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EXHIBIT 2.9
ASSET PURCHASE AGREEMENT
DATED AS OF NOVEMBER 8, 2000
BY AND AMONG
XXX RADIO, INC.,
CXR HOLDINGS, INC.,
AND
RADIO ONE, INC.
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TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS.......................................................1
"Accounts Receivable"........................................................1
"Adjustment Time"............................................................1
"Assets".....................................................................1
"Assumed Contracts"..........................................................1
"Closing"....................................................................2
"Closing Date"...............................................................2
"Consents"...................................................................2
"Contracts"..................................................................2
"Escrow Agent"...............................................................2
"Escrow Agreement"...........................................................2
"FCC" ....................................................................2
"FCC Consent"................................................................2
"FCC Licenses"...............................................................2
"Final Order"................................................................2
"HSR Act"....................................................................2
"Intangibles"................................................................2
"Licenses"...................................................................3
"Permitted Liens"............................................................3
"Purchase Price".............................................................3
"Real Property"..............................................................3
"Tangible Personal Property".................................................3
Section 2. PURCHASE AND SALE OF ASSETS.......................................3
2.1 Agreement to Sell and Buy..................................3
2.2 Excluded Assets............................................4
2.3 Purchase Price.............................................4
2.4 Manner of Determining Adjustments..........................5
2.5 Payment of Purchase Price..................................6
2.6 Assumption of Liabilities and Obligations..................6
2.7 Appraisal..................................................7
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TABLE OF CONTENTS
(continued)
PAGE
2.8 Like-Kind Exchange.........................................7
2.9 Qualified Intermediary.....................................7
Section 3. REPRESENTATIONS AND WARRANTIES OF SELLERS.........................8
3.1 Organization, Standing, and Authority......................8
3.2 Authorization and Binding Obligation.......................8
3.3 Absence of Conflicting Agreements..........................8
3.4 Governmental Licenses......................................8
3.5 Title to and Condition of Real Property....................9
3.6 Title to and Condition of Tangible Personal Property.......9
3.7 Contracts.................................................10
3.8 Consents..................................................10
3.9 Intangibles...............................................10
3.10 Financial Statements......................................11
3.11 Insurance.................................................11
3.12 Reports...................................................11
3.13 Taxes.....................................................11
3.14 Claims and Legal Actions..................................12
3.15 Environmental Matters.....................................12
3.16 Compliance with Laws......................................13
3.17 Conduct of Business in Ordinary Course....................13
3.18 Transactions with Affiliates..............................14
3.19 Broker....................................................14
3.20 Personnel.................................................14
3.21 Labor Relations...........................................15
3.22 WPEK Purchase Agreement...................................16
3.23 Full Disclosure...........................................16
Section 4. REPRESENTATIONS AND WARRANTIES OF BUYER..........................16
4.1 Organization, Standing, and Authority.....................16
4.2 Authorization and Binding Obligation......................16
4.3 Absence of Conflicting Agreements.........................16
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TABLE OF CONTENTS
(continued)
PAGE
4.4 Broker....................................................17
4.5 Qualification.............................................17
4.6 Full Disclosure...........................................17
Section 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING......................17
5.1 Generally.................................................17
5.2 Contracts.................................................17
5.3 Disposition of Assets.....................................17
5.4 Encumbrances..............................................18
5.5 Licenses..................................................18
5.6 Rights....................................................18
5.7 No Inconsistent Action....................................18
5.8 Access to Information.....................................18
5.9 Maintenance of Assets.....................................18
5.10 Insurance.................................................19
5.11 Consents..................................................19
5.12 Books and Records.........................................19
5.13 Notification..............................................19
5.14 Compliance with Laws......................................19
5.15 Financing Leases..........................................19
5.16 Preservation of Business..................................19
5.17 Personnel Recommendations.................................19
5.18 Programming...............................................19
Section 6. SPECIAL COVENANTS AND AGREEMENTS.................................20
6.1 Governmental Approvals....................................20
6.2 HSR Act Filing............................................20
6.3 Control of the Station....................................20
6.4 Risk of Loss..............................................20
6.5 Confidentiality...........................................20
6.6 Environmental Survey......................................21
6.7 Cooperation...............................................21
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TABLE OF CONTENTS
(continued)
PAGE
6.8 Bulk Sales Law............................................21
6.9 Title Insurance and Surveys...............................21
6.10 Sales Tax Filings.........................................22
6.11 Access to Books and Records...............................22
6.12 Employee Matters..........................................22
6.13 Financial Information.....................................23
6.14 Fees and Expenses.........................................23
6.15 Collection of Accounts Receivable.........................23
6.16 WPEK Purchase Agreement...................................24
6.17 KDGE Purchase Agreement...................................24
Section 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING.........24
7.1 Conditions to Obligations of Buyer........................24
7.2 Conditions to Obligations of Seller.......................25
Section 8. CLOSING AND CLOSING DELIVERIES...................................26
8.1 Closing...................................................26
8.2 Deliveries by Seller......................................26
8.3 Deliveries by Buyer.......................................27
Section 9. TERMINATION......................................................28
9.1 Termination by Seller.....................................28
9.2 Termination by Buyer......................................28
9.3 Rights on Termination.....................................28
9.5 Escrow Deposit............................................29
Section 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
CERTAIN REMEDIES................................................29
10.1 Representations and Warranties............................29
10.2 Indemnification by Seller.................................29
10.3 Indemnification by Buyer..................................30
10.4 Procedure for Indemnification.............................30
10.5 Limitations...............................................31
10.6 Specific Performance......................................31
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TABLE OF CONTENTS
(continued)
PAGE
10.7 Attorneys' Fees...........................................32
Section 11. MISCELLANEOUS...................................................32
11.1 Notices...................................................32
11.2 Benefit and Binding Effect................................33
11.3 Further Assurances........................................33
11.4 Governing Law.............................................33
11.5 Headings..................................................33
11.6 Gender and Number.........................................33
11.7 No Strict Construction....................................33
11.8 Entire Agreement..........................................33
11.9 Waiver of Compliance; Consents............................33
11.10 Counterparts..............................................34
11.11 Press Releases............................................34
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SCHEDULES
The following schedules have been omitted and will be furnished
supplementally to the Commission upon request.
Schedule 3.3 -- Consents
Schedule 3.4 -- Licenses
Schedule 3.5 -- Real Property
Schedule 3.6 -- Tangible Personal Property
Schedule 3.7 -- Contracts
Schedule 3.9 -- Intangibles
Schedule 3.11 -- Insurance Matters
Schedule 3.14 -- Claims and Legal Actions
Schedule 3.18 -- Transactions with Affiliates
Schedule 3.20 -- Personnel Matters
Schedule 5.18 -- Change in WPEK Format
Schedule 8.2(j) -- Opinions of Seller's Counsel
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT is dated as of November 8, 2000, by and
among Xxx Radio, Inc., a Delaware corporation ("CRI"); CXR Holdings, Inc., a
Nevada corporation ("CXR", CRI and CXR are collectively referred to herein as
"Buyer"); and Radio One, Inc., a Delaware corporation ("Seller").
RECITALS
A. Seller and Radio One Licenses, Inc., a Delaware corporation and a
wholly-owned subsidiary of Seller ("ROLI"), currently own and operate radio
stations WDYL(FM), Chester, Virginia ("WDYL") and WJMZ-FM, Anderson, South
Carolina ("WJMZ") pursuant to licenses and authorizations issued by the Federal
Communications Commission and Seller has entered into an Asset Purchase
Agreement (the "WPEK Purchase Agreement"), dated as of August 7, 2000, by and
between Radio One and Alpeak Broadcasting Corp. pursuant to which Seller has
agreed to acquire radio station WPEK(FM), Seneca, South Carolina ("WPEK"). WDYL,
WJMZ and WPEK are collectively referred to herein as the "Stations".
B. Seller desires to sell, and Buyer wishes to buy, substantially all
the assets that are used or useful in the business or operations of the
Stations, for the price and on the terms and conditions set forth in this
Agreement.
AGREEMENTS
In consideration of the above recitals and of the mutual agreements and
covenants contained in this Agreement, Buyer and Seller, intending to be bound
legally, agree as follows:
SECTION 1. DEFINITIONS
The following terms, as used in this Agreement, shall have the meanings
set forth in this Section:
"Accounts Receivable" means the rights of Seller to payment for the
sale of advertising or programming time run on the Stations prior to the
Adjustment Time.
"Adjustment Time" means 12:01 a.m., local Virginia and South Carolina
time, on the Closing Date.
"Assets" means the assets to be sold, transferred, or otherwise
conveyed to Buyer under this Agreement, as specified in SECTIONS 2.1(a) and (b).
"Assumed Contracts" means (i) all Contracts listed in Schedule 3.7
(except for any trade or barter agreements relating to WDYL which Buyer shall
not assume at Closing), (ii) Contracts with advertisers for the sale of
advertising time on the Stations for cash at prevailing rates which
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have not been prepaid and which may be canceled by the Stations without penalty
on not more than thirty (30) days' notice, and (iii) any Contracts entered into
by Seller between the date of this Agreement and the Closing Date that Buyer
agrees in writing to assume.
"Closing" means the consummation of the purchase and sale of the Assets
pursuant to this Agreement in accordance with the provisions of SECTION 8.
"Closing Date" means the date on which the Closing occurs, as
determined pursuant to SECTION 8.
"Consents" means the consents, permits, or approvals of government
authorities and other third parties necessary to transfer the Assets to Buyer or
otherwise to consummate the transactions contemplated by this Agreement.
"Contracts" means all contracts, leases, non-governmental licenses, and
other agreements (including leases for personal or real property and employment
agreements), written or oral (including any amendments and other modifications
thereto) that Seller will assume under the WPEK Purchase Agreement or to which
Seller is a party or which are binding upon Seller and which relate to or affect
the Assets or the business or operations of the Stations, and (i) which are in
effect on the date of this Agreement or (ii) which are entered into by Seller
between the date of this Agreement and the Closing Date.
"Escrow Agent" means The Bank of New York.
"Escrow Agreement" means the Escrow Agreement dated as of the date
hereof by and among Buyer, Seller and the Escrow Agent.
"FCC" means the Federal Communications Commission.
"FCC Consent" means action by the FCC granting its consent to the
assignment of the FCC Licenses to Buyer as contemplated by this Agreement.
"FCC Licenses" means all Licenses issued by the FCC in connection with
the business or operations of the Stations.
"Final Order" means an action by the FCC that has not been reversed,
stayed, enjoined, set aside, annulled, or suspended, and with respect to which
no requests are pending for administrative or judicial review, reconsideration,
appeal, or stay, and the time for filing any such requests and the time for the
FCC to set aside the action on its own motion have expired.
"HSR Act" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended.
"Intangibles" means all copyrights, trademarks, trade names, service
marks, service names, licenses, patents, permits, jingles, proprietary
information, domain names, technical information and data and machinery and
equipment warranties (and any goodwill associated with any of the foregoing)
applied for, issued to, or owned by Seller or under which Seller is licensed
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or franchised and which are used or useful in the business and operations of the
Stations, together with any additions thereto between the date of this Agreement
and the Closing Date.
"Licenses" means all licenses, permits, tower registrations and other
authorizations issued by the FCC, the Federal Aviation Administration, or any
other federal, state, or local governmental authorities in connection with the
conduct of the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Permitted Liens" mean liens for current taxes not yet due and payable
and liens set forth on Schedules 3.5 and 3.6 that are designated on such
schedules as liens that will remain on the Assets following the Closing.
"Purchase Price" means the purchase price specified in SECTION 2.3.
"Real Property" means all real property and interests in real property,
including fee estates, leaseholds and subleaseholds, purchase options,
easements, licenses, rights to access, and rights of way, and all buildings and
other improvements thereon, and other real property interests which are used or
useful in the business or operations of the Stations, together with any
additions thereto between the date of this Agreement and the Closing Date.
"Tangible Personal Property" means all machinery, equipment, tools,
vehicles, furniture, leasehold improvements, office equipment, plant, inventory,
spare parts, and other tangible personal property which (i) with respect to WJMZ
and WPEK is used or useful in the conduct of the business or operations of WJMZ
and WPEK and (ii) with respect to WDYL is predominantly used or useful in the
conduct of the business or operations of WDYL, in each case together with any
additions thereto between the date of this Agreement and the Closing Date.
SECTION 2. PURCHASE AND SALE OF ASSETS
2.1 Agreement to Sell and Buy.
(a) Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to sell, transfer, and deliver to Buyer on the
Closing Date, and Buyer hereby agrees to purchase on the Closing Date, all of
the tangible and intangible assets used or useful in connection with the conduct
of the business or operations of the Stations, together with any additions
thereto between the date of this Agreement and the Closing Date, but excluding
the assets described in SECTION 2.2, free and clear of any claims, liabilities,
security interests, mortgages, liens, pledges, conditions, charges, or
encumbrances of any nature whatsoever (except for Permitted Liens), including
the following:
(i) The Tangible Personal Property;
(ii) The Real Property;
(iii) The Licenses;
(iv) The Assumed Contracts;
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(v) The Intangibles and all intangible assets of Seller
relating to the Stations that are not specifically included within the
Intangibles, including the goodwill of the Stations;
(vi) All of Seller's proprietary information, technical
information and data, machinery and equipment warranties, maps, computer discs
and tapes, plans, diagrams, blueprints, and schematics, including filings with
the FCC relating to the business and operation of the Stations;
(vii) All choses in action of Seller relating to the
Stations; and
(viii) All books and records relating to the business or
operations of the Stations, including executed copies of the Assumed Contracts,
and all records required by the FCC to be kept by the Stations.
(b) Subject to the terms and conditions set forth in this
Agreement, Seller hereby agrees to cause ROLI to sell, transfer, and deliver to
Buyer on the Closing Date, and Buyer hereby agrees to purchase on the Closing
Date, all of the Licenses, including, without limitations, all FCC Licenses,
owned or held by or issued to ROLI, together with any other assets or records
owned or held by ROLI which are used or useful in connection with the Stations
(collectively, the "License Assets").
2.2 Excluded Assets. The Assets shall exclude the following assets:
(a) Seller's cash on hand as of the Closing and all other cash in
any of Seller's bank accounts;
(b) Any notes receivable, insurance policies, bonds, letters of
credit, or other similar items, and any cash surrender value in regard thereto;
(c) Any pension, profit-sharing, or employee benefit plans, and
employment, consulting or collective bargaining agreements;
(d) All books and records that Seller is required by law to retain;
(e) Any interest in and to any refunds of federal, state, or local
franchise, income, or other taxes for periods prior to the Closing Date; and
(f) The Accounts Receivable.
2.3 Purchase Price. The Purchase Price for the Assets shall be Fifty
Two Million Five Hundred Thousand Dollars ($52,500,000), adjusted as provided
below:
(a) Prorations. The Purchase Price shall be increased or decreased
as required to effectuate the proration of expenses. All expenses arising from
the operation of the Stations, including business and license fees, FCC annual
regulatory fees, utility charges, real and personal property taxes and
assessments levied against the Assets, property and equipment rentals,
applicable copyright or other fees, sales and service charges, taxes (except for
taxes
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arising from the transfer of the Assets under this Agreement), and similar
prepaid and deferred items shall be prorated between Buyer and Seller in
accordance with the principle that Seller shall be responsible for all expenses,
costs, and liabilities allocable to the period prior to the Adjustment Time, and
Buyer shall be responsible for all expenses, costs, and liabilities allocable to
the period after the Adjustment Time. Notwithstanding the preceding sentence,
there shall be no adjustment for, and Seller shall remain solely liable with
respect to, any Contracts not included in the Assumed Contracts and any other
obligation or liability not being assumed by Buyer in accordance with SECTION
2.6.
(b) Trade Adjustment. The Purchase Price shall be reduced by the
amount in excess of Ten Thousand Dollars ($10,000) by which the value of the
advertising time remaining to be run by WJMZ and WPEK under trade or barter
agreements as of the Adjustment Time exceeds the value of the goods or services
to be received by WJMZ and WPEK under such trade or barter agreements as of the
Adjustment Time. For purposes of this Section, the liability of WJMZ and WPEK
for unperformed time shall be valued according to those stations' prevailing
rates as of the Adjustment Time and the value of the goods or services to be
received by WJMZ and WPEK shall be valued at their fair market value as of the
Adjustment Time.
2.4 Manner of Determining Adjustments. The Purchase Price, taking into
account the adjustments and prorations pursuant to SECTIONS 2.3(a) and (b) will
be determined finally in accordance with the following procedures:
(a) Not later than five (5) days before the Closing Date,
(A) Seller shall prepare and deliver to Buyer a preliminary statement which
shall set forth Seller's good faith estimate of the adjustments to the Purchase
Price under SECTIONS 2.3(a) and (b) as of the Closing Date (the "Prorations
Statement"). The Prorations Statement (A) shall contain all information
reasonably necessary to determine the adjustments to the Purchase Price under
SECTIONS 2.3(a) and (b), to the extent such adjustments can be determined or
estimated as of the date of such statement, and such other information as may be
reasonably requested by Buyer, and (B) shall be certified by Seller to be true
and complete as of the date thereof. The adjustments to the Purchase Price to be
made at Closing shall be based upon the Prorations Statement, except that any
item disputed by Buyer shall be omitted therefrom.
(b) Not later than sixty (60) days after the Closing Date, Buyer
will deliver to Seller a statement setting forth Buyer's determination of the
Purchase Price and the calculation thereof pursuant to SECTIONS 2.3(a) and (b).
If Seller disputes the amount of the Purchase Price determined by Buyer, Seller
shall deliver to Buyer within thirty (30) days after its receipt of Buyer's
statement a statement setting forth Seller's determination of the amount of the
Purchase Price. If Seller notifies Buyer of its acceptance of Buyer's statement,
or if Seller fails to deliver its statement within the thirty (30) day period
specified in the preceding sentence, Buyer's determination of the Purchase Price
shall be conclusive and binding on the parties as of the last day of the thirty
(30) day period.
(c) Buyer and Seller shall use good faith efforts to resolve any
dispute involving the determination of the Purchase Price. If the parties are
unable to resolve the dispute within fifteen (15) days following the delivery of
Seller's statement, Buyer and Seller shall jointly designate an independent
certified public accountant, who shall be knowledgeable and
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experienced in the operation of radio broadcasting stations, to resolve the
dispute. The accountant's resolution of the dispute shall be final and binding
on the parties, and a judgment may be entered thereon in any court of competent
jurisdiction. Any fees of this accountant shall be split equally between Seller
on the one hand and Buyer on the other hand.
2.5 Payment of Purchase Price. The Purchase Price shall be paid by
Buyer to Seller as follows:
(a) Payment of Estimated Purchase Price. At the Closing, Buyer
shall pay or cause to be paid to or for the account of Seller the Purchase Price
as adjusted pursuant to SECTIONS 2.3 (a) and (b) (the "Estimated Purchase
Price") by federal wire transfer of same-day funds pursuant to wire instructions
which shall be delivered by Seller to Buyer at least two (2) business days prior
to the Closing Date.
(b) Payments to Reflect Adjustments.
(i) If the Purchase Price as finally determined pursuant to
SECTIONS 2.4(b) or (c) exceeds the Estimated Purchase Price, Buyer shall pay to
Seller, in immediately available funds within five (5) days after the date on
which the Purchase Price is determined pursuant to SECTION 2.4(b) or (c), the
difference between the Purchase Price and the Estimated Purchase Price.
(ii) If the Purchase Price as finally determined pursuant to
SECTION 2.4(b) or (c) is less than the Estimated Purchase Price, Seller shall
pay to Buyer, in immediately available funds within five (5) days after the date
on which the Purchase Price is determined pursuant to SECTION 2.4(b) or (c), the
difference between the Purchase Price and the Estimated Purchase Price.
2.6 Assumption of Liabilities and Obligations. As of the Closing Date,
Buyer shall assume and undertake to pay, discharge, and perform all obligations
and liabilities of Seller under the Licenses and the Assumed Contracts insofar
as they relate to the time on and after the Closing Date, and arise out of
events related to Buyer's ownership of the Assets or its operation of the
Stations on or after the Closing Date. Buyer shall not assume any other
obligations or liabilities of Seller, including (i) any obligations or
liabilities under any Contract not included in the Assumed Contracts, (ii) any
obligations or liabilities under the Assumed Contracts relating to the period
prior to the Closing Date, (iii) any claims or pending litigation or proceedings
relating to the ownership or operation of the Stations prior to the Closing,
(iv) other than the Assumed Contracts, any obligations or liabilities arising
under capitalized leases or other financing agreements, (v) any obligations or
liabilities arising under agreements entered into other than in the ordinary
course of business, (vi) any obligations or liabilities of Seller under any
employee pension, retirement, health and welfare or other benefit plans,
including the Employee Plans and the Compensation Arrangements (in each case as
defined below), and under any employment, consulting or collective bargaining
agreements, (vii) any obligation to any employee of the Stations for severance
benefits, vacation time, or sick leave accrued prior to the Closing Date, except
that Buyer shall assume the unused vacation time and sick leave of employees of
the Stations who are hired by Buyer at Closing subject to Buyer receiving an
adjustment in its favor for the value of such time and leave under SECTION
2.3(a) or (viii) any obligations or liabilities
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caused by, arising out of, or resulting from any action or omission of Seller
prior to the Closing, and all such obligations and liabilities shall remain and
be the obligations and liabilities solely of Seller.
2.7 Appraisal. The Purchase Price shall be allocated among the Assets
as mutually agreed among the parties based upon an appraisal to be prepared by
Bond & Xxxxxx. Seller and Buyer shall use the mutually agreed upon allocations
determined pursuant to this SECTION 2.7 for all tax purposes, including without
limitation, those matters subject to Section 1060 of the Internal Revenue Code
of 1986, as amended (the "Code"), provided, however, that if Buyer and Seller
are unable to reasonably agree on such appraisal, neither party shall be bound
by such appraisal. The cost of such appraisal shall be paid one-half by Buyer
and one-half by Seller.
2.8 Like-Kind Exchange. Buyer shall reasonably cooperate with Seller to
facilitate the transfer of all or some of the Assets to Buyer as part of a
like-kind exchange of property within the meaning of Section 1031 the Code,
which cooperation shall include, without limitation, the acceptance of notice of
the assignment of Seller's rights under this Agreement to a qualified
intermediary (as defined in Treas. Reg. ss. 1.1031(k)-1(g)) (a "Qualified
Intermediary").
2.9 Qualified Intermediary. Seller desires and intends to effect the
transfers of all or some of the Assets pursuant to this Agreement as part of an
exchange of like-kind properties under Section 1031 of the Code (the "1031
Exchange"). To facilitate the completion of the 1031 Exchange, Seller may assign
to a Qualified Intermediary its rights with respect to the transfer of all or
some of the Assets, and its right to receive the Purchase Price, as adjusted.
The parties hereto agree to cooperate with any other party to complete the 1031
Exchange; provided, however that (i) Buyer shall not assume responsibility for
the tax consequences to Seller arising out of the 1031 Exchange; (ii)
assignment(s) by Seller to a Qualified Intermediary shall not limit or modify
any obligations or liabilities of the assigning party, and, notwithstanding any
such assignment(s), Seller shall remain directly and primarily bound by all
conditions, representations, warranties, covenants and indemnities contained
herein and all remedies related thereto; (iii) title to the Assets shall be
delivered by Seller directly to Buyer; and (iv) the Qualified Intermediary, and
not Buyer, shall be solely responsible for all actions necessary to acquire and
transfer any replacement property in connection with the 1031 Exchange.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLERS
Seller represents and warrants to Buyer as follows:
3.1 Organization, Standing, and Authority. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is authorized to conduct business as a foreign corporation under
the laws of the States of Virginia and South Carolina. Seller owns all of the
issued and outstanding shares of ROLI and has the authority to cause ROLI to
transfer the License Assets to Buyer at Closing. ROLI is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is authorized to conduct business as a foreign corporation under
the laws of the State of Virginia. Except for WPEK for which this representation
will be only true and correct following the closing under the WPEK Purchase
Agreement (the "WPEK Closing"), Seller and ROLI have all requisite power and
authority (i) to own, lease, and use the Assets as now owned, leased, and used,
and (ii) to conduct the business and operations of the Stations as now
conducted. Seller has all requisite power and authority to execute and deliver
this Agreement and the documents contemplated hereby, and to perform and comply
with all of the terms, covenants, and conditions to be performed and complied
with by Seller hereunder and thereunder. Seller and ROLI are not participants in
any joint venture or partnership with any other person or entity with respect to
any part of the operations of the Stations or any of the Assets.
3.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement by Seller has been duly authorized by all
necessary action on the part of Seller. The sale of the License Assets by ROLI
hereunder will be duly authorized by all necessary action on the part of ROLI.
This Agreement has been duly executed and delivered by Seller and constitutes
the legal, valid, and binding obligation of Seller, enforceable against Seller
in accordance with its terms except as the enforceability of this Agreement may
be affected by bankruptcy, insolvency, or similar laws affecting creditors'
rights generally, and by judicial discretion in the enforcement of equitable
remedies.
3.3 Absence of Conflicting Agreements. Subject to obtaining the FCC
Consent, the Consents listed on Schedule 3.3, and any filing under the HSR Act,
the execution, delivery, and performance by Seller of this Agreement and the
documents contemplated hereby (with or without the giving of notice, the lapse
of time, or both): (i) do not require the consent of any third party; (ii) will
not conflict with any provision of the organizational documents of Seller or
ROLI; (iii) will not conflict with, result in a breach of, or constitute a
default under, any law, judgment, order, ordinance, injunction, decree, rule,
regulation, or ruling of any court or governmental instrumentality; (iv) will
not conflict with, constitute grounds for termination of, result in a breach of,
constitute a default under, or accelerate or permit the acceleration of any
performance required by the terms of, any agreement, instrument, license, or
permit to which Seller or ROLI is a party or by which Seller or ROLI may be
bound; and (v) will not create any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature whatsoever upon any of the
Assets.
3.4 Governmental Licenses. Schedule 3.4 includes a true and complete
list of all of the Licenses together with their expiration dates. Seller has
delivered to Buyer true and complete copies of the Licenses (including any
amendments and other modifications thereto). The
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Licenses have been validly issued pursuant to Final Orders, and except for WPEK,
ROLI is the authorized legal holder thereof. Following the WPEK Closing, ROLI
will be the authorized legal holder of all of the Licenses set forth on Schedule
3.4 relating to WPEK. The Licenses comprise all of the licenses, permits, and
other authorizations required from any governmental or regulatory authority for
the lawful conduct of the business and operations of the Stations in the manner
and to the full extent they are now conducted, and none of the Licenses is
subject to any restriction or condition that would limit the full operation of
the Stations as now operated except as appears on the face of the Licenses. The
Licenses are in full force and effect, and the conduct of the business and
operations of the Stations is in accordance therewith. Seller has no reason to
believe that any of the Licenses would not be renewed for a full term with no
materially adverse conditions by the FCC or other granting authority in the
ordinary course.
3.5 Title to and Condition of Real Property. Schedule 3.5 contains a
complete and accurate description of all the Real Property and Seller's
interests therein (including the street address, use and legal description of
such Real Property). Except for the studio of WDYL, the Real Property listed on
Schedule 3.5 comprises all real property interests necessary to conduct the
business and operations of the Stations as now conducted. Except for WPEK,
Seller has good and marketable fee simple title, insurable at standard rates, to
all fee estates, if any (including the improvements thereon), included in the
Real Property, and following the WPEK Closing, Seller will have good and
marketable fee simple title, insurable at standard rates, to all fee estates
(including the improvements thereon), included in the Real Property of WPEK, in
each case free and clear of all liens, mortgages, pledges, covenants, easements,
restrictions, encroachments, leases, charges, and other claims and encumbrances
of any nature whatsoever, and without reservation or exclusion of any mineral,
timber, or other rights or interests, except for liens for real estate taxes not
yet due and payable and liens disclosed on Schedule 3.5. With respect to each
leasehold or subleasehold interest included in the Real Property, so long as
Seller fulfills its obligations under the lease therefor, Seller has enforceable
rights to nondisturbance and quiet enjoyment, and no third party holds any
interest in the leased premises with the right to foreclose upon Seller's
leasehold or subleasehold interest (this representation will be true and
accurate with respect to WPEK only following the WPEK Closing). All towers, guy
anchors, and buildings and other improvements included in the Assets are located
entirely on the Real Property listed in Schedule 3.5. Seller has delivered to
Buyer true and complete copies of all deeds pertaining to the Real Property. All
Real Property (including the improvements thereon) (i) is in good condition and
repair consistent with its present use, (ii) is available for immediate use in
the conduct of the business and operations of the Stations, and (iii) complies
in all material respects with all applicable building or zoning codes and the
regulations of any governmental authority having jurisdiction. Except for WPEK,
Seller has full legal and practical access to the Real Property and following
the WPEK Closing, Seller will have full legal and practical access to the Real
Property of WPEK. All easements, rights-of-way, and real property licenses
included in the Real Property have been properly recorded in the appropriate
public recording offices.
3.6 Title to and Condition of Tangible Personal Property. Schedule 3.6
lists all material items of Tangible Personal Property. The Tangible Personal
Property listed on Schedule 3.6 comprises all material items of tangible
personal property necessary to conduct the business and operations of the
Stations as now conducted. Except as described in Schedule 3.6, Seller owns and
has good title to each item of Tangible Personal Property, and none of the
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Tangible Personal Property owned by Seller is subject to any security interest,
mortgage, conditional sales agreement, or other lien or encumbrance, except for
liens for current taxes not yet due and payable except that this representation
shall only be true and correct with respect to WPEK following the WPEK Closing.
Each item of Tangible Personal Property is available for immediate use in the
business and operations of the Stations. All items of transmitting and studio
equipment included in the Tangible Personal Property (i) have been maintained in
a manner consistent with generally accepted standards of good engineering
practice, (ii) are in good condition and repair consistent with their use, and
(iii) will permit the Stations and any associated auxiliary broadcast stations
to operate in accordance with the terms of the FCC Licenses and the rules and
regulations of the FCC, and in material compliance with all other applicable
federal, state, and local statutes, ordinances, rules, and regulations.
3.7 Contracts. Schedule 3.7 is a true and complete (i) list of all
Contracts except contracts with advertisers for the sale of advertising time on
the Stations for cash at prevailing rates and which have not been prepaid and
which may be canceled by the Stations without penalty on not more than thirty
(30) days' notice, and (ii) summary of the Stations' rights and obligations as
of the date hereof under trade and barter agreements. Seller has delivered to
Buyer true and complete copies of all written Contracts, and true and complete
memoranda of all oral Contracts (including any amendments and other
modifications to such Contracts). Other than the Contracts listed on Schedule
3.7, Contracts with advertisers for the sale of advertising time on the Stations
for cash and the studio lease for WDYL, the Stations require no contract, lease,
or other agreement to enable them to carry on their business as now conducted.
All of the Assumed Contracts are in full force and effect, and are valid,
binding, and enforceable in accordance with their terms. There is not under any
Assumed Contract any default by any party thereto or any event that, after
notice or lapse of time or both, could constitute a default. Seller is not aware
of any intention by any party to any Assumed Contract (i) to terminate such
Assumed Contract or amend the terms thereof, (ii) to refuse to renew such
Assumed Contract upon expiration of its term, or (iii) to renew such Assumed
Contract upon expiration only on terms and conditions which are more onerous
than those now existing. Except for the need to obtain the Consents listed in
Schedule 3.3, Seller has full legal power and authority to assign its rights
under the Assumed Contracts to Buyer in accordance with this Agreement, and such
assignment will not affect the validity, enforceability, or continuation of any
of the Assumed Contracts.
3.8 Consents. Except for the FCC Consent provided for in SECTION 6.1,
any filings required under the HSR Act, and the other Consents described in
Schedule 3.3, no consent, approval, permit, or authorization of, or declaration
to or filing with any governmental or regulatory authority, or any other third
party is required (i) to consummate this Agreement and the transactions
contemplated hereby, (ii) to permit Seller and ROLI to assign or transfer the
Assets to Buyer, or (iii) to enable Buyer to conduct the business and operations
of the Stations in essentially the same manner as such business and operations
are now conducted.
3.9 Intangibles. Schedule 3.9 is a true and complete list of all
Intangibles (exclusive of those listed in Schedule 3.4), all of which are valid
and in good standing and uncontested. Seller has delivered to Buyer copies of
all documents establishing or evidencing all Intangibles. Seller is not
infringing upon or otherwise acting adversely to any trademarks, trade names,
service marks, service names, copyrights, patents, patent applications,
know-how, methods, or processes owned by any other person or persons, and there
is no claim or action pending, or to
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the knowledge of Seller threatened, with respect thereto. The Intangibles listed
on Schedule 3.9 comprise all intangible property interests necessary to conduct
the business and operations of the Stations as now conducted.
3.10 Financial Statements. Seller has furnished Buyer with true and
complete copies of unaudited results of operations of the Stations for the
twelve-month period ended December 31, 1998 and 1999 and an unaudited results of
operations of the Stations for the eight-month period ending August 31, 2000
("Financial Statements"). Attached hereto as Schedule 3.10 are the Financial
Statements. The Financial Statements have been prepared from the books and
records of Seller, have been prepared materially in accordance with generally
accepted accounting principles consistently applied and maintained throughout
the periods indicated, accurately reflect the books, records, and accounts of
the Stations (which books, records, and accounts are complete and correct), are
complete and correct in all material respects, and present fairly the financial
condition of the Stations as at their respective dates and the results of
operations for the periods then ended. None of the Financial Statements
understates the true costs and expenses of conducting the business or operations
of the Stations, fails to disclose any material contingent liabilities, or
inflates the revenues of the Stations. With respect to each Station, the
representations and warranties in this SECTION 3.10 as they relate to such
Station are to Seller's knowledge for periods prior to the acquisition by Seller
of such Station.
3.11 Insurance. Schedule 3.11 is a true and complete list of all
insurance policies of Seller that insure any part of the Assets or the business
of the Stations. All policies of insurance listed in Schedule 3.11 are in full
force and effect. The insurance policies listed in Schedule 3.11 are adequate in
amount with respect to, and for the full value (subject to customary
deductibles) of, the Assets, and insure the Assets and the business of the
Stations against all customary and foreseeable risks. No insurance policy of
Seller on the Assets or the Stations has been canceled by the insurer and no
application of Seller for insurance has been rejected by any insurer.
3.12 Reports. All returns, reports, and statements which the Stations
are currently required to file with the FCC or with any other governmental
agency have been filed, and all reporting requirements of the FCC and other
governmental authorities having jurisdiction over Seller, ROLI or the Stations
have been complied with in all material respects. All of such returns, reports,
and statements are substantially complete and correct as filed. Seller and ROLI
have timely paid to the FCC all annual regulatory fees payable with respect to
the FCC Licenses. All tower registration applications that the Stations are
required to file with the FCC with respect to the Assets have been filed and the
FCC has issued registrations with respect to such towers.
3.13 Taxes. Each of Seller and ROLI has filed or caused to be filed all
federal income tax returns and all other federal, state, county, local, or city
tax returns which are required to be filed by it, and each of Seller and ROLI
has paid or caused to be paid all taxes shown on those returns or on any tax
assessment received by Seller or ROLI to the extent that such taxes have become
due, or has set aside on its books adequate reserves (segregated to the extent
required by generally accepted accounting principles) with respect thereto.
There are no governmental investigations or other legal, administrative, or tax
proceedings pursuant to which Seller or ROLI is or could be made liable for any
taxes, penalties, interest, or other charges, the liability for which could
extend to Buyer as transferee of the Assets and the business of the Stations,
and no
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event has occurred that could impose on Buyer any transferee liability for any
taxes, penalties, or interest due or to become due from Seller or ROLI.
3.14 Claims and Legal Actions. Except for any FCC rulemaking
proceedings generally affecting the radio broadcasting industry, there is no
claim, legal action, counterclaim, suit, arbitration, governmental investigation
or other legal, administrative, or tax proceeding, nor any order, decree or
judgment, in progress or pending, or to the knowledge of Seller threatened,
against Seller or ROLI with respect to its ownership or operation of the
Stations or otherwise relating to the Assets or the business or operations of
the Stations, nor does Seller know or have reason to be aware of any basis for
the same. In particular, but without limiting the generality of the foregoing,
except as disclosed on Schedule 3.14, there are no applications, complaints or
proceedings pending or, to the best of Seller's knowledge, threatened (i) before
the FCC relating to the business or operations of the Stations other than rule
making proceedings which affect the radio industry generally, (ii) before any
federal or state agency relating to the business or operations of the Stations
involving charges of illegal discrimination under any federal or state
employment laws or regulations, or (iii) before any federal, state, or local
agency relating to the business or operations of the Stations involving zoning
issues under any federal, state, or local zoning law, rule, or regulation.
3.15 Environmental Matters.
To Seller's knowledge,
(a) Seller has complied in all material respects with all laws,
rules, and regulations of all federal, state, and local governments (and all
agencies thereof) concerning the environment, public health and safety, and
employee health and safety, and no charge, complaint, action, suit, proceeding,
hearing, investigation, claim, demand, or notice has been filed or commenced
against any Seller in connection with Seller's ownership or operation of the
Stations alleging any failure to comply with any such law, rule, or regulation.
(b) Seller has no liability relating to Seller's ownership and
operation of the Stations (and there is no basis related to the past or present
operations, properties, or facilities of Seller for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under the Comprehensive
Environmental Response, Compensation and Liability Act, the Resource
Conservation and Recovery Act, the Federal Water Pollution Control Act, the
Clean Air Act, the Safe Drinking Water Act, the Toxic Substances Control Act,
the Refuse Act, or the Emergency Planning and Community Right-to-Know Act (each
as amended) or any other law, rule, or regulation of any federal, state, or
local government (or agency thereof) concerning release or threatened release of
hazardous substances, public health and safety, or pollution or protection of
the environment.
(c) Seller has no liability relating to its ownership and
operation of the Stations (and there is no basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim, or
demand against Seller giving rise to any such liability) under the Occupational
Safety and Health Act, as amended, or under any other law, rule, or regulation
of any federal, state, or local government (or agency thereof) concerning
employee health and safety.
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(d) In connection with its ownership and operation of the
Stations, Seller has obtained and been in material compliance with all of the
terms and conditions of all permits, licenses, and other authorizations which
are required under, and have complied in all material respects with all other
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables which are contained in, all federal,
state, and local laws, rules, and regulations (including all codes, plans,
judgments, orders, decrees, stipulations, injunctions, and charges thereunder)
relating to public health and safety, worker health and safety, and pollution or
protection of the environment, including laws relating to emissions, discharges,
releases, or threatened releases of pollutants, contaminants, or chemical,
industrial, hazardous, or toxic materials or wastes into ambient air, surface
water, ground water, or lands or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of pollutants, contaminants, or chemical, industrial, hazardous, or
toxic materials or wastes.
(e) All properties and equipment used in the business of the
Stations are and have been free of asbestos and asbestos-related products,
PCB's, methylene chloride, trichloroethylene, 1, 2-trans-dichloroethylene,
dioxins, dibenzofurans, and Extremely Hazardous Substances (as defined in
Section 302 of the Emergency Planning and Community Right-to-Know Act).
(f) No pollutant, contaminant, or chemical, industrial, hazardous,
or toxic material or waste has ever been manufactured, buried, stored, spilled,
leaked, discharged, emitted, or released by Seller in connection with its
ownership and operation of the Stations, or, by any other party on any Real
Property.
3.16 Compliance with Laws. Each of Seller and ROLI has complied in all
material respects with (i) the Licenses, and (ii) all federal, state, and local
laws, rules, regulations, and ordinances applicable or relating to the ownership
and operation of the Stations. Neither the ownership or use of the properties of
the Stations nor the conduct of the business or operations of the Stations
conflicts with the rights of any other person or entity.
3.17 Conduct of Business in Ordinary Course. Since December 31, 1999
with respect to WDYL, since the acquisition of WJMZ by Seller with respect to
WJMZ and since the WPEK Closing with respect to WPEK, each of Seller and ROLI
has conducted the business and operations of the Stations only in the ordinary
course and has not:
(a) Suffered any material adverse change in the business, assets,
prospects or properties of the Stations, including any damage, destruction, or
loss affecting any assets used or useful in the conduct of the business of the
Stations;
(b) Made any sale, assignment, lease, or other transfer of the
Stations' properties other than in the normal and usual course of business with
suitable replacements being obtained therefor;
(c) Canceled any debts owed to or claims held by Seller with
respect to the Stations, except in the normal and usual course of business;
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(d) Suffered any material write-down of the value of any Assets or
any material write-off as uncollectible of any accounts receivable of the
Stations; or
(e) Transferred or granted any right under, or entered into any
settlement regarding the breach or infringement of, any license, patent,
copyright, trademark, trade name, franchise, or similar right, or modified any
existing right relating to the Stations.
3.18 Transactions with Affiliates. Except as disclosed in Schedule
3.18, neither Seller nor ROLI has been involved in any business arrangement or
relationship relating to the Stations with any affiliate of Seller or ROLI, and
no affiliate of Seller or ROLI owns any property or right, tangible or
intangible, which is used in the business of the Stations. As used in this
paragraph, "affiliate" has the meaning set forth in Rule 12b-2 promulgated under
the Securities and Exchange Act of 1934.
3.19 Broker. Neither Seller nor any person or entity acting on Seller's
behalf has incurred any liability for any finders' or brokers' fees or
commissions in connection with the transactions contemplated by this Agreement.
3.20 Personnel.
(a) Seller has furnished to Buyer a copy of the employee
handbook(s) describing Seller's Employee Plans and Compensation Arrangements.
Schedule 3.20 contains a true and complete list of all employees of the
Stations, their job titles, dates of hire and salary amounts.
(b) Except as described in Schedule 3.20, neither Seller nor any
other trade or business under common control with Seller (within the meaning of
Sections 414(b), (c), (m) or (o) of the Code) sponsor, maintain or contribute to
any Employee Plan or Compensation Arrangement that provides retiree medical or
retiree life insurance coverage to employees of Seller at the Stations upon
their retirement.
(c) Except as described in Schedule 3.20, with respect to each
Employee Plan and, to the extent applicable, each Compensation Arrangement: (i)
each Employee Plan that is intended to be tax-qualified, and each amendment
thereto, is the subject of a favorable determination letter (or an opinion of
counsel that the form of such Employee Plan is so qualified under Section 401(a)
of the Code) and no plan amendment would affect the validity of an Employee
Plan's letter (or of such opinion of counsel); (ii) no prohibited transaction,
within the definition of section 4975 of the Code or Title 1, Part 4 of ERISA,
has occurred which would subject Seller to any liability that could become a
liability of Buyer; and (iii) all contributions, premiums or payments accrued,
in whole or in part, under each Employee Plan or Compensation Arrangement or
with respect thereto as of the Closing will be paid by Seller prior to the
Closing.
(d) Seller shall furnish to Buyer as soon as practicable prior to
the Closing (but no later than 15 days prior to the Closing) (i) a list,
calculated as of the Closing Date, estimating the total amount of compensation
deferred under Seller's 401(k) plan by each employee of Seller employed at the
Stations under the terms of Section 402(g) of the Code during the calendar year
in which the Closing occurs; and (ii) a list of those employees who, as
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of the Closing Date, have outstanding participant loans from Seller's 401(k)
plan, including the amount and term of such loans.
(e) For purposes of this Agreement, the following terms shall have
the meaning indicated: (i) "Employee Plan" shall mean any pension,
profit-sharing, deferred compensation, vacation, bonus, incentive, medical,
vision, dental, disability, life insurance or any other employee benefit plan as
defined in Section 3(3) of ERISA to which Seller or any entity related to Seller
(under the terms of Section 414(b), (c), (m) or (o) of the Code) contribute or
to which Seller or any entity related to Seller (under the terms of Section
414(b), (c), (m) or (o) of the Code) sponsor, maintain or otherwise are bound
which provides benefits to persons employed or previously employed at the
Stations; (ii) "Code" shall mean the Internal Revenue Code of 1986, as amended,
any successor thereto and any regulations promulgated thereunder; (iii)
"Compensation Arrangement" shall mean any plan or compensation arrangement other
than an Employee Plan, whether written or unwritten, which provides to persons
employed or previously employed at the Stations any compensation or other
benefits, whether deferred or not, in excess of base salary or wages, including,
but not limited to, any bonus or incentive plan, vacation or sick pay plan,
stock rights plan, deferred compensation arrangement, life insurance, stock
purchase plan, severance pay plan and any other employee fringe benefit plan;
and (iv) "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, any successor thereto and any regulations promulgated thereunder.
3.21 Labor Relations. Seller is not a party to or subject to any
collective bargaining agreements with respect to the Stations. Seller has no
written or oral contracts of employment with any employee of the Stations, other
than those listed in Schedule 3.7. Seller has complied in all material respects
with all laws, rules, and regulations relating to the employment of labor,
including those related to wages, hours, collective bargaining, occupational
safety, discrimination, and the payment of social security and other payroll
related taxes, and Seller has not received any written notice alleging that they
have failed to comply with any such laws, rules, or regulations. No
controversies, disputes, or proceedings are pending or, to the best of Seller's
knowledge, threatened, between Seller and any employee (singly or collectively)
of the Stations. No labor union or other collective bargaining unit represents
or claims to represent any of the employees of the Stations. There is no union
campaign being conducted to represent employees of the Stations or to solicit
cards from employees to authorize a union to request a National Labor Relations
Board certification election with respect to any employees at the Stations.
3.22 WPEK Purchase Agreement. Seller has provided Buyer with a true and
complete copy of the WPEK Purchase Agreement and any other agreements related
thereto (the "WPEK Purchase Documents"). As of the date hereof, Seller has no
knowledge of any material breaches or defaults under such documents.
3.23 Full Disclosure. No representation or warranty made by Seller in
this Agreement or in any certificate, document, or other instrument furnished or
to be furnished by Seller pursuant hereto contains or will contain any untrue
statement of a material fact, or willfully omits or willfully will omit to state
any material fact and required to make any statement made herein or therein not
misleading.
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
4.1 Organization, Standing, and Authority. CRI is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware and on or before the Closing Date will be qualified to conduct business
as a foreign corporation under the laws of the Commonwealth of Virginia and the
State of South Carolina. CXR is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada. Buyer has all
requisite power and authority to execute and deliver this Agreement and the
documents contemplated hereby, and to perform and comply with all of the terms,
covenants, and conditions to be performed and complied with by Buyer hereunder
and thereunder.
4.2 Authorization and Binding Obligation. The execution, delivery, and
performance of this Agreement by Buyer have been duly authorized by all
necessary actions on the part of Buyer. This Agreement has been duly executed
and delivered by Buyer and constitutes the legal, valid, and binding obligation
of Buyer, enforceable against Buyer in accordance with its terms except as the
enforceability of this Agreement may be affected by bankruptcy, insolvency, or
similar laws affecting creditors' rights generally and by judicial discretion in
the enforcement of equitable remedies.
4.3 Absence of Conflicting Agreements. Subject to obtaining the FCC
Consent, the Consents and any filings required under the HSR Act, the execution,
delivery, and performance by Buyer of this Agreement and the documents
contemplated hereby (with or without the giving of notice, the lapse of time, or
both): (i) do not require the consent of any third party; (ii) will not conflict
with the organizational documents of Buyer; (iii) will not conflict with, result
in a breach of, or constitute a default under, any law, judgment, order,
ordinance, injunction, decree, rule, regulation, or ruling of any court or
governmental instrumentality; and (iv) will not conflict with, constitute
grounds for termination of, result in a breach of, constitute a default under,
or accelerate or permit the acceleration of any performance required by the
terms of, any agreement, instrument, license, or permit to which Buyer is a
party or by which Buyer may be bound, such that Buyer could not acquire or
operate the Assets.
4.4 Broker. Except for Media Venture Partners whose fees shall be paid
by Buyer, neither Buyer nor any person or entity acting on Buyer's behalf has
incurred any liability for any finders' or brokers' fees or commissions in
connection with the transactions contemplated by this Agreement.
4.5 Qualification. To Buyer's knowledge, Buyer is legally and
financially qualified under the Communications Act of 1934, as amended, and the
current rules and regulations of the FCC to acquire the Stations under this
Agreement and Buyer requires no waiver under the current rules and regulations
of the FCC in order for the FCC to grant the FCC Consent.
4.6 Full Disclosure. No representation or warranty made by Buyer in
this Agreement or in any certificate, document or other instrument furnished or
to be furnished by Buyer pursuant hereto contains or will contain any untrue
statement of a material fact, or willfully omits
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or willfully will omit to state any material fact and required to make any
statement made herein or therein not misleading.
SECTION 5. OPERATIONS OF THE STATIONS PRIOR TO CLOSING
5.1 Generally. Seller agrees that, (i) between the date of this
Agreement and the Closing Date, Seller shall operate the Stations other than
WPEK only in the ordinary course of business and only in accordance with the
covenants in this SECTION 5 and (ii) between the WPEK Closing and the Closing
Date, Seller shall operate WPEK only in the ordinary course of business and only
in accordance with the covenants in this SECTION 5.
5.2 Contracts. Seller will not enter into any contract or commitment
relating to the Stations or the Assets, or amend or terminate any Contract (or
waive any material right thereunder), or incur any obligation (including
obligations relating to the borrowing of money or the guaranteeing of
indebtedness) that will be binding on Buyer after Closing without Buyer's prior
written consent, except that Seller may enter into in the ordinary course of
business Contracts with advertisers for the sale of advertising time on the
Stations for cash at prevailing rates which have not been prepaid and which may
be cancelled by the Stations without penalty on not more than thirty (30) days'
notice. Prior to the Closing Date, Seller shall deliver to Buyer a list of all
Contracts entered into between the date of this Agreement and the Closing Date,
together with copies of such Contracts.
5.3 Disposition of Assets. Seller shall not, and shall cause ROLI not
to, sell, assign, lease, or otherwise transfer or dispose of any of the Assets,
except in connection with the acquisition of replacement property of equivalent
kind and value.
5.4 Encumbrances. Seller shall not, and shall cause ROLI not to,
create, assume or permit to exist any claim, liability, mortgage, lien, pledge,
condition, charge, or encumbrance of any nature whatsoever upon the Assets,
except for (i) Permitted Liens and (ii) mechanics' liens and other similar liens
which shall be removed prior to the Closing Date.
5.5 Licenses. Seller shall not, and shall cause ROLI not to, knowingly
or willfully cause or permit, by any act or failure to act, any of the Licenses
to expire or to be revoked, suspended, or modified, or take any action that
could cause the FCC or any other governmental authority to institute proceedings
for the suspension, revocation, or adverse modification of any of the Licenses.
Seller shall not, and shall cause ROLI not to, fail to prosecute with due
diligence any applications to any governmental authority in connection with the
operation of the Stations.
5.6 Rights. Seller shall not, and shall cause ROLI not to, waive any
material right relating to the Stations or any of the Assets.
5.7 No Inconsistent Action. Seller shall not, and shall cause ROLI not
to, take any action that is inconsistent with Seller's obligations under this
Agreement or that could hinder or delay the consummation of the transactions
contemplated by this Agreement.
5.8 Access to Information. Seller shall give Buyer and its counsel,
accountants, engineers, and other authorized representatives reasonable access
to the Assets and to all other
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properties, equipment, books, records, Contracts, and documents relating to the
Stations for the purpose of audit and inspection, including inspections incident
to the environmental survey described in SECTION 6.4, and will furnish or cause
to be furnished to Buyer or its authorized representatives all information with
respect to the affairs and business of the Stations that Buyer may reasonably
request (including any financial reports and operations reports produced with
respect to the affairs and business of the Stations). Without limiting the
generality of the foregoing, Seller shall give Buyer and its counsel,
accountants and other authorized representatives reasonable access to Seller's
financial records and Seller's employees, counsel, accountants and other
representatives for the purpose of preparing and auditing such financial
statements as Buyer determines, in its judgment, are required or advisable to
comply with federal or state securities laws and the rules and regulations of
securities markets as a result of the execution and delivery of this Agreement
or the consummation of the transactions contemplated hereby.
5.9 Maintenance of Assets. Seller shall maintain all of the Assets in
good condition (ordinary wear and tear excepted), and use, operate, and maintain
all of the Assets in a reasonable manner. Seller shall maintain inventories of
spare parts and expendable supplies at levels consistent with past practices. If
any loss, damage, impairment, confiscation, or condemnation of or to any of the
Assets occurs, Seller shall repair, replace, or restore the Assets to their
prior condition as represented in this Agreement as soon thereafter as possible,
and Seller shall use the proceeds of any claim under any insurance policy solely
to repair, replace, or restore any of the Assets that are lost, damaged,
impaired, or destroyed.
5.10 Insurance. Seller shall maintain the existing insurance policies
on the Stations and the Assets.
5.11 Consents. Seller shall obtain the estoppel certificates described
in SECTION 8.2(b) and shall use commercially reasonable efforts to obtain the
Consents in each case without any change in the terms or conditions of any
Contract or License that could be less advantageous to the Stations than those
pertaining under the Contract or License as in effect on the date of this
Agreement. Seller shall promptly advise Buyer of any difficulties experienced in
obtaining any of the Consents and of any conditions proposed, considered, or
requested for any of the Consents. Except in the case of a Material Consent (as
defined below), the inability of Seller to obtain any such Consent shall not be
an excuse to Buyer's obligation to purchase the Assets under this Agreement
provided that Seller has used commercially reasonable efforts to obtain such
consent. Seller and Buyer agree that if Seller is unable to obtain a Consent to
the assignment of any of the Assumed Contracts (other than a Material Consent),
then Seller agrees to hold such Assumed Contract for the benefit of Buyer, but
at the expense of Buyer (so long as Buyer receives the benefits thereunder),
from and after Closing and until such time as the Consent is eventually obtained
or the Assumed Contract expires and Seller shall continue to use commercially
reasonable efforts to obtain such Consent.
5.12 Books and Records. Seller shall maintain the books and records
relating to the Stations in accordance with past practices.
5.13 Notification. Seller shall promptly notify Buyer in writing of any
unusual or material developments with respect to the business or operations of
the Stations, and of any
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material change in any of the information contained in Seller's representations
and warranties contained in SECTION 3 of this Agreement.
5.14 Compliance with Laws. Seller shall, and shall cause ROLI to,
comply in all material respects with all laws, rules, and regulations applicable
or relating to the ownership and operation of the Stations.
5.15 Financing Leases. Other than Assumed Contracts, Seller will
satisfy at or prior to Closing all outstanding obligations under capital or
financing leases, if any, with respect to any of the Assets and obtain good
title to the Assets leased by Seller pursuant to those leases so that those
Assets shall be transferred to Buyer at Closing free of any interest of the
lessors.
5.16 Preservation of Business. Seller shall use its commercially
reasonable efforts to preserve the business and organization of the Stations, to
keep available to the Stations their present employees and to preserve the
audience of the Stations and the Stations' present relationships with suppliers,
advertisers, and others having business relations with the Stations, to the end
that the business, operations, and prospects of the Stations shall be unimpaired
at the Closing Date.
5.17 Personnel Recommendations. Seller shall promptly notify Buyer as
personnel vacancies occur at the Stations with respect to department heads or
managers and consider without obligation for employment all personnel
recommended by Buyer for such vacant positions. Other than reasonable raises for
certain employees of WJMZ and WPEK, Seller shall not increase the compensation,
retirement or other employee benefits payable or to become payable to any
employee of the Stations, except as may be required by law or pursuant to any
contract in effect on the date hereof.
5.18 Programming. Except as set forth in Schedule 5.18, Seller shall
not make any material changes in the broadcast hours or in the type of
programming broadcast by the Stations except such changes as in the good faith
judgment of Seller are required by the public interest.
SECTION 6. SPECIAL COVENANTS AND AGREEMENTS
6.1 Governmental Approvals.
(a) The assignment of the FCC Licenses in connection with the
purchase and sale of the Assets pursuant to this Agreement shall be subject to
the prior consent and approval of the FCC.
(b) Seller and Buyer shall promptly prepare appropriate
applications for the FCC Consent and shall file the applications with the FCC
within three (3) business days of the date hereof. The parties shall prosecute
the applications with all reasonable diligence and otherwise use their best
efforts to obtain a grant of the applications as expeditiously as practicable.
Each party agrees to comply with any condition imposed on it by the FCC Consent
except such condition which would have a material adverse effect upon it. Buyer
and Seller shall oppose any requests for reconsideration or judicial review of
the FCC Consent. If the Closing shall not have occurred for any reason within
the original effective period of the FCC Consent, and no party shall have
terminated this Agreement under SECTION 9, the parties shall
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jointly request an extension of the effective period of the FCC Consent. No
extension of the FCC Consent shall limit the exercise by any party of its rights
under SECTION 9.
6.2 HSR Act Filing. Seller and Buyer agree to (a) file, or cause to be
filed, with the U.S. Department of Justice ("DOJ") and Federal Trade Commission
("FTC") all filings, if any, which are required in connection with the
transactions contemplated hereby under the HSR Act within six (6) business days
of the date of this Agreement; (b) submit to the other party, prior to filing,
their respective HSR Act filings to be made hereunder, and to discuss with the
other any comments the reviewing party may have; (c) cooperate with each other
in connection with all HSR Act filings, which cooperation shall include
furnishing the other with any information or documents in such party's
possession that may be reasonably required in connection with such filings; (d)
promptly file, after any request by the FTC or DOJ, any information or documents
requested by the FTC or DOJ; and (e) furnish each other with any correspondence
from or to, and notify each other of any other communications with, the FTC or
DOJ which relates to the transactions contemplated hereunder, and to the extent
practicable, to permit each other to participate in any conferences with the FTC
or DOJ.
6.3 Control of the Station. Prior to Closing, Buyer shall not, directly
or indirectly, control, supervise, direct, or attempt to control, supervise, or
direct, the operations of the Stations, and all such operations, including
complete control and supervision of all of the Stations' programs, employees,
and policies, shall be the sole responsibility of Seller until the Closing.
6.4 Risk of Loss. The risk of any loss, damage, impairment,
confiscation, or condemnation of any of the Assets from any cause whatsoever
shall be borne by Seller at all times prior to the Closing.
6.5 Confidentiality. Except as necessary for the consummation of the
transaction contemplated by this Agreement and except as and to the extent
required by law, including disclosure requirements of federal and state
securities laws and rules and regulations of securities markets, each party will
keep confidential any information obtained from the other party in connection
with the transactions contemplated by this Agreement. If this Agreement is
terminated, each party will return to the other party upon request all
information obtained by such party from the other party in connection with the
transactions contemplated by this Agreement and will not disclose such
information for a period of three (3) years without the other party's prior
written consent.
6.6 Environmental Survey. Buyer may, at its option and expense, retain
an environmental consultant to be selected by Buyer to perform a Phase I
environmental survey and if necessary, a Phase II environmental survey of the
Real Property within forty-five (45) days of the date hereof. If the survey
discloses any material environmental hazard or liability for environmental
damages or clean-up costs, Buyer shall so notify Seller within forty-five (45)
days of the date of this Agreement and Seller shall be required to cure such
environmental hazards or damages prior to Closing, provided, that if the
remediation of all such hazards or damages under this Agreement and the WARV
Purchase Agreement, dated as of the date hereof by and between Honolulu
Broadcasting, Inc. and Seller (the "WARV Purchase Agreement") would require
expenditures in excess of $200,000 by Seller, Seller shall not be obligated to
remediate such
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defects. If Seller determines not to effect any remediation requiring
expenditures in excess of $200,000 under this Agreement and the WARV Purchase
Agreement, Buyer shall have the right at its option either to terminate this
Agreement or to consummate the Closing under this Agreement and reduce the
Purchase Price by the amount of the expenditures required by Buyer to remediate
the environmental hazard or damage provided that the reduction to the purchase
price hereunder and under the WARV Purchase Agreement shall not exceed $200,000.
The parties hereto agree that Seller shall to the extent reasonably possible
effectuate any remediation required by this SECTION 6.6 prior to Closing but to
the extent it is not reasonably possible through no fault of Seller to remediate
any environmental defects prior to Closing, Seller shall only be required to
effectuate the portion of such remediation which is reasonably possible to be
made prior to Closing and the Purchase Price shall be reduced by any additional
costs consistent with Seller's obligations under this Section which are required
to be made after Closing to remediate such environmental defect.
6.7 Cooperation. Buyer and Seller shall cooperate fully with each other
and their respective counsel and accountants in connection with any actions
required to be taken as part of their respective obligations under this
Agreement, and Buyer and Seller shall execute such other documents as may be
necessary and desirable to the implementation and consummation of this
Agreement, and otherwise use their best efforts to consummate the transaction
contemplated hereby and to fulfill their obligations under this Agreement.
Notwithstanding the foregoing, Buyer shall have no obligation (i) to expend
funds or deliver any other consideration to obtain any of the Consents or (ii)
to agree to any adverse change in any License or Assumed Contract to obtain a
Consent required with respect thereto.
6.8 Bulk Sales Law. If applicable, the Bulk Sales law of the
Commonwealth of Virginia and the State of South Carolina shall be complied with
by Seller. Any loss, liability, obligation, or cost suffered by Seller or Buyer
as the result of the failure of Seller or Buyer to comply with the provisions of
any bulk sales law applicable to the transfer of the Assets as contemplated by
this Agreement shall be borne by Seller.
6.9 Title Insurance and Surveys.
(a) Title Insurance on Fee Property. With respect to each parcel of
owned Real Property included in the Assets, Buyer may obtain, at Buyer's
expense, at or prior to Closing, an ALTA Owner's Policy of Title Insurance Form
B-1987 (or equivalent policy acceptable to Buyer), issued by a title insurer
satisfactory to Buyer, in an amount equal to the fair market value of the
property and any improvements thereon (as reasonably determined by Buyer),
insuring title to such parcel in the name of Buyer as of the Closing, subject
only to liens or encumbrances expressly permitted by this Agreement.
(b) General Requirements as to Title Insurance Policies. Each title
insurance policy obtained by Buyer pursuant to this Agreement shall (1) insure
title to the Real Property described in the policy and all recorded easements
benefiting such Real Property, (2) contain an "extended coverage endorsement"
insuring over the general exceptions customarily contained in title policies,
(3) contain an endorsement insuring that the Real Property described in the
policy is the same real estate shown in the survey delivered with respect to
such property, (4) contain a "contiguity" endorsement with respect to any Real
Property consisting of more than one record
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parcel, and (5) not be subject to any survey exception or any defect or
encroachment disclosed by a survey delivered with respect to the property.
(c) Surveys. With respect to each parcel of Real Property, as to
which a title insurance policy is to be procured pursuant to this Agreement,
Buyer may procure a current survey of the parcel, 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 customarily shown
on such surveys, and showing access affirmatively to public streets and roads.
6.10 Sales Tax Filings. Prior to Closing, Seller shall continue to file
Virginia and South Carolina sales tax returns with respect to the Stations in
accordance with Seller's past practices and shall concurrently deliver copies of
all such returns to Buyer.
6.11 Access to Books and Records. Seller shall provide Buyer access and
the right to copy for a period of three (3) years from the Closing Date any
books and records relating to the Assets but not included in the Assets. Buyer
shall provide Seller access and the right to copy for a period of three (3)
years from the Closing Date any books and records relating to the Assets that
are included in the Assets.
6.12 Employee Matters.
(a) Seller agrees to make full and final settlement with Seller's
employees employed at the Stations within 20 days after the Closing, with
respect to all liabilities and obligations relating to their employment with
Seller to the extent earned or accrued through the Closing Date, except for
liabilities and obligations for which there is a legitimate dispute between
Seller and the applicable employee.
(b) Seller shall be liable for all payments for all of Seller's
employees at the Stations for work-related injuries that occur on or prior to
the Closing Date, in each case whether or not the claims for, or the payment of,
such expenses or payment were or are to be made prior to or following the
Closing Date.
(c) Seller agrees to provide all health continuation, life
continuation, and other continuation coverage arising under, or related to,
Seller's Employee Plans, Compensation Agreements, or insurance policies,
including any coverage required by Code Section 4980B(f), other applicable state
or federal laws or the terms of Seller's Employee Plans, Compensation Agreements
or insurance policies. Seller shall provide such coverage to all persons
entitled to continuation coverage, whether that entitlement arose or continued
before or at Closing, with respect to employment at the Stations. Buyer shall
have no responsibility or liability for providing continuation coverage arising
under, or related to, any Employee Plan, Compensation Agreement or insurance
policy of Seller to the extent that coverage arises before or at Closing. The
parties agree that this provision is intended only to set forth Seller's
obligations as between Seller and Buyer, and is not intended to give rise to
additional rights on the part of employees or other third parties.
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(d) Nothing in this Agreement shall be deemed or construed to
require Buyer to hire or continue to employ any of Seller's employees for any
period on or after Closing.
(e) Seller represents and warrants to Buyer that none of the
"full-time employees" of Seller (as said term is defined under the WARN Act)
employed at the Stations has experienced an "employment loss" (as said term is
defined under the WARN Act) during the 90-day period prior to the date hereof,
and Seller agrees to provide to Buyer at Closing an updated list of such
employees, effective as of the Closing Date.
6.13 Financial Information. Seller shall furnish to Buyer within thirty
(30) days after the end of each month ending between the date of this Agreement
and the Closing Date a profit and loss statement for the Stations for the month
just ended and such other financial information (including information on
payables and receivables) relating to the Stations as Buyer may reasonably
request. As soon as practicable following December 31, 2000, but no later than
90 days following such date, Seller shall provide Buyer with audited financial
statements of the Stations for fiscal year 2000 (which shall include a profit
and loss statement). All financial information delivered by Seller to Buyer
pursuant to this Section shall be prepared from the books and records of Seller,
shall accurately reflect the books, records, and accounts of the Stations, shall
be prepared in accordance with generally accepted accounting principles
consistently applied, shall be complete and correct in all material respects,
and shall present fairly the financial condition of the Stations as at their
respective dates and the results of operations for the periods then ended. With
respect to each Station, the representations and warranties in this SECTION 6.13
as they relate to such Station are to Seller's knowledge for periods prior to
the acquisition by Seller of such Station.
6.14 Fees and Expenses. Seller shall pay any transfer taxes,
recordation taxes, sales taxes, document stamps, or other charges levied by any
governmental entity on account of the transfer of the Assets from Seller to
Buyer, except that Seller on the one hand and Buyer on the other hand each shall
pay one-half of the filing fees payable upon filing of the applications for FCC
Consent and any filing fees required under the HSR Act. Except as otherwise
provided in this Agreement, each party shall pay its own expenses incurred in
connection with the authorization, preparation, execution, and performance of
this Agreement, including all fees and expenses of counsel, accountants, agents,
and representatives.
6.15 Collection of Accounts Receivable. Seller shall deliver to Buyer
not later than five (5) days after the Closing Date a complete and detailed
statement of all Accounts Receivable of WJMZ and WPEK (the "Greenville Accounts
Receivable") as of the Closing Date, showing the name, amount and age of each
account. During the period from the Closing Date through the end of the fourth
successive calendar month after the Closing Date (including the calendar month
during which the Closing occurs) (the "Collection Period"), with respect to the
Greenville Accounts Receivable, (i) Buyer will use reasonable best efforts, in
accordance with Buyer's customary business practices, to collect the Greenville
Accounts Receivable, but Buyer shall not be obligated to use any efforts to
collect any of the Greenville Accounts Receivable that are more extensive than
the efforts that Buyer uses to collect its own accounts receivable, (ii) Buyer
shall not make any referral or compromise of any of the Greenville Accounts
Receivable to any collection agency or attorney for collections and shall not
settle or adjust the amount of any of such Greenville Accounts Receivable
without the prior written authorization of Seller, and
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(iii) Buyer shall remit to Seller, on or before the fifth business day after the
end of each successive calendar month during the Collection Period, all amounts
collected by Buyer with respect to the Greenville Accounts Receivable that have
not previously been remitted to Seller, net of any commissions paid or payable
with respect thereto. If Buyer receives any payment from an account debtor that
is liable under any of the Greenville Accounts Receivable, Buyer shall credit
the payment to the oldest account due unless the account debtor directs
otherwise. Buyer shall not collect the Accounts Receivable of WDYL.
6.16 WPEK Purchase Agreement. Seller shall not amend, terminate or
waive any of Seller's rights under the WPEK Purchase Documents without Buyer's
prior written approval. Seller shall notify Buyer promptly upon learning of any
material breach or default under the WPEK Purchase Documents. Seller shall
comply with the terms of the WPEK Purchase Documents and use its commercially
reasonable efforts to consummate the closing under the WPEK Purchase Agreement
in accordance with the terms thereof.
6.17 KDGE Purchase Agreement. Seller shall use commercially reasonable
efforts to cause the transactions contemplated by the Purchase Agreement for the
purchase by Seller of Radio Station KDGE(FM), Gainesville, Texas (the "KDGE
Purchase Agreement") to be consummated.
6.18 WJMZ Coordinates. Seller shall file with the FCC all applications
which are necessary to ensure that the transmission site coordinates listed on
the station license for WJMZ correspond to the coordinates listed on the tower
registration for the WJMZ transmission site.
6.19 WJMZ Matters. Seller shall cooperate with Buyer in its attempt to
obtain a renewal of the studio lease for WJMZ. Prior to Closing, Seller shall
repair the main transmitter of WJMZ so that it operates at a power consistent
with its FCC license and the FCC rules.
6.20 WPEK Matters. Seller shall seal or paint and put an ice shield on
the currently used transmitter building of WPEK. If Seller is unable to complete
these tasks before Closing, the Purchase Price shall be reduced by the amount
necessary for Buyer to complete such work. Prior to Closing, Seller shall outfit
the second production room in the WJMZ studio so that WPEK can broadcast from
such location in accordance with good engineering practices. Seller shall
cooperate with Buyer in its attempt to get a lease on the adjacent space to the
WJMZ studio for additional space for WPEK. Seller shall cooperate with Buyer in
giving termination notices under the programming agreements of WPEK included
among the Assumed Contracts so that they may be possibly terminated at Closing.
SECTION 7. CONDITIONS TO OBLIGATIONS OF BUYER AND SELLER AT CLOSING
7.1 Conditions to Obligations of Buyer. All obligations of Buyer at the
Closing are subject at Buyer's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Seller contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
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(b) Covenants and Conditions. Seller shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by Seller prior to
or on the Closing Date.
(c) Consents. All Consents under contracts and agreements indicated
as material on Schedules 3.5 and 3.7 (the "Material Consents") shall have been
obtained and delivered to Buyer without any adverse change in the terms or
conditions of any agreement or any governmental license, permit, or other
authorization.
(d) FCC Consent. The FCC Consent shall have been granted without
the imposition on Buyer of any conditions that need not be complied with by
Buyer under SECTION 6.1 hereof and Seller and ROLI shall have complied with any
conditions imposed on Seller and ROLI by the FCC Consent.
(e) Governmental Authorizations. ROLI shall be the holder of all
Licenses and there shall not have been any modification of any License that
could have an adverse effect on the Stations or the conduct of the business and
operations of the Stations. No proceeding shall be pending the effect of which
could be to revoke, cancel, fail to renew, suspend, or modify adversely any
License.
(f) Deliveries. Seller shall have made or stand willing to make all
the deliveries to Buyer set forth in SECTION 8.2.
(g) HSR Act. The waiting period under the HSR Act shall have
expired or terminated without unresolved action by the DOJ or the FTC to prevent
the Closing.
(h) Adverse Change. Between the date of this Agreement and the
Closing Date, there shall have been no material adverse change in the assets,
properties, or business of the Stations, and no damage, destruction, or loss
affecting any Assets which would have a material adverse effect on the
operations of the Stations. Any legislative or regulatory action, or threat
thereof, affecting the radio broadcast industry, shall not constitute a material
adverse change under this SECTION 7.1(h).
(i) WPEK Purchase Agreement. The closing under the WPEK Purchase
Agreement shall have been consummated substantially in accordance with the terms
thereof and ROLI shall be the holder of the FCC Licenses of WPEK and Seller
shall be the owner of the other assets of WPEK to be acquired pursuant to the
WPEK Purchase Agreement.
7.2 Conditions to Obligations of Seller. All obligations of Seller at
the Closing are subject at Seller's option to the fulfillment prior to or at the
Closing Date of each of the following conditions:
(a) Representations and Warranties. All representations and
warranties of Buyer contained in this Agreement shall be true and complete in
all material respects at and as of the Closing Date as though made at and as of
that time.
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(b) Covenants and Conditions. Buyer shall have performed and
complied in all material respects with all covenants, agreements, and conditions
required by this Agreement to be performed or complied with by Buyer prior to or
on the Closing Date.
(c) Deliveries. Buyer shall have made or stand willing to make all
the deliveries set forth in SECTION 8.3.
(d) FCC Consent. The FCC Consent shall have been granted without
the imposition on Seller or ROLI of any conditions that need not be complied
with by Seller or ROLI under SECTION 6.1 hereof and Buyer shall have complied
with any conditions imposed on it by the FCC Consent.
(e) HSR Act. The waiting period under the HSR Act shall have
expired or terminated without unresolved action by the DOJ or the FTC to prevent
the Closing.
(f) KDGE Purchase Agreement. The conditions of closing under the
KDGE Purchase Agreement shall have been satisfied or waived by the parties
thereto and neither party shall have terminated the KDGE Purchase Agreement.
SECTION 8. CLOSING AND CLOSING DELIVERIES
8.1 Closing.
(a) Closing Date. Subject to satisfaction or waiver of the
conditions of Closing set forth in this Agreement, the Closing shall take place
at 10:00 a.m. on a date which shall be within five (5) business days following
the later to occur of (i) the satisfaction or waiver (by the party entitled to
waive such condition) of the conditions of Closing set forth in SECTIONS 7.1(d)
and 7.2(d) and (ii) notice by Seller to Buyer that the condition set forth in
SECTION 7.2(f) has been satisfied or waived by Seller. Seller shall notify Buyer
that the condition set forth in SECTION 7.2(f) has been satisfied or waived
within two business days of satisfaction or waiver of such condition. If the
date of Closing determined in accordance with the requirements of this SECTION
8.1(a) falls on a date that is not a business day, the Closing shall occur on
the next business day. Notwithstanding the foregoing, the parties further agree
that if the FCC Consent for WJMZ and WPEK is obtained prior to receiving the FCC
Consent for WDYL, Seller may demand that Buyer close its purchase of WJMZ and
WPEK provided all of the conditions of Closing of Buyer with regard to WJMZ and
WPEK have been satisfied or waived by Buyer. At the Closing of the sale of WJMZ
and WPEK, Buyer shall pay Seller $43,500,000 of the Purchase Price for the
assets of WJMZ and WPEK subject to the adjustments and other terms and
provisions set forth in this Agreement. Subject to the satisfaction of the
conditions set forth in this Agreement with respect to WJMZ and WPEK, the
Closing of the sale of WJMZ and WPEK shall occur within five (5) business days
of the grant of the FCC Consent for such stations.
(b) Closing Place. The Closing shall be held at the offices of Dow,
Xxxxxx & Xxxxxxxxx, PLLC, 0000 Xxx Xxxxxxxxx Xxx., X.X., Xxxxx 000, Xxxxxxxxxx,
X.X. 00000, or any other place that is agreed upon by Buyer and Seller.
8.2 Deliveries by Seller. Prior to or on the Closing Date, Seller shall
deliver to Buyer the following, in form and substance reasonably satisfactory to
Buyer and its counsel:
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(a) Transfer Documents. Duly executed warranty bills of sale,
general warranty deeds, motor vehicle titles, assignments, and other transfer
documents which shall be sufficient to vest good and marketable title to the
Assets (including, without limitations, the License Assets) in the name of
Buyer, free and clear of all claims, liabilities, security interests, mortgages,
liens, pledges, conditions, charges and encumbrances, except for Permitted
Liens;
(b) Estoppel Certificates. Estoppel certificates of the lessors of
all leasehold and subleasehold interests included in the Real Property;
(c) Consents. A manually executed copy of any instrument evidencing
receipt of any Consent;
(d) Officer's Certificate. A certificate, dated as of the Closing
Date, executed on behalf of Seller by a duly authorized officer of Seller
certifying (1) that the representations and warranties of Seller contained in
this Agreement are true and complete in all material respects as of the Closing
Date as though made on and as of that date and (2) that Seller has in all
material respects performed and complied with all of the covenants, agreements
and conditions set forth in this Agreement to be performed and complied with by
Seller on or prior to the Closing Date;
(e) INTENTIONALLY OMITTED;
(f) UCC, Tax, Lien, and Judgment Searches. Results of a search for
UCC, tax, lien, and judgment filings in the Secretary of State's records of the
Commonwealth of Virginia and the State of South Carolina and in the records of
the county or counties in which the Stations' main studio and transmission plant
are located, such searches having been made no earlier than fifteen (15) days
prior to the Closing Date;
(g) Licenses, Contracts, Business Records, Etc. Copies of all
Licenses, Assumed Contracts, blueprints, schematics, working drawings, plans,
projections, engineering records, and all files and records used by Seller in
connection with the business and operation of the Stations;
(h) Authorizing Resolutions. Certified copies of the resolutions of
Seller's board of directors and if necessary, shareholders, approving the
transactions contemplated by this Agreement; and
(i) Opinion of Seller's Counsel. Opinions of Seller's corporate and
FCC counsel containing opinions substantially in the form of Schedule 8.2(i)
hereto.
8.3 Deliveries by Buyer. Prior to or on the Closing Date, Buyer shall
deliver to Seller the following, in form and substance reasonably satisfactory
to Seller and their counsel:
(a) Purchase Price. The Estimated Purchase Price as provided in
SECTION 2.5(a);
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(b) Assumption Agreements. Appropriate assumption agreements
pursuant to which Buyer shall assume and undertake to perform Seller's
obligations under the Licenses and Assumed Contracts in accordance with SECTION
2.6;
(c) Officer's Certificate. A certificate, dated as of the Closing
Date, executed on behalf of each of CRI and CXR by a duly authorized officer of
such entity, certifying (1) that the representations and warranties of Buyer
contained in this Agreement are true and complete in all material respects as of
the Closing Date as though made on and as of that date, and (2) that Buyer has
in all material respects performed and complied with all of the covenants,
agreements and conditions set forth in this Agreement to be performed and
complied with by Buyer on or prior to the Closing Date; and
(d) Authorizing Resolutions. Certified copies of the resolutions of
the board of directors of each of CRI and CXR and if necessary, shareholders,
approving the transactions contemplated by this Agreement.
SECTION 9. TERMINATION
9.1 Termination by Seller. This Agreement may be terminated by Seller
and the purchase and sale of the Stations abandoned, if Seller is not then in
material default, upon written notice to Buyer, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be the Closing
Date any of the conditions precedent to the obligations of Seller set forth in
this Agreement have not been satisfied or waived in writing by Seller.
(b) Judgments. If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree, or order that would prevent
or make unlawful the Closing.
(c) Upset Date. If the Closing shall not have occurred on or before
August 1, 2001 (the "Upset Date").
(d) KDGE Purchase Agreement. If the KDGE Purchase Agreement is
terminated.
9.2 Termination by Buyer. This Agreement may be terminated by Buyer and
the purchase and sale of the Stations abandoned, if Buyer is not then in
material default, upon written notice to Seller, upon the occurrence of any of
the following:
(a) Conditions. If on the date that would otherwise be the Closing
Date any of the conditions precedent to the obligations of Buyer set forth in
this Agreement have not been satisfied or waived in writing by Buyer.
(b) Judgments. If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree, or order that would prevent
or make unlawful the Closing.
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(c) Upset Date. If the Closing shall not have occurred on or before
the Upset Date.
(d) Interruption of Service. If any event shall have occurred that
prevented signal transmission by any Station in the normal and usual manner for
a continuous period of seven (7) days.
(e) Environmental Hazards. Buyer shall have notified Seller of
material environmental hazards or liability for environmental damages or
clean-up costs, as indicated in the environmental survey described in SECTION
6.6, and the cause thereof shall not have been remedied by Seller prior to the
date that would be the Closing Date.
9.3 Rights on Termination. If this Agreement is terminated pursuant to
SECTION 9.1 or SECTION 9.2 and no party is in material breach of any provision
of this Agreement, the parties hereto shall not have any further liability to
each other with respect to the purchase and sale of the Assets and Buyer shall
be entitled to the return of the Escrow Deposit (as defined below), together
with all interest earned thereon. If this Agreement is terminated by Seller due
to Buyer's material breach of this Agreement and Seller is not in material
breach of this Agreement, then the payment of Two Million Five Hundred Thousand
Dollars ($2,500,000) to Seller under SECTION 9.4(c) shall be liquidated damages
by reason of Buyer's material breach of this Agreement. Seller and Buyer agree
in advance that actual damages would be difficult to ascertain and that the sum
of Two Million Five Hundred Thousand Dollars ($2,500,000) is a fair and
equitable amount to reimburse Seller for damages sustained due to Buyer's
material breach of this Agreement. If Seller believes that it has suffered
actual damages in excess of the amount of the Escrow Deposit, Seller shall have
the right to institute legal proceedings against Buyer to recover such
additional damages, provided, that Buyer shall not be liable to Seller for
damages (including the amount of the Escrow Deposit) in excess of Ten Million
Dollars ($10,000,000) and Buyer shall not be liable to Seller for any punitive
or other similar damages. If this Agreement is terminated by Buyer due to
Seller's material breach of any provision of this Agreement, Buyer shall have
all rights and remedies available at law or equity.
9.4 Escrow Deposit. Buyer has deposited on the date hereof with the
Escrow Agent the sum of Two Million Five Hundred Thousand Dollars ($2,500,000)
(the "Escrow Deposit") in accordance with the Escrow Agreement. All such funds
deposited with the Escrow Agent shall be held and disbursed in accordance with
the terms of the Escrow Agreement and the following provisions:
(a) At the Closing, the Escrow Deposit together with any interest
or other proceeds from the investment thereof shall be disbursed to Seller in
partial payment of the Purchase Price.
(b) If this Agreement is terminated pursuant to Section 9.1 or 9.2
for any reason other than as provided in Section 9.4(c), the Escrow Deposit
together with any interest or other proceeds from the investment thereof shall
be disbursed to or at the direction of Buyer; and
(c) If this Agreement is terminated by Seller due to Buyer's
material breach of this Agreement and Seller is not in material breach of this
Agreement, then the Xxxxxx Xxxxxxx
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xxxxx xx disbursed to or at the direction of Seller as liquidated damages under
Section 9.3 above and any interest or other proceeds from the investment thereof
shall be disbursed by the Escrow Agent to or at the direction of Buyer.
SECTION 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION; CERTAIN
REMEDIES
10.1 Representations and Warranties. All representations and warranties
contained in this Agreement shall be deemed continuing representations and
warranties and shall survive the Closing for a period of one (1) year. Any
investigations by or on behalf of any party hereto shall not constitute a waiver
as to enforcement of any representation, warranty, or covenant contained in this
Agreement. No notice or information delivered by Seller shall affect Buyer's
right to rely on any representation or warranty made by Seller or relieve Seller
of any obligations under this Agreement as the result of a breach of any of its
representations and warranties.
10.2 Indemnification by Seller. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Buyer or any
information Buyer may have, Seller hereby agrees to indemnify and hold Buyer
harmless against and with respect to, and shall reimburse Buyer for:
(a) Any and all losses, liabilities, or damages resulting from any
untrue representation, breach of warranty, or nonfulfillment of any covenant or
agreement by Seller contained in this Agreement or in any certificate, document,
or instrument delivered to Buyer under this Agreement.
(b) Any and all obligations of Seller not assumed by Buyer
pursuant to this Agreement, including any liabilities arising at any time under
any Contract not included in the Assumed Contracts.
(c) Any loss, liability, obligation, or cost resulting from the
failure of the parties to comply with the provisions of any bulk sales law
applicable to the transfer of the Assets.
(d) Any and all losses, liabilities, or damages resulting from the
operation or ownership of the Stations prior to the Closing, including any
liabilities arising under the Licenses or the Assumed Contracts which relate to
events occurring prior to the Closing Date.
(e) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs, and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.3 Indemnification by Buyer. Notwithstanding the Closing, and
regardless of any investigation made at any time by or on behalf of Seller or
any information Seller may have, Buyer hereby agrees to indemnify and hold
Seller harmless against and with respect to, and shall reimburse Seller for:
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(a) Any and all losses, liabilities, or damages resulting from any
untrue representation, breach of warranty, or nonfulfillment of any covenant or
agreement by Buyer contained in this Agreement or in any certificate, document,
or instrument delivered to Seller under this Agreement.
(b) Any and all obligations of Seller assumed by Buyer pursuant to
this Agreement.
(c) Any and all losses, liabilities, or damages resulting from the
operation or ownership of the Stations on and after the Closing.
(d) Any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses, including reasonable legal fees and
expenses, incident to any of the foregoing or incurred in investigating or
attempting to avoid the same or to oppose the imposition thereof, or in
enforcing this indemnity.
10.4 Procedure for Indemnification. The procedure for indemnification
shall be as follows:
(a) The party claiming indemnification (the "Claimant") shall
promptly give notice to the party from which indemnification is claimed (the
"Indemnifying Party") of any claim, whether between the parties or brought by a
third party, specifying in reasonable detail the factual basis for the claim. If
the claim relates to an action, suit, or proceeding filed by a third party
against Claimant, such notice shall be given by Claimant as promptly as
practicable.
(b) With respect to claims solely between the parties, following
receipt of notice from the Claimant of a claim, the Indemnifying Party shall
have thirty (30) days to make such investigation of the claim as the
Indemnifying Party deems necessary or desirable. For the purposes of such
investigation, the Claimant agrees to make available to the Indemnifying Party
and/or its authorized representatives the information relied upon by the
Claimant to substantiate the claim. If the Claimant and the Indemnifying Party
agree at or prior to the expiration of the thirty (30) day period (or any
mutually agreed upon extension thereof) to the validity and amount of such
claim, the Indemnifying Party shall immediately pay to the Claimant the full
amount of the claim. If the Claimant and the Indemnifying Party do not agree
within the thirty (30) day period (or any mutually agreed upon extension
thereof), the Claimant may seek appropriate remedy at law or equity.
(c) With respect to any claim by a third party as to which the
Claimant is entitled to indemnification under this Agreement, the Indemnifying
Party shall have the right at its own expense, to participate in or assume
control of the defense of such claim, and the Claimant shall cooperate fully
with the Indemnifying Party, subject to reimbursement for actual out-of-pocket
expenses incurred by the Claimant as the result of a request by the Indemnifying
Party. If the Indemnifying Party elects to assume control of the defense of any
third-party claim, the Claimant shall have the right to participate in the
defense of such claim at its own expense. If the Indemnifying Party does not
elect to assume control or otherwise participate in the defense of any third
party claim, it shall be bound by the results obtained by the Claimant with
respect to
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such claim. The Indemnifying Party shall not settle any claim without Claimant's
approval unless there is a full release of Claimant.
(d) If a claim, whether between the parties or by a third party,
requires immediate action, the parties will make every effort to reach a
decision with respect thereto as expeditiously as possible.
(e) The indemnification rights provided in SECTIONS 10.2 AND 10.3
shall extend to the shareholders, directors, officers, employees, and
representatives of any Claimant although for the purpose of the procedures set
forth in this SECTION 10.4, any indemnification claims by such parties shall be
made by and through the Claimant.
10.5 Limitations. Neither Seller nor Buyer shall be liable to the other
in respect of any indemnification hereunder except to the extent that the
aggregate amount of all losses, liabilities, damages, costs and expenses (the
"Losses") of the party to be indemnified under this Agreement exceed Forty-Nine
Thousand Dollars ($49,000) (the "Basket Amount"), whereupon the party to be
indemnified shall be entitled to indemnification from the other party hereunder
for all Losses incurred by the party to be indemnified without taking into
consideration the Basket Amount. The limitation set forth in this SECTION 10.5
shall not apply to adjustments to the Purchase Price under SECTION 2.3 and to
FCC violations.
10.6 Specific Performance. The parties recognize that if Seller
breaches this Agreement and refuses to perform under the provisions of this
Agreement, monetary damages alone would not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled, in addition to any other remedies
that may be available, including money damages, to obtain specific performance
of the terms of this Agreement. If any action is brought by Buyer to enforce
this Agreement, Seller shall waive the defense that there is an adequate remedy
at law.
10.7 Attorneys' Fees. In the event of a default by any party which
results in a lawsuit or other proceeding for any remedy available under this
Agreement, the prevailing party shall be entitled to reimbursement from the
other party of its reasonable legal fees and expenses.
SECTION 11. MISCELLANEOUS
11.1 Notices. All notices, demands, and requests required or permitted
to be given under the provisions of this Agreement shall be (a) in writing, (b)
delivered by personal delivery, or sent by commercial delivery service or
registered or certified mail, return receipt requested, (c) deemed to have been
given on the date of personal delivery or the date set forth in the records of
the delivery service or on the return receipt, and (d) addressed as follows:
If to Seller: Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, President
With a copy to: Xxxxx Xxxxxx, Esq.
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Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000
If to Buyer: Xxx Radio, Inc.
0000 Xxxx Xxxxx Xxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxx
and
CXR Holdings, Inc.
0000 Xxxxxx Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxx
With a copy to: Dow, Xxxxxx & Xxxxxxxxx, PLLC
0000 Xxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000-0000
Attention: Xxxxx X. Xxxx, Esq.
or to any other or additional persons and addresses as the parties may from time
to time designate in a writing delivered in accordance with this SECTION 11.1.
11.2 Benefit and Binding Effect. None of the parties hereto may assign
this Agreement without the prior written consent of the other parties hereto,
except as provided in SECTIONS 2.8 AND 2.9 and except that Buyer may assign any
or all its rights and obligations under this Agreement without obtaining
Seller's consent to an affiliate of Buyer provided such assignment does not
require the filing of an FCC Form 314 or 315 or materially delay the FCC
Consent. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
11.3 Further Assurances. The parties shall take any actions and execute
any other documents that may be necessary or desirable to the implementation and
consummation of this Agreement, including, in the case of Seller, any additional
bills of sale, deeds, or other transfer documents that, in the reasonable
opinion of Buyer, may be necessary to ensure, complete, and evidence the full
and effective transfer of the Assets to Buyer pursuant to this Agreement.
11.4 Governing Law. This agreement shall be governed, construed, and
enforced in accordance with the laws of the State of Delaware (without regard to
any choice of law or conflict of law provisions (whether of the State of
Delaware or any other jurisdiction) that would cause the application of laws of
any jurisdiction other than the State of Delaware).
11.5 Headings. The headings in this Agreement are included for ease of
reference only and shall not control or affect the meaning or construction of
the provisions of this Agreement.
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11.6 Gender and Number. Words used in this Agreement, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number, singular
or plural, as the context requires.
11.7 No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent. In the event an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the parties,
and no presumption or burden of proof will arise favoring or disfavoring any
person or entity by virtue of the authorship of any of the provisions of this
Agreement.
11.8 Entire Agreement. This Agreement, the schedules and exhibits
hereto, and all documents, certificates, and other documents to be delivered by
the parties pursuant hereto, collectively represent the entire understanding and
agreement among Buyer and Seller with respect to the subject matter hereof. This
Agreement supersedes all prior negotiations between the parties and cannot be
amended, supplemented, or changed except by an agreement in writing that makes
specific reference to this Agreement and which is signed by the party against
which enforcement of any such amendment, supplement, or modification is sought.
11.9 Waiver of Compliance; Consents. Except as otherwise provided in
this Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement, or condition herein may be waived
by the party entitled to the benefits thereof only by a written instrument
signed by the party granting such waiver, but such waiver or failure to insist
upon strict compliance with such obligation, representation, warranty, covenant,
agreement, or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure. Whenever this Agreement requires or
permits consent by or on behalf of any party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this SECTION 11.9.
11.10 Counterparts. This Agreement may be signed in counterparts with
the same effect as if the signature on each counterpart were upon the same
instrument.
11.11 Press Releases. The parties hereto shall reasonably cooperate in
the issuance of any press release or any other public announcement or other
communication with any news media concerning this Agreement or the transactions
contemplated hereby; provided, however, that nothing contained herein shall
prevent any party from promptly making all filings with governmental authorities
as may, in its judgment, be required or advisable in connection with the
execution and delivery of this Agreement or the consummation of the transactions
contemplated hereby, in which case the other parties shall be first notified in
writing.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been executed by Seller and
Buyer as of the date first written above.
XXX RADIO, INC.
By: /s/ Xxxx X. Xxxxxxxx
----------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Financial Officer
CXR HOLDINGS, INC.
By: /s/ Xxxxxx X. Merdeck
----------------------------------
Name: Xxxxxx X. Merdeck
Title: Secretary
RADIO ONE, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive VP/CFO
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