________________________________
___________________________________________
SELLER: ___________________________________________
Address:___________________________________________
___________________________________________
ESCROW AGENT: Media Venture Partners, Ltd.
Address: 1650 Tysons Boulevard
Suite 790
McLean, VA 22102
WITNESSETH:
WHEREAS, Buyer and Seller have entered into an Agreement of Purchase and Sale
with respect to __________, said Agreement dated the __ day of ______ ,19__,
being by reference incorporated herein and made a part hereof (the "Agreement"),
and
WHEREAS. the parties wish to provide for an orderly disposition of the funds
deposited into escrow pursuant to said Agreement;
NOW, THEREFORE, in consideration of the premises, promises and mutual covenants
herein, the parties hereby agree as follows:
1. DEPOSIT OF ESCROW FUNDS. Upon the execution of this Escrow Agreement, buyer
is delivering or causing to be delivered to the Escrow Agent, the sum of
_____ Dollars in cash __, check __, or other _____ (check appropriate box,
and if other, describe).
MEDIA VENTURE PARTNERS
2. INVESTMENT OF ESCROW FUND. The Escrow Agent shall, upon request of Buyer,
invest and reinvest the escrow funds in direct obligations of the United
States government, in federally insured savings accounts or in bank
certificates of deposits, as Buyer shall instruct; provided, that the
Escrow Agent shall not be required to invest in or hold any instrument in
bearer form. The Escrow Agent shall hold said escrow funds together with
all interest accumulated thereon and proceeds therefrom and dispose of the
same as hereinafter provided.
3. DISPOSITION OF ESCROW FUNDS. The Escrow Agent shall distribute and dispose
of the escrow funds as follows:
(a) In the event the purchase and sale closes in the manner contemplated
in the Agreement, the escrow funds shall be paid over to the Seller at
closing in accord with said Agreement. In such event, all interest
earned and accumulated thereon and proceeds therefrom shall be paid
over to Buyer at closing.
(b) In the event the purchase and sale does not close as contemplated in
the Agreement due to the material breach by or default of the Buyer
under the terms of the Agreement, then the escrow funds shall be paid
over to Seller together with all interest earned and accumulated
thereon and the proceeds therefrom.
(c) In the event the purchase and sale does not close as contemplated in
the Agreement due to material breach by or default of the Seller under
the terms of the Agreement, then the escrow funds shall be paid over
to Buyer together with all interest earned and accumulated thereon and
the proceeds therefrom.
(d) In all other events, if the Agreement is terminated or if the
transactions or closing contemplated thereby are not consummated, the
escrow funds shall be returned to the Buyer together with all interest
earned.
(e) If any provision of this Paragraph with respect to the disposition of
the escrow fund is in conflict with any provision or the Agreement
with respect to such disposition, then such provision in the Agreement
shall prevail.
4. CONTROVERSIES WITH RESPECT TO ESCROW. The Escrow Agent shall discharge his
duties to dispose of the escrow fund in accord with the provisions of
paragraph 3 above upon the joint written instructions of the Seller and
Buyer or their duty designated representatives. If the Escrow Agent shall
not have received such joint written instructions and a controversy shall
exist between Buyer and Seller as to the correct disposition of the escrow
funds, the Escrow Agent shall continue to hold the escrow funds and the
income earned or accrued thereon until:
(a) The receipt by the Escrow Agent of the joint written instructions of
the Seller and Buyer as to the disposition of the escrow funds; or
2
MEDIA VENTURE PARTNERS
(b) The receipt by the Escrow Agent of a final order entered by a court of
competent jurisdiction determining the disposition of the escrow funds
and the income earned or accrued thereon; or
(c) The Escrow Agent shall have, at its option, filed an action or bill in
interpleader, or similar action for such purpose, in a court of
competent jurisdiction and paid the escrow funds and all income earned
or accrued thereon into said court, in which event, the Escrow Agent's
duties, responsibilities and liabilities with respect to the escrow
fund, proceeds therefrom and this Agreement shall terminate.
5. CONCERNING THE ESCROW AGENT. The following shall control the fees,
resignation, discharge, liabilities and indemnification of the Escrow
Agent:
(a) The Escrow Agent shall charge no fees for its service hereunder, but
shall be reimbursed for all reasonable expenses, disbursements and
advancements incurred or made by the Escrow Agent in performance of
his duties hereunder, one-half (1/2) of any such expenses,
disbursements and advances to be paid by Buyer and one-half (1/2) by
the Seller, other than expenses for investments authorized hereunder
which shall be borne by Buyer.
(b) The Escrow Agent may resign and be discharged from its duties
hereunder at any time by giving written notice of such resignation to
the parties hereto, specifying the date when such resignation shall
take effect. Upon such notice, a successor escrow agent shall be
appointed with the unanimous consent of the parties hereto, and the
service of such successor escrow agent shall be effective as of the
date of resignation specified in such notice, which date shall not be
less than thirty (30) days after the giving of such notice. If the
parties hereto are unable to agree upon a successor escrow agent
within thirty (30) days after such notice, the Escrow Agent shall be
authorized to appoint its successor. The Escrow Agent shall continue
to serve until its successor accepts the escrow by written notice to
the parties hereto and the Escrow Agent deposits the escrow fund with
such successor escrow agent.
(c) The Escrow Agent undertakes to perform such duties as are specifically
set forth herein and may conclusively rely, and shall be protected in
acting or refraining from acting, on any written notice, instrument or
signature believed by it to be genuine and to have been signed or
presented by the proper party or parties duly authorized to do so. The
Escrow Agent shall have no responsibility for the contents of any
writing contemplated herein and may rely without any liability upon
the contents thereof.
3
MEDIA VENTURE PARTNERS
(d) The Escrow Agent shall not be liable for any action taken or omitted
by it in good faith and believed by it to be authorized hereby or
within the rights and powers conferred upon it hereunder, nor for
action taken or omitted by it in good faith, or in accordance with
advice of counsel and it shall not be liable for any mistake of fact
or error of judgment or for any acts or omissions of any kind unless
caused by its own misconduct or gross negligence.
(e) Each of the Buyer and Seller agrees to indemnify the Escrow Agent and
hold it harmless against any and all liabilities incurred by it
hereunder as a consequence of such party's action, and the Buyer and
Seller agree jointly to indemnify the Escrow Agent and hold it
harmless against any and all liabilities incurred by it hereunder
which are not a consequence of any party's actions, except in the case
of liabilities incurred by the Escrow Agent resulting from its own
misconduct or gross negligence.
(f) The Escrow Agent acts hereunder as a depository only, and is not
responsible or liable in any manner for the sufficiency, correctness,
genuineness or validity of any cash or security deposited with it.
(g) Buyer and Seller agree each to pay one half of the escrow agent's out-
of-pocket costs within fifteen (15) days of presentment, including
reasonable attorneys fees which the escrow agent may expend of incur
in any dispute or action.
Should Buyer or Seller fail to reimburse escrow agent for such out-of-
pocket costs and/or attorneys fees, the escrow agent, at its option,
may choose to deduct said expenses from any escrow funds disbursed
from the escrow account.
6. MISCELLANEOUS.
(a) This Escrow Agreement shall be construed by and governed in accordance
with the laws of the District of Columbia, applicable to agreements
executed and wholly to be performed therein.
(b) This Escrow Agreement shall be binding upon and shall inure to the
benefit of the parties, their successors and assigns.
(c) This Escrow Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument.
(d) All notices, requests, demands and other communication hereunder shall
be in writing, shall be given simultaneously to all parties hereunder
and shall be deemed to have been duly given if delivered or mailed
(certified mail, postage pre-paid, return receipt requested) as
follows:
4
MEDIA VENTURE PARTNERS
If to Seller:
----------------------
----------------------
----------------------
Attention:
----------------------
If to Buyer:
----------------------
----------------------
----------------------
Attention:
----------------------
If to Escrow Agent: Media Venture Partners, Ltd.
1650 Tysons Boulevard
Suite 790
McLean, VA 22102
Attention:
-------------------------
or to such other addresses as any party may have furnished to the other in
writing, in accord herewith.
7. TERMINATION. This Escrow Agreement shall automatically terminate upon the
distribution of the escrow fund in accord with the terms hereof.
IN WITNESS WHEREOF, the parties have caused their hands, or those of their duly
authorized officers, and seals to be affixed as of the date first above written.
SELLER:
By:
--------------------------
BUYER:
By:
--------------------------
ESCROW AGENT: MEDIA VENTURE PARTNERS, LTD.
By:
--------------------------
5
EXHIBIT 3.5 Personal Property
KDBX INVENTORY
--------------
3/13/96 PAGE 1
Location QTY Item Manufacturer Model
====================================================================================================
Transmitter 700 feet 1 5/8 inch Celfex Coax Cable Wave
- -----------------------------------------------------------------------------------------------------
Transmitter 1 1 5/8" Coax Switch Dielectric 1896
- -----------------------------------------------------------------------------------------------------
Transmitter 2 1 5/8" through line sections Bird
- -----------------------------------------------------------------------------------------------------
Transmitter 1 1 kW slug Bird
- -----------------------------------------------------------------------------------------------------
Transmitter 1 10 kW slug Bird
- -----------------------------------------------------------------------------------------------------
Transmitter 1 3 1/8" 2-bay FM ant.(107.5) ERI
- -----------------------------------------------------------------------------------------------------
Transmitter 1 480 to 208 Step down 45kva transformer Westinghouse DT3
- -----------------------------------------------------------------------------------------------------
Transmitter 1 5' Equipment Rack
- -----------------------------------------------------------------------------------------------------
Transmitter 1 6' Equipment Rack
- -----------------------------------------------------------------------------------------------------
Transmitter 1 A/C Breakpanels/disconnect (installed)
- -----------------------------------------------------------------------------------------------------
Transmitter 2 A/C units (3 tons) Lennox CD19-31-3P-
- -----------------------------------------------------------------------------------------------------
Transmitter 1 AC emergency power generator Kohler 40R03P
- -----------------------------------------------------------------------------------------------------
Transmitter 1 AM noise monitor RDL ACM2
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Bandpass Filter Shively Labs 2516-3A
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Best Fortress UPS L117.7KVA
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Cat Link Single composite QEI 400
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Dummy Load Altronic Rsrch 6715E3
- -----------------------------------------------------------------------------------------------------
Transmitter 1 FM Antenna Shively Labs 6015-21-3R
- -----------------------------------------------------------------------------------------------------
Transmitter 1 FM Transmitter QEI FMQ-10,000
- -----------------------------------------------------------------------------------------------------
Transmitter 1 FM Exciter QEI 675B
- -----------------------------------------------------------------------------------------------------
Transmitter 1 FM Mod Monitor TFT 844A
- -----------------------------------------------------------------------------------------------------
Transmitter 2 Interface panels Burk IP-8
- -----------------------------------------------------------------------------------------------------
Transmitter 1 misc. 1 5/8" elbows and coax hardline Cable Wave
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Modem (for Burke RC) Hayes Accura 144
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Nitrogen Regulator
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Optimod FM Orban 8200/U35
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Remote Control - Xmtr unit only Burk ARC-16
- -----------------------------------------------------------------------------------------------------
Transmitter 1 sample ports
- -----------------------------------------------------------------------------------------------------
Transmitter 2 T1-ISO Digital Link DL551A
- -----------------------------------------------------------------------------------------------------
Transmitter 1 Transformer Panel Zenith 43R-1000C
SCHEDULE 3.6
------------
ASSUMED CONTRACTS
-----------------
1. Agreement dated March 26, 1996 by and between Combined Communications,
Inc., Common Ground Broadcasting, Inc. and Salem Communications Corporation.
2. Agreement dated July 1, 1995 by and between First Media Television, L.P.,
a Delaware limited partnership, and Salem Communications Corporation, a
California corporation. (Assignment of this agreement requires the consent of
the landlord.)
SCHEDULE 3.8
------------
FCC LICENSES
------------
See Attached.
[LETTERHEAD OF FEDERAL COMMUNICATIONS COMMISSION]
FM BROADCAST STATION LICENSE
Official Mailing Address: AUTHORIZING OFFICIAL:
- ------------------------------- --------------------
COMMON GROUND BROADCASTING INC Robert D. Greenberg
57400 SOUTH MORSE ROAD Supervisory Engineer
WARREN, OR 97053 Audio Services Division
- ------------------------------- Mass Media Bureau
GRANT DATE: NOV 28, 1995
Call Sign: KDBX This license expires 3:00 a.m.
local time, February 01, 1998
License File No.: BLH-950801KC
This license covers Permit No.: BPH-940930IE
Subject to the provisions of the Communications Act of 1934, subsequent acts
and treaties, and all regulations heretofore or hereafter made by this
Commission, and further subject to the conditions set forth in this license, the
licensee is hereby authorized to use and operate the radio transmitting
apparatus herein described.
This license is issued on the licensee's representation that the statements
contained in licensee's application are true and that the undertakings therein
contained so far as they are consistent herewith, will be carried out in good
faith. The licensee shall, during the term of this license, render such
broadcasting service as will serve the public interest, convenience, or
necessity to the full extent of the privileges herein conferred.
This license shall not vest in the licensee any right to operate the station nor
any right in the use of the frequency designated in the license beyond the term
hereof, nor in any other manner than authorized herein. Neither the license nor
the right granted hereunder shall be assigned or otherwise transferred in
violation of the Communications Act of 1934. This license is subject to the
right of use or control by the Government of the United States conferred by
Section 606 of the Communications Act of 1934.
Name of Licensee:
COMMON GROUND BROADCASTING, INC.
Page 1
Callsign: KDBX License No.: BLH - 950801KC
Station Location:
OR BANKS
Frequency (MHZ): 107.5
Channel: 298
Class: C2
Hours of Operation: Unlimited
Main Studio Address:
OR-448 SOUTH 1ST STREET, HILLSBORO
Transmitter location (address or description): OR-262 NORTHWEST MILLER ROAD,
PORTLAND
Remote Control Point Address:
OR - 448 SOUTH 1ST STREET, HILLSBORO
OR - 5110 SOUTHEAST STARK STREET, PORTLAND
Transmitter: Type Accepted. See Sections 73.1660, 73.1665 and 73.1670 of the
Commission's Rules.
Transmitter output power: 9.2 kW
Antenna type: (directional or non-directional): Non-Directional
Description: SHIVELY 6015-2-3R, TWO SECTIONS
Antenna Coordinates: North Latitude: 45 31 22
West Longitude: 122 45 7
Horizontally Vertically
Polarized Polarized
Antenna Antenna
Effective radiated power in the
Horizontal Plane (kW) .......... : 6.3 6.3
Height of radiation center above
ground (Meters) ................ : 198 198
Height of radiation center above
mean sea level (Meters)......... : 493 493
Height of radiation center above
average terrain (Meters)........ : 406 406
Overall height of antenna structure above ground
(including obstruction lighting if any): 330 Meters
Obstruction marking and lighting specifications for antenna structure:
It is to be expressly understood that the issuance of these specifications
Page 2
Callsign: KDBX License No.:BLH - 950801KC
is in no way to be considered as precluding additional or modified marking
or lighting as may hereafter be required under the provisions of Section
303(q) of the Communications Act of 1934, as amended.
PARAGRAPH 01.0, FCC FORM 715 (OCTOBER 1985): Antenna structures shall be
painted throughout their height with alternate bands of aviation surface
orange and white, terminating with aviation surface orange bands-at both
top and bottom. The width of the bands shall be equal and approximately
one-seventh the height of the structure, provided however, that the bands
shall not be more than 100 feet nor less than 1 and 1/2 feet in width. All
towers shall be cleaned and repainted as often as necessary to maintain
good visibility.
PARAGRAPH 03.0, FCC FORM 715 (APRIL 1985): There shall be installed at
the top of the structure one 300 m/m electric code beacon equipped with two
620- or 700-watt lamps (PS-40, Code Beacon type), both lamps to burn
simultaneously, and equipped with aviation red color filters. Where a rod
or other construction of not more than 20 feet in height and incapable of
supporting this beacon is mounted on top of the structure and it is
determined that this additional construction does not permit unobstructed
visibility of the code beacon from aircraft at any normal angle of
approach, there shall be installed two such beacons positioned so as to
insure unobstructed visibility of at least one of the beacons from aircraft
at any normal angle of approach. The beacons shall be equipped with a
flashing mechanism producing not more than 40 flashes per minute nor less
than 12 flashes per minute with a period of darkness equal to approximately
one-half of the luminous period.
PARAGRAPH 08.0, FCC FORM 715 (APRIL 1985): On levels at approximately
three-fourths, one-half and one-fourth of the over-all height of the tower
one similar flashing 300 m/m electric code beacon shall be installed in
such position within the tower proper that the structural members will not
impair the visibility of the beacon from aircraft at any normal angle of
approach. In the event these beacons cannot be installed in a manner to
insure unobstructed visibility of the beacon from aircraft at any normal
angle of approach, there shall be installed two such beacons at each level.
Each beacon shall be mounted on the outside of diagonally opposite corners
or opposite sides of the tower at the prescribed height.
PARAGRAPH 17.0, FCC FORM 715 (APRIL 1985): On levels at approximately
seven-eighths, five-eighths, three-eighths and one-eight of the over-all
height of the tower, at least one 116- or 125-watt lamp (A21/TS) enclosed
in an aviation red obstruction light globe shall be installed on each
outside corner of the structure.
PARAGRAPH 21.0, FCC FORM 715 (APRIL 1985): All lighting shall burn
continuously or shall be controlled by a light sensitive device adjusted so
that the lights will be turned on at a north sky light intensity level of
about 35 foot candles and turned off at a north sky light intensity level
of about 58 foot candles.
Page 3
Callsign: KDBX License No.: BLH - 950801KC
Special operating conditions or restrictions:
1. The permittee/licensee in coordination with other users of the
site must reduce power or cease operation as necessary to protect
persons having access to the site, tower or antenna from radio-
frequency radiation in excess of FCC guidelines.
*** END OF AUTHORIZATION ***
Page 4
Exhibit 3.9
Insurance Policies
================================================================================
Producer THIS CERTIFICATE IS ISSUED AS A MATTER OF
INFORMATION ONLY AND CONFERS NO RIGHTS
Sullivan & Curtis UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE
3310 Two Union Square DOES NOT AMMEND, EXTEND OR ALTER THE COVERAGE
Seattle, WA 98101 AFFORDED BY THE POLICIES BELOW.
(206) 521-3800 ==============================================
- ---------------------------------- COMPANIES AFFORDING COVERAGES
Insured Company
Letter A National Surety Corporation
Common Ground Broadcasting, Inc. ---------------------------------------------
(KDBX-FM) Company
448 S. First Ave., #100 Letter B TIG Insurance Company
Hillsboro OR 97123 ---------------------------------------------
Company
Letter C CIGNA Insurance Company
---------------------------------------------
Company
Letter D National Casualty Company
---------------------------------------------
Company
Letter E Cert. #07 (KDBX-FM)
===============================================================================
THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED
TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED, NOTWITHSTANDING ANY
REQUIREMENTS, TERM OR CONDITION OR ANY CONDITION OF ANY CONTRACT OR OTHER
DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN,
THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE
TERMS, EXCLUSION AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN
REDUCED BY PAID CLAIMS.
- --------------------------------------------------------------------------------
CO TYPE OF INSURANCE POLICY NUMBER POLICY EFF DATE POLICY EXP DATE LIMITS
LTR mm/dd/yy mm/dd/yy
- -------------------------------------------------------------------------------------------------------------------------
GENERAL LIABILITY General Aggregate $ 2,000,000
A [X] Commercial General liab. MXX80637062 12/31/95 12/31/96 Prod-Comp/Ops Agg $ 2,000,000
[_] claim made [X] Occur Pers & Adv Injury $ 1,000,000
[_] Owner's & Contractors Each Occurrence $ 1,000,000
Protective Fire Damage $ 50,000
[_] (Any one fire)
[_] Medical Payments $ 5,000
(Any one person)
- -------------------------------------------------------------------------------------------------------------------------
AUTOMOBILE LIABILITY Combined $ 1,000,000
A [X] Any Auto MXX80637062 12/31/95 12/31/96 Single Limit
[_] All Owned Autos -------------------------------
[_] Scheduled Autos Bodily Injury $
[X] Hired Autos (Per Person)
[X] Non-Owned Autos -------------------------------
[_] Garage Liability Bodily Injury $
[_] (Per Accident)
--------------------------------
Property Damage $
=========================================================================================================================
EXCESS LIABILITY Ea Occurrence $10,000,000
B [X] Umbrella Form XKB2784050 12/31/95 12/31/96 Aggregate $10,000,000
[_] Other Than Umbrella Form
- ------------------------------------------------------------------------------------------------------------------------
WORKER'S COMPENSATION [X] Statutory
C AND C29205917 12/01/95 12/01/96 Each Accident $ 1,000,000
EMPLOYER'S LIABILITY Disease-Pol Limit $ 1,000,000
Disease-Each Empl $ 1,000,000
- ------------------------------------------------------------------------------------------------------------------------
A OTHER PROPERTY- MXX80637062 12/31/95 12/31/96 Blkt. Pars. Prop. and Equip.
Special Form incl Towers & Antennas/EDP/BI.
========================================================================================================================
Description of Operations/Locations/Vehicles/Special Items
Broadcaster and Film & Program Producer Errors and Omissions Coverage, Policy no, LS004536, Company Letter D,
12/31/95-12/31/96, $1,000,000 Limit each occurrence.
========================================================================================================================
001 Should any of the above described policies be cancelled before the
expiration date thereof, the issuing company will endeavor to mail
For Informational Purposes Only 10 days written notice to the certificate holder named to the left,
but failure to mail such notice shall impose no obligation or
liability of any kind upon the company, it's agent's or
representatives.
--------------------------------------------------------------------
Authorized Representative
/s/ Steven s. Stafford
========================================================================================================================
Opinion of Seller's Counsel
__________ 1995
American Radio Systems, Inc.
116 Huntington Avenue
Boston, MA 02116
The Bank of New York, as Agent
One Wall Street
New York, NY 10286
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase
Agreement (the "Agreement") dated as of _______________ by and between American
Radio Systems, Inc., a Massachusetts corporation ("Buyer") and ____________, a
_____________ corporation ("Seller"). Capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed to them in the
Agreement.
I have reviewed the Agreement and other pertinent information and records and
files necessary to render this opinion. In arriving at the opinions expressed
herein, I have examined and relied upon original or copies, identified to my
satisfaction, of all corporate records and other instruments, documents,
certificates of public officials, officers and representations of the Seller,
and other persons or entities and have made such investigations as I have
considered necessary or appropriate. In making such examinations, I have assumed
but not independently verified the genuineness and authenticity of all
documents, and the conformity to original documents of all certified or
photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have
not been independently established, I have relied upon certificates of the
officers, directors and representatives of the Seller and certificates of public
officials, and I have assumed the accuracy and correctness of all statements of
fact contained therein, including the accuracy and correctness of the factual
representations and warranties of the Seller set forth in the Agreement and the
documents and instruments delivered to you in connection therewith.
1. Seller is a corporation, duly organized, validly existing and in good
standing under the laws of the State of ___________, and is duly qualified to
conduct business in the State of ____________.
2. Seller has full corporate power and authority to enter into the
Agreement and all documents required to be executed or delivered by Seller
pursuant to the
PAGE 2
Agreement (the "Related Documents"), and to consummate the transactions
contemplated thereby. The Agreement and the Related Documents have been duly
authorized, executed and delivered by Seller and constitute the legal, valid and
binding obligations of Seller, enforceable in accordance with their respective
terms, except as such enforceability may be limited by (a) applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting the
rights of creditors generally, or (b) general principles of equity, whether
considered in a proceeding in equity or at law.
3. The execution and delivery of the Agreement and the Related Documents,
and the consummation of the transactions contemplated thereby, will not (a)
result in a breach of or constitute a default under, the Articles of
Incorporation or Bylaws of Seller, (b) result in a breach of or constitute a
default under any agreement, trust or instrument to which Seller is a party or
by which Seller or its respective properties or assets are bound, or (c)
constitute a breach, violation or default under any judgment, order, writ,
injunction or decree of any court or governmental agency or other authority
applicable to Seller.
4. Except as disclosed in the Agreement, there are no governmental
consents, permits, approvals or authorizations required to be obtained by Seller
in order to consummate the transactions contemplated by the Agreement.
5. To the best of our knowledge and except as set forth in the schedules
to the Agreement, there is no litigation, proceeding or investigation of any
nature pending or threatened, or any judgment, award, order or decree
outstanding, against the Seller or the Assets, which if adversely determined
might have a material adverse effect on the Station or the Assets (taken as a
whole) or prevent the consummation of the transactions contemplated by the
Agreement.
The opinions expressed herein are rendered only to you and are solely for your
benefit and that of other lenders who are participants in the Amended and
Restated Credit Agreement dated September 12, 1994, as amended, by and among
Seller, the Bank of New York as Agent, and the lenders named therein, their
assigns, and by any future participants thereof and their assigns and may not be
relied upon by you or by such other lenders for any purpose other than in
connection with the transactions contemplated by the Agreement; or relied upon
by any other person for any purpose; or, except as required by applicable law or
requested by any governmental authority, furnished to or quoted to any person
without our prior written consent.
Very truly yours,
Opinion of Seller's FCC Counsel
-------------------------------
___________1996
American Radio Systems Corporation
116 Huntington Avenue
Boston, MA 02116
The Bank of New York, as Agent
One Wall Street
New York, NY 10286
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase
Agreement (the "Agreement") dated as of, _____________, by and between
American Radio Systems Corporation, a Delaware corporation ("Buyer") and
_________________ ("Seller"). Capitalized terms used herein, unless otherwise
defined herein, shall have the meanings ascribed to them in the Agreement.
We have reviewed the Agreement and other pertinent information and records and
files necessary to render this opinion. In arriving at the opinions expressed
herein, I have examined and relied upon original or copies, identified to my
satisfaction, of all records, instruments, documents, and certificates of the
Seller and of public officials, officers and representatives of the Seller, as I
have considered necessary or appropriate, and I have made such other
investigations as I have considered necessary or appropriate. In making such
examinations, I have assumed but not independently verified the genuineness and
authenticity of all documents, and the conformity to original documents of all
certified or photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have
not been independently established, we have relied upon certificates of the
officers and representatives of the Seller and certificates of public officials,
and we have assumed the accuracy and correctness of all statements of fact
contained therein, including the accuracy and correctness of the factual
representations and warranties of the Seller set forth in the Agreement and the
documents and instruments delivered to you in connection therewith. This opinion
is limited to the Communications Act of 1934, as amended (the "Act") and the
Rules and Regulations of the FCC.
1. Seller validly holds the Licenses listed on Schedule 3.4 of the
Agreement and the Licenses are in full force and effect. The Licenses include
all licenses, permits and authorizations which are necessary under FCC rules for
Seller to operate the Station in the manner in which we understand the station
is currently being operated.
Opinion of Buyer's Counsel
--------------------------
________________1996
Regent Broadcasting of Dayton, Inc.
Gentlemen:
This opinion is being delivered to you in connection with the Asset Purchase
Agreement (the "Agreement") dated as of ________________ by and between
American Radio Systems Corporation, a Delaware corporation ("Buyer") and
_________ , a ________________ corporation ("Seller"). Capitalized terms used
herein, unless otherwise defined herein, shall have the meanings ascribed to
them in the Agreement.
We have reviewed the Agreement and other pertinent information and records and
files necessary to render this opinion. In arriving at the opinions expressed
herein, we have examined and relied upon original or copies, identified to my
satisfaction, of all corporate records and other instruments, documents,
certificates of public officials, officers and representations of the Buyer, and
other persons or entities and have made such investigations as we have
considered necessary or appropriate. In making such examinations, we have
assumed but not independently verified the genuineness and authenticity of all
documents, and the conformity to original documents of all certified or
photostatic copies submitted.
As to matters of fact material to the opinions expressed herein, and which have
not been independently established, we have relied upon certificates of the
officers, directors and representatives of the Buyer and certificates of public
officials, and we have assumed the accuracy and correctness of all statements of
fact contained therein, including the accuracy and correctness of the factual
representations and warranties of the Buyer set forth in the Agreement and the
documents and instruments delivered to you in connection therewith.
1. 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
2. Buyer has full corporate power and authority to enter into the Agreement
and all documents required to be executed or delivered by Seller pursuant to the