Exhibit 10.45(a)
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ASSET PURCHASE AGREEMENT
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by and among
▇▇▇▇▇▇▇▇ TELECABLE, INC.
d/b/a ▇▇▇▇▇▇▇▇ COMMUNICATIONS
and
COMMONWEALTH BROADCASTING, LLC
and
RADIO ONE, INC.
for the sale and purchase of
Station WCDX-FM, Station WPLZ-FM, Station WGCV-AM and Station WJRV-FM
Dated as of May 6, 1999
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TABLE OF EXHIBITS
EXHIBIT 1 -- Escrow Agreement
EXHIBIT 2 -- Time Brokerage Agreement
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TABLE OF SCHEDULES
SCHEDULE 2.1(c)(1) Contracts
SCHEDULE 6.1 Seller's Places of Business
SCHEDULE 6.3 Litigation
SCHEDULE 6.4 Permitted Encumbrances
SCHEDULE 6.5 Governmental Authorizations
SCHEDULE 6.6 Equipment
SCHEDULE 6.8 Intellectual Property
SCHEDULE 6.9 Insurance
SCHEDULE 6.10(b) Financial Statements
SCHEDULE 6.11 Employees
SCHEDULE 6.12 Employment and Benefits Agreements
SCHEDULE 6.13 Real Property
SCHEDULE 6.14 Environmental
SCHEDULE 6.15 Compliance With Law
SCHEDULE 6.21 Related Parties
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ASSET PURCHASE AGREEMENT
This Agreement, made and entered into as of this ______ day of May,
1999, by and among ▇▇▇▇▇▇▇▇ Telecable, Inc. d/b/a ▇▇▇▇▇▇▇▇ Communications, an
Indiana corporation, Commonwealth Broadcasting, LLC, a Commonwealth of Virginia
limited liability company (collectively "Seller", individually, "▇▇▇▇▇▇▇▇" and
"Commonwealth" respectively), and Radio One, Inc., a Delaware corporation
("Buyer").
WITNESSETH THAT:
WHEREAS, ▇▇▇▇▇▇▇▇ is the licensee of Stations WCDX-FM, Mechanicsville,
Virginia, 92.1 MHz, WPLZ-FM, Petersburg, Virginia, 99.3 MHz, and WGCV-AM,
Petersburg, Virginia, 1240 KHz and Commonwealth is the licensee of Station
WJRV-FM, Richmond, Virginia, 105.7 MHz (the "Stations"); and
WHEREAS, the parties desire that Buyer purchase the assets used or held
for use in the operation of the Stations and acquire the authorizations issued
by the Federal Communications Commission (the "Commission") for the operation of
the Stations; and
WHEREAS, Seller may elect to structure this Transaction as a
tax-deferred like-kind exchange pursuant to Internal Revenue Code Section 1031,
consistent with the provisions contained herein; and
WHEREAS, the authorizations issued by the Commission may not be
assigned to Buyer without the Commission's prior consent.
NOW THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties, intending to be legally bound, agree as follows:
1.0 RULES OF CONSTRUCTION.
1.1. DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings:
"ADMINISTRATIVE VIOLATION" means those violations described in Section
8.6 hereof.
"ASSIGNMENT APPLICATION" means the applications on FCC Form 314 that
Seller and Buyer shall join in and file with the Commission requesting its
consent to the assignment of the FCC Licenses (as hereinafter defined) from
Seller to Buyer.
"BUSINESS RECORDS" means all business records of Seller (including
logs, public files materials and engineering records) relating to or used in the
operation of the Stations and not relating solely to Seller's internal corporate
affairs.
"BUYER" means Radio One, Inc., a Delaware corporation.
"BUYER DOCUMENTS" means those documents, agreements and instruments to
be executed and delivered by Buyer in connection with this Agreement as
described in Section 7.2.
"CLOSING" means the consummation of the Transaction (as hereinafter
defined).
"CLOSING DATE" means the date on which the Closing takes place, as
determined by Section 11.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations promulgated thereunder.
"COMMISSION" means the Federal Communications Commission.
"COMMUNICATIONS ACT" shall mean the Communications Act of 1934, as
amended.
"CONTRACTS" means those contracts, leases and other agreements listed
or described in Schedule 2.1(c)(1) which are in effect on the date hereof and
which Buyer has agreed to assume, but not including Sales Agreements and Trade
Agreements (as hereinafter defined).
"ENVIRONMENTAL LAW" means any law, rule, order, decree or regulation of
any Governmental Authority relating to pollution or protection of human health
and the environment, including any law or regulation relating to emissions,
discharges, releases or threatened releases of Hazardous Substances (as
hereinafter defined) into ambient air, surface water, groundwater, land or other
environmental media, and including without limitation all laws, regulations,
orders and rules pertaining to occupational health and safety.
"ESCROW AGENT" means Wilmington Trust Company.
"ESCROW AGREEMENT" means the escrow agreement described in Section 3,
the form of which is attached as Exhibit 1.
"ESCROW DEPOSIT" means the monies deposited with the Escrow Agent
described in Section 3.
"EQUIPMENT" means all tangible personal property and fixtures used or
useful in the operation of the Stations as described in Section 2.1(b).
"EXCLUDED ASSETS" means those assets excluded from the Purchased Assets
and retained by the Seller, to the extent in existence on the Closing Date, as
specifically described in Section 2.2.
"FCC LICENSES" means all licenses, pending applications, permits and
other authorizations issued by the Commission for the operation of the Stations
listed on Schedule 6.5.
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"FINAL ORDER" means any action that shall have been taken by the
Commission (including action duly taken by the Commission's staff, pursuant to
delegated authority) which shall not have been reversed, stayed, enjoined, set
aside, annulled or suspended; with respect to which no timely request for stay,
petition for rehearing, appeal or certiorari or sua sponte action of the
Commission with comparable effect shall be pending; and as to which the time for
filing any such request, petition, appeal, certiorari or for the taking of any
such sua sponte action by the Commission shall have expired or otherwise
terminated.
"FINANCIAL STATEMENTS" means Seller's audited and unaudited financial
statements as described in Section 6.10.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any agency, court or other entity that
exercises executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"HAZARDOUS SUBSTANCES" means any hazardous, dangerous or toxic waste,
substance or material, as those or similar terms are defined in or for purposes
of any applicable federal, state or local Environmental Law, and including
without limitation any asbestos or asbestos-related products, oils, petroleum or
petroleum-derived compounds, CFCs, or PCBs.
"INTANGIBLE PROPERTY" means all of Seller's right, title and interest
in and to the goodwill and other intangible assets used or useful in or arising
from the business of the Stations as described in Section 2.1(f).
"INTELLECTUAL PROPERTY" means all Seller's right, title and interest in
and to the trademarks, tradenames, service marks, patents, franchises,
copyrights, including registrations and applications for registration of any of
them, slogans, jingles, logos, computer programs and software, trade secrets and
similar materials and rights relating to the Stations as listed on Schedule 6.8.
"KNOWLEDGE OF BUYER" means the actual knowledge, after reasonable
inquiry of Buyer's senior management, and the books and records of Buyer.
"KNOWLEDGE OF SELLER" means the actual knowledge, after reasonable
inquiry of Seller's senior management, the books and records of the Stations,
and the actual knowledge of J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"MATERIAL CONTRACTS" means those leases, contracts and agreements
specifically designated in Schedule 2.1(c)(1) as being "Material Contracts."
"PERMITTED ENCUMBRANCES" means those permitted liens or encumbrances to
the Purchased Assets described in Section 6.4 and set forth on Schedule 6.4.
"PURCHASE PRICE" shall mean the total consideration for the Purchased
Assets as described in Section 4.1.
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"PURCHASED ASSETS" means those assets which are the subject matter of
this Agreement that Seller shall sell, assign, transfer, convey and deliver to
Buyer at Closing as described in Section 2.1.
"SALES AGREEMENTS" means agreements entered into by Seller for the sale
of time on the Stations for cash, as described in Section 2.1(c)(2).
"SELLER" means ▇▇▇▇▇▇▇▇ Telecable, Inc. d/b/a ▇▇▇▇▇▇▇▇ Communications,
and Commonwealth Broadcasting, LLC.
"SELLER DOCUMENTS" means those documents, agreements and instruments to
be executed and delivered by Seller in connection with this Agreement as
described in Section 6.1.
"SPECIFIED EVENT" means those broadcast transmission failures described
in Section 8.5(b).
"STATIONS" means WCDX-FM, Mechanicsville, Virginia, 92.1 MHz, WPLZ-FM,
Petersburg, Virginia, 99.3 MHz, WJRV-FM, Richmond, Virginia, 105.7 MHz, and
WGCV-AM, Petersburg, Virginia, 1240 KHz.
"STUDIO SITE" means the leased real estate located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as the studio
and office facilities for Stations WCDX-FM, WPLZ-FM and WJRV-FM.
"WGCV-AM STUDIO SITE" means the leased real estate located at ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
"TRADE AGREEMENTS" means agreements entered into by Seller for the sale
of time on the Stations in exchange for merchandise or services, including those
listed on Schedule 2.1(c)(1).
"TRADE BALANCE" means the difference between the aggregate value of
time owed pursuant to the Trade Agreements and the aggregate value of goods and
services to be received pursuant to the Trade Agreements, as computed in
accordance with the Station's customary bookkeeping practices. The Trade Balance
is "negative" if the value of time owed as of Closing exceeds the value of goods
and services to be received. The Trade Balance is "positive" if the value of
time owed as of Closing is less than the value of goods and services to be
received.
"TRANSACTION" means the sale and purchase and assignments and
assumptions contemplated by this Agreement and the respective obligations of
Seller and Buyer set forth herein.
"WCDX-FM BACKUP TRANSMITTER SITE" means the real estate located at ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ owned by ▇▇▇▇ ▇▇▇▇▇▇▇▇, that is
currently used as Station WCDX's backup transmitter site.
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"WCDX-FM TRANSMITTER SITE" means the real estate located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as Station WCDX's transmitter
site.
"WPLZ-FM TRANSMITTER SITE" means the real estate located at Hare and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as Station WPLZ's
transmitter site.
"WJRV-FM TRANSMITTER SITE" means the real estate located at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as Station WJRV's
transmitter site.
"WGCV-AM TRANSMITTER SITE" means the real estate located at Hare and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as Station WGCV's
transmitter site.
"WPLZ STL SITE" means the real estate located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ that is currently used as Station WPLZ's Studio Transmitter
Link ("STL") site.
1.2. OTHER DEFINITIONS. Other capitalized terms used in this Agreement
shall have the meanings ascribed to them herein.
1.3. NUMBER AND GENDER. Whenever the context so requires, words used in
the singular shall be construed to mean or include the plural and vice versa,
and pronouns of any gender shall be construed to mean or include any other
gender or genders.
1.4. HEADINGS AND CROSS-REFERENCES. The headings of the Sections and
Paragraphs hereof, the Table of Exhibits, and the Table of Schedules have been
included for convenience of reference only, and shall in no way limit or affect
the meaning or interpretation of the specific provisions of this Agreement. All
cross-references to Sections or Paragraphs herein shall mean the Sections or
Paragraphs of this Agreement unless otherwise stated or clearly required by the
context. All references to Schedules herein shall mean the Schedules to this
Agreement. Words such as "herein" and "hereof" shall be deemed to refer to this
Agreement as a whole and not to any particular provision of this Agreement
unless otherwise stated or clearly required by the context. The term "including"
means "including without limitation."
1.5. COMPUTATION OF TIME. Whenever any time period provided for in this
Agreement is measured in "business days" there shall be excluded from such time
period each day that is a Saturday, Sunday, recognized federal legal holiday, or
other day on which the Commission's offices are closed and are not reopened
prior to 5:30 p.m. Washington, D.C. time. In all other cases all days shall be
counted.
2.0 ASSETS TO BE CONVEYED.
2.1. PURCHASED ASSETS. On the Closing Date, Seller shall sell, assign,
transfer, convey and deliver to Buyer free of all liens, encumbrances,
mortgages, security interests of any kind or type whatsoever, all of Seller's
assets used in the conduct of the business and operations of the
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Stations (collectively referred to as the "Purchased Assets"), including, but
not limited to, the following:
(A) LICENSES. The FCC Licenses, and all other transferrable
licenses, permits and authorizations issued by any other Governmental Authority
that are used in or necessary for the lawful operation of the Stations as
currently operated by Seller.
(B) EQUIPMENT. All tangible personal property and fixtures used
or held for use in the operation of the Stations, including the property and
assets listed or described in Schedule 6.6, together with supplies, inventory,
spare parts and replacements thereof and improvements and additions thereto made
between the date hereof and the Closing Date (the "Equipment").
(C) CONTRACTS AND AGREEMENTS. The Contracts, Sales Agreements and
Trade Agreements, subject to the following:
(1) Buyer shall be obligated to assume only those Contracts
that are listed in Schedule 2.1(c)(1) or that have been or will have been
entered into in the ordinary course of the Station's business and in accordance
with the terms of this Agreement, between the date hereof and the Closing Date,
provided that, unless otherwise approved in writing by Buyer, the obligations of
the Stations or Buyer under such Contracts entered into in the ordinary course
of business do not exceed Five Thousand Dollars ($5,000) per annum per Contract
or Twenty-five Thousand Dollars ($25,000) per annum in the aggregate or are
terminable by the Stations on not more than 30 days' notice.
(2) Except for those Sales Agreements to be assumed by Buyer
that are listed on Schedule 2.1(c)(1), Buyer shall be obligated to assume only
those Sales Agreements with terms of no longer than ten (10) weeks, or if
containing terms of longer than 10 weeks, are terminable by the Station on not
more than 15 days' notice and are (i) in existence as of the date of this
Agreement or (ii) will have been entered into in the ordinary course of business
and in accordance with the terms of this Agreement at commercially reasonable
rates.
(3) Except with regard to that certain Trade Agreement dated
February 4, 1999, between ▇▇▇▇▇▇▇▇ Telecable, Inc. and ▇▇▇▇▇ Cadillac (the
"Cadillac Lease"), Buyer shall be obligated to assume only those Trade
Agreements that are listed in Schedule 2.1(c)(1) or that have been or will have
been entered into in the ordinary course of business and in accordance with the
terms of this Agreement, between the date hereof and the Closing Date, and are
(i) immediately preemptible for cash time sales; (ii) require the provision of
air time only on a "run of schedule" basis; and (iii) primarily inure or will
inure to the benefit of the Stations. Notwithstanding the foregoing and except
with regard to the Cadillac Lease, Buyer's obligation to assume Trade Agreements
(including those Trade Agreements listed on Schedule 2.1(c)(1) and those entered
into by the Station on or before May 31, 1999 in the ordinary course of
business) that have an aggregate negative Trade Balance exceeding Five Thousand
Dollars ($5,000), is conditioned upon Seller's agreement that Buyer will receive
a credit against the Purchase Price at
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Closing equivalent to the amount that such negative Trade Balance exceeds Five
Thousand Dollars ($5,000) as of May 31, 1999.
(4) Notwithstanding any provision of this Agreement to the
contrary, this Agreement shall not constitute an agreement to assign any
Contract or other agreement, undertaking or obligation if (i) an attempted
assignment, without the consent required for such assignment, may constitute a
breach thereof or may in any way have a material adverse effect on Seller's
rights thereunder prior to Closing or Buyer's rights thereunder after Closing
and (ii) such consent is not obtained by Seller prior to Closing, provided,
however, that Seller will use its best efforts at its own expense to obtain all
such consents prior to Closing.
(D) PROGRAMMING MATERIALS. All programs, programming material,
and music libraries in whatever form or nature owned by Seller and used or
intended for use in the operation of the Stations.
(E) INTELLECTUAL PROPERTY. All Seller's right, title and interest
in and to the Intellectual Property used in the operation of the Stations.
(F) INTANGIBLE PROPERTY. All of Seller's right, title and
interest in and to the goodwill and other intangible assets used or useful in or
arising from the business of the Stations, including all customer lists, and
sales plans.
(G) BUSINESS RECORDS. All business records of Seller (including
logs, public file materials and engineering records) relating to or used in the
operation of the Stations and not relating solely to Seller's internal corporate
affairs.
(H) STATION RECORDS. All of the Stations' proprietary
information, technical information and data, machinery and equipment warranties
(to the extent such warranties are assignable), maps, plans, diagrams,
blueprints, schematics, files, records, studies, data, lists, general accounting
records, books of account, in whatever form, used or held for use for the
business or operation of the Stations, including filings with the FCC which
relate to the Stations.
(I) REAL PROPERTY. The Real Property described in Schedule 6.13
which is used as both the WPLZ-FM Transmitter Site and WGCV-AM Transmitter Site.
(J) REAL PROPERTY LEASES. ▇▇▇▇▇▇▇▇ currently holds a leasehold
interest in the Real Property described in Schedule 6.13 which is used as the
WCDX-FM Transmitter Site and the WPLZ(FM) Studio Transmitter Link site (WPJB292
call sign). Commonwealth currently holds a leasehold interest in the Real
Property described in Schedule 6.13 which is used as the WJRV-FM Transmitter
Site. At Closing, Seller shall transfer and assign any and all of its rights,
title and interest in these leasehold interests to Buyer. In addition, ▇▇▇▇
▇▇▇▇▇▇▇▇ hold title to the Real Property described in Schedule 6.13 which is
used as the WCDX-FM Backup Transmitter Site. At Closing, Seller shall at Buyer's
option cause ▇▇▇▇ ▇▇▇▇▇▇▇▇ (or his successors and assigns) to enter into a lease
with Buyer for an initial term of ten (10) years, with, at Buyer's
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option, two (2) renewal terms of ten (10) years each, for the amount of $100
per year for continued use of the site.
(K) STUDIO SITE LEASES. Seller currently holds a leasehold
interest in the Real Property described in Schedule 6.13 which is used as the
Studio Site and the WGCV-AM Studio Site. At Closing, Seller shall transfer and
assign any and all of its rights, title and interest in the Studio Site Leases
to Buyer.
2.2. EXCLUDED ASSETS. There shall be excluded from the Purchased
Assets and retained by the Seller, to the extent in existence on the Closing
Date, the following assets (the "Excluded Assets"):
(A) RECEIVABLES. All Accounts Receivable.
(B) CASH AND INVESTMENTS. All cash and cash equivalents on hand
or in bank accounts and other cash items and investment securities of Seller on
the Closing Date.
(C) INSURANCE. All contracts of insurance (including any cash
surrender value thereof) and all insurance proceeds of settlement and insurance
claims made by Seller on or before the Closing Date, except that any insurance
proceeds Seller receives due to damaged equipment will be used to repair or
replace such equipment.
(D) EMPLOYEE BENEFIT ASSETS. All pension, profit sharing and
savings plans and trusts, and any assets thereof, except that any employee
account balances under any plan qualified under Section 401(k) of the Code shall
be promptly transferred to a plan qualified under Section 401(k) and, at Buyer's
request, made available by or on behalf of Buyer if such employee is hired by
Buyer, to the extent allowed under each such plan and applicable law.
(E) CONTRACTS. All contracts that will have terminated or expired
prior to Closing by their terms and all contracts, agreements, instruments,
undertakings and obligations not expressly assumed by Buyer hereunder.
(F) TAX ITEMS. All claims, rights and interest in and to any
refunds for federal, state or local taxes to which Seller is entitled for
periods prior to the Closing Date.
(G) CORPORATE RECORDS. Seller's corporate minute books and other
books and records relating to internal corporate minutes.
3.0 ESCROW DEPOSIT. Simultaneously with the execution and delivery of
this Agreement by both parties, Buyer has deposited with Wilmington Trust
Company ("Escrow Agent"), a cash deposit of One Million Two Hundred and Fifty
Thousand Dollars ($1,250,000) (the "Escrow Deposit"). The Escrow Deposit shall
be held in an interest-bearing account and disbursed by Escrow Agent pursuant to
the terms of an escrow agreement in the form attached hereto as Exhibit 1 (the
"Escrow Agreement"), which Escrow Agreement has been entered into by Seller,
Buyer and Escrow Agent simultaneously herewith.
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4.0 PURCHASE PRICE AND METHOD OF PAYMENT.
4.1. CONSIDERATION. The total consideration for the Purchased Assets at
Closing (the "Purchase Price") shall be Thirty Four Million Dollars
($34,000,000) payable as set forth in this Section 4.
4.2. PAYMENT AT CLOSING. At Closing, Buyer shall pay:
(a) Thirty Two Million Seven Hundred and Fifty Thousand Dollars
($32,750,000) (as adjusted pursuant to Sections 8.5 and 12.1) to Seller by check
or wire transfer of same day funds pursuant to wire transfer instructions
which shall be delivered by Seller to Buyer at least five business days prior to
Closing.
(b) One Million Two Hundred Fifty Thousand Dollars ($1,250,000)
to Seller by causing the Escrow Agent to release the Escrow Deposit to Seller,
with all interest earned on the Escrow Deposit remitted to Buyer.
4.3. ALLOCATION. The Purchase Price shall be allocated to the Purchased
Assets in accordance with an allocation schedule prepared by Seller pursuant to
Section 1060 of the Code and mutually agreed upon by Seller and Buyer. Seller
and Buyer shall use such allocation for tax accounting (including preparation of
IRS Form 8594), and all other purposes. If Seller and Buyer have not agreed upon
the allocation prior to the Closing Date, Closing shall take place as scheduled
and any dispute shall be resolved by a qualified media appraiser mutually
acceptable to Seller and Buyer, whose decision shall be final and whose fees and
expenses shall be paid one-half by Seller and one-half by Buyer. If the
allocation must be determined by a media appraiser, Seller and Buyer agree to
cooperate in good faith so that such appraisal may be completed within sixty
(60) days after Closing.
4.4. SELLER'S LIABILITIES. Buyer does not and shall not assume or be
deemed to assume, pursuant to this Agreement or otherwise, any agreements,
liabilities, undertakings, obligations or commitments of Seller or the Stations
of any nature whatsoever except: (i) liabilities accruing after Closing under
the Contracts, Sales Agreements and Trade Agreements listed in Schedule
2.1(c)(1) or otherwise expressly assumed by Buyer pursuant to, and subject to,
Section 2.1(c), provided, that, Buyer shall not assume liability for any
breaches, violations or defaults under the Contracts, Sales Agreements and Trade
Agreements that occurred prior to Closing; and (ii) prorated items that are to
be paid by Buyer after Closing pursuant to Section 12.1.
5.0 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. As promptly as practicable and no later than ten
(10) days following the execution of this Agreement, Seller and Buyer shall
complete any filing that may be required pursuant to the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended. Seller and Buyer shall
diligently take all necessary and proper steps and provide any additional
information reasonably requested in order to comply with the requirements of
such Act. Buyer shall pay the filing fee.
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6.0 SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller hereby makes
to and for the benefit of Buyer, the following representations, warranties and
covenants:
6.1. EXISTENCE, POWER AND IDENTITY. ▇▇▇▇▇▇▇▇ is a corporation duly
organized and validly existing under the laws of the State of Indiana and
Commonwealth is a limited liability company duly organized and validly existing
under the laws of the Commonwealth of Virginia. Both ▇▇▇▇▇▇▇▇ and Commonwealth
are licensed to do business in the Commonwealth of Virginia with full corporate
power and authority (a) to own, lease and use the Purchased Assets as currently
owned, leased and used, (b) to conduct the business and operation of the
Stations as currently conducted and (c) to execute and deliver this Agreement
and each other document, agreement and instrument to be executed and delivered
by Seller in connection with this Agreement (collectively, the "Seller
Documents"), and to perform and comply with all of the terms, obligations and
covenants to be performed and complied with by Seller hereunder and thereunder.
The addresses of Seller's chief executive office and all of Seller's additional
places of business, and all places where any of the tangible personal property
included in the Purchased Assets is now located, or has been located during the
past 180 days, are correctly listed in Schedule 6.1. Except as set forth in
Schedule 6.1, during the past five years, Seller has not been known by or used,
nor, to the best of Seller's knowledge, has any prior owner of the Stations been
known by or used, any corporate, partnership, fictitious or other name in the
conduct of the Stations' business or in connection with the ownership, use or
operation of the Purchased Assets.
6.2. BINDING EFFECT. The execution, delivery and performance by Seller
of this Agreement has been and the Seller Documents will be duly authorized by
all necessary corporate or limited liability company action, and copies of those
authorizing resolutions, certified by an officer, member, partner or manager as
appropriate, shall be delivered to Buyer at Closing. No other action by ▇▇▇▇▇▇▇▇
or Commonwealth is required for Seller's execution, delivery and performance of
this Agreement. This Agreement has been duly and validly executed and delivered
by Seller to Buyer and constitutes a legal, valid and binding obligation of
Seller, enforceable against Seller in accordance with its terms, subject to
bankruptcy, reorganization, fraudulent conveyance, insolvency, moratorium and
similar laws relating to or affecting creditors, and other obligees' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
6.3. NO VIOLATION. Except as set forth on Schedule 6.3, none of (i) the
execution, delivery and performance by Seller of this Agreement or any of the
Seller Documents, (ii) the consummation of the Transaction, or (iii) Seller's
compliance with the terms or conditions hereof will, with or without the giving
of notice or the lapse of time or both, conflict with, breach the terms or
conditions of, constitute a default under, or violate (x) Seller's articles of
incorporation, bylaws, operating agreement or limited liability company
agreement, (y) any judgment, decree, order, consent, agreement, lease or other
instrument (including any Contract, Sales Agreement or Trade Agreement) to which
Seller is a party or by which Seller or any of its assets (including the
Purchased Assets) or the Stations is or may be legally bound or affected, or (z)
any law, rule,
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regulation or ordinance of any Governmental Authority applicable to Seller or
any of its assets (including the Purchased Assets) or the operation of the
Stations.
6.4. CONVEYANCE OF ASSETS. At Closing, Seller shall convey to Buyer
good and marketable title to all the Purchased Assets, free and clear of all
liens, pledges, collateral assignments, security interests, capital or financing
leases, easements, covenants, restrictions and encumbrances or other defects of
title except: (i) the inchoate lien for current taxes or other governmental
charges not yet due and payable and that will be prorated between Seller and
Buyer pursuant to Section 12.1; and (ii) the Permitted Encumbrances.
6.5. GOVERNMENTAL AUTHORIZATIONS. Except for the FCC Licenses which are
set forth in Schedule 6.5, no transferable licenses, permits, or authorizations
from any Governmental Authority are required to own, use or operate the
Purchased Assets, to operate the Stations or to conduct Seller's business as
currently operated and conducted by Seller. The FCC Licenses are all the
Commission authorizations held by Seller with respect to the Stations, and are
all the Commission authorizations used in or necessary for the lawful operation
of the Stations as currently operated by Seller. The FCC Licenses are in full
force and effect, are subject to no conditions or restrictions other than those
which appear on their face and are unimpaired by any acts or omissions of
Seller, Seller's officers, employees or agents. Seller has delivered true and
complete copies of all FCC Licenses to Buyer. There is not pending or, to the
Knowledge of Seller, threatened, any action by or before the Commission or any
other Governmental Authority to revoke, cancel, rescind or modify any of the FCC
Licenses (other than proceedings to amend Commission rules of general
applicability or otherwise affecting the broadcast industry generally), and
there is not now issued, outstanding or pending or, to the Knowledge of Seller,
threatened, by or before the Commission or any other Governmental Authority, any
order to show cause, notice of violation, notice of apparent liability, or
notice of forfeiture or complaint against Seller or otherwise with respect to
the Stations. The Stations are operating in compliance with all FCC Licenses,
the Communications Act of 1934, as amended (the "Communications Act"), and the
current rules, regulations, policies and practices of the Commission. The
Commission's most recent renewals of the FCC Licenses were not challenged by any
petition to deny or any competing application. Seller has no knowledge of any
facts relating to it that, under the Communications Act or the current rules,
regulations, policies and practices of the Commission may cause the Commission
to deny Commission renewal of the FCC Licenses or deny Commission consent to the
Transaction.
6.6. EQUIPMENT. Seller has good and marketable title, both legal and
equitable, to the Equipment. The Equipment, together with any improvements and
additions thereto and replacements thereof less any retirements or other
dispositions as permitted by this Agreement between the date hereof and the
Closing Date, will, at Closing, be all the tangible personal property used or
useful in the lawful operation of the Stations as currently operated by Seller.
Except as specifically indicated to the contrary in Schedule 6.6, all Equipment
is serviceable, in good
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operating condition (reasonable wear and tear excepted), and is not in imminent
need of repair or replacement. All items of transmitting and studio equipment
included in the Equipment (i) have been maintained in a manner consistent with
generally accepted standards of good engineering practice and (ii) will permit
the Stations to operate in accordance with the terms of the FCC Licenses.
6.7. CONTRACTS. Seller has made available to Buyer or its
representatives complete and correct copies of all Contracts and Trade
Agreements listed on Schedule 2.1(c)(1) hereto. The list of Trade Agreements on
Schedule 2.1(c)(1) is accurate and complete. Except for Sales Agreements that
comply with the terms of this Agreement, Schedule 2.1(c)(1) includes all the
contracts, leases, and agreements to which Seller is a party and which Buyer has
agreed to assume, other than those contracts that will be performed in full
prior to the Closing. To the Knowledge of Seller, each Contract is in full force
and effect and is unimpaired by any acts or omissions of Seller, Seller's
employees or agents, or Seller's officers. Except as set forth on Schedule
2.1(c)(1), there has not occurred as to any Contract any event of default by
Seller or any event that, with notice, the lapse of time or otherwise, could
become an event of default by Seller. There has not occurred as to any Contract
any default by any other party thereto or any event that, with notice, the lapse
of time or otherwise, or at the election of any person other than Seller, could
become an event of default by such party. Those Contracts whose stated duration
extends beyond the Closing Date will, at Closing, be in full force and effect,
unimpaired by any acts or omissions of Seller, Seller's employees or agents, or
Seller's officers. If any Contract requires the consent of any third party in
order for Seller to assign that Contract to Buyer, Seller shall use its best
efforts to obtain at its own expense such consent prior to Closing.
6.8. PROMOTIONAL RIGHTS. The Intellectual Property set forth on
Schedule 6.8 includes all call signs and trademarks that Seller is transferring
to Buyer, used to promote or identify the Stations. Except as set forth on
Schedule 6.8, the Intellectual Property is in good standing and uncontested by
any third party. Except as set forth on Schedule 6.8, Seller has no Knowledge of
any infringement or unlawful or unauthorized use of those promotional rights,
including the use of any call sign, slogan or logo by any broadcast or cable
stations in the Richmond or Petersburg metropolitan areas that may be
confusingly similar to those currently used by the Stations. Except as set forth
on Schedule 6.8, to the Knowledge of Seller, the operations of the Stations do
not infringe, and no one has asserted to Seller that such operations infringe,
any copyright, trademark, tradename, service ▇▇▇▇ or other similar right of any
other party.
6.9. INSURANCE. Schedule 6.9 lists all insurance policies held by
Seller with respect to the Purchased Assets and the business and operation of
the Stations. Such insurance policies are in full force and effect, all premiums
with respect thereto are currently paid and Seller is in compliance with the
terms thereof. Seller has not received any notice from any issuer of any such
policies of its intention to cancel, terminate, or refuse to renew any policy
issued by it. Seller will maintain the insurance policies listed on Schedule 6.9
in full force and effect through the Closing Date.
6.10. FINANCIAL STATEMENTS.
(a) Seller has furnished Buyer with the audited Financial
Statements for fiscal years 1996, and 1997 as well as unaudited Financial
Statements for December 31, 1998. The Financial Statements: (i) have been
prepared in accordance with generally accepted accounting
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principles applied on a consistent basis throughout the periods involved and as
compared with prior periods; and (ii) fairly present Seller's financial
position, income, expenses, assets, liabilities, shareholder's equity and the
results of operations of the Stations as of the dates and for the periods
indicated. Since December 31, 1998, there has been no material adverse change in
the business, assets, properties or condition (financial or otherwise) of the
business. No event has occurred that would make such Financial Statements
misleading in any respect.
(b) Except as reflected in the most recently available balance sheets,
including the notes thereto or otherwise disclosed in this Agreement or the
Schedules hereto, and except for the current liabilities and obligations
incurred in the ordinary course of business of the Stations (not including for
this purpose any tort-like liabilities or breach of contract) since the date of
the most recently available balance sheets, there exist no liabilities or
obligations of Seller, contingent or absolute, matured or unmatured, known or
unknown. Except as set forth on Schedule 6.10(b) since the date of the most
recently available balance sheets, (i) Seller has not made any contract,
agreement or commitment or incurred any obligation or liability (contingent or
otherwise), except in the ordinary course of business and consistent with past
business practices, (ii) there has not been any discharge or satisfaction of any
obligation or liability owed by Seller, which is not in the ordinary course of
business or which is inconsistent with past business practices, (iii) there has
not occurred any sale of or loss or material injury to the business, or any
material adverse change in the business or in the condition (financial or
otherwise) of the Stations, (iv) Seller has operated the business in the
ordinary course and (v) Seller has not increased the salaries or any other
compensation of any of its employees or agreed to the payment of any bonuses.
The monthly balance sheets (i) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved and as compared with prior periods; and (ii) fairly present
Company's financial position, income, expenses, assets, liabilities,
shareholder's or member's equity and the results of operations of the Stations
as of the dates and for the periods indicated, subject to year end adjustments
which do not materially affect the operations of Seller.
6.11. EMPLOYEES. Except as otherwise listed on Schedule 6.11, (i) no
employee of the Stations is represented by a union or other collective
bargaining unit, no application for recognition as a collective bargaining unit
has been filed with the National Labor Relations Board, and, to the Knowledge of
Seller, there has been no concerted effort to unionize any of the Stations'
employees and (ii) Seller has no other written or oral employment agreement or
arrangement with any Station employee, and no written or oral agreement
concerning bonus, termination, hospitalization or vacation. Seller has delivered
to Buyer a list of all persons currently employed at the Stations together with
an accurate description of the terms and conditions of their respective
employment as of the date of this Agreement. Seller will promptly advise Buyer
of any terminations or resignations of management employees or on-air staff that
occur prior to the earlier of commencement of the Time Brokerage Agreement
between the parties or the Closing Date.
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6.12. EMPLOYEE BENEFIT PLANS.
(1) Except as described in Schedule 6.12, neither Seller nor
any Affiliates (as defined below) have at any time established, sponsored,
maintained, or made any contributions to, or been parties to any contract or
other arrangement or been subject to any statute or rule requiring them to
establish, maintain, sponsor, or make any contribution to, (i) any "employee
pension benefit plan" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended, and regulations thereunder ("ERISA"))
("Pension Plan"); (ii) any "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) ("Welfare Plan"); or (iii) any deferred compensation,
bonus, stock option, stock purchase, or other employee benefit plan, agreement,
commitment, or arrangement ("Other Plan"). Seller and the Affiliates have no
obligations or liabilities (whether accrued, absolute, contingent, or
unliquidated, whether or not known, and whether due or to become due) with
respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA), or
Other Plan that is not listed in Schedule 6.12. For purposes of this Section
6.12, the term "Affiliate" shall include all persons under common control with
Seller within the meaning of Sections 4001(a)(14) or (b)(1) of ERISA or any
regulations promulgated thereunder, or Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code").
(2) Each plan or arrangement listed in Schedule 6.12 (and any
related trust or insurance contract pursuant to which benefits under such plans
or arrangements are funded or paid) has been administered in all material
respects in compliance with its terms and in both form and operation is in
compliance with applicable provisions of ERISA, the Code, the Consolidated
Omnibus Budget Reconciliation Act of 1986 and regulations thereunder, and other
applicable law. Each Pension Plan listed in Schedule 6.12 has been determined by
the Internal Revenue Service to be qualified under Section 401(a) and, if
applicable, Section 401(k) of the Code, and nothing has occurred or been omitted
since the date of the last such determination that resulted or could result in
the revocation of such determination. Seller and the Affiliates have made all
required contributions or payments to or under each plan or arrangement listed
in Schedule 6.12 on a timely basis and have made adequate provision for reserves
to meet contributions and payments under such plans or arrangements that have
not been made because they are not yet due.
(3) To the Knowledge of Seller, the consummation of this
Agreement (and the employment by Buyer of former employees of Seller or any
employees of an Affiliate) will not result in any carryover liability to Buyer
for taxes, penalties, interest or any other claims resulting from any employee
benefit plan (as defined in Section 3(3) of ERISA) or Other Plan. In addition,
Seller and each Affiliate make the following representations (i) as to all of
their Pension Plans: (A) neither Seller nor any Affiliate has become liable to
the PBGC under ERISA under which a lien could attach to the assets of Seller or
an Affiliate; (B) Seller and each Affiliate has not ceased operations at a
facility so as to become subject to the provisions of Section 4062(e) of ERISA;
and (C) Seller and each Affiliate has not made a complete or partial withdrawal
from a multiemployer plan (as defined in Section 3(37) of ERISA) so as to incur
withdrawal liability as defined in Section 4201 of ERISA, and (ii) all group
health plans maintained by the Seller and each Affiliate have been operated in
material compliance with Section 4980B(f) of the Code.
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(4) The parties agree that Buyer does not and will not assume
the sponsorship of, or the responsibility for contributions to, or any liability
in connection with, any Pension Plan, any Welfare Plan, or Other Plan maintained
by Seller or an Affiliate for its employees, former employees, retirees, their
beneficiaries or any other person.
6.13. REAL PROPERTY. ▇▇▇▇▇▇▇▇ holds title to the real property
described in Schedule 6.13 which is used as the WPLZ-FM Transmitter Site and the
WGCV-AM Transmitter Site. In addition, ▇▇▇▇ ▇▇▇▇▇▇▇▇ holds title to the real
property described in Schedule 6.13 which is used as the WCDX-FM Backup
Transmitter Site. ▇▇▇▇▇▇▇▇ also holds leasehold interests in the real property
described in Schedule 6.13 which is used as the WCDX-FM Transmitter Site, the
WPLZ-FM STL Site and the real property described in Schedule 6.13 which is used
as the WCDX-FM, WPLZ-FM and WJRV-FM Studio Site. Commonwealth holds a leasehold
interest in the property described in Schedule 6.13 which is used as the WJRV
Transmitter Site. ▇▇▇▇▇▇▇▇ holds a leasehold interest in the real property
described in Schedule 6.13 which is used as the WGCV-AM Studio Site. All such
interests in real property are hereinafter referred to as "Real Property".
Except as listed on Schedule 6.13, all of the improvements, and all heating and
air conditioning equipment, plumbing, electrical and other mechanical
facilities, and the roof, walls and other structural components which are part
of, or located in, such improvements, are in good operating condition and
repair, comply in all material respects with applicable zoning laws and the
building, health, fire and environmental protection codes of all applicable
governmental jurisdictions, and do not require any repairs other than normal
routine maintenance to maintain them in good condition and repair. None of the
improvements have any structural defects. No portion of the Real Property
described in Schedule 6.13 is the subject of any condemnation or eminent domain
proceedings currently instituted or pending, and to the Knowledge of Seller, no
such proceedings are threatened. There are no condemnation, zoning or other land
use regulations proceedings instituted or, to the Knowledge of Seller, planned
to be instituted, which would materially affect the use and operations of the
Real Property for any lawful purpose, and Seller has not received notice of any
special assessment proceedings materially affecting the Real Property. The Real
Property has direct and unobstructed access to all public utilities necessary
for the uses to which the Real Property is currently devoted by Seller in the
operation of the Stations.
6.14. ENVIRONMENTAL PROTECTION. Except as set forth on Schedule 6.14,
(i) no Hazardous Substances have been treated, stored, used, released or
disposed of on the Studio Site, or the WGCV-AM Studio Site, (collectively the
"Studio Sites"), the WPLZ-FM Transmitter Site, the WGCV-AM Transmitter Site, the
WCDX-FM Transmitter Site, the WJRV-FM Transmitter Site, the WCDX-FM Backup
Transmitter Site or the WPLZ-FM STL Site (collectively the "Transmitter Sites")
by Seller or to the Knowledge of Seller, by any other party; (ii) to the
Knowledge of Seller, Seller is not liable for cleanup or response costs with
respect to any present or past emission, discharge, or release of any Hazardous
Substances; (iii) to the Knowledge of Seller, no "underground storage tank" (as
that term is defined in regulations promulgated by the federal Environmental
Protection Agency) is used in the operation of the Stations or is located on the
Studio Sites or the Transmitter Sites; (iv) there are no pending actions, suits,
claims, legal proceedings or any other proceedings based on environmental
conditions or noncompliance at the
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Studio Sites or Transmitter Sites, or any part thereof, arising from Seller's
activities involving Hazardous Substances; (v) there are no conditions,
facilities, procedures or any other facts or circumstances caused by the Seller,
or to the Knowledge of the Seller, caused by any other party at the Studio Sites
or Transmitter Sites which constitute noncompliance with Environmental Law or
regulations; and (vi) there are no structures, improvements, equipment,
activities, fixtures or facilities at the Studio Sites or Transmitter Sites that
have been placed by the Seller, or to the Knowledge of the Seller, by any other
party which are constructed with, use or otherwise contain Hazardous Substances,
including, but without limitation, asbestos or polychlorinated biphenyls.
6.15. COMPLIANCE WITH LAW. There is no outstanding complaint, citation,
or notice issued by any Governmental Authority asserting that Seller is in
violation of any law, regulation, rule, ordinance, order, decree or other
material requirement of any Governmental Authority (including any applicable
statutes, ordinances or codes relating to zoning and land use, health and
sanitation, environmental protection, occupational safety and the use of
electric power) affecting the Purchased Assets or the business or operations of
the Stations, and Seller is in material compliance with all such laws,
regulations, rules, ordinances, decrees, orders and requirements. Without
limiting the foregoing:
(a) The Stations' transmitting and studio equipment is in
material respects operating in accordance with the terms and conditions of the
FCC Licenses, all underlying construction permits, and the rules, regulations,
practices and policies of the Commission, including all requirements concerning
equipment authorization and human exposure to radio frequency radiation.
(b) Seller has, in the conduct of the Stations' business,
materially complied with all applicable laws, rules and regulations relating to
the employment of labor, including those concerning wages, hours, equal
employment opportunity, collective bargaining, pension and welfare benefit
plans, and the payment of Social Security and similar taxes, and Seller is not
liable for any arrears of wages or any tax penalties due to any failure to
comply with any of the foregoing.
(c) Except as set forth in Schedule 6.15, all ownership reports,
employment reports, tax returns and other material documents required to be
filed by Seller with the Commission or other Governmental Authority have been
filed; such reports and filings are accurate and complete in all material
respects; such items as are required to be placed in the Stations' local public
records files have been placed in such files; all proofs of performance and
measurements that are required to be made by Seller with respect to the
Stations' transmission facilities have been completed and filed at the Stations;
and all information contained in the foregoing documents is true, complete and
accurate.
(d) Seller will, prior to Closing, use its best efforts to make
the Stations' local public file complete in all material respects.
(e) The location of the Stations' main studio(s) complies with
the FCC's rules.
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(f) Seller has paid to the Commission the regulatory fees due for
the Stations for the years 1994-98.
6.16. LITIGATION. Except for proceedings affecting radio broadcasters
generally and except as set forth on Schedule 6.3, there is no litigation,
complaint, investigation, suit, claim, action or proceeding pending, or to the
Knowledge of Seller, threatened before or by the Commission, any other
Governmental Authority, or any arbitrator or other person or entity relating to
the business or operations of the Stations or to the Purchased Assets. Except as
set forth on Schedule 6.3, there is no other litigation, action, suit,
complaint, claim, investigation or proceeding pending, or to the Knowledge of
Seller, threatened that may give rise to any material claim against any of the
Purchased Assets or adversely affect Seller's ability to consummate the
Transaction as provided herein. To the Knowledge of Seller, there are no facts
that could reasonably result in any such proceedings.
6.17. INSOLVENCY PROCEEDINGS. No insolvency proceedings of any
character, including bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller, the
Stations' Assets or the Purchased Assets are pending or, to the Knowledge of
Seller, threatened. Seller has not made an assignment for the benefit of
creditors.
6.18. SALES AGREEMENTS. The Sales Agreements in existence on the date
hereof have been entered into in the ordinary course of the Stations' business,
at rates consistent with Seller's usual past practices and each Sales Agreement
is for a term no longer than 10 weeks or, if longer, is terminable by the
Stations upon not more than 15 days notice.
6.19. LIABILITIES. There are no known liabilities or obligations of
Seller relating to the Stations, whether related to tax or non-tax matters, due
or not yet due, except as and to the extent set forth on the most recent
Financial Statements described in Section 6.10.
6.20. SUFFICIENCY OF ASSETS. The Purchased Assets in conjunction with
the leases referred to in Section 2.1(j) are and, on the Closing Date will be,
sufficient to conduct the operation and business of the Stations in the manner
in which it is currently being conducted.
6.21. RELATED PARTIES. Except as disclosed in Schedule 6.21 neither
Seller nor any member, manager, shareholder, officer or director of Seller has
any interest whatsoever in any corporation, firm, partnership or other business
enterprise which has had any business transactions with Seller relating to the
Purchased Assets or the Stations, and no member, manager, shareholder, officer
or director of Seller has entered into any transactions with Seller relating to
the Purchased Assets or the Stations.
6.22. TAXES. The Seller has timely filed with all appropriate
Governmental Authority all federal, state, commonwealth, local, and other tax or
information returns and tax reports (including, but not limited to, all income
tax, unemployment compensation, social security, payroll, sales and use, profit,
excise, privilege, occupation, property, ad valorem, franchise, license, school
and any other tax under the laws of the United States or of any state or any
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commonwealth or any municipal entity or of any political subdivision with valid
taxing authority) due for all periods ended on or before the date hereof. Seller
has paid in full all federal, state, commonwealth, foreign, local and other
governmental taxes, estimated taxes, interest, penalties, assessments and
deficiencies (collectively, "Taxes") which have become due pursuant to such
returns or without returns or pursuant to any assessments received by Seller.
The Seller has timely withheld and paid over all taxes with respect to
employees, independent contractors and shareholders. Such returns and forms are
true, correct and complete in all material respects, and Seller has no liability
for any Taxes in excess of the Taxes shown on such returns. Seller is not a
party to any pending action or proceeding and, to the Knowledge of Seller, there
is no action or proceeding threatened by any Governmental Authority against
Seller for assessment or collection of any Taxes, and no unresolved claim for
assessment or collection of any Taxes has been asserted against Seller.
6.23. NO MISLEADING STATEMENTS. This Agreement, and any disclosures
made in this Agreement and any Schedule attached hereto will not contain any
untrue statement of a material fact or omits or will omit to state a material
fact required to be stated in order to make the statement, in light of the
circumstances in which it is made, not misleading. Seller represents and
warrants that it has disclosed, and agrees it will continue to disclose to
Buyer, any fact that Seller is obligated to disclose to assure the continuing
accuracy of the representations and warranties contained in this Section 6.
7.0 BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer hereby makes
to and for the benefit of Seller, the following representations, warranties
and covenants:
7.1. EXISTENCE AND POWER. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to assume and perform this Agreement,
and as of the Closing Date will be authorized to do business in the Commonwealth
of Virginia.
7.2. BINDING EFFECT. The execution, delivery and performance by Buyer
of this Agreement, and each other document, agreement and instrument to be
executed and delivered by Buyer in connection with this Agreement (collectively,
the "Buyer Documents") has been or will be duly authorized by all necessary
corporate action, and copies of those authorizing resolutions, certified by
Buyer's Secretary shall be delivered to Seller at Closing. This Agreement has
been, and each of the Buyer Documents will be, duly and validly executed and
delivered by Buyer to Seller and constitutes a legal, valid and binding
obligation of Buyer, enforceable in accordance with its terms, subject to
bankruptcy, reorganization, fraudulent conveyance, insolvency, moratorium and
similar laws relating to or affecting creditors' and other obligees' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
7.3. NO VIOLATION. The execution, delivery and performance by Buyer of
this Agreement or any of the Buyer's documents will not, with or without the
giving of notice or the lapse of time or both, conflict with, breach the terms
or conditions of, constitute a default under, or violate (x) Buyer's articles of
incorporation or by-laws, (y) any judgment, decree, order,
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consent agreement, lease or other instrument to which Buyer is a party or by
which Buyer is legally bound, or (z) any law, rule, regulation or ordinance of
any Governmental Authority applicable to Buyer.
7.4. LITIGATION. There is no litigation, action, suit, complaint,
proceeding or investigation, pending or, to the Knowledge of Buyer, threatened
that may adversely affect Buyer's ability to consummate the Transaction as
provided herein. To the Knowledge of Buyer, there are no facts that could
reasonably result in any such proceedings.
7.5. LICENSEE QUALIFICATIONS. To the Knowledge of Buyer, there is no
existing fact that would, under the current published and written policies,
rules and regulations of the Commission or any other federal agency, disqualify
Buyer from being the assignee of the FCC Licenses or the owner and operator of
the Stations. Should Buyer become aware of any such fact, it will so inform
Seller, and Buyer will use commercially reasonable efforts to remove any such
disqualification. If such commercially reasonable efforts by Buyer are
unsuccessful, Seller shall have the right in accordance with the terms hereof to
terminate this Agreement.
7.6. FINANCIAL QUALIFICATIONS. Buyer will have available on the
Closing Date, sufficient funds to enable it to consummate the Transaction
contemplated hereby.
8.0 PRE-CLOSING OBLIGATIONS. The parties covenant and agree as follows with
respect to the period prior to Closing:
8.1. APPLICATION FOR COMMISSION CONSENT. Seller and Buyer shall join
in and file the Assignment Application no later than June 1, 1999. Once the
Assignment Application is filed, Seller and Buyer shall diligently take all
reasonable steps necessary or desirable and proper expeditiously to prosecute
the Assignment Application and to obtain the Commission's determination that
grant of the Assignment Application will serve the public interest, convenience
and necessity. Each party shall promptly provide the other with a copy of any
pleading, order or other document served on the other relating to the Assignment
Application. In the event that Closing occurs prior to a Final Order, then each
party's obligations hereunder shall survive the Closing.
8.2. ACCESS. Between the date hereof and the Closing Date, Seller
shall, in consultation with Buyer and upon reasonable notice to Seller, give
Buyer and representatives of Buyer reasonable access during business hours to
the Purchased Assets, the Stations, the employees of Seller and the Stations and
the books and records of Seller relating to the business and operations of the
Stations. It is expressly understood that, pursuant to this Section, Buyer, at
its expense, shall be entitled to conduct such engineering inspections of the
Stations, such environmental assessments and surveys of the Studio Site, the
WGCV-AM Studio Site and the Transmitter Sites, and such reviews of the Station's
financial records as Buyer may desire, so long as the same do not unreasonably
interfere with Seller's operation of the Stations. No inspection or
investigation made by or on behalf of Buyer, or Buyer's failure to make any
inspection or investigation, shall affect Seller's representations, warranties
and covenants
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hereunder or be deemed to constitute a waiver of any of those representations,
warranties and covenants.
8.3. MATERIAL ADVERSE CHANGES; FINANCIAL STATEMENTS. Through the
Closing Date:
(a) Seller shall promptly notify Buyer of any event of which
Seller obtains knowledge which has caused or is likely to cause a material
adverse change to the financial condition or operation of the Stations.
(b) Seller shall furnish to Buyer (i) monthly Financial
Statements for Seller and (ii) such other reports as Buyer may reasonably
request relating to Seller. Each of the Financial Statements delivered pursuant
to this Section 8.3(b) shall be prepared in accordance with GAAP consistently
applied during the periods covered (except as disclosed therein).
8.4. OPERATIONS PRIOR TO CLOSING. Between the date of this Agreement
and the Closing Date:
(a) Seller shall operate the Stations in a manner consistent with
Seller's and the Stations' past practice and in material compliance with all
applicable laws, regulations, rules, decrees, ordinances, orders and
requirements of the Commission and all other Governmental Authority. Seller
shall promptly notify Buyer of any actions or proceedings that from the date
hereof are commenced against Seller or the Stations or, to the Knowledge of
Seller, against any officer, director, employee, consultant, agent or other
representative of Seller with respect to the business of the Stations or the
Purchased Assets.
(b) Seller shall: (i) use the Purchased Assets only for the
operation of the Stations; (ii) maintain the Purchased Assets in substantially
their present condition (reasonable wear and tear in normal use and damage due
to unavoidable casualty excepted); (iii) replace and/or repair the Purchased
Assets as necessary in the ordinary course of business; (iv) maintain all
inventories of supplies, tubes and spare parts at levels at least equivalent to
those existing on the date of this Agreement; and (v) promptly give Buyer
written notice of any unusual or materially adverse developments with respect to
the Purchased Assets or the business or operations of the Stations.
(c) Seller shall maintain the Stations' Business Records in the
usual, regular and ordinary manner, on a basis consistent with prior periods.
(d) Seller shall not: (i) sell, lease, encumber or otherwise
dispose of any Purchased Assets or any interest therein except in the ordinary
course of business and only if any property disposed of is replaced by property
of like or better value, quality and utility prior to Closing; (ii) cancel,
terminate, modify, amend or renew any of the Contracts without Buyer's express
prior written consent; (iii) increase the compensation payable or to become
payable to any employee of the Stations; or (iv) except to the extent expressly
permitted in Section 2.1(c), enter into any Contract or other agreement,
undertaking or obligation or assume any liability that may impose any obligation
on Buyer after Closing, whether Seller is acting within or outside of
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the ordinary course of the Stations' business, without Buyer's prior written
consent. Such consent shall not be unreasonably withheld provided that such
action by Seller is taken in accordance with the ordinary course of business.
(e) Seller and the Stations will enter into Sales Agreements only
in the ordinary course of the Stations' business at commercially reasonable
rates and each such Sales Agreement shall have a term not longer than 10 weeks
or, if longer, shall be terminable by the Stations upon not more than 15 days
notice.
(f) Seller and the Stations will enter into Trade Agreements only
in the ordinary course of the Stations' business and only if such Trade
Agreements are (i) immediately preemptible for cash time sales; (ii) require the
provision of air time only on a "run of schedule" basis; and (iii) primarily
inure or will inure to the benefit of the Stations.
(g) Seller shall use its best efforts to preserve the operations,
organization and reputation of the Stations intact, by continuing to make
expenditures and engage in activities designed to promote the Stations and
encourage the purchase of advertising time on the Stations in a manner
consistent with Seller's past practices. Seller shall use its best efforts to
preserve the goodwill and business of the Stations' advertisers, suppliers and
others having business relations with the Stations, and to continue to conduct
financial operations of the Stations, including credit and collection policies,
with no less effort, as in the prior conduct of the business of the Stations.
(h) Seller shall not make or agree to any material amendment to
any FCC License relating to the Stations.
(i) Seller shall not, except as required by law, adopt any
profit-sharing, bonus, deferred compensation, insurance, pension, retirement,
severance or other employee benefit plan, payment or arrangement or enter into
any employment, consulting or management contract.
(j) With respect to the Purchased Assets, Seller shall not merge
or consolidate with any other corporation, acquire control of any other
corporation or business entity, or take any steps incident to, or in furtherance
of, any of such actions, whether by entering into an agreement providing
therefore or otherwise.
(k) Seller shall not solicit, either directly or indirectly,
initiate, encourage or accept any offer for the purchase or acquisition of the
Purchased Assets by any party other than Buyer.
(l) Seller shall not terminate without comparable replacement or
fail to renew any insurance coverage applicable to the Purchased Assets or Real
Property of Seller.
(m) Seller shall not take any action or fail to take any action
that would cause the Seller to materially breach the representations, warranties
and covenants contained in this Agreement.
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8.5. DAMAGE.
(A) RISK OF LOSS. The risk of loss or damage, confiscation or
condemnation of the Purchased Assets shall be borne by Seller at all times prior
to Closing. In the event of material loss or damage, Seller shall promptly
notify Buyer thereof and use its best efforts to repair, replace or restore the
lost or damaged property to its former condition as soon as possible. If the
cost of repairing, replacing or restoring any lost or damaged property is One
Hundred Thousand Dollars ($100,000) or less, and Seller has not repaired,
replaced or restored such property prior to the Closing Date, Closing shall
occur as scheduled and Buyer may deduct from the Purchase Price paid at Closing
the amount necessary to restore the lost or damaged property to its former
condition. If the cost to repair, replace, or restore the lost or damaged
property exceeds One Hundred Thousand Dollars ($100,000), and Seller has not
repaired, replaced or restored such property prior to the Closing Date to the
reasonable satisfaction of Buyer, Buyer may, at its option:
(1) elect to consummate the Closing in which event Buyer may
deduct from the Purchase Price paid at Closing the amount necessary to restore
the lost or damaged property to its former condition in which event Seller shall
be entitled to all proceeds under any applicable insurance policies with respect
to such claim; or
(2) elect to postpone the Closing, with prior consent of the
Commission if necessary, for such reasonable period of time (not to exceed
ninety (90) days) as is necessary for Seller to repair, replace or restore the
lost or damaged property to its former condition.
If, after the expiration of such extension period the lost or damaged
property has not been fully repaired, replaced or restored to Buyer's
satisfaction, Buyer may terminate this Agreement, in which event the Escrow
Deposit and all interest earned thereon shall be returned to Buyer and the
parties shall be released and discharged from any further obligation hereunder.
(B) FAILURE OF BROADCAST TRANSMISSIONS. Seller shall give
prompt written notice to Buyer if any of the following (a "Specified Event")
shall occur and continue for a period of more than twelve (12) consecutive
hours: (i) the transmission of the regular broadcast programming of any of the
Stations in the normal and usual manner is interrupted or discontinued; or (ii)
any of the Stations is operated at less than its licensed antenna height above
average terrain or at less than eighty percent (80%) of its licensed effective
radiated power. If, prior to Closing, any of the Stations is not operated at its
licensed operating parameters for more than forty-eight (48) hours (or, in the
event of force majeure or utility failure affecting generally the market served
by the Stations, one hundred and twenty (120) hours, whether or not consecutive,
during any period of thirty (30) consecutive days, or if there are three (3) or
more Specified Events each lasting more than twelve (12) consecutive hours, then
Buyer may, at its option: (i) terminate this Agreement, or (ii) proceed in the
manner set forth in Paragraph 8.5(a)(1) or 8.5(a)(2). In the event of
termination of this Agreement by Buyer pursuant to this Section, the
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Escrow Deposit together with all interest accrued thereon shall be returned to
Buyer and the parties shall be released and discharged from any further
obligation hereunder.
(C) RESOLUTION OF DISAGREEMENTS. If the parties are unable to
agree upon the extent of any loss or damage, the cost to repair, replace or
restore any lost or damaged property, the adequacy of any repair, replacement,
or restoration of any lost or damaged property, or any other matter arising
under this Section, the disagreement shall be referred promptly to a qualified
consulting communications engineer mutually acceptable to Seller and Buyer who
is a member of the Association of Federal Communications Consulting Engineers,
whose decision shall be final, and whose fees and expenses shall be paid
one-half each by Seller and Buyer.
8.6. ADMINISTRATIVE VIOLATIONS. If Seller receives any finding,
order, complaint, citation or notice prior to Closing which states that any
aspect of any of the Stations' operations violates or may violate any rule,
regulation or order of the Commission or of any other Governmental Authority (an
"Administrative Violation"), including, any rule, regulation or order concerning
Environmental Law, the employment of labor or equal employment opportunity,
Seller shall promptly notify Buyer of the Administrative Violation, use its best
efforts to remove or correct the Administrative Violation, and be responsible
prior to Closing for the payment of all costs associated therewith, including
any fines or back pay that may be assessed.
8.7. [THIS SECTION INTENTIONALLY OMITTED]
8.8. CONTROL OF STATIONS. The Transaction shall not be consummated
until after the Commission has given its written consent thereto and between the
date of this Agreement and the Closing Date, Seller shall control, supervise and
direct the operation of the Stations.
8.9. COOPERATION WITH RESPECT TO FINANCIAL AND TAX MATTERS. Between
the date hereof and the Closing Date, Seller, its shareholders, members,
managers, officers, directors and employees shall cooperate and Seller shall
cause its independent accounting firm to cooperate with Buyer for the purpose of
preparing Financial Statements reviewed by Buyer's independent accountants for
purposes of including such statements in any reports filed by Buyer with any
Governmental Authority. Buyer shall be permitted to disclose the audited
Financial Statements for, 1996, 1997 and 1998 as well as unaudited Financial
Statements for any period subsequent to 1998 available prior to Closing and this
Agreement in any filings submitted by the Buyer to any Governmental Authority.
8.10. CLOSING OBLIGATIONS. Seller and Buyer shall make commercially
reasonable efforts to satisfy the conditions precedent to Closing.
8.11 ENVIRONMENTAL ASSESSMENT. From the date hereof through the date
that is within thirty (30) days prior to Closing, Buyer may commence and
complete, at its expense, a Phase I and, if necessary, a Phase II Environmental
Assessment of the owned and leased Real Property, including the WGCV-AM and
WPLZ-FM Transmitter Site, the WCDX-FM Transmitter Site, the WCDX Backup
Transmitter Site, the WJRV-FM Transmitter Site, the WPLZ-FM STL Site, the
WGCV-AM Studio Site and the Studio Site. Seller agrees to cooperate with Buyer
and such firm
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in performing such Environmental Assessment. Buyer shall provide a copy of such
Environmental Assessment to Seller but such delivery shall not relieve Seller of
any obligation with respect to any representation, warranty or covenant in this
Agreement or waive any condition to Buyer's obligation under this Agreement.
8.12. TIME BROKERAGE AGREEMENT. Seller and Buyer shall enter into a
Time Brokerage Agreement ("TBA") that will commence on June 1, 1999 in the form
attached hereto as Exhibit 2.
8.13. TAX-DEFERRED EXCHANGE. Seller has advised Buyer that it may elect
to structure this Transaction as a tax-deferred like-kind exchange pursuant to
Internal Revenue Code Section 1031. Buyer will cooperate with Seller to
effectuate such an exchange provided, that, such tax-deferred, like-kind
exchange shall (i) not commence a second statutory 30-day public notice period
for the Assignment Application under the Commission's published rules,
regulations or policies, (ii) not result in any additional cost or expense to
Buyer, (iii) not result in any tax consequences to Buyer, (iv) not affect
Seller's liability to Buyer for any of the representations, warranties,
covenants and obligations of Seller pursuant to this Agreement and (v) not
require Buyer to serve as the qualified intermediary.
8.14. OBJECTIONS TO PENDING APPLICATIONS. To the Knowledge of Buyer,
there have been no petitions to deny or informal objections filed with the
Commission against any application which is pending as of the date of this
Agreement for assignment of license or transfer of control of any broadcast
station to Buyer. Between the date hereof and the Closing Date, Buyer shall
promptly inform Seller if any party files a petition to deny or informal
objection with the Commission against any pending application for assignment of
license or transfer of control of any broadcast station to Buyer.
9.0 STATUS OF EMPLOYEES.
9.1. EMPLOYMENT RELATIONSHIP. All Station employees shall be and
remain Seller's employees, subject to Seller's discretion, with Seller having
full authority and control over their actions, and Buyer shall not assume the
status of an employer or a joint employer of, or incur or be subject to any
liability or obligation of an employer with respect to, any such employees
unless and until actually hired by Buyer. Seller shall be solely responsible for
any and all liabilities and obligations Seller may have to its employees,
including, compensation, severance pay and accrued vacation time and sick leave.
Seller shall be solely responsible for any and all liabilities, penalties, fines
or other sanctions that may be assessed or otherwise due under such laws on
account of the Transaction and the dismissal or termination of any of Seller's
employees.
9.2. BUYER'S RIGHT TO EMPLOY. Seller consents to Buyer discussing with
the Stations' employees, at any time after ten (10) business days from the
execution of this Agreement the possibility of their employment by Buyer. Seller
agrees and acknowledges, however, that Buyer is under no obligation to offer
employment to any of those employees.
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10.0 CONDITIONS PRECEDENT.
10.1. MUTUAL CONDITIONS. The respective obligations of both Buyer and
Seller to consummate the Transaction are subject to the satisfaction of each of
the following conditions:
(A) APPROVAL OF ASSIGNMENT APPLICATION. The Commission shall have
granted the Assignment Application, and such grant shall be in full force and
effect on the Closing Date.
(B) ABSENCE OF LITIGATION. As of the Closing Date, no litigation,
action, suit or proceeding enjoining, restraining or prohibiting the
consummation of the Transaction shall be pending before any court, the
Commission or any other Governmental Authority or arbitrator; provided, however,
that this Section may not be invoked by a party if any such litigation, action,
suit or proceeding was solicited or encouraged by, or instituted as a result of
any act or omission of, such party.
(C) ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. All applicable waiting periods under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, shall have
expired.
10.2. ADDITIONAL CONDITIONS TO BUYER'S OBLIGATION. In addition to the
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Buyer to consummate the Transaction is subject, at Buyer's option, to the
satisfaction or waiver by Buyer of each of the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Seller to Buyer shall be true, complete, and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(B) COMPLIANCE WITH CONDITIONS. All of the terms, conditions and
covenants to be complied with or performed by Seller on or before the Closing
Date under this Agreement and the Seller Documents shall have been duly complied
with and performed in all material respects.
(C) DISCHARGE OF LIENS. Seller shall have obtained and delivered
to Buyer, at least 10 days prior to Closing, a report prepared by C.T.
Corporation System (or similar firm reasonably acceptable to Buyer) showing the
results of searches of lien, tax, judgment and litigation records, demonstrating
that the Purchased Assets are being conveyed to Buyer free and clear of all
liens, security interests and encumbrances except for Permitted Encumbrances or
otherwise consented to by Buyer in writing. The record searches described in the
report shall have taken place no more than 15 days prior to the Closing Date.
Buyer and Seller shall each pay one half of the expenses associated with these
reports.
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(D) THIRD-PARTY CONSENTS. Seller shall have obtained (i) all
required third-party consents to Buyer's assumption of the Material Contracts,
such that Buyer will, after Closing, enjoy all the rights and privileges of
Seller under the Material Contracts subject only to the same obligations as are
binding on Seller pursuant to the Material Contracts' current terms; and (ii)
all other requisite third-party consents and approvals which may be necessary to
consummate the Transaction.
(E) ESTOPPEL CERTIFICATES. At Closing, Seller shall deliver to
Buyer a certificate executed by the other party to each Material Contract,
including the landlord under the leases for the Studio Site, the WGCV-AM Studio
Site, the WCDX-FM Transmitter Site, the WPLZ-FM STL Site and the WJRV-FM
Transmitter Site dated no more than 15 days prior to the Closing Date, stating
(i) that such Contract is in full force and effect and has not been amended or
modified; (ii) the date to which all rent and/or other payments due thereunder
have been paid; and (iii) that Seller is not in breach or default under such
Material Contract, and that no event has occurred that, with notice or the
passage of time or both, would constitute a breach or default thereunder by
Seller.
(F) NO MATERIAL ADVERSE CHANGE. None of the Stations nor the
Purchased Assets shall have suffered a material adverse change since the date of
this Agreement, and there shall have been no changes since the date of this
Agreement in the business, operations, condition (financial or otherwise),
properties, assets or liabilities of Seller, of the Stations or of the Purchased
Assets, except changes contemplated by this Agreement and changes which are not
(either individually or in the aggregate) materially adverse to the Stations.
(G) OPINION OF SELLER'S COUNSEL. At Closing, Seller shall deliver
to Buyer the written opinion or opinions of Seller's counsel, dated the Closing
Date, in scope and form satisfactory to Buyer, to the following effect:
(1) ▇▇▇▇▇▇▇▇ is a corporation duly organized, validly
existing and in good standing under the laws of the State of Indiana, and
licensed to do business in the Commonwealth of Virginia with all requisite
corporate power and authority to enter into and perform this Agreement.
(2) Commonwealth is a limited liability company duly
organized, validly existing and in good standing under the laws of the
Commonwealth of Virginia, with all requisite corporate power and authority to
enter into and perform this Agreement.
(3) This Agreement has been duly executed and delivered by
Seller and such action has been duly authorized by all necessary corporate
action. This Agreement constitutes the legal, valid, and binding obligation of
Seller, enforceable against Seller in accordance with its terms subject to
bankruptcy, reorganization, fraudulent conveyance, insolvency, moratorium and
similar laws relating to or affecting creditors' and other obligees' rights
generally and the exercise of judicial discretion in accordance with general
equitable principles.
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(4) None of (i) the execution and delivery of this Agreement,
(ii) the consummation of the Transaction, or (iii) compliance with the terms and
conditions of this Agreement will, with or without the giving of notice or lapse
of time or both, conflict with, breach the terms and conditions of, constitute a
default under, or violate Seller's operating agreement, articles of
incorporation or bylaws, any law, rule, regulation or other requirement of any
Governmental Authority, or any judgment, decree, order, agreement, lease or
other instrument to which Seller is a party or by which Seller, the Stations or
any of the Seller's assets, including the Purchased Assets, may be bound or
affected.
(5) Except as disclosed in Schedule 6.3, to such counsel's
knowledge, no suit, action, claim or proceeding is pending or threatened that
questions or may affect the validity of any action to be taken by Seller
pursuant to this Agreement or that seeks to enjoin, restrain or prohibit Seller
from carrying out the Transaction.
(6) Except as disclosed in Schedule 6.3, to such counsel's
knowledge, there is no outstanding judgment, or any suit, action, claim or
proceeding pending, threatened or deemed by Seller's counsel to be probable of
assertion, or any governmental proceeding or investigation in progress (other
than proceedings affecting radio broadcasters generally) that could reasonably
be expected to have an adverse effect upon the Purchased Assets or upon the
business or operations of the Stations after Closing.
(7) Seller is the authorized legal holder of the FCC
Licenses, the FCC Licenses are in full force and effect, and the FCC Licenses
are not the subject of any pending license renewal application. The FCC Licenses
set forth on Schedule 6.5 constitute all FCC licenses and authorizations issued
in connection with the operation of the Stations and are the only such licenses
and authorizations required for the operation of the Stations, as currently
operated. There are no applications pending before the Commission with respect
to the Stations.
(8) The Commission has consented to the assignment of the FCC
Licenses to Buyer and, to such counsel's knowledge, no appeal or petition for
reconsideration was filed.
(9) To the best of such counsel's knowledge, there is no
Commission investigation, notice of apparent liability or order of forfeiture,
pending or outstanding against the Stations, or any complaint, petition to deny
or proceeding against or involving the Stations pending before the Commission.
The foregoing opinions shall be for the benefit of and may be relied on
by Buyer and Buyer's lenders. In rendering such opinions, Seller's counsel may
rely upon such corporate records of Seller and such certificates of public
officials and officers of Seller as Seller's counsel deems appropriate.
(H) FINAL ORDER. The Commission's action granting the
Assignment Application shall have become a Final Order.
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(I) FINANCIAL STATEMENTS. The financial information set forth
in the Stations' Financial Statements for the years ending December 31, 1997 and
December 31, 1998, and for the period ending thirty (30) days prior to the
Closing Date fairly and accurately reflect the financial performance and results
of operation of the Stations for those periods.
(J) TRADE BALANCE. The Trade Balance, if negative, will not
exceed Five Thousand Dollars ($5,000).
(K) COMPENSATION. Seller shall have satisfied all amounts due
employees for compensation, whether pursuant to the terms of a written agreement
or otherwise, including bonuses, vacation and sick pay and reimbursement of
expenses, that have accrued as of the Closing.
(L) STUDIO SITE LEASE. At Closing, ▇▇▇▇▇▇▇▇ shall have
assigned its interest in or have caused the owner of the Studio Site to enter
into a written lease with Buyer for the use of the real property described in
Section 6.13 as the Studio Site.
(M) WGCV-AM STUDIO SITE LEASE. At Closing, Seller shall have
assigned its interest in or have cause the owner of the WGCV-AM Studio Site to
enter into a written lease with Buyer for the use of the real property described
in Schedule 6.13 as the WGCV-AM Studio Site.
(N) WCDX-FM TRANSMITTER SITE LEASE. At Closing, ▇▇▇▇▇▇▇▇
shall have assigned its interest in or have caused the owner of the WCDX-FM
Transmitter Site to enter into a written lease with Buyer for the use of the
real property described in Schedule 6.13 as the WCDX-FM Transmitter Site.
(O) WJRV-FM TRANSMITTER SITE LEASE. At Closing, Commonwealth
shall have assigned its interest in or have caused the owner of the WJRV-FM
Transmitter Site to enter into a written lease with Buyer for the use of the
real property described in Schedule 6.13 as the WJRV-FM Transmitter Site.
(P) WCDX-FM BACKUP TRANSMITTER SITE LEASE. At Closing, Seller
shall have caused ▇▇▇▇ ▇▇▇▇▇▇▇▇ (or his successors and assigns) to enter into a
written lease with Buyer for the use of the WCDX-FM Backup Transmitter Site for
an initial term of ten (10) years, with, at Buyer's option, two (2) renewal
terms of ten (10) years each for the amount of $100 per year.
(Q ) WPLZ-FM STL SITE. At Closing, Seller shall have assigned
its interest in or have cause the owner of the WPLZ-FM STL Site to enter into a
written lease with Buyer for the use of the real property described in Schedule
6.13 as the WPLZ-FM STL Site.
(R) ENVIRONMENTAL REMEDIATION. Seller shall have cured, to
Buyer's satisfaction, any deficiency identified in the Environmental Assessment,
provided that in no event shall Seller be required to effect any cure except to
the extent any Hazardous Substances
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would give rise to liability under Environmental Law as it applies to the
present use of the Real Property, and provided further that Seller shall not be
required to expend more than Fifty Thousand Dollars ($50,000) to cure such
deficiency.
(S) TITLE INSURANCE AND SURVEYS. Buyer, at its cost and
expense, will obtain with respect to each parcel of owned real property
described in Schedule 6.13 which is used as Station WPLZ-FM Transmitter Site and
Station WGCV-AM Transmitter Site not less than forty-five (45) days prior to
Closing, (i) an owner's policy, in an amount equal to the fair market value of
such real property (including all improvements located thereon), insuring
Buyer's fee simple title to such real property as of the Closing without defects
in title, together with such endorsements for zoning, continuity, public access
and extended coverage as Buyer or its lender may reasonably request and (ii) a
current survey of each parcel of real property certified to Buyer and its
lender, prepared by a licensed surveyor and conforming to current ALTA Minimum
Detail Requirements for Land Title Surveys, disclosing the location of all
improvements, easements, party walls, sidewalks, roadways, utility lines, and
other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads ("Survey") which shall not disclose
any defect or encroachment from or onto any of the real property which has not
been cured or insured over prior to the Closing.
(T) CLOSING DOCUMENTS. At the Closing Seller shall deliver to
Buyer (i) such assignments, bills of sale and other instruments of conveyance as
are necessary to vest in Buyer title to the Purchased Assets, all of which
documents shall be dated as of the Closing Date, duly executed by Seller and in
form reasonably acceptable to Buyer; (ii) a certificate, dated the Closing Date,
executed by Seller's President certifying as to those matters set forth in
Section 10.2(a) and (b); (iii) copies of Seller's corporate and governing
resolutions authorizing the Transaction, each certified as to accuracy and
completeness by Seller's Secretary, (iv) a document providing that Seller
indemnifies Buyer for any claims that the intermediate party participating in
the like-kind exchange may have against Buyer and (v) a certificate stating that
the Operating Agreement for Station WGCV-AM with ▇▇▇▇▇▇▇ Communications, Inc.
has been terminated and all obligations under that agreement have been
satisfied.
10.3. ADDITIONAL CONDITIONS TO SELLER'S OBLIGATION. In addition to
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Seller to consummate the Transaction is subject, at Seller's option, to the
satisfaction or waiver by Seller of each of the following conditions:
(A) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Buyer to Seller shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(B) COMPLIANCE WITH CONDITIONS. All of the terms, conditions and
covenants to be complied with or performed by Buyer on or before the Closing
Date under this Agreement shall have been duly complied with and performed in
all material respects.
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(C) ASSUMPTION OF LIABILITIES. Buyer shall assume and agree to
pay, perform and discharge Seller's obligations under the Contracts, Sales
Agreements and Trade Agreements to the extent Buyer has expressly agreed to
assume such obligations pursuant to Section 4.4.
(D) PAYMENT. Buyer shall pay Seller the Purchase Price due at
Closing, as provided in Section 4.2.
(E) CLOSING DOCUMENTS. Buyer shall deliver to Seller at the
Closing (i) copies of Buyer's corporate resolutions authorizing the Transaction
certified as to accuracy and completeness by Buyer's Secretary; and (ii) a
certificate, dated the Closing Date, executed by Buyer's President certifying as
to those matters set forth in Section 10.3(a) and (b).
11.0. CLOSING. The Closing shall occur no earlier than the tenth day after
the date on which the Commission's grant of the Assignment Application becomes a
Final Order and no later than eighteen (18) months from the date of this
Agreement. Notwithstanding the preceding sentence, Seller shall have the option,
upon sixty (60) days prior written notice to Buyer, of establishing a date for
Closing that is no earlier than the tenth day after the date on which the
Commission's grant of the Assignment Application becomes a Final Order and no
later than eighteen (18) months from the date of this Agreement, provided that,
all of the conditions to Closing described in Section 10 have been satisfied or
waived. Seller and Buyer shall cooperate in seeking extensions from the
Commission as necessary to permit Closing to occur consistent with the terms
hereof. Closing shall take place at 10:00 a.m. on the Closing Date at the
offices of Buyer's counsel, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
12.0. PRORATIONS.
12.1. APPORTIONMENT OF EXPENSES. To the extent that they are not
prorated pursuant to Section 13.0 of the Time Brokerage Agreement, Seller shall
be responsible for all expenses arising out of the business of the Stations
until 11:59 p.m. on the Closing Date, and Buyer shall be responsible for all
expenses arising out of the business of the Stations after 11:59 p.m. on the
Closing Date to the extent such expenses relate to liabilities assumed by Buyer
pursuant to Section 4.4. All overlapping expenses shall be prorated or
reimbursed, as the case may be, as of 11:59 p.m. on the Closing Date, provided
however, that Seller shall be responsible for the payment of any and all
Regulatory Fees for Fiscal Year 1999 (covering authorizations held in connection
with the Stations as of October 1, 1998), owing to the Federal Communications
Commission for each of the Stations and any and all auxiliary broadcast
facilities licensed to Seller and used in the operation of Stations.
12.2. DETERMINATION AND PAYMENT. Prorations shall be made, insofar as
feasible, at Closing and shall be paid by way of adjustment to the Purchase
Price. As to the prorations that cannot be made at Closing, the parties shall,
within ninety (90) days after the Closing Date, make and pay all such
prorations. If the parties are unable to agree upon all such prorations within
that 90-day period, then any disputed items shall be referred to a firm of
independent certified public accountants, mutually acceptable to Seller and
Buyer, whose decision shall be final, and whose fees and expenses shall be
allocated between and paid by Seller and Buyer, respectively, to the
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extent that such party does not prevail on the disputed matters decided by the
accountants. If the disputed amount of the prorations are Ten Thousand Dollars
($10,000) or less, Seller and Buyer shall each pay one-half.
13.0. POST-CLOSING OBLIGATIONS. The parties covenant and agree as follows
with respect to the period subsequent to Closing:
13.1. INDEMNIFICATION.
(A) BUYER'S RIGHT TO INDEMNIFICATION. Seller hereby
indemnifies and holds Buyer, its officers, directors and shareholders harmless
from and against (i) any breach, misrepresentation, or violation of any of
Seller's representations, warranties, covenants, or other obligations contained
in this Agreement or in any Seller Document; (ii) all obligations and
liabilities of Seller and/or the Stations not expressly assumed by Buyer
pursuant to Section 4.4; and (iii) all claims by third parties (including
employees) against Buyer attributable to the operation of the Stations and/or
the use or ownership of the Purchased Assets prior to Closing. This indemnity is
intended by Seller to cover all actions, suits, proceedings, claims, demands,
assessments, adjustments, interest, penalties, costs and expenses (including,
reasonable fees and expenses of counsel), whether suit is instituted or not and,
if instituted, whether at the trial or appellate level, with respect to any and
all of the specific matters set forth in this indemnity.
(B) SELLER'S RIGHT TO INDEMNIFICATION. Buyer hereby
indemnifies and holds Seller, its officers, directors, shareholders, managers
and members harmless from and against (i) any breach, misrepresentation or
violation of any of Buyer's representations, warranties, covenants or
obligations contained in this Agreement; (ii) all obligations and liabilities
expressly assumed by Buyer hereunder pursuant to Section 4.4; and (iii) all
claims by third parties against Seller attributable to Buyer's operation of the
Stations after Closing. This indemnity is intended by Buyer to cover all
actions, suits, proceedings, claims, demands, assessments, adjustments,
interest, penalties, costs and expenses (including reasonable fees and expenses
of counsel), whether suit is instituted or not and, if instituted, whether at
the trial or appellate level, with respect to any and all of the specific
matters set forth in this indemnity.
(C) PROCEDURE FOR INDEMNIFICATION. The procedure for
indemnification shall be as follows:
(1) The party claiming indemnification (the "Claimant")
shall give written notice to the party from which indemnification is sought (the
"Indemnitor") promptly after the Claimant learns of any claim or proceeding
covered by the foregoing agreements to indemnify and hold harmless and failure
to provide prompt notice shall not be deemed to jeopardize Claimant's right to
demand indemnification, provided, that, Indemnitor is not prejudiced by the
delay in receiving notice.
(2) With respect to claims between the parties,
following receipt of notice from the Claimant of a claim, the Indemnitor shall
have 15 days to make any investigation of the claim that the Indemnitor deems
necessary or desirable, or such lesser time if a 15-day
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period would jeopardize any rights of Claimant to oppose or protest the claim.
For the purpose of this investigation, the Claimant agrees to make available to
the Indemnitor and its authorized representatives the information relied upon by
the Claimant to substantiate the claim. If the Claimant and the Indemnitor
cannot agree as to the validity and amount of the claim within the 15-day
period, or lesser period if required by this section (or any mutually agreed
upon extension hereof) the Claimant may seek appropriate legal remedies.
(3) The Indemnitor shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such claim,
provided, that, Indemnitor acknowledges in writing to Claimant that Indemnitor
would assume responsibility for and demonstrates its financial ability to
satisfy the claim should the party asserting the claim prevail. In the event
that the Indemnitor shall not satisfy the requirements of the preceding sentence
or shall elect not to undertake such defense, or within 15 days after notice of
any such claim from the Claimant shall fail to defend, the Claimant shall have
the right to undertake the defense, compromise or settlement of such claim, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnitor. Anything in this Section 13.1(c)(3) to the
contrary notwithstanding, (i) if there is a reasonable probability that a claim
may materially and adversely affect the Claimant other than as a result of money
damages or other money payments, the Claimant shall have the right, at its own
cost and expense, to participate in the defense, compromise or settlement of the
claim, (ii) the Indemnitor shall not, without the Claimant's written consent,
settle or compromise any claim or consent to entry of any judgment which does
not include as an unconditional term thereof the giving by the plaintiff to the
Claimant of a release from all liability in respect of such claim, and (iii) in
the event that the Indemnitor undertakes defense of any claim consistent with
this Section, the Claimant, by counsel or other representative of its own
choosing and at its sole cost and expense, shall have the right to consult with
the Indemnitor and its counsel or other representatives concerning such claim
and the Indemnitor and the Claimant and their respective counsel or other
representatives shall cooperate with respect to such claim.
(D) ASSIGNMENT OF CLAIMS. If any payment is made pursuant to
this Section 13.1, the Indemnitor shall be subrogated to the extent of such
payment to all of the rights of recovery of Claimant, and Claimant shall assign
to Indemnitor, for its use and benefit, any and all claims, causes of actions,
and demands of whatever kind and nature that Claimant may have against the
person, firm, corporation or entity giving rise to the loss for which payment
was made. Claimant agrees to reasonably cooperate in any efforts by Indemnitor
to recover such loss from any person, firm, corporation or entity.
(E) INDEMNIFICATION NOT SOLE REMEDY. The right to
indemnification provided for in this Section shall not be the exclusive remedy
of either party in connection with any breach by the other party of its
representations, warranties, covenants or other obligations hereunder, nor shall
such indemnification be deemed to prejudice or operate as a waiver of any right
or remedy to which either party may otherwise be entitled as a result of any
such breach by the other party.
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(F) THRESHOLD CONCERNING SECTIONS 13.1(A) AND (B).
Notwithstanding anything to the contrary in Sections 13.1(a) and (b), the
parties shall not be entitled to indemnity under Sections 13.1(a) and (b) unless
the aggregate loss indemnified against thereunder exceeds $25,000 (in which
case, the Claimant shall be entitled to recovery from the Indemnitor of the full
amount of the loss).
13.2 COOPERATION WITH RESPECT TO FINANCIAL AND TAX MATTERS. From the
date of Closing and for a period of three (3) years thereafter, Seller shall
provide Buyer with such cooperation and information as Buyer shall reasonably
request in Buyer's: (i) analysis and review of the Financial Statements or (ii)
preparation of documentation to fulfill any reporting requirements of Buyer
including reports that may be filed with the Securities and Exchange Commission.
Seller shall make its independent accounting firm available, the cost of said
firm to be paid by the Buyer, and the information relied upon by that firm,
including its opinions and Financial Statements for the Seller, to provide
explanations of any documents or information provided hereunder and to permit
disclosure by Buyer, including disclosure to any Governmental Authority.
13.3. LIABILITIES. Following the Closing Date, Seller shall pay
promptly when due all of the debts and liabilities of Seller relating to the
Stations, other than liabilities specifically assumed by Buyer hereunder.
14. DEFAULT AND REMEDIES.
14.1. OPPORTUNITY TO CURE. If either party believes the other to be in
breach or in default hereunder, the former party shall provide the other with
written notice specifying in reasonable detail the nature of such default. If
the default has not been cured by the earlier of: (i) the Closing Date, or (ii)
within 10 days after delivery of that notice (or such additional reasonable time
as the circumstances may warrant provided the party in default undertakes
diligent, good faith efforts to cure the default within such 10-day period and
continues such efforts thereafter), then the party giving such notice may
exercise the remedies available to such party pursuant to this Section, subject
to the right of the other party to contest the alleged default through
appropriate proceedings.
14.2. SELLER'S REMEDIES. Buyer recognizes that if the Transaction is
not consummated as a result of Buyer's default, Seller would be entitled to
compensation, the extent of which is extremely difficult and impractical to
ascertain. To avoid this problem, the parties agree that if the Transaction is
not consummated due to the default of Buyer, Seller, provided that Seller is not
in default and has otherwise complied with its obligations under this Agreement,
shall be entitled to the Escrow Deposit, with interest earned thereon. The
parties agree that this sum shall constitute liquidated damages and shall be in
lieu of any other relief to which Seller might otherwise be entitled due to
Buyer's failure to consummate the Transaction as a result of a default by Buyer.
14.3. BUYER'S REMEDIES. Seller agrees that the Purchased Assets
include unique property that cannot be readily obtained on the open market and
that Buyer will be irreparably
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injured if this Agreement is not specifically enforced. Therefore, Buyer shall
have the right specifically to enforce Seller's performance under this
Agreement, and Seller agrees (i) to waive the defense in any such suit that
Buyer has an adequate remedy at law and (ii) to interpose no opposition, legal
or otherwise, as to the propriety of specific performance as a remedy. If Buyer
elects to terminate this Agreement as a result of Seller's default instead of
seeking specific performance, Buyer shall be entitled to the return of the
Escrow Deposit together with all interest earned thereon, and in addition
thereto, to initiate a suit for damages. Buyer and Seller hereby agree that the
total amount of damages to be recovered by Buyer from any suit for damages shall
equal Two Million Dollars ($2,000,000).
15.0. TERMINATION OF AGREEMENT.
15.1. FAILURE TO CLOSE. This Agreement may be terminated at the option
of either party upon written notice to the other if the Commission has not
granted the Assignment Application within twelve (12) months after the
Commission accepts the Assignment Application for filing or may be terminated by
Buyer if the Commission's action granting the Assignment Application has not
become a Final Order within eighteen (18) months from execution of this
Agreement. This Agreement may also be terminated upon the mutual agreement of
Buyer and Seller. In the event of termination pursuant to this Section, the
Escrow Deposit, together with all interest earned thereon, shall be returned to
Buyer and the parties shall be released and discharged from any further
obligation hereunder unless the failure to consummate the Transaction is
attributable to Buyer's default, and Seller is not in default and has otherwise
complied with its obligations under this Agreement, in which case the Escrow
Deposit plus interest earned thereon shall be released to Seller as liquidated
damages pursuant to Section 14.2.
15.2. DESIGNATION FOR HEARING. The time for approval provided in
Section 15.1 notwithstanding, either party may terminate this Agreement upon
written notice to the other, if, for any reason, the Assignment Application is
designated for hearing by the Commission, provided, however, that written notice
of termination must be given within 10 days after release of the hearing
designation order and that the party giving such notice is not in default and
has otherwise complied with its obligations under this Agreement. Upon
termination pursuant to this Section and provided that Buyer is not in default,
the Escrow Deposit together with all interest earned thereon shall be returned
to Buyer and the parties shall be released and discharged from any further
obligation hereunder.
15.3. ENVIRONMENTAL REMEDIATION. By either Buyer or Seller if the
Environmental Assessment shows the presence of conditions that must be cured or
removed and such remediation will cost in excess of Fifty Thousand Dollars
($50,000) ("Threshold Amount") and Seller declines to pay for remediation in
excess of the Threshold Amount, provided that neither Buyer nor Seller will be
entitled to terminate this Agreement pursuant to this Section 15.3 if Buyer
elects to pay for remediation in excess of the Threshold Amount and such excess
payment does not reduce the Purchase Price.
15.4. FAILURE TO PAY TIME BROKERAGE AGREEMENT FEES. If Buyer defaults
on its obligations to pay the Time Brokerage Fee as defined in the Time
Brokerage Agreement or the
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expenses defined in Schedule 3.0 of the Time Brokerage Agreement and such
default has not been cured within the period defined in the Time Brokerage
Agreement, Seller may terminate this Agreement and exercise the remedies
provided to Seller in Section 14.2 hereof.
16. GENERAL PROVISIONS.
16.1. BROKERAGE. Seller and Buyer represent to each other that neither
party has dealt with a broker in connection with the Transaction, except that
Seller has retained Star Media Group. No finders fee is due to any person or
entity in connection with the Transaction except for Star Media Group and such
fee shall be paid one half by Buyer and one half by Seller at Closing, provided
that Buyer shall not be required to pay more than $265,000.
16.2. FEES. All Commission filing fees for the Assignment Application,
and all recording costs, transfer taxes, sales tax, document stamps and other
similar charges shall be paid one-half by Seller and one-half by Buyer. Except
as otherwise provided herein, all other expenses incurred in connection with
this Agreement or the Transaction shall be paid by the party incurring those
expenses whether or not the Transaction is consummated.
16.3. NOTICES. All notices, requests, demands and other communications
pertaining to this Agreement shall be in writing and shall be deemed duly given
when (i) delivered personally (which shall include delivery by Federal Express
or other recognized overnight courier service that issues a receipt or other
confirmation of delivery) to the party for whom such communication is intended,
(ii) delivered by facsimile transmission or (iii) three business days after the
date mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to ▇▇▇▇▇▇▇▇ or Commonwealth:
Mr. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ Telecable, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
Mr. J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to Buyer:
▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President
Radio One, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esquire
Radio One, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Executive Vice President
Radio One, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may change its address for notices by written notice to the other
given pursuant to this Section. Any notice purportedly given by a means other
than as set forth in this Section shall be deemed ineffective.
16.4. ASSIGNMENT. Neither party may assign this Agreement without the
other party's express prior written consent, provided, however, Buyer may assign
its rights and obligations pursuant to this Agreement without Seller's consent
prior to closing to (i) an entity which is a subsidiary or parent of Buyer or to
an entity owned or controlled by Buyer or its principals
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provided that, Buyer remains obligated to pay the Purchase Price, or (ii) to
Buyer's lenders as collateral for any indebtedness incurred by Buyer; and
subsequent to Closing to (x) any entity which acquires all or substantially all
of the Purchased Assets or (y) to Buyer's lenders as collateral for any
indebtedness incurred by Buyer. Subject to the foregoing, this Agreement shall
be binding on, inure to the benefit of, and be enforceable by the original
parties hereto and their respective successors and permitted assignees.
16.5. EXCLUSIVE DEALINGS. For so long as this Agreement remains in
effect, neither Seller nor any person acting on Seller's behalf shall, directly
or indirectly, solicit or initiate any offer from, or conduct any negotiations
with, any person or entity concerning the acquisition of all or any interest in
any of the Purchased Assets or the Stations, other than Buyer or Buyer's
permitted assignees.
16.6. THIRD PARTIES. Nothing in this Agreement, whether express or
implied, is intended to: (i) confer any rights or remedies on any person other
than Seller, Buyer and their respective successors and permitted assignees; (ii)
relieve or discharge the obligations or liability of any third party; or (iii)
give any third party any right of subrogation or action against either Seller or
Buyer.
16.7. INDULGENCES. Unless otherwise specifically agreed in writing to
the contrary: (i) the failure of either party at any time to require performance
by the other of any provision of this Agreement shall not affect such party's
right thereafter to enforce the same; (ii) no waiver by either party of any
default by the other shall be taken or held to be a waiver by such party of any
other preceding or subsequent default; and (iii) no extension of time granted by
either party for the performance of any obligation or act by the other party
shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
16.8. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations,
warranties, and indemnification obligations of the parties contained herein
shall survive for twelve (12) months after the Closing Date except that claims
properly asserted within the twelve (12) month period shall survive until
finally and fully resolved; provided, however, that Seller's representations and
warranties in Sections 6.2, 6.3, 6.4, 6.5, 6.10, 6.13 and 6.21 and Buyer's
indemnification rights with respect thereto and with respect to Section
13.1(a)(ii) shall survive the Closing until the end of the applicable statute of
limitations period.
16.9. PRIOR NEGOTIATIONS. This Agreement supersedes in all respects all
prior and contemporaneous oral and written negotiations, understandings and
agreements between the parties with respect to the subject matter hereof. All of
such prior and contemporaneous negotiations, understandings and agreements are
merged herein and superseded hereby.
16.10. EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached
hereto or referred to herein are a material part of this Agreement, as if set
forth in full herein.
16.11. ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Exhibits and
Schedules to this Agreement set forth the entire understanding between the
parties in connection with the
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Transaction, and there are no terms, conditions, warranties or representations
other than those contained, referred to or provided for herein and therein.
Neither this Agreement nor any term or provision hereof may be altered or
amended in any manner except by an instrument in writing signed by each of the
parties hereto.
16.12. COUNSEL/INTERPRETATION. Each party has been represented by its
own counsel in connection with the negotiation and preparation of this
Agreement. This Agreement shall be fairly interpreted in accordance with its
terms and, in the event of any ambiguities, no inferences shall be drawn against
either party.
16.13. GOVERNING LAW, JURISDICTION. This Agreement shall be governed
by, and construed and enforced in accordance with the laws of the Commonwealth
of Virginia without regard to the choice of law rules utilized in that
jurisdiction. Buyer and Seller each (a) hereby irrevocably submit to the
jurisdiction of the courts of that state and (b) hereby waive, and agree not to
assert, by way of motion, as a defense, or otherwise, in any such suit, action
or proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution, that the suit, action or proceeding is brought in an inconvenient
forum, that the venue of the suit, action or proceeding is improper or that this
Agreement or the subject matter hereof may not be enforced in or by such court.
Buyer and Seller each hereby consent to service of process by registered mail at
the address to which notices are to be given. Each of Buyer and Seller agrees
that its submission to jurisdiction and its consent to service of process by
mail is made for the express benefit of the other party hereto. Final judgment
against Buyer or Seller in any such action, suit or proceeding may be enforced
in other jurisdictions by suit, action or proceeding on the judgment, or in any
other manner provided by or pursuant to the laws of such other jurisdiction;
provided, however, that any party may at its option bring suit, or institute
other judicial proceedings, in any state or federal court of the United States
or of any country or place where the other party or its assets, may be found.
16.14. SEVERABILITY. If any term of this Agreement is illegal or
unenforceable at law or in equity, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. Any illegal or unenforceable term shall be deemed to be void
and of no force and effect only to the minimum extent necessary to bring such
term within the provisions of applicable law and such term, as so modified, and
the balance of this Agreement shall then be fully enforceable.
16.15. COUNTERPARTS. This Agreement may be signed in any number of
counterparts with the same effect as if the signature on each such counterpart
were on the same instrument. Each fully executed set of counterparts shall be
deemed to be an original, and all of the signed counterparts together shall be
deemed to be one and the same instrument.
16.16. FURTHER ASSURANCES. Seller shall at any time and from time to
time after the Closing execute and deliver to Buyer such further conveyances,
assignments and other written assurances as Buyer may reasonably request to vest
and confirm in Buyer (or its assignee) the title and rights to and in all the
Purchased Assets to be and intended to be transferred, assigned and conveyed
hereunder.
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IN WITNESS WHEREOF, and to evidence their assent to the foregoing,
Seller and Buyer have executed this Asset Purchase Agreement under seal as of
the date first written above.
SELLER:
▇▇▇▇▇▇▇▇ TELECABLE, INC.
d/b/a ▇▇▇▇▇▇▇▇ COMMUNICATIONS
By: ______________________________
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
President
AND
COMMONWEALTH BROADCASTING, LLC
By: ______________________________
J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Member
BUYER:
RADIO ONE, INC.
By: ______________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President
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