Exhibit 10.57
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of December 1,
1999 by and between Greater Media Radio Company, a Pennsylvania corporation
("Seller") and Radio One, Inc., a Delaware corporation ("Buyer").
Recitals
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Seller owns and operates radio broadcast station WPLY(FM), Media, Pennsylvania
(the "Station") pursuant to certain licenses, permits and authorizations (as
further defined below, the "FCC Authorizations") issued by the Federal
Communications Commission (the "FCC"); and
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
the Station Assets (defined below), subject to the terms and conditions of this
Agreement.
Agreement
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NOW, THEREFORE, taking the foregoing into account, and in consideration of the
mutual covenants and agreements set forth herein, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE 1: SALE AND PURCHASE
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1.1 Station Assets. Subject to and in reliance upon the representations,
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warranties and agreements herein set forth, and subject to the terms and
conditions herein contained, Seller shall grant, convey, sell, assign, transfer
and deliver to Buyer on the Closing Date (as hereinafter defined) all right,
title and interest of Seller in all properties, assets, privileges, rights,
interests and claims, the Roxborough Lease (defined below), personal property,
tangible and intangible, of every type and description, wherever located,
including its business and goodwill (except for Excluded Assets as defined in
Section 1.2) used or held for use in the business or operation of the Station
(collectively, the "Station Assets"). Without limiting the foregoing, the
Station Assets shall include the following:
(a) FCC Authorizations. All of the FCC Authorizations issued with
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respect to the Station, including without limitation all rights in and to the
Station's call letters and any variations thereof, and all of those FCC
Authorizations listed and described on Schedule 1.1(a) attached hereto, and all
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applications therefor, together with any renewals or extensions thereof and
additions thereto (collectively, the "FCC Authorizations").
(b) Tangible Personal Property. All interests of Seller as of the date
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of this Agreement in all equipment, electrical devices, antennas, cables,
vehicles, furniture, fixtures, STL supporting structures at the Studio Site,
office materials and supplies, hardware, tools, spare parts, and other tangible
personal property of every kind and description, used or held for use in
connection with the business or operation of the Station, including without
limitation those listed and described on Schedule 1.1(b) attached hereto,
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and any additions and improvements thereto between the date of this Agreement
and the Closing Date (collectively, the "Tangible Personal Property").
(c) Real Property. All interests of Seller as of the date of this
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Agreement under its Roxborough auxiliary transmitter site Lease Agreement dated
October 1, 1996 by and between Cornerstone TeleVision, Inc. (as lessor) and
Greater Media Radio Company (as lessee) (the "Roxborough Lease") (together with
the Studio Lease and the Tower Lease (each defined below), collectively, the
"Real Property").
(d) Time Sales Agreements. Those obligations of Seller that exist on
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the Closing Date for the sale of air time on the Station for cash entered in the
ordinary course of business, at commercially reasonable rates and cancelable
without penalty on no more than thirty (30) days notice (the "Time Sales
Agreements").
(e) Station Contracts. Those contracts and agreements used in
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connection with the business or operation of the Station that are listed and
described on Schedule 1.1(e) attached hereto (the "Station Contracts") and those
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contracts that Buyer shall elect in writing to assume at Closing.
(f) Intangible Property. All interests, if any and to whatever extent,
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of Seller as of the date of this Agreement in all trademarks, trade names,
service marks, franchises, patents, jingles, slogans, logotypes and other
intangible rights, used or held for use in connection with the business or
operation of the Station, if any, including without limitation all right, title
and interest in and to the xxxx consisting of the Station's call letters and any
variations thereof, and all of those listed and described on Schedule 1.1(f)
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attached hereto, and those acquired by Seller between the date hereof and the
Closing Date (collectively and together with the Websites (defined below), the
"Intangible Property").
(g) Programming and Copyrights. All interests of Seller as of the date
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of this Agreement in all programs and programming materials and elements of
whatever form or nature used or held for use in the business or operation of the
Station, whether recorded on tape or any other substance or intended for live
performance, and whether completed or in production, and all related common-law
and statutory copyrights used or held for use in the business or operation of
the Station, if any, together with all such programs, materials, elements and
copyrights acquired by Seller in the business or operation of the Station
between the date hereof and the Closing Date, if any.
(h) Files and Records. All FCC logs and other records that relate to
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the operation of the Station; all financial statements, balance sheets,
compilations, analyses and other financial records; and all files and other
records of Seller relating to the business or operation of the Station (other
than duplicate copies of such files ("Duplicate Records")), including without
limitation all schematics, blueprints, engineering data, customer lists,
reports, specifications, projections, statistics, promotional graphics, original
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art work, mats, plates, negatives and other advertising, marketing or related
materials, and all other technical and financial information concerning the
Station or the Station Assets any of the foregoing of which are in the
possession or control of the Seller.
(i) Claims. Any and all claims and rights against third parties under
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manufacturers' and vendors' warranties, which have not been made prior to
Closing.
(j) Prepaid Items. All prepaid expenses relating to the Station and
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prepaid taxes relating to the Station or the Station Assets, all of which shall
be adjusted in accordance with Section 1.7.
(k) Goodwill. All of Seller's goodwill in, and going concern value
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of, the Station.
(l) Internet Websites. Without limiting the foregoing, all interests,
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if any, and to whatever extent, of Seller in any internet domain leases and
domain names of Seller relating to the Station, the unrestricted right to the
use of HTML content located and publicly accessible from those domain names,
and, to the extent allowed by law and provided Seller legally is capable of
making such transfer without the consent of "visitors" or any other third
parties, the "visitor" email data base for those sites (collectively, the
"Websites").
The Station Assets shall be sold and conveyed to Buyer free and clear of all
mortgages, liens, deeds of trust, security interests, pledges, restrictions,
prior assignments, charges, claims, defects in title and encumbrances of any
kind or type whatsoever (collectively, "Liens") except: (i) liens for taxes not
yet due and payable for which Buyer receives a Purchase Price adjustment under
Section 1.7; and (ii) the post-Closing obligations of Seller which Buyer will
assume under the Station Contracts ("Permitted Encumbrances").
1.2 Excluded Assets. There shall be excluded from the Station Assets and
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retained by Seller to the extent in existence on the Closing Date, all accounts
receivable; cash; cash equivalents; bank accounts, reserves, and deposits;
publicly traded securities; all corporate books and records (other than those
described in Section 1.1(h)); tax returns and worksheets; insurance policies and
all claims or rights to payment thereunder, other than as set forth in Section
10.7 (Risk of Loss); any contracts and agreements not included in the Station
Contracts; pension, profit sharing and all other employee benefit plans; any
Duplicate Records; any causes of action and claims of Seller arising out of or
relating to transactions or occurrences prior to the Closing Date, other than
those described in Section 1.1(i) above; rights to any tax refunds for tax
periods ending on or prior to the Closing; any contracts not expressly assumed
by Buyer; and the tangible personal property located at the office of Xxxxxx
Xxxxxx as listed on Schedule 1.2 (the "Excluded Assets").
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In addition, it is specifically understood and agreed the Station Assets do
not include the Studio Site (as hereinafter defined) and the Tower Site (as
hereinafter defined).
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1.3 Liabilities.
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(a) At Closing, Buyer shall execute and deliver to Seller an agreement,
in form and content, reasonably acceptable to Seller and Buyer, pursuant to
which Buyer shall assume and agree to pay, perform and discharge each of the
following solely to the extent liability therefore relates to the business and
operations of the Station from and after the Closing Date (collectively, the
"Assumed Obligations"):
(i) Seller's liabilities, obligations and commitments, contingent
or otherwise, asserted or unasserted, and matured or unmatured, under or
otherwise in respect of the Roxborough Lease; all Station Contracts; and Time
Sales Agreements hereunder;
(ii) Barter Agreements (defined below) consistent with Sections
1.7(b) and 4.1 of this Agreement;
(iii) agreements entered into with Buyer's written consent;
(iv) agreements for miscellaneous services or supplies and other
commitments and contracts of Seller relating to the business and operations of
the Station: (x) entered into after the date hereof consistent with Section 4.1
and outstanding as of the Closing Date which individually do not involve a
commitment of more than Five Thousand ($5,000.00) Dollars and which in the
aggregate do not exceed Fifty Thousand ($50,000.00) Dollars or which can be
terminated on no more than thirty (30) days notice without penalty, and (y)
specified at Closing in a schedule reasonably acceptable to Buyer and Seller;
and
(v) all of Sellers' liabilities and obligations relating to the
business and operations of the Station which are allocated or prorated to Buyer
pursuant to Section 1.7(a) of this Agreement (Adjustments to Purchase Price).
(b) Other than as set forth above in this section, Buyer shall not
assume any liabilities, obligations, debts or commitments whatsoever (all such
liabilities, obligations, debts and commitments, collectively, the "Retained
Liabilities"). The Retained Liabilities include, without limitation: (i) any
liability or obligation of Seller arising out of or relating to any contract,
lease agreement, or instrument (other than the Assumed Obligations); (ii) any
liability or obligation of Seller arising out of or relating to any employee
benefit plan or otherwise relating to employment, including employment
obligations not assumed by Buyer, required by law or by employment handbooks,
policies or contracts through the Closing Date; (iii) any liability or
obligation of Seller arising out of or relating to any litigation, proceeding or
claim relating to events or omissions before the Closing Date; (iv) any other
liabilities, obligations, debts or commitments of Seller whatsoever, whether
accrued now or hereafter, whether fixed or contingent, whether known or unknown;
or (v) any claims asserted against the Station or any of the Station Assets
relating to any event (whether act or omission) prior to the Closing Date,
including without limitation, the payment of all taxes. Seller retains and shall
hereafter pay, satisfy, discharge, perform and fulfill all Retained Liabilities
as they become due, unless contested in good faith by Seller, without any charge
or cost to Buyer.
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1.4 Purchase Price.
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(a) Amount. The purchase price to be paid for the Station Assets shall
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be Eighty Million Dollars ($80,000,000), as adjusted pursuant to Section 1.7
hereof (the "Purchase Price").
(b) Payment. Upon Closing, the Purchase Price shall be paid in cash in
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immediately available funds by Fedwire transfer pursuant to written instructions
of the Seller to be delivered by Seller to Buyer at least three (3) business
days prior to Closing.
1.5 Deposit. Upon execution of this Agreement, Buyer shall deposit Three
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Million Seven Hundred and Fifty Thousand Dollars ($3,750,000) (the "Deposit")
into escrow with Wilmington Trust Company (the "Escrow Agent"), pursuant to the
Escrow Agreement of even date herewith among Buyer, Seller and the Escrow Agent.
At Closing, the Deposit shall be paid to Seller as a partial payment of the
Purchase Price, and all interest earned thereon shall be returned to Buyer. If
this Agreement is terminated by Seller pursuant to Section 10.1(h) or 10.1(i),
then the Deposit shall be disbursed to Seller as liquidated damages and such
disbursement shall be the sole and exclusive remedy of Seller. Seller hereby
waives all other legal and equitable rights and remedies it may otherwise have
as a result of any breach or default by Buyer under this Agreement. If this
Agreement is terminated without a Closing for any other reason, then the Deposit
and all interest thereon shall be returned to Buyer. Seller and Buyer shall
each solely act in good faith to instruct the Escrow Agent to disburse the
Deposit and all interest thereon in accordance with this Agreement and shall
not, by any act or omission, delay or prevent any such disbursement.
1.6 Allocation. Concurrent with Closing, or, if later, within 90 days
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thereafter, Buyer and Seller will allocate the Purchase Price in accordance with
the respective fair market values of the Station Assets and the goodwill being
purchased and sold in accordance with the requirements of Section 1060 of the
Internal Revenue Code of 1986, as amended (the "Code"). The allocation shall be
pursuant to a schedule prepared by Buyer and mutually agreeable to the parties.
Buyer and Seller each further agrees to file its federal income tax returns and
its other tax returns reflecting such allocation.
1.7 Adjustments.
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(a) The operation of the Station and the income and normal operating
expenses attributable thereto through the date preceding the Closing Date (the
"Adjustment Date") shall be for the account of Seller and thereafter for the
account of Buyer, and, if any income or expense is properly allocable or
credited, then it shall be allocated, charged or prorated accordingly. Expenses
for goods or services received both before and after the Adjustment Date, power
and utilities charges, frequency discounts, and rents and similar prepaid and
deferred items shall be prorated between Seller and Buyer as of the Adjustment
Date in accordance with generally accepted accounting principles. All special
assessments and similar charges or liens imposed against the Tangible Personal
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Property in respect of any period of time through the Adjustment Date, whether
payable in installments or otherwise, shall be the responsibility of Seller, and
amounts payable with respect to such special assessments, charges or liens in
respect of any period of time after the Adjustment Date shall be the
responsibility of Buyer, and such charges shall be adjusted accordingly. To the
extent that any of the foregoing prorations and adjustments cannot be determined
as of the Closing Date, Buyer and Seller shall conduct a final accounting and
make any further payments, as required on a date mutually agreed upon, within
ninety (90) days after the Closing.
(b) With respect to trade, barter or similar agreements for the sale of
time for goods or services ("Barter Agreements") assumed by Buyer pursuant to
Sections 1.3(a)(i) or 1.3(a)(ii), if any, if there exists on the date of
assumption an aggregate negative barter balance (i.e., the amount by which the
value of air time (based upon the Station's then prevailing rates) to be
provided exceeds the fair market value of goods or services to be received
therefor), then, to the extent such excess is greater than $35,000 in the
aggregate for the Station, it will be treated as prepaid time sales and adjusted
for as a proration in Buyer's favor. If, however, there exists on such date an
aggregate positive barter balance (i.e., the amount by which the value of air
time (based upon the Station's then prevailing rates) to be provided is less
than the fair market value of goods or services to be received therefor) with
respect to Barter Agreements assumed by Buyer, there shall be no proration in
Seller's favor.
1.8 Closing. The time and date of closing ("Closing") hereunder (the
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"Closing Date") shall be the date specified by Buyer on at least five days'
prior written notice to Seller, which date is not earlier than the fifth
business day, and not later than the tenth business day, after the date that the
FCC Consent shall become a Final Order (defined below), and in the event Buyer
shall fail to specify a Closing Date, the Closing Date shall be 10:00 AM local
time the date that is ten business days after the date that the FCC Consent
shall become a Final Order, or at such other place, time or date as Buyer and
Seller may mutually agree in writing; provided, however, that Buyer may in its
sole discretion waive the requirement that the FCC Consent shall have become a
Final Order and elect to close after the release of initial FCC approval on
public notice that it has consented to the transaction upon a date which may be
mutually agreed by Seller and Buyer; and provided further that the Closing shall
occur no later than July 31, 2000 (which shall be extended to the extent of any
cure period that becomes available under Section 10.1(g) or 10.1(i)) (the "Final
Closing Date"). Notwithstanding anything to the contrary, Seller and Buyer
agree that the Closing Date shall be extended until the tenth business day in
the year 2000 in the event the Closing Date would otherwise be earlier than such
date. The Closing shall occur at the law offices of Xxxxxxx Xxxxxx Xxxxxxx &
Groudine, P.C., Xxxxx Xxxxx, Xxxxx Xxxxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000 or
such other place as to which the Parties may mutually agree in writing.
1.9 FCC Application.
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(a) As soon as possible (but in no event later than ten business days
after the date of this Agreement) Seller and Buyer shall file an application
with the FCC (the "FCC Application") requesting the FCC's written consent to the
assignment of the FCC Authorizations from Seller to Buyer or, at Buyer's option,
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to Buyer's wholly-owned subsidiary Radio One Licenses, Inc., pursuant to this
Agreement. Seller and Buyer shall diligently take all steps that are necessary,
proper or desirable to expedite the prosecution of the FCC Application to a
favorable conclusion. Each party shall promptly provide the other with a copy of
any pleading, order or other document served on it relating to the FCC
Application, shall furnish all information required by the FCC, and shall be
represented at all meetings or hearings scheduled to consider the FCC
Application.
(b) The FCC's written consent to the FCC Application is referred to
herein as the "FCC Consent." For purposes of this Agreement, the term "Final
Order" shall mean that action shall have been taken by the FCC (including action
duly taken by the FCC's staff, pursuant to delegated authority) which shall not
have been reversed, stayed, enjoined, set aside, annulled or suspended; with
respect to which no timely request for stay, petition for rehearing, appeal or
certiorari or sua sponte action of the FCC with comparable effect shall be
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pending; and as to which the time for filing any such request, petition, appeal,
certiorari or for the taking of any such sua sponte action by the FCC shall
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have expired or otherwise terminated.
1.10 Xxxx-Xxxxx-Xxxxxx. As soon as possible (but in no event later than ten
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business days after the date of this Agreement), Buyer and Seller, at Buyer's
sole cost and expense, shall prepare and file with the Federal Trade Commission
and the United States Department of Justice any documents that may be necessary
to comply with the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx
"XXX Xxx") (including a request for early termination of the waiting period
thereunder) and Buyer shall promptly deliver to Seller a true and correct copy
of that which was filed and Buyer, with Seller's cooperation, shall thereafter
promptly furnish all materials thereafter requested by such agencies with copy
to Seller.
1.11 Studio Lease. At the Closing, Seller shall cause its affiliate (the
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"Studio Site Owner") that owns the real property used as the Station's studio
(the "Studio Site") to enter into a lease of such property, including all
portions of the Studio Site currently or historically used in connection with
the business or operations of the Station and including, without limitation, the
space used for the Station's STLs and any other transmission equipment, in form
and substance reasonably satisfactory to Buyer and Seller (the "Studio Lease");
provided, however, the personal office of Xxxxxx Xxxxxx consisting of 275 sq.
feet, more or less, and one reserved parking space nearest the main entrance to
the building shall be retained by Studio Site Owner for its own use and shall
not be leased to Buyer. The Studio Lease shall commence upon the Closing Date,
shall be for a term of one year, at a monthly rental rate of $7,500, with Buyer
responsible for all utilities and regular maintenance, and shall be terminable
by Buyer upon 30 days notice without further liability of Buyer other than rent,
utilities and regular maintenance through the date of termination.
1.12 Tower Lease. At the Closing, Seller shall cause its affiliate Greater
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Media Tower Company (the "Tower Site Lessee") that leases the real property used
as the Station's tower site for its main transmitter (the "Tower Site") and owns
the tower and transmitter building located at the Tower Site to enter into a
lease of such space on such tower and on the ground at such property as
currently or historically used by the Station in form and substance reasonably
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satisfactory to Buyer and Seller (the "Tower Lease"). The Tower Lease shall
commence upon the Closing Date, shall be for a term expiring September 30, 2017,
and for no rent (all rental consideration being given hereunder with Buyer
responsible for electricity used by the Station's transmitting equipment
(separate metering or sub-metering equipment to be installed at Buyer's
expense)), provided that Buyer shall reimburse the Tower Site Lessee for Buyer's
proportionate share (which shall be deemed to be 50%) of regular maintenance of
the tower and real property taxes charged to the Tower Site Lessee by the Lessor
of the Tower Site pursuant to the Lease Agreement that commenced October 1, 1997
relating thereto (the "Tower Site Lease"). The Tower Lease shall terminate upon
the demised premises ceasing to serve as a transmitter site for the Station.
1.13 Collection of Accounts Receivable.
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(a) Seller hereby appoints Buyer its agent, for the balance of the
calendar month in which Closing shall have occurred and for four (4) calendar
months thereafter (the "Period of Collection"), to collect accounts receivable
owing to Seller with respect to the Station as of 12:01 a.m. current local time
on the Closing Date. Within five (5) business days after the Closing Date,
Seller shall deliver to Buyer a detailed statement (the "A/R Statement") of such
accounts receivable, listing each account debtor, the respective amounts due and
whether (and when) each such account debtor has been billed. Seller's accounts
receivable shall not be purchased by Buyer but shall remain the property of
Seller. Buyer agrees, however, that for the aforesaid Period of Collection,
Buyer shall use reasonable good faith efforts to collect said accounts
receivable for the account of Seller. Such efforts by Buyer shall not require
(i) the retention of any attorney or the institution of suit or referral to a
collection or similar agency, or (ii) the institution of any proceeding against
an account debtor under any bankruptcy, insolvency or similar law affecting the
rights of creditors generally. Seller agrees to cooperate with Buyer to
facilitate the collection of accounts receivable, including by executing and
delivering any necessary powers of attorney for the deposit of checks.
(b) Any amounts collected by Buyer during the Period of Collection from
an account debtor listed on the A/R Statement who also is indebted to Buyer
shall first be applied to the accounts receivable to be collected by Buyer on
Seller's behalf, unless such account debtor disputes in writing the amount or
liability of any account shown on the A/R Statement to be due and owing to
Seller, in which case, Buyer, at its sole election, may return such disputed
account to Seller for collection (without any further obligation to apply funds
subsequently received from such account debtor to Seller's accounts receivable)
or may pay to Seller the full amount of the disputed account and retain the
account. Buyer shall promptly report such disputes and requests to Seller.
(c) On or before the fifteenth (15th) day of each of the second, third,
fourth and fifth calendar months immediately following the Closing Date, Buyer
shall pay over to Seller, all of Seller's accounts receivable collected by Buyer
during the previous month (the first such payment also to include the balance of
the month in which Closing shall have occurred).
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(d) Buyer agrees that it may not settle, discount payment of, extend the
terms of, or otherwise compromise any of Seller's accounts receivable, except as
consented to in writing by Seller. If any account debtor is in bankruptcy,
reorganization or similar proceeding, Seller will have the full collection
responsibility as to such account and the same will no longer be deemed a
Seller's account receivable hereunder; and, Buyer will give notice of any such
bankruptcy, reorganization or other proceeding to Seller promptly after
receiving notice thereof.
(e) Buyer does not guarantee the collection of the whole or any part of
Seller's accounts receivable and shall have no liability to Seller for the
uncollectability of any of Seller's accounts receivable.
(f) Buyer and Seller agree that, without cost to the other, each one's,
bookkeeper will work closely with the bookkeeper of the other and will supply
all information and accommodations as reasonably requested and, in order to
facilitate Buyer's collection of Seller's accounts receivable hereunder, Seller
agrees to maintain at its own expense the software system currently in use and
to assist Buyer in operating such software.
(g) At the end of the Period of Collection, Buyer shall return to Seller
for collection all of Seller's accounts receivable uncollected during the Period
of Collection, and Buyer shall have no further obligation with respect to the
collection thereof.
ARTICLE 2: REPRESENTATIONS AND WARRANTIES OF SELLER
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To induce Buyer to enter into this Agreement and to consummate the
transactions contemplated hereby, Seller represents and warrants (and where
appropriate covenants) to Buyer as follows:
2.1 Organization. Seller is duly organized, validly existing and in good
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standing under the laws of the jurisdiction of its organization (as first set
forth above). Seller has the requisite power and authority to own and operate
the Station, to carry on the Station's business as now conducted by it, and to
execute and deliver this Agreement and all of the other agreements and
instruments to be executed and delivered Seller pursuant hereto (collectively,
the "Seller Ancillary Agreements"), to consummate the transactions contemplated
hereby and thereby and to comply with the terms, conditions and provisions
hereof and thereof.
2.2 Authority. The execution, delivery and performance of this Agreement
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and the Seller Ancillary Agreements by Seller have been duly authorized and
approved by all necessary action of Seller and do not require any further
authorization or consent of Seller. This Agreement is, and each Seller
Ancillary Agreement when executed and delivered by Seller and the other parties
thereto will be, a legal, valid and binding agreement of Seller enforceable in
accordance with its respective terms, except in each case as such enforceability
may be limited by bankruptcy, moratorium, insolvency, reorganization or other
similar laws affecting or limiting the enforcement of creditors' rights
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generally and except as such enforceability is subject to general principles of
equity (regardless of whether such enforceability is considered in a proceeding
in equity or at law).
2.3 No Conflicts. Except as set forth in correspondence from Seller to
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Buyer dated November 22, 1999, neither the execution and delivery by Seller of
this Agreement and the Seller Ancillary Agreements or the consummation by Seller
of any of the transactions contemplated hereby or thereby nor compliance by
Seller with or fulfillment by Seller of the terms, conditions and provisions
hereof or thereof will:
(i) conflict with, result in a breach of the terms, conditions or
provisions of, or constitute a default, an event of default or an event creating
rights of acceleration, termination or cancellation or a loss of rights under,
or result in the creation or imposition of any Lien upon any of the Station
Assets under, the charter or other organizational documents of Seller, or any
contract, lease, agreement or instrument, or any governmental license, permit or
authorization, or any judgment, order, award or decree to which Seller is a
party or any of the Station Assets is subject or by which Seller is bound, or
any statute, other law or regulatory provision affecting Seller or the Station
Assets; or
(ii) require the approval, consent, authorization or act of, or the
making by Seller of any declaration, filing or registration with, any third
party except for those consents, if any, which are to be delivered at Closing
hereunder or any foreign, federal, state or local court, governmental or
regulatory authority or body, except for such of the foregoing as are necessary
pursuant to the HSR Act and the Communications Act (defined below).
2.4 Financial Statements.
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(a) Seller has furnished Buyer with unaudited financial statements
used by Seller in the preparation of its federal and state tax returns for
fiscal years 1996, 1997 and 1998 as well as unaudited monthly financial
statements for the period from January 1, 1999 through June 30, 1999. Pursuant
to Section 4.2, Seller will, each month, furnish to Buyer unaudited monthly
financial statements for the subject calendar month as well as financial
statements for the year to date period. In addition, Seller will deliver
financial statements for the comparable month and year to date period for the
previous calendar year. So, for example, on December 31st, Seller would deliver
financial statements for the following periods: (i) October, 1999; (ii) January
1, 1999 through October 31, 1999; (iii) October, 1998; and (iv) January 1, 1998
through October 31, 1998. The financial statements described in the preceding
sentences and in Section 4.2 shall be collectively referred to as "Financial
Statements". The Financial Statements: (x) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved and as compared with prior periods; and (y)
fairly present Seller's financial position, income, expenses, assets,
liabilities, and the results of operations of the Station as of the dates and
for the periods indicated. There has been no material adverse change in the
financial condition of the Station since the preparation of the most recent
annual or monthly Financial Statement.
(b) Except as reflected in the balance sheets included in the
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Financial Statements dated June 30, 1999, including the notes thereto or
otherwise disclosed in this Agreement or the schedules hereto, and except for
the current liabilities and obligations incurred in the ordinary course of
business of the Station (not including for this purpose any tort-like
liabilities or breach of contract) since the date of this most recent balance
sheet, there exist no liabilities or obligations of Seller, contingent or
absolute, matured or unmatured, known or unknown. Since the June 30, 1999,
balance sheet: (i) Seller has not made any contract, agreement or commitment or
incurred any obligation or liability (contingent or otherwise), except in the
ordinary course of business and consistent with past business practices; (ii)
there has not been any discharge or satisfaction of any obligation or liability
owed by Seller, which is not in the ordinary course of business or which is
inconsistent with past business practices; (iii) there has not occurred any sale
of or loss or material injury to the business, or any material adverse change in
the business or in the condition (financial or otherwise) of the Station; (iv)
Seller has operated the business in the ordinary course; and (v) Seller has not
increased the salaries or any other compensation of any of its employees or
agreed to the payment of any bonuses other than in the ordinary course of
business or which increases or bonuses will not constitute any of the Assumed
Obligations. The monthly balance sheets: (x) have been prepared on a
consistent basis throughout the periods involved and as compared with prior
periods; and (y) fairly present Seller's financial position, income, expenses,
assets, liabilities, and the results of operations of the Station as of the
dates and for the periods indicated, subject to year end adjustments which do
not materially affect the operations of Seller.
2.5 Taxes. Seller has, in respect of the Station's business, filed all
-----
foreign, federal, state, county and local income, excise, property, sales, use,
franchise and other tax returns and reports which are required to have been
filed by it under applicable law and has paid all taxes which have become due
pursuant to such returns or pursuant to any assessments which have become
payable. All monies required to be withheld by Seller from employees of the
Station for income taxes, social security and other payroll taxes have been
collected or withheld, and paid to the appropriate governmental authorities.
2.6 Station Assets. Except for the Excluded Assets, the Station Assets
--------------
constitute all the assets used or held for use in the business or operation of
the Station. Seller has, or will have on the Closing Date, good and marketable
title to the Station Assets, free and clear of Liens, except for Permitted
Encumbrances. Upon delivery to Buyer at Closing of the documents contemplated
by Section 8.1(a), Seller will thereby transfer to Buyer good and marketable
title to the Station Assets, free and clear of Liens, except for Permitted
Encumbrances.
2.7 FCC Authorizations.
------------------
(a) Seller is the holder of the FCC Authorizations listed and described
on Schedule 1.1(a). Such FCC Authorizations constitute all of the licenses
---------------
and authorizations required under the Communications Act of 1934, as amended
(the "Communications Act"), or the rules and regulations of the FCC for, and
used in the operation of, the Station. The FCC Authorizations are in full force
and effect and have not been revoked, suspended, canceled, rescinded or
11
terminated and have not expired. There is not pending or to the knowledge of
Seller threatened any action by or before the FCC to revoke, suspend, cancel,
rescind or modify any of the FCC Authorizations (other than proceedings to amend
FCC rules of general applicability), and there is not now issued or outstanding
or pending or to the knowledge of Seller threatened, by or before the FCC, any
order to show cause, notice of violation, notice of apparent liability, or
notice of forfeiture or complaint against Seller or the Station. The Station is
operating in material compliance with the FCC Authorizations, the Communications
Act, and the rules and regulations of the FCC.
(b) All reports and filings required to be filed with, and all
regulatory fees required to be paid to, the FCC by Seller with respect to the
Station (including without limitation all required equal employment opportunity
reports) have been timely filed and paid. All such reports and filings are
accurate and complete. Seller maintains a public file for the Station as
required by FCC rules in all material respects. With respect to FCC licenses,
permits and authorizations, Seller is operating only those facilities for which
an appropriate FCC Authorization has been obtained and is in effect, or
otherwise as allowed by law or regulation and Seller is in material compliance
with the conditions of each such FCC Authorization.
(c) Seller is aware of no facts indicating that Seller is not in
compliance with all material requirements of the FCC, the Communications Act, or
any other applicable federal, state and local statutes, regulations and
ordinances. Seller is aware of no facts and Seller has received no notice or
communication, formal or informal, indicating that the FCC is considering
revoking, suspending, canceling, rescinding or terminating any FCC
Authorization.
(d) The operation of the Station does not cause or result in exposure
of workers or the general public to levels of radio frequency radiation in
excess of the "Radio Frequency Protection Guides" recommended in "American
National Standard Safety Levels with Respect to Human Exposure to Radio
Frequency Electromagnetic Fields 3 kHz to 300 GHz" (ANSI/IEEE C95.1-1992) issued
by the American National Standards Institute, adopted by the FCC effective
October 15, 1997, and described in OET Bulletin No. 65. Renewal of the FCC
Authorizations would not constitute a significant environmental impact within
the meaning of Section 1.1307, of the FCC's rules written as it exists on the
date of this Agreement.
(e) Each communications tower structure used in the operation of the
Station (whether owned or leased) has been registered under the rules and
regulations of the FCC, and the Federal Aviation Administration has issued a
determination of no hazard to air navigation with respect to each such tower for
which such a determination is required.
2.8 Real Property.
-------------
(a) General. Schedule 1.1(c) contains a description of all real
------- --------
property used or held for use in the business or operation of the Station. The
12
Real Property includes sufficient access to and rights in the real property used
or held for use in the business and operations of the Station as presently
operated and sufficient access to the Station's facilities without need to
obtain any other access rights. Neither the whole nor any part of any Real
Property is subject to any pending or to the knowledge of Seller threatened suit
for condemnation or other taking by any public authority. All buildings and
other improvements included in the Real Property are in good operating condition
and repair, and free from material defect or damage normal wear and tear
excepted and have been maintained in a commercially reasonable manner, and to
the knowledge of Seller comply with applicable zoning, health and safety laws
and codes in all material respects. Seller has delivered to Buyer copies of all
title insurance policies in its possession that are applicable to the Real
Property.
(b) Studio Site. The Studio Site Owner has good and marketable fee
-----------
simple title to the Studio Site (identified on Schedule 1.1(c)), including all
---------------
buildings and other improvements thereon.
(c) Roxborough Lease. The Roxborough Lease is described on
----------------
Schedule 1.1(c) (including the expiration date, renewal and the location of the
---------------
real property covered by such lease), and a complete and correct copy thereof,
together with all amendments thereto, has been delivered to Buyer. Seller is the
lessee under the Roxborough Lease. The Roxborough Lease is in full force and
effect and constitutes a valid and binding obligation of Seller and, to the
knowledge of Seller, the other parties thereto (subject to bankruptcy,
insolvency, reorganization or other similar laws relating to or affecting the
enforcement of creditors' rights generally). Seller is in material compliance
with its obligations under the Roxborough Lease, and, to the knowledge of
Seller, is not in, or alleged to be in, breach or default under the Roxborough
Lease, and, to the best knowledge of Seller, no other party to the Roxborough
Lease has breached or defaulted thereunder, and to Seller's knowledge no event
has occurred and no condition or state of facts exists which, with the passage
of time or the giving of notice or both, would constitute such a material
default or breach by Seller or, to the best knowledge of Seller, by any such
other party.
(d) Tower Site Lease. The Tower Site Lease is described on
----------------
Schedule 1.1(c) (including the expiration date, renewal and the location of
---------------
the real property covered by such lease), and a complete and correct copy
thereof, together with all amendments thereto, has been delivered to Buyer. The
Tower Site Lessee is the lessee under the Tower Site Lease. The Tower Site Lease
is in full force and effect and constitutes a valid and binding obligation of
the Tower Site Lessee and, to the knowledge of Seller and the Tower Site Lessee,
the other parties thereto (subject to bankruptcy, insolvency, reorganization or
other similar laws relating to or affecting the enforcement of creditors' rights
generally). The Tower Site Lessee is in material compliance with its obligations
under the Tower Site Lease, and, to the knowledge of Seller and the Tower Site
Lessee, is not in, or alleged to be in, breach or default under the Tower Site
Lease, and, to the best knowledge of Seller and the Tower Site Lessee, no other
party to the Tower Site Lease has breached or defaulted thereunder, and to their
knowledge no event has occurred and no condition or state of facts exists which,
with the passage of time or the giving of notice or both, would constitute such
a material default or breach by the Tower Site Lessee or, to the best knowledge
of Seller and the Tower Site Lessee, by any such other party.
13
2.9 Personal Property. Except for the Excluded Assets, Schedule 1.1(b)
----------------- ---------------
shall (when delivered pursuant to Section 11.8 hereof) contain a list of all
------------
machinery, equipment, vehicles, furniture and other tangible personal property
used or held for use in the business or operation of the Station. Each item of
Tangible Personal Property is in good operating condition and repair, is free
from material defect or damage, normal wear and tear excepted and is functioning
materially in the manner and purposes for which it was intended.
2.10 Contracts. Each of the Station Contracts constitutes a valid and
---------
binding obligation of Seller and, to the best knowledge of Seller, the other
parties thereto (subject to bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of creditors' rights
generally), is in full force and effect and (except for those Station Contracts
which by their terms will expire prior to the Closing Date or will be otherwise
terminated prior to the Closing Date in accordance with the provisions hereof)
may be transferred to the Buyer pursuant to this Agreement, unless consent to
such transfer is required as set forth in correspondence from Seller to Buyer
dated November 22, 1999, and will be in full force and effect at the time of
such transfer, in each case without breaching the terms thereof or resulting in
the forfeiture or impairment of any rights thereunder and without the consent,
approval or act of, or the making of any filing with, any other party. Seller
is in material compliance with its obligations under each of the Station
Contracts, and Seller to its knowledge is not in, or alleged to be in, breach or
default under any of the Station Contracts, and, to the best knowledge of
Seller, no other party to any of the Station Contracts has breached or defaulted
thereunder, and to its knowledge no event has occurred and no condition or state
of facts exists which, with the passage of time or the giving of notice or both,
would constitute such a material default or breach by Seller or, to the best
knowledge of Seller, by any such other party. Complete and correct copies of
each of the Station Contracts, together with all amendments thereto, have been
delivered to Buyer by Seller.
2.11 Intangible Property. Seller has all right, title and interest in and
-------------------
to, or is licensed to use, all trademarks, service marks, trade names,
copyrights, Websites and all other intangible property necessary to the conduct
of the Station as presently operated. Schedule 1.1(f) contains a description of
---------------
all material Intangible Property. Seller has received no notice of any claim
that any Intangible Property or the use thereof conflicts with, or infringes
upon, any rights of any third party (and Seller is not aware of a reasonable
basis for any such claim of conflict). Seller has received no notice that any
service provided by the Station or any programming or other material used,
broadcast or disseminated by the Station infringes upon any copyright, patent or
trademark of any other party.
2.12 Employees. Seller has delivered to Buyer by correspondence dated
---------
October 15, 1999 and November 19, 1999 a list of all Station employees and their
position and rate of compensation, and a description of all Seller's employee
benefit plans. Seller has delivered to Buyer copies of all Seller's handbooks,
if any, policies and procedures relating to Station employees. Seller is in
material compliance with all labor and employment laws, rules and regulations
applicable to the Station's business, including without limitation those which
14
relate to wages, hours, discrimination in employment and collective bargaining,
and is not liable for any arrears of wages or any taxes or penalties for failure
to comply with any of the foregoing. There is no (i) unfair labor practice
charge or complaint against Seller in respect of the Station's business pending
or threatened before the National Labor Relations Board, any state labor
relations board or any court or tribunal, or (ii) strike, dispute, request for
representation, slowdown or stoppage pending or to Seller's knowledge threatened
in respect of the Station's business. Buyer shall have the right, but not the
obligation, to offer employment to any Station employees concurrent with
Closing.
2.13 Compliance with Law. Seller has complied materially with all laws,
-------------------
regulations, rules, writs, injunctions, ordinances, franchises, decrees or
orders of any court or of any foreign, federal, state, municipal or other
governmental authority which are applicable to the Station Assets, the Station
or the Station's business. There is no action, suit or proceeding pending or to
Seller's knowledge threatened against Seller in respect of the Station Assets,
the Station or the Station's business. To the best knowledge of Seller, there
are no claims or investigations pending or threatened against Seller in respect
of the Station Assets, the Station or the Station's business. There is no
action, suit or proceeding pending or threatened against Seller which questions
the legality or propriety of the transactions contemplated by this Agreement.
2.14 Insurance. Seller maintains insurance policies relating to the
---------
Station bearing the policy numbers, for the terms, with the companies, in the
amounts, providing the general coverage set forth in writing and delivered to
Buyer by correspondence dated October 15, 1999. All of such policies are in
full force and effect and Seller is not in default thereunder. Seller has not
received notice from any issuer of any such policies of its intention to cancel,
terminate or refuse to renew any policy issued by it.
2.15 Environmental. No hazardous or toxic substance or waste (including
-------------
without limitation petroleum products) or other material regulated under any
applicable environmental, health or safety law (each a "Contaminant") has been
generated, stored, transported or released (each a "Release") on, in, from or to
the assets or properties of the Station. Neither the Station nor any of the
assets or properties of the Station is subject to any order from or agreement
with any governmental authority or private party respecting (i) any
environmental, health or safety law, (ii) any environmental clean-up, removal,
prevention or other remedial action or (iii) any obligation or liability arising
from the Release of a Contaminant. Neither the Station nor any of the assets or
properties of the Station include any underground storage tanks or surface
impoundments, any asbestos containing material, or any polychlorinated biphenyls
except as set forth on Schedule 2.15. Seller has not received in respect of the
-------------
Station or any assets or properties of the Station any notice or claim to the
effect that it is or may be liable as a result of the Release of a Contaminant.
To the best knowledge of Seller, neither the Station nor any of its assets or
properties is the subject of any investigation by any governmental authority
with respect to a Release of a Contaminant. Seller has delivered to Buyer
copies of all environmental surveys, analyses and assessments in its possession
relating to any of the Real Property.
15
2.16 No Finder. No broker, finder or other person is entitled to a
---------
commission, brokerage fee or other similar payment from Seller in connection
with this Agreement or the transactions contemplated hereby as a result of any
agreement or action of Seller or any party acting on Seller's behalf.
2.17 Disclosure. With respect to Seller, the Station and the Station
----------
Assets, this Agreement, including any document delivered or generated by Seller
as contemplated hereunder, and the Seller Ancillary Agreements do not and will
not contain any untrue statement of material fact or omit to state a material
fact required to be made in order to make the statements herein and therein not
misleading in light of the circumstances in which they are made.
ARTICLE 3: REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
To induce Seller to enter into this Agreement and to consummate the
transactions contemplated hereby, Buyer represents and warrants (and where
appropriate covenants) to Seller as follows:
3.1 Organization. Buyer is duly organized, validly existing and in good
------------
standing under the laws of the jurisdiction of its organization (as first set
forth above). Buyer has the requisite power and authority to execute and
deliver this Agreement and all of the other agreements and instruments to be
executed and delivered by Buyer (collectively, the "Buyer Ancillary
Agreements"), to consummate the transactions contemplated hereby and thereby and
to comply with the terms, conditions and provisions hereof and thereof.
3.2 Authority. The execution, delivery and performance of this Agreement
---------
and the Buyer Ancillary Agreements by Buyer have been duly authorized and
approved by all necessary action of Buyer and do not require any further
authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary
Agreement when executed and delivered by Buyer and the other parties thereto
will be, a legal, valid and binding agreement of Buyer enforceable in accordance
with its respective terms, except in each case as such enforceability may be
limited by bankruptcy, moratorium, insolvency, reorganization or other similar
laws affecting or limiting the enforcement of creditors' rights generally and
except as such enforceability is subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
3.3 No Conflicts. Neither the execution and delivery by Buyer of this
------------
Agreement and the Buyer Ancillary Agreements or the consummation by Buyer of any
of the transactions contemplated hereby or thereby nor compliance by Buyer with
or fulfillment by Buyer of the terms, conditions and provisions hereof or
thereof will: (i) conflict with the charter or other organizational documents
of Buyer or any judgment, order or decree to which Buyer is subject; or (ii)
require the approval, consent, authorization or act of, or the making by Buyer
of any declaration, filing or registration with, any third party or any foreign,
federal, state or local court, governmental or regulatory authority or body,
except for such of the foregoing as are necessary pursuant to the HSR Act and
the Communications Act.
16
3.4 No Finder. No broker, finder or other person is entitled to a
---------
commission, brokerage fee or other similar payment in connection with this
Agreement or the transactions contemplated hereby as a result of any agreement
or action of Buyer or any party acting on Buyer's behalf, other than Star Media
Group, whose fee shall be paid by Buyer.
3.5 Ability to Consummate Agreement. Buyer is legally, technically,
-------------------------------
financially, and otherwise qualified to hold the FCC Authorizations and knows of
no reason why it will not be granted Commission consent to hold the FCC
Authorizations and to own and operate the Station under the Communications Act
and the rules and regulations of the Commission, and knows of no reason why it
would not receive an unconditional grant from the Commission to be the licensee
of the Station.
3.6 Buyer's Financial Ability to Consummate. Buyer has commitment(s) for
---------------------------------------
sufficient funds to consummate the transactions contemplated herein.
3.7 Acquisition Event. In the event that on or after the date of this
-----------------
Agreement, Buyer contracts to acquire an interest in a radio station or other
media property (or is a party to a time brokerage agreement or similar agreement
with respect to such a property) (an "Acquisition Event") which operates in the
same market as the Station, and the FCC advises Buyer and Seller, whether orally
or otherwise, that such Acquisition Event will have the effect of impeding the
likelihood of Seller and Buyer receiving the timely written consent of the FCC
to the FCC Application, Buyer shall promptly take such action as shall be
reasonably necessary to remove such impediment, including making any divestiture
or other arrangement that may be necessary in connection therewith.
3.8 Disclosure. This Agreement and any document delivered or generated by
----------
Buyer as contemplated hereunder does not and will not contain any untrue
statement of material fact or omit to state a material fact required to be made
in order to make the statements herein not misleading in light of the
circumstances in which they are made.
ARTICLE 4: COVENANTS OF SELLER
-------------------
Seller covenants and agrees that from the date hereof until the completion of
the Closing:
4.1 Operation of the Business.
-------------------------
(a) Seller shall: (i) except as set forth in this Agreement, continue to
carry on the business of the Station and keep its books and accounts, records
and files materially in conformity with the usual and ordinary manner in which
the business has been conducted in the past; (ii) operate the Station materially
in accordance with the terms of the FCC Authorizations and in material
compliance with the Communications Act, FCC rules, regulations and policies, and
all other applicable laws, rules and regulations, and maintain the FCC
Authorizations in full force and effect and timely file and prosecute any
necessary applications for renewal of the FCC Authorizations; (iii) use
17
commercially reasonable efforts to preserve the business organization of the
Station intact, retain substantially as at present the Station's employees,
consultants and agents, and preserve the goodwill of the Station's suppliers,
advertisers, customers and others having business relations with it; (iv) keep
all Tangible Personal Property and Real Property in good operating condition
(ordinary wear and tear excepted) and repair and maintain adequate and usual
supplies of inventory, office supplies, spare parts and other materials as have
been customarily maintained in the past; and (v) maintain in effect its current
insurance policies with respect to the Station and the Station Assets. Nothing
contained in this Agreement shall give Buyer any right to control the
programming, operations or any other matter relating to the Station prior to the
Closing, and Seller shall have complete control of the programming, operations
and all other matters relating to the Station up to the Closing.
(b) Notwithstanding Section 4.1(a), Seller shall not, without the prior
written consent of Buyer: (i) sell, lease, transfer, or agree to sell, lease or
transfer, any Station Assets except for non-material sales or leases, in the
ordinary course of business of items which are being replaced by assets of
comparable or superior kind, condition and value; (ii) grant any raises to
employees of the Station, pay any substantial bonuses or enter into any contract
of employment with any employee or employees of the Station except in the
ordinary course of business or which shall not continue beyond the Closing Date;
(iii) amend or terminate any existing time sales contracts with respect to the
Station except in the ordinary course of business; (iv) amend or terminate any
of the Station Contracts or enter into any contract, lease or agreement with
respect to the Station except those entered into in the ordinary course of
business that will be paid and performed in full before Closing; or (v) by any
act or omission knowingly cause any representation or warranty set forth in
Article 2 to become untrue or inaccurate.
(c) Seller shall continue diligently to prosecute, including by
requesting reconsideration of the FCC's adverse decision, Seller's pending FCC
application for construction permit to relocate the antenna of the Station from
Media, Pennsylvania to Philadelphia, Pennsylvania (FCC File No. BPH-940513IB)
(the "Relocation Petition"). Until such time as the Relocation Petition shall
have been granted, Seller shall operate primarily from its main transmitter
location. With respect to the Relocation Petition, Seller shall timely respond
to all FCC inquiries, timely provide Buyer copies of all documents prepared or
received by it that relate thereto, otherwise keep Buyer fully informed of the
status thereof, and consult with Buyer in advance regarding Seller's actions in
connection therewith.
4.2 Reports. Seller shall furnish to Buyer as promptly as possible, but in
-------
no event later than 60 days, after each calendar month for such calendar month:
(a) monthly Financial Statements for Seller, and (b) such other reports as Buyer
may reasonably request relating to Seller. Each of the Financial Statements
delivered pursuant to this Section shall have been prepared in accordance with
generally accepted accounting principles consistently applied during the periods
covered (except as disclosed therein).
18
4.3 Access. Between the date hereof and the Closing Date, Seller shall give
------
Buyer and the officers, employees, accountants, counsel, agents, consultants and
representatives of Buyer reasonable access to all Station Assets, employees of
Seller and the Station, accounts, books, records, federal and state tax returns
(if, in the view of Buyer's counsel or accountants, reasonably required in
connection with an audit permitted hereunder), deeds, title papers, insurance
policies, licenses, agreements, contracts, commitments, records and files of
every character, equipment, machinery, fixtures, furniture, vehicles, notes and
accounts payable and receivable of Seller relating to the Station, and any other
information concerning the affairs of the Station as Buyer may reasonably
request. It is expressly understood that, pursuant to this Section, Buyer, at
its expense, shall be entitled to conduct such inspections and reviews of the
Station, the Station Assets, and financial records relating to the Station as
Buyer may reasonably desire including without limitation to prepare monthly
financial statements relating to the business or operations of Seller prior to
the deadline specified in Section 4.2 (which shall be at Buyer's election and
which shall not relieve Seller of its obligations pursuant to Section 4.2
above), so long as the same do not unreasonably interfere with Seller's
operation of the Station; provided, however, all such inspections and reviews of
Seller's financial records shall occur at the office of Seller's independent
accountants or at such other location as shall be reasonably agreeable to Buyer
and Seller. No inspection or investigation made by or on behalf of Buyer, or
Buyer's failure to make any inspection or investigation, shall affect Seller's
representations, warranties and covenants hereunder or be deemed to constitute a
waiver of any of those representations, warranties and covenants. Immediately
after the date hereof, Seller shall also reasonably cooperate, and shall cause
its accountants to reasonably cooperate, with Buyer for purposes of Buyer's
inspection and review and to conduct an audit by Buyer's independent accountants
of the Financial Statements for the Station for the years 1996, 1997, 1998 and
1999 all at Buyer's expense (such expense to include prompt payment of
reasonable legal, accounting, and other professional fees and expenses of
Seller, if any, and all advance payments reasonably requested or required by
same). Buyer shall no later than three (3) business days of receipt of any and
all interim or final reports of such inspections, reviews, and audit, deliver a
copy of each such report to Seller and may disclose such financial statements
provided or created hereunder as are, in the view of Buyer's counsel or
accountants, reasonably required in connection with Buyer's reporting pursuant
to relevant SEC regulations, including Regulation S-X, in reports filed by Buyer
with any governmental or regulatory authority, including the Securities and
Exchange Commission; provided, a copy of the proposed disclosure or filing is
delivered to Seller no less than ten (10) days prior to its filing and in the
event Seller shall disagree with the content of any such disclosure or filing,
Buyer shall incorporate or append to such filing the comments of Seller. Any
investigation or examination by Buyer shall not in any way diminish or obviate
any representations or warranties of Seller made in this Agreement or in
connection herewith.
4.4 Consents. Seller shall use commercially reasonable efforts to obtain
--------
all of the consents required to the assignment of any Station Contract as set
forth in correspondence from Seller to Buyer dated November 22, 1999. If Seller
does not obtain a consent required to assign a Station Contract hereunder, Buyer
shall not be required to assume such Station Contract. Buyer shall identify in
writing to Seller within ten (10) business days of the date hereof, those
consents the receipt of which is a condition precedent to Buyer's obligation to
19
close under this Agreement (the "Required Consents"). Seller shall obtain the
Required Consents prior to Closing.
4.5 Estoppel Certificates; Title Insurance. Seller, at Seller's expense,
--------------------------------------
will obtain and deliver to Buyer written estoppel certificates (the "Estoppel
Certificates") duly executed by the lessor under the Roxborough Lease, in form
and substance reasonably satisfactory to Buyer. Buyer, at Buyer's expense,
shall have the right to obtain commitments from a title company acceptable to
Buyer to issue to Buyer at standard rates ALTA extended coverage leasehold title
insurance policies with respect to the Roxborough Lease and the Tower Lease with
no exceptions other than Permitted Encumbrances and the following, but only if
and to the extent not at any time adversely affecting the current and intended
use of the properties or requiring the removal or alteration of the presently
existing structures, or appurtenant structures thereon: (a) building and use
restrictions of record; (b) vehicular or pedestrian easements of record
affecting the properties and being contiguous to the front, rear or side lot
lines; (c) water, sewer, gas, electric, cable television, and telephone lines or
easements of record or as presently installed; and (d) prior grants,
reservations or leases of coal, oil, gas, or other minerals as shown by
instruments of record (the "Title Commitments"). The Estoppel Certificates
shall be dated within fifteen days prior to Closing.
4.6 Environmental. Following the execution of this Agreement, at Buyer's
-------------
expense, Buyer may engage engineering or environmental assessment firms
reasonably acceptable to Seller, to perform one or more Phase I, Phase II or
other environmental assessments for any or all of the Real Property, including
the Studio Site and the Tower Site (collectively, the "Environmental
Assessments"). Seller shall cooperate, and shall use reasonable efforts to
ensure that any other person in control of any of the Real Property, including
the Studio Site and the Tower Site, shall also cooperate, with Buyer and such
firms in performing such Environmental Assessments. The Environmental
Assessments shall initially be ordered promptly, but not later than thirty (30)
days, after the date hereof, it being understood that, so long as the initial
Environmental Assessment for a piece of property has been ordered within such
time, any follow-up Environmental Assessments need not be ordered within such
time. Delivery of the Environmental Assessments to Buyer shall not relieve
Seller of any obligation with respect to any representation, warranty or
covenant of Seller herein or waive any condition to Buyer's obligations herein.
If any Environmental Assessment, including any follow-up Environmental
Assessment, reveals the existence of Environmental Noncompliance (defined as any
condition inconsistent with Section 2.15 hereof), Buyer shall have the right to
terminate this Agreement, exercisable by giving written notice thereof to Seller
within fifteen (15) days of the receipt by Buyer of any Environmental
Assessment, or within such longer period as is reasonable in the event further
Environmental Assessments are ordered, specifying the nature of the
Environmental Noncompliance revealed by the Environmental Assessments and the
estimated cost of remediation thereof. In the event an Environmental Assessment
discloses Environmental Noncompliance that can be remedied by the expenditure of
Two Hundred Fifty Thousand Dollars ($250,000) or less, Seller shall remedy the
Environmental Noncompliance at its expense prior to the Closing, and the Closing
will otherwise take place in the manner and at the time provided for herein. In
the event that the cost of remedying the Environmental Noncompliance will exceed
Two Hundred Fifty Thousand Dollars ($250,000), this Agreement shall terminate
20
unless Buyer agrees to be responsible for the remediation costs in excess of Two
Hundred Fifty Thousand Dollars ($250,000), in which event the Closing will take
place with a reduction of the Purchase Price in the amount of Two Hundred Fifty
Thousand Dollars ($250,000) and Buyer shall be responsible for remedying the
problem at its sole cost and expense. Nothing in this Section or otherwise in
this Agreement shall be construed as creating any third-party beneficiaries or
any other rights in parties other than the parties hereto.
ARTICLE 5: COVENANTS OF BUYER AND SELLER
-----------------------------
Buyer and Seller covenant and agree that from the date hereof until the
completion of the Closing, each party shall promptly notify the other in writing
upon: (a) becoming aware of any order or decree or any complaint praying for an
order or decree restraining or enjoining the consummation of this Agreement or
the transactions contemplated hereunder; or (b) receiving any notice from any
governmental department, court, agency or commission of its intention (i) to
institute an investigation into, or institute a suit or proceeding to restrain
or enjoin, the consummation of this Agreement or such transactions, or (ii) to
nullify or render ineffective this Agreement or such transactions if
consummated.
ARTICLE 6: CONDITIONS TO THE OBLIGATIONS OF SELLER
---------------------------------------
The obligations of Seller under this Agreement are, at its option, subject to
the fulfillment of the following conditions prior to or on the Closing Date:
6.1 Representations, Warranties and Covenants. Each of the representations
-----------------------------------------
and warranties of Buyer contained in this Agreement shall have been true and
correct as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and correct, except to the extent
changes are permitted or contemplated pursuant to this Agreement. Buyer shall
have performed and complied with each and every covenant and agreement required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date. Buyer shall have furnished Seller with a certificate, dated the
Closing Date and duly executed by an officer of Buyer authorized on behalf of
Buyer to give such a certificate, to the effect that the conditions set forth in
this Section 6.1 have been satisfied.
6.2 Proceedings. Neither Seller nor Buyer shall be subject to any
-----------
restraining order or injunction restraining or prohibiting the consummation of
the transactions contemplated hereby. In the event such a restraining order or
injunction is in effect, this Agreement may not be abandoned by Seller pursuant
to this Section 6.2 prior to the Final Closing Date, but the Closing shall be
delayed during such period. This Agreement may be abandoned after the Final
Closing Date if such restraining order or injunction remains in effect.
6.3 FCC Consent. The FCC Consent shall have been granted by the FCC by
-----------
initial order.
21
6.4 Xxxx-Xxxxx-Xxxxxx. If applicable, the waiting period under the HSR Act
-----------------
shall have expired or been terminated.
6.5 Deliveries. Buyer shall have complied with its obligations set forth in
----------
Section 8.2.
ARTICLE 7: CONDITIONS TO THE OBLIGATIONS OF BUYER
--------------------------------------
The obligations of Buyer under this Agreement are, at its option, subject to
the fulfillment of the following conditions prior to or on the Closing Date:
7.1 Representations, Warranties and Covenants. Each of the representations
-----------------------------------------
and warranties of Seller contained in this Agreement shall have been true and
correct as of the date when made and shall be deemed to be made again on and as
of the Closing Date and shall then be true and correct except to the extent
changes are permitted or contemplated pursuant to this Agreement. Seller shall
have performed and complied with each and every covenant and agreement required
by this Agreement to be performed or complied with by it prior to or on the
Closing Date. Seller shall have furnished Buyer with a certificate, dated the
Closing Date and duly executed by an officer of Seller authorized on behalf of
Seller to give such a certificate, to the effect that the conditions set forth
in this Section 7.1 have been satisfied.
7.2 Proceedings. Neither Seller nor Buyer shall be subject to any
-----------
restraining order or injunction restraining or prohibiting the consummation of
the transactions contemplated hereby. In the event such a restraining order or
injunction is in effect, this Agreement may not be abandoned by Buyer pursuant
to this Section 7.2 prior to the Final Closing Date, but the Closing shall be
delayed during such period. This Agreement may be abandoned after such date if
such restraining order or injunction remains in effect.
7.3 FCC Consent. The FCC Consent shall have been granted by the FCC by Final
-----------
Order, without any conditions materially adverse to Buyer.
7.4 Xxxx-Xxxxx-Xxxxxx. If applicable, the waiting period under the HSR Act
-----------------
shall have expired or been terminated.
7.5 Deliveries. Seller shall have complied with its obligations set forth in
----------
Section 8.1.
7.6 Required Consents. Seller shall have obtained all of the Required
-----------------
Consents.
7.7 Material Adverse Change. Neither the Station nor any of the Station
-----------------------
Assets shall have suffered a material adverse change since the date hereof, and
there shall have been no changes since the date hereof in the business,
operations, condition (financial or otherwise), properties, assets or
liabilities of Seller, the Station or any of the Station Assets, except: (i)
changes in the economy or other circumstances generally affecting the
broadcasting industry or advertising in the Philadelphia, Pennsylvania market,
22
provided that any "year 2000 problem" (defined below) shall not be considered a
circumstance generally affecting the broadcasting industry or advertising in the
Philadelphia, Pennsylvania market; (ii) changes contemplated by this Agreement;
and (iii) changes which are not (either individually or in the aggregate)
materially adverse to the Station. The "Year 2000 problem" is anything, other
than the general failure of public services such as power and telephone, that
causes any of Seller's systems, machinery, information technology, computer
software and hardware, and other data sensitive technology not to operate
without error or interruption related to date data (meaning data or input that
includes an indication of or reference to a date) and without other problems
commonly referred to as "year 2000 problems."
ARTICLE 8: ITEMS TO BE DELIVERED AT THE CLOSING
------------------------------------
8.1 Deliveries by Seller. At the Closing, Seller shall deliver to Buyer duly
--------------------
executed by Seller or such other signatory as may be required by the nature of
the document:
(a) bills of sale, certificates of title for owned motor vehicles,
assignments, and other good and sufficient instruments of sale, conveyance,
transfer and assignment, in form and substance reasonably satisfactory to Buyer,
sufficient to sell, convey, transfer and assign the Station Assets to Buyer free
and clear of Liens (other than Permitted Encumbrances);
(b) the Required Consents and any other consents obtained by Seller under
Section 4.4;
(c) certified copies of resolutions authorizing the execution, delivery
and performance by Seller of this Agreement, which shall be in full force and
effect;
(d) the certificate referred to in Section 7.1;
(e) an opinion of Seller's counsel in the form and substance reasonably
satisfactory to Buyer;
(f) the Estoppel Certificates;
(g) the Studio Lease; and
(h) the Tower Lease.
8.2 Deliveries by Buyer. At the Closing, Buyer shall deliver to Seller:
-------------------
(a) the Purchase Price, which shall be paid in the manner specified in
Section 1.4;
(b) an instrument or instruments of assumption of the Assumed
Obligations;
23
(c) certified copies of resolutions authorizing the execution, delivery
and performance by Buyer of this Agreement, which shall be in full force and
effect at the time of the Closing; and
(d) the certificate referred to in Section 6.1.
ARTICLE 9: SURVIVAL; INDEMNIFICATION
-------------------------
9.1 Survival. All representations, warranties, covenants and agreements
--------
contained in this Agreement, or in any certificate, agreement, or other document
or instrument, delivered pursuant hereto, shall survive (and not be affected in
any respect by) the Closing and any investigation conducted by any party hereto
and any information which any party may receive for a period of one (1) year
following the Closing Date.
9.2 Indemnification.
---------------
(a) From and after Closing for a period of one (1) year following the
Closing Date, provided that any claim for a Deficiency made hereunder within
such one (1) year period shall not be voided by the expiration of such period,
Seller (an "Indemnifying Party") hereby agrees to indemnify and hold harmless
Buyer, the shareholders, directors, officers and employees of Buyer and all
persons which directly or indirectly, through one or more intermediaries,
control, are controlled by, or are under common control with Buyer, and their
respective successors and assigns (collectively, the "Buyer Indemnitees") from,
against and in respect of, and to reimburse the Buyer Indemnitees for, the
amount of any and all Deficiencies (as defined in Section 9.3(a)).
(b) From and after Closing for a period of one (1) year following the
Closing Date, provided that any claim for a Deficiency made hereunder within
such one (1) year period shall not be voided by the expiration of such period,
Buyer (an "Indemnifying Party") hereby agrees to indemnify and hold harmless
Seller, the shareholders, directors, officers and employees of Seller and all
persons which directly or indirectly, through one or more intermediaries,
control, are controlled by, or are under common control with Seller, and their
respective successors and assigns (collectively, the "Seller Indemnitees") from,
against and in respect of, and to reimburse the Seller Indemnitees for, the
amount of any and all Deficiencies (as defined in Section 9.3(b)).
9.3 Deficiencies.
------------
(a) As used in this Article 9, the term "Deficiencies" when asserted by
Buyer Indemnitees or arising out of a third party claim against Buyer
Indemnitees shall mean any and all losses, damages, liabilities and claims
sustained by the Buyer Indemnitees and arising out of, based upon or resulting
from: (i) any misrepresentation, breach of warranty, or any failure to comply
with any covenant, obligation or agreement on the part of Seller contained in or
made pursuant to this Agreement; (ii) any failure by Seller to pay or perform
any of the Retained Liabilities unless being contested in good faith or not yet
24
due or payable; or (iii) without limiting the foregoing, any litigation,
proceeding or claim by any third party relating to the business or operation of
the Station prior to Closing. Such Deficiencies include without limitation any
and all acts, suits, proceedings, demands, assessments and judgments, and all
fees, costs and expenses of any kind, related or incident to any of the
foregoing (including, without limitation, any and all Legal Expenses (as defined
in Section 9.6 below)).
(b) As used in this Article 9, the term "Deficiencies" when asserted by
Seller Indemnitees or arising out of a third party claim against Seller
Indemnitees shall mean any and all losses, damages, liabilities and claims
sustained by the Seller Indemnitees and arising out of, based upon or resulting
from: (i) any misrepresentation, breach of warranty, or any failure to comply
with any covenant, obligation or agreement on the part of Buyer contained in or
made pursuant to this Agreement; (ii) any failure by Buyer to pay or perform any
of the Assumed Obligations unless being contested in good faith or not yet due
or payable; or (iii) any litigation, proceeding or claim by any third party
relating to the business or operation of the Station after Closing. Such
Deficiencies include without limitation any and all acts, suits, proceedings,
demands, assessments and judgments, and all fees, costs and expenses of any
kind, related or incident to any of the foregoing (including, without
limitation, any and all Legal Expenses (as defined in Section 9.6 below)).
9.4 Procedures.
----------
(a) In the event that any claim shall be asserted by any third party
against the Buyer Indemnitees or Seller Indemnitees (Buyer Indemnitees or Seller
Indemnitees, as the case may be, hereinafter, the "Indemnitees"), which, if
sustained, would result in a Deficiency, then the Indemnitees, within ten (10)
days after learning of such claim, shall notify the Indemnifying Party of such
claim describing in reasonable detail the facts giving rise to the claim, and
shall extend to the Indemnifying Party a reasonable opportunity to control and
to defend against such claim, at the Indemnifying Party's sole expense and
through legal counsel acceptable to the Indemnitees, provided that the
Indemnifying Party proceeds in good faith, expeditiously and diligently. The
Indemnitees shall, at their option and expense, which expense shall not
constitute a Deficiency, have the right to participate in, but not to control,
any defense undertaken by the Indemnifying Party with legal counsel of their own
selection. No settlement or compromise of any claim which may result in a
Deficiency may be made by the Indemnifying Party without the prior written
consent of the Indemnitees unless: (A) prior to such settlement or compromise
the Indemnifying Party acknowledges in writing its obligation to pay in full the
amount of the settlement or compromise and all associated expenses; and (B) the
Indemnitees are furnished with a full and unconditional release from the party
or parties asserting the claim.
(b) In the event that the Indemnitees assert the existence of any
Deficiency against the Indemnifying Party, they shall give written notice to the
Indemnifying Party of the nature and amount of the Deficiency asserted. If the
Indemnifying Party, within a period of thirty (30) days (or such shorter period
as shall be reasonable in the circumstances) after the giving of notice by the
Indemnitees, shall not give written notice to the Indemnitees announcing its
intent to contest such assertion of the Indemnitees (such notice by the
25
Indemnifying Party being hereinafter referred to as the "Contest Notice"), such
assertion of the Indemnitees shall be deemed accepted and the amount of the
Deficiency shall be deemed established. In the event, however, that a Contest
Notice is given to the Indemnitees within said 30-day period (or such shorter
period as set forth above), then the contested assertion of a Deficiency shall
be settled by arbitration to be held in Philadelphia, Pennsylvania in accordance
with the Commercial Rules of the American Arbitration Association then existing.
The determination of the arbitrator shall be delivered in writing to the
Indemnifying Party and the Indemnitees and shall be final, binding and
conclusive upon all of the parties hereto, and the amount of the Deficiency, if
any, determined to exist, shall be deemed established.
(c) The Indemnitees and the Indemnifying Party may agree in writing, at
any time, as to the existence and amount of a Deficiency, and, upon the
execution of such agreement such Deficiency shall be deemed established.
9.5 Payment. The Indemnifying Party hereby agrees to pay the amount of
-------
established Deficiencies within 15 days after the establishment thereof. The
amount of established Deficiencies shall be paid in cash. At the option of the
Indemnitees, the Indemnitees may offset any Deficiency or any portion thereof
that has not been paid by the Indemnifying Party to the Indemnitees against any
obligation the Indemnitees, or any of them, may have to the Indemnifying Party.
9.6 Legal Expenses. As used in this Article 9, the term "Legal Expenses"
--------------
shall mean any and all fees (whether of attorneys, accountants or other
professionals), costs and expenses of any kind reasonably incurred by any person
identified herein and its counsel in investigating, preparing for, defending
against, or providing evidence, producing documents or taking other action with
respect to any threatened or asserted claim.
9.7 Threshold. Notwithstanding anything to the contrary contained in this
---------
Agreement, neither party shall have the right to assert a claim for Deficiencies
against the other party, unless, at the time such claim is asserted, the
aggregate amount of all Deficiencies of the party asserting such claim for
Deficiencies exceeds One Hundred Thousand Dollars ($100,000.00) (the "Basket"),
provided that: (i) once the Basket has been exceeded, all Deficiencies,
including the amount of the Basket, shall be repaid as set forth herein, and
(ii) the Basket shall not apply to the Assumed Obligations or the Retained
Liabilities, but credit against the Basket shall be given for any Assumed
Obligations or Retained Liabilities wrongfully paid by an Indemnitee. Any claim
of Buyer or Seller shall be reduced to the extent of insurance proceeds actually
received or realized in connection with such claim for Deficiencies.
ARTICLE 10: MISCELLANEOUS
10.1 Termination. This Agreement may be terminated at any time prior to
-----------
Closing: (a) by the mutual consent of Seller and Buyer; (b) by any party hereto
if the FCC has denied the FCC Application in a Final Order; (c) by Buyer as
provided in Section 4.6 (Environmental) or in Section 10.6 (Broadcast
Transmission Interruption); (d) by Buyer as provided in Section 10.7 (Risk of
Loss); (e) by Buyer or Seller if the Closing has not taken place by the Final
26
Closing Date; (f) by Buyer, if on the Closing Date Seller has failed to satisfy
any of the conditions set forth in Section 7.1, 7.5, 7.6 or 7.7; (g) by Buyer if
Seller has failed to cure a material breach of any of its agreements,
obligations, representations, warranties or covenants under this Agreement
within thirty (30) calendar days after it receives notice from Buyer of such
breach, provided that no such notice and cure period shall be afforded to Seller
anent its obligation to make deliveries on the Closing Date as set forth in
Section 8.1 (other than Section 8.1(d) and other than Section 8.1(a) (but only
if Buyer fails to tender the Purchase Price)); (h) by Seller, if on the Closing
Date Buyer has failed to satisfy either of the conditions set forth in Section
6.1 or 6.5; or (i) by Seller if Buyer has failed to cure a material breach of
any of its agreements, obligations, representations, warranties or covenants
under this Agreement within thirty (30) calendar days after it receives notice
from Seller of such breach, provided that no such notice and cure period shall
be afforded to Buyer anent its obligation to make deliveries on the Closing Date
as set forth in Section 8.2 (other than Section 8.2(d)). A termination pursuant
to this Section 10.1 shall not relieve any party of any liability it would
otherwise have for a breach of this Agreement, nor may any party exercise its
rights to terminate if such party shall be in material breach of this Agreement.
10.2 Specific Performance. In the event of anticipatory repudiation or
--------------------
breach by Seller of any representation, warranty, covenant or agreement under
this Agreement, at Buyer's election, in addition to any other remedy available
to it, Buyer shall be entitled to an injunction restraining any such
anticipatory repudiation or breach and, subject to obtaining any requisite
approval of the FCC, to enforcement of this Agreement by a decree of specific
performance requiring Seller to fulfill its obligations under this Agreement, in
each case without the necessity of showing economic loss or other actual damage.
The remedies provided Buyer in this Agreement shall be cumulative and shall not
preclude the assertion by Buyer of any other rights or the seeking of any other
remedies against Seller.
10.3 Expenses. Unless otherwise provided in this Agreement, or as otherwise
--------
agreed by the parties, each party hereto shall bear all of its expenses incurred
in connection with the transactions contemplated by this Agreement, including
without limitation, accounting and legal fees incurred in connection herewith;
provided, however, that: (i) Seller and Buyer shall each pay one-half of the
FCC filing fees required to be paid in connection with the FCC Application; (ii)
Seller shall be exclusively responsible for, and Buyer shall not have any
liability or responsibility for, any sales or transfer taxes (including without
limitation any real estate transfer taxes), arising from the transfer of the
Station Assets to Buyer; and (iii) the HSR Act filing fee will be paid for by
Buyer.
10.4 Further Assurances. From time to time prior to and after Closing, each
------------------
party hereto will execute all such instruments and take all such actions as any
other party shall reasonably request, without payment of further consideration,
in connection with carrying out and effectuating the intent and purpose hereof
and all transactions contemplated by this Agreement, including without
limitation the execution and delivery of any and all confirmatory and other
instruments in addition to those to be delivered at Closing, and any and all
actions which may reasonably be necessary to complete the transactions
contemplated hereby. The parties shall cooperate reasonably with each other
and with their respective counsel and accountants in connection with any steps
27
required to be taken as part of their respective obligations under this
Agreement.
10.5 Public Announcements. Prior to Closing, neither party shall, without
--------------------
the approval of the other party hereto, make any press release or other public
announcement concerning the transactions contemplated by this Agreement, except
(i) to announce it has been entered into, and (ii) as and to the extent that
such party shall be so obligated by law, in which case such party shall give
advance notice to the other party and the parties shall use their best efforts
to cause a mutually agreeable release or announcement to be issued.
Notwithstanding the foregoing, the parties acknowledge that the rules and
regulations of the FCC require that public notice of the transactions
contemplated by this Agreement be made after the FCC Application has been filed
with the FCC, and that such notice may be broadcast on the Station without the
advance consent of Buyer.
10.6 Broadcast Transmission Interruption. If before Closing the regular
-----------------------------------
broadcast transmission of the Station in the normal and usual manner is
interrupted for a period of twenty four consecutive hours or more, Seller shall
give the prompt written notice thereof to Buyer. Buyer shall then have the
right, by giving written notice to Seller, to postpone (and if necessary re-
postpone) the Closing to a date that is thirty (30) days after the end of any
such interruption. If regular broadcast transmission in the normal and usual
manner is interrupted for a continuous period of seventy-two (72) hours or more
at any time prior to Closing, then (a) Seller immediately shall give written
notice thereof to Buyer, and (b) Buyer shall have the right, by giving written
notice to Seller, to (i) terminate this Agreement, or (ii) postpone the Closing
as provided above.
10.7 Risk of Loss. The risk of any loss, damage or destruction to any of
------------
the Station Assets to be transferred to Buyer hereunder, including without
limitation Buyer's rights under the Tower Lease and the Studio Lease, from fire
or other casualty or cause shall be borne by Seller at all times up to 12:01
a.m. local time on the Closing Date. Upon the occurrence of any loss or damage
to any of the property or assets to be transferred hereunder as a result of
fire, casualty, accident or other causes prior to the Closing, Seller shall: (a)
promptly notify Buyer of same in writing stating with particularity the extent
of loss or damage incurred, the cause thereof, if known, and the extent to which
restoration, replacement and repair of the Station Assets lost or destroyed is
expected to be covered under any insurance policy with respect thereto; and (b)
except as set forth below: (x) promptly begin to repair or cause to be repaired
and to restore the property to its condition prior to any such loss, damage or
destruction; and (y) apply the proceeds of any claim for any loss payable under
any insurance policy with respect thereto to repair, replace or restore any such
property to its former condition, subject to the conditions stated below.
Without limiting Seller's obligations set forth above, in the event the loss
exceeds One Million Dollars ($1,000,000.00) and the property cannot be
substantially repaired or restored within ninety (90) days, Buyer shall have the
option (but not the obligation) exercisable within ten (10) days after receipt
of such notice from Seller to:
(i) Postpone the Closing until such time as the property has been
completely repaired, replaced or restored, which Seller shall promptly
do; or
28
(ii) Elect to consummate the Closing and accept the property in its
"then" condition, in which event Seller shall assign to Buyer all
rights under any insurance policy covering the loss and pay over to
the Buyer any proceeds under any such insurance policy thereto
received by Seller with respect thereto as a credit against Buyer's
obligation to pay the Purchase Price to Seller; or
(iii) Terminate this Agreement (but only if, as provided above, the
property cannot be substantially repaired or restored within ninety
(90) days) and receive the Deposit together with interest thereon.
10.8 Cooperation. Buyer and Seller shall each promptly deliver to the other
-----------
a copy of each and every filing it shall make referencing the other and the
Station to (i) the FCC and (ii) the SEC during the period from the date hereof
to the Closing Date. Any of Seller's books, records and documents acquired by
Buyer and reasonably required by Seller shall, on reasonable notice, be made
available to Seller for examination and duplication after Closing at Buyer's
principal office in Philadelphia, Pennsylvania for a period of four (4) years
from the Closing Date. From the date of Closing and for a period of three (3)
years thereafter, if, in the view of Buyer's counsel or accountants, reasonably
required in connection with Buyer's reporting pursuant to relevant SEC
regulations, including Regulation S-X, Seller, at the sole cost and expense of
Buyer (such expense to include payment of reasonable legal, accounting, and
other professional fees and expenses of Seller, if any, and all advance payments
reasonably requested or required by same), shall provide Buyer with such
cooperation and information as Buyer shall reasonably request in Buyer's: (i)
analysis and review of Financial Statements or information provided or created
hereunder, or (ii) preparation of any reports or analyses prepared by Buyer.
Seller shall also make its accountants available, including any opinions and
financial statements relating to the Seller, to provide explanations of any
documents or information provided hereunder and to permit disclosure of such
information by Buyer, including disclosure to any governmental authority,
including the Securities and Exchange Commission, if such disclosure is, in the
view of Buyer's counsel or accountants, reasonably required in connection with
Buyer's reporting pursuant to relevant SEC regulations, including Regulation S-
X.
ARTICLE 11: GENERAL PROVISIONS
------------------
11.1 Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the parties hereto, and their respective representatives,
successors and assigns. Neither Seller nor Buyer may assign any of its rights or
delegate any of its duties hereunder without the prior written consent of the
other party, and any such attempted assignment or delegation without such
consent shall be void, provided, in the event in accordance with Section 1.9(a)
Buyer shall have elected to have filed the FCC Application in the name of Radio
One Licenses, Inc. as assignee, and consent to which has been granted, Radio One
29
shall have the right to have the FCC Authorizations assigned by Seller at
Closing to its wholly-owned subsidiary Radio One Licenses, Inc.
11.2 Amendments; Waivers. The terms, covenants, representations, warranties
-------------------
and conditions of this Agreement may be changed, amended, modified, waived, or
terminated only by a written instrument executed by the party waiving
compliance. The failure of any party at any time or times to require
performance of any provision of this Agreement shall in no manner affect the
right of such party at a later date to enforce the same. No waiver by any party
of any condition or the breach of any provision, term, covenant, representation
or warranty contained in this Agreement, whether by conduct or otherwise, in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or of the breach of any other provision,
term, covenant, representation or warranty of this Agreement.
11.3 Notices. All notices, requests, demands and other communications
-------
required or permitted under this Agreement shall be in writing (which shall
include notice by telex or facsimile transmission) and shall be deemed to have
been duly made and received when personally served, or when delivered by Federal
Express or a similar overnight courier service, expenses prepaid, or, if sent by
telex, graphic scanning or other facsimile communications equipment, delivered
by such equipment, addressed as follows:
if to Seller: Greater Media Radio Company
0000 X. Xxxxxxxxx Xxxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Facsimile No.: 000-000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx Xxxxxx Xxxxxxx & Groudine, P.C.
Xxxxx Xxxxxxxx
Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxxxx X. Xxxxxx
Facsimile No.: (000) 000-0000
if to Buyer: Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx, President
Facsimile No.: (000) 000-0000
30
with a copy (which shall not constitute notice) to:
Radio One, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, General Counsel
Facsimile No.: (000) 000-0000
and Wiley, Rein & Fielding
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attn: Xxxxxxx X. Xxxxxxxxxxxx
Facsimile No.: (000) 000-0000
Any party may alter the address to which communications are to be sent by
giving notice of such change of address in conformity with the provisions of
this Section providing for the giving of notice.
11.4 Captions. The captions of Articles and Sections of this Agreement are
--------
for convenience only and shall not control or affect the meaning or construction
of any of the provisions of this Agreement.
11.5 Governing Law. This Agreement and all questions relating to its
-------------
validity, interpretation, performance and enforcement shall be governed by and
construed in accordance with the laws of the State of Pennsylvania, without
giving effect to principles of conflicts of laws.
11.6 Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all prior agreements, understandings, inducements
or conditions, express or implied, oral or written, relating to the subject
matter hereof. The express terms hereof control and supersede any course of
performance and/or usage of trade inconsistent with any of the terms hereof.
This Agreement has been prepared by all of the parties hereto, and no inference
of ambiguity against the drafter of a document therefore applies against any
party hereto.
11.7 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument.
11.8 Delivery of Schedule 1.1(b). The parties acknowledge that Schedule
--------------------------- --------
1.1(b) has not been delivered as of the date hereof. Seller shall deliver a
------
draft of Schedule 1.1(b) to Buyer no later than ten (10) business days after the
---------------
date hereof. Schedule 1.1(b), when delivered, shall include without limitation
---------------
all of the tangible personal property used or held for use in the business or
operation of the Station wherever located (including at the Studio Site, the
Tower Site and the site of the Roxborough Lease), provided, however, that such
-------- -------
schedule shall not under any circumstances include any Excluded Asset, the tower
and building at the Tower Site or the building at the Studio Site. Buyer shall
have ten (10) business days from receipt of the draft Schedule 1.1(b) to review
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the form and substance of such draft schedule, including by visiting the Station
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and any location at which any of the Station Assets shall be located. In the
event that draft Schedule 1.1(b) is not in form and substance reasonably
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satisfactory to Buyer, Buyer shall notify Seller thereof specifying in detail
why such Schedule is not acceptable, and Buyer and Seller shall negotiate in
good faith to agree upon the form and substance of Schedule 1.1(b).
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11.9 Corporate Existence. Seller shall maintain in good standing its
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corporate existence until at least December 15, 2000, and shall maintain during
such period a Net Worth (defined below) of no less than $1,000,000. "Net Worth"
means total assets less total liabilities, both determined in accordance with
generally accepted accounting principles.
[SIGNATURE PAGE FOLLOWS]
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[SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
BUYER: RADIO ONE, INC.
By: /s/ Xxxxxx X. Xxxxxxx, III
--------------------------------
Name: Xxxxxx X. Xxxxxxx, III
Title: Chief Executive Officer & President
SELLER: GREATER MEDIA RADIO COMPANY
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Name: Xxxx X. Xxxxxx
Title: President
Schedules
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1.1(a) FCC Authorizations
1.1(b) Tangible Personal Property
1.1(c) Real Property
1.1(e) Station Contracts
1.1(f) Intangible Property
1.2 Excluded Personal Property of Xxxxxx Xxxxxx
2.15 Environmental
