SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 16, 1996
MULTI-MARKET RADIO, INC.
(Exact name of registrant as specified in charter)
Delaware 0-22080 13-3707697
(State or Other Jurisdiction (Commission File No.) (IRS Employer
of Incorporation) Identification No.)
150 East 58th Street, 19th Floor, New York, New York 10155
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (212) 407-9150
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events
As previously disclosed, the registrant entered into an agreement with
Precision Media Corporation dated as of April 1, 1996 to acquire radio station
WKSS-FM.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits
10.1 Asset Purchase Agreement by and between Multi-Market Radio, Inc.
and Precision Media Corporation dated April 1, 1996.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereto duly authorized.
MULTI-MARKET RADIO, INC.
By: /s/ Jerry D. Emlet
------------------------------
Name: Jerry D. Emlet
Title: Chief Financial Officer
Date: May 23, 1996
ASSET PURCHASE AGREEMENT
AGREEMENT (this "Agreement") dated as of April 1, 1996, between
Multi-Market Radio, Inc., a Delaware corporation (the "Buyer") and Precision
Media Corporation, a Delaware corporation (the "Seller").
WHEREAS, the Seller is the owner, licensee and operator of a radio
station WKSS-FM, broadcasting at a frequency of 95.7 mhz in and licensed to
Hartford/Meriden, Connecticut (the "Station"); and
WHEREAS, the Seller wishes to sell and the Buyer wishes to purchase
certain assets of the Seller relating to the Seller's operation of the
Station; and
WHEREAS, the purchase and sale of such assets may not be consummated
unless and until the Federal Communications Commission (the "FCC") approves
the transfer to the Buyer of the Seller's FCC license to operate the Station.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. DEFINITIONS.
The following terms shall have the meanings respectively assigned
to them below in this Section 1 or in the other provisions of this Agreement
referred to below:
Acquired Assets. As defined in Section 2.
Assumption Agreement. An Assumption Agreement, to be executed and
dated as of the Closing Date, substantially in the form of Exhibit A.
Closing. As defined in Section 5.1.
Closing Date. The date to be designated by notice from the Buyer to
the Seller, or such other date as the parties may mutually agree for the
closing of this transaction; provided, however, that the Closing Date shall
not be more than thirty days after the date on which there is an effective FCC
Consent; provided, further, in no event shall the Closing Date occur later
than seven (7) months following the date of this Agreement.
Contracts. As defined in Section 2.3.
Encumbrances. As defined in Section 7.4.
Excluded Assets. As defined in Section 2.4.
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FCC. As defined in the preamble.
FCC Consent. Authorization that is
1.0.0.0.0.1.
duly granted by the FCC approving the transfer of the License to the
Buyer and approving thereby the control and operation of the Station by the
Buyer on and after the Closing Date under conditions that are not less
favorable than those currently applicable to the Seller; and
1.0.0.0.0.2.
final, that is, one with respect to which no appeal or petition or
motion for rehearing and no reconsideration or review is pending, and as to
which the time for filing or initiating such an appeal or petition or motion
or reconsideration or review has expired, or, if filed or initiated, has been
denied, dismissed or withdrawn and the time for any further administrative or
legal proceedings has expired.
FTC. Federal Trade Commission.
HSR Act. The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.
Leases. Collectively, the Studio Lease and the Tower Lease.
Letter of Credit. The letter of credit issued by Chemical Bank on
behalf of the Buyer for the benefit of the Seller in the face amount of
$1,800,000 in the form of Exhibit B.
License. As defined in Section 7.5.
Materially Adverse Effect. Any materially adverse effect on the
ability of the Seller to operate the Station in accordance with applicable law
or to pay its debts as they become due and payable.
Non-Competition Agreement. The Non-Competition Agreement between the
Buyer, the Seller and Timothy J.A. Montgomery, individually, to be dated as of
the Closing Date, substantially in the form of Exhibit C.
Permitted Encumbrances. As defined in Section 5.2.
Purchase Price. As defined in Section 3.1.
Real Estate. Collectively, the Studio Site and the Tower Site.
Station. As defined in the preamble.
<PAGE>
Station Records. As defined in Section 11.3.
Studio Lease. The lease of the Studio Site dated January 1, 1992
between the Seller and SKW II Real Estate Limited Partnership in the form of
Exhibit D.
Studio Site. The premises located at Ten Columbus Boulevard,
Hartford, Connecticut 06106 as more particularly described in the Studio
Lease.
Tower Lease. The Lease of the Tower Site dated August 26, 1975
between the Seller, CWS Leasing Company and in the form of Exhibit E.
Tower Site. The premises located in Meriden, Connecticut, as more
particularly described in and leased pursuant to the Tower Lease.
SECTION 2. PURCHASE AND SALE; NON-COMPETITION AGREEMENT.
Subject to the terms and conditions set forth in this Agreement,
at the Closing the Seller shall sell and transfer to the Buyer, and the Buyer
shall purchase and acquire from the Seller, all of the assets described in
Sections 2.1 and 2.2 below (collectively, the "Acquired Assets") and all of
the Seller's interests in and rights under the contracts described in Section
2.3 below (the "Contracts"):
Section2.1. Tangible Assets.
The transmission tower housing on the Tower Site, the guy wires
relating thereto and stanchions or other supports for the guy wires, and all
transmission, studio and other equipment, furniture, fixtures, motor vehicles,
promotional blimps and balloons and other tangible personal properties located
in Hartford and Meriden, Connecticut and environs that are used, necessary or
useful in connection with the operation of the Station and that the Seller
either owns or has the power to transfer including, without limitation, those
listed on Schedule 2.1 (which schedule shall indicate which assets are owned
and which assets are leased or otherwise held), together with any replacements
or modifications thereof and additions thereto made between the date hereof
and the Closing Date in the ordinary course of business and in accordance with
the provisions of this Agreement.
Section2.2. Intangible Assets.
All rights, permits, trade names, service marks, slogans, customer
lists, logos, jingles, goodwill and other intangible property used, necessary
or useful in connection with the operation of the Station and that the Seller
either owns or has the power to transfer, including, without limitation, the
License and any renewals or modifications thereof between the date hereof
<PAGE>
and the Closing Date, the call sign "WKSS-FM," and the trade name "Kiss 95.7",
all logos and artwork associated therewith and the License and including,
without limitation, those listed on Schedule 2.2, together with any
replacements thereof and additions thereto made between the date hereof and
the Closing Date in the ordinary course of business and in accordance with the
provisions of this Agreement.
Section 2.3. CONTRACTS, ETC.
All of the Seller's right, title and interest in and to those
particular agreements, whether written or oral, and any and all extensions
thereof, including, without limitation, the Leases and the License pursuant to
which the Seller has the right to use the trade name "Kiss 95.7", that are
used, necessary or useful in connection with the operation of the Station or
the Acquired Assets and which
2.3.0.0.0.1.
are currently existing or in effect and listed and described in
Schedule 2.3,
2.3.0.0.0.2.
are entered into subsequent to the date of this Agreement and prior
to the Closing Date in the ordinary course of the Seller's business and
consistently with the Seller's customary operation of the Station, subject to
the limitations set forth in Section 9.2 or
2.3.0.0.0.3.
are entered into subsequent to the date of this Agreement and prior
to the Closing Date outside of the ordinary course of the Seller's business if
the Buyer on the Closing Date elects to assume such agreements pursuant to the
Assumption Agreement.
Section 2.4. EXCLUDED ASSETS.
The Acquired Assets being sold to the Buyer do not include
2.4.0.0.0.1.
the Station's cash on hand and in banks,
2.4.0.0.0.2.
the Station's cash equivalents,
2.4.0.0.0.3.
the Station's accounts receivable, and
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2.4.0.0.0.4.
the rights of the Seller under this Agreement and under the Letter of
Credit (collectively, the "Excluded Assets").
Section 2.5.
NON-COMPETITION AGREEMENT.
The Buyer, the Seller and Timothy J.A. Montgomery shall enter into
the Non-Competition Agreement.
Section 2.6.
EMPLOYEE MATTERS.
Buyer shall have the right, but not the obligation, to hire
substantially all of the employees of the Station immediately following the
Closing; provided, that Buyer shall be obligated to assume the contracts of
those employees of the Seller listed on Schedule 2.6 attached hereto. Seller
shall be responsible for all salary and benefits of the employees of the
Station for the period prior to the Closing Date. All employees of the Station
shall cease active participation in all of Seller's employee benefit plans on
the Closing Date, in accordance with the terms of such plans.
SECTION 3. PAYMENTS.
Section 3.1. PURCHASE PRICE FOR ACQUIRED ASSETS AND CONTRACTS.
On the date hereof the Buyer has delivered the Letter of Credit to
Seller. At the Closing, the Buyer shall pay to the Seller, as the aggregate
purchase price for the Acquired Assets and Contracts an amount equal to
$18,000,000 (the "Purchase Price"), plus or minus, as the case may be, the
amount of any proration adjustment required by Section 6. The Purchase Price
will be paid by delivery by the Buyer to the Seller of a bank wire transfer or
other immediately available funds to a bank or banks designated by Seller in
writing.
Section 3.2. ALLOCATION OF PURCHASE PRICE.
The Purchase Price shall be allocated, for tax purposes, as
mutually agreed upon by Seller and Buyer prior to Closing. In the event that
the parties are unable in good faith to mutually agree upon the allocation by
Closing, Buyer and Seller shall select an independent certified public
accountant mutually acceptable to both parties within ten (10) days after the
Closing and such independent certified public accountant shall make a
determination of the allocation within sixty (60) days after his or her
selection. The allocation determined by their mutual agreement or otherwise by
the independent certified public
<PAGE>
accountant, as the case may be, shall be conclusive and binding on Buyer and
Seller for the reporting and disclosure requirements of the Internal Revenue
Service.
SECTION 4. ASSUMPTION OF CERTAIN OBLIGATIONS.
At the Closing, the Buyer shall assume and agree to pay, perform
fulfill and discharge, pursuant to the Assumption Agreement, those obligations
of the Seller under the Contracts that accrue after the Closing and that
relate to events that transpire subsequent to the Closing. Anything in this
Agreement to the contrary notwithstanding, the Buyer shall not assume, shall
not be deemed to have assumed, and shall not be responsible for any liability
or obligation of the Seller other than those obligations assumed pursuant to
the Assumption Agreement. Schedule 4 attached hereto sets forth all barter and
other trade obligations of the Seller outstanding on the date hereof. In no
event shall the Buyer be deemed to have assumed any net negative barter or
other trade balances of the Seller in excess of $50,000.
SECTION 5. CLOSING.
Section 5.1. TIME AND PLACE.
The closing (the "Closing") of the purchase and sale transactions
contemplated by this Agreement shall take place on the Closing Date at the
offices of Bingham, Dana & Gould at 100 Pearl Street, Hartford, Connecticut at
the time designated in the Buyer's notice to the Seller, or at such other time
and place as the parties mutually agree.
Section 5.2. TRANSACTIONS AT CLOSING.
At the Closing:
5.2.0.0.0.1.
the Seller shall duly execute and deliver to the Buyer such bills of
sale, certificates of title and other instruments of assignment or transfer
with respect to the Acquired Assets and the Contracts as the Buyer may
reasonably request and as may be reasonably necessary to vest in the Buyer
title to all of the Acquired Assets and rights to enjoy and enforce the
Contracts, in each case subject to no Encumbrance except for the Encumbrances
specified in Schedule 5.2 (the "Permitted Encumbrances");
5.2.0.0.0.2.
the Seller shall deliver to the Buyer a schedule setting forth all
barter and other trade obligations and balances owing by the Seller on the
Closing Date;
5.2.0.0.0.3.
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with respect to any agreements entered into subsequent to the date of
this Agreement and which were not entered into
5.2.0.0.0.3.1.
in the ordinary course of the Seller's business consistent with the
Seller's customary operation of the Station or
5.2.0.0.0.3.2.
with the Buyer's written consent, the Buyer shall notify the Seller
which of such agreements the Buyer elects to assume as Contracts;
5.2.0.0.0.4.
the Buyer shall deliver to the Seller by bank wire transfer or other
immediately available funds the Purchase Price;
5.2.0.0.0.5.
the Seller and the Buyer shall execute and deliver the Assumption
Agreement;
5.2.0.0.0.6.
the Seller, the Buyer, and Timothy J.A. Montgomery shall execute and
deliver the Non- Competition Agreement; and
5.2.0.0.0.7.
the Seller shall deliver the Station Records to the Buyer at the
Station.
Section 5 .3. ACCOUNTS RECEIVABLE
5.3.0.0.0.1.
Buyer acknowledges that all accounts receivable arising in connection
with the operation of the Station, including but not limited to accounts
receivable for advertising revenues for programs and announcements performed
at the Station prior to the Closing Date and other broadcast revenues for
services performed at the Station prior to the Closing Date, shall remain the
property of Seller and that, except a provided for below, Buyer shall not
acquire any beneficial right or interest therein or responsibility therefor.
5.3.0.0.0.2.
Buyer is hereby designated as agent for Seller for the
purposes of billing, if unbilled, and collecting accounts
<PAGE>
receivable of the Station existing on or before the Closing Date and
arising out of the operations of the Station on or before the Closing
Date, together with advertising broadcast by the Station prior to the
Closing Date and not yet billed to advertisers, and Buyer shall
account for all monies attributable to all of the Station's accounts
receivable collected. On the thirtieth (30th) day, the sixtieth
(60th) day, the ninetieth (90th) day, the one hundred twentieth
(120th) day and on the one hundred fiftieth (150th) day following the
Closing Date, Buyer shall render and deliver to Seller any monies
collected with respect to the Station's accounts receivable, its
written account of such billing and collection efforts, together with
copies of such bills, correspondence, documents, instruments, and
such other information as the Seller shall reasonably request. On the
day which is one hundred eighty (180) days after the Closing Date, or
if such day is not a business day, the next preceding business day,
Buyer shall deliver to Seller one hundred percent (100%) of all
monies actually collected by Buyer on Seller's behalf and any
additional bills, correspondence, documents, instruments, files and
other information concerning the billing of the accounts receivable
of the Station to which such monies relate and which have not yet
been delivered to Seller. Notwithstanding the foregoing, Seller and
Buyer hereby agree that Buyer shall in no way be obligated to pay
Seller any amounts received by Buyer as payments on accounts
receivable which arise after the Closing Date (the "POST-CLOSING DATE
ACCOUNTS RECEIVABLE").
5.3.0.0.0.3.
Buyer shall receive no remuneration for the services
rendered pursuant to this Section 5.3(a) and shall not be liable in
any way for non-collection or failure of any such collection of
accounts receivable (except for liability arising in connection with
the gross negligence or willful misconduct of the Buyer in connection
with such accounts receivable). On or before the Closing Date, Seller
shall deliver Buyer a list of the Station's accounts receivable
existing on or before the Closing Date, as well as its unbilled
broadcast advertising, existing as of the Closing Date ("PRE-CLOSING
DATE ACCOUNTS RECEIVABLE") which shall be attached hereto as Schedule
5.3. Any cash received by Buyer as payments on such accounts
receivable after the Closing Date from customers included in the
Pre-Closing Date Accounts Receivable will be applied first to
Pre-Closing Date Accounts Receivable and then to Post-Closing Date
Accounts Receivable. If a customer, in writing, disputes all or any
portion of the Pre-Closing Date Account Receivable, Buyer may credit
any cash payment to a Post-Closing Date Account Receivable from the
same customer. The disputed Pre-Closing Date Accounts Receivable
shall be returned to Seller for it to collect. Any Pre-Closing Date
<PAGE>
Account Receivable which is outstanding one hundred eighty (180) days
after the Closing Date shall be returned to Seller on such one
hundred and eightieth (180th) day for it to collect. The obligations
of Buyer under this Section 5.3(c) shall survive the termination of
this Agreement.
5.3.0.0.0.4.
Buyer and Seller hereby agree that (i) the provisions of
this Section5.3 apply only to accounts receivable of the Seller arising
in connection with the operations of the Station on or before the
Closing Date and (ii) nothing set forth herein shall affect or refer
to in any way any other accounts receivable of the Seller.
SECTION 6. ADJUSTMENTS.
The operation of the Station, the Acquired Assets and the Contracts
and the income and the expense attributable thereto, including, but not
limited to, utilities, rent, deposits, prepaid and accrued items, payroll,
vacation and severance pay earned but not paid, and property or other taxes
and assessments applicable to the Acquired Assets and Contracts up to 12:01
a.m. current local time on the Closing Date shall be for the account of the
Seller and thereafter for the account of the Buyer, and such income and
expenses shall be prorated between the account of the Seller and Buyer and net
settlement made on the Closing Date as far as feasible, by means of an
addition to or, as the case may be, subtraction from the Purchase Price. If
the amount of any such items cannot be readily ascertained on the Closing
Date, proration of all such items shall be made on one occasion as soon after
the Closing Date as the amount thereof is ascertainable, and in any event
within ninety (90) days following the Closing Date. All prorations and
adjustments made pursuant to this Section 6 shall be made in accordance with
generally accepted accounting principles. Nothing in this Section 6 shall be
deemed to apply to accountants fees, appraisal costs and legal expenses
incurred by either party hereto in connection with the transactions
contemplated hereby.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller represents and warrants to the Buyer as follows:
Section 7.1. ORGANIZATION AUTHORITY; BINDING EFFECT.
The Seller is a corporation duly organized and validly existing
under the laws of the State of Delaware and is duly qualified and authorized
to do business as a foreign corporation in the State of Connecticut. The
Seller has the power to own and hold the Acquired Assets, to carry on the
business of the Station as now carried on by it and to enter into and perform
this Agreement, the Non-Competition Agreement and the Assumption
<PAGE>
Agreement. This Agreement has been duly executed and delivered by the Seller
and constitutes, and when executed and delivered, each of the Non-Competition
Agreement and the Assumption Agreement will have been duly executed and
delivered and will constitute, the legal, valid and binding obligation of the
Seller, enforceable against it in accordance with their respective terms.
Section 7.2. FINANCIAL STATEMENTS, ETC.
The Seller has furnished to the Buyer a complete and correct copy
of its audited balance sheet and profit and loss statement for the Station as
at December 31, 1993 and December 31, 1994, for the period then ended and its
unaudited balance sheet and profit and loss statement for the Station at
December 31, 1995, for the calendar year then ended. Such financial statements
have been prepared in accordance with generally accepted accounting principles
on a consistent basis throughout the periods indicated and fairly present the
financial condition of the Station as at the date specified therein and the
result of its operations for the period then ended, subject to audit and
normal year-end adjustments.
Section 7.3. ABSENCE OF CERTAIN CHANGES.
Since December 31, 1995, there has not been any material adverse
change in the assets, liabilities, or business of the Seller relating to its
operation of the Station, or in the Seller's relationship with suppliers,
customers, lessors or others relating to the operation of the Station, which
has had a Materially Adverse Effect.
Section 7.4. TITLE TO ACQUIRED ASSETS, ETC.
The Acquired Assets constitute all of the Seller's assets (other
than the Excluded Assets) used, necessary or useful in connection with the
operation of the Station. Except for Permitted Encumbrances, the Seller has
good and valid title to all of the Acquired Assets, free and clear of all
mortgages, restrictions, liens, pledges, charges, security interests,
encumbrances or title retention agreements (collectively, "Encumbrances").
Each of the Contracts is valid and subsisting and no event or condition exists
that constitutes, or after notice or lapse of time or both would constitute, a
material default thereunder or other event which would allow cancellation or
early termination by the other party or parties thereto. All of the Acquired
Assets are transferable by the Seller by the Seller's sole act and deed and at
the Closing Date no consent on the part of any other person will be necessary
to validate the transfer to the Buyer, except that
7.4.0.0.0.1.
the License is not assignable without the FCC Consent;
<PAGE>
7.4.0.0.0.2.
certain of the Contracts described in Schedule 2.3 may be assigned
only with the consent of third parties, each of such required consents being
specified in Schedule 2.3; and
7.4.0.0.0.3.
certain liens on the Acquired Assets currently held by Bank of Boston
Connecticut to secure certain indebtedness of the Seller will be required to
be released, which liens shall be released on or prior to the Closing Date.
All of the Acquired Assets are in good operating condition and repair,
ordinary wear and tear excepted, are suitable for the purposes for which they
are used and comply with all requirements of the FCC.
Section 7.5. FCC LICENSE.
The Seller is the holder of unrestricted licenses and other
authorizations issued by the FCC, copies of which licenses and authorizations
are attached hereto as Schedule 7.5 (collectively, the "License"), that
authorize the Seller to operate the Station in accordance with those
specifications also set forth in the License. The License has been duly and
validly issued, is in full force and effect, and is transferable with the
consent of the FCC. The License is valid through the date indicated thereon.
There are no orders, complaints, proceedings or investigations pending or, to
the Seller's knowledge, threatened that would affect the validity of the
License, other than FCC rulemaking procedures of general application. The
Station and the Real Estate are in compliance in all material respects with
the terms of the License and all material statutes, rules, regulations and
policies of the FCC or any federal, state or local agencies having
jurisdiction over the Station, including all applicable radio signal
transmission, electromagnetic radiation, zoning, building and environmental
laws, rules and regulations. All transmitters used or useful in the operation
of the Station now operate in a manner such that any FCC action for which
environmental factors must be considered would not constitute a major action
as defined in 47 C.F.R. Section1.1305 as in effect on the date hereof.
Section 7.6. INTELLECTUAL PROPERTY.
Except as otherwise disclosed on Schedule 2.2, the Seller owns or
licenses all trade names, service marks, logos, slogans, jingles and other
intellectual property used for the operation of the Station, all of which are
being assigned to the Buyer hereunder. To the best of the Seller's knowledge
after due diligence and inquiry, none of such intellectual property infringes
any intellectual property or related rights of third parties nor is any third
party infringing on the Seller's rights with respect to such intellectual
property.
<PAGE>
Section 7.7. EMPLOYEES OF THE SELLER.
Attached hereto as Schedule 7.7 is a complete and accurate list of
all of the officers and employees of the Seller employed primarily in
connection with the operation of the Station, their respective monthly rates
of compensation as of the date hereof and their accrued vacation entitlement,
if any.
Section 7.8. APPROVAL BY GOVERNMENTAL AGENCIES.
Except for the FCC Consent and the filings required pursuant to the
HSR Act and the rules and regulations issued thereunder, no approval of or
filing with any governmental administrative agency or authority is required
for the execution or delivery of this Agreement by the Seller or the
consummation of the transactions contemplated herein.
Section 7.9. NO UNLISTED AGREEMENT.
The Seller is not a party to or subject to or covered by any other
material agreement or plan or policy relating to the operation of the Station
or the employment of the Station's employees. Any unfunded liabilities of the
Seller with respect to any such agreements, plans or policies comprising
pension or other employee benefits are set forth in Schedule 7.9. The net
negative barter balance of the Station will not exceed the total sum of
$50,000 on the Closing Date. Each of Schedule 2.3 and Schedule 4 accurately
sets forth all of the material terms of the Seller's barter and other trade
agreements assigned to the Seller pursuant to this Agreement and in existence
on the date hereof, which terms, including, without limitation, the rates at
which station radio time is traded are consistent with the Seller's historic
practice with respect to such barter or other trade agreements.
Section 7.10. LABOR LAWS.
The Seller has complied with all applicable laws, rules, collective
bargaining agreements, and regulations pertaining to the employment of labor
or the provision of personnel benefits in connection with the Station. The
Seller has paid all taxes and withheld all amounts required by law or
agreement to be withheld from compensation of the Station's employees and is
not liable for arrears of wages or for tax or penalty for failure to comply
with the foregoing. There are no controversies pending or, to the best of the
Seller's knowledge, threatened between the Seller and the employees of the
Station which would have a Materially Adverse Effect.
Section 7.11. RECORDS AND REPORTS.
Except to the extent that the failure to comply with such rules of
the FCC has, and will have, no material impact on the ownership, operation or
transfer of the Station,
<PAGE>
7.11.0.0.0.1.
all statements relating to the Station currently required to be filed
by the Seller with the FCC or any governmental instrumentality have been filed
and complied with and are complete and correct as filed;
7.11.0.0.0.2.
all such statements shall be continued to be filed on a current basis
until the Closing Date, and will be complete and correct as filed;
7.11.0.0.0.3.
all items required by the FCC to be placed in the local public record
files of the Station have been placed in such files and are in possession of
the Seller, and all such documents are complete and correct; and
7.11.0.0.0.4.
all required logs and business records relating to the operation of
the Station have been maintained in accordance with the rules of the FCC and
are in possession of the Seller. The Seller's local public files will be
transferred to the Buyer at the Closing and will be complete and up-to-date.
Section 7.12. INSURANCE.
The Seller currently maintains, with respect to all of the
insurable assets of the Station, the insurance policies listed and described
on Schedule 7.12.
Section 7.13. BROKERS.
Seller has neither employed nor is liable to any broker, finder or
any other third party in connection with the transactions contemplated by this
Agreement other than Blackburn & Co., for whose fees and expenses Seller shall
be solely responsible up to a maximum amount not in excess of $216,666.
Section 7.14. DISCLOSURE.
No representation or warranty by the Seller in this Agreement or in
any other document delivered or to be delivered to the Buyer in connection
herewith contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact required to be stated therein or
necessary to make the statements contained therein not misleading or necessary
in order to provide a prospective purchaser of the business of the Seller with
proper and complete information as to the Seller and the identity and
character of the Acquired Assets and the Contracts. There is no material fact
known to the Seller
<PAGE>
relating to the Acquired Assets, the Contracts, the operation of the Station
with the Acquired Assets and the Contracts or liabilities arising therefrom
that may materially adversely affect the same and that has not been disclosed
to the Buyer in writing.
Section 7.15. ENVIRONMENTAL MATTERS.
In the course of any activities conducted by the Seller in
connection with the Real Estate, Seller has complied in all material respects
with all federal, state and local environmental laws, rules and regulations
applicable to the Station and its operations, including but not limited to the
FCC's guidelines regarding RF radiation.
Section 7.16. LITIGATION.
Except as set forth in Schedule 7.16 hereto, there are no actions,
suits, proceedings or investigations of any kind pending or, to the best
knowledge of the Seller, threatened against the Seller before any court,
tribunal or administrative agency or board that, if adversely determined,
would, either in any case or in the aggregate, have a Materially Adverse
Effect.
Section 7.17. AUTHORIZATION
The execution, delivery and performance of this Agreement, the
Non-Competition Agreement and the Assumption Agreement and the performance by
the Seller of all of its agreements and obligations under each of such
documents
7.17.0.0.0.1.
are within the corporate authority of the Seller,
7.17.0.0.0.2.
have been duly authorized by all necessary corporate proceedings,
7.17.0.0.0.3.
do not conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which the Seller is subject
or any judgment, order, writ, injunction, license or permit applicable to such
Person and
7.17.0.0.0.4.
do not conflict with any provision of the corporate charter or bylaws
of, any agreement or other instrument binding upon the Seller.
<PAGE>
SECTION 8. REPRESENTATIONS, WARRANTIES AND COVENANTS BY THE BUYER.
The Buyer represents and warrants to the Seller as follows:
Section 8.1. ORGANIZATION; AUTHORITY; APPROVALS; BINDING
EFFECT.
The Buyer is a corporation duly organized and validly existing
under the laws of the State of Delaware. The Buyer has the power to enter into
and perform this Agreement, the Non- Competition Agreement and the Assumption
Agreement. This Agreement has been duly executed and delivered by the Buyer
and constitutes, and when executed and delivered hereunder by the Buyer, each
of the Non-Competition Agreement and the Assumption Agreement, will have been
duly executed by the Buyer and will constitute, the legal, valid and binding
obligation of the Buyer, enforceable against the Buyer in accordance with its
terms.
Section 8.2. AUTHORIZATION.
The execution, delivery and performance of this Agreement, the
Non-Competition Agreement and the Assumption Agreement and the performance by
each such Person of all of its agreements and obligations under each of such
documents
8.2.0.0.0.1.
are within the corporate authority of the Buyer
8.2.0.0.0.2.
have been duly authorized by all necessary corporate proceedings
8.2.0.0.0.3.
do not conflict with or result in any breach or contravention of any
provision of law, statue, rule or regulation to which the Buyer is subject or
any judgment, order, writ, injunction, license or permit applicable to the
Buyer and
8.2.0.0.0.4.
do not conflict with any provision of the corporation charter or
bylaws of, any agreement or other instrument binding upon the Buyer.
Section 8.3. GOVERNMENTAL CONSENT.
Except for the FCC Consent and filings required by the HSR Act and
the rules and regulations issued thereunder, no approval of or filing with any
governmental administrative agency or
<PAGE>
authority is required for the execution or delivery of this Agreement by the
Buyer or the consummation of the transactions contemplated herein.
Section 8.4. BROKERS.
Buyer has neither employed nor is liable to any broker, finder or
any other third party in connection with the transactions contemplated by this
Agreement other than Blackburn & Co. and The Sillerman Companies, for whose
fees and expenses Buyer shall be solely responsible (up to a maximum amount,
with respect to Blackburn & Co., not in excess of $216,666).
Section 8.5. DISCLOSURE.
No representation or warranty by the Buyer in this Agreement or in
any other document delivered or to be delivered to the Seller in connection
herewith contains or will contain any untrue statement of material fact or
omits or will omit to state a material fact required to be stated therein.
SECTION 9. AGREEMENTS BY THE SELLER PENDING CLOSING DATE.
Section 9.1. AFFIRMATIVE COVENANTS.
Between the date hereof and the Closing Date, the Seller shall:
9.1.0.0.0.1.
maintain the Station Records in accordance with the Seller's
current practice, and, from time to time, upon reasonable notice and
during regular business hours, give to representatives of the Buyer
full access to the Station Records and cooperate in discussing the
business and affairs of the Seller with the representatives of the
Buyer;
9.1.0.0.0.2.
keep in good repair and maintain all of the property related
to or used in the Station in good operating condition and in
accordance with FCC regulations and the Seller's current practice;
9.1.0.0.0.3.
maintain at all times with respect to all of the Station's
insurable assets the insurance policies currently in effect or
substantially similar policies with other financially sound and
reputable insurers;
9.1.0.0.0.4.
<PAGE>
conduct continuously the broadcast programs and the business
of the Station with due diligence in accordance with the terms and
requirements of the License and use the Seller's commercially
reasonable efforts to preserve and maintain the Station's business
organization and the goodwill and support of the Station's listeners,
advertisers, employees and other persons having business relations
with the Station; and
9.1.0.0.0.5.
employ the Seller's commercially reasonable efforts to
secure, before the Closing Date, the consent, in form and substance
satisfactory to the Buyer, to the consummation of the transactions
contemplated by this Agreement by each party to any agreement,
including, without limitation, any Contract listed in Schedule 2.3
and any Contract entered into after the date hereof, under which such
transactions would constitute a material default, would accelerate
obligations of the Seller or would permit cancellation or early
termination of any such agreement;
9.1.0.0.0.6.
use its reasonable efforts to complete all obligations owing under
trade agreements of the Station prior to the Closing;
9.1.0.0.0.7.
spend not less than one hundred percent (100%) of the cash
promotions and advertising expenditures Seller budgeted for the
Station for the period from the date of this Agreement through the
Closing Date (which budgeted amounts are described in more detail on
Schedule 9.1(g) hereto);
9.1.0.0.0.8.
use its reasonable efforts to maintain the employment at the
Station and to renew, in accordance with this Agreement, the existing
employment contracts of the employees listed in Schedule 7.7;
provided, that nothing set forth herein shall obligate the Seller to
increase the amount of compensation or benefits payable to any of
such employees;
9.1.0.0.0.9.
provide Buyer with sales reports for the Station on a weekly
basis during the term of this Agreement, and within forty-five (45)
days of the end of each month deliver to Buyer an unaudited statement
of revenue and expenses of the Station for the month then ended,
certified by the President or Vice President of Seller as being true
and complete to
<PAGE>
the best of Seller's knowledge and that such statements and
reports fairly and accurately represents the results of operation of
the Station for the period covered by such reports and statements;
9.1.0.0.0.10.
furnish to the Buyer a complete and correct copy of its
audited balance sheet and profit and loss statement for the Station
as at December 31, 1995, for the period then ended, within ten (10)
days of its completion but in any event, no later than April 10,
1996; provided, that the Buyer acknowledges and agrees that the Buyer
will reimburse the Seller promptly on demand for a portion of the
costs incurred by the Seller in connection with the preparation of
such financial statements in an amount equal to $8,334.00.
9.1.0.0.0.11.
subject to the terms of the Confidentiality Agreement dated
February 12, 1996 between the Buyer and the Seller, permit the Buyer
or any of the Buyer's other designated representatives, to visit and
inspect any of the properties of the Seller relating to the operation
of the Station, to examine the books of account of the Station (and
to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Station with, and to be advised
as to the same by, Seller's officers, all at such reasonable times
and intervals as the Buyer may reasonably request; provided, that the
rights of the Buyer under this subsection (k) shall not be exercised
in such a manner as to interfere unreasonably with the business of
the Station and,
9.1.0.0.0.12.
Between the date hereof and for a period of one (1) year
from the Closing Date, Seller shall not, directly or indirectly,
through any agent or otherwise, hire or solicit the employment of any
of the employees listed on Schedule 7.7 who are hired by Buyer at or
after the Closing or who are subject to non-competition agreements
with Buyer (but only to the extent limited by such non-competition
agreements), except as agreed to in writing by Buyer and Seller.
Section 9.2. NEGATIVE COVENANTS.
Between the date hereof and the Closing Date, the Seller shall
operate the Station only in the ordinary course, and shall not, without the
consent of the Buyer, do any of the following:
9.2.0.0.0.1.
<PAGE>
create, incur or permit the creation of any Encumbrance on the
Seller's business, property or assets now owned or hereafter acquired in
connection with the Station;
9.2.0.0.0.2.
except for contracts for the sale of advertising for cash for which
no prepayment has been received and with not more than twelve (12) months
remaining in their term, and except for such other contracts or leases that
involve commitments by the Seller not in excess of $10,000 in any one case nor
more than $50,000 in the aggregate, make or become a party to any contract,
lease or commitment, or renew, extend, amend or modify any contract, lease or
commitment without the prior written consent of the Buyer;
9.2.0.0.0.3.
agree to pay, conditionally or otherwise, any bonus (other than
bonuses in amounts or calculated according to methods disclosed to the Buyer
and payable as a reward for continued satisfactory performance during the
period from the date of this Agreement to the Closing Date, which bonuses
shall be payable by the Seller), extra compensation, pension or severance pay
to any agent, officer or employee or increase the rate of compensation of any
of the officers or employees of the Seller above the rates shown on Schedule
7.7 except for certain regularly scheduled annual raises noted on Schedule 7.7
which would normally be made between the date of this Agreement and the
Closing Date and which are in amounts consistent with the Seller's prior
practices;
9.2.0.0.0.4.
permit, either in violation of the FCC's rules and regulations or
contrary to the Seller's past practices relating to record retention, the
removal from the Station, or the destruction, of the Station Records;
9.2.0.0.0.5.
except to the extent that FCC rules and regulations require that such
matters be left to the discretion of the Seller, change materially the manner
in which the Seller operates the Station or the Seller's practices with
respect to the Station, including, without limitation, the type, quality and
amount of promotional support which the Seller has historically provided to
the Station; or
9.2.0.0.0.6.
renew the Studio Lease without the prior written consent of the Buyer.
Section 9.3. CONTROL OF STATION.
<PAGE>
The Buyer shall not directly or indirectly control, supervise or
direct, or attempt to control, supervise or direct the operations of the
Station; such operations, including complete control and supervision of all
programs and employees, shall be the sole responsibility of the Seller.
Without limiting the foregoing, the Buyer shall not induce any of the
employees of the Seller to leave their employment with the Seller or employ or
otherwise contract for the services of any person who is now employed by the
Seller at the time of the commencement of employment discussions between the
Buyer and such person.
SECTION 10. BEST EFFORTS TO SECURE REGULATORY AUTHORIZATION AND FCC
CONSENT.
10.0.0.0.0.1.
If necessary, the Seller and the Buyer shall proceed to
file, not later than fifteen (15) business days following the date
hereof, with the FTC and the Antitrust Division of the United States
Department of Justice notification and report forms and documentary
material which comply with the provisions of the HSR Act and the
rules and regulations issued thereunder, and will promptly file any
additional information requested as soon as practicable after receipt
of the request. Neither of the Buyer or the Seller will take any
action which will have the effect of delaying, impairing or impeding
the receipt of any required approvals and both such parties will use
their best efforts to secure such approvals as promptly as possible.
10.0.0.0.0.2.
The Seller and Buyer shall proceed to file, not later than
ten (10) business days following the date hereof, proper applications
with the FCC requesting the FCC Consent, and shall file with the FCC
thereafter any other instruments necessary to obtain the FCC Consent,
including additional information or amendments to the application,
and shall cooperate fully with one another and shall otherwise use
their best efforts to procure the FCC Consent at the earliest
possible date. Without limiting the foregoing, neither the Buyer nor
the Seller will take any action which will have the effect of
delaying, impairing or impeding the receipt of the FCC Consent. All
costs of obtaining such consents shall be borne equally by the Seller
and the Buyer.
SECTION 11. CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATIONS.
Each and every obligation of the Buyer to be performed at the
Closing shall be subject to the satisfaction of the following conditions (to
the extent noncompliance is not waived in writing by the Buyer):
<PAGE>
Section 11.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
SELLER.
The representations and warranties of the Seller set forth in
Section 7 shall be true and correct in all material respects as of the Closing
Date with the same force and effect as though made again at and as of the
Closing Date, except for changes contemplated and permitted or required by
this Agreement. The Seller shall have performed and complied in all material
respects with all agreements and conditions required by this Agreement to be
performed or complied with by the Seller prior to or at the Closing. The
Seller shall have executed and delivered, in form and substance satisfactory
to the Buyer, the Assumption Agreement and the Non-Competition Agreement. The
Seller shall have delivered to the Buyer the Seller's certificate, dated as of
the Closing Date, stating that the conditions set forth in this Section 11.1
have been satisfied, together with a good standing certificate relating to the
Seller and issued by each of the Secretaries of State of Delaware and
Connecticut, respectively.
Section 11.2. GOVERNMENTAL AGENCY APPROVALS.
The FCC Consent shall have become effective and each other
governmental agency the approval of which is required prior to the
consummation of any of the transactions contemplated by this Agreement shall
have approved such transaction on the terms contemplated by this Agreement and
the applicable (if any) waiting periods under the HSR Act and the rules and
regulations issued thereunder shall have expired; provided that the parties
hereto shall have complied with the provisions of Section 10(a) hereof.
Section 11.3. PUBLIC RECORDS FILE; OTHER BOOKS AND RECORDS; BARTER
AND OTHER TRADE AGREEMENTS.
The Seller shall have delivered to the Buyer on the Closing Date
all books and records (or copies thereof) of the Seller relating to the
Seller's operation of the Station (collectively, the "Station's Records"), as
of the Closing Date. The Seller shall deliver at the Closing a schedule of all
of its current barter and other trade agreements and a statement of its
outstanding net barter and other trade balances as of the Closing Date. For a
period of not less than one (1) year after Closing, the Buyer agrees to retain
any Station's Records in its possession. If required by the Seller for
regulatory, audit, tax or other reasonable and similar purposes, the Buyer
will grant the Seller reasonable access to, or make copies of the Station's
Records relating to the pre-closing operations of the Station as are in its
possession. The Seller will pay the Buyer the costs of copying such Station's
Records. The Buyer will not destroy any of the Station's Records relating to
the pre-closing operations of the Station prior to six (6) years after the
Closing Date without notifying the Seller and allowing the other party to take
possession of and preserve such Station's Records.
<PAGE>
Section 11.4. CONSENTS.
Each other party to each of the Leases, and each other party to any
other Contract or other agreement with the Seller under which the transactions
contemplated by this Agreement
11.4.0.0.0.1.
would constitute a default giving rise to a claim for damages or
injunctive relief which could materially adversely affect any Acquired Asset
or the business or operations of the Station,
11.4.0.0.0.2.
would accelerate obligations, or
11.4.0.0.0.3.
would cause the early termination or cancellation of such agreement,
shall have given such consent at no expense to the Buyer, in a form and
substance approved by the Buyer (which approval shall not be unreasonably
withheld), as may be necessary to permit the consummation of the transactions
contemplated by this Agreement and such assignment, all without default or
acceleration under or early termination or cancellation of such agreement and
without charge.
Section 11.5. NO MATERIALLY ADVERSE CHANGE.
No action or proceeding shall have been instituted, and no order,
decree or judgment of any court or governmental authority shall be subsisting,
against the Buyer or the Seller that would render it unlawful, as of the
Closing Date, to effect the transactions contemplated hereunder in accordance
with the terms hereof or that would affect, as of the Closing Date, the
validity of the License.
Section 11.6. OPINION OF COUNSEL.
The Seller shall have delivered to the Buyer on the Closing Date
11.6.0.0.0.1.
areasonable satisfactory opinion from Bingham, Dana & Gould, special
counsel for the Seller, dated as of the Closing Date, and substantially in the
form of Exhibit E, and
11.6.0.0.0.2.
areasonably satisfactory opinion of Kaye, Scholer, Fierman, Hayes &
Handler, special FCC counsel to the Seller, dated as of
<PAGE>
the Closing Date, as to the matters set forth in Section 7.5 and the validity
of the FCC Consent.
Section 11.7. MINIMUM OPERATING INCOME.
The Operating Income of the Station for the four (4) consecutive
fiscal quarter period of the Borrower ending June 30, 1996, as set forth in
the unaudited, management prepared financial statements of the Station for
such period, shall not be less than $1,000,000. As used herein, "Operating
Income" shall mean the aggregate amount of net revenues of the Station for
such period minus the aggregate amount of operating expenses of the Station
for such period. Operating expenses shall not include interest, depreciation,
amortization and other non-cash charges. Net revenue shall include all tower
rental and other income. The Buyer also agrees that
11.7.0.0.0.1.
the calculation of the Station's Operating Income for the fiscal year
ended December 31, 1995, attached hereto as Exhibit F, is acceptable to the
Buyer with respect to the calculation of Operating Income for such period (and
for the four (4) quarter period ending June 30, 1996) and
11.7.0.0.0.2.
the extraordinary expenses added back to Operating Income for such
period, all as set forth on such Exhibit F, are acceptable to the Buyer and
such extraordinary expenses shall also be added back (on a pro rata basis for
amounts of such expenses actually incurred during such four quarter period)
when calculating Operating Income of the Station for the four (4) consecutive
fiscal quarter period ending June 30, 1996.
Section 11.8. ADDITIONAL CERTIFICATES AND OTHER DOCUMENTS.
On or before the Closing Date, the Seller shall have furnished to
the Buyer such additional certificates and other documents as the Buyer may
have reasonably requested as to any of the conditions or other matters set
forth in this Section 11, including, without limitation, as to compliance with
Section 11.1.
SECTION 12. CONDITIONS PRECEDENT TO THE SELLER'S OBLIGATIONS.
Each and every obligation of the Seller to be performed at the
Closing shall be subject to the satisfaction of the following conditions (to
the extent noncompliance is not waived in writing by the Seller):
Section 12.1. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYER.
<PAGE>
The representations and warranties of the Buyer set forth in
Section 8 shall be true and correct as to all material matters as of the
Closing Date with the same force and effect as though made again at and as of
the Closing Date, except for changes contemplated and permitted or required by
this Agreement. The Buyer shall have tendered to the Seller the Purchase
Price, executed and delivered the Non-Competition Agreement and performed and
complied with all other agreements and conditions required by this Agreement
to be performed or complied with by the Buyer prior to or at the Closing. The
Buyer shall have delivered to the Seller a certificate, dated as of the
Closing Date, stating that the conditions set forth in this Section 12.1 have
been satisfied.
Section 12.2. GOVERNMENTAL AGENCY APPROVALS.
The FCC Consent shall have become effective and each other
government agency the approval of which is required prior to the consummation
of any of the transactions contemplated by this Agreement shall have approved
such transaction on the terms contemplated by this Agreement and the
applicable waiting periods under the HSR Act and the rules and regulations
issued thereunder shall have expired; provided that the parties hereto shall
have complied with the provisions of Section 10(a) hereof.
Section 12.3. NO OBSTRUCTIVE PROCEEDING.
No action or proceeding shall have been instituted, and no order,
decree or judgment of any court, agency, commission or governmental authority
shall be subsisting, against the Buyer or the Seller that would render it
unlawful, as of the Closing Date, to effect the transactions contemplated
hereunder in accordance with terms hereof.
Section 12.4. OPINION OF COUNSEL.
The Buyer shall have delivered to the Seller on the Closing Date an
opinion from Richard Liese, Esq., corporate counsel for the Buyer, that is in
form and detail reasonably satisfactory to the Seller.
SECTION 13. INDEMNIFICATION BY BUYER.
Section 13.1. INDEMNIFICATION OF SELLER.
The Buyer agrees to indemnify and hold the Seller harmless from and
with respect to any and all claims, liabilities, losses, damages, costs and
expenses (including reasonable attorney's fees) arising from or related to any
of the following: (a) any material inaccuracies in any representation or
warranty made by the Buyer herein or in any document delivered by the Buyer in
connection herewith, or any material failure by the Buyer to comply with any
covenant made by the Buyer in this Agreement or any such document; (b) any and
all claims, liabilities and
<PAGE>
obligations arising out of the ownership or operation following the Closing
Date of the Station or the Acquired Assets or the performance following the
Closing Date of the Contracts; provided that such claims, liabilities and
obligations are not based solely on facts existing prior to the Closing Date;
(c) any claims, liability or obligation with respect to any employee of the
Buyer in connection with his or her employment by the Buyer following the
Closing Date; or (d) any loss, cost or expense of the Seller relating to the
failure of the Buyer to comply in any material respect with the provisions of
this Section 13, provided that Buyer shall have no liability under this
Section13.1 until the aggregate for all claims hereunder exceeds the sum of
$25,000 (the "Threshold Amount"), in which event Buyer shall then be liable
for all claims for indemnification hereunder, including the Threshold Amount.
Section13.2. Claims.
In the event that the Seller desires to make a claim against the
Buyer under Section 13.1, the Seller shall notify the Buyer within ninety (90)
days of the date on which Seller becomes aware of all of the facts and
circumstances giving rise to such claim. Upon receipt of such notice from the
Seller of any claim made by a third party, the Buyer shall be entitled to
assume the defense of such claim, and in the case of such an assumption the
Buyer shall have the authority to negotiate, compromise and settle such claim
at its sole expense and cost, provided, that any such settlement shall include
as an unconditional term thereof the giving by such third party to the Seller
of a release from all liability in respect of such claim.
Section 13.3. LIMITATION.
No claim may be made pursuant to this Section 13 unless notice
thereof pursuant to Section 13.2 has been given on or prior to the second
anniversary of the Closing Date; provided that if and to the extent that the
Seller continues to be liable directly to the third parties under any Contract
such time limitation shall not apply with respect to claims made pursuant to
this Section 13 and relating to the performance after the Closing Date of such
Contracts. No claim may be made in respect of any matter covered by Section
13.1, including but not limited to any claim by the Seller based on any
inaccuracy of any representation or warranty made by the Buyer, except
pursuant to the provisions of this Section 13.
SECTION 14. INDEMNIFICATION BY SELLER.
Section 14.1. INDEMNIFICATION OF BUYER.
The Seller agrees to indemnify and hold the Buyer harmless from and
with respect to any and all claims, liabilities, losses, damages, costs and
expenses (including reasonable attorney's fees) arising from or related to any
of the following: (a) any
<PAGE>
material inaccuracies in any representation or warranty made by the Seller
herein or in any document delivered by the Seller in connection herewith, or
any material failure by the Seller to comply with any covenant made by the
Seller in this Agreement or any such document; (b) any and all claims,
liabilities and obligations arising out of the ownership or operation on or
prior to the Closing Date of the Station or the Acquired Assets or the
performance on or prior to the Closing Date of the Contracts; provided that
such claims, liabilities and obligations are based on facts which came into
existence after the Closing Date; (c) any claim or liability arising under the
bulk sales or related tax laws of any jurisdiction in connection with
transactions contemplated by this Agreement (in view of such indemnification
obligation the Buyer hereby waives the Seller's compliance with any such bulk
sales and related tax laws as a condition to the Closing hereunder); (d) any
claims, liability or obligation with respect to any employee of the Seller in
connection with his or her employment and/or termination of employment on or
prior to the Closing Date by the Seller; (e) any and all claims or
counterclaims arising in connection with the Excluded Assets; or (f) any loss,
cost or expense of the Buyer relating to the failure of the Seller to comply
in any material respect with the provisions of this Section 14, provided that
Seller shall have no liability under this Section14.1 until the aggregate for
all claims hereunder exceeds the Threshold Amount, in which event Seller shall
be liable for all claims for, indemnification hereunder, including the
Threshold Amount.
Section 14.2. CLAIMS.
In the event that the Buyer desires to make a claim against the
Seller under Section 14.1, the Buyer shall notify the Seller within ninety
(90) days of the date on which Buyer becomes aware of all of the facts and
circumstances giving rise to such claim. Upon receipt of such notice from the
Buyer of any claim made by a third party, the Seller shall be entitled to
assume the defense of such claim, and in the case of such an assumption the
Seller shall have the authority to negotiate, compromise and settle such claim
at its sole expense and cost; provided, that any such settlement shall include
as an unconditional term thereof the giving by such third party to the Buyer
of a release from all liability with respect to such claim.
Section 14.3. LIMITATION.
No claim may be made pursuant to this Section 14 unless notice
thereof pursuant to Section 14.2 has been given on or prior to the second
anniversary of the Closing Date, or, if the claim relates to any tax liability
or claim, the third anniversary of the Closing Date. No claim may be made in
respect of any matter covered by Section 14.1, including but not limited to
any claim by the Buyer based on any inaccuracy of any representation or
warranty made by the Seller, except pursuant to the provisions of this Section
14.
<PAGE>
SECTION 15. TERMINATION OF AGREEMENT.
Section 15.1. TERMINATION.
This Agreement may be terminated by either Buyer or Seller (as long
as such party has complied in all material respects with its covenants and
agreements under this Agreement) upon the occurrence of any of the following:
15.1.0.0.0.1.
if, on or prior to the Closing Date, the other party hereto
defaults in any material respect in the observance or in the due and
timely performance of any of its covenants or agreements herein
contained and such default shall not be cured within thirty (30) days
of the date of notice of default served by the party claiming such
default; or
15.1.0.0.0.2.
on ten (10) days written notice if the FCC denies any
application requesting the FCC Consent, or if the FCC fails to grant
the FCC Consent within six (6) months following the date of this
Agreement, provided, that Seller shall extend such time limit an
additional one (1) month at the request of Buyer so long as Buyer
shall be diligently prosecuting the FCC Application in good faith and
the FCC has not issued any ruling or decision denying the FCC
Application; or
15.1.0.0.0.3.
if there shall be in effect any judgment, decree or order
that would prevent or make unlawful the Closing of this Agreement; or
15.1.0.0.0.4.
by Buyer only, if between the date hereof and the Closing
Date the Station for any reason does not broadcast at substantially
full licensed power and antenna heights as described in the License
(an "Off Air Event") for a continuous period of five (5) days or if
all Off Air Events result in an aggregate of five (5) days wherein
the Station does not broadcast at full licensed power and antenna
height or if there are more than four (4) Off Air Events, each
lasting six (6) hours or more.
Section 15.2. DRAWDOWN OF LETTER OF CREDIT.
The Buyer and the Seller hereby agree that
15.2.0.0.0.1.
<PAGE>
upon the termination of this Agreement as a result of the failure by
the Buyer to comply in any material respect with the terms of this Agreement,
or
15.2.0.0.0.2.
if any representation or warranty of the Buyer herein shall prove to
be false in any material respect when made, (c) if the Letter of Credit will
expire in accordance with its terms prior to the scheduled Closing Date, the
Seller will be free in sole and absolute discretion to make a drawing under
the Letter of Credit for the full amount available thereunder. Seller
acknowledges and agrees that the amounts available to be drawn down under the
Letter of Credit shall be the sole and exclusive remedy of Seller against
Buyer in connection with such default and termination. The Seller shall hold
the Letter of Credit in escrow (subject to its drawdown rights hereunder)
until its drawdown in accordance with the terms hereof or its return to the
Buyer upon the consummation of the transactions contemplated herein.
SECTION 16. GENERAL.
Section 16.1. EXPENSES.
Except as otherwise expressly provided in this Agreement, all
expenses of the preparation, execution and consummation of this Agreement and
of the transactions contemplated hereby shall be borne by the party incurring
such expenses.
Section 16.2. NOTICES.
All notices, demands and other communications hereunder shall be in
writing or by written telecommunication, and shall be deemed to have been duly
given if delivered personally or if mailed by certified mail, return receipt
requested, postage prepaid, or sent by written telecommunication, as follows:
(a) if to the Seller, to: Precision Media Corporation,, Hartford Square North,
Ten Columbus Boulevard, Hartford, Connecticut 06106, Attention: Timothy J.A.
Montgomery, Vice President; and (b) if to the Buyer, to: Multi-Market Radio,
Inc., One Monarch Place, Suite 220, Springfield, Massachusetts 01144,
Attention: Michael G. Ferrel, President and CEO.
Section 16.3. FURTHER ASSURANCES.
From time to time, at the request of the Buyer and without further
consideration, the Seller shall execute and deliver such further instruments
of conveyance and transfer and take such other actions as the Buyer may
reasonably require more effectively to convey and transfer any of the Acquired
Assets and to assign any of the Contracts to the Buyer. The Seller and the
Buyer shall also execute and deliver to the appropriate other party such other
instruments as may be reasonably required in
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connection with the performance of this Agreement and each shall take all such
further actions as may be reasonably required to carry out the transactions
contemplated by this Agreement.
Section 16.4. FULL CONSIDERATION; RISK OF LOSECTION
Except as otherwise expressly provided in this Agreement, the
Seller shall be responsible to deliver the Acquired Assets and to assign the
Contracts upon the terms of this Agreement without further cost or expense to
the Buyer and shall be responsible for satisfying any and all costs and
expenses payable to any third parties arising as a result of the Seller's
delivery of the Acquired Assets and the assignment of the Contracts to the
Buyer. The risk of loss, damage or destruction to any Acquired Asset from any
cause whatsoever prior to the Closing shall be borne by the Seller, who shall,
prior to the Closing and at the Seller's own expense, repair, rebuild or
replace any Acquired Asset so lost, damaged or destroyed.
Section 16.5. PUBLIC STATEMENTS OR RELEASES.
The parties hereto each agree that neither party to this Agreement
will make any public announcement of the existence of, or reveal the status
of, the transactions provided for herein, without the prior approval of the
other party hereto. Each party hereto agrees that it will not unreasonably
withhold or delay any such approval. Nothing contained in this Section 16.5
shall prevent any party from making such public announcements as such party
may consider necessary in order to satisfy such party's legal or contractual
obligations.
Section 16.6. NONRECOURSE OBLIGATIONS.
Notwithstanding any contrary provision contained in this Agreement,
the Non-Competition Agreement, the Assumption Agreement or any other
agreement, document or instrument delivered in connection herewith or
therewith, none of the shareholders, officers, directors or employees of the
Buyer or the Seller nor any legal representative, heir, successor or assignee
of any shareholder, officer, director or employee of the Buyer or the Seller
shall have any personal liability for any misrepresentation or breach of
warranty made by the Buyer or the Seller hereunder or thereunder, or any
failure by the Buyer or the Seller to perform or observe any of the terms,
covenants or conditions to be performed or observed by the Buyer hereunder or
thereunder or any other obligation arising hereunder or thereunder. In the
event of any such misrepresentation, breach or failure, the Seller or the
Buyer, as the case may be, shall be entitled to proceed solely against the
Buyer or the Seller, as the case may be.
Section 16.7. SPECIFIC PERFORMANCE.
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Seller recognizes that, in the event Seller refuses to perform the
provisions of this Agreement, monetary damages alone will not be adequate.
Buyer shall, therefore, be entitled in such event, in addition to bringing
suit at law or equity for money or other damages, to obtain specific
performance of the terms of this Agreement. In any action to enforce the
provisions of this Agreement, Seller shall waive the defense that there is an
adequate remedy at law or equity and agrees that Buyer shall have the right to
obtain specific performance of the terms of this Agreement without being
required to prove actual damages, post bond or furnish other security.
Section 16.8. MISCELLANEOUS.
This Agreement contains the entire understanding of the parties,
supersedes all prior agreements and understandings relating to the subject
matter hereof and shall not be amended except by a written instrument
hereafter signed by each of the parties hereto. The validity and construction
of this Agreement shall be governed by the laws of the State of Connecticut.
The headings of sections are for reference only and shall not limit or control
the meaning thereof. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
Neither party may assign its interests under this Agreement without the prior
consent of the other, except that Buyer may assign its interests to a
wholly-owned subsidiary of the Buyer without the Seller's prior consent;
provided, that such assignment shall not be effective unless (a) the Buyer
shall have provided the Buyer with not less than five (5) business days prior
written notice of such assignment in accordance with the terms hereof and (b)
the Buyer shall have agreed in writing with the Seller that the Buyer will
remain fully and directly liable for the prompt payment and performance of all
of the Buyer's and such Assignee's obligations hereunder. The representations
and warranties of each party contained in this Agreement or otherwise made in
writing in connection with the transactions contemplated hereby shall be
deemed material and, notwithstanding any investigation by the other party
hereto, shall be deemed to have been relied upon by such other party and shall
survive the Closing and the consummation of the transactions contemplated
hereby. Except as otherwise expressly provided herein, nothing herein
expressed or implied is intended or shall be construed to confer upon or to
give any person, other than the Seller and the Buyer, any rights or remedies
under or by reason of this Agreement. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
PRECISION MEDIA CORPORATION
By: /s/ Timothy J.A. Montgomery
-----------------------
Timothy J.A. Montgomery
Title: Vice President and
General Manager
MULTI-MARKET RADIO, INC.
By: /s/ Michael G. Ferrel
-----------------------
Michael G. Ferrel
Title: President and CEO
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EXHIBIT A
Assumption Agreement
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EXHIBIT B
Letter of Credit
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EXHIBIT C
Non-Competition Agreement
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EXHIBIT D
Studio Lease
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EXHIBIT E
TOWER LEASE
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EXHIBIT F
December 31, 1995 Unaudited Financial Statements
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EXHIBIT F
PAGE TWO
EXTRAORDINARY EXPENSE ADD BACKS:
17. $1,065,000
Montgomery/Excess compensation as shareholder:
18. $1,022,000
Legal Expense due to shareholder tax issues:
(Bingham, Dana & Gould)
19. $1,023,177
Auditor expense due to shareholder tax issues:
(Freeley & Driscoll)
20. $1,003,500
Legal expense for New Hampshire station acquisition
Hartford-allocation (Katten Muchine):
21. $1,012,000
401K Contribution
22. $1,005,000
Keyman Life/Montgomery
23. $1,018,000
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Controller Salary allocation:
24. $1,015,000
Excess insurance premiums
25. $1,005,000
Auto purchase per Seven-Up (client Goodwill)
26. $1,005,600
Consultant (Strategic Planning):
27. $1,008,659
Gary Craig replacement (Management option):
28. $1,026,000
Excess promotional expenses to counter
Gary Craig departure:
29. $1,001,000
Gift to terminally ill employee:
30. $1,007,900
Montgomery auto:
Total $1,217,836
Total 1995 Operating Income $1,418,506
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SCHEDULE 2.1
TANGIBLE ASSETS
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SCHEDULE 2.2
INTANGIBLE ASSETS
Call Sign
1. "WKSS-FM"
Trade Name
"Kiss 95.7"
"The Nut Hut"
"Spousal Arousal"
"Worst Joke Wednesday"
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SCHEDULE 2.3
CONTRACTS
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SCHEDULE 2.4
ASSUMED EMPLOYEE CONTRACTS
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SCHEDULE 4
TRADE ACCOUNTS
Positive Balances (owes us)
Total:
NEGATIVE BALANCES (we owe them)
Total:
GRAND TOTAL
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SCHEDULE 5.2
PERMITTED ENCUMBRANCES
30.0.0.0.0.0.1.
Liens to secure taxes, assessments and other
government charges in respect of obligations not overdue or
liens on properties to secure claims for labor, material or
supplies in respect of obligations not overdue;
30.0.0.0.0.0.2.
Deposits or pledges made in connection with, or to
secure payment of, workmen's compensation, unemployment
insurance, old age pensions or other social security
obligations;
30.0.0.0.0.0.3.
Encumbrances on Real Estate consisting of
easements, rights of way, zoning restrictions, restrictions
on the use of real property and defects and irregularities
in the title thereto, landlord's or lessor's liens under
leases to which the Seller is a party, and other minor liens
or encumbrances none of which in the opinion of the Seller
interferes materially with the use of the property affected
in the ordinary conduct of the business of the Seller which
defects do not individually or in the aggregate have a
materially adverse effect on the business of the Seller; and
30.0.0.0.0.0.4.
Liens on all assets and properties of the Seller in
favor of Bank of Boston Connecticut.
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SCHEDULE 5.3
PRE-CLOSING DATE ACCOUNTS RECEIVABLE
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SCHEDULE 7.5
LICENSE
FCC license for WKSS attached hereto as Attachment 7.5.
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SCHEDULE 7.7
EMPLOYEES
The attached list contains payroll information for bi-monthly pay
period ending March 31, 1996 for employees of Station WKSS.
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SCHEDULE 7.9
UNFUNDED LIABILITIES
None
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SCHEDULE 7.12
INSURANCE
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SCHEDULE 7.16
LITIGATION
None
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SCHEDULE 9.1(g)
Advertising Budget
April $45,000
May $55,000
June $30,000
July $15,000
August $15,000
Total $160,000.00
