<PAGE>
As filed with the Securities and Exchange Commission on April 14, 1999
Registration No. 333-74351
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
AMENDMENT NO. 3 TO
FORM S-1
REGISTRATION STATEMENT
Under
The Securities Act of 1933
---------------
Radio One, Inc.
(Exact name of Registrant as specified in its charter)
---------------
Delaware 52-1166660 4832
(State or other (I.R.S. Employer (Primary Standard Industry
jurisdiction of Identification No.) Classification Number)
incorporation of
organization)
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
---------------
ALFRED C. LIGGINS, III
Chief Executive Officer and President
Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copies to:
RICHARD L. PERKAL, ESQ. ANTOINETTE COOK BUSH, ESQ.
Kirkland & Ellis STEPHEN W. HAMILTON, ESQ.
655 Fifteenth Street, N.W. Skadden, Arps, Slate, Meagher &
Washington, D.C. 20005 Flom LLP
Telephone: (202) 879-5000 1440 New York Avenue, N.W.
Washington, D.C. 20005
Telephone: (202) 371-7000
---------------
Approximate date of commencement of the proposed sale to the public: As soon
as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), check the following box. [_]
If this Form is filed to register additional securities for an offering pur-
suant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act Registration Statement number of the earlier ef-
fective Registration Statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) un-
der the Securities Act, check the following box and list the Securities Act
Registration Statement number of the earlier effective Registration Statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed
Maximum
Title of each Class of Amount Proposed Aggregate Amount of
Securities to be to be Maximum Offering Registration
Registered Registered(/1/) Offering Price Price(/2/) Fee(/3/)
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<S> <C> <C> <C> <C>
Class A Common Stock,
par value $0.01 per
share................ 6,820,000 Shares $21.00 $143,220,000 $39,816
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</TABLE>
(1) Includes 620,000 shares that the underwriters have the option to purchase
from the Company to cover over-allotments, if any.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to paragraph (o) of Rule 457 of the Securities Act.
(3) Previously paid.
---------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registra-
tion Statement shall thereafter become effective in accordance with Section
8(a) of the Securities Act or until this Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting pur-
suant to said Section 8(a), may determine.
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<PAGE>
Explanatory Note to Amendment No. 3
This Amendment No. 3 to the Radio One, Inc. Registration Statement on Form
S-1 has been filed solely for the purpose of filing certain exhibits to the
Registration Statement.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the estimated expenses to be incurred in
connection with the issuance and distribution of the securities being
registered, other than underwriting discounts and commissions, to be paid by
Radio One:
<TABLE>
<S> <C>
SEC registration fee.................................................. *
Printing and engraving fees........................................... *
Legal fees and expenses............................................... *
Accounting fees and expenses.......................................... *
Blue Sky fees and expenses............................................ *
Trustee fees.......................................................... *
Directors' and Officers' Insurance.................................... *
Miscellaneous......................................................... *
Total............................................................... $
</TABLE>
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* To be filed by amendment
Item 14. Indemnification of Directors and Officers.
Radio One's Amended and Restated By-Laws incorporate substantially the
provisions of the General Corporation Law of the State of Delaware (the "DGCL")
in providing for indemnification of directors and officers against expenses,
judgments, fines, settlements and other amounts actually and reasonably
incurred in connection with any proceeding arising by reason of the fact that
such person is or was an officer or director of Radio One. In addition, Radio
One is authorized to indemnify employees and agents of Radio One and may enter
into indemnification agreements with its directors and officers providing
mandatory indemnification to them to the maximum extent permissible under
Delaware law.
Radio One's Amended and Restated Certificate of Incorporation provides that
Radio One shall indemnify (including indemnification for expenses incurred in
defending or otherwise participating in any proceeding) its directors and
officers to the fullest extent authorized or permitted by the DGCL, as it may
be amended, and that such right to indemnification shall continue as to a
person who has ceased to be a director or officer of Radio One and shall inure
to the benefit of his or her heirs, executors and administrators except that
such right shall not apply to proceedings initiated by such indemnified person
unless it is a successful proceeding to enforce indemnification or such
proceeding was authorized or consented to by the board of directors. Radio
One's certificate of incorporation also specifically provides for the
elimination of the personal liability of a director to the corporation and its
stockholders for monetary damages for breach of fiduciary duty as director. The
provision is limited to monetary damages, applies only to a director's actions
while acting within his or her capacity as a director, and does not entitle
Radio One to limit director liability for any judgment resulting from (a) any
breach of the director's duty of loyalty to Radio One or its stockholders;
(b) acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of the law; (c) paying an illegal dividend or approving
an illegal stock repurchase; or (d) any transaction from which the director
derived an improper benefit.
Section 145 of the DGCL provides generally that a person sued (other than in
a derivative suit) as a director, officer, employee or agent of a corporation
may be indemnified by the corporation for reasonable expenses, including
counsel fees, if the person acted in good faith and in a manner the person
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe that the person's conduct was unlawful. In the case
of a derivative suit, a director, officer, employee or agent of the corporation
may be indemnified by the corporation for reasonable expenses, including
attorneys' fees, if the person has acted in good faith and in a manner the
person reasonably believed to be in or not opposed to the best interests of the
corporation, except that no indemnification shall be made in the case of a
derivative suit in respect of any claim as to, which such director, officer,
II-1
<PAGE>
employee or agent has been adjudged to be liable to the corporation unless the
Delaware Court of Chancery or the court in which such action or suit was
brought shall determine that such person is fairly and reasonably entitled to
indemnity for proper expenses. Indemnification is mandatory under section 145
of the DGCL in the case of a director or officer who is successful on the
merits in defense of a suit against him.
The Underwriting Agreement provides that the Underwriters are obligated,
under certain circumstances, to indemnify Radio One, the directors, certain
officers and controlling persons of Radio One, Inc. against certain
liabilities, including liabilities under the Securities Act. Reference is made
to the form of Underwriting Agreement filed as Exhibit 1.1 hereto.
Radio One has entered into indemnification agreements with the directors
and certain officers pursuant to which Radio One has agreed to maintain
directors' and officers' insurance and to indemnify such officers to the
fullest extent permitted by applicable law except for certain claims described
therein. [Reference is made to the form of Director and Officer
Indemnification Agreement filed as Exhibit [to come] hereto.]
Radio One maintains directors and officers liability insurance for the
benefit of its directors and certain of its officers.
Item 15. Recent Sales of Unregistered Securities.
On May 19, 1997, Radio One issued approximately $85.0 million (aggregate
principal amount) of 12% senior subordinated notes to certain investors. Such
notes were offered pursuant to Rule 144A under the Securities Act.
On May 19, 1997, Radio One issued approximately $20.9 million of Series A
and Series B 15% senior cumulative preferred stock to certain investors. Such
shares were issued pursuant to the exemption from registration provided by
Section 4(2) of Securities Act.
On January 25, 1999, Radio One issued an aggregate of 51,192 shares of
common stock to its Chief Financial Officer. These shares were issued pursuant
to the exemption from registration provided by Rule 701 under the Securities
Act.
On February 25, 1999, pursuant to a plan of recapitalization, Radio One
issued to the holders of its class A common stock, in exchange for all of the
outstanding shares of class A common stock, 46.15 shares of class B common
stock and 92.3 shares of class C common stock. These shares were issued
pursuant to the exemption from registration provided by Section 4(2) of the
Securities Act.
On March 30, 1999, Radio One issued approximately 3.3 million shares of
common stock to the shareholders of ROA in connection with Radio One's
acquisition of ROA. These shares were issued pursuant to the exemption from
registration provided by Section 4(2) of the Securities Act.
Item 16. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed as part of this registration
statement.
<TABLE>
<S> <C>
1.1(/5/) Form of Underwriting Agreement
3.1(/6/) Certificate of Incorporation of Radio One, Inc.
3.2(/6/) Amended and Restated By-laws of Radio One, Inc.
4.1(/1/) Indenture dated as of May 15, 1997 among Radio One, Inc., Radio One Licenses,
Inc. and United States Trust Company of New York.
</TABLE>
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(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1998 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
II- 2
<PAGE>
<TABLE>
<S> <C>
4.2(/2/) First Supplemental Indenture dated as of June 30, 1998, to Indenture dated as of
May 15, 1997, by and among Radio One, Inc., as Issuer and United States Trust
Company of New York, as Trustee, by and among Radio One, Inc., Bell Broadcasting
Company, Radio One of Detroit, Inc., and United States Trust Company of New York,
as Trustee.
4.3(/3/) Second Supplemental Indenture dated as of December 23, 1998, to Indenture dated
as of May 15, 1997, by and among Radio One, Inc., as Issuer and United States
Trust Company of New York, as Trustee, by and among Radio One, Inc., Allur-
Detroit, Allur Licenses, Inc., and United States Trust Company of New York, as
Trustee.
4.4(/1/) Purchase Agreement dated as of May 14, 1997 among Radio One, Inc., Radio One
Licenses, Inc., Credit Suisse First Boston Corporation and NationsBanc Capital
Markets, Inc.
4.5(/1/) Registration Rights Agreement dated as of May 14, 1997 among Radio One, Inc.,
Radio One Licenses, Inc., Credit Suisse First Boston Corporation and NationsBanc
Capital Markets, Inc.
4.6(/1/) Standstill Agreement dated as of May 19, 1997 among Radio One, Inc., Radio One
Licenses, Inc., NationsBank of Texas, N.A., United States Trust Company of New
York and the other parties thereto.
4.7(/4/) Standstill Agreement dated as of June 30, 1998 among Radio One, Inc., the
subsidiaries of Radio One, Inc., United States Trust Company of New York and the
other parties thereto.
5.1(/5/) Form of Opinion and consent of Kirkland & Ellis.
8.1(/5/) Form of Opinion and consent of Kirkland & Ellis.
10.1(/1/) Office Lease dated February 3, 1997 between National Life Insurance Company and
Radio One, Inc. for premises located at 5900 Princess Garden Parkway, Lanham,
Maryland, as amended on February 24, 1997.
10.2(/1/) Purchase Option Agreement dated February 3, 1997 between National Life Insurance
Company and Radio One, Inc. for the premises located at 5900 Princess Garden
Parkway, Lanham, Maryland.
10.3(/1/) Office Lease commencing November 1, 1993 between Chalrep Limited Partnership and
Radio One, Inc., with respect to the property located at 100 St. Paul Street,
Baltimore, Maryland.
10.4(/1/) Preferred Stockholders' Agreement dated as of May 14, 1997 among Radio One, Inc.,
Radio One Licenses, Inc. and the other parties thereto.
10.5(/4/) First Amendment to Preferred Stockholders' Agreement dated as of June 30, 1998
among Radio One, Inc., Radio One Licenses, Inc., and the other parties thereto.
10.6(/1/) Warrantholders' Agreement dated as of June 6, 1995, as amended by the First
Amendment to Warrantholders' Agreement dated as of May 19, 1997, among Radio One,
Inc., Radio One Licenses, Inc. and the other parties thereto.
10.7(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Syncom Capital Corporation.
10.8(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Alliance Enterprise Corporation.
10.9(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Greater Philadelphia Venture Capital Corporation, Inc.
10.10(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Opportunity Capital Corporation.
10.11(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Capital Dimensions Venture Fund, Inc.
10.12(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to TSG Ventures Inc.
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1998 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
II-3
<PAGE>
<TABLE>
<S> <C>
10.13(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Fulcrum Venture Capital Corporation.
10.14(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Alta Subordinated Debt Partners III, L.P.
10.15(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to BancBoston Investments, Inc.
10.16(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997, issued
to Grant M. Wilson.
10.17(/4/) Credit agreement dated June 30, 1998 among Radio One, Inc., as the borrower and
NationsBank, N.A., as Documentation Agent and Credit Suisse First Boston as the
Agent.
10.18(/1/) Management Agreement dated as of August 1, 1996 by and between Radio One, Inc.
and Radio One of Atlanta, Inc.
10.19(/1/) Fifth Amendment dated as of July 31, 1997 to that certain Letter of Intent dated
March 12, 1997 by and between Radio One, Inc. and Allied Capital Financial
Corporation, as amended.
10.20(/1/) Sixth Amendment dated as of September 8, 1997 to that certain Letter of Intent
dated March 12, 1997 by and between Radio One, Inc. and Allied Capital Financial
Corporation, as amended.
10.21(/1/) Time Management and Services Agreement dated March 17, 1998, among WYCB
Acquisition Corporation, Broadcast Holdings, Inc., and Radio One, Inc.
10.22(/1/) Stock Purchase Agreement dated December 23, 1997, between the shareholders of
Bell Broadcasting Company and Radio One, Inc.
10.23(/1/) Option and Stock Purchase Agreement dated November 19, 1997, among Allied Capital
Financial Corporation, G. Cabell Williams III, Broadcast Holdings, Inc. and WYCB
Acquisition Corporation.
10.24(/1/) Amended and Restated Warrant of Radio One, Inc., dated January 9, 1998, issued to
TSG Ventures L.P.
10.25(/1/) Stock Purchase Warrant of Radio One, Inc., dated March 16, 1998 issued to Allied
Capital Financial Corporation.
10.26(/1/) Amended and Restated credit agreement dated May 19, 1997 among several lenders,
NationsBank of Texas, N.A. and Radio One, Inc.
10.27(/1/) First Amendment to credit agreement dated December 31, 1997 among several
lenders, NationsBank of Texas, N.A. and Radio One, Inc.
10.28(/1/) Amendment to Preferred Stockholders' Agreement dated as of December 31, 1997
among Radio One, Inc., Radio One Licenses, Inc. and the other parties thereto.
10.29(/1/) Assignment and Assumption Agreement dated October 23, 1997, between Greater
Philadelphia Venture Capital Corporation, Inc. and Alfred C. Liggins, III.
10.30(/1/) Agreement dated February 20, 1998 between WUSQ License Limited Partnership and
Radio One, Inc.
10.31(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Capital Dimensions Venture Fund Inc.
10.32(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Fulcrum Venture Capital Corporation.
10.33(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Syncom Capital Corporation.
10.34(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Alfred C. Liggins, III.
10.35(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to TSG Ventures L.P.
10.36(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Alliance Enterprise Corporation.
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1998 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
II-4
<PAGE>
<TABLE>
<S> <C>
10.37(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Alta Subordinated Debt Partners III, L.P.
10.38(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to BancBoston Investments Inc.
10.39(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998 issued
to Grant M. Wilson.
10.40 Merger Agreement dated as of March 30, 1999 relating to the acquisition of Radio
One of Atlanta, Inc.
10.41 Asset Purchase Agreement dated as of November 23, 1998 (as amended on December 4,
1998) relating to the acquisition of WFUN-FM, licensed to Bethalto, Illinois.
10.42 Asset Purchase Agreement relating to the Acquisition of WENZ-FM and WERE-AM, both
licensed to Cleveland, Ohio.
10.43 Asset Purchase Agreement dated as of February 10, 1999 relating to the
acquisition of WDYL-FM, licensed to Chester, Virginia.
10.44 Asset Purchase Agreement dated as of February 26, 1999 relating to the
acquisition of WJKS-FM, licensed to Crewe Virginia, and WSOJ-FM, licensed
Petersburg, Virginia.
10.45 [Asset Purchase Agreement relating to the acquisition of WCDX-FM, licensed to
Mechanicsville, Virginia, WPLZ-FM, licensed to Petersburg, Virginia, WJRV-FM
licensed to Richmond, Virginia, and WGCV-AM licensed to Petersburg, Virginia.]
10.46(/7/) Stock Purchase Agreement dated as of October 26, 1998, by and between Radio One
and Syndicated Communications Venture Partners, II, L.P.
10.47 Second Amendment to Preferred Stockholders' Agreement dated as of November 23,
1998 among Radio One, Inc., Radio One Licenses, Inc. and the other parties
thereto.
10.48 Third Amendment to Preferred Stockholders' Agreement dated as of December 23,
1998 among Radio One, Inc., Radio One Licenses, Inc. and the other parties
thereto.
10.49 Fourth Amendment to Preferred Stockholders' Agreement dated as of December 31,
1998 among Radio One, Inc., Radio Once Licenses, Inc. and the other parties
thereto.
10.50 Amended and Restated Credit Agreement dated as of February 26, 1999, among Radio
One, Inc., as the borrower, and Nations Bank, N.A., as Administrative Agent, and
Credit Suisse First Boston, as the Documentation Agent.
10.51 Fifth Amendment to Preferred Stockholders' Agreement dated as of February 26,
1999 among Radio One, Inc., Radio One Licenses, Inc. and the other parties
thereto.
21.1(/6/) Subsidiaries of Radio One, Inc.
23.1(/9/) Consent of Arthur Andersen, L.L.P.
23.2(/9/) Consent of Mitchell & Titus, L.L.P.
23.3(/5/) Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.4(/5/) Consent of Kirkland & Ellis (included in Exhibit 8.1).
23.5(/8/) Consent of Larry Marcus
27.1(/9/) Financial Data Schedule (included on pages S1-S3).
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report filed on Form 10-
K for the period ended December 31, 1997 (File No. 333-30795; Film No.
98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1998 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to provisions described in Item 14 above, or otherwise, the
registrant has been advised that in the opinion of the SEC such indemnification
is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer
II-5
<PAGE>
or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form
of prospectus filed by the registrant pursuant to Rule 424 (b) (1) or (4)
or 497 (h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes to provide to the underwriters
at the closing specified in the Underwriting Agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in Lanham, Maryland on
April 14, 1999.
RADIO ONE, INC.
BY: /s/ Alfred C. Liggins, III
----------------------------------
Name: Alfred C. Liggins, III
Title:
President and Chief Executive
Officer
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed on behalf of the following persons by
Scott R. Royster, their true and lawful attorney, on the date indicated.
Radio One, Inc.
<TABLE>
<CAPTION>
Signature Title(s) Date
--------- -------- ----
<S> <C> <C>
_/s/ Catherine L. Hughes__ Chairperson of the Board of Directors April 14, 1999
Catherine L. Hughes
____/s/ Terry L. Jones____ Director April 14, 1999
Terry L. Jones
___/s/ Brian W. McNeill___ Director April 14, 1999
Brian W. McNeill
/s/ Alfred C. Liggins, III President and Chief Executive Officer April 14, 1999
Alfred C. Liggins, III (Principal Executive Officer)
and Director
___/s/ Scott R. Royster___ Executive Vice President and April 14, 1999
Scott R. Royster Chief Financial Officer
(Principal Financial and
Accounting Officer)
</TABLE>
II-8
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
1.1(/5/) Form of Underwriting Agreement
3.1(/6/) Certificate of Incorporation of Radio One, Inc.
3.2(/6/) Amended and Restated By-laws of Radio One, Inc.
4.1(/1/) Indenture dated as of May 15, 1997 among Radio One, Inc., Radio One Licenses,
Inc. and United States Trust Company of New York.
4.2(/2/) First Supplemental Indenture dated as of June 30, 1998, to Indenture dated as
of May 15, 1997, by and among Radio One, Inc., as Issuer and United States
Trust Company of New York, as Trustee, by and among Radio One, Inc., Bell
Broadcasting Company, Radio One of Detroit, Inc., and United States Trust
Company of New York, as Trustee.
4.3(/3/) Second Supplemental Indenture dated as of December 23, 1998, to Indenture dated
as of May 15, 1997, by and among Radio One, Inc., as Issuer and United States
Trust Company of New York, as Trustee, by and among Radio One, Inc., Allur-
Detroit, Allur Licenses, Inc., and United States Trust Company of New York, as
Trustee.
4.4(/1/) Purchase Agreement dated as of May 14, 1997 among Radio One, Inc., Radio One
Licenses, Inc., Credit Suisse First Boston Corporation and NationsBanc Capital
Markets, Inc.
4.5(/1/) Registration Rights Agreement dated as of May 14, 1997 among Radio One, Inc.,
Radio One Licenses, Inc., Credit Suisse First Boston Corporation and
NationsBanc Capital Markets, Inc.
4.6(/1/) Standstill Agreement dated as of May 19, 1997 among Radio One, Inc., Radio One
Licenses, Inc., NationsBank of Texas, N.A., United States Trust Company of New
York and the other parties thereto.
4.7(/4/) Standstill Agreement dated as of June 30, 1998 among Radio One, Inc., the
subsidiaries of Radio One, Inc., United States Trust Company of New York and
the other parties thereto.
5.1(/5/) Form of Opinion and consent of Kirkland & Ellis.
8.1(/5/) Form of Opinion and consent of Kirkland & Ellis.
10.1(/1/) Office Lease dated February 3, 1997 between National Life Insurance Company and
Radio One, Inc. for premises located at 5900 Princess Garden Parkway, Lanham,
Maryland, as amended on February 24, 1997.
10.2(/1/) Purchase Option Agreement dated February 3, 1997 between National Life
Insurance Company and Radio One, Inc. for the premises located at 5900 Princess
Garden Parkway, Lanham, Maryland.
10.3(/1/) Office Lease commencing November 1, 1993 between Chalrep Limited Partnership
and Radio One, Inc., with respect to the property located at 100 St. Paul
Street, Baltimore, Maryland.
10.4(/1/) Preferred Stockholders' Agreement dated as of May 14, 1997 among Radio One,
Inc., Radio One Licenses, Inc. and the other parties thereto.
10.5(/4/) First Amendment to Preferred Stockholders' Agreement dated as of June 30, 1998
among Radio One, Inc., Radio One Licenses, Inc., and the other parties thereto.
<CAPTION>
Page
----------- ----
<C>
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1999 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 Filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<C> <S>
10.6(/1/) Warrantholders' Agreement dated as of June 6, 1995, as amended by the First
Amendment to Warrantholders' Agreement dated as of May 19, 1997, among Radio
One, Inc., Radio One Licenses, Inc. and the other parties thereto.
10.7(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Syncom Capital Corporation.
10.8(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Alliance Enterprise Corporation.
10.9(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Greater Philadelphia Venture Capital Corporation, Inc.
10.10(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Opportunity Capital Corporation.
10.11(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Capital Dimensions Venture Fund, Inc.
10.12(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to TSG Ventures Inc.
10.13(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Fulcrum Venture Capital Corporation.
10.14(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Alta Subordinated Debt Partners III, L.P.
10.15(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to BancBoston Investments, Inc.
10.16(/1/) Amended and Restated Warrant of Radio One, Inc. dated as of May 19, 1997,
issued to Grant M. Wilson.
10.17(/4/) Credit agreement dated June 30, 1998 among Radio One, Inc., as the borrower and
NationsBank, N.A., as Documentation Agent and Credit Suisse First Boston as the
Agent.
10.18(/1/) Management Agreement dated as of August 1, 1996 by and between Radio One, Inc.
and Radio One of Atlanta, Inc.
10.19(/1/) Fifth Amendment dated as of July 31, 1997 to that certain Letter of Intent
dated March 12, 1997 by and between Radio One, Inc. and Allied Capital
Financial Corporation, as amended.
10.20(/1/) Sixth Amendment dated as of September 8, 1997 to that certain Letter of Intent
dated March 12, 1997 by and between Radio One, Inc. and Allied Capital
Financial Corporation, as amended.
10.21(/1/) Time Management and Services Agreement dated March 17, 1998, among WYCB
Acquisition Corporation, Broadcast Holdings, Inc., and Radio One, Inc.
10.22(/1/) Stock Purchase Agreement dated December 23, 1997, between the shareholders of
Bell Broadcasting Company and Radio One, Inc.
10.23(/1/) Option and Stock Purchase Agreement dated November 19, 1997, among Allied
Capital Financial Corporation, G. Cabell Williams III, Broadcast Holdings, Inc.
and WYCB Acquisition Corporation.
10.24(/1/) Amended and Restated Warrant of Radio One, Inc., dated January 9, 1998, issued
to TSG Ventures L.P.
<CAPTION>
Page
----------- ----
<C>
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1999 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 Filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
<PAGE>
<TABLE>
<CAPTION>
Exhib No. Description
---------- -----------
<C> <S>
10.25(/1/) Stock Purchase Warrant of Radio One, Inc., dated March 16, 1998 issued to
Allied Capital Financial Corporation.
10.26(/1/) Amended and Restated credit agreement dated May 19, 1997 among several lenders,
NationsBank of Texas, N.A. and Radio One, Inc.
10.27(/1/) First Amendment to credit agreement dated December 31, 1997 among several
lenders, NationsBank of Texas, N.A. and Radio One, Inc.
10.28(/1/) Amendment to Preferred Stockholders' Agreement dated as of December 31, 1997
among Radio One, Inc., Radio One Licenses, Inc. and the other parties thereto.
10.29(/1/) Assignment and Assumption Agreement dated October 23, 1997, between Greater
Philadelphia Venture Capital Corporation, Inc. and Alfred C. Liggins, III.
10.30(/1/) Agreement dated February 20, 1998 between WUSQ License Limited Partnership and
Radio One, Inc.
10.31(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Capital Dimensions Venture Fund Inc.
10.32(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Fulcrum Venture Capital Corporation.
10.33(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Syncom Capital Corporation.
10.34(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Alfred C. Liggins, III.
10.35(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to TSG Ventures L.P.
10.36(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Alliance Enterprise Corporation.
10.37(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Alta Subordinated Debt Partners III, L.P.
10.38(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to BancBoston Investments Inc.
10.39(/4/) Amended and Restated Warrant of Radio One, Inc. dated as of June 30, 1998
issued to Grant M. Wilson.
10.40 Merger Agreement dated as of March 30, 1999 relating to the acquisition of
Radio One of Atlanta, Inc.
10.41 Asset Purchase Agreement dated as of November 23, 1998 (as amended on December
4, 1998) relating to the acquisition of WFUN-FM, licensed to Bethalto,
Illinois.
10.42 Asset Purchase Agreement relating to the Acquisition of WENZ-FM and WERE-AM,
both licensed to Cleveland, Ohio.
10.43 Asset Purchase Agreement dated as of February 10, 1999 relating to the
acquisition of WDYL-FM, licensed to Chester, Virginia.
10.44 Asset Purchase Agreement dated as of February 26, 1999 relating to the
acquisition of WJKS-FM, licensed to Crewe Virginia, and WSOJ-FM, licensed
Petersburg, Virginia.
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1999 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 Filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
<PAGE>
<TABLE>
<CAPTION>
Exhib No. Description
---------- -----------
<C> <S>
10.45(/5/) [Asset Purchase Agreement relating to the acquisition of WCDX-FM, licensed to
Mechanicsville, Virginia, WPLZ-FM, licensed to Petersburg, Virginia, WJRV-FM
licensed to Richmond, Virginia, and WGCV-AM licensed to Petersburg, Virginia.]
10.46(/7/) Stock Purchase Agreement dated as of October 26, 1998, by and between Radio One
and Syndicated Communications Venture Partners, II, L.P.
10.47 Second Amendment to Preferred Stockholders' Agreement dated as of November 23,
1998 among Radio One, Inc., Radio One Licenses, Inc. and the other parties
thereto.
10.48 Third Amendment to Preferred Stockholders' Agreement dated as of December 23,
1998 among Radio One, Inc., Radio One Licenses, Inc. and the other parties
thereto.
10.49 Fourth Amendment to Preferred Stockholders' Agreement dated as of December 31,
1998 among Radio One, Inc., Radio Once Licenses, Inc. and the other parties
thereto.
10.50 Amended and Restated Credit Agreement dated as of February 26, 1999, among
Radio One, Inc., as the borrower, Nations Bank, N.A., as the Administrative
Agent, and Credit Suisse First Boston, as the Documentation Agent.
10.51 Fifth Amendment to Preferred Stockholders' Agreement dated as of February 26,
1999 among Radio One, Inc., Radio One Licenses, Inc. and other parties thereto.
21.1(/6/) Subsidiaries of Radio One, Inc.
23.1(/9/) Consent of Arthur Andersen, L.L.P.
23.2(/9/) Consent of Mitchell & Titus, L.L.P.
23.3(/5/) Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.4(/5/) Consent of Kirkland & Ellis (included in Exhibit 8.1).
23.5(/8/) Consent of Larry Marcus.
27.1(/9/) Financial Data Schedule (included on pages S1-S3).
</TABLE>
- --------
(1) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327).
(2) Incorporated by reference to Radio One's Current Report on Form 8-K
filed July 13, 1998 (File No. 333-30795; Film No. 98665139).
(3) Incorporated by reference to Radio One's Current Report on Form 8-K
filed January 12, 1999 (File No. 333-30795; Film No. 99504706).
(4) Incorporated by reference to Radio One's Quarterly Report on Form 10-Q
for the period ended June 30, 1998 (File No. 333-30795; Film No. 98688998).
(5) To be filed by Amendment to this Registration Statement on Form S-1.
(6) Previously filed with Radio One's Registration Statement on Form S-1
filed on March 12, 1999 (File No. 333-74351; Film No. 99564316).
(7) Incorporated by reference to Radio One's Annual Report on Form 10-K for
the period ended December 31, 1999 (File No. 333-30795; Film No. 99581532).
(8) Incorporated by reference to Radio One's Amendment No. 1 to its
Registration Statement on Form S-1 Filed April 6, 1999 (File No. 333-74351;
Film No. 99588274).
(9) Incorporated by reference to Radio One's Amendment No. 2 to its
Registration Statement on Form S-1 filed April 13, 1999 (File No. 333-74351;
Film No. 99593007).
<PAGE>
Exhibit 10.40
================================================================================
MERGER AGREEMENT
By and Among
RADIO ONE, INC.
as "Parent"
ROA MERGER SUBSIDIARY, INC.
ALTA SUBORDINATED DEBT PARTNERS III, L.P.,
ALLIED CAPITAL CORPORATION,
ALLIED INVESTMENT CORPORATION,
SYNDICATED COMMUNICATIONS VENTURE PARTNERS II, L.P.,
MARY CATHERINE SNEED
and
ALFRED C. LIGGINS, III
as "Stockholders"
and
RADIO ONE OF ATLANTA, INC.
-----------------------
MARCH 30, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. Definitions........................................................ 1
-----------
2. Basic Transaction.................................................. 5
-----------------
(a) The Merger.................................................. 5
----------
(b) The Closing................................................. 5
-----------
(c) Actions at the Closing...................................... 5
----------------------
(d) Effect of Merger............................................ 6
----------------
3. Representations and Warranties Concerning the Transaction.......... 7
---------------------------------------------------------
(a) Representations and Warranties of the Stockholders.......... 7
--------------------------------------------------
(b) Representations and Warranties of the Parent................ 8
--------------------------------------------
4. Representations and Warranties Concerning the Company and Its
-------------------------------------------------------------
Subsidiaries....................................................... 10
------------
(a) Organization, Qualification, and Corporate Power............ 11
------------------------------------------------
(b) Capitalization.............................................. 11
--------------
(c) Noncontravention............................................ 11
----------------
(d) Title to Assets............................................. 12
---------------
(e) Subsidiaries................................................ 12
------------
(f) Financial Statements........................................ 13
--------------------
(g) Events Subsequent to Most Recent Fiscal Month End........... 13
-------------------------------------------------
(h) Undisclosed Liabilities..................................... 14
-----------------------
(i) Legal Compliance............................................ 15
----------------
(j) Tax Matters................................................. 15
-----------
(k) Tangible Assets............................................. 15
---------------
(l) Litigation.................................................. 15
----------
(m) Disclosure.................................................. 15
----------
(n) Continuity of Business Enterprise........................... 15
---------------------------------
(o) Continuity of Shareholder Interest.......................... 16
----------------------------------
(p) Reorganization.............................................. 16
--------------
5. Pre-Closing Covenants.............................................. 16
---------------------
(a) General..................................................... 16
-------
(b) Notices and Consents........................................ 16
--------------------
(c) Exclusivity................................................. 17
-----------
(d) Waiver of Rights............................................ 17
----------------
(e) Agreement to Vote........................................... 17
-----------------
(f) Substantially All of Company's Assets....................... 17
-------------------------------------
(g) Reorganization.............................................. 18
--------------
6. Post-Closing Covenants............................................. 18
----------------------
(a) General..................................................... 18
-------
(b) Litigation Support.......................................... 18
------------------
(c) Certain Taxes............................................... 18
-------------
(d) Reorganization.............................................. 18
--------------
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C> <C>
7. Conditions to Obligation to Close.................................. 19
---------------------------------
(a) Conditions to Obligation of the Parent...................... 19
--------------------------------------
(b) Conditions to Obligation of the Stockholders................ 21
--------------------------------------------
8. Remedies for Breaches of This Agreement............................ 22
---------------------------------------
(a) Survival of Representations and Warranties................... 22
------------------------------------------
(b) Indemnification Provisions for Benefit of the Parent......... 22
----------------------------------------------------
(c) Indemnification Provisions for Benefit of the Stockholders... 23
----------------------------------------------------------
(d) Matters Involving Third Parties.............................. 23
-------------------------------
(e) Determination of Adverse Consequences........................ 24
-------------------------------------
(f) Exclusive Remedy............................................. 24
----------------
9. Termination........................................................ 24
-----------
(a) Termination of Agreement.................................... 24
------------------------
(b) Effect of Termination....................................... 25
---------------------
10. Miscellaneous......................................................... 25
-------------
(a) Nature of Certain Obligations.................................. 25
-----------------------------
(b) Press Releases and Public Announcements........................ 25
---------------------------------------
(c) No Third-Party Beneficiaries................................... 25
----------------------------
(d) Entire Agreement............................................... 26
----------------
(e) Succession and Assignment...................................... 26
-------------------------
(f) Counterparts................................................... 26
------------
(g) Headings....................................................... 26
--------
(h) Notices........................................................ 26
-------
(i) Governing Law.................................................. 28
-------------
(j) Amendments and Waivers......................................... 28
----------------------
(k) Severability................................................... 28
------------
(l) Expenses....................................................... 28
--------
(m) Construction................................................... 29
------------
(n) Incorporation of Exhibits, Annexes, and Schedules.............. 29
-------------------------------------------------
</TABLE>
Exhibit A -- Certificate of Merger
Exhibit B -- Historical Financial Statements
Exhibit C -- Form of Registration Rights Agreements
Exhibit D -- Form of Pledge Agreement - Alta and Syncom
Exhibit E -- Form of Pledge Agreement - Mary Catherine Sneed
Exhibit F -- Form of Warrant - Alta, Syncom, Liggins and Mary Catherine Sneed
Exhibit G -- Form of Warrant - Allied Capital Entities
Disclosure Schedule--Exceptions to Representations and Warranties Concerning
Radio One of Atlanta, Inc.
(ii)
<PAGE>
MERGER AGREEMENT
Agreement entered into on March ___, 1999, by and among Radio One, Inc., a
Delaware corporation (the "Parent"), ROA Merger Subsidiary, Inc., a Delaware
corporation ("Transitory Subsidiary"), Alta Subordinated Debt Partners III,
L.P., Allied Capital Corporation, Allied Investment Corporation, Syndicated
Communications Venture Partners II, L.P., Mary Catherine Sneed and Alfred C.
Liggins, III (collectively the "Stockholders"), and Radio One of Atlanta, Inc.,
a Delaware corporation (the "Company"). The Parent, Transitory Subsidiary, the
Company and the Stockholders are referred to collectively herein as the
"Parties".
The Stockholders in the aggregate own all of the outstanding capital stock
of the Company.
This Agreement contemplates a transaction in which the Parent will acquire
all of the outstanding capital stock of the Company in exchange for cash and the
capital stock of Parent through a reverse subsidiary merger of Transitory
Subsidiary with and into the Company (the "Merger").
For federal income tax purposes, it is intended that the Merger will
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended.
Now, therefore, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows.
1. Definitions.
------------
"Accredited Investor" has the meaning set forth in Regulation D promulgated
under the Securities Act.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, reasonable
amounts paid in settlement, liabilities, obligations, taxes, liens, losses,
expenses, and fees, including court costs and reasonable attorneys' fees and
expenses.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Allied Capital Entities" means Allied Capital Corporation and Allied
Investment Corporation.
"Allied Stock Pledge Agreement" means the Stock Pledge Agreement made as of
March 31, 1997, by Liggins and the Company in favor of the Allied Capital
Entities, as amended by Amendment No. 1 thereto made as of September 30, 1998.
<PAGE>
"Applicable Rate" means the corporate base rate of interest publicly
announced from time to time by Bank of America, N.A. plus 1% per annum.
"Alta" means Alta Subordinated Debt Partners III, L.P.
"Certificate of Merger" has the meaning set forth in (S)2(c), below.
"Class A Common Stock" means Company's Class A Common Stock, par value
$1.00 per share.
"Class B Common Stock" means the Company's Class B Common Stock, par value
$1.00 per share.
"Closing" has the meaning set forth in (S)2(b), below.
"Closing Date" has the meaning set forth in (S)2(b), below.
"Company" has the meaning set forth in the preface above.
"Company Share" means any share of the Company's Class A Common Stock, par
value $1.00 per share, or Class B Common Stock, par value $1.00 per share.
"Communications Act" means the Communications Act of 1934, as amended.
"Disclosure Schedule" has the meaning set forth in (S)4 below.
"Effective Time" has the meaning set forth in (S)2(d), below.
"Exchange Agreement" means the Exchange and Amendment Agreement dated as of
April 7, 1997 among Alta, Syncom, the Company, Liggins and Dogwood
Communications, Inc.
"FCC" means the Federal Communications Commission.
"Financial Statement" has the meaning set forth in (S)4(f), below.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time.
"Hart-Scott-Rodino Act" means the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
"Income Tax" means any federal, state, local, or foreign income tax,
including any interest, penalty, or addition thereto, whether disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
-2-
<PAGE>
"Indemnified Party" has the meaning set forth in (S)8(d), below.
"Indemnifying Party" has the meaning set forth in (S)8(d), below.
"Intellectual Property" means (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium).
"Investors' Shareholders Agreement" means the Investors' Shareholders
Agreement dated as of March 31, 1997, among the Company, Liggins, Alta, the
Allied Capital Entities and Syncom.
"Knowledge" means actual knowledge after reasonable investigation.
"Liggins" means Alfred C. Liggins, III.
"Merger" has the meaning set forth in (S)2(a), below.
"Merger Consideration" has the meaning set forth in (S)2(d)(vi), below.
"Most Recent Balance Sheet" means the balance sheet contained within the
Most Recent Financial Statements.
"Most Recent Financial Statements" has the meaning set forth in (S)4(f)
below.
"Most Recent Fiscal Month End" has the meaning set forth in (S)4(f) below.
"Most Recent Fiscal Year End" has the meaning set forth in (S)4(f) below.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency).
"Parent" has the meaning set forth in the preface above.
"Parent Capital Stock" has the meaning set forth in (S)3(b)(v), below.
-3-
<PAGE>
"Parent Class A Shares" has the meaning set forth in (S)2(a), below.
"Parent Class B Shares" has the meaning set forth in (S)2(a), below.
"Parent Shares" means the Parent Class A Shares and the Parent Class B
Shares.
"Party" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, an association,
a joint stock company, a trust, a joint venture, an unincorporated organization,
or a governmental entity (or any department, agency, or political subdivision
thereof).
"Requisite Stockholders" means Liggins and the holders of at least fifty-
one percent (51%) of the Company's capital stock held by Alta, the Allied
Capital Entities and Syncom.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance, charge,
or other security interest, other than (a) mechanic's, materialmen's, and
similar liens, (b) liens for taxes not yet due and payable or for taxes that the
taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Stockholders" has the meaning set forth in the preface above.
"Senior Lenders" means the several lenders parties with the Parent to the
Credit Agreement dated as of June 30, 1998, and amended as of December 23, 1998,
as such Credit Agreement may be further amended, modified, restated,
supplemented, renewed, extended, increased, rearranged and/or substituted from
time to time.
"Senior Preferred Stock" means the Parent's Series A and Series B 15%
Senior Cumulative Redeemable Preferred Stock.
"Subsidiary" means any corporation with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient securities to elect a majority of the
directors.
"Surviving Corporation" has the meaning set forth in (S)2(a), below.
"Syncom" means Syndicated Communications Venture Partners II, L.P.
"Third Party Claim" has the meaning set forth in (S)8(d), below.
-4-
<PAGE>
"Transfer of Control Application" means the application on FCC Form 314
that Parent filed with the FCC on October 1, 1998 requesting its consent to the
transfer of control of Company to Parent and assignment of Company's licenses to
a wholly-owned Subsidiary of Company.
"Transitory Subsidiary" has the meaning set forth in the preface above.
"Warrant" means a warrant exercisable for Parent Shares in the form
attached hereto as Exhibit F (in the case of Alta, Syncom, Liggins and Mary
Catherine Sneed) or Exhibit G (in the case of the Allied Capital Entities).
2. Basic Transaction.
-----------------
(a) The Merger. On and subject to the terms and conditions of this
----------
Agreement, the Transitory Subsidiary will merge with and into the
Company (the "Merger") at the Effective Time. The Company shall be the
corporation surviving the Merger (the "Surviving Corporation").
(b) The Closing. The closing of the transactions contemplated by this
-----------
Agreement (the "Closing") shall take place at the offices of Kirkland &
Ellis in Washington, D.C., commencing at 9:00 a.m. local time on the
second business day following the satisfaction or waiver of all
conditions to the obligations of the Parties to consummate the
transactions contemplated hereby (other than conditions with respect to
actions the respective Parties will take at the Closing itself) or such
other date as the Parties may mutually determine (the "Closing Date");
provided, however, that the Closing Date shall be no later than April
-------- -------
30, 1999.
(c) Actions at the Closing. At the Closing, (i) each of the Stockholders
----------------------
will deliver to the Parent and the Transitory Subsidiary the various
certificates, instruments, and documents required to be delivered by
such Stockholder pursuant to (S)7(a) below, (ii) the Parent and the
Transitory Subsidiary will deliver to the Stockholders the various
certificates, instruments, and documents referred to in (S)7(b) below,
(iii) the Company and the Transitory Subsidiary will file with the
Secretary of State of the State of Delaware a Certificate of Merger in
the form attached hereto as Exhibit A (the "Certificate of Merger"),
(iv) the Parent will cause the Surviving Corporation to deliver to each
of the Stockholders the Merger Consideration provided below in this
(S)2, and (v) each of the Stockholders will deliver to the Parent stock
certificates representing all of his, her, or its Company Shares,
endorsed in blank or accompanied by duly executed assignment
documents.
(d) Effect of Merger.
----------------
(i) General. The Merger shall become effective at the time (the
--------
"Effective Time") the Company and the Transitory Subsidiary file
the Certificate of Merger with the Secretary of State of the State
of Delaware. The Merger shall have the effect set forth in the
Delaware General Corporation Law. The Surviving Corporation may, at
any time after the Effective Time, take any action (including
executing and delivering any document) in the name and on behalf
-5-
<PAGE>
of either the Company or the Transitory Subsidiary in order to
carry out and effectuate the transactions contemplated by this
Agreement.
(ii) Certificate of Incorporation. The Certificate of Incorporation of
----------------------------
the Company shall be the Certificate of Incorporation of the
Surviving Corporation.
(iii) Bylaws. The Bylaws of the Company shall be the Bylaws of the
------
Surviving Corporation.
(iv) Directors and Officers. The directors and officers of the
----------------------
Company shall remain as the directors and officers of the
Surviving Corporation.
(v) Conversion of Capital Stock of the Transitory Subsidiary. At and
--------------------------------------------------------
as of the Effective Time, each share of Common Stock, $.01 par
value per share, of the Transitory Subsidiary shall be converted
into one share of Common Stock, $.01 par value per share, of the
Surviving Corporation.
(vi) Conversion of Company Shares. At and as of the Effective Time,
----------------------------
(A) each share of Class A Common Stock shall be converted into
the right to receive (I) nine-hundred sixty-two thousand two-
hundred eighteen hundred millionths (0.00962218) of a share of
Class A Common Stock, par value $.01 per share, of Parent (the
"Parent Class A Shares"), and (II) a Warrant exercisable for
thirty-nine thousand three-hundred thirty-four hundred millionths
(0.00039334) of a Parent Class A Share, and (B) each share of
Class B Common Stock shall be converted into the right to receive
(I) nine-hundred sixty-two thousand two-hundred eighteen hundred
millionths (0.00962218) of a share of Class B Common Stock, par
value $.01 per share, of Parent (the "Parent Class B Shares"),
(II) a Warrant exercisable for thirty-nine thousand three-hundred
thirty-four hundred millionths (0.00039334) of a Parent Class B
Share, and (III) cash in the amount of $302.27 (the consideration
described in this (S)2(d)(vi), the "Merger Consideration"). No
Company Share shall be deemed to be outstanding or to have any
rights other than those set forth in this (S)2(d)(vi) after the
Effective Time.
3. Representations and Warranties Concerning the Transaction.
----------------------------------------------------------
(a) Representations and Warranties of the Stockholders. Each of the
---------------------------------------------------
Stockholders represents and warrants to the Parent that the statements
contained in this (S)3(a) are correct and complete in all material
respects as of the date of this Agreement and will be correct and
complete in all material respects as of the Closing Date (as though
made then and as though the Closing Date were substituted for the date
of this Agreement throughout this (S)3(a)) with respect to himself,
herself or itself.
(i) Organization of Certain Stockholders. If such Stockholder is a
-------------------------------------
corporation, such Stockholder is duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation.
-6-
<PAGE>
(ii) Authorization of Transaction. Such Stockholder has full power
-----------------------------
and authority (including, if the Stockholder is a corporation,
full corporate power and authority) to execute and deliver this
Agreement and to perform his, her or its obligations hereunder.
This Agreement constitutes the valid and legally binding
obligation of such Stockholder, enforceable in accordance with
its terms and conditions. Except for the Transfer of Control
Application and filings required pursuant to the Hart-Scott-
Rodino Act, such Stockholder need not give any notice to, make
any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
-----------------
this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which the Stockholder is subject or, if such
Stockholder is a corporation, any provision of its charter or
bylaws or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require
any notice under any material agreement, contract, lease,
license, instrument, or other arrangement to which the
Stockholder is a party or by which he, she or it is bound or to
which any of his, her or its assets is subject.
(iv) Brokers' Fees. Such Stockholder has no liability or obligation
--------------
to pay any fees or commissions to any broker, finder, or agent
with respect to the transactions contemplated by this Agreement
for which the Parent could become liable or obligated.
(v) Company Shares. Such Stockholder holds of record and owns
---------------
beneficially the number of Company Shares set forth next to his,
her or its name in (S)4(b) of the Disclosure Schedule, free and
clear of any restrictions on transfer (other than any
restrictions under the Securities Act and state securities laws),
taxes, Security Interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands, in each
case, except as provided in the Investors' Shareholders
Agreement, and, with respect to the Company Shares held by
Liggins, the Allied Stock Pledge Agreement and the Exchange
Agreement. Such Stockholder is not a party to any option,
warrant, purchase right, or other contract or commitment that
could require such Stockholder to sell, transfer, or otherwise
dispose of any capital stock of the Company (other than this
Agreement and the Investors' Shareholders Agreement and, with
respect to the Company Shares held by Liggins, the Allied Stock
Pledge Agreement and the Exchange Agreement). Such Stockholder is
not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of
the Company other than the Investors' Shareholders Agreement.
-7-
<PAGE>
(vi) Investment. Each Stockholder (A) understands that the Parent
-----------
Shares have not been, and will not be, registered under the
Securities Act, or under any state securities laws, and are
being offered and sold in reliance upon federal and state
exemptions for transactions not involving any public offering,
(B) is acquiring the Parent Shares solely for his, her or its
own account for investment purposes, and not with a view to the
distribution thereof, (C) is a sophisticated investor with
knowledge and experience in business and financial matters, and
(D) has received certain information concerning the Parent and
has had the opportunity to obtain additional information as
desired in order to evaluate the merits and the risks inherent
in owning the Parent Shares.
(vii) Continuity of Shareholder Interest. Prior to the Merger,
----------------------------------
such Stockholder did not have any portion of such Stockholder's
Company interest redeemed by the Company, or receive an
extraordinary distribution with respect to its Company interest,
and no corporation related to the Company within the meaning of
Treasury Regulations Section 1.368-1(e)(3)(i)(B) acquired any
stock of the Company held by such Stockholder, where such
disposition or acquisition would reduce the aggregate fair
market value of the Parent Shares to be received by such
Stockholder (with such fair market value measured as of the
Effective Time) to an amount less than fifty percent (50%) of
the aggregate fair market value of the Company's stock
determined immediately before any of such distributions,
dispositions, or acquisitions.
(viii) Reorganization. Such Stockholder has no plan or intention
--------------
to take any action that would cause the Merger not to qualify
and continue to qualify as a reorganization under Section 368(a)
of the Code.
(b) Representations and Warranties of the Parent. The Parent represents
---------------------------------------------
and warrants to the Stockholders that the statements contained in this
(S)3(b) are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made
then and as though the Closing Date were substituted for the date of
this Agreement throughout this (S)3(b)).
(i) Organization of the Parent and the Transitory Subsidiary. Each of
--------------------------------------------------------
the Parent and the Transitory Subsidiary is a corporation duly
organized, validly existing, and in good standing under the laws
of the jurisdiction of its incorporation.
(ii) Authorization of Transaction. Each of the Parent and the
----------------------------
Transitory Subsidiary has full power and authority (including full
corporate power and authority) to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement
constitutes the valid and legally binding obligation of the Parent
and the Transitory Subsidiary, enforceable in accordance with its
terms and conditions. Except for the Transfer of Control
Application and filings required pursuant to the Hart-Scott-Rodino
Act, the Parent and the Transitory Subsidiary need not give any
notice to,
-8-
<PAGE>
make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to
consummate the transactions contemplated by this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
-----------------
this Agreement, nor the consummation of the transactions
contemplated hereby, will (A) violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling,
charge, or other restriction of any government, governmental
agency, or court to which the Parent or the Transitory Subsidiary
is subject or any provision of its charter or bylaws or (B)
conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or
other arrangement to which the Parent or the Transitory Subsidiary
is a party or by which it is bound or to which any of its assets
is subject, except for such conflicts as will be waived and such
notices that will be given prior to the Closing Date.
(iv) Brokers' Fees. Neither the Parent nor the Transitory Subsidiary
-------------
has any liability or obligation to pay any fees or commissions to
any broker, finder, or agent with respect to the transactions
contemplated by this Agreement for which any Stockholder could
become liable or obligated.
(v) Capitalization. The entire authorized capital stock of the Parent
---------------
consists of: (i) 140,000 shares of 15% Series A Cumulative
Redeemable Preferred Stock, par value $.01 per share, of which
124,467.10 shares are issued and outstanding; (ii) 150,000 shares
of 15% Series B Cumulative Redeemable Preferred Stock, par value
$.01 per share, of which 84,843.03 shares are issued and
outstanding, and 4,000 shares of which are issuable pursuant to a
warrant outstanding as of the date hereof; (iii) 1,000 shares of
Class A Common Stock, par value $.01 per share, none of which are
issued and outstanding, 147.04 shares of which are issuable
pursuant to warrants outstanding as of the date hereof, and 60.39
shares of which are issuable pursuant to the terms, and subject to
the conditions, of this Agreement (including pursuant to the
Warrants constituting a portion of the Merger Consideration); (iv)
1,000 shares of Class B Common Stock, par value $.01 per share, of
which 46.15 shares are issued and outstanding, and 39.76 shares of
which are issuable pursuant to the terms, and subject to the
conditions of this Agreement (including pursuant to the Warrants
constituting a portion of the Merger Consideration); and (v) 1,000
shares of Class C Common Stock, par value $.01 per share, of which
93.80 shares are issued and outstanding, (all such shares of
capital stock are referred to herein as the "Parent Capital
Stock"). All of the issued and outstanding shares of Parent
Capital Stock have been duly authorized, and are validly issued,
fully paid, and nonassessable. Except as described above, and
except as provided in Parent's Amended and Restated Certificate of
Incorporation, there are no outstanding or authorized options,
warrants, purchase rights, subscription rights,
-9-
<PAGE>
conversion rights, exchange rights, or other contracts or
commitments that could require the Parent to issue, sell, or
otherwise cause to become outstanding any of its capital stock.
There are no outstanding or authorized stock appreciation, phantom
stock, profit participation, or similar rights with respect to the
Parent. Except for the Stockholders Agreement dated as of March 2,
1999, among Liggins and Catherine L. Hughes, there are no voting
trusts, proxies, or other agreements or understandings with
respect to the voting of the capital stock of the Parent.
(vi) Continuity of Business Enterprise. It is the present intention
---------------------------------
of the Parent to continue at least one significant historic
business line of the Company, or to use at least a significant
portion of the Company's historic assets in a business, in each
case within the meaning of Treasury Regulations Section 1.368-
1(d). In addition, the Parent has no plan or intention to transfer
the stock of the Company following the Merger to (i) a corporation
that is not a member of the Parent's "qualified group" within the
meaning of Treasury Regulations Section 1.368-1(d)(4)(ii), or (ii)
a partnership (including any entity classified as such for federal
income tax purposes).
(vii) Reorganization. The Parent has no plan or intention to take
--------------
any action that would cause the Merger not to qualify and continue
to qualify as a reorganization under Section 368(a) of the Code.
4. Representations and Warranties Concerning the Company and Its Subsidiaries.
---------------------------------------------------------------------------
The Company represents and warrants to the Parent that the statements
contained in this (S)4 are correct and complete as of the date of this
Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the
date of this Agreement throughout this (S)4), except as set forth in the
disclosure schedule delivered by the Company to the Parent on the date
hereof (the "Disclosure Schedule"). The Disclosure Schedule will be
arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this (S)4.
(a) Organization, Qualification, and Corporate Power. Each of the Company
-------------------------------------------------
and its Subsidiaries is a corporation duly organized, validly existing,
and in good standing under the laws of the jurisdiction of its
incorporation. Each of the Company and its Subsidiaries is duly
authorized to conduct business and is in good standing under the laws
of each jurisdiction where such qualification is required, except where
the lack of such qualification would not have a material adverse effect
on the business, financial condition, operations, results of
operations, or future prospects of the Company and its Subsidiaries.
Each of the Company and its Subsidiaries has full corporate power and
authority to carry on the businesses in which it is engaged and to own
and use the properties owned and used by it. (S)4(a) of the Disclosure
Schedule lists the directors and officers of each of the Company and
its Subsidiaries.
(b) Capitalization. The entire authorized capital stock of the Company
---------------
consists of 14,670 shares of common stock, par value $1.00, of which
10,000 shares are Class A Common Stock and 3,970 shares are Class B
Common Stock, of which 6,030
-10-
<PAGE>
shares of Class A Common Stock are issued and outstanding and 3,970
shares of Class B Common Stock are issued and outstanding. All of the
issued and outstanding Company Shares have been duly authorized, are
validly issued, fully paid, and nonassessable. There are no
outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require the Company to issue,
sell, or otherwise cause to become outstanding any of its capital
stock. There are no outstanding or authorized stock appreciation,
phantom stock, profit participation, or similar rights with respect to
the Company. There are no voting trusts, proxies, or other agreements
or understandings with respect to the voting of the capital stock of
the Company other than the Investors' Shareholders Agreement.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated
hereby, will (i) violate any constitution, statute, regulation, rule,
injunction, judgment, order, decree, ruling, charge, or other
restriction of any government, governmental agency, or court to which
any of the Company and its Subsidiaries is subject or any provision of
the charter or bylaws of any of the Company and its Subsidiaries or
(ii) conflict with, result in a breach of, constitute a default under,
result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under
any agreement, contract, lease, license, instrument, or other
arrangement to which any of the Company and its Subsidiaries is a
party or by which it is bound or to which any of its assets is subject
(or result in the imposition of any Security Interest upon any of its
assets), except where the violation, conflict, breach, default,
acceleration, termination, modification, cancellation, failure to give
notice, or Security Interest would not have a material adverse effect
on the business, financial condition, operations, results of
operations, or future prospects of the Company and its Subsidiaries or
on the ability of the Parties to consummate the transactions
contemplated by this Agreement. None of the Company and its
Subsidiaries needs to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order for the Parties to consummate the
transactions contemplated by this Agreement, except where the failure
to give notice, to file, or to obtain any authorization, consent, or
approval would not have a material adverse effect on the business,
financial condition, operations, results of operations, or future
prospects of the Company and its Subsidiaries or on the ability of the
Parties to consummate the transactions contemplated by this Agreement.
(d) Title to Assets. The Company and its Subsidiaries have good and valid
---------------
title to, or a valid leasehold interest in, the properties and assets
used by them, located on their premises, or shown on the Most Recent
Balance Sheet or acquired after the date thereof, free and clear of
all Security Interests, except for properties and assets disposed of
in the Ordinary Course of Business since the date of the Most Recent
Balance Sheet.
(e) Subsidiaries. (S)4(e) of the Disclosure Schedule sets forth for each
------------
Subsidiary of the Company (i) its name and jurisdiction of
incorporation, (ii) the number of shares of
-11-
<PAGE>
authorized capital stock of each class of its capital stock, (iii) the
number of issued and outstanding shares of each class of its capital
stock, the names of the holders thereof, and the number of shares held
by each such holder, and (iv) the number of shares of its capital
stock held in treasury. All of the issued and outstanding shares of
capital stock of each Subsidiary of the Company have been duly
authorized and are validly issued, fully paid, and nonassessable. One
of the Company and its Subsidiaries holds of record and owns
beneficially all of the outstanding shares of each Subsidiary of the
Company, free and clear of any restrictions on transfer (other than
restrictions under the Securities Act and state securities laws),
taxes, Security Interests, options, warrants, purchase rights,
contracts, commitments, equities, claims, and demands. There are no
outstanding or authorized options, warrants, purchase rights,
subscription rights, conversion rights, exchange rights, or other
contracts or commitments that could require any of the Company and its
Subsidiaries to sell, transfer, or otherwise dispose of any capital
stock of any of its Subsidiaries or that could require any Subsidiary
of the Company to issue, sell, or otherwise cause to become
outstanding any of its own capital stock. There are no outstanding
stock appreciation, phantom stock, profit participation, or similar
rights with respect to any Subsidiary of the Company. There are no
voting trusts, proxies, or other agreements or understandings with
respect to the voting of any capital stock of any Subsidiary of the
Company. None of the Company and its Subsidiaries controls directly or
indirectly or has any direct or indirect equity participation in any
corporation, partnership, trust, or other business association which
is not a Subsidiary of the Company.
(f) Financial Statements. Attached hereto as Exhibit B are the following
--------------------
financial statements (collectively the "Financial Statements"): (i)
audited consolidated balance sheets and statements of income, changes
in stockholders' equity, and cash flow as of and for the fiscal years
ended December 31, 1996 and December 31, 1997 (the "Most Recent Fiscal
Year End") for the Company and its Subsidiaries; and (ii) unaudited
consolidated balance sheets and statements of income, changes in
stockholders' equity, and cash flow (the "Most Recent Financial
Statements") as of and for the twelve months ended December 31, 1998
(the "Most Recent Fiscal Month End") for the Company and its
Subsidiaries. The Financial Statements (including the notes thereto)
have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods covered thereby and present fairly the
financial condition of the Company and its Subsidiaries as of such
dates and the results of operations of the Company and its
Subsidiaries for such periods; provided, however, that the Most Recent
Financial Statements are subject to normal year-end adjustments (which
will not be material individually or in the aggregate) and lack
footnotes and other presentation items.
(g) Events Subsequent to Most Recent Fiscal Month End. Since the Most
-------------------------------------------------
Recent Fiscal Month End, there has not been any material adverse
change in the business, financial condition, operations, results of
operations, or future prospects of the Company and its Subsidiaries
taken as a whole. Without limiting the generality of the foregoing,
since that date:
-12-
<PAGE>
(i) none of the Company and its Subsidiaries has sold, leased,
transferred, or assigned any material assets, tangible or
intangible, outside the Ordinary Course of Business;
(ii) none of the Company and its Subsidiaries has entered into any
material agreement, contract, lease, or license outside the
Ordinary Course of Business;
(iii) no party (including any of the Company and its Subsidiaries)
has accelerated, terminated, made material modifications to,
or canceled any material agreement, contract, lease, or
license to which any of the Company and its Subsidiaries is a
party or by which any of them is bound;
(iv) none of the Company and its Subsidiaries has imposed any
material Security Interest upon any of its assets, tangible or
intangible;
(v) none of the Company and its Subsidiaries has made any material
capital expenditures outside the Ordinary Course of Business;
(vi) none of the Company and its Subsidiaries has made any material
capital investment in, or any material loan to, any other
Person outside the Ordinary Course of Business;
(vii) the Company and its Subsidiaries have not created, incurred,
assumed, or guaranteed more than $1,000,000 in aggregate
indebtedness for borrowed money and capitalized lease
obligations;
(viii) none of the Company and its Subsidiaries has granted any
license or sublicense of any material rights under or with
respect to any Intellectual Property;
(ix) none of the Company and its Subsidiaries has declared, set
aside, or paid any dividend or made any distribution with
respect to its capital stock (whether in cash or in kind) or
redeemed, purchased, or otherwise acquired any of its capital
stock;
(x) none of the Company and its Subsidiaries has experienced any
material damage, destruction, or loss (whether or not covered
by insurance) to its property;
(xi) none of the Company and its Subsidiaries has made any loan to,
or entered into any other transaction with, any of its
directors, officers, and employees outside the Ordinary Course
of Business;
(xii) none of the Company and its Subsidiaries has entered into any
employment contract or collective bargaining agreement,
written or oral, or modified the
-13-
<PAGE>
terms of any existing such contract or agreement except to
provide for increases in compensation for fiscal year 1999;
(xiii) none of the Company and its Subsidiaries has granted any
increase in the base compensation of any of its directors,
officers, and employees outside the Ordinary Course of
Business;
(xiv) none of the Company and its Subsidiaries has adopted, amended,
modified, or terminated any bonus, profit-sharing, incentive,
severance, or other plan, contract, or commitment for the
benefit of any of its directors, officers, and employees (or
taken any such action with respect to any other Employee
Benefit Plan); and
(xv) none of the Company and its Subsidiaries has committed to any
of the foregoing.
(h) Undisclosed Liabilities. None of the Company and its Subsidiaries has
-----------------------
any material liability of a type required to be disclosed as a
liability on its balance sheet according to generally accepted
accounting principles (whether known or unknown, whether asserted or
unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to
become due, including any liability for taxes), except for (i)
liabilities set forth on the face of the Most Recent Balance Sheet
(rather than in any notes thereto) and (ii) liabilities which have
arisen after the Most Recent Fiscal Month End in the Ordinary Course
of Business.
(i) Legal Compliance. Each of the Company and its Subsidiaries has
----------------
complied in all material respects with all applicable laws (including
rules, regulations, codes, plans, injunctions, judgments, orders,
decrees, rulings, and charges thereunder) of federal, state, local,
and foreign governments (and all agencies thereof), and no action,
suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them
alleging any failure so to comply, except where the failure to comply
would not have a material adverse effect on the business, financial
condition, operations, results of operations, or future prospects of
the Company and its Subsidiaries.
(j) Tax Matters. Each of the Company and its Subsidiaries has filed all
-----------
Income Tax Returns that it was required to file, and has paid all
Income Taxes shown thereon as owing, except where the failure to file
Income Tax Returns or to pay Income Taxes would not have a material
adverse effect on the financial condition of the Company and its
Subsidiaries taken as a whole.
(k) Tangible Assets. The buildings, machinery, equipment, and other
---------------
tangible assets that the Company and its Subsidiaries own and lease
are free from material defects (patent and latent), have been
maintained in accordance with normal industry practice, and are in
good operating condition and repair (subject to normal wear and tear).
-14-
<PAGE>
(l) Litigation. (S)4(l) of the Disclosure Schedule sets forth each
----------
instance in which any of the Company and its Subsidiaries (i) is
subject to any outstanding injunction, judgment, order, decree,
ruling, or charge or (ii) is a party or, to the Knowledge of the
Company and its Subsidiaries, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before
any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator.
(m) Disclosure. The representations and warranties contained in this (S)4
----------
do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this (S)4 not misleading.
(n) Continuity of Business Enterprise. The Company operates at least one
---------------------------------
significant historic business line, or owns at least a significant
portion of its historic business assets, in each case within the
meaning of Treasury Regulations Section 1.368-1(d).
(o) Continuity of Shareholder Interest. Prior to the Merger, the Company's
----------------------------------
shareholders neither had portions of their Company interests redeemed
by the Company, nor received extraordinary distributions with respect
to their Company interests, and no corporation related to the Company
within the meaning of Treasury Regulations Section 1.368-1(e)(3)(i)(B)
acquired any Company stock, where such dispositions or acquisitions
would reduce the aggregate fair market value of the Parent Shares to
be received by the Company's shareholders as a group (with such fair
market value measured as of the Effective Time) to an amount less than
fifty percent (50%) of the aggregate fair market value of the
Company's stock determined immediately before any of such
distributions, dispositions, or acquisitions.
(p) Reorganization. The Company has no plan or intention to take any
--------------
action that would cause the Merger not to qualify and continue to
qualify as a reorganization under Section 368(a) of the Code.
5. Pre-Closing Covenants. The Parties agree as follows with respect to the
----------------------
period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use his, her or its reasonable best
-------
efforts to take all action and to do all things necessary, proper, or
advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including satisfaction, but not
waiver, of the closing conditions set forth in (S)7 below).
(b) Notices and Consents. The Company and its Subsidiaries will give any
--------------------
notices to third parties, and will use reasonable best efforts to
obtain any third party consents, that the Parent reasonably may
request in connection with the matters referred to in (S)4(c) above.
Each of the Parties will give any notices to, make any filings with,
and use its reasonable best efforts to obtain any authorizations,
consents, and approvals of governments and governmental agencies in
connection with any matters pertaining to such Party and referred to
in (S)3(a)(ii), (S)3(b)(ii), and (S)4(c) above. Without limiting the
generality of the foregoing:
-15-
<PAGE>
(i) Not later than five (5) business days after the execution of
this Agreement, the Parent and the Company will file any
Notification and Report Forms and related material that may be
required to file with the Federal Trade Commission and the
Antitrust Division of the United States Department of Justice
under the Hart-Scott-Rodino Act, will use their reasonable best
efforts to obtain a waiver from the applicable waiting period,
and will make any further filings pursuant thereto that may be
necessary, proper, or advisable in connection therewith; and
(ii) The Parent and the Company diligently shall take or cooperate
in the taking of all steps which are reasonably necessary or
appropriate to expedite the prosecution and grant of the
Transfer of Control Application. No party by commission or
omission shall put in jeopardy its qualifications as an FCC
licensee, or impair the routine processing of the Transfer of
Control Application. The Company will use its best efforts and
otherwise cooperate with the Parent, and the Stockholders shall
likewise use their reasonable best efforts and otherwise
cooperate with the Parent in responding to any information
requested by the FCC related to the Transfer of Control
Application and in defending against any petition, complaint or
objection which may be filed against the Transfer of Control
Application. In the event the Transfer of Control Application
as tendered is rejected for any reason, the Party liable for
the rejection shall take all reasonable steps to cure the basis
for rejection and the Stockholders, the Parent and the Company
shall jointly resubmit the Transfer of Control Application.
(c) Exclusivity. None of the Stockholders will (i) solicit, initiate, or
-----------
encourage the submission of any proposal or offer from any Person
relating to the acquisition of any capital stock or other voting
securities, or any substantial portion of the assets, of any of the
Company and its Subsidiaries (including any acquisition structured as
a merger, consolidation, or share exchange) or (ii) participate in any
discussions or negotiations regarding, furnish any information with
respect to, assist or participate in, or facilitate in any other
manner any effort or attempt by any Person to do or seek any of the
foregoing. None of the Stockholders will vote their Company Shares in
favor of any such acquisition structured as a merger, consolidation,
or share exchange.
(d) Waiver of Rights. Each Stockholder (i) hereby waives and relinquishes
----------------
its rights under Article IV, Section 5.1 and Article XI of the
Investors' Shareholders Agreement with respect to the transactions
contemplated by this Agreement, and (ii) agrees that the Investors'
Shareholders Agreement will terminate and be of no further force or
effect upon the Closing.
(e) Agreement to Vote. Each Stockholder will vote their Company Shares in
-----------------
favor of the Merger.
(f) Substantially All of Company's Assets. Following the Merger, the
-------------------------------------
Surviving Corporation will hold at least ninety percent (90%) of the
fair market value of the net
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<PAGE>
assets and at least seventy percent (70%) of the fair market value of
the gross assets held by the Company immediately prior to the Merger.
For this purpose, amounts, if any, paid by or on behalf of the Company
for expenses of the Merger, amounts, if any, paid by the Company to
dissenters or to shareholders who receive cash or other property and
all redemptions and distributions (except for regular, normal
distributions) made by the Company immediately preceding or in
contemplation of the Merger will be included as assets of the Company
immediately prior to the Merger.
(g) Reorganization. None of the Parties will take any action that would
--------------
cause the Merger not to qualify and continue to qualify as a
reorganization under Section 368(a) of the Code.
6. Post-Closing Covenants. The Parties agree as follows with respect to the
----------------------
period following the Closing.
(a) General. In case at any time after the Closing any further action is
-------
necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the
requesting Party (unless the requesting Party is entitled to
indemnification therefor under (S)8 below). The Stockholders
acknowledge and agree that from and after the Closing the Parent will
be entitled to possession of all documents, books, records (including
tax records), agreements, and financial data of any sort relating to
the Company and its Subsidiaries.
(b) Litigation Support. In the event and for so long as any Party actively
------------------
is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in
connection with (i) any transaction contemplated under this Agreement
or (ii) any fact, situation, circumstance, status, condition,
activity, practice, plan, occurrence, event, incident, action, failure
to act, or transaction on or prior to the Closing Date involving any
of the Company and its Subsidiaries, each of the other Parties will
cooperate with him, her or it and his, her or its counsel in the
contest or defense, make available their personnel, and provide such
testimony and access to their books and records as shall be necessary
in connection with the contest or defense, all at the sole cost and
expense of the contesting or defending Party (unless the contesting or
defending Party is entitled to indemnification therefor under (S)8
below).
(c) Certain Taxes. All transfer, documentary, sales, use, stamp,
-------------
registration and other such Taxes and fees (including any penalties
and interest) applicable to each Stockholder incurred in connection
with this Agreement shall be paid by such Stockholder when due, and
each Stockholder will, at its own expense, file all necessary Tax
Returns and other documentation with respect to all such transfer,
documentary, sales, use, stamp, registration and other Taxes and fees,
and, if required by applicable law, Parent will, and will cause its
affiliates to, join in the execution of any such Tax Returns and other
documentation.
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<PAGE>
(d) Reorganization. None of the Parties will take any action that would
--------------
cause the Merger not to qualify and continue to qualify as a
reorganization under Section 368(a) of the Code.
7. Conditions to Obligation to Close.
----------------------------------
(a) Conditions to Obligation of the Parent. The obligation of each of the
--------------------------------------
Parent and the Transitory Subsidiary to consummate the transactions to be
performed by it in connection with the Closing is subject to satisfaction
of the following conditions:
(i) the representations and warranties set forth in (S)3(a) and
(S)4 above shall be true and correct in all material respects
at and as of the Closing Date;
(ii) the Stockholders shall have performed and complied with all of
their respective covenants hereunder in all material respects
through the Closing;
(iii) the Company and its Subsidiaries shall have procured all of the
material third party consents required pursuant to (S)5(b)
above;
(iv) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any
of the transactions contemplated by this Agreement, (B) cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation, (C) affect adversely the
right of the Parent to own the Company Shares and to control
the Company and its Subsidiaries, or (D) affect materially and
adversely the right of any of the Company and its Subsidiaries
to own its assets and to operate its businesses (and no such
injunction, judgment, order, decree, ruling, or charge shall be
in effect);
(v) each of the Stockholders shall have delivered to the Parent a
certificate to the effect that each of the conditions specified
above in (S)7(a)(i)-(ii) is satisfied, and the Company shall
have delivered to the Parent a certificate to the effect that
each of the conditions specified above in (S)7(a)(iii)-(iv) is
satisfied;
(vi) the FCC shall have granted the Transfer of Control Application
and such grant shall be in full force and effect, all
applicable waiting periods (and any extensions thereof) under
the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated, and the Parties, the Company, and its Subsidiaries
shall have received all other material authorizations,
consents, and approvals of governments and governmental
agencies referred to in (S)3(a)(ii), (S)3(b)(ii), and (S)4(c)
above;
(vii) the Parent and each of the Stockholders shall have entered into
a Registration Rights Agreement in form and substance as set
forth in Exhibit C attached hereto and the same shall be in
full force and effect;
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<PAGE>
(viii) the Parent shall have received from each Stockholder that is
not a natural person (A) a copy of resolutions duly adopted by
such Stockholder's board of directors authorizing such
Stockholder to enter into this Agreement and consummate the
transactions contemplated hereby, certified by the secretary or
assistant secretary of such Stockholder as being complete and
correct and in full force and effect as of the Closing Date,
and (B) an incumbency certificate dated as of the Closing Date
with respect to the officer executing this Agreement on behalf
of such Stockholder;
(ix) the Parent shall have obtained on terms and conditions
satisfactory to it in its sole discretion all of the financing
it needs in order to consummate the transactions contemplated
hereby;
(x) a majority of the Parent's directors that are not Affiliates of
the Company shall have approved the transactions contemplated
hereby;
(xi) the holders of eighty percent (80%) of the Parent's Senior
Preferred Stock shall have approved the transactions
contemplated hereby;
(xii) the Parent shall be satisfied that no material adverse change
in the financial condition, results of operation, business,
assets, properties or prospects of the Company shall have
occurred since December 31, 1998;
(xiii) the Parent shall have received an opinion from a nationally
recognized investment bank stating the transactions
contemplated hereby are fair to the Parent from a financial
point of view;
(xiv) the Parent and Mary Catherine Sneed shall have executed
amendments to Ms. Sneed's employment and equity incentive
agreements on terms satisfactory to Parent in its sole
discretion;
(xv) Alta and Syncom shall each have entered into, and shall have
pledged all the Parent Class A Shares and Warrants issuable to
it hereunder for the benefit of the Senior Lenders pursuant to,
a pledge agreement in the form attached hereto as Exhibit D;
(xvi) Mary Catherine Sneed shall have entered into, and shall have
pledged all the Parent Class A Shares and Warrants issuable to
her hereunder for the benefit of the Senior Lenders pursuant
to, a pledge agreement in the form attached hereto as Exhibit
E; and
(xvii) all actions to be taken by the Stockholders in connection with
consummation of the transactions contemplated hereby and all
certificates, opinions, instruments, and other documents
required to effect the transactions contemplated hereby will be
reasonably satisfactory in form and substance to the Parent.
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<PAGE>
The Parent may waive any condition specified in this (S)7(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Stockholders. The obligation of each
--------------------------------------------
Stockholder to consummate the transactions to be performed by him, her
or it in connection with the Closing is subject to satisfaction of the
following conditions:
(i) the representations and warranties set forth in (S)3(b) above
shall be true and correct in all material respects at and as of
the Closing Date;
(ii) each of the Parent and the Transitory Subsidiary shall have
performed and complied with all of its covenants hereunder in
all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any
arbitrator wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any
of the transactions contemplated by this Agreement or (B) cause
any of the transactions contemplated by this Agreement to be
rescinded following consummation (and no such injunction,
judgment, order, decree, ruling, or charge shall be in effect);
(iv) the Parent shall have delivered to each of the Stockholders a
certificate to the effect that each of the conditions specified
above in (S)7(b)(i)-(iii) is satisfied in all respects;
(v) the FCC shall have granted the Transfer of Control Application
and such grant shall be in full force and effect, all
applicable waiting periods (and any extensions thereof) under
the Hart-Scott-Rodino Act shall have expired or otherwise been
terminated, and the Parties, the Company, and its Subsidiaries
shall have received all other material authorizations,
consents, and approvals of governments and governmental
agencies referred to in (S)3(a)(ii), (S)3(b)(ii), and (S)4(c)
above;
(vi) the Parent and each of the Stockholders shall have entered into
a Registration Rights Agreement in form and substance as set
forth in Exhibit C attached hereto and the same shall be in
full force and effect;
(vii) each of the Stockholders shall have received from the Parent
and the Transitory Subsidiary (A) a true, correct and complete
copy of such Party's Amended and Restated Articles of
Incorporation, certified by the secretary of state of Delaware,
(B) a certificate of good-standing with respect to such Party
issued by the secretary of state of Delaware not more than ten
(10) business days prior to the Closing Date, (C) a copy of
resolutions duly adopted by such Party's board of directors
authorizing such Party to enter into this Agreement and
consummate the transactions contemplated hereby,
-20-
<PAGE>
certified by the secretary or assistant secretary of such Party
as being complete and correct and in full force and effect as
of the Closing Date, and (D) an incumbency certificate dated as
of the Closing Date with respect to the officer executing this
Agreement on behalf of such Party;
(viii) the transactions contemplated hereby shall have been approved
by a majority of the Company's board of directors and by the
Requisite Stockholders; and
(ix) all actions to be taken by the Parent and the Transitory
Subsidiary in connection with the consummation of the
transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect
the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Requisite
Stockholders.
The Requisite Stockholders may waive any condition specified in this
(S)7(b) if they execute a writing so stating at or prior to the
Closing.
8. Remedies for Breaches of This Agreement.
---------------------------------------
(a) Survival of Representations and Warranties. Except as specifically
------------------------------------------
provided below, all of the representations and warranties of the
Parties contained in (S)3 above shall survive the Closing (even if the
damaged Party knew or had reason to know of any misrepresentation or
breach of warranty at the time of Closing) and continue in full force
and effect forever thereafter (subject to any applicable statutes of
limitations); provided, however, that the representations made by each
-------- -------
Stockholder pursuant to (S)3(a)(iv) and (S)3(a)(vi) shall survive the
Closing only for a period of two years and shall thereafter be of no
further force or effect. The representations and warranties of the
Company contained in (S)4 shall terminate as of the Closing and shall
be of no further force or effect.
(b) Indemnification Provisions for Benefit of the Parent. In the event any
----------------------------------------------------
of the Stockholders breaches any of his, her or its covenants in
(S)2(e) above or any of his, her or its representations and warranties
in (S)3(a) above, and, if there is an applicable survival period
pursuant to (S)8(a) above, provided that the Parent makes a written
claim for indemnification against such Stockholder pursuant to (S)10(h)
below within such survival period, then such Stockholder severally and
not jointly agrees to indemnify the Parent from and against the
entirety of any Adverse Consequences the Parent may suffer through and
after the date of the claim for indemnification (including any Adverse
Consequences the Parent may suffer after the end of any applicable
survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach.
(c) Indemnification Provisions for Benefit of the Stockholders. In the
----------------------------------------------------------
event the Parent breaches any of its representations, warranties, and
covenants contained herein, and, if there is an applicable survival
period pursuant to (S)8(a) above, provided that any of the Stockholders
makes a written claim for indemnification against the Parent pursuant
to (S)10(h) below within such survival period, then the Parent agrees
to
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<PAGE>
indemnify each of the Stockholders from and against the entirety of any
Adverse Consequences the Stockholder may suffer through and after the
date of the claim for indemnification (including any Adverse
Consequences such Stockholder may suffer after the end of any
applicable survival period) resulting from, arising out of, relating
to, in the nature of, or caused by the breach.
(d) Matters Involving Third Parties.
-------------------------------
(i) If any third party shall notify any Party (the "Indemnified
Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any
other Party (the "Indemnifying Party") under this (S)8, then
the Indemnified Party shall promptly notify each Indemnifying
Party thereof in writing; provided, however, that no delay on
the part of the Indemnified Party in notifying any Indemnifying
Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then solely to the extent) the
Indemnifying Party thereby is prejudiced.
(ii) Any Indemnifying Party will have the right to assume the
defense of the Third Party Claim with counsel of his, her or
its choice reasonably satisfactory to the Indemnified Party at
any time within 15 days after the Indemnified Party has given
notice of the Third Party Claim; provided, however, that the
Indemnifying Party must conduct the defense of the Third Party
Claim actively and diligently thereafter in order to preserve
its rights in this regard; and provided further that the
Indemnified Party may retain separate co-counsel at its sole
cost and expense and participate in the defense of the Third
Party Claim.
(iii) So long as the Indemnifying Party has assumed and is conducting
the defense of the Third Party Claim in accordance with
(S)8(d)(ii) above, (A) the Indemnifying Party will not consent
to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written
consent of the Indemnified Party (not to be withheld
unreasonably) unless the judgment or proposed settlement
involves only the payment of money damages by one or more of
the Indemnifying Parties and does not impose an injunction or
other equitable relief upon the Indemnified Party and (B) the
Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party
Claim without the prior written consent of the Indemnifying
Party (not to be withheld unreasonably).
(iv) In the event none of the Indemnifying Parties assumes and
conducts the defense of the Third Party Claim in accordance
with (S)8(d)(ii) above, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or
enter into any settlement with respect to, the Third Party
Claim in any manner he or it reasonably may deem appropriate
(and the Indemnified Party need not consult with, or obtain any
consent from, any Indemnifying Party in connection therewith)
and (B) the Indemnifying Parties will remain responsible for
any Adverse Consequences the
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<PAGE>
Indemnified Party may suffer resulting from, arising out of,
relating to, in the nature of, or caused by the Third Party
Claim to the fullest extent provided in this (S)8.
(c) Determination of Adverse Consequences. The Parties shall make
-------------------------------------
appropriate adjustments for tax consequences and insurance coverage
and take into account the time cost of money (using the Applicable
Rate as the discount rate) in determining Adverse Consequences for
purposes of this (S)8.
(f) Exclusive Remedy. The remedies provided in (S)8(a) through (e) are
----------------
intended to be the sole remedies of the Parties as to the other
Parties subsequent to the Closing Date as to all matters arising out
of the breach of any representations, warranties or covenants
contained in this Agreement, except as expressly specified to the
contrary in this (S)8(f). In the event that all conditions set forth
in (S)7 are satisfied within the time provided in (S) 9(a) and the
Closing of the transactions is not consummated as a result of actions
taken by Parent, on the one hand, or the Stockholders on the other
hand, any Stockholder or the Parent, as the case may be, shall be
entitled to seek as against the other Party or Parties all remedies
normally available to a party for breach of a contract, including but
not limited to specific performance and damages proximately caused by
the breach.
9. Termination.
-----------
(a) Termination of Agreement. Certain of the Parties may terminate this
------------------------
Agreement as provided below:
(i) the Parent and the Requisite Stockholders may terminate this
Agreement by mutual written consent at any time prior to the
Closing;
(ii) the Parent may terminate this Agreement by giving written
notice to each of the Stockholders at any time prior to the
Closing (A) in the event any of the Stockholders or the Company
has breached any material representation, warranty, or covenant
contained in this Agreement in any material respect, the Parent
has notified the Stockholders and the Company of the breach,
and the breach has continued without cure for a period of 30
days after the notice of breach or (B) if the Closing shall not
have occurred on or before April 30, 1999, by reason of the
failure of any condition precedent under (S)7(a) hereof (unless
the failure results primarily from the Parent itself breaching
any representation, warranty, or covenant contained in this
Agreement); and
(iii) the Requisite Stockholders may terminate this Agreement by
giving written notice to the Parent at any time prior to the
Closing (A) in the event the Parent has breached any material
representation, warranty, or covenant contained in this
Agreement in any material respect, any of the Stockholders has
notified the Parent of the breach, and the breach has continued
without cure for a period of 30 days after the notice of breach
or (B) if the Closing shall not have occurred on or before
April 30, 1999, by reason of the failure
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<PAGE>
of any condition precedent under (S)7(b) hereof (unless the
failure results primarily from any of the Stockholders
themselves breaching any representation, warranty, or covenant
contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement pursuant
---------------------
to (S)9(a) above, all rights and obligations of the Parties hereunder
shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
10. Miscellaneous.
-------------
(a) Nature of Certain Obligations. The covenants of each of the
-----------------------------
Stockholders in (S)2(c) above concerning his, her or its Company
Shares and the representations and warranties of each of the
Stockholders in (S)3(a) above concerning the transaction are several
obligations. This means that the particular Stockholder making the
representation, warranty, or covenant will be solely responsible to
the extent provided in (S)8 above for any Adverse Consequences the
Parent may suffer as a result of any breach thereof.
(b) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject
matter of this Agreement prior to the Closing without the prior
written approval of the Parent and the Requisite Stockholders;
provided, however, that any Party may make any public disclosure it
believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which
case the disclosing Party will use its reasonable best efforts to
advise the other Parties prior to making the disclosure).
(c) No Third-Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(d) Entire Agreement. This Agreement (including the documents referred to
----------------
herein) constitutes the entire agreement among the Parties and
supersedes any prior negotiations, understandings, agreements, or
representations by or among the Parties, written or oral, to the
extent they related in any way to the subject matter hereof.
(e) Succession and Assignment. This Agreement shall be binding upon and
-------------------------
inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this
Agreement or any of his, her or its rights, interests, or obligations
hereunder without the prior written approval of the Parent and the
Requisite Stockholders; provided, however, that the Parent may (i)
assign any or all of its rights and interests hereunder to one or more
of its Affiliates and (ii) designate one or more of its Affiliates to
perform its obligations hereunder (in any or all of which cases the
Parent nonetheless shall remain responsible for the performance of all
of its obligations hereunder).
-24-
<PAGE>
(f) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of
which together will constitute one and the same instrument.
(g) Headings. The section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the
meaning or interpretation of this Agreement.
(h) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request,
demand, claim, or other communication hereunder shall be deemed duly
given if (and then two business days after) it is sent by registered
or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Stockholders:
-----------------------
Radio One of Atlanta, Inc.
5900 Princess Garden Parkway
Lanham, Maryland 20706
Attention: Alfred C. Liggins, III, President
Fax: (301) 306-9694
and
Alta Subordinated Debt Partners III, L.P.
c/o Burr, Egan, Deleage & Co.
One Post Office Square, Suite 3800
Boston, MA 02109
Attention: Brian W. McNeill
Fax: (617) 482-1944
and
Syndicated Communications Venture Partners II, L.P.
8401 Colesville Road, Suite 300
Silver Spring, MD 20910
Attention: Terry L. Jones, Vice President
Fax: (301) 608-3307
and
Mary Catherine Sneed
c/o Radio One of Atlanta, Inc.
75 Piedmont Street, 10/th/ Floor
Atlanta, GA 30303
Fax: (404)688-7686
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<PAGE>
Copy to:
Goodwin Procter & Hoar LLP
Exchange Place
Boston, MA 02109
Attention: John J. Egan, P.C.
Fax: (617) 523-1231
and
Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309-3424
Attention: Randall D. Grayson, Esq.
Fax: (404)881-7777
If to the Parent:
-----------------
Radio One, Inc.
5900 Princess Garden Parkway
Lanham, Maryland 20706
Attention: Scott R. Royster, Chief Financial Officer
Fax: (301)306-9426
Copy to:
--------
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Attention: Richard L. Perkal, Esq.
Fax: (202)879-5200
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set
forth above using any other means (including personal delivery,
expedited courier, messenger service, telecopy, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or
other communication shall be deemed to have been duly given unless and
until it actually is received by the intended recipient. Any Party may
change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other
Parties notice in the manner herein set forth.
(i) Governing Law. This Agreement shall be governed by and construed in
-------------
accordance with the domestic laws of the State of Delaware without
giving effect to any choice or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than
the State of Delaware.
-26-
<PAGE>
(j) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and
signed by the Parent and the Requisite Stockholders. No waiver by any
Party of any default, misrepresentation, or breach of warranty or
covenant hereunder, whether intentional or not, shall be deemed to
extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.
(k) Severability. Any term or provision of this Agreement that is invalid
------------
or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions
hereof or the validity or enforceability of the offending term or
provision in any other situation or in any other jurisdiction.
(l) Expenses. Each of the Parent and the Company will bear its own costs
--------
and expenses (including legal fees and expenses) incurred in
connection with this Agreement and the transactions contemplated
hereby. The Company will bear a portion not to exceed $50,000.00 of
the Stockholders' aggregate costs and expenses (including reasonable
legal fees and expenses) in connection with this Agreement and the
transactions specifically contemplated hereby.
(m) Construction. The Parties have participated jointly in the negotiation
------------
and drafting of this Agreement. In the event an ambiguity or question
of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of
proof shall arise favoring or disfavoring any Party by virtue of the
authorship of any of the provisions of this Agreement. Any reference
to any federal, state, local, or foreign statute or law shall be
deemed also to refer to all rules and regulations promulgated
thereunder, unless the context requires otherwise. The word
"including" shall mean including without limitation.
(n) Incorporation of Exhibits, Annexes, and Schedules. The Exhibits,
-------------------------------------------------
Annexes, and Schedules identified in this Agreement are incorporated
herein by reference and made a part hereof.
-27-
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this Agreement on the date
first above written.
RADIO ONE, INC.
/s/ Alfred C. Liggins, III
- ------------------------------------------
By: Alfred C. Liggins, III
Title: President
ROA MERGER SUBSIDIARY, INC.
/s/ Alfred C. Liggins, III
- ------------------------------------------
By: Alfred C. Liggins, III
Title: President
RADIO ONE OF ATLANTA, INC.
/s/ Alfred C. Liggins, III
- ------------------------------------------
By: Alfred C. Liggins, III
Title: President
ALTA SUBORDINATED DEBT PARTNERS III, L.P.
By: /s/ Eileen McCarthy
---------------------------------------
Title: General Partner
------------------------------------
ALLIED CAPITAL CORPORATION
By: /s/ Gay Truscott
---------------------------------------
Title: Senior Vice President
------------------------------------
ALLIED INVESTMENT CORPORATION
By: /s/ Gay Truscott
---------------------------------------
Title: Senior Vice President
------------------------------------
<PAGE>
SYNDICATED COMMUNICATIONS VENTURE PARTNERS II, L.P.
By: /s/ Terry L. Jones
-------------------------------------
Title: General Partner
----------------------------------
/s/ Mary Catherine Sneed
- ----------------------------------------
Mary Catherine Sneed
/s/ Alfred C. Liggins, III
- ----------------------------------------
Alfred C. Liggins, III
<PAGE>
DISCLOSURE SCHEDULE
EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
CONCERNING RADIO ONE OF ATLANTA, INC.
4.(a) Organization, Qualification and Corporate Power. Officers and
-----------------------------------------------
Directors of the Company:
Alfred C. Liggins, III Director, President
Catherine L. Hughes Director, Secretary
Scott R. Royster Executive Vice President, Chief
Financial Officer
Terry L. Jones Director
Brian W. McNeill Director
4.(b) Capitalization.
--------------
Alfred C. Liggins, III 3,970 shares of Class B Common Stock
Mary Catherine Sneed 700 shares of Class A Common Stock
Allied Capital Entities 1,430 shares of Class A Common Stock
Syncom 2,400 shares of Class A Common Stock
Alta 1,500 shares of Class A Common Stock
(c) Noncontravention. Consummation of the transactions contemplated by
----------------
the Agreement will require the filings described in Sections 5(b)(i) and (ii) of
the Agreement.
(d) Title to Assets. Pursuant to the Investment Agreement dated March
---------------
31, 1997 among the Company, Dogwood Communications Inc. and the Allied Capital
Entities, the Company has granted to the Allied Capital Entities a security
interest in all of the Company's tangible and intangible assets to secure the
Company's obligations under that agreement. Pursuant to the Subordinated
Security Agreement dated June 20, 1995, between the Company and Design Media,
Inc., the Company has granted to Design Media, Inc. a security interest in all
of the Company's tangible and intangible assets to secure the Company's
obligations under the Note (as such term is defined in such agreement).
(e) Subsidiaries. The Company has no Subsidiaries.
------------
See also the disclosure under Sections 4(b) and (d), above.
(g) Events Subsequent to Most Recent Fiscal Month End. The Company has
-------------------------------------------------
loaned or will loan an aggregate of approximately $200,000 to Sneed.
(l) Litigation. On November 24, 1998, the Company settled a claim
----------
brought against it by Fawn Marsh, a former employee. Keenan Nix, counsel for
Marsh, has from time to time suggested to the Company that he may bring
additional claims against the Company on behalf of other employees.
30
<PAGE>
Exhibit 10.41
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT ("Agreement"), made and entered into as of
this 23rd day of November, 1998, by and between Arch Broadcasting, L.P, an
Illinois limited partnership ("Seller") and Radio One Inc., a Delaware
corporation ("Buyer").
WITNESSETH:
-----------
WHEREAS, Seller at the time of Closing holds certain licenses, permits and
authorizations issued by the Federal Communications Commission (the
"Commission") for the operation of Station WFUN(FM), Bethalto, Illinois (the
"Station");
WHEREAS, Seller at the time of Closing holds title to certain assets herein
described in Section 1.1; and
WHEREAS, the Seller owns or leases and desires to sell and/or assign, and
Buyer desires to purchase and/or assume certain of the assets, property and
business used in the operation of the Station; and
NOW, THEREFORE, the parties, intending to be legally bound, agree as follows:
SECTION I
ASSETS TO BE SOLD
-----------------
1.1 On the Closing Date, Seller shall sell, assign, transfer, convey, set
over, and deliver to Buyer, and Buyer shall purchase and/or accept assignment of
the following (hereinafter collectively the "Assets"):
1.1.1 Authorizations. All licenses, permits and authorizations issued
---------------
or granted by the Commission for the operation of, or used in connection with
the operation of the Station (hereinafter "Commission Authorizations"), whether
or not such grant occurs prior to or after the date of this Agreement, as listed
in Schedule 1.1.1.
<PAGE>
1.1.2 Real Property. All of the Seller's rights in and to the land,
--------------
buildings, improvements, and other real property and all leaseholds and other
interests in real property and the buildings and improvements thereon
(hereinafter collectively the "Real Property"), consisting of all real property
and leases, contracts and agreements creating such interests listed and
described in Schedule 1.1.2., whether or not such rights vest prior to or after
the date of this Agreement.
1.1.3 Tangible Personal Property. All of Seller's rights in and to the
---------------------------
fixed and tangible personal property used in the operation of the Station,
including, but not limited to the physical assets and equipment, leasehold
improvements, furniture, fixtures, receivers, programming, tapes, transmitters,
switches and related equipment, and music libraries listed in Schedule 1.1.3,
together with replacements thereof, additions and alterations thereto, and
substitutions therefor, made between the date hereof and the Closing Date
(hereinafter collectively the "Tangible Personal Property").
1.1.4 Agreements. All Seller's rights to and in the contracts and
----------
agreements, and leases to which Seller or the Station are a party listed in
Schedule 1.1.4 (hereinafter collectively "Agreements"), together with all
contracts, agreements and leases, entered into or acquired by the Seller between
the date hereof and the Closing Date in accordance with the terms and
provisions of this Agreement.
1.1.5 lntangibles. All right, title and interest of Seller in and to
-----------
the call letters "WFUN", together with other, intangible property of Seller used
or useful in the operation of or otherwise pertaining to the Station as set
forth on Schedule 1.1.5 attached hereto and made a part hereof (hereinafter
collectively the "Intangibles").
-2-
<PAGE>
1.1.6 Business Records. All of Seller's financial records, engineering
================
reports, advertising reports, programming studies, consulting reports, computing
software, marketing data, ledger sheets, customer lists and business and
personnel records relating solely to the business or operation of the Station
(hereinafter collectively "Business Records") or to the assets or agreements
purchased by Buyer.
1.2 Excluded Assets. The Assets shall not include the following assets
===============
along with all rights, title and interest therein which shall be referred to as
the "Excluded Assets";
1.2.1 All cash, cash equivalents or similar type investments of
Seller, such as certificates of deposit, Treasury bills and other marketable
securities on hand and/or banks;
1.2.2 All tangible and intangible personal property disposed of or
consumed in the ordinary course of business between the date of this Agreement
and the Closing Date, or as permitted under the terms hereof;
1.2.3 The Accounts Receivable of the Station as of 11:59 p.m., local
time, on the day prior to the Closing date;
1.2.4 All agreements that have terminated or expired prior to the
Closing date in the ordinary course of business and as permitted hereunder;
1.2.5 Seller's minute books, charter documents, stock record books
and such other books and records as pertaining to the organization, existence or
share capitalization of Seller and duplicate copies of such records as are
necessary to enable seller to file its tax returns and reports as well as any
other records or materials relating to seller generally and not involving
specific aspects of the Station's operation;
1.2.6 Contracts of insurance, including the cash surrender value
thereof, and all insurance proceeds or claims made by seller relating to
property or equipment repaired, replaced or restored by Seller prior to the
Closing Date;
-3-
<PAGE>
1.2.7 Any and all other claims made by Seller with respect to
transactions prior to the Closing Date and the proceeds thereof to the extent
the Station has been made whole for any loss or damage they or their assets may
have suffered or incurred as a result of the item, event or occurrence giving
rise to such claim; and
1.2.8 All pension, profit sharing or cash or deferred (Section 401(k))
plans and trusts and the assets thereof and any other employee benefit plan or
arrangement and the assets thereof, if any, maintained by Seller.
SECTION 2
PURCHASE PRICE
==============
2.1 Purchase Price. In consideration of Seller's performance of this
==============
Agreement, the sale, assignment, transfer, conveyance, setting over, and
delivery of the Assets as defined hereinabove to Buyer, the total purchase price
(the "Purchase Price") to be paid by Buyer shall be the sum of Thirteen Million
Six Hundred Thousands DOLLARS ($13,600,000.00)
2.2 Payment of Purchase Price. The Purchase Price shall be paid to Seller
=========================
as follows:
(a) Upon the full and complete execution of the Agreement, Buyer shall
deliver to Escrow Agent an earnest money escrow deposit in the amount of Four
Hundred Thirty Thousand DOLLARS ($430,000.00) (the "Escrow Earnest Deposit") in
the form of a cashier's check or by wire transfer of immediately available
funds. This amount shall be deposited in an interest bearing account in a
federally insured institution pursuant to the terms of an Escrow Agreement as
set forth in Exhibit A. The Escrow Earnest Deposit shall be applied at the
closing
-4-
<PAGE>
toward the purchase price. In addition, Buyer shall deliver to Seller's counsel,
Shainis & Peltzman, Chartered, the sum of Two Hundred and Fifty Thousand DOLLARS
($250,000.00). This money shall immediately be available to Seller. Buyers, at
the time of execution of the instant Asset Purchase Agreement, shall be provided
an assignment of Seller's rights in the principal of the Two Hundred Fifty
Thousand DOLLARS ($250,000.00) escrow with Coltre Broadcasting, Inc.
(b) At the Closing Date, Buyer will pay to Seller in the form of a
cashier's check or by wire transfer of immediately available funds to a bank
designated by Seller the sum of Eleven Million Four Hundred Seventy-five
Thousand DOLLARS ($11,475,000.00), as adjusted to reflect any Adjustments made
at Closing pursuant to Section 3 and any adjustments.
(c) At the Closing Date, Buyer will place into an escrow account by
wire transfer of immediately available funds the sum of One Million Six Hundred
Ninety-five Thousand DOLLARS ($1,695,000.00) plus tax liability reimbursement.
Such sum shall be held in an escrow agreement between the Seller and Buyer to be
executed at closing governing the use and distribution of those funds.
2.3 Allocation of Purchase Price. Prior to the Closing Date, the parties
============================
agree to allocate the Purchase Price in accordance with the requirements of
Section 1060 of the Internal Revenue Code of 1986. In the event that the
parties are unable to reach such an agreement prior to the Closing Date, they
will select a qualified, independent and nationally recognized appraiser of
broadcast properties and that firm's decision shall be binding upon the parties
and the fees and expenses shall be borne equally by Buyer and Seller. The
parties also agree to use such Purchase Price allocation in completing and
filing Internal Revenue Code Form 8594 for federal income tax purposes.
-5-
<PAGE>
SECTION 3
ADJUSTMENTS
===========
3.1 Adjustment Time. The "Adjustment Time" as used herein shall be 12:01
===============
A.M. current local time on the Closing Date.
3.2 Adjustment Items. The following items (the "Adjustment Items") shall
================
be prorated as of the Adjustment Time, assuming a 365-day year or a 30-day or
31-day month, as appropriate, and monies shall be paid at Closing in accordance
with Section 3.3 herein below.
3.2.1 Rentals or other charges, payable or paid in respect of
leasehold interests or tenancies, or leased transmitter sites, studios, offices
or other Real Property or equipment under any lease or tenancy of Real Property,
and any and all equipment leases described in Schedule 1.1.2.
3.2.2 Real and personal property taxes and assessments (including
sewerage assessments and fees), levied or assessed against or otherwise paid or
payable with respect to any of the Assets.
3.2.3 Transferable license, permit, and registration fees, and like
items.
3.2.4 Wages and salaries of employees (but not including accruals for
bonuses, commissions on the sale of advertising broadcast prior to the Closing
date, vacation pay, sick leave and severance pay, all of which obligations, if
any, shall remain the responsibility of Seller), time sales agreements, license
fees, and all other income and expenses attributable to the ownership and
operation of the Station.
-6-
<PAGE>
3.2.5 Charges for utilities (including but not limited to electricity,
fuel, water, basic monthly telephone charges, long distance telephone calls, and
sanitation and garbage disposal) furnished to or in connection with the Station.
3.2.6 License agreements with ASCAP, BMI and SESAC.
3.2.7 Unpaid obligation of Seller with respect to any lease, contract,
or agreement which Buyer assumes, including, without limitation, unpaid prepaid
premiums on any insurance policies that Seller has agreed to assign to Buyer and
Buyer elects to assume.
3.2.8 Other similar items applicable to the Assets and/or attributable
to the operations and/or the business of the Station, it being the intention of
the parties that all operations and the business of the Station prior to the
Adjustment Time shall be for the account of Seller, and all operations and
business of the Station after the Adjustment Time shall be for the account of
Buyer.
3.2.9 Security deposits, if any.
3.2.10 If the amount of any real or personal property tax to be
prorated is not known on the Closing Date, such tax shall be apportioned on the
basis of the most recent tax assessment.
3.2.11 Buyer shall have no obligation to employ any of the employees
of Seller. On execution of this Agreement, Seller shall deliver to Buyer a
detailed list of all employees of the Station, their salaries, benefits and any
other job-related matters for Buyer's review.
3.3 Adjustments After Closing Date. If the amount of any items to be
==============================
adjusted cannot be readily ascertained or agreed upon on the Closing Date,
proration of such items shall be determined within thirty (30) days after the
Closing Date and payment therefor shall be made to
-7-
<PAGE>
the party entitled thereto within five (5) days after notice of such
determination thereof has been given to Buyer or Seller, as the case may be. In
the event of any disputes between parties as to adjustments, the amounts not in
dispute shall nonetheless be paid at the time provided in this Section and such
disputes shall be determined by an independent certified public accountant
mutually acceptable to the parties. The accountant's resolution of the dispute
shall be final and binding on the parties, and a judgement may be entered
thereon in any court of competent jurisdiction. The fees and expenses of such
accountant shall be paid one-half by Seller and one-half by Buyer. The inability
of Seller and Buyer to resolve any adjustment shall not entitle Buyer to delay
the return of the Accounts Receivable pursuant to Section 11.
SECTION 4
APPLICATION TO AND CONSENT BY COMMISSION
========================================
4.1 Commission Consent. Consummation of the purchase and sale provided
==================
for herein and the performance of the obligations of Seller and Buyer under this
Agreement are subject to the condition that the Commission shall have given its
consent in writing, without any condition materially adverse to Buyer or Seller,
to the assignment of the Commission Authorizations and all Other Authorizations
to Buyer. Such consent shall have become final (i.e. no longer subject to
administrative or judicial review).
4.2 Application For Commission Consent.
==================================
(a) Seller and Buyer agree to proceed expeditiously and with due
diligence and to use their best efforts and to cooperate with each other in
seeking the Commission's approval of the transactions contemplated hereunder.
Within five (5) days after the date of this Agreement,
-8-
<PAGE>
each party shall prepare and file with the Commission the Assignment Application
and all information, data, exhibits, resolutions, statements, and other
materials necessary and proper in connection with such Assignment Application.
Each party further agrees expeditiously to prepare Application amendments
whenever such amendments are required by the Commission or its rules.
(b) Except as otherwise provided herein, each party will be solely
responsible for the expenses incurred by it in the preparation, filing and
prosecution of its respective portion of the Assignment Application. All filing
fees and grant fees imposed by the Commission should be paid one-half (1/2) each
by Seller and Buyer.
(c) Each party agrees to comply with any condition imposed on it by
the Commission, except that no party shall be required to comply with a
condition that would have a material adverse effect upon it unless the condition
was imposed as the result of a circumstance which constitutes a breach by that
party of any of its representations, warranties, or covenants in this Agreement.
Buyer and Seller shall oppose any efforts for reconsideration or judicial review
of the grant by the Commission of the Assignment Application (but nothing in
this Section shall limit any party's right to terminate this Agreement pursuant
to Section 17 of this Agreement).
4.3 Notice of Application. Seller shall, at its expense, give due notice
=====================
of the filing of the Assignment Application by broadcasting on the Station, or
by such other means as may be required by the rules and regulations of the
Commission.
4.4 Delay in Approval of Application. Either party at its option may
================================
terminate this Agreement by five (5) business days prior written notice to the
other party, and without liability to the other party, at any time after one-
hundred eighty (180) days after the date of this
-9-
<PAGE>
Agreement if the Commission has not granted the Assignment Application within
that time, or at any time after two-hundred forty (240) days after the date of
this Agreement if the Commission grant of the Assignment Application has not
become final, provided that the party requesting termination is not the cause of
the Commission failing to timely grant the Assignment Application. In the event
of such termination, each party shall bear its own expenses, and the Escrow
Agent shall return to Buyer the Escrow Earnest Deposit plus accrued interest. In
the event Buyer is unable to procure Commission approval of the Assignment
Application due to events arising out of Seller's ownership of the Assets,
Seller agrees to undertake to satisfy any problems or issues with the Commission
or, alternatively, Buyer may at its option elect to terminate this Agreement and
shall receive a refund of the Escrow Earnest Deposit plus accrued interest plus
repayment of the Two-Hundred Fifty Thousand DOLLARS ($250,000.00). In the event
Buyer is unable to procure Commission approval of the Assignment Application due
to issues relating to Buyer's qualifications, Seller, at its option, may elect
to terminate this Agreement and shall retain the Escrow Earnest Deposit plus
accrued interest.
SECTION 5
ASSUMPTIONS
===========
5.1 Buyer's Assumed Obligations. Buyer covenants and agrees to assume at
===========================
Closing and discharge following the Closing all of the unperformed duties of the
Seller accruing under the leases and the Agreements listed in Schedules 1.1.2
and 1.1.4 and under all advertising contracts for the sale of time for cash on
the Station, but only to the extent that such duties accrue after the Closing
date based on the operation of the Station by Buyer following the Closing Date.
Barter obligations shall be assumed by Buyer up to Five Thousand Dollars
($5,000.00) in the aggregate.
-10-
<PAGE>
5.2 Seller's Liability. Seller shall, remain liable for and covenants to
==================
pay, satisfy, or discharge, all liabilities, payment, obligations, and duties
under (a) the Agreements and any leases or other instruments transferred or
assigned to Buyer hereunder, accruing prior to or by reason of events occurring
prior to the Closing Date, and (b) all Agreements not being transferred to Buyer
no matter when the obligations occur.
SECTION 6
REPRESENTATIONS AND WARRANTIES OF THE SELLER
============================================
To the extent Seller's representations and warranties are predicated on the
representations and warranties made to it in an Asset Purchase Agreement dated
July 6, 1998, as amended on September 8, 1998, Seller has no independent
knowledge of any untrue statements contained therein. However, Seller has not
independently verified these representations and warranties.
6.1 Organization and Standing.
=========================
6.1.1 Seller is now and on the Closing Date will be a limited
partnership validly existing and in good standing under the laws of the State of
Illinois. Seller has the full power to own the assets and to carry on the
business of the Station as it now is being conducted and is qualified and in
good standing in the State of Illinois.
6.1.2 Seller has the full power and authority to enter into this
Agreement and all of Seller's Closing Documents that require Seller's signature.
Appropriate resolutions to the effect will be provided at Closing. The
execution, delivery and performance of this Agreement (as of the date of
execution of this Agreement and on the Closing Date) and the Seller's Closing
Documents (on the Closing Date) are or will be authorized by all necessary
action of the seller.
-11-
<PAGE>
6.2 Binding Effect of Agreement. This Agreement constitutes a valid and
===========================
binding obligation of Seller enforceable against Seller in accordance with the
terms of the Agreement. Upon execution, the Seller's Closing Documents will
constitute valid and binding obligations of Seller enforceable against Seller in
accordance with their terms. The execution, delivery, and performance of this
Agreement or any of the Closing Documents does not violate any provision of the
Limited Partnership Agreement of Seller, or any contract provision or other
commitment to which Seller or any of its officers or directors of the Station is
a party or under which it or its property is bound, or any judgement or order,
and will not result in the creation or imposition of any lien, charge, security
interest, or encumbrance of any nature whatsoever upon any Assets.
6.3 Business Records and Financial Statements.
=========================================
6.3.1 Seller has maintained the business records of the Station in the
usual, regular and ordinary manner in accordance with good business practices.
6.3.2 Seller has provided Buyer with the financial statements for the
Station (the "Financial Statements"). The Financial Statements have been
prepared on an accrual basis in accordance with generally accepted accounting
principles. The Financial Statements accurately reflect the books, records and
accounts of the Station in all material respects and present fairly the
financial condition and results of the operation of the Station, as of the dates
and for the periods indicated.
6.4 Real and Tangible Personal Property.
===================================
6.4.1 Real Property. Schedule 1.1.2 attached hereto accurately lists
=============
-12-
<PAGE>
and describes all the Real Property leased or otherwise held or used by the
Station which is being assigned or transferred to the Buyer. The Real Property
listed in Schedule 1.1.2 comprises all of the real property interests necessary
to conduct the business or operations of the Station as now conducted. Seller
has good and marketable fee simple title, insurable at standard rates, to all of
the fee estates (including the improvements thereon) included in Real Property,
free and clear of all liens, mortgages, pledges, covenants, easements,
restrictions, encroachments, leases, charges, and other claims and encumbrances
of any nature whatsoever, and without reservation or exclusion of any mineral,
timber, or other rights or interests, except for liens for real estate taxes not
yet due and payable. To the extent the property is subject to any easements,
restrictions, encroachments and/or state and local zoning ordinances, these are
listed in schedule 1.1.2.a. Buyer accepts existing easements, restrictions,
encroachments and state and local zoning ordinances provided none of them
prevent the use of the properties for their present purpose.
6.4.2 Patents, Trademarks, Copyrights. The Intangible Property
===============================
includes all call signs, slogans, and logos used to promote or identify the
Station. Seller has no knowledge of any infringement or unlawful or unauthorized
use of those promotional rights, including without limitation the use of any
call sign, slogan or logo by any broadcast station or cable system in the
Bethalto, Illinois metropolitan area which may be confusingly similar to the
call signs, slogans, and logos currently used by the Station.
6.4.3 Tangible Personal Property. Schedule 1.1.3 attached hereto
==========================
accurately lists all, the material Tangible Personal Property owned, leased, or
otherwise held by the Station and/or Seller which is intended to be conveyed
hereunder, except as disclosed in Schedule 1.1.3. Seller is the owner of and at
Closing will have good, clear, marketable, and indefeasible title to
-13-
<PAGE>
all of the Tangible Personal Property listed in Schedule 1.1.3, free and clear
of all liens, charges, encumbrances, restrictions, debts, demands, or claims of
any kind or nature whatsoever.
6.4.4 Condition of Tangible Personal Property. The Tangible Personal
=======================================
Property listed in Schedule 1.1.3 (except as expressly noted herein) is in good
maintenance, operating condition, and repair in accordance with generally
accepted standards of practice in the broadcast industry, and to Seller's
knowledge, is free from defects and workmanship in all material respects.
6.5 Agreements.
==========
6.5.1 Schedule 1.1.4 accurately lists all agreements and other contracts
(or, when the same are oral, a complete and correct description thereof) with
respect to the Station to be conveyed hereby (except for contracts for the sale
of advertising time for cash) to which, as of the date hereof, Seller and/or the
Station is a party or by which Seller and/or the station may be bound or
obligated in any way.
6.5.2 The Agreements listed in Schedule 1.1.4 are in full force and effect
and are valid, binding, and enforceable in accordance with their terms, and
except as stated in Schedule 1.1.4, are assignable by Seller to Buyer on the
same terms and conditions as Seller now enjoys, and to the best of Seller's
knowledge, Seller has performed in all material respects, all the obligations
imposed upon Seller under any such Agreements or other obligations that are to
be performed as of the making of this warranty. Notwithstanding any other
Section of this Agreement, to the extent that the consent or approval of any
third person is required under any Agreement in order to assign such Agreement
from Seller to Buyer, Seller shall in good faith endeavor to obtain such
consents and approvals. If any such consent or approval is not obtained, then
Buyer shall have no obligation to assume that Agreement at Closing.
-14-
<PAGE>
6.5.3 To Seller's knowledge, there is no default by or claim of default
against the Seller or any other party to the Agreements listed in Schedule 1.1.4
or any event occurring that, with or without notice, lapse of time or the
occurrence of any other event, would result in a default under any such
Agreement by Seller or any other party. There are no contracts or agreements to
which the Seller and/or the Station is a party which may be binding upon the
Assets to be sold hereunder other than the Agreements expressly set forth in
Schedule 1.1.4 and other contracts and agreements entered into in the usual
course of business.
6.5.4 Leases. Schedule 1.1.2 accurately describes all of the leases
======
which Buyer has agreed to assume to which the Seller and/or the Station are a
party or under which Seller and/or the Station are bound for the rental of real
property. All such leases are in full force and effect and valid, binding, and
enforceable in accordance with their terms, and Seller has duly performed all of
its material obligations under such leases. To the best of Seller's knowledge,
there is no default by or claim of default against Seller or any other party to
such leases, or any event or circumstance that with the passage of time or the
giving of notice or both would result in a default by Seller or any other party,
or any notice or termination existing with respect to any of such leases.
Seller's leases are assignable to Buyer on the same terms and conditions as
Seller now enjoys, except as stated in Schedule 1.1.2..
6.6 Authorizations.
==============
6.6.1 Seller at the time of Closing shall be the holder of all
licenses, permits, and authorizations necessary to operate the business of the
Station as it now is being conducted, including, without limitation, all
Commission Authorizations listed in Schedule 1.1.1. All such
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Commission Authorizations are validly existing authorizations for the operation
of facilities described therein under the Communications Act of 1934, as
amended. There is no action pending nor to the Seller's knowledge, threatened,
before the Commission or other body to revoke, refuse to renew, suspend or
modify any of the Commission Authorizations, or any action which may result in
the denial of any pending applications, the issuance of any cease and desist
orders, or the imposition of any administrative sanctions whatsoever with
respect to the Station or its operation, except as required to transfer same to
Buyer.
6.6.2 All reports, applications and other documents required to be
filed by Seller with the Commission or any other administrative body with
respect to the Station or its operations have been filed and all such reports,
applications and documents are true and correct in all material respects. There
are no matters that might result in the suspension or revocation of any
Commission Authorizations or any Other Authorizations pertaining to the Station.
6.7 Litigation and Insurance.
========================
6.7.1 Litigation; Compliance With Law. The Station is in compliance
===============================
in all material respects with all applicable federal, state and local laws,
ordinances and regulations, including compliance with the Communications Act and
all rules and regulations issued thereunder. Other than proceedings affecting
the broadcasting industry in general, there is no complaint, claim, litigation,
investigation, or judicial, administrative, or other proceeding of any nature,
including, without limitation, a grievance, arbitration, or insolvency or
bankruptcy proceeding, pending, or to the best of the Seller's knowledge,
threatened, against the Station, Seller, or any of the Assets being sold or
transferred to Buyer, including, without limitation, any proceeding which may
(a) adversely affect the Assets or the Commission Authorizations to be
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<PAGE>
assigned hereunder, or the operation of the Station, or the ability of Buyer to
own and operate the Station, or the use, ownership, or operation of any Assets
by Buyer, (b) restrain or enjoin the Closing or the consummation of the
transactions contemplated hereby, or (c) result in the revocation, modification
or suspension of the Commission Authorizations, or the issuance or imposition of
any administrative sanction that might adversely affect the Assets or the
Commission Authorizations, or the operation of the Station or the ability of
Buyer to own and operate the Station or the use, ownership, or operation of any
of the Assets by Buyer. In addition, to Seller'' knowledge, no such litigation,
investigation, or proceedings has been threatened. Seller will give Buyer prompt
notice of its discovery of any such basis or the institution or the threat of
any such litigation, investigation, or proceeding. Seller is not in default in
respect to any judgement, order, writ, injunction, decree, rule, or regulation
of any applicable court or governmental body, which default could have a
materially adverse effect on the Assets or the Station.
6.7.2 Insurance. All of the tangible Personal Property listed in
=========
Schedule 1.1.3 is insured under the policies listed and described in Schedule
6.7.2, including, without limitation, public liability and broadcaster's
liability insurance for the Station. All such policies are in full force and
effect, and all premiums for all such fire, flood, and extended coverage
insurance and such public liability and broadcaster's liability insurance have
been paid when due.
6.8 Employees and Labor Relations.
=============================
6.8.1 Seller: (a) is not a party to any collective bargaining
agreement covering or relating to any of Station's employees and has not
recognized, and to Seller's knowledge, is not required to recognize, and has
received no demand for recognition by any
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contract with any of the employees of the Station or to any other employment
contract, labor agreement, or union agreement, written or oral; (b) other than
as disclosed in the Schedules, has not promulgated any policy or entered into
any agreement relating to the payment of pensions, profit sharing, or bonuses to
any of its employees whose employment, if terminated or suspended, for which
Buyer will be liable; and (c) to Seller's knowledge, has not committed any
unfair labor practices.
6.8.2 Seller has complied in all material respects with all applicable
laws, rules and regulations relating to the employment of labor, including those
relating to rates, hours, equal employment opportunity, collective bargaining,
and the withholding and payment of taxes and contributions and has withheld all
amounts required by law or agreement to be withheld from the wages or salaries
of the Station's employees and is not liable to the employees or any government
body for arrears of wages or for any tax or penalty for failure to comply with
the foregoing.
6.8.3 Seller has delivered to Buyer a list of all employees, their
salaries, benefits and other job related matters for the Buyer's review. Buyer
shall have no obligation to employ any of the Seller's employees.
6.9 Taxes and Other Matters.
=======================
6.9.1 Payment of Taxes. All returns and reports concerning franchise
================
taxes, unemployment insurance, withholding and payroll taxes, sales taxes,
personal property taxes, license taxes, social security taxes, and all other
reports required to have been filed by the Seller relating to the Assets, the
Station, and/or its operation pursuant to any law or regulation have been duly
filed, and all taxes, interest, assessments, and penalties which are due to any
taxing
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authority, federal, state, or local, with respect to any tax period ending on or
prior to the making of this warranty have been duly paid.
6.9.2 Insolvency Proceedings. No insolvency proceedings of any kind,
======================
including without limitation bankruptcy, receivership, reorganization,
composition or arrangement with creditors, voluntary, affecting Seller or the
Purchased Assets are pending or threatened. Seller has not made an assignment
for the benefit of creditors or taken any action with a view to, or that would
constitute a valid basis for, the institution of any such insolvency
proceedings.
6.9.3 Intangibles. Seller has full and exclusive right, title to or
===========
interest in and to all of the Intangibles, including, without limitation, the
call letters "WFUN" and all copyrights, patents, program rights, trade names,
trade marks, logos, service marks, proprietary information, and other similar
rights or symbols associated therewith, together with all goodwill associated
therewith and all intellectual properties, as described on Schedule 1.1.5, free
from infringements, interferences, litigation and disputes of any kind or nature
whatsoever.
6.9.4 Environment Matters.
===================
(a) To the best of Seller's knowledge, Seller has complied in
all material respects with all laws, rules and regulations of all federal,
state, and local governments (and all agencies thereof) concerning the
environment, public health and safety, and employee health and safety, and no
charge, complaint, action, suit proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against Seller alleging any
failure to comply with any such law, rule or regulation. Seller has not
performed an environmental assessment of the site, but is not aware of any
environmental problems.
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<PAGE>
(b) To the best of Seller's knowledge, after due investigation,
Seller has no liability and Seller has not handled or disposed of any substance,
arranged for the disposal of any substance, or owned or operated any property of
facility in any manner that could form the basis for any present or future
charge, complaint, action, suit, proceeding, hearing, investigation, claim or
demand (under the common law or pursuant to any statute) against Seller giving
rise to any liability for damage to any site, location, or body of water
(surface or subsurface) or for illness or personal injury.
6.9.5 No Untrue Statements or Omission. No representation or warranty
================================
made by Seller in this Agreement or any Schedule, exhibit, statement,
certificate, or other document heretofore or hereafter furnished by Seller, or
on its behalf, to Buyer and pursuant to this Agreement or in connection with the
transactions contemplated hereby contains or will contain any knowingly untrue
statement or knowingly omits to state a material fact necessary to make the
statements contained therein not misleading. All representations and warranties
of Seller set forth in this Agreement shall be true, complete and accurate in
all material respects as of the Closing Date as if made on that date.
SECTION 7
WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
==================================================
Buyers covenants, represents, and warrants as follows:
7.1 Organization and Standing. Buyer is now and on the Closing Date will
=========================
be a corporation validly existing and in good standing under the laws of the
State of Delaware and Buyer will as of the Closing be qualified and in good
standing in the States of Illinois and Missouri.
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<PAGE>
7.2 Authorization and Binding Obligation. Buyer has all necessary power and
====================================
authority to enter into this Agreement and at Closing will have all necessary
power and authority to execute all of Buyer's Closing Documents that require
Buyer's signature. Appropriate resolutions to that effect shall be provided at
closing. The execution, delivery and performance of this Agreement (as of the
date of execution of this Agreement and on the Closing Date) and the Buyer's
Closing Documents (on the Closing Date) are or will be authorized by all
necessary action of Buyer. This Agreement constitutes a valid and binding
obligations of Buyer enforceable against Buyer in accordance with the terms of
this Agreement. Upon execution, the Buyer's Closing Documents will constitute
valid and binding obligations of Buyer enforceable against Buyer in accordance
with their terms.
7.3 No Contravention. The execution, delivery and performance of this
================
Agreement or any of Buyer's Closing Documents does not violate any provision of
the Articles of Incorporation or By-laws of Buyer, or any contract provision or
other commitment to which Buyer or any of its officers or directors is bound, or
any judgement or order.
7.4 Litigation. Except for administration rule making or other proceedings
==========
of general applicability to the broadcast industry, there is no litigation,
proceeding, judgment, claim, action, investigation or complaint, before the
Commission, other governmental body, or court, of any nature pending or, to the
best of Buyer's knowledge, threatened against or affecting it which would affect
Buyer's authority or ability to carry out this Agreement.
7.5 Information Held in Confidence. From the date hereof until the Closing
==============================
Date, Buyer and other representatives of Buyer, including Buyer's lenders, if
any, will hold in strict confidence, and will not disclose to any third party,
any data and information obtained in
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connection with this transaction with respect to the business of Seller, except
insofar as any of such data and information may be required by law to be
publicly disclosed or submitted to the Commission. If the transactions
contemplated by this Agreement are not consummated, Buyer will return to Seller
all such data and information may be required by law to be publicly disclosed or
submitted to the Commission. If the transactions contemplated by this Agreement
are not consummated, Buyer will return to Seller all Such data and information,
including, but not limited to, all documents, copies of documents and memoranda
or other materials prepared by Buyer which incorporate data or information
obtained from Seller and all other data and information made available to Buyer
in connection with this transaction, except that which may be required to be
submitted to the Commission.
7.6 Access. Seller and its authorized representatives shall have, after the
======
Closing Date, The right to obtain, upon prior request, access to originals or
copies of all logs, books, relevant records, contracts and documents relating to
ownership of the Station by Seller.
7.7 Buyer's Qualifications. There is no fact that would, under present law
======================
(including the Communications Act of 1934, as amended) and the present rules and
regulations of the Commission, disqualify Buyer from being the assignee of the
Station or that would delay Commission approval of the Assignment Application.
Should Buyer become aware of any such fact, it will so inform Seller and will
use its best efforts to remove any such disqualification. Buyer will not take
any action that Buyer knows, or has reason to believe, would result in such
disqualification.
7.7.1 Insolvency Proceedings. No insolvency proceedings of any kind,
======================
including without limitation bankruptcy, receivership, reorganization,
composition, or arrangement with creditors, voluntary or involuntary affecting
Buyer are pending or threatened. Buyer has not made any assignment for the
benefit or creditors or taken any action with a view to or that would constitute
a valid basis for, the institution of any such insolvency proceedings.
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<PAGE>
7.8 No Untrue Statements or Omission. No representation or warranty made
================================
by Buyer in this Agreement or any Schedule, exhibit, statement, certificate, or
other document heretofore or hereafter furnished to Seller and Pursuant to this
Agreement or in connection with the transactions contemplated hereby contains or
will contain any knowingly untrue statement or knowingly omits to state a
material fact necessary to make the statement contained therein not misleading.
7.9 Reliance. Neither Buyer nor any person acting as Buyer's
========
representative or on Buyer's behalf has relied on any representation or
statement of Seller or any other person except as expressly set forth in this
Agreement. Buyer acknowledges that it has been given full opportunity to
examine, to its satisfaction, the Contracts listed or described in Schedule
1.1.4.
SECTION 8
SELLER'S CONDUCT OF BUSINESS PRIOR
TO CLOSING AND BUYER'S ACCESS TO INFORMATION
============================================
8.1 Affirmative Covenants of Seller. From the date of this Agreement until
===============================
the Closing Date, Seller shall have complete control and supervision of and sole
responsibility for the Station and its operation, and during such period, Seller
shall or shall exercise its rights to cause the licensee of the Station to:
8.1.1 Make reasonable efforts to endeavor to protect the service area
of the Station from interference from other Stations, existing or proposed, of
which Seller has actual knowledge, to the extent such interference is prohibited
by the Commission's rules and regulations, and promptly give Buyer notice of any
proposed interference.
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<PAGE>
8.1.2 Deliver to Buyer, within five (5) business days after filing
thereof with the Commission, copies of any and all reports, application, and/or
responses relating to the Station which are filed with the Commission on or
prior to the Closing Date, including a copy of any Commission inquiries to which
the filing is responsive (in the event of an oral Commission inquiry, Seller
will furnish a written summary thereof).
8.1.3 Give prompt notice to Buyer of any occurrence that comes to
Seller's attention that may constitute a misrepresentation, breach of warranty,
or nonfulfillment of any covenant or condition on the part of the Seller or
Buyer contained in this Agreement.
8.2 Negative Covenants of Seller. Between the date hereof and the Closing
============================
Date, Seller shall not, and shall exercise its rights to cause the licensee of
the station not to with respect to the Assets, the Station, or the operation
thereof, without the consent of Buyer, which consent shall not be unreasonably
withheld:
8.2.1 Cancel, modify, alter, amend, encumber, or any way discharge,
terminate, or impair any material Agreements or leases pertaining to the
Station.
8.2.2 By any act or omission surrender, modify adversely, forfeit, or
fail to renew under regular terms the Commission Authorizations with respect to
the Station or give the Commission grounds to institute any proceedings for the
revocation, suspension or modification of any such Commission Authorization, or
fail to prosecute with due diligence any pending applications with respect to
such Commission Authorizations.
8.2.3 Create or suffer or permit the creation of any mortgage,
conditional sales agreement, security interest, lien, hypothecation, pledge,
encumbrance, restriction, liability charge claim or imperfection of title on any
of the Assets or with respect thereto.
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<PAGE>
8.2.4 Take any action that would prevent Seller from consummating the
transactions contemplated in this Agreement.
8.2.5 Other than in the usual and ordinary course of business, sell or
dispose of any of the Assets. Seller shall replace all Assets thus disposed of
in the usual and ordinary course of business with assets having an aggregate
value at least equal to the aggregate value of the Assets sold or otherwise
disposed of.
8.3 Access to Information.
=====================
8.3.1 Access to the Assets. Between the date hereof and the Closing
====================
Date, upon reasonable notice Seller, subject to the consent of Coltre
Broadcasting, Inc., will give to Buyer and its authorized representatives and
agents, including engineers, accountants, lawyers, and other representatives,
reasonable access during reasonable business hours to the Assets. Such access
shall remain subject to the reasonable availability of representatives of Seller
to accompany Buyer's representatives. Seller shall furnish to Buyer such
information and materials concerning the Station's affairs as Buyer may
reasonably request, so far as such access, information and materials pertain to
the operation of the Station.
8.4 Restrictions on Buyer. Nothing contained in this Agreement shall give
=====================
Buyer any right to control the programming or operations of the Station prior to
the the Closing Date.
8.5 Buyer's Covenants. From the date of this Agreement until the Closing
=================
Date, Buyer covenants that it will take no action, or fail to take any action,
that would disqualify it from becoming the licensee of the Station or delay the
grant of the Assignment Application by the Commission. Furthermore, Buyer shall
give prompt notice to Seller of any occurrence of which Buyer has actual
knowledge that may constitute a misrepresentation, breach of warranty or
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<PAGE>
nonfulfillment of any covenant or condition on the part of Buyer or Seller
contained in this Agreement.
8.6 Environmental Assessment. Within thirty (30) days after filing the
=========================
assignment of license application, Buyer may retain, at its expense, an
environmental assessment firm to perform a Phase I and Phase II Environmental
Assessment of the Real Property, title to which will be conveyed at closing.
Seller agrees to cause its officers, directors, employees, agents and
representatives and to use its best efforts to cause Coltre Broadcasting, Inc.
to cooperate with Buyer and such firm in performing such Environmental
Assessment. Buyer shall provide a copy of such Environmental Assessment to
Seller but such delivery shall not relieve Seller of any obligation with respect
to any representation, warranty or covenant in this Agreement or waive any
condition to Buyer's obligations under this Agreement. If the Environmental
Assessment shows the presence of any condition that must be cured or removal at
a cost in excess of Fifty Thousand DOLLARS ($50,000.00), then Buyer may
terminate this Agreement, in which event Escrow Earnest Deposit and all interest
earned thereon plus the Two Hundred Fifty Thousand DOLLARS ($250,000.00) shall
be returned to Buyer and the parties shall be released and discharged from any
further obligation.
8.7 Cooperation with Respect to Financial and Tax Matters. Between the
=====================================================
date hereof and the Closing Date, Seller, its officers, directors and employees
shall cooperate and Seller shall cause its independent accounting firm and use
its best efforts to cause Coltre Broadcasting, Inc. to cooperate with Buyer for
the purpose of preparing Financial Statements reviewed by Buyer's independent
accountants for purposes of including such statements in any reports filed by
Buyer with any governmental authority and disclosing to financial institutions
to obtain financing.
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<PAGE>
Buyer shall be permitted to disclose the Financial Statements for the Station
for the years 1995 through the Closing Date in any reports filed by the Buyer
with any governmental authority.
SECTION 9
CONDITIONS FOR CLOSING
======================
9.1 Closing. The Closing of this Agreement shall take place at the offices
=======
of Seller, or such other place as shall be mutually agreed upon by Buyer and
Seller, within ten (10) days after the grant by the Commission of the Assignment
Application has become final (i.e. o longer subject to administrative or
judicial review) or February 15, 1999, whichever comes later, and assuming all
other conditions to Closing have been met. Moreover, a delineation of
additional conditions precedent to Buyer's obligation to close shall be
contained in a subsequent document to be executed by the parties. For purposes
of this Agreement, a "Final Order" means that the grant by the Commission to the
consummation of the transactions contemplated by this Agreement is in full force
and is no longer subject to administrative or judicial review, recall or
reconsideration.
9.2 Conditions Precedent to Obligations of Buyer. The performance of the
============================================
obligations of the Buyer under this Agreement is subject to the satisfaction of
each of the following express conditions precedent, provided that Buyer may, at
its election, waive any of such conditions on the Closing Date, notwithstanding
that such condition is not fulfilled on the Closing Date:
9.2.1 Seller shall have delivered to Buyer the Seller's Closing
Documents as described in Section 10.1 below.
9.2.2 Each of the Seller's representations and warranties contained in
this Agreement or in any Schedule, certificate, or document delivered pursuant
to the provisions
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hereof, or in connection with the transactions contemplated hereby, shall be
true and correct in all material respects at and as of the Closing Date with the
same force and effect as if each such representation or warranty were made at
and as of such time, except with respect to such changes as are contemplated or
permitted by this Agreement.
9.2.3 Seller shall have performed and complied in all material
respects with all covenants, agreements and obligations required by this
Agreement to be performed or complied with by it prior to the Closing Date and
shall be in full compliance therewith on the Closing Date.
9.2.4 Seller shall be the holder of the requisite Commission
Authorizations and have good and marketable title to all other Assets described
in Section 1.1
9.2.5 All outstanding mortgages, liens, security agreements, and other
charges and encumbrances on the Assets, shall have been discharged and
satisfied, or arrangements made to discharge same at Closing.
9.2.6 Seller shall have delivered to Buyer an inventory of the
Tangible Personal property to be conveyed, current as of the Closing Date. There
shall be no material changes between Schedule 1.1.3 and the inventory of
Tangible Personal Property as of the Closing Date other than changes that have
been agreed to and accepted by Buyer, in its reasonable discretion.
9.2.7 Seller shall have delivered to Buyer an opinion dated the
Closing Date from counsel for Seller, in form and substance reasonably
satisfactory to counsel for Buyer.
9.2.8 Seller shall have obtained all consents, approvals, and waivers
of other persons or parties as may be required for the consummation of the
transactions contemplated by
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<PAGE>
this Agreement and such consents shall contain terms no less favorable than now
enjoyed by Seller, including consents to assign the Agreements listed in
Schedules 1.1.2 and 1.1.4.
9.2.9 Lien Search. Sellers shall have obtained and delivered to
===========
Buyer, at Seller's expense, at least 10 days prior to the Closing Date, a report
prepared by C.T. Corporation System ( or similar firm reasonably acceptable to
Buyer) showing the results of searches of lien, tax, judgment and litigation
records in the State of Illinois and Madison and St. Louis Counties,
demonstrating that the Real Property and all other Assets are free and clear of
all liens, mortgages and encumbrances except for encumbrances to be discharged
on the closing Date using the proceeds from the Purchase Price and that there
are no judgments or pending litigation. The record searches described in the
report shall have taken place no more than 15 days prior to the Closing Date.
9.2.10 Compensation. Seller shall have satisfied all amounts due
============
Buyer, atemployees for compensation, whether pursuant to the terms of a written
agreement or otherwise, including bonuses and reimbursement of expenses, that
have accrued as of the Closing.
9.3 Conditions Precedent to Obligations of Seller. The performance of the
=============================================
obligations of the Seller under this Agreement is subject to the satisfaction of
each of the following express conditions precedent, provided that Seller may, at
its election, waive any of such conditions at Closing, notwithstanding that such
condition is not fulfilled on the Closing Date:
9.3.1 Buyer shall have delivered to Seller the Buyer's Closing
Documents (as defined in Section 10.2 below).
9.3.2 Each of Buyer's representations and warranties contained in this
Agreement or in any Schedule, certificate or document delivered pursuant to the
provision
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hereof, or in connection with the transactions contemplated hereby, shall be
true and correct in all material respects at and as of Closing Date, as though
each such representation or warranty was made at and as of such time, except in
respect of such changes as are contemplated or permitted by this Agreement.
9.3.3 Buyer shall have performed all of the obligations set forth in
Section 2.2 of this Agreement with respect to the payment of the Purchase Price.
9.3.4 Buyer shall have agreed in a form reasonably acceptable to Seller to
assume all obligations under the Agreements assigned to Buyer arising on or
after the Closing Date.
9.3.5 Seller shall have received an opinion dated the Closing Date
from counsel for Buyer, in form and substance reasonably satisfactory to counsel
for Seller.
9.4 Failure of Conditions Precedent to Obligations of Buyer. In case of
=======================================================
the failure of any of the conditions precedent described in Section 9.2 hereof,
and if Seller, after having received written notice of such failure from Buyer
and having had a reasonable opportunity (i.e. fifteen (15) days) has failed to
cure same, Buyer shall have the right to terminate this Agreement without
liability. In addition, if the failure to such condition precedent constitutes a
material default by Seller, Buyer shall have the right, as its option, to
exercise any or all of its rights or remedies for default provided in Section 17
hereof. Buyer shall not be deemed to have waived any failure by Seller to
fulfill any of the conditions precedent described in Section 9.2 if Buyer does
not have actual knowledge of such failure a the time of Closing.
9.5 Failure of Conditions Precedent to Obligations of Seller. In case of
========================================================
the failure of any of the conditions precedent described in Section 9.3 hereof,
and if buyer, after having
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received written notice of such failure from Seller and having had a reasonable
opportunity (i.e. fifteen (15) days has failed to cure the same, Seller shall
have the right to terminate this Agreement without liability. In addition, if
the failure of such condition precedent results from a material default by
Buyer, Seller shall have the right, at its option, to exercise any or all of its
rights or remedies for default provided in Section 17 hereof. Seller shall not
be deemed to have waived any failure by Buyer to fulfill any of the conditions
precedent described in Section 9.3 if Seller does not have actual knowledge of
such failure at the time of Closing.
SECTION 10
OBLIGATIONS AT CLOSING
======================
10.1 Closing Documents to be Delivered by Seller. At the Closing,
===========================================
Seller shall deliver to Buyer the following ("Seller's Closing Documents"):
10.1.1 An executed Bill of Sale in form and substance reasonably
satisfactory to Buyer transferring to Buyer all Tangible Personal Property to be
transferred hereunder.
10.1.2 A special warranty deed in the usual form in the State of
Illinois, conveying good and marketable title to the Real Property and any
improvements thereon , with all required documentary stamps attached and in
proper form for recording.
10.1.3 An executed Assignment and Assumption Agreement in form and
substance reasonably satisfactory to Buyer assigning the Buyer the Agreement to
be assigned hereunder.
10.1.4 An executed Assignment and Transfer in form and substance
reasonably satisfactory to counsel for Buyer assigning and transferring to Buyer
all of the Commission Authorizations and the Intangibles.
<PAGE>
10.1.5 A certified copy of the resolutions of Seller authorizing the
execution delivery, and performance of this Agreement by Seller and the
consummation of the transactions provided for herein, attested to by the
Secretary of Seller's General Partner.
10.1.6 An opinion of Seller's counsel, dated as of the Closing Date.
10.1.7 A certificate executed by Seller's general partner stating that
(a) all of the representations and warranties of Seller set forth in this
Agreement are in all material respects true, correct, and accurate as of the
Closing Date, and (b) all covenants set forth in this Agreement to be performed
by Seller on or prior to the Closing Date have been performed in all material
respects.
10.1.8 All Business Records.
10.1.9 Possession and/or ownership of and all right, title and/or
interest in and to the Assets.
10.1.10 An assignment of the Accounts Receivable for collection only
pursuant to Section 11 hereof.
10.1.11 Instructions executed on behalf of Seller directing the Escrow
Agent to deliver the Escrow Deposit to Seller.
10.1.12 Consents referred to in Section 9.2.8.
10.1.13 Title Insurance. Buyer shall have obtained, at Seller's
===============
expense, ALTA extended form title insurance policies insuring Buyer's fee simple
absolute interest in the Real Property in Edwardsville subject only to those
exceptions expressly accepted by Buyer in writing within fifteen (15) days of
its receipt of a preliminary commitment of title insurance therefor. Such Title
Insurance shall not reveal any defects in title or any encroachments upon the
Real
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Property by any buildings, structures, or improvements located on adjoining real
estate or any encroachments by the improvements (including without limitation
any guy wires or guy anchors) constructed on the Real Property onto property not
owned by Seller which would have a material adverse effect on Buyer's use,
occupancy and ownership of such Real Property and shall show that such
buildings, structures and improvements are constructed in conformity with all
setback lines, easements, and other restrictions, or rights of record, or that
have been established by any applicable building or safety code zoning
ordinance.
10.2 Closing Documents to be Delivered by Buyer. At the Closing, Buyer
==========================================
shall deliver to Seller the following ("Buyer's Closing Documents"):
10.2.1 The Purchase Price as provided in Section 2.2.
10.2.2 A certificate executed by Buyer's President stating that; (a)
all of the representations and warranties of Buyer set forth in this Agreement
are in all material respects true, correct, and accurate as of the Closing Date,
and (b) all covenants set forth in this Agreement to be performed by Buyer on or
prior to the Closing Date have been performed in all material respects.
10.2.3 An Assignment and Assumption Agreement executed by Buyer, in
form and substance reasonably satisfactory to Seller.
10.2.4 An Opinion Letter of Buyer's counsel, dated as of the Closing
Date
10.2.5 A certified copy of the resolutions of Buyer authorizing the
execution, delivery and performance of this Agreement by Buyer and the
consummation of the transactions provided for herein, attested to by the
Secretary of Buyer.
10.2.6 Instructions executed on behalf of Buyer directing the Escrow
Agent
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to deliver the Escrow Deposit to Seller.
SECTION 11
ACCOUNTS RECEIVABLE
===================
11.1 Collection Procedures. At Closing, Seller shall assign to Buyer all
=====================
of the Accounts Receivable for purposes of collection only. Buyer shall use such
efforts as are reasonable and in the ordinary course of business to collect the
Accounts Receivable for a period of one hundred eighty (180) days following the
Closing Date (the "Collection Period"). This obligation however, shall not
extend to the institution of litigation, employment of counsel, or any other
extraordinary means of collection. So long as the Accounts Receivable are in
Buyer's possession, neither Seller nor its agents shall make any solicitation of
them for collection purposes nor institute litigation for the collection of any
amounts due thereunder. All payments received by Buyer during the Collection
Period from any person obligated with respect to any of the Accounts Receivable
shall be applied first to Seller's account and only after full satisfaction
thereof to Buyer's account; provided, however, that if during the Collection
Period any account debtor contests in writing the validity of its obligation
with respect to any Account Receivable, then Buyer may return that Account
Receivable to Seller after which Seller shall be solely responsible for the
collection thereof. Except for the payment of all salesperson's, agency, and
representative commissions due with respect to the Accounts Receivable, Buyer
shall not incur or cause to be incurred any collateral or outside fees, costs or
charges in connection with its efforts at collection of the Accounts Receivable
without first having obtained the authorization in writing of Seller. Buyer
shall remit all amounts collected on Seller's behalf no less often than the
fifth (5th) business day after the close of each month during which any amounts
due to Seller are
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collected. Within five (5) business days following the expiration of the
Collection Period, Buyer shall furnish Seller with a list of the Accounts
Receivable collected during the Collection Period accompanied by a payment equal
to the amount of such collections, to the extent not already paid, minus
commissions. Any of the Accounts Receivable that are not collected during the
Collection Period shall be reassigned to Seller after which Buyer shall have no
further obligation to Seller with respect to the Accounts Receivable; provided,
however, that all funds subsequently received by Buyer (without time limitation)
that can be specifically identified, whether by accompanying invoice or
otherwise, as a payment on any Account Receivable shall be promptly paid over or
forwarded to Seller. Buyer shall not have the right to compromise, settle, or
adjust the amounts of any of the Accounts Receivable without Seller's prior
written consent, or to withhold any proceeds of the Accounts Receivable or to
retain any uncollected Accounts Receivable after the expiration of the
Collection Period for any reason whatsoever. To the extent not already paid,
Seller shall be responsible for the payment of all saleperson's, agency, and
representative commissions due with respect to the Accounts Receivable and shall
defend and hold Buyer harmless against any claims for such commission.
SECTION 12
BROKERAGE
=========
Seller and Buyer each represent and warrant to the other that neither Buyer
nor Seller has engaged any broker, finder or agent in connection with the
transactions contemplated by this Agreement, other than Seller's engagement of
Star Media Group, Inc. ("Broker"). Neither Seller nor Buyer has incurred any
unpaid liability or agreed to pay any broker's, finder's or consultant's fee in
connection with the transactions contemplated by this Agreement other than the
fee of
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<PAGE>
Broker, the payment of which shall be the sole responsibility of Seller. Seller
agrees to indemnify Buyer and Buyer agrees to indemnify Seller against any
claims asserted against the other party for any such fees or commissions by any
person purporting to act or to have acted for or on behalf of the indemnifying
party. Notwithstanding any other provision of this Agreement, this
representation and warranty shall survive the Closing Date without limitation as
to time.
SECTION 13
INDEMNIFICATIONS
================
13.1 Breach of Seller's Agreements, Representations, and Warranties. Seller
==============================================================
shall reimburse Buyer for, and indemnify and hold harmless Buyer from and
against, any loss, damage, liability, obligation, deficiency, claim, suit, cause
of action, demand, judgment, or expense (including without limitation, payments,
fines, penalties, interest, taxes, assessments, and reasonable attorney's fees
and accounting fees of any kind or nature), contingent or otherwise, whether
incurred or asserted prior to or after the Closing Date, arising out of or
sustained by Buyer by reason of:
(a) any material breach of any warranty, representation, or agreement
of Seller contained under this Agreement or in any certificate or other
instrument furnished to Buyer pursuant to this Agreement or in connection with
any of the transactions contemplated hereby;
(b) the operation of the Station or the ownership of the Assets prior
to Closing (including, but not limited to, any and all claims, liabilities, and
obligations arising or required to be performed prior to the Closing Date under
this Agreement, or any other lease, contract, or agreement);
(c) any transaction entered into by Seller or Coltre Broadcasting,
Inc. or arising in
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<PAGE>
connection with the Station or the operation of the business or any of the
Assets prior to the Closing; or
(d) any and all liabilities or obligations of Seller or Coltre
Broadcasting, Inc. not specifically assumed by Buyer pursuant to this Agreement;
or
(e) any and all actions, suits, or proceedings, incident to any of the
foregoing.
13.2 Breach of Buyer's Agreements, Representations and Warranties.
============================================================
Buyer shall reimburse Seller for, and indemnify and hold harmless Seller from
and against, any loss, damage, liability, obligation, deficiency, claim, suit,
cause of action, demand, judgment, or expense (including without being limited
to, payments, fines, penalties, interest, taxes, assessments, reasonable
attorney's fees and accounting fees of any kind or nature), contingent or
otherwise, whether incurred or asserted prior to or after Closing Date, arising
out of or sustained by Seller by reason of:
(a) any material breach of any warranty, representation, or agreement
of Buyer contained under this Agreement or any certificate or other instrument
furnished by Buyer pursuant to this Agreement or in connection with any of the
transactions contemplated hereby;
(b) the operation of the Station or the ownership of the Assets
subsequent to Closing (including, but not limited to, any and all claims,
liabilities and obligations first arising or required to be performed subsequent
to the Closing Date under the Agreement);
(c) any transaction entered into by Buyer or first arising in
connection with the Station or the operation of the business thereof or any of
the Assets subsequent to the Closing;
(d) any and all liabilities or obligations of Seller specifically
assumed by Buyer pursuant to this Agreement; or
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<PAGE>
(e) any and all actions, suits, or proceedings incident to any of the
foregoing.
13.3 Notice of Claim. Buyer and Seller agree to give prompt written
===============
notice to each other of any claim for indemnification under Sections 13.1 or
13.2 hereof ("Notice of Claim"), which amount is believed to be required to
discharge the obligations of the indemnifying party resulting therefrom. Within
ten (10) days after having been given the Notice of Claim, the indemnifying
party may deliver to the other party (i) a written notice of objection to the
payment of such claim ("Notice of Objection"), which Notice of Objection shall
set forth the basis for such objection; or (ii) a written notice that the
indemnification party intends to defend against such claim in good faith
("Notice of Intention to Defend"). If such a Notice of Intention to Defend is
delivered, the indemnified party shall have the right to hold in abeyance its
claim for indemnification if and so long as such defense is conducted by the
indemnifying party at the latter's expense in a manner effective to protect the
indemnified party against such claim. If no Notice of Objection or Notice of
Intention to Defend is given within the prescribed ten (10) day period, the
indemnifying party shall promptly pay to the indemnified party the amount set
forth in the Notice of Claim. If the parties are unable to resolve any Notice of
Claim and corresponding Notice of Objection, either party may take whatever
action it deems reasonable, including without limitation, the filing of a claim,
petition, or other pleading in a court of competent jurisdiction.
13.4 Sole Remedy. Except as provided to the contrary in this Agreement,
===========
the right to indemnification pursuant to this Section shall be the sole and
exclusive remedy of each party in connection with any breach or other violation
by the other party of its representations, warranties, or covenants contained in
this Agreement.
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<PAGE>
SECTION 14
RISK OF LOSS
============
The risk of any loss or damage to the Assets by fire, theft, breakage,
explosion, earthquake, accident, flood, rain, storm, riot, act-of-God, or public
enemy, or any other casualty or cause, reasonable wear and tear excepted, prior
to the Closing Date, is assumed and shall be borne by the Seller at all times
before the Closing Date. If any such loss or damage occurs, Seller shall give
prompt written notice of the loss or damage to Buyer and shall promptly take all
steps to rebuild, replace, restore or repair any such damaged property at is own
cost and expense. In the event that Seller does not fully replace or restore
any such lost or damaged Asset or Assets by the time the Closing otherwise would
be held, Buyer may, at its option, upon written notice to Seller, either (i)
terminate this Agreement, or (ii) elect to close without restoration, in which
event Seller will deliver all insurance proceeds paid or payable by reason of
the loss or damage to Buyer, notwithstanding Section 1.2.6. If Buyer terminates
this Agreement under this Section, each party shall bear its own expenses, and
the Escrow Agent shall deliver to Buyer the Escrow Deposit and all interest
earned thereon and repayment of the Two Hundred Fifty Thousand DOLLARS
($250,000.00). Buyer's option to terminate this Agreement under this Section 14
shall arise only if such damage to the Station is so substantial that it
prevents the Station from operating in its normal and customary manner for a
period of five (5) consecutive days. Buyer's failure to terminate this Agreement
under Section 14 in the event damage to the Station is substantial does not
affect its right to other remedies under this Section 14.
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<PAGE>
SECTION 15
FEES AND EXPENSES
=================
Each party shall pay its own attorneys' fees and expenses which it
initiates, creates, or incurs in connection with the negotiation, preparation
and execution of this Agreement. Real estate transfer and recording fees
assessed or levied in connection with the sale of the Real Property to the Buyer
hereunder shall be paid in accordance with the custom prevailing in Bethalto,
Illinois, on the Closing Date. All other expenses incurred in connection with
this transaction shall be borne by the party incurring same. Buyer will pay the
filing or recording fees incident to any instrument of conveyance or transfer
delivered pursuant to this Agreement.
SECTION 16
BULK SALES LAW
==============
The parties do not believe that any bulk sales or fraudulent conveyance
statute applies to the transactions contemplated by this Agreement. Buyer
therefore waives compliance by Seller with the requirements of any such
statutes, and Seller agrees to indemnify and hold Buyer harmless against any
claim made against Buyer by any creditor of Seller as a result of a failure to
comply with any such statute.
SECTION 17
DEFAULT AND TERMINATION
=======================
17.1 A party shall "default" under this Agreement if it knowingly makes any
material misrepresentation to the other party in connection with this Agreement,
or materially breaches or fails to perform any of its representations,
warranties, or covenants contained in this Agreement. Non-material breaches or
failures shall not be grounds for declaring a party to be in default, postponing
the Closing, or terminating this Agreement.
17.2 If either party believes the other to be in default hereunder, the
former party shall
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<PAGE>
provide the other with written notice specifying in reasonable detail the nature
of such default. If the default is not curable or has not been cured within
fifteen (15) days after delivery of that notice (or such additional reasonable
time as the circumstances may warrant provided the party in default undertakes
diligent, good faith efforts to cure the default within such fifteen (15) day
period and continues such efforts thereafter), then the party giving such notice
may terminate this Agreement and/or exercise the remedies available to such
party pursuant to this Agreement, subject to the right of the other party to
contest such action through appropriate proceedings.
17.3 Buyer recognizes that if the transaction contemplated by this Agreement is
not consummated as a result of Buyer's default, Seller would be entitled to
compensation, the extent of which is extremely difficult and impractical to
ascertain. To avoid this problem, the parties agree that if this Agreement is
not consummated due to the default of Buyer, Seller shall be entitled to receive
as liquidated damages the Escrow Earnest Deposit. The parties agree that such
amount (i.e. Six Hundred Eighty Thousand DOLLARS ($680,000.00)) shall constitute
liquidated damages and shall be in lieu of any other remedies to which Seller
might otherwise be entitled due to Buyer's wrongful failure to consummate the
transaction contemplated by this Agreement. All interest or other proceeds from
the investment of the Escrow Earnest Deposit shall be paid to Seller. Buyer and
Seller each acknowledge and agree that the liquidated damage amount is
reasonable in light of the anticipated harm which will be caused by Buyer's
breach of this agreement, the difficulty of proof of loss, the inconvenience and
non-feasibility of otherwise obtaining an adequate remedy, and the value of the
transaction to be consummated hereunder.
17.4 Seller agrees that the Assets include unique property that cannot be
readily obtained on the open market and that Buyer will be irreparably injured
if this Agreement is not
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<PAGE>
specifically enforced. Therefore, Buyer shall have the right specifically to
enforce Seller's performance under this Agreement, and Seller agrees to waive
the defense in any such suit that Buyer has an adequate remedy at law and to
interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy. In the event Buyer elects to terminate this Agreement
as a result of Seller's default instead of seeking specific performance, Buyer
shall be entitled to the return of the Escrow Earnest Deposit plus accrued
interest and repayment of the Two Hundred Fifty Thousand DOLLARS ($250,000.00)
and to pursue all available remedies at law or equity.
SECTION 18
SURVIVAL OF WARRANTIES
======================
18.1 All representations, warranties, and covenants made by the parties in this
Agreement shall be deemed made for the purpose of inducing the other to enter
into this Agreement, and shall survive the Closing and remain operative and in
full force and effect, for a period of six (6) months.
18.2 Neither the acceptance nor the delivery of property hereunder shall
constitute a waiver of any covenant, representation, warranty, agreement,
obligation, undertaking, or indemnification of Seller or Buyer contained in this
Agreement, all of which shall, unless otherwise specifically provided, survive
the Closing hereunder in accordance with the terms of this Agreement and shall
be binding upon and inure to the benefit of all of the parties hereto, their
heirs, legal representatives, successors and assigns.
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<PAGE>
SECTION 19
NOTICES
=======
19.1 All notices, requests, demands, waivers, consents and other communications
required or permitted hereunder shall be in writing and be deemed to have been
duly given when delivered in person (against receipt) to the party to be
notified at the address set out below or sent by registered or certified mail,
or by express mail or courier, postage prepaid, return receipt requested,
addressed to the party to be notified, as follows:
If to Seller:
Arch Broadcasting, L.P.
c/o Aaron P. Shainis, Secretary/Treasurer
1901 L Street, N.W., Suite 290
Washington, DC 20036
With a copy (which shall not constitute notice) to:
Lee J. Peltzman, Esq.
1901 L Street, N.W., Suite 290
Washington, DC 20036
If to Buyer:
Alfred C. Liggins, President
Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20708
With a copy (which shall not constitute notice) to:
Linda J. Eckard, Esq.
General Counsel
Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20708
Either party may change its address for notices by written notice to the
other given pursuant to this Section. Any notice purportedly given by a means
other than as provided in this
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<PAGE>
Section shall be invalid and shall have no force or effect.
SECTION 20
MISCELLANEOUS
=============
20.1 Headings. The headings of the Sections of this Agreement are for
========
convenience of reference only, and do not form a part thereof, and do not in any
way modify, interpret or construe the meaning of the sections themselves or the
intentions of the parties.
20.2 Assignability. Subject to the consent of Seller, Buyer may assign its
=============
rights under this Agreement to the third party. Such consent shall not be
unreasonably withheld.
20.3 Entire Agreement. This Agreement and any other agreements entered into
================
contemporaneously herewith set forth the entire agreement of the parties and are
intended to supersede all prior negotiations, understandings, and agreements and
cannot be altered, amended, changed or modified in any respect or particular
unless each such alteration, amendment, change or modification shall have been
agreed to by each of the parties hereto and reduced to writing in its entirety
and signed and delivered by each party. No provision, condition or covenant of
this Agreement shall be waived by either party hereto except by a written
instrument delivered to the other party and signed by the party consenting to
and to be charged with such waiver.
20.4 Binding Effect and Assignment. This Agreement shall be binding upon
==============================
and inure to the benefit of and be enforceable by the parties hereto, and their
respective successors and assigns. Neither party hereto may assign this
Agreement or its rights and obligations hereunder without the written consent of
the other; provided, however, Buyer may assign this Agreement without Seller's
consent to any entity which is a subsidiary or parent of Buyer or to another
legal entity owned by Buyer or its principals, provided Buyer provides written
notice to Seller. Buyer
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<PAGE>
may make a collateral assignment of its rights under this Agreement to any
institutional lender who provides funds to Buyer for the acquisitions or
operation of the Stations. Seller agrees to execute acknowledgements of such
assignment(s) and collateral assignments in such forms as Buyer or Buyer's
institutional lender(s) may from time to time request, provided that such
acknowledgments create no liability for Seller. In the event of such a proposed
assignment by Buyer, the provisions of this Agreement shall inure to the benefit
of and be binding upon Buyer's assigns. Nothing in this Agreement, express or
implied, is intended to or shall confer on any person other than the parties
hereto and their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
20.5 Additional Documents. The parties hereto agree to execute, acknowledge
====================
and deliver, at or after the Closing Date, such other and further instruments
and documents as may be reasonably necessary to implement, consummate and
effectuate the terms of this Agreement, the effective vesting in Buyer of title
to the Assets, and/or the successful processing by the Commission of the
application to be filed with it, as provided in Section 4.
20.6 Counterparts. This Agreement may be executed in one or more
============
counterparts, all of which together shall comprise one and the same instrument.
20.7 Legal Actions. If either Seller or Buyer initiates any legal action or
=============
lawsuit against the other involving this Agreement, the prevailing party in such
action or suit shall be entitled to receive reimbursement from the other party
for all reasonable attorney's fees and other costs and expenses incurred by the
prevailing party in respect of that litigation, including any appeal, and such
reimbursement may be included in the judgement or final order issued in such
proceeding. Any award of damages following judicial remedy or arbitration as a
results of the breach of this
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<PAGE>
Agreement or any of its provisions shall include an award of prejudgment
interest from the date of the breach at the maximum rate of interest allowed by
law.
20.8 Governing Law. The parties agree that this agreement and the
=============
transaction herein contemplated shall be interpreted, construed, and enforced
under and according to the laws of the State of Illinois.
20.9 Counsel. Each party has been represented by its own counsel in
=======
connection with the negotiation and preparation of this Agreement and,
consequently, each party hereby waives the application of any rule of law to the
effect that any provision of this Agreement shall be interpreted or construed
against the party whose counsel drafted that provision.
20.10 Time is of the Essence. Time shall be of the essence in this
======================
Agreement and the performance of each and every provision hereof.
20.11 Severability. If any term or provision of this Agreement or its
============
application, to any extent, is declared to be invalid or unenforceable, the
remaining terms and provisions shall not be affected and shall remain in full
force and effect and to such extent are severable.
20.12 Publicity. Seller and Buyer agree that all public announcements
=========
relating to this agreement or the transactions contemplated hereby, including
announcements to employees, will be made only as may be mutually agreed upon by
the parties, which consent shall not be unreasonably withheld, except that
Seller acknowledges Buyer will be issuing a press release regarding this
transaction.
20.13 (a) Seller agrees that it will not amend, alter, modify or change the
Asset Purchase Agreement between Seller and Coltre Broadcasting, Inc. ("Coltre
APA"), dated July 6, 1998, as amended on September 8, 1998, without the prior
written consent of Buyer.
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<PAGE>
(b) Prior to the consummation of the transaction contemplated by the
Coltre APA, Seller agrees to promptly take any and all actions which it is
required to take under the Coltre APA and to take any and all actions necessary
to enforce its rights under the Coltre APA. After consummation of the
transactions contemplated by the Coltre APA, the Seller agrees, solely at the
discretion of the Buyer, to take any and all actions to enforce its rights under
the Coltre APA, including without limitation, all rights of indemnification.
The Seller further agrees and acknowledges that on and after the consummation of
the transaction contemplated by the Coltre APA without prior written consent of
Buyer, and Seller will, to the extent possible, permit Buyer to take any and all
actions under the Coltre APA that Seller would otherwise be permitted to take.
Should Buyer request that such actions be taken after consummation of the
transactions contemplated by this Agreement, the Buyer shall be permitted at its
expense to participate in such actions.
20.14 Post Closing Cooperation. From the date of Closing and for a period
========================
of three (3) years thereafter, Seller shall provide Buyer with such cooperation
and information as Buyer shall reasonably request in Buyer's: (i) analysis and
review of the financial statements for the Station or (ii) preparation of
documentation to fulfill any reporting requirements of Buyer including reports
that may be filed with the Securities and Exchange Commission. Such cooperation
and information shall include providing copies of relevant tax returns or
portions thereof, together with the accompanying schedules and related work
papers and documents relating to rulings or other determinations by tax
authorities. Arch shall make its independent accounting firm available, the cost
of said firm to be paid by the Buyer, and the information relied upon by that
firm, including its opinions and financial statements for the Station, to
provide explanations of
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<PAGE>
disclosure to any governmental authority.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and executed by their proper officers thereunto duly authorized as of the
day and year first above written.
SELLER:
ARCH BROADCASTING, L.P.
BY: /s/ Aaron P. Shainis
--------------------
Aaron P. Shainis
Secretary/Treasurer
Arch Broadcasting, Inc., General Partner
BUYER:
RADIO ONE, INC.
BY: /s/ Alfred C. Liggins
----------------------
Alfred C. Liggins
President
-48-
<PAGE>
AMENDMENT TO
ASSET PURCHASE AGREEMENT
Arch Broadcasting, L.P. ("Arch" or "Seller") and Radio One, Inc. ("Radio
One" or "Buyer") have executed an Asset Purchase Agreement ("Agreement") dated
November 23, 1998, whereby Buyer shall acquire from Seller, subject to FCC
approval, the license and other assets used in the operation of Station
WFUN(FM), Bethalto, Illinois. The parties, in order to clarify the November 23,
1998 Agreement and achieve certainty as to their respective obligations to one
another, hereby amend the Agreement as follows:
1. Escrow Account. The funds to be placed in escrow pursuant to Section
--------------
2(c) of the Agreement shall be used for the purpose of constructing modified
facilities for Station KWWR, Mexico, Missouri, at a site more particularly
described in Section 2(b) below, satisfying the obligations under the agreement
with KXEO Radio, Inc., as described in Section 2(a) below, and constructing
modified facilities for Station WFUN, Bethalto, Illinois, at a site more
particularly described in Section 2(e) below. The funds shall be held in an
escrow account pursuant to an Escrow Agreement and disbursed in the manner
provided in a Construction and Management Agreement as more particularly
described in Section 2(h) below.
2. Additional Conditions Precedent to Obligations of Buyer. The performance
-------------------------------------------------------
of the obligations of Buyer under the Agreement is subject to the satisfaction
of each of the following express conditions precedent, provided that Buyer may,
at its election, waive any of such conditions on the Closing Date,
notwithstanding that such condition is not fulfilled on the Closing Date:
(a) Seller shall have entered into a binding agreement with KXEO Radio,
Inc. ("KXEO Agreement"), wherein KXEO Radio, Inc., agrees to move the
transmitter site for Station KWWR to the location more particularly described in
Section 2(b) below, KXEO Radio, Inc., agrees to permit Seller to manage the
construction of the modified facilities and such agreement with KXEO Radio,
Inc., is assigned to Buyer.
<PAGE>
(b) The Federal Communications Commission must have granted the
modification application to relocate Station KWWR to a site located at Latitude
39[degrees] 15' 49", Longitude 92[degrees] 08' 06" without any conditions
adverse to Buyer and such grant must have become final.
(c) The land on which Station KWWR proposes to construct its modified
facilities as more particularly described in Section 2(b) above must be
available for immediate construction of the modified facilities either through
purchase or lease agreement.
(d) All regulatory approvals, including FAA and zoning, to permit
construction of the modified facilities more particularly described in Section
2(b) must be obtained without any conditions adverse to Buyer and such approvals
must no longer be subject to reconsideration or appeal. Or, if local zoning
approval is not required, then an opinion letter from local counsel to that
effect must be delivered at closing.
(e) The Federal Communications Commission must have granted the
modification application to relocate Station WFUN to a site located at Latitude
38[degrees] 45' 44", Longitude 90[degrees] 11' 23" with an antenna height above
average terrain of 158 meters and to change from a Class A to a Class C3 without
any adverse conditions to Buyer and such grant must have become final.
(f) The land on which Station WFUN proposes to construct its modified
facilities as more particularly described in Section 2(e) above must be
available for immediate constructions of the modified facilities either through
purchase or long term lease agreement.
(g) All regulatory approvals, including FAA and zoning, to permit
construction of the modified facilities more particularly described in Section
2(e) must be obtained without any conditions adverse to Buyer and such approvals
must no longer be subject to reconsideration or appeal.
(h) Seller and Buyer shall have entered into a Construction and Management
Agreement in substantially the form attached hereto.
<PAGE>
3. Closing on Acquisition from Coltre Broadcasting, Inc. Seller
----------------------------------------------------
acknowledges that Buyer has an interest in assurances that Seller's Acquisition
of Station WFUN(FM) from Coltre Broadcasting, Inc., is properly documented.
Seller agrees to permit Buyer to review the documentation prepared for Seller's
closing on the acquisition of Station WFUN from Coltre Broadcasting, Inc., in
advance of execution of those documents.
4. Termination of Agreement. Buyer may terminate the Agreement by five (5)
------------------------
business days prior to written notice to Seller, and without liability to
Seller, at any time after one hundred eighty (180) days after the date of the
Agreement if any of the conditions precedent described in Section 2 have not
been satisfied. Upon termination, Buyer shall be entitled to a return of the
Escrow Earnest Deposit plus accrued interest and repayment of the Two Hundred
Fifty Thousand Dollars ($250,000).
5. Time is of the Essence. Time is of the essence in this Agreement and the
----------------------
performance of each and every provision hereof.
6. Counterparts. The instant document may be signed in counterparts, each
------------
one shall be deemed a duplicate original.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Addendum to Asset
Purchase Agreement to be signed and executed by their proper officers thereunto
duly authorized as of this 4th day of December, 1998.
SELLER:
ARCH BROADCASTING, L.P.
BY: /s/ Aaron P. Shainis
---------------------
Aaron P. Shainis
Secretary/Treasurer of
Arch Broadcasting, Inc., General Partner
BUYER:
RADIO ONE, INC.
BY: /s/ Alfred C. Liggins
----------------------
Alfred C. Liggins
President
<PAGE>
Exhibit 10.42
ASSETS PURCHASE AGREEMENT
by and among
CLEAR CHANNEL BROADCASTING, INC.
and
CLEAR CHANNEL BROADCASTING LICENSES, INC.
and
RADIO ONE, INC.
Concerning the Sale of
Radio Stations
WENZ-FM and WERE(AM),
Cleveland, Ohio
<PAGE>
TABLE OF CONTENTS
<TABLE>
Page
<S> <C>
ARTICLE 1 PURCHASE OF ASSETS
1.1 TRANSFER OF ASSETS............................................... 2
1.2 EXCLUDED ASSETS.................................................. 2
1.3 APPORTIONMENT OF CONTRACTS....................................... 3
1.4 RETAINED PORTION OF WERE(AM) TOWER SITE.......................... 4
1.4.1 SUBDIVISION OF WERE TOWER PROPERTY......................... 4
1.4.2 PROCEDURE FOR SUBDIVISION.................................. 5
ARTICLE 2 ASSUMPTION OF OBLIGATIONS................................... 5
2.1 ASSUMPTION OF OBLIGATIONS........................................ 5
2.2 RETAINED LIABILITIES............................................. 5
ARTICLE 3 CONSIDERATION............................................... 6
3.1 DELIVERY OF CONSIDERATION........................................ 6
3.2 ESCROW DEPOSIT................................................... 6
3.3 PRORATION OF INCOME AND EXPENSES; TRADE AGREEMENTS ADJUSTMENT
3.4 ALLOCATION OF PURCHASE PRICE..................................... 7
ARTICLE 4 CLOSING..................................................... 7
4.1 CLOSING.......................................................... 8
4.2 UNWIND........................................................... 8
ARTICLE 5 GOVERNMENTAL CONSENTS....................................... 8
5.1 FCC CONSENT AND DEPARTMENT OF JUSTICE CONSENT.................... 8
5.2 FCC APPLICATION.................................................. 8
5.3 HSR APPLICATION.................................................. 9
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYER..................... 9
6.1 ORGANIZATION AND STANDING........................................ 9
6.2 AUTHORIZATION AND BINDING OBLIGATION............................. 9
6.3 QUALIFICATION.................................................... 10
6.4 ABSENCE OF CONFLICTING AGREEMENTS OF REQUIRED CONSENTS........... 10
6.5 LITIGATION....................................................... 10
6.6 COMMISSIONS OR FINDER'S FEES..................................... 10
6.7 AVAILABILITY OF FUNDS............................................ 10
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER.................... 10
7.1 ORGANIZATION AND STANDING........................................ 11
7.2 AUTHORIZATION AND BINDING OBLIGATION............................. 11
7.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS........... 11
7.4 GOVERNMENT AUTHORIZATIONS........................................ 11
7.5. COMPLIANCE WITH FCC REGULATIONS................................. 12
7.6 TAXES............................................................ 12
7.7 PERSONAL PROPERTY................................................ 12
7.8 REAL PROPERTY.................................................... 12
7.9 CONTRACTS........................................................ 14
7.10 STATUS OF CONTRACTS, ETC........................................ 14
7.11 ENVIRONMENTAL................................................... 14
7.12 INTELLECTUAL PROPERTY........................................... 14
7.13 PERSONNEL INFORMATION........................................... 14
</TABLE>
<PAGE>
<TABLE>
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<S> <C>
7.14 LITIGATION..................................................... 15
7.15 COMMISSIONS OR FINDER'S FEES................................... 15
7.16 INSURANCE...................................................... 15
7.17 COMPLIANCE WITH LAWS........................................... 15
7.18 FINANCIAL INFORMATION.......................................... 16
ARTICLE 8 COVENANTS OF BUYER......................................... 16
8.1 CLOSING......................................................... 16
8.2 NOTIFICATION.................................................... 16
8.3 NO INCONSISTENT ACTION.......................................... 16
8.4 ACCOUNTS RECEIVABLE............................................. 16
ARTICLE 9 COVENANTS OF SELLER........................................ 17
9.1 SELLER'S PRE-CLOSING COVENANTS.................................. 17
9.2 NOTIFICATION.................................................... 19
9.3 NO INCONSISTENT ACTION.......................................... 19
9.4 CLOSING......................................................... 19
9.5 COOPERATION WITH RESPECT TO FINANCIAL INFORMATION............... 19
ARTICLE 10 JOINT COVENANTS........................................... 19
10.1 CONFIDENTIALITY................................................ 19
10.2 COOPERATION.................................................... 20
10.3 CONTROL OF STATIONS............................................ 21
10.4 CONSENTS TO ASSIGNMENT......................................... 21
10.5 FILINGS........................................................ 21
10.6 EMPLOYEE MATTERS............................................... 21
10.7 SECTION 1031 ASSET EXCHANGE.................................... 22
10.8 TRUST.......................................................... 22
10.9 STUDIO LOCATION................................................ 23
10.10 LEASE WITH PURCHASER OF WNCX-FM............................... 23
ARTICLE 11 CONDITIONS OF CLOSING BY BUYER............................ 23
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS...................... 23
11.2 GOVERNMENTAL CONSENTS.......................................... 24
11.3 TRUST.......................................................... 24
11.4 GOVERNMENTAL AUTHORIZATIONS.................................... 24
11.5 ADVERSE PROCEEDINGS............................................ 24
ARTICLE 12 CONDITIONS OF CLOSING BY SELLER........................... 24
12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS...................... 24
12.2 GOVERNMENTAL CONSENTS.......................................... 25
12.3 ADVERSE PROCEEDINGS............................................ 25
12.4 JACOR CLOSING................................................. 25
12.5 TRUST.......................................................... 25
12.6 WNCX LEASE..................................................... 25
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES......................... 25
13.1 EXPENSES....................................................... 25
13.2 TRANSFER TAXES AND SIMILAR CHARGES............................. 25
13.3 GOVERNMENTAL FILING OR GRANT FEES.............................. 25
ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING...................... 26
14.1 SELLER'S DOCUMENTS............................................. 26
14.2 BUYER'S DOCUMENTS.............................................. 26
ARTICLE 15 SURVIVAL; INDEMNIFICATION; ETC............................ 27
</TABLE>
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<TABLE>
<CAPTION>
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15.1 SURVIVAL OF REPRESENTATIONS, ETC............................... 27
15.2 INDEMNIFICATION................................................ 27
15.3 PROCEDURES; THIRD PARTY AND DIRECT INDEMNIFICATION CLAIMS...... 28
ARTICLE 16 TERMINATION RIGHTS........................................ 29
16.1 TERMINATION.................................................... 29
16.2. LIABILITY..................................................... 30
16.3. MONETARY DAMAGES, SPECIFIC PERFORMANCE AND OTHER REMEDIES..... 30
16.4 SELLER'S LIQUIDATED DAMAGES.................................... 31
16.5 SURVIVAL....................................................... 31
ARTICLE 17 MISCELLANEOUS PROVISIONS.................................. 31
17.1 CASUALTY LOSS.................................................. 31
17.2 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS................... 31
17.3 FURTHER ASSURANCES............................................. 32
17.4 BENEFIT AND ASSIGNMENT......................................... 32
17.5 AMENDMENTS..................................................... 32
17.6 HEADINGS....................................................... 33
17.7 GOVERNING LAW.................................................. 33
17.8 NOTICES........................................................ 33
17.9 COUNTERPARTS................................................... 34
17.10 NO THIRD PARTY BENEFICIARIES.................................. 34
17.11 SEVERABILITY.................................................. 34
17.12 ENTIRE AGREEMENT.............................................. 34
</TABLE>
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedule 1.1.5 Programming Materials, Etc.
1.2.8 Miscellaneous Excluded Assets
7.4 Station Licenses, Etc.
7.7 Tangible Personal Property
7.8 Real Property
7.9 Contracts
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Personnel Information
7.14 Litigation
7.16 Insurance
7.17 Compliance with Laws
10.6 Retained Employees
Exhibit
A Approximation of Retained Property
B Deposit Escrow Agreement
C Assignment and Assumption Agreement
<PAGE>
ASSETS PURCHASE AGREEMENT
-------------------------
THIS ASSETS PURCHASE AGREEMENT (this "Agreement") is made and entered this
29th day of March, 1999, by and among CLEAR CHANNEL BROADCASTING, INC., a Nevada
corporation ("CCB"), and CLEAR CHANNEL BROADCASTING LICENSES, INC., a Nevada
corporation ("CCBL") (together, "Seller"), and RADIO ONE, INC., a Delaware
corporation ("Buyer").
RECITALS
--------
WHEREAS, Seller owns and operates radio stations WENZ-FM and WERE(AM),
Cleveland, Ohio (each, individually a "Station" and together, the "Stations")
pursuant to licenses issued by the Federal Communications Commission ("FCC");
WHEREAS, Clear Channel Communications, Inc., the parent of Seller ("Clear
Channel Parent") and CCU Merger Sub, Inc., a Delaware corporation ("Clear
Channel Merger Sub"), have entered into that certain Agreement and Plan of
Merger, dated October 8, 1998, as amended November 11, 1998 (the "Jacor
Agreement"), with Jacor Communications, Inc., a Delaware corporation ("Jacor"),
pursuant to which Jacor will merge with and into Clear Channel Merger Sub;
WHEREAS, Buyer and Seller desire that prior to, or simultaneously with, the
consummation of the transactions contemplated in the Jacor Agreement (the "Jacor
Closing"), in order to comply with certain regulatory limits, Seller will sell
and Buyer will purchase certain assets and assume certain obligations associated
with the ownership and operation of the Stations, all on the terms and subject
to the conditions set forth herein; and
WHEREAS, Seller and Buyer hereby desire that Seller may, at Seller's option
upon notice to Buyer and with prior FCC consent, assign the assets and licenses
of the Stations to a trustee ("Trustee") who would operate and maintain the
Stations between the closing under the Jacor Agreement and the Closing Date
hereunder, pursuant to a trust agreement (the "Trust"), and upon such
circumstances, the Trustee would be charged with consummation of the
transactions contemplated hereunder on Seller's behalf and would be required to
perform Seller's duties hereunder with respect to the Station Assets held in the
Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants and agreements hereinafter set forth, the parties hereto, intending to
be legally bound, hereby agree as follows:
<PAGE>
ARTICLE 1
PURCHASE OF ASSETS
------------------
1.1 Transfer of Assets. On the terms and subject to the conditions
------------------
hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined),
Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and assume from Seller, all of the right, title and interest of
Seller in and to all of the assets, properties, interests and rights of Seller
of whatsoever kind and nature, real and personal, tangible and intangible, owned
or leased (to the extent of Seller's leasehold interest) by Seller as the case
may be which are used exclusively in the operation of the Stations and which are
---
specifically described in this Section 1.1, excluding the Excluded Assets as
hereafter defined (the "Station Assets"):
1.1.1 all licenses, permits and other authorizations issued to Seller
by any governmental or regulatory authority, including without limitation those
issued by the FCC with respect to the Stations (the licenses, permits and
authorizations issued by the FCC are hereafter referred to as the "Stations
Licenses"), which are used exclusively in connection with the operation of the
Stations as described in Schedule 7.4, along with renewals or modifications of
------------
such items between the date hereof and the Closing Date;
1.1.2 all equipment, electrical devices, antennae, cables, tools,
hardware, office furniture and fixtures, office materials and supplies,
inventory, motor vehicles, spare parts and all other tangible personal property
of every kind and description, and Seller's rights therein, owned, leased (to
the extent of Seller's leasehold interest) or held by Seller and used
exclusively in connection with the operation of the Stations and which are
---
listed in Schedule 7.7, and less any retirements or dispositions thereof made
------------
between the date hereof and the Closing Date in the ordinary course of business
and consistent with past practices of Seller;
1.1.3 all Time Sales Agreements (as defined in Section 2.1), all
Trade Agreements (as defined in Section 2.1), all Real Estate Contracts (as
defined in Section 7.8), and all other contracts, agreements, leases and legally
binding contractual rights, written or oral, relating to the operation of the
Stations which are listed in Schedule 7.8 or Schedule 7.9, together with all
------------ ------------
contracts, agreements, leases and legally binding contractual rights entered
into or acquired by Seller or the Trustee, as the case may be, between the date
hereof and the Closing Date in the ordinary course of business which relate to
the operation of the Station Assets and which are consistent with Section
9.1.4(e) (collectively, the "Contracts");
1.1.4 all of Seller's rights in and to the call letters "WENZ-FM" and
"WERE(AM)" as well as Seller's rights in and to the trademarks, trade names,
service marks, franchises, copyrights, including registrations and applications
for registration of any of them, computer software, programs and programming
material, jingles, slogans, logos and all other logos or licenses to use same
and all other intangible property rights of Seller, which are used exclusively
in connection with the operation of the Stations and which are listed in
---
Schedule 7.12 (collectively, the "Intellectual Property");
- -------------
1.1.5 all programming materials and elements of whatever form or
nature owned by Seller that are used exclusively in connection with the
operation of the Stations, and which are
---
2
<PAGE>
listed on Schedule 1.1.5, whether recorded on tape or other medium or intended
--------------
for live performance;
1.1.6 Seller's rights in and to all the files, documents, records,
and books of account (or copies thereof) relating exclusively to the operation
of the Stations or to the Station Assets, including the Stations' local public
files, programming information and studies, blueprints, technical information
and engineering data, advertising studies, marketing and demographic data, sales
correspondence, lists of advertisers, credit and sales reports and filings with
the FCC, all written Contracts to be assigned hereunder, logs, software programs
and books and records relating to employees and operation matters; but excluding
records relating solely to any of the Excluded Assets (as hereinafter defined);
and
1.1.7 real property owned in fee by Seller which relates exclusively
to the Stations, together with all appurtenant easements thereunto and all
structures, fixtures and improvements located thereon, and which is described in
---
Schedule 7.8.
- ------------
The Station Assets shall be transferred to Buyer free and clear of all
liens, liabilities, encumbrances or rights of third parties whatsoever
("Liens"), except for (i) Assumed Liabilities as provided for in Section 2.1,
(ii) liens for taxes not yet due and payable and for which Buyer receives a
credit pursuant to Section 3.3.1, (iii) such easements, rights of way, building
and use restrictions, exceptions, reservations and limitations as do not in any
material way detract from the value of the property subject thereto or in any
material way interfere with or impair the present and continued use thereof in
the usual and normal conduct of the business of the Stations, (iv) such non-
monetary liens and encumbrances as do not in any material way detract from the
value of the property subject thereto or in any material way interfere with or
impair the present and continued use thereof in the usual and normal conduct of
the business of the Stations, and (v) those permitted encumbrances listed on
Schedule 7.7 (collectively, "Permitted Liens").
- ------------
1.2 Excluded Assets. Notwithstanding anything to the contrary contained
---------------
herein, it is expressly understood and agreed that the Station Assets shall not
include the following assets along with all rights, title and interest therein
(the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Seller on hand and/or in
banks, including without limitation certificates of deposit, commercial paper,
treasury bills, marketable securities, asset or money market accounts and all
such similar accounts or investments;
1.2.2 all accounts receivable or notes receivable arising in
connection with the operation of the Stations prior to the Closing Date;
1.2.3 all tangible and intangible personal property of Seller
disposed of or consumed in the ordinary course of business of Seller between the
date of this Agreement and the Closing Date;
1.2.4 all Contracts that have terminated or expired prior to the
Closing Date in the ordinary course of business of Seller;
3
<PAGE>
1.2.5 Seller's corporate seal, minute books, charter documents,
corporate stock record books and such other books and records as pertain to the
organization, existence or share capitalization of Seller and duplicate copies
of such records as are necessary to enable Seller to file its tax returns and
reports as well as any other records or materials relating to Seller generally
and not involving or relating to the Station Assets or the operation or
operations of the Stations;
1.2.6 contracts of insurance, and all insurance proceeds or claims
made thereunder, except as provided in Section 17.1;
1.2.7 all pension, profit sharing or cash or deferred (Section
401(k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Seller;
1.2.8 any right, property or asset described in Schedule 1.2.8, or
--------------
any right, property or asset not specifically described in Section 1.1 herein;
1.2.9 such portion of any Contract that is apportioned other than to
Buyer pursuant to Section 1.3 hereof; and
1.2.10 such portion of any Owned Real Estate that is retained by
Seller or otherwise not transferred to Buyer pursuant to Section 1.4 hereof.
1.3 Apportionment of Contracts. Notwithstanding anything to the contrary
--------------------------
contained herein, it is expressly understood and agreed that certain of the
Contracts are jointly used by and among WNCX-FM and one or both of the Stations.
Upon Closing, as to those Contracts used in common by WNCX-FM and by one or both
of the Stations, Seller will equitably allocate the rights and obligations
thereunder between the owner of WNCX-FM and Buyer in accordance with: (a) the
allocation in the contract (which shall control, if applicable); (b) industry
practice, if applicable; (c) quantifiable proportionate benefit; and (d)
reasonable allocation or accommodation, as determined by Seller. The parties
shall cooperate to effect such an equitable allocation, and, upon Closing Buyer
shall assume those contracts and leases assigned to it hereunder (whether such
assignment is in whole or allocated), and neither Seller nor the owner of WNCX-
FM shall have any obligations with respect to such contracts, or portions
thereof, allocated to Buyer.
1.4 Retained Portion of WERE(AM) Tower Site.
---------------------------------------
1.4.1 Subdivision of WERE Tower Property. Notwithstanding anything
----------------------------------
to the contrary contained herein, the parties acknowledge and agree that the
parcel of Owned Real Estate on which the WERE(AM) radio transmission towers (the
"WERE Towers") are located (the "WERE Tower Property") may, at Seller's election
(which may be exercised before or after Closing), be subdivided into two or more
separate parcels by Seller (if possible, prior to Closing), which subdivision
may include an easement for access to a portion of the WERE Tower Property that
will not be conveyed to Buyer at Closing and which would extend over the portion
of the WERE Tower Property that will be conveyed to Buyer at Closing (the
portion of
4
<PAGE>
the WERE Tower Property not being conveyed to Buyer, the "Retained Property").
Seller contemplates as of the date hereof that the Retained Property will
consist of: (i) the portion of the WERE Tower Property west of the WERE Towers,
and (ii) the north-eastern portion of the WERE Tower Property connecting to
Ridge Road (approximately 100 feet x 750 feet), each approximately as indicated
on Exhibit A. Any subdivision contemplated in this Section 1.4 shall be at
---------
Seller's sole expense, and the Retained Property shall be an Excluded Asset.
1.4.2 Procedure for Subdivision. If one or more of the subdivisions
-------------------------
contemplated in this Section 1.4 is not completed prior to Closing, the entire
WERE Tower Property (less the portion, if any, as to which a subdivision has
been completed) shall be conveyed to Buyer on the condition that, if the
subdivision occurs within two years after the Closing, Buyer shall reconvey the
Retained Portion to Seller or Seller's designee promptly after such subdivision
has occurred. If Seller elects to subdivide the WERE Tower Property, the parties
shall use their reasonable best efforts to reach mutual agreement on each of the
following: (a) if an easement for access is required in connection with all or a
portion of the Retained Property, a form of easement agreement (the "Easement
Agreement") designating the location of any required ingress and egress for the
Retained Property and the parties' rights to use and responsibilities for
maintaining any such easement, and (b) a form of restrictive covenant (the
"Restrictive Covenant") encumbering the Retained Property and benefiting the
remainder of the WERE Tower Property, and providing that the use and ownership
of the Retained Property shall not (i) interfere with or damage the operation of
the WERE Towers and any interference or damage caused by Seller or an agent of
Seller shall be remedied at Seller's sole expense, or (ii) impair the
obligations of the owner of the conveyed portion of the WERE Tower Property as
landlord under the WNCX Lease (defined below) or the lease(s) with Educational
Television Association of Metropolitan Cleveland. Any Easement Agreement or
Restrictive Covenant shall be executed, delivered and recorded in connection
with the Closing, or, if the subdivision is not then completed, upon
reconveyance of the Retained Property to Seller.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
-------------------------
2.1 Assumption of Obligations. Subject to the provisions of this Section
2.1, Section 2.2 and Section 3.3, on the Closing Date, Buyer shall assume, pay,
satisfy, discharge and perform in accordance with the terms thereof the
obligations of Seller arising or to be performed on and after the Closing Date
(except to the extent such obligations and liabilities arise out of or are
related to activities, events or transactions occurring prior to the Closing
Date) under the Contracts, including (a) all agreements for the sale of
advertising time on the Stations for cash and at prices consistent with Seller's
ordinary course of business ("Time Sales Agreements"); and (b) all agreements
which are for consideration other than cash, such as merchandise, services or
promotional consideration arising in the ordinary course of business of Seller
and listed on Schedule 7.9 hereto ("Trade Agreements"). All of the foregoing
------------
liabilities and obligations shall be referred to herein collectively as the
"Assumed Liabilities."
2.2 Retained Liabilities. Notwithstanding anything contained in this
--------------------
Agreement to the contrary, Buyer expressly does not, and shall not, assume or
agree to discharge or perform
5
<PAGE>
and will not be deemed by virtue of the execution and delivery of this Agreement
or any agreement, instrument or document delivered pursuant to or in connection
with this Agreement or otherwise by reason of or in connection with the
consummation of the transactions contemplated hereby or thereby, to have assumed
or to have agreed to discharge or perform, any liabilities, obligations or
commitments of Seller of any nature whatsoever whether accrued, absolute,
contingent or otherwise and whether or not disclosed to Buyer, other than the
Assumed Liabilities.
ARTICLE 3
CONSIDERATION
-------------
3.1 Delivery of Consideration. In consideration for the sale of the
-------------------------
Station Assets to Buyer, in addition to the assumption of certain obligations of
Seller pursuant to Section 2.1 above, Buyer shall, at the Closing (as
hereinafter defined), deliver to Seller TWENTY MILLION DOLLARS ($20,000,000) by
wire transfer of immediately available funds, subject to adjustment pursuant to
the provisions of Sections 3.2 and 3.3 below (the "Purchase Price").
3.2 Escrow Deposit.
--------------
3.2.1 Within one (1) business day of the execution and delivery of
this Agreement, Buyer, Seller and The Fifth Third Bank, as Escrow Agent (the
"Deposit Escrow Agent"), shall enter into a Deposit Escrow Agreement in the form
of Exhibit B hereto (the "Deposit Escrow Agreement") pursuant to which Buyer
---------
shall deposit the amount described below as a deposit on the amount of the
Purchase Price. Such amounts held in escrow shall be applied as set forth
herein and in the Deposit Escrow Agreement.
3.2.2 Buyer shall wire transfer TWO MILLION DOLLARS ($2,000,000) to
the Deposit Escrow Agent's trust account pursuant to the Deposit Escrow
Agreement (the "Escrow Deposit"), and at the Closing, the Escrow Deposit shall
be applied to the Purchase Price to be paid to Seller and the interest accrued
thereon shall be paid to Buyer. As more fully described in the Deposit Escrow
Agreement: (a) in the event of Buyer's material breach of this Agreement and
Seller shall not at such time be in material breach of this Agreement, the
Escrow Deposit, plus any interest earned thereon, shall be paid to Seller as
liquidated damages as provided in Section 16.4 hereto for Buyer's material
breach of this Agreement (the payment of such sum to Seller shall discharge any
liability Buyer may have to Seller hereunder other than in connection with any
FCC, Escrow Agent or other fees to the extent payable by Buyer hereunder),
unless Seller elects to specifically enforce the Agreement pursuant to the
provisions of Section 16.3; and (b) in the event this Agreement is terminated
under any circumstances other than a Closing hereunder or those set forth in the
immediately preceding clause (a), the Escrow Deposit and the interest accrued
thereon shall be paid to Buyer.
3.3 Proration of Income and Expenses; Trade Agreements Adjustment .
-------------------------------------------------------------
3.3.1 Except as otherwise provided herein, all deposits, reserves and
prepaid and deferred income and expenses relating to the Station Assets or the
Assumed Liabilities and
6
<PAGE>
arising from the conduct of the business and operations of the Stations shall be
prorated between Buyer and Seller in accordance with generally accepted
accounting principles as of 11:59 p.m., Eastern time, on the date immediately
preceding the Closing Date. Such prorations shall include, without limitation,
all ad valorem, real estate and other property taxes (but excluding taxes
arising by reason of the transfer of the Station Assets as contemplated hereby
which shall be paid as set forth in Section 13.2), business and license fees,
music and other license fees, utility expenses, amounts due or to become due
under Contracts to the extent provided in Section 3.3.3 hereof, rents, lease
payments and similar prepaid and deferred items. Real estate taxes shall be
apportioned on the basis of taxes assessed for the preceding year, with a
reapportionment, if any, as soon as the new tax rate and valuation can be
ascertained.
3.3.2 On the Closing Date, Seller shall deliver to Buyer a report,
dated as of the Closing Date (the "Closing Date Trade Report"), which report
lists all Trade Agreements included in the Station Assets and the contract end
date for each Trade Agreement together with an itemized statement of the
aggregate value of time owed ("Barter Payable") and the aggregate value of goods
and services to be received ("Barter Receivable") pursuant to each of the Trade
Agreements. To the extent that the aggregate value as reflected on the Closing
Date Trade Report of the Stations' Barter Payable is $30,000 more than the
aggregate value as reflected on the Closing Date Trade Report of the Barter
Receivable, Buyer shall be entitled to receive a credit against the Purchase
Price at Closing to the extent Barter Payable exceeds Barter Receivable by more
than $30,000.
3.3.3 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 3.3, to the extent practicable, shall
be made on the Closing Date. As to those prorations and adjustments not capable
of being ascertained on the Closing Date, an adjustment and proration shall be
made within ninety (90) days of the Closing Date.
3.3.4 In the event of any disputes between the parties as to such
adjustments, the amounts not in dispute shall nonetheless be paid at the time
provided in Section 3.3.3 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by Seller and
one-half by Buyer. Notwithstanding the foregoing, if the aggregate amount in
dispute is $5,000 or less, the disputed amount shall be shared equally by Buyer
and Seller.
3.4 Allocation of Purchase Price. The Purchase Price shall be allocated
----------------------------
among the Assets in a manner as mutually agreed between the parties based upon
an appraisal prepared by Bond & Pecaro (the cost of which shall be paid by
Seller), and such appraisal and allocation shall be completed prior to Closing
unless otherwise agreed to by the parties. Seller and Buyer agree to use the
allocations determined pursuant to this Section 3.4 for all tax purposes,
including without limitation, those matters subject to Section 1060 of the
Internal Revenue Code of 1986, as amended.
7
<PAGE>
ARTICLE 4
CLOSING
-------
4.1 Closing. Except as otherwise mutually agreed upon by Buyer and
-------
Seller, the consummation of the transactions contemplated herein (the "Closing")
shall occur on the later to occur of: (a) (i) the satisfaction or waiver of the
conditions to closing contained herein (excluding conditions that by their terms
cannot be satisfied until the Closing Date), and provided that each party hereto
shall use its reasonable commercial efforts to cause each condition to closing
to be satisfied so that the Closing may occur at the earliest possible date;
(ii) obtaining the FCC Consent (as defined in Section 5.1), (iii) obtaining the
DOJ Consent (as defined in Section 5.1), and (iv) the date of closing under the
Jacor Agreement, unless waived by Seller, or (b) such other date as may be
mutually agreed by the parties hereto (the "Closing Date"). The Closing shall
be held in the offices of Seller's counsel, or at such place and in such manner
as the parties hereto may agree.
4.2 Unwind. If the FCC Consent is reversed or otherwise set aside and
------
there is an order of the FCC (or a court of competent jurisdiction) that is no
longer subject to judicial or other review denying or disapproving the
assignment of the Stations Licenses to Buyer or returning, or requiring the
reassignment of, the Stations Licenses to CCBL (an "FCC Denial"), Buyer shall
assign to CCBL the Stations Licenses and reconvey to CCB the other Station
Assets, and Seller shall pay to Buyer the Purchase Price and reassume the
contracts and leases assigned and assumed at Closing, all on a mutually
agreeable date within thirty (30) days of any FCC Denial (or, if earlier, within
the time required by such order). In connection herewith, Buyer and Seller
shall each execute such documents and make such payments as are necessary to
give effect thereto. Each party further agrees to execute such documents,
instruments and agreements, and take such other action, as may be necessary to
implement any such transaction and carry out the intent of this Section 4.2 in
the event of an FCC Denial. In the event that Seller is precluded from having
the Stations Licenses and Station Assets assigned and reconveyed to it because
of restrictions imposed by the FCC and/or DOJ, then Seller and Buyer will
cooperate to assign and convey the Stations Licenses and Station Assets to a
mutually-agreeable third party. Any excess or deficiency between the Purchase
Price and the amount paid by such third-party buyer of the Stations shall be
split evenly between the Buyer and Seller. This Section shall survive the
Closing, but shall terminate on the date the FCC Consent becomes final.
ARTICLE 5
GOVERNMENTAL CONSENTS
---------------------
5.1 FCC Consent and Department of Justice Consent. It is specifically
---------------------------------------------
understood and agreed by Buyer and Seller that the Closing, the assignment of
the Stations Licenses and the transfer of the Station Assets are expressly
conditioned on and are subject to the prior consent and approval of (i) the FCC
without the imposition of any conditions materially adverse to either party or
their respective Affiliates (the "FCC Consent") and (ii) the United States
Department of Justice ("DOJ") without the imposition of any conditions
materially adverse to either party or their respective Affiliates ("DOJ
Consent").
5.2 FCC Application. If the same has not already been filed as of the
---------------
time of the execution hereof, then within three (3) business days after the
execution of this Agreement,
8
<PAGE>
Buyer and Seller shall file an application with the FCC for the FCC Consent (the
"FCC Application"). Buyer and Seller shall prosecute the FCC Application with
all reasonable diligence and otherwise use their reasonable best efforts to
obtain the FCC Consent as expeditiously as practicable (but neither Buyer nor
Seller shall have any obligation to satisfy complainants or the FCC by taking
any steps which would have a material adverse effect upon Buyer or Seller or
upon any of their respective Affiliates). If the FCC Consent imposes any
condition on Buyer or Seller or any of their respective Affiliates, such party
shall use its reasonable best efforts to comply with such condition; provided,
however, that neither Buyer nor Seller shall be required hereunder to comply
with any condition that would have a material adverse effect upon it or any of
its Affiliates. If reconsideration or judicial review is sought with respect to
the FCC Consent, the party affected shall vigorously oppose such efforts for
reconsideration or judicial review and the other party shall cooperate in such
efforts; provided, however, that nothing herein shall be construed to limit
either party's right to terminate this Agreement pursuant to Article 16 hereof.
5.3 HSR Application. If the same has not already been filed as of
---------------
the time of the execution hereof, then within ten (10) business days after the
execution of this Agreement, Buyer and Seller shall make any and all required
governmental filings pursuant to the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended (the "HSR Act") with respect to the transactions
contemplated hereby, and shall use their best efforts to respond as promptly as
practicable to all inquiries received from the applicable governmental agencies
or committees for additional information or documentation. Buyer and Seller
will notify each other of all correspondence, filings or communications between
such party or its representatives, on the one hand, and the applicable
governmental agencies or committees, on the other hand, with respect to this
Agreement and the transaction contemplated hereby. Buyer and Seller will
furnish each other with such necessary information and reasonable assistance as
such other parties may request in connection with their preparation of all
filings pursuant to the HSR Act.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby makes the following representations and warranties to Seller,
each of which is true and correct on the date hereof:
6.1 Organization and Standing. Buyer is a corporation duly organized,
-------------------------
validly existing and in good standing under the laws of the State of Delaware,
and at the time of Closing will be authorized to conduct business in the State
of Ohio.
6.2 Authorization and Binding Obligation. Buyer has all necessary power
------------------------------------
and authority to enter into and perform this Agreement and the transactions
contemplated hereby, and to own or lease the Station Assets and to carry on the
business of the Stations upon the consummation of the transactions contemplated
by this Agreement. Buyer's execution, delivery and performance of this
Agreement and the transactions contemplated hereby have been duly and validly
authorized by all necessary action on its part and, assuming the due
authorization, execution and delivery of this Agreement by Seller, this
Agreement will constitute the valid and
9
<PAGE>
binding obligation of Buyer, enforceable against it in accordance with its
terms, except as limited by laws affecting creditors' rights or equitable
principles generally.
6.3 Qualification. Buyer is legally, financially and otherwise
-------------
qualified to be the licensee of, acquire, own and operate the Stations under the
Communications Act of 1934, as amended, and the rules, regulations and policies
of the FCC. To the best knowledge of Buyer, there are no facts that would, under
existing law and the existing rules, regulations and policies of the FCC,
disqualify Buyer as an assignee of the Stations Licenses or as the owner and
operator of the Station Assets. No waiver of any FCC rule or policy is
necessary to be obtained for the grant of the application for the assignment of
the Stations Licenses to Buyer.
6.4 Absence of Conflicting Agreements of Required Consents. Except as
------------------------------------------------------
set forth in Article 5 hereof with respect to governmental consents, the
execution, delivery and performance of this Agreement by Buyer: (a) do not
conflict with the provisions of the articles of incorporation, operating
agreement, or by-laws of Buyer or with any other similar instrument of corporate
governance; (b) do not require the consent of any third party (including,
without limitation, the consent of any governmental, regulatory, administrative
or similar authority); (c) will not violate any applicable law, judgment, order,
injunction, decree, rule, regulation or ruling of any governmental authority to
which Buyer is bound; and (d) will not, either alone or with the giving of
notice or the passage of time, or both, conflict with, constitute grounds for
termination of or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any agreement, instrument, license or permit to
which Buyer is now subject.
6.5 Litigation. There is no claim, litigation, proceeding or investigation
----------
pending or, to the best of Buyer's knowledge, threatened against Buyer, that
could reasonably be expected to materially adversely affect Buyer's ability to
perform its obligations pursuant to this Agreement. Buyer is not in violation of
any law, regulation, or ordinance or any other requirement of any governmental
body or court which could reasonably be expected to have a material adverse
effect on Buyer's ability to perform its obligations pursuant to this Agreement.
6.6 Commissions or Finder's Fees'. Neither Buyer nor any person or
-----------------------------
entity acting on behalf of Buyer has agreed to pay a commission, finder's fee or
similar payment in connection with this Agreement or any matter related hereto,
except to Media Ventures Partners, whose fees shall be paid by Buyer, and Buyer
shall hold harmless and indemnify Seller therefor.
6.7 Availability of Funds. Buyer has available as of the date hereof
---------------------
sufficient funds to enable it to pay the Escrow Deposit as called for herein and
in the Escrow Agreement, and will have available on the Closing Date sufficient
funds to enable it to consummate the transactions contemplated hereby.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyer, each of
which is true and correct on the date hereof:
10
<PAGE>
7.1 Organization and Standing. Seller is a corporation duly organized,
-------------------------
validly existing and in good standing under the laws of the State of Nevada, is
authorized to conduct business within the State of Ohio, and has the power and
authority to own, lease and operate the Station Assets and to carry on the
business of the Stations as now being conducted and as proposed to be conducted
between the date hereof and the Closing Date.
7.2 Authorization and Binding Obligation. Seller has the power and
------------------------------------
authority, and has taken all necessary and proper action to enter into and
perform this Agreement and to consummate the transactions contemplated hereby.
This Agreement has been duly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery of this Agreement by
Buyer, constitutes the valid and binding obligation of Seller enforceable
against Seller in accordance with its terms, except as limited by laws affecting
the enforcement of creditor's rights or equitable principles generally.
7.3 Absence of Conflicting Agreements or Required Consents. Except as
------------------------------------------------------
set forth in Article 5 with respect to governmental consents and in Schedule 7.8
------------
or Schedule 7.9 with respect to consents required in connection with the
------------
assignment of certain Contracts, the execution, delivery and performance of this
Agreement by Seller: (a) do not require the consent of any third party
(including, without limitation, the consent of any governmental, regulatory,
administrative or similar authority); (b) do not conflict with, result in a
breach of, or constitute a violation of or default under, the provisions of
Seller's articles of incorporation, bylaws or other charter documents or any
applicable law, judgment, order, injunction, decree, rule, regulation or ruling
of any governmental authority to which Seller is a party or by which Seller or
any of the Station Assets are bound; (c) will not either alone or with the
giving of notice or the passage of time, or both, conflict with, constitute
grounds for termination of or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any Contract, agreement,
instrument, license or permit to which Seller or any of the Station Assets is
now subject; and (d) will not result in the creation of any Liens on any of the
Station Assets.
7.4 Government Authorizations.
-------------------------
7.4.1 Schedule 7.4 hereto contains a true and complete list of the
------------
Stations Licenses and other licenses, permits or other authorizations from
governmental and regulatory authorities which are required for the lawful
conduct of the business and operations of the Stations in the manner and to the
full extent they are presently conducted (including, without limitation,
auxiliary licenses associated with the Stations).
7.4.2 Seller is the authorized legal holder of the Stations Licenses
and the other licenses, permits and authorizations listed in Schedule 7.4,
------------
which, except as set forth in Schedule 7.4, are in full force and effect, in
------------
good standing and are, to the knowledge of Seller, unimpaired by any act of
Seller or its directors, officers, employees, agents or Affiliates, and none of
which is subject to any restrictions or conditions which would limit in any
respect the full operation of the Stations as now operated.
11
<PAGE>
7.4.3 Except as set forth in Schedule 7.4, there are no applications,
------------
complaints, petitions or proceedings pending or, to Seller's knowledge,
threatened as of the date hereof before the FCC or any other governmental or
regulatory authority relating to the business or operations of the Stations.
The operations of the Stations are in material compliance with the Stations
Licenses and the underlying construction permits and the other licenses, permits
and authorizations listed in Schedule 7.4.
------------
7.4.4 Except as set forth in Schedule 7.4, all material reports,
------------
forms, and statements required to be filed by Seller with the FCC with respect
to the Stations since the acquisition of the Stations by Seller have been filed.
7.4.5 Except as set forth in Schedule 7.4, to the best knowledge of
------------
Seller, there are no facts which, under the Communications Act of 1934, as
amended, or the existing rules and regulations of the FCC, would disqualify
Seller as assignor of the Stations Licenses or cause the Stations Licenses and
the other licenses, permits and authorizations listed in Schedule 7.4 not to be
------------
renewed in their ordinary course.
7.5. Compliance with FCC Regulations. Except as set forth in Schedule
------------------------------- --------
7.4, the operation of the Stations and all of the Station Assets are in
- ---
compliance in all material respects with: (a) all applicable engineering
standards required to be met under applicable FCC rules; and (b) all other
applicable federal, state and local rules, regulations, requirements and
policies, including, but not limited to, equal employment opportunity policies
of the FCC, and all applicable painting and lighting requirements of the FCC and
the Federal Aviation Administration to the extent required to be met under
applicable FCC rules and regulations, and to Seller's knowledge, there are no
existing claims to the contrary.
7.6 Taxes. Except where failure to do so would not have a material
-----
adverse affect on the business or operations of the Stations, Seller has filed
all federal, state, local and foreign income, franchise, sales, use, property,
excise, payroll and other tax returns required by law to be filed by it and has
paid in full all taxes, estimated taxes, interest, assessments, and penalties
due and payable by it.
7.7 Personal Property. Schedule 7.7 hereto contains a list of all
----------------- ------------
material items of tangible personal property owned by Seller which are used
exclusively in the conduct of the business and operations of the Stations, and
which are to be conveyed to Buyer pursuant to the terms of this Agreement.
Schedule 7.7 also separately lists any material tangible personal property
- ------------
leased by Seller pursuant to leases included within the Contracts. Except as
disclosed in Schedule 7.7, Seller has, or at the Closing will have, and
------------
following the Closing, Buyer will have, good and marketable title to all of the
Station Assets (other than those subject to lease) and none of the Station
Assets is, or at the Closing will be, subject to any Liens or title defects,
except for Permitted Liens. The Station Assets include all of the assets,
properties, interests and rights of whatsoever kind or nature, real or personal,
tangible or intangible owned or leased necessary to conduct the business and
operations of the Stations as now conducted.
7.8 Real Property.
-------------
12
<PAGE>
7.8.1 Schedule 7.8 hereto contains a complete and accurate list and
------------
description of: (a) all real property or the relevant portions thereof
(including without limitation, real property relating to the towers,
transmitters, studio sites and offices of the Stations) owned by Seller and used
by Seller exclusively in connection with the operations of the Stations (the
"Owned Real Estate"); and (b) all real property or the relevant portions thereof
(including without limitation, real property relating to the towers,
transmitters, studio sites and offices of the Stations) not owned by Seller and
used by Seller exclusively in connection with the operations of the Stations
pursuant to agreements, leases and other contracts (the "Real Estate
Contracts").
7.8.2 The Real Estate Contracts listed on Schedule 7.8 and Schedule
------------ --------
7.9 are in full force and effect and are valid, binding and enforceable in
- ---
accordance with their terms. Seller enjoys quiet possession of all real
property subject to the Real Estate Contracts. Seller is not in material
default under any Real Estate Contract nor, to Seller's knowledge, is any other
party thereto, and there are no present disputes or claims with respect to
offsets or defenses by any party against the other under any of the Real Estate
Contracts. Seller has delivered to Buyer true and complete copies of all Real
Estate Contracts.
7.8.3 Seller has, or at Closing will have, good, marketable and
insurable fee simple title to the Owned Real Estate free and clear of any Liens,
except for Permitted Liens. Seller has good and marketable leasehold interests
in the real estate subject to the Real Estate Contracts (where the Real Estate
Contract is a lease), free and clear of any Liens, except for Permitted Liens.
7.8.4 Seller has full legal and practical access to all of the real
property described in Schedule 7.8. The Owned Real Estate, together with the
------------
real estate subject to the Real Estate Contracts, includes all the real
property, easements, rights of way, and other real property interests necessary
to conduct the business and operations of the Stations as now conducted. To
Seller's knowledge, all buildings, structures, towers, antennae, improvements
and fixtures comprising part of the real properties owned or leased by Seller
are in good and sound operating condition, have no latent structural, mechanical
or other defects of material significance, are reasonably suitable for the
purposes for which they are being used and each has adequate rights of ingress
and egress, utility service for water and sewer, telephone, electric and/or gas,
and sanitary service for the conduct of the business and operations of the
Stations as presently conducted.
7.8.5 The WERE Tower Property less the Retained Property will be
sufficient for: (a) the ownership and operation of the WERE Towers, (b) the
tower and other transmission facilities of WNCX-FM, and (c) satisfaction of any
obligation owing to Educational Television Association of Metropolitan Cleveland
under leases relating to WVIZ transmission facilities on the WERE Tower
Property. All of the representations and warranties made by Seller with respect
to the Station Assets, the Owned Real Estate and any other terms that include
the WERE Tower Property shall be deemed to be made both with respect to the
entire WERE Tower Property and with respect to the WERE Tower Property excluding
the Retained Property, including but not limited to the representations that the
Owned Real Estate includes all real property necessary to conduct the business
and operations of the Stations as now conducted, and
13
<PAGE>
that use or ownership of the Station Assets is not in violation of any laws
(including but not limited to any zoning or land use ordinances).
7.9 Contracts. Schedule 7.9 lists all material Contracts respecting the
--------- ------------
Stations (excepting Time Sales Agreements, which are not separately listed but
which are consistent with Section 2.1(a)) to which Seller is a party and which
are to be assigned to Buyer pursuant to the terms of this Agreement, as of the
date of this Agreement. Those Contracts, if any, requiring the consent of a
third party to assignment are identified with an asterisk on Schedule 7.9.
------------
7.10 Status of Contracts, Etc. Except as set forth on Schedule 7.9, all
------------------------ ------------
of the Contracts are in full force and effect and are valid, binding and
enforceable in accordance with their respective terms, except as limited by laws
affecting creditors' rights or equitable principles generally. Seller has
complied in all material respects with all written and oral Contracts, and is
not in material default beyond any applicable grace periods under any thereof
and, to Seller's knowledge, no other contracting party is in material default
under any thereof.
7.11 Environmental. Except as set forth in Schedule 7.11, to Seller's
------------- -------------
knowledge, Seller has complied in all material respects with all federal, state
and local environmental laws, rules and regulations as in effect on the date
hereof applicable to the Station Assets which are used or useful in the
operation of the Stations, including but not limited to the FCC's guidelines
regarding RF radiation. To Seller's knowledge, the technical equipment included
within the Station Assets which are used or useful in the operation of the
Stations does not contain any PCBs. No hazardous or toxic waste, substance,
material or pollutant (as those or similar terms are defined under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended, 42 U.S.C. (S)(S) 9601 et seq., Toxic Substances Control Act, 15 U.S.C.
-- ---
(S)(S) 2601 et seq., the Resource Conservation and Recovery Act of 1976, 42
-- ---
U.S.C. (S)(S) 6901 et seq. or any other applicable federal, state and local
-- ---
environmental law, statute, ordinance, order, judgment, rule or regulation
relating to the environment or the protection of human health ("Environmental
Laws")), including but not limited to, any asbestos or asbestos related
products, oils or petroleum-derived compounds, CFCs, PCBs, or underground
storage tanks, have been released, emitted or discharged by Seller or at
Seller's direction or to Seller's knowledge are currently located in, on, under,
or about the Owned Real Estate or property used pursuant to Real Estate
Contracts, including the transmitter sites, or contained in the tangible
personal property included within the Station Assets which are used or useful in
the operation of the Stations.
7.12 Intellectual Property. Schedule 7.12 hereto is a true and complete
--------------------- -------------
list of all Intellectual Property applied for, registered or issued to, and
owned by Seller or under which Seller is a licensee which is used in the conduct
of the Seller's business and operations of the Station Assets which is being
transferred to Buyer pursuant to this Agreement. Except as set forth on
Schedule 7.12, Seller's right, title and interest in the Intellectual Property
- -------------
as owner or licensee, as applicable, is free and clear of all Liens and, to the
extent any of the Intellectual Property is licensed to Seller, such interest is
valid and uncontested by the licensor thereof or any third party.
7.13 Personnel Information.
---------------------
14
<PAGE>
7.13.1 Except as disclosed in Schedule 7.13, Seller is not a party to
-------------
any contract or agreement with any labor organization, nor has Seller agreed to
recognize any union or other collective bargaining unit, nor has any union or
other collective bargaining unit been certified as representing any employees of
Seller relating to the Stations. Seller has no knowledge of any organizational
effort currently being made or threatened by or on behalf of any labor union
with respect to employees of the Stations.
7.13.2 Except as disclosed in Schedule 7.13, Seller has complied in
-------------
all material respects with all laws relating to the employment of labor,
including, without limitation, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and those laws relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, equal employment
opportunity and payment and withholding of taxes ("Employment Laws"); provided,
--------
however, that Seller's representation under this Section 7.13.2 is made only to
- -------
the extent Buyer could have liability as a result of Seller's noncompliance with
Employment Laws.
7.14 Litigation. Except as set forth in Schedule 7.14, Seller is not
---------- -------------
subject to any judgment, award, order, writ, injunction, arbitration decision or
decree relating to the conduct of the business or the operation of the Stations
or any of the Station Assets, and, except as set forth in Schedules 7.4 and
-------------
7.14, there is no litigation, administrative action, arbitration, proceeding or
- ----
investigation pending or, to the knowledge of Seller, threatened against the
Stations in any federal, state or local court, or before any administrative
agency or arbitrator (including, without limitation, any proceeding which seeks
the forfeiture of, or opposes the renewal of, any of the Stations Licenses), or
before any other tribunal duly authorized to resolve disputes.
7.15 Commissions or Finder's Fees'. Neither Seller nor any person or
-----------------------------
entity acting on behalf of Seller has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity.
7.16 Insurance. Seller now has in force adequate fire and other risk
---------
insurance covering the full replacement value of the Station Assets and shall
cause such insurance to be maintained in full force until the Closing Date.
Except as set forth in Schedule 7.16, Seller also shall maintain in full force
-------------
until the Closing Date, adequate general public liability insurance with respect
to the Station Assets in amounts consistent with broadcasting industry standards
for similar stations.
7.17 Compliance With Laws. Except as set forth in Schedule 7.17, Seller
-------------------- -------------
is not in violation of, and has not received any notice asserting any non-
compliance by it in connection with the operation of the Stations or use or
ownership of any of the Station Assets with, any applicable statute, rule or
regulation, whether federal, state or local, that would have a material adverse
effect on the Stations. Seller is not in material default with respect to any
judgment, order, injunction or decree of any court, administrative agency or
other governmental authority or any other tribunal duly authorized to resolve
disputes which relate to the transactions contemplated hereby or that would have
a material adverse effect on the Stations. Except where failure to do so would
not have a material adverse affect on the Stations, Seller is in full compliance
with all laws, regulations and governmental orders applicable to the conduct of
the
15
<PAGE>
business and operations of the Stations, and its present use of the Station
Assets does not violate any of such laws, regulations or orders.
7.18 Financial Information. Seller has furnished Buyer with an unaudited
---------------------
income statement and balance sheet for the Stations for calendar year 1998. This
financial information: (i) has, to Seller's best knowledge and belief, been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis through the period involved; and (ii) fairly presents in all
material respects the information relating to the Stations set forth therein as
of the date and for the period indicated.
******
Except with respect to Section 7.4, whenever in this Article 7 a warranty
or representation is qualified by a word or phrase referring to Seller's
knowledge, it shall mean, as to each Station, to the actual knowledge of each
Station's respective general manager.
ARTICLE 8
COVENANTS OF BUYER
------------------
8.1 Closing. Subject to Article 11 hereof, on the Closing Date, Buyer
-------
shall purchase the Station Assets from Seller as provided in Article 1 hereof
and shall assume the Assumed Liabilities of Seller as provided in Article 2
hereof.
8.2 Notification. Buyer will provide Seller prompt written notice of
------------
any material change in any of the information contained in the representations
and warranties made in Article 6. Buyer shall also promptly notify Seller of
any litigation, arbitration or administrative proceeding pending or, to the best
of its knowledge, threatened against Buyer which challenges the transactions
contemplated hereby.
8.3 No Inconsistent Action. Buyer shall not take any action which (i)
----------------------
is materially inconsistent with its obligations under this Agreement; (ii) would
cause any representation or warranty of Buyer contained herein to be or become
false or invalid; or (iii) could unreasonably hinder or delay the consummation
of the transactions contemplated by this Agreement. In the event any fact
relating to Buyer which would cause the FCC to deny its consent to the
transactions contemplated by this Agreement comes to Buyer's attention, Buyer
shall promptly notify Seller thereof and will use its reasonable efforts to take
such steps as are necessary to remove such impediment to the FCC's consent to
the transactions contemplated by this Agreement, including but not limited to,
refraining from entering into agreements to acquire, time broker, or sell time
for, any stations in the Stations' market, divesting any stations purchased or
contracted for after the date hereof which the FCC advises Buyer and Seller,
whether orally or otherwise, will impede the timely grant of the FCC Consent,
and/or terminating any agreements to acquire, time broker, or sell time for, any
stations in the Stations' market.
8.4 Accounts Receivable. Buyer acknowledges that all accounts receivable
-------------------
arising prior to the Closing Date in connection with the operation of the
Stations, including but not
16
<PAGE>
limited to accounts receivable for advertising revenues for programs and
announcements performed prior to the Closing Date and other broadcast revenues
for services performed prior to the Closing Date, shall remain the property of
Seller (the "Seller Accounts Receivable") and that Buyer shall not acquire any
beneficial right or interest therein or responsibility therefor. For a period of
one hundred eighty (180) days from the Closing Date ("Collection Period"), Buyer
agrees to collect the Seller Accounts Receivable for the Stations in the normal
and ordinary course of Buyer's business and will apply all such amounts
collected to the debtor's oldest account receivable first, except that any such
accounts collected by Buyer from persons who are also indebted to Buyer may be
applied to Buyer's account if expressly directed by the debtor if there is a
bona fide dispute between Seller and such account debtor with respect to such
account and in which case the Buyer shall notify the Seller of such dispute and
after such notification Seller shall have the right to pursue collection of such
account and to avail itself of all legal remedies available to it. Except as set
forth in the previous sentence, during the Collection Period, neither Seller nor
its agents shall make any direct solicitation of any such account debtor for
collection purposes or institute litigation for the collection of amounts due.
Buyer's obligation and authority shall not extend to the institution of
litigation, employment of counsel or a collection agency or any other
extraordinary means of collection. After the Collection Period, Buyer agrees to
reasonably cooperate with Seller, at Seller's expense (including reimbursement
of actual expenses reasonably incurred by Buyer in connection with such
cooperation), as to any litigation or other collection efforts instituted by
Seller to collect any delinquent Seller Accounts Receivable. Any amounts
relating to the Seller Accounts Receivable that are paid directly to the Seller
shall be retained by the Seller, but Seller shall provide Buyer with notice of
any such payment. Within twenty (20) days after the end of each month end during
the Collection Period, Buyer shall make a payment to Seller equal to the amount
of all collections of Seller Accounts Receivable during the preceding month,
less any commissions then owing and paid (but not paid or prorated for at
Closing) to salespersons or agencies for ads to which such collected Seller
Accounts Receivable related, and no later than twenty (20) days following the
conclusion of the Collection Period, Buyer shall make a payment to Seller equal
to the amount of all collections of Seller Accounts Receivable during Collection
Period not previously paid to Seller. At the end of the Collection Period, any
remaining Seller Accounts Receivable shall be returned to Seller for collection.
ARTICLE 9
COVENANTS OF SELLER
-------------------
9.1 Seller's Pre-Closing Covenants'. Seller covenants and agrees with
-------------------------------
respect to the Stations that, between the date hereof and the Closing Date,
except as expressly permitted by this Agreement or with the prior written
consent of Buyer, which shall not be unreasonably withheld, Seller shall act in
accordance with the following:
9.1.1 Seller shall conduct the business and operations of the
Stations in the ordinary course of business consistent with past practice;
9.1.2 Seller shall operate the Stations in all material respects in
accordance with FCC rules and regulations and the Stations Licenses and with all
other laws, regulations, rules
17
<PAGE>
and orders, and shall not cause or permit by any act, or failure to act, any of
the Stations Licenses or other licenses, permits or authorizations listed in
Schedule 7.4 to expire, be surrendered, adversely modified (other than as set
- ------------
forth in Schedule 7.4 or as specifically permitted by this Agreement), or
------------
otherwise terminated, or the FCC to institute any proceedings for the
suspension, revocation or adverse modification of any of the Stations Licenses,
or fail to prosecute with due diligence any pending applications to the FCC.
9.1.3 Should any fact relating to Seller which would cause the FCC to
deny its consent to the transactions contemplated by this Agreement come to
Seller's attention, Seller will promptly notify Buyer thereof and will use its
reasonable efforts to take such steps as may be necessary to remove any such
impediment to the FCC's consent to the transactions contemplated by this
Agreement.
9.1.4 Seller shall not, other than in the ordinary course of business
in accordance with past practices: (a) sell, lease or dispose of or commit to
sell, lease or dispose of any of the Station Assets, except as permitted
pursuant to Section 1.1.2 hereof; (b) sell broadcast time on a prepaid basis
with regard to the Stations; (c) change the advertising rates in effect as of
the date hereof; (d) create, assume or permit to exist any Liens or rights
affecting any of the Station Assets, except for those in existence on the date
of this Agreement and disclosed in Schedule 7.8 or Schedule 7.9; or (e) enter in
------------ ------------
any consecutive three-month period, the first such period to commence on the
date hereof, into any contract or contracts with respect to the business or
operation of a Station that would impose an obligation on Buyer in excess of
$50,000 per annum individually or $100,000 per annum in the aggregate without
obtaining Buyer's consent thereto.
9.1.5 In order that Buyer may have full opportunity to make such
investigation as it desires of the affairs of the Stations, Seller shall give or
cause the Stations to give Buyer and Buyer's counsel, accountants, engineers and
other representatives, at Buyer's reasonable request and upon reasonable notice,
full and reasonable access during normal business hours to all of Seller's
personnel, properties, books, Contracts, reports and records, environmental
audits, real estate, buildings and equipment relating to the Stations and, with
Seller's prior consent, which shall not be unreasonably withheld, to the
Stations' employees, and to furnish Buyer with information and copies of all
documents and agreements relating to the Stations and the operation thereof that
Buyer may reasonably request, it being understood that such access, information
and copies may be limited as Seller reasonably deems appropriate in light of
Buyer's and/or its Affiliates ownership or potential ownership of radio stations
that will compete with Seller's or its Affiliates' remaining stations in the
market. The rights of Buyer under this Section 9.1.5 shall be exercised at
Buyer's sole expense and shall not be exercised in such a manner as to interfere
unreasonably with the business of the Stations. Buyer may, at its sole expense
and in a manner that will not disrupt or interfere with the normal business and
operations of the Stations, have access to the Owned Real Estate to conduct an
environmental assessment thereof. The results of the investigation and
environmental assessment provided for in this Section 9.1.5 shall not under any
circumstances give rise to a right on the part of Buyer to terminate this
Agreement, adjust the Purchase Price, or receive any other remedy from Seller,
provided that 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 and warranties in Section 7.11 hereof or be deemed to constitute
a waiver of any of those representations and warranties.
18
<PAGE>
9.1.6 Seller shall use commercially reasonable efforts to obtain any
third party consents necessary for the assignment of any Contract (which shall
not require any payment to any such third party except for such amounts
contemplated by the Contract to be assigned, any amount then owing by Seller to
such third party or the reasonable expenses incurred by such third party in
connection with such assignment).
9.2 Notification. Seller will provide Buyer prompt written notice of
------------
any material change in the information contained in the representations and
warranties made by it in Article 7. Seller agrees to promptly notify Buyer of
any litigation, arbitration or administrative proceeding pending or, to the best
of its knowledge, threatened, which challenges the transactions contemplated
hereby.
9.3 No Inconsistent Action. Seller shall not take any action which is
----------------------
materially inconsistent with its obligations under this Agreement, or take any
action which would cause any representation or warranty of Seller contained
herein to be or become false or invalid or which could unreasonably hinder or
delay the consummation of the transactions contemplated by this Agreement.
9.4 Closing. Subject to Section 10.8 and Article 12 hereof, on the
-------
Closing Date Seller shall transfer, convey, assign and deliver to Buyer the
Station Assets and the Assumed Liabilities as provided in Articles 1 and 2 of
this Agreement.
9.5 Cooperation with Respect to Financial Information. Between the date
-------------------------------------------------
hereof and the Closing Date, Seller shall cooperate and shall cause its
independent accounting firm to cooperate with Buyer, at Buyer's expense
(including reimbursement of actual expenses reasonably incurred by Seller in
connection with such cooperation), to make available to Buyer such audited
financial information, or such as yet unaudited financial information in
connection with auditing the same, with respect to the Stations as Buyer
reasonably requests. Notwithstanding the foregoing in this Section 9.5, the
results of, or information obtained in connection with, such investigation shall
not under any circumstances give rise to a right on the part of Buyer to
terminate this Agreement, adjust the Purchase Price, or receive any other remedy
from Seller.
ARTICLE 10
JOINT COVENANTS
---------------
Buyer and Seller hereby covenant and agree that between the date hereof and
the Closing Date, each shall act in accordance with the following:
10.1 Confidentiality.
---------------
10.1.1 Subject to the requirements of applicable law, Buyer and
Seller shall each keep confidential all information obtained by it with respect
to the other parties hereto in connection with this Agreement and the
negotiations preceding this Agreement ("Confidential Information"); provided
that, the parties hereto may furnish such Confidential Information to its
19
<PAGE>
employees, agents and representatives who need to know such Confidential
Information (including its financial and legal advisers, its banks and other
lenders) (collectively, "Representatives"); provided however, the disclosing
party shall be responsible for all actions or omissions of such Representatives
with regard to Representatives' breach of this Section 10.1. Each party hereto
shall, and shall cause each of such party's Representatives to, use the
Confidential Information solely in connection with the transactions contemplated
by this Agreement, and not for any competitive purpose or advantage detrimental
to the other party hereto or its Affiliates. If the transactions contemplated
hereby are not consummated for any reason, each party shall (i) return to such
other party hereto, without retaining a copy thereof, any schedules, documents
or other written information (and any derivative work product) obtained from
such other party in connection with this Agreement and the transactions
contemplated hereby, and (ii) provide, upon request, a written confirmation that
all Confidential Information (and derivative work product) has been returned to
the other party, and that the Confidential Information was used solely in
connection with the transactions contemplated by this Agreement.
10.1.2 Notwithstanding anything contained in Section 10.1.1, no
party shall be required to keep confidential or return any Confidential
Information which: (a) is known or available through other lawful sources, not
bound by a confidentiality agreement with the disclosing party; (b) is or
becomes publicly known through no fault of the receiving party or its agents;
(c) is required to be disclosed pursuant to an order or request of a judicial or
governmental authority (provided the disclosing party is given reasonable prior
notice of the order or request and the purpose of the disclosure); or (d) is
developed by the receiving party independently of the disclosure by the
disclosing party.
10.1.3 Notwithstanding anything to the contrary in this Agreement,
Buyer, Seller and the Affiliates of either shall, in accordance with their
respective legal obligations, including but not limited to filings permitted or
required by the Securities Act of 1933 and the Securities and Exchange Act of
1934, the NASDAQ National Market and other similar regulatory bodies, make (i)
such press releases and other public statements and announcements ("Releases")
as Buyer, Seller or the Affiliates of either deems necessary and appropriate in
connection with this Agreement and the transactions contemplated hereby, and
(ii) any and all statements Buyer or Seller deems in its sole judgment to be
appropriate in any and all filings, prospectuses and other similar documents.
Buyer and Seller shall each use reasonable efforts to provide the other with a
copy of any Releases before any publication of same; provided that, if the
content of the Release is, in the sole judgment of Buyer or Seller reasonably
exercised, substantially similar to the content of a Release previously
provided, the issuer of such release shall have no obligation to provide the
other party with a copy of such Release. Each party may make comments to the
other with respect to any such Releases provided to it, provided however, the
party receiving such comments is not required to incorporate any such comments
into the Releases.
10.2 Cooperation. Subject to express limitations contained elsewhere
-----------
herein, Buyer and Seller agree to cooperate fully with one another in taking any
reasonable actions (including without limitation, reasonable actions to obtain
the required consent of any governmental instrumentality or any third party)
necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the satisfaction of any condition to
closing set forth herein.
20
<PAGE>
10.3 Control of Stations. Buyer shall not, directly or indirectly,
-------------------
control, supervise or direct the operations of the Stations prior to the
Closing. Such operations, including complete control and supervision of all the
Stations' programs, employees and policies, shall be the sole responsibility of
Seller.
10.4 Consents to Assignment. To the extent that any Contract identified
----------------------
in the Schedules is not capable of being sold, assigned, transferred, delivered
or subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, transfer, delivery or sublease thereof. In those cases where
consents, assignments, releases and/or waivers have not been obtained at or
prior to the Closing to the transfer and assignment to Buyer of the Contracts,
this Agreement and any assignment executed pursuant hereto, to the extent
permitted by law, shall constitute an equitable assignment by Seller to Buyer of
all of Seller's rights, benefits, title and interest in and to the Contracts,
and where necessary or appropriate, Buyer shall be deemed to be Seller's agent
for the purpose of completing, fulfilling and discharging all of Seller's rights
and liabilities arising after the Closing Date under such Contracts. Seller
shall use its best efforts to provide Buyer with the financial and business
benefits of such Contracts (including, without limitation, permitting Buyer to
enforce any rights of Seller arising under such Contracts), and Buyer shall, to
the extent Buyer is provided with the benefits of such Contracts, assume,
perform and in due course pay and discharge all debts, obligations and
liabilities of Seller under such Contracts to the extent that Buyer was to
assume those obligations pursuant to the terms hereof.
10.5 Filings. In addition to the covenants of the parties set forth in
-------
Article 5 hereto, as promptly as practicable after the execution of this
Agreement, Buyer and Seller shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, consents,
orders and approvals of any governmental authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any governmental authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, any reports
or notifications that may be required to be filed with the FCC or to be filed
under the HSR Act with the Federal Trade Commission and the Antitrust Division
of the Department of Justice, and each shall furnish to one another all such
information in its possession as may be necessary for the completion of the
reports or notifications to be filed by the other.
10.6 Employee Matters. Except for the retained employees set forth on
----------------
Schedule 10.6, the parties acknowledge and agree that Buyer shall have the right
- -------------
(but not the obligation) to interview and to elect which of the employees, if
any, of Seller set forth on Schedule 7.13 that it will hire (who, once hired,
-------------
shall be referred to as "Hired Employees"). In that regard and solely with
respect to the employees set forth on Schedule 7.13, Seller shall provide Buyer
-------------
access to its personnel records and personnel files, and shall provide such
other information regarding such employees as Buyer may reasonably request prior
to the Closing Date. Seller shall be
21
<PAGE>
responsible for the payment of all compensation and accrued employee benefits
payable to all employees of Seller through the Closing Date. Buyer shall cause
all Hired Employees as of the Closing Date to be eligible to participate in its
"employee welfare benefit plans" and "employee pension benefit plans" (as
defined in Section 3(1) and 3(2) of ERISA, respectively) of Buyer in which
similarly situated employees of Buyer are generally eligible to participate;
provided, however, that, to the extent permitted under such plans with respect
- -------- -------
to Hired Employees, all Hired Employees and their spouses and dependents shall
be eligible for coverage immediately after the Closing Date and shall not be
excluded from coverage on account of any condition that was not a pre-existing
condition for such person when employed by Seller. For purposes of any length of
service requirements, waiting periods, vesting periods or differential benefits
based on length of service in any such plan for which a Hired Employee may be
eligible after the Closing, Buyer shall ensure that service by such Hired
Employee with Seller shall be deemed to have been service with the Buyer. In
addition, Buyer shall ensure that each Hired Employee receives credit under any
welfare benefit plan of Buyer for any deductibles or co-payments paid by such
Hired Employee and his or her dependents for the current plan year under a plan
maintained by Seller.
10.7 Section 1031 Asset Exchange. Buyer acknowledges that Seller may
---------------------------
designate that the transfer of the Station Assets contemplated by this Agreement
will be part of an exchange of assets that will qualify, pursuant to Section
1031 of the Internal Revenue Code and regulations thereunder, as a deferred
like-kind exchange by Seller. It is expressly acknowledged that Seller, its
assignee or transferee, may, at or prior to Closing, assign its rights (in
whole or in part) under this Agreement to a qualified intermediary as defined in
Treasury regulation section 1.1031(k)-1(g)(4), or a similar entity or
arrangement ("Qualified Intermediary"), subject to all of Seller's rights and
obligations herein and shall promptly provide written notice of such assignment
to Buyer. Buyer shall cooperate with the reasonable requests of the Seller's
Qualified Intermediary in arranging and effecting this exchange and any
additional exchange as would qualify under Section 1031 of the Internal Revenue
Code. Without limiting the generality of the foregoing, if Seller has given
notice of its intention to effect an exchange using a Qualified Intermediary,
Buyer shall promptly provide Seller with written acknowledgment of such notice.
If requested by Seller, Buyer shall pay the Purchase Price for the Station
Assets to the Qualified Intermediary of Seller (and not to Seller), and such
payment shall satisfy the obligations of Buyer to make payment of the Purchase
Price herein. Seller's assignment to a Qualified Intermediary will not relieve
Seller of any of its duties or obligations herein. Except for the obligations
of Buyer set forth in this Section, Buyer shall not have any liability or
obligation to Seller for the failure of the contemplated exchange to qualify as
a like kind exchange under Section 1031 of the Internal Revenue Code unless such
failure is the result of the material breach by Buyer of its representations,
warranties, covenants and obligations herein.
10.8 Trust. Seller and Buyer hereby agree that Seller may, at
-----
Seller's option and with prior FCC approval, assign the assets and licenses of
the Stations to the Trustee who would operate and maintain the Stations between
the closing under the Jacor Agreement and the Closing Date hereunder, pursuant
to the Trust, and upon such circumstances, the Trustee would be charged with
consummation of the transactions contemplated hereunder on Seller's behalf and
would be required to perform Seller's duties and obligations hereunder with
respect to the Station Assets held in the Trust.
22
<PAGE>
10.9 Studio Location. For a period not to exceed sixty (60) days from
---------------
and after the Closing Date, Buyer shall be entitled to use the existing studios
located at 1041 Huron Road (the "Existing Studios") in common with the FCC
licensee of WNCX-FM. During such period, Buyer shall pay to the FCC licensee of
WNCX-FM Buyer's proportionate share of the rent and customary pass-throughs of
costs or expenses incurred in relation to the Existing Studios, and shall
cooperate with Seller and the FCC licensee of WNCX-FM in the sharing of the
Existing Studios.
10.10 Lease With Purchaser of WNCX-FM. From and after Closing, Buyer
-------------------------------
shall lease to the FCC licensee of WNCX-FM a portion of the WERE Tower Property
comprised of real property and transmitter building space for: (a) the tower,
satellite dish and transmission facilities of WNCX-FM, in perpetuity rent-free
(but with customary pass-throughs of proportionate costs or expenses) and
together with rights of access to the lessee and other terms customary or
reasonably appropriate for a lease of such kind, (b) the transmission facilities
of Educational Television Association of Metropolitan Cleveland under leases
relating to WVIZ-TV, and (c) the transmission facilities of Ohio Music
Corporation pursuant to Agreements dated on or about 12/4/81 and 8/20/85. Such
lease (the "WNCX Lease") shall be executed and delivered at Closing by Buyer, as
lessor, and either Seller or the licensee of WNCX-FM, as lessee, and shall be
freely assignable to any subsequent licensee of WNCX-FM. Seller agrees to use
its best efforts to assist Buyer to complete negotiation of the WNCX Lease.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYER
------------------------------
The obligations of Buyer hereunder are, at its option, subject to
satisfaction, on or prior to the Closing Date or such earlier date as
specifically provided below, of each of the following conditions:
11.1 Representations, Warranties and Covenants.
-----------------------------------------
11.1.1 All representations and warranties of Seller made in this
Agreement or in any Exhibit, Schedule or document delivered pursuant hereto,
shall be true and complete in all material respects as of the date hereof and on
and as of the Closing Date as if made on and as of that date.
11.1.2 All of the terms, covenants and conditions to be complied with
and performed by Seller on or prior to the Closing Date shall have been complied
with or performed in all material respects.
11.1.3 Buyer shall have received a certificate, dated as of the
Closing Date, from Seller, executed by an authorized officer of Seller to the
effect that: (a) the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date; and (b) Seller has complied with
or performed in all material respects all terms, covenants and conditions to be
complied with or performed by it on or prior to the Closing Date.
23
<PAGE>
11.2 Governmental Consents. The FCC Consent and DOJ Consent shall have
---------------------
been obtained, and neither consent shall impose any condition materially adverse
to Buyer, and any waiting period under the HSR Act with respect to the
transactions contemplated by this Agreement shall have elapsed or been
terminated.
11.3 Trust. If the Stations are transferred into the Trust, the Trustee
-----
shall have assigned, or shall assign concurrently with the Transfer from the
Trust to Buyer, the assets and licenses of the Stations which comprise all or
part of the Station Assets to Buyer in accordance with this Agreement.
11.4 Governmental Authorizations. Seller shall be the holder of the
---------------------------
Stations Licenses, and there shall not have been any modification (other than as
specifically permitted by this Agreement) of any of such licenses, permits and
other authorizations which has a material adverse effect on the Stations or the
operations thereof.
11.5 Adverse Proceedings. No suit, action, claim or governmental
-------------------
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which: (a) would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms; (b) questions the validity or legality of any transaction contemplated
hereby; (c) seeks to enjoin any transaction contemplated hereby; or (d) a
petition of bankruptcy by or against Seller, an assignment by Seller for the
benefit of its creditors, or other similar proceeding.
ARTICLE 12
CONDITIONS OF CLOSING BY SELLER
-------------------------------
The obligations of Seller hereunder are, at its option, subject to
satisfaction, on or prior to the Closing Date, of each of the following
conditions:
12.1 Representations, Warranties and Covenants.
-----------------------------------------
12.1.1 All representations and warranties of Buyer made in this
Agreement or in any Exhibit, Schedule or document delivered pursuant hereto,
shall be true and complete in all material respects as of the date hereof and on
and as of the Closing Date as if made on and as of that date, except for changes
expressly permitted or contemplated by the terms of this Agreement.
12.1.2 All the terms, covenants and conditions to be complied with
and performed by Buyer on or prior to the Closing Date shall have been complied
with or performed in all material respects.
12.1.3 Seller shall have received a certificate, dated as of the
Closing Date, executed by an authorized officer of Buyer, to the effect that:
(a) the representations and warranties of Buyer contained in this Agreement are
true and complete in all material respects on and as of the Closing Date as if
made on and as of that date; and (b) that Buyer has complied
24
<PAGE>
with or performed in all material respects all terms, covenants and conditions
to be complied with or performed by it on or prior to the Closing Date.
12.2 Governmental Consents. The FCC Consent and DOJ Consent shall have
---------------------
been obtained, and neither consent shall impose any condition materially adverse
to Seller, and any waiting period under the HSR Act with respect to the
transactions contemplated by this Agreement shall have elapsed or been
terminated.
12.3 Adverse Proceedings. No suit, action, claim or governmental
-------------------
proceeding shall be pending against, and no order, decree or judgment of any
court, agency or other governmental authority shall have been rendered against,
any party hereto which: (a) would render it unlawful, as of the Closing Date, to
effect the transactions contemplated by this Agreement in accordance with its
terms; (b) questions the validity or legality of any transaction contemplated
hereby; (c) seeks to enjoin any transaction contemplated hereby; or (d) is a
petition of bankruptcy by or against Buyer, an assignment by Buyer for the
benefit of its creditors, or other similar proceeding.
12.4 Jacor Closing. The transactions that are the subject of the Jacor
-------------
Agreement shall have been consummated.
12.5 Trust. If the Stations are transferred into the Trust, the Trustee
-----
shall have assigned, or shall assign concurrently with the Transfer from the
Trust to Buyer, the assets and licenses of the Stations which comprise all or
part of the Station Assets to Buyer in accordance with this Agreement.
12.6 WNCX Lease. The form of the WNCX Lease shall have been agreed upon
----------
to Seller's reasonable satisfaction.
ARTICLE 13
TRANSFER TAXES; FEES AND EXPENSES
---------------------------------
13.1 Expenses. Except as set forth in Section 13.2 and 13.3 hereof or
--------
otherwise expressly set forth in this Agreement, each party hereto shall be
solely responsible for all costs and expenses incurred by it in connection with
the negotiation, preparation and performance of and compliance with the terms of
this Agreement including, but not limited to the costs and expenses incurred
pursuant to Article 5 hereof and the fees and disbursements of counsel and other
advisors.
13.2 Transfer Taxes and Similar Charges. All costs of transferring the
----------------------------------
Station Assets in accordance with this Agreement, including recordation,
transfer and documentary taxes and fees, and any excise, sales or use taxes,
shall be paid by Buyer.
13.3 Governmental Filing or Grant Fees. Any filing or grant fees
---------------------------------
imposed by any governmental authority the consent of which or the filing with
which is required for the consummation of the transactions contemplated hereby
shall be paid equally by Buyer and Seller; provided however, that any HSR Act
filing fees and expenses shall be paid by Buyer.
25
<PAGE>
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
------------------------------------
14.1 Seller's Documents'. At the Closing, Seller shall deliver or cause
-------------------
to be delivered to Buyer the following:
14.1.1 Certified resolutions of the Board of Directors of Seller
approving the execution and delivery of this Agreement and authorizing the
consummation of the transactions contemplated hereby;
14.1.2 A certificate of Seller, dated the Closing Date, in the form
described in Section 11.1.3;
14.1.3 Such certificates, bills of sale, assignments, general
warranty deeds, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents to
conveyance, assignment or transfer), and Lien releases, all in form satisfactory
to Buyer, as shall be effective to vest in Buyer good and marketable title in
and to the Station Assets, free and clear of all Liens, except for Permitted
Liens.
14.1.4 An Assignment and Assumption Agreement in the form of Exhibit
-------
C effectuating the assignment and assumption of the Assumed Liabilities (the
- -
"Assignment and Assumption Agreement").
14.1.5 At the time and place of Closing, originals and all copies of
all program, operations, transmission or maintenance logs and all other records
required to be maintained by the FCC with respect to the Stations, including the
public files of the Stations, shall be left at the Stations and thereby
delivered to Buyer; and
14.1.6 Such additional information, materials, agreements, documents
and instruments as Buyer and its counsel may reasonably request in order to
consummate the Closing.
14.2 Buyer's Documents'. At the Closing, Buyer shall deliver or cause
------------------
to be delivered to Seller the following:
14.2.1 Certified resolutions of the Board of Directors of Buyer
approving the execution and delivery of this Agreement and authorizing the
consummation of the transactions contemplated hereby;
14.2.2 A certificate of Buyer, dated the Closing Date, in the form
described in Section 12.1.3.
14.2.3 The Assignment and Assumption Agreement;
26
<PAGE>
14.2.4 The Purchase Price in accordance with Section 3.1 hereof;
14.2.5 Such additional information, materials, agreements, documents
and instruments as Seller and its counsel may reasonably request in order to
consummate the Closing;
14.2.6 The WNCX Lease; and
14.2.7 An agreement between Arbitron and Radio One, Inc. for Arbitron
services to the Stations from Closing through December 31, 2000 at the rates
already disclosed and on the standard Arbitron form of agreement.
ARTICLE 15
SURVIVAL; INDEMNIFICATION; ETC.
-------------------------------
15.1 Survival of Representations, Etc. It is the express intention and
--------------------------------
agreement of the parties to this Agreement that all covenants and agreements
(together, "Agreements") and all representations and warranties (together,
"Warranties") made by Buyer and Seller in this Agreement shall survive the
Closing (regardless of any knowledge, investigation, audit or inspection at any
time made by or on behalf of Buyer or Seller) for a period of six (6) months
from the Closing Date. The right of any party to recover Damages (as defined in
Section 15.2.1) pursuant to Section 15.2 shall not be affected by the expiration
of any Agreements or Warranties as set forth herein, provided and subject to the
condition that notice of the existence of any Damages (but not necessarily the
fixed amount of any such Damages) has been given by the indemnified party to the
indemnifying party prior to such expiration. Notwithstanding the foregoing in
this Section 15.1, the provisions of Section 1.4 shall survive Closing for the
period set forth therein.
15.2 Indemnification.
---------------
15.2.1 From and after the Closing, Seller shall defend, indemnify and
hold harmless Buyer from and against any and all losses, costs, damages,
liabilities and expenses, including reasonable attorneys' fees and expenses
("Damages") incurred by Buyer arising out of or related to: (a) any breach of
the Agreements or Warranties given or made by Seller in this Agreement; and (b)
the conduct of the business and operations of the Stations or any portion
thereof or the use or ownership of any of the Station Assets prior to the
Closing Date; provided, however, that (i) Seller shall have no liability to
-----------------
Buyer hereunder until, and only to the extent that, Buyer's aggregate Damages
exceed Three Hundred Seventy-Five Thousand Dollars ($375,000), and (ii) the
maximum liability of Seller hereunder shall be One Million Five Hundred Thousand
Dollars ($1,500,000). Notwithstanding the foregoing, the limitations set forth
in Section 15.2.1(i) shall not apply to Seller's obligations pursuant to Section
1.4 and Schedule 7.8 ((S) C.2).
27
<PAGE>
15.2.2 From and after the Closing, Buyer shall defend, indemnify and
hold harmless Seller from and against any and all Damages incurred by Seller
arising out of or related to: (a) any breach of the Agreements or Warranties
given or made by Buyer in this Agreement; (b) the Assumed Liabilities; and (c)
the conduct of the business and operations of the Stations or any portion
thereof or the use or ownership of any of the Station Assets on or after the
Closing Date; provided, however, that (i) Buyer shall have no liability to
-------- -------
Seller hereunder until, and only to the extent that, Seller's aggregate Damages
exceed Three Hundred Seventy-Five Thousand Dollars ($375,000), and (ii) the
maximum liability of Buyer hereunder shall be One Million Five Hundred Thousand
Dollars ($1,500,000). Notwithstanding the foregoing, the limitations set forth
in Section 15.2.2(i) shall not apply to Buyer's obligations pursuant to Sections
1.4 and 2.1.
15.3 Procedures; Third Party and Direct Indemnification Claims. The
---------------------------------------------------------
indemnified party agrees to give prompt written notice to the indemnifying party
of any demand, suit, claim or assertion of liability by third parties or other
circumstances that could give rise to an indemnification obligation hereunder
against the indemnifying party (hereinafter collectively "Claims," and
individually a "Claim"), it being understood that the failure to give such
notice or delaying such notice shall not affect the indemnified party's right to
indemnification and the indemnifying party's obligation to indemnify as set
forth in this Agreement, except to the extent the indemnifying party's ability
to remedy, contest, defend or settle with respect to such Claim is thereby
prejudiced.
The obligations and liabilities of the parties hereto with respect to their
respective indemnities pursuant to Section 15.2 resulting from any Claim shall
be subject to the following additional terms and conditions:
15.3.1 The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense or opposition
to such Claim.
15.3.2 In the event that the indemnifying party shall elect not to
undertake such defense or opposition, or within twenty (20) days after written
notice, which notice shall include sufficient description of background
information explaining the basis for such Claim, shall fail to undertake to
defend or oppose, the indemnified party (upon further written notice to the
indemnifying party) shall have the right to undertake the defense, opposition,
compromise or settlement of such Claim, by counsel or other representatives of
its own choosing, on behalf of and for the account and risk of the indemnifying
party (subject to the right of the indemnifying party to assume defense of or
opposition to such Claim at any time prior to settlement, compromise or final
determination thereof).
15.3.3 Anything in this Section 15.3 to the contrary notwithstanding:
(a) the indemnified party shall have the right, at its own cost and expense, to
participate in the defense, opposition, compromise or settlement of the Claim;
(b) the indemnifying party shall not, without the indemnified party's written
consent, settle or compromise any Claim or consent to entry of any judgment
which does not include as an unconditional term thereof the giving by the
claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such Claim; and (c) in the event that the indemnifying
party undertakes defense of or opposition to any Claim, the indemnified party,
by counsel or other representative of its own choosing and at its
28
<PAGE>
sole cost and expense, shall have the right to consult with the indemnifying
party and its counsel or other representatives concerning such Claim and the
indemnifying party and the indemnified party and their respective counsel or
other representatives shall cooperate in good faith with respect to such Claim.
15.3.4 The parties agree that all claims not disputed by the
indemnifying party shall be paid by the indemnifying party within thirty (30)
days after receiving notice of the Claim. "Disputed Claims" shall mean claims
for Damages by an indemnified party which the indemnifying party objects to in
writing within twenty (20) days after receiving notice of the Claim. In the
event there is a Disputed Claim with respect to any Damages, the indemnifying
party shall be required to pay the indemnified party the amount of such Damages
for which the indemnifying party has, pursuant to a final determination, been
found liable within ten (10) days after there is a final determination with
respect to such Disputed Claim. As used in this Section 15.3.4, a final
determination of a Disputed Claim shall be (i) a judgment of any court
determining the validity of a Disputed Claim, if no appeal is pending from such
judgment and if the time to appeal therefrom has elapsed; (ii) an award of any
arbitration determining the validity of such disputed claim, if there is not
pending any motion to set aside such award and if the time within which to move
to set aside such award has elapsed; (iii) a written termination of the dispute
with respect to such claim signed by all of the parties thereto or their
attorneys; (iv) a written acknowledgment of the indemnifying party that it no
longer disputes the validity of such claim; or (v) such other evidence of final
determination of a disputed claim as shall be acceptable to the parties.
15.3.5 No undertaking of defense or opposition to a Claim shall be
construed as an acknowledgment by such party that it is liable to the party
claiming indemnification with respect to the Claim at issue or other similar
Claims.
ARTICLE 16
TERMINATION RIGHTS
------------------
16.1 Termination. This Agreement may be terminated at any time prior to
-----------
Closing as follows:
16.1.1 Upon the mutual written consent of Buyer and Seller on such
terms and conditions as so agreed;
16.1.2 By written notice of Buyer to Seller if Seller breaches in any
material respect any of its representations or warranties or defaults in any
material respect in the observance or in the due and timely performance of any
of its covenants or agreements herein contained and such breach or default shall
not be cured within thirty (30) days of the date of notice of breach or default
served by Buyer; provided, however, that with respect to breaches which cannot
reasonably be cured within such thirty day period, Buyer shall have no right to
terminate pursuant to this paragraph so long as Seller is diligently continuing
to cure such breach and such breach or default is cured within forty-five (45)
days of the date of notice of breach or default;
29
<PAGE>
16.1.3 By written notice of Seller to Buyer if Buyer breaches in any
material respect any of its representations or warranties or defaults in any
material respect in the observance or in the due and timely performance of any
of its covenants or agreements herein contained and such breach or default shall
not be cured within thirty (30) days of the date of notice of breach or default
served by Buyer; provided, however, that with respect to breaches which cannot
reasonably be cured within such thirty day period, Seller shall have no right to
terminate pursuant to this paragraph so long as Buyer is diligently continuing
to cure such breach and such breach or default is cured within forty-five (45)
days of the date of notice of breach or default;
16.1.4 By written notice of Buyer to Seller, or by Seller to Buyer,
if the FCC denies the FCC Application or designates it for a trial-type hearing;
16.1.5 By written notice of Buyer to Seller, or by Seller to Buyer,
if any court of competent jurisdiction shall have issued an order, decree or
ruling or taken any other action restraining, enjoining or otherwise prohibiting
the transactions contemplated by this Agreement;
16.1.6 By written notice of Seller to Buyer if the Closing shall not
have been consummated on or before August 1, 1999;
16.1.7 By written notice of Seller to Buyer if the Jacor Agreement is
terminated or expires pursuant to its terms;
16.1.8 By written notice of Seller to Buyer if the DOJ Consent is not
obtained, or is denied or rescinded;
16.1.9 By written notice of Seller to Buyer, or of Buyer to Seller,
if the Closing has not occurred on or before May 1, 2000; or
16.1.10 By written notice of Seller to Buyer if, at a time when the
conditions set forth in Article 11 have been satisfied, the condition set forth
in Section 12.6 has not been satisfied.
Notwithstanding the foregoing, no party hereto may effect a
termination hereof if such party is in material default or breach of this
Agreement.
16.2. Liability. Except as set forth in Section 16.4 below, the
---------
termination of this Agreement under Section 16.1 shall not relieve any party of
any liability for breach of this Agreement prior to the date of termination.
16.3. Monetary Damages, Specific Performance and Other Remedies. The
---------------------------------------------------------
parties recognize that if either party refuses to consummate the Closing
pursuant to the provisions of this Agreement or either party otherwise breaches
("Breaching Party") such that the Closing has not occurred, monetary damages
alone will not be adequate to compensate the non-breaching party ("Non-Breaching
Party") for its injury. Such Non-Breaching Party shall therefore be entitled to
30
<PAGE>
obtain specific performance of the terms of this Agreement in addition to any
other remedies, including but not limited to monetary damages, that may be
available to it; provided, however, that Seller may elect to recover liquidated
-------- -------
damages in lieu of obtaining specific performance, or vice versa, in accordance
with Section 16.4. If any action is brought by the Non-Breaching Party to
enforce this Agreement, the Breaching Party shall waive the defense that there
is an adequate remedy at law. In the event of a default by the Breaching Party
which results in the filing of a lawsuit for damages, specific performance, or
other remedy, the Non-Breaching Party shall be entitled to reimbursement by the
Breaching Party of reasonable legal fees and expenses incurred by the Non-
Breaching Party; provided that, the Non-Breaching Party is successful in such
lawsuit.
16.4 Seller's Liquidated Damages'. Subject to Section 16.3, in the event
----------------------------
this Agreement is terminated by Seller due to a material breach hereof by Buyer,
and Seller is not at that time in material breach hereof, then Buyer shall pay
to Seller the Escrow Deposit, plus interest accrued thereon, which amount shall
constitute liquidated damages. It is understood and agreed that such liquidated
damages amount represents Buyer's and Seller's reasonable estimate of actual
damages and does not constitute a penalty. Except in the case of the remedy of
specific performance and damages as set forth in Section 16.3, which, if chosen
by Seller, shall preclude Seller from receiving liquidated damages, recovery of
liquidated damages shall be the sole and exclusive remedy of the Seller against
the Buyer as a result of the Buyer's material breach hereof, regardless of the
actual amount of damages sustained, and all other remedies are deemed waived by
the Seller.
16.5 Survival. Notwithstanding anything contained herein to the
--------
contrary, Sections 10.1 and 13.1 shall survive any termination of this
Agreement.
ARTICLE 17
MISCELLANEOUS PROVISIONS
------------------------
17.1 Casualty Loss. In the event any loss or damage of the Station
-------------
Assets exists on the Closing Date, Buyer and Seller shall consummate the
transaction on the Closing Date and Seller shall assign to Buyer the proceeds of
any insurance payable to Seller on account of such damage or loss.
17.2 Certain Interpretive Matters and Definitions. Unless the context
--------------------------------------------
otherwise requires: (a) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof; (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to "$" or dollar amounts will be to lawful currency of the United
States of America.
31
<PAGE>
17.3 Further Assurances.
------------------
17.3.1 Generally. After the Closing, Seller shall from time to time,
---------
at the request of and without further cost or expense to Buyer, execute and
deliver such other instruments of conveyance and transfer and take such other
actions as may reasonably be requested in order to more effectively consummate
the transactions contemplated hereby to vest in Buyer good title to the Station
Assets, and Buyer shall from time to time, at the request of and without further
cost or expense to Seller, execute and deliver such other instruments and take
such other actions as may reasonably be requested in order more effectively to
relieve Seller of any obligations being assumed by Buyer hereunder.
17.3.2 Cooperation with Respect to Financial and Tax Matters. From
-----------------------------------------------------
the date of Closing, and for a period of three (3) years thereafter, Seller and
Buyer shall cooperate, and each shall cause its respective independent
accounting firm to cooperate, at the expense (including reimbursement of actual
expenses reasonably incurred by the party from whom such cooperation is
requested in connection with such cooperation) of the party making a request, to
provide such information as the other party hereto shall reasonably request for
preparation of documentation to fulfill its reporting requirements to
governmental agencies, including with respect to income, franchise, sales, use,
property, excise, payroll and other tax returns.
17.4 Benefit and Assignment. This Agreement shall be binding upon and
----------------------
shall inure to the benefit of the parties hereto and their respective successors
and assigns. Subject to the provisions of Section 10.7 with respect to the
Seller assigning its rights (in whole or in part) under this Agreement to a
Qualified Intermediary, and provided that Seller shall be permitted to sell,
assign and/or transfer some or all of the Station Assets and/or this Agreement
(in whole or in part) to its designee, assignee, trustee or other entity if it
determines that it would be advisable to make such a transfer in order to make
more certain or otherwise facilitate the consummation of the transactions
contemplated hereby or the transactions contemplated by the Jacor Agreement
("Permitted Assignment"), neither party may voluntarily or involuntarily assign
its interest under this Agreement without the prior written consent of the other
party hereto. Buyer shall not be permitted to assign its rights under this
Agreement without the express written consent of Seller, provided that Buyer may
assign this Agreement to its primary lenders under its June 30, 1998 Credit
Agreement, or any successor Credit Agreement, as collateral for any indebtedness
incurred pursuant to such Credit Agreement. Buyer agrees with respect to any
Permitted Assignment that it shall take all such actions as are reasonably
requested by Seller to effectuate such Permitted Assignment, including but not
limited to cooperating in any appropriate filings with the FCC or other
governmental authorities. All covenants, agreements, statements,
representations, warranties and indemnities in this Agreement by and on behalf
of any of the parties hereto shall bind and inure to the benefit of their
respective successors and permitted assigns of the parties hereto.
17.5 Amendments. No amendment, waiver of compliance with any provision
----------
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
32
<PAGE>
17.6 Headings. The headings set forth in this Agreement are for
--------
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.7 Governing Law. The construction and performance of this Agreement
-------------
shall be governed by the laws of the State of Ohio without giving effect to the
choice of law provisions thereof. Any action, suit or proceeding brought by any
party to this Agreement relating to or arising out of this Agreement or any
other agreement, instrument, certificate or other document delivered pursuant
hereto (or the enforcement hereof or thereof) must be brought and prosecuted as
to all parties in, and each of the parties hereby consents to service of
process, personal jurisdiction and venue in, the state and Federal courts of
general jurisdiction located in Hamilton County, Ohio.
17.8 Notices. Any notice, demand or request required or permitted to be
-------
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been duly delivered and received on the
date of personal delivery, on the third day after deposit in the U.S. mail if
mailed by registered or certified mail, postage prepaid and return receipt
requested, on the day after delivery to a nationally recognized overnight
courier service if sent by an overnight delivery service for next morning
delivery or when dispatched by facsimile transmission (with the facsimile
transmission confirmation being deemed conclusive evidence of such dispatch) and
shall be addressed to the following addresses, or to such other address as any
party may request, in the case of Seller, by notifying Buyer, and in the case of
Buyer, by notifying Seller:
If to Seller: Clear Channel Broadcasting, Inc.
Clear Channel Broadcasting Licenses, Inc.
200 Concord Plaza
Suite 600
San Antonio, TX 78216
Attention: Kenneth E. Wyker, Esq.
Senior Vice President/Legal Affairs
Fax: 210-822-2299
and Jacor Communications, Inc.
50 East RiverCenter Boulevard, 12th Floor
Covington, Kentucky 41011
Attention: Paul F. Solomon
Senior Vice President and General Counsel
Fax: 606-655-9356
Copy to: Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Attention: Richard J. Bodorff, Esq.
Fax: 202-719-7049
33
<PAGE>
To Buyer: Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Attention: Alfred C. Liggins
CEO/President
Fax: 301-306-9694
Copies to: Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Attention: Linda J. Eckard
Fax: 301-306-9638
Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, MD 20706
Attention: Scott Royster
Fax: 301-306-9426
17.9 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which will be deemed an original and all of which together
will constitute one and the same instrument.
17.10 No Third Party Beneficiaries. Nothing herein expressed or implied
----------------------------
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns, any
rights or remedies under or by reason of this Agreement.
17.11 Severability. The parties agree that if one or more provisions
------------
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.12 Entire Agreement. This Agreement and the Exhibits hereto embody
----------------
the entire agreement and understanding of the parties hereto and supersede any
and all prior agreements, arrangements and understandings relating to the
matters provided for herein.
[SIGNATURES ON FOLLOWING PAGE]
34
<PAGE>
SIGNATURE PAGE FOR ASSETS PURCHASE AGREEMENT
--------------------------------------------
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
SELLER:
CLEAR CHANNEL BROADCASTING, INC.
By: /s/ Mark P. Mays
____________________________________
Name: Mark P. Mays
____________________________________
Title:
____________________________________
CLEAR CHANNEL BROADCASTING LICENSES, INC.
By: /s/ Mark P. Mays
____________________________________
Name: Mark P. Mays
____________________________________
Title:
____________________________________
BUYER:
RADIO ONE, INC.
By: /s/ Alfred C. Liggins, III
____________________________________
Name: Alfred C. Liggins
Title: President
<PAGE>
Exhibit 10.43
- --------------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
- --------------------------------------------------------------------------------
by and between
HOFFMAN COMMUNICATIONS, INC.
for the sale and purchase of
Station WDYL-FM
Dated as of February 10, 1999
<PAGE>
TABLE OF CONTENTS
Page
<TABLE>
<CAPTION>
<S> <C> <C>
1.0 RULES OF CONSTRUCTION..................................... 1
1.1. Defined Terms..................................... 1
1.2. Other Definitions................................. 4
1.3. Number and Gender................................. 5
1.4. Headings and Cross-References..................... 5
1.5. Computation of Time............................... 5
2.0 ASSETS TO BE CONVEYED..................................... 5
2.1. Purchased Assets.................................... 5
(a) Licenses..................................... 5
(b) Equipment.................................... 5
(c) Contracts and Agreements..................... 5
(d) Programming Materials........................ 6
(e) Intellectual Property........................ 6
(f) Intangible Property.......................... 6
(g) Business Records............................. 7
(h) Station Records.............................. 7
2.2. Excluded Assets..................................... 7
(a) Receivables................................... 7
(b) Cash and Investments.......................... 7
(c) Insurance..................................... 7
(d) Employee Benefit Assets....................... 7
(e) Contracts..................................... 7
(f) Tax items..................................... 7
(g) Corporate Records............................. 8
(h) Real Property ................................ 8
(i) Book Store Assets............................. 8
3.0 INITIAL ESCROW DEPOSIT.................................... 8
4.0 PURCHASE PRICE AND METHOD OF PAYMENT..................... 8
4.1. Consideration..................................... 8
4.2. Payment at Closing................................ 8
4.3. Allocation........................................ 8
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
4.4. Seller's Liabilities.............................. 9
5.0 HART-SCOTT-RODINO......................................... 9
6.0 SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS........ 9
6.1. Existence, Power and Identity...................... 9
6.2. Binding Effect..................................... 9
6.3. No Violation....................................... 10
6.4. Conveyance of Assets............................... 10
6.5. Governmental Authorizations........................ 10
6.6. Equipment.......................................... 11
6.7. Contracts.......................................... 11
6.8. Promotional Rights................................. 11
6.9. Insurance.......................................... 12
6.10. Financial Statements............................... 12
6.11. Employees.......................................... 13
6.12. Employee Benefit Plans............................. 13
6.13 Real Property...................................... 14
6.14. Environmental Protection........................... 14
6.15. Compliance with Law................................ 15
6.16. Litigation......................................... 16
6.17. Insolvency Proceedings............................. 16
6.18. Sales Agreements................................... 17
6.19. Liabilities........................................ 17
6.20. Sufficiency of Assets.............................. 17
6.21. Related Parties.................................... 18
6.22. Taxes.............................................. 18
6.23. No Misleading Statements........................... 18
7. BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS......... 18
7.1. Existence and Power............................... 18
7.2. Binding Effect.................................... 19
7.3. No Violation...................................... 19
7.4. Litigation........................................ 19
7.5. Licensee Qualifications........................... 19
8. PRE-CLOSING OBLIGATIONS.................................... 19
8.1. Application for Commission Consent............ 19
8.2. Access........................................ 20
8.3. Operations Prior to Closing................... 20
8.4. Damage........................................ 21
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
(a) Risk of Loss.................................. 21
(b) Failure of Broadcast Transmissions............ 22
(c) Resolution of Disagreements................... 22
8.5. Administrative Violations..................... 23
8.6. Bulk Sales Act................................ 23
8.7. Control of Station............................ 23
8.8. Audit......................................... 23
8.9. Time Brokerage and Operating Agreement........ 23
8.10. Closing Obligations........................... 23
9. STATUS OF EMPLOYEES....................................... 23
9.1. Employment Relationship............................ 23
9.2. Buyer's Right to Employ............................ 24
10. CONDITIONS PRECEDENT..................................... 24
10.1. Mutual Conditions................................. 24
(a) Approval of Assignment Application.......... 24
(b) Absence of Litigation....................... 24
(c) Consulting Agreement........................ 24
(d) Hart-Scott-Rodino........................... 24
(e) Noncompetition Agreement.................... 24
10.2. Additional Conditions to Buyer's Obligation...... 24
(a) Representations and Warranties.............. 24
(b) Compliance with Conditions.................. 25
(c) Discharge of Liens.......................... 25
(d) Third-Party Consents........................ 25
(e) Estoppel Certificates....................... 25
(g) Opinion of Seller's Counsel................. 25
(h) Final Order................................. 27
(i) Closing Documents........................... 27
10.3. Additional Conditions to Seller's Obligation..... 27
(a) Representations and Warranties............. 27
(b) Compliance with Conditions................. 27
(c) Opinion of Buyer's Counsel................. 27
(d) Assumption of Liabilities.................. 28
(e) Payment.................................... 28
(f) Closing Documents.......................... 28
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
11. CLOSING................................................ 28
12. PRORATIONS............................................. 29
12.1. Apportionment of Expenses....................... 29
12.2. Determination and Payment....................... 29
13. POST-CLOSING OBLIGATIONS............................... 29
13.1. Collection of Accounts Receivable.............. 29
13.2. Indemnification................................ 30
(a) Buyer's Right to Indemnification............ 30
(b) Seller's Right to Indemnification........... 30
(c) Procedure for Indemnification............... 30
(d) Assignment of Claims........................ 31
(e) Indemnification Not Sole Remedy............. 31
(f) De minimis Amount........................... 32
13.3. Liabilities...................................... 32
14. DEFAULT AND REMEDIES.................................... 32
14.1. Opportunity to Cure............................ 32
14.2. Seller's Remedies.............................. 32
14.3. Buyer's Remedies.... .......................... 32
15. CANCELLATION OF AGREEMENT............................... 33
15.1. Failure to Close.................................. 33
15.2. Designation for Hearing........................... 33
16. GENERAL PROVISIONS....................................... 34
16.1. Brokerage......................................... 34
16.2. Fees.............................................. 34
16.3. Notices........................................... 34
16.4. Assignment........................................ 35
16.5. Exclusive Dealings................................ 35
16.6. Third Parties..................................... 35
16.7. Indulgences....................................... 35
16.8. Survival of Representations and Warranties..... 36
16.9. Prior Negotiations................................ 36
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
16.10. Exhibits and Appendices............................ 36
16.11. Entire Agreement; Amendment........................ 36
16.12. Counsel............................................ 36
16.13. Governing Law, Jurisdiction........................ 36
16.14. Severability....................................... 37
16.15. Counterparts....................................... 37
16.16. Further Assurances................................. 37
</TABLE>
5
<PAGE>
TABLE OF EXHIBITS
EXHIBIT 1 -- Initial Escrow Agreement
EXHIBIT 2 -- Lease for Studio Site
EXHIBIT 3 -- Lease for Transmitter Site
6
<PAGE>
TABLE OF SCHEDULES
SCHEDULE 2.1(c)(1) Contracts
SCHEDULE 2.2 Excluded Assets
SCHEDULE 6.1 Seller's Places of Business
SCHEDULE 6.3 Litigation
SCHEDULE 6.4 Permitted Encumbrances
SCHEDULE 6.5 FCC Licenses
SCHEDULE 6.6 Equipment
SCHEDULE 6.8 Intellectual Property
SCHEDULE 6.9 Insurance
SCHEDULE 6.10 Financial Statements
SCHEDULE 6.11 Employees
SCHEDULE 6.12 Employment and Benefits Agreements
SCHEDULE 6.13 Real Property Leases
SCHEDULE 6.14 Environmental
SCHEDULE 6.21 Related Parties
7
<PAGE>
ASSET PURCHASE AGREEMENT
This Agreement, made and entered into as of this 10th day of February,
1999, by and between Hoffman Communications, Inc., a Virginia corporation
("Seller"), and Radio One, Inc., a Delaware corporation ("Buyer").
WITNESSETH THAT:
WHEREAS, Seller is the licensee of Station WDYL-FM, 101.1 MHz, Chester,
Virginia (the "Station"); and
WHEREAS, the parties desire that Buyer purchase certain assets used or held
for use in the operation of the Station and acquire the authorizations issued by
the Federal Communications Commission (the "Commission") for the operation of
the Station; and
WHEREAS, the authorizations issued by the Commission may not be assigned to
Buyer without the Commission's prior consent.
NOW THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties, intending to be legally bound, agree as follows:
1.0 RULES OF CONSTRUCTION.
---------------------
1.1. Defined Terms.
-------------
As used in this Agreement, the following terms shall have the
following meanings:
"Accounts Receivable" means the cash accounts receivable of Seller arising
from Seller's operation of the Station prior to and immediately before the
Closing.
"Administrative Violation" means those violations described in Section 8.6
hereof.
"Assignment Application" means the application on FCC Form 314 that Seller
and Buyer shall join in and file with the Commission requesting its consent to
the assignment of the FCC Licenses (as hereinafter defined) from Seller to
Buyer.
"Business Records" means all business records of Seller (including logs,
public file materials and engineering records) relating to or used in the
operation of the Station and not relating solely to Seller's internal corporate
affairs.
"Buyer" means Radio One, Inc., a Delaware corporation.
"Buyer Documents" means those documents, agreements and instruments to be
executed and delivered by Buyer in connection with this Agreement as described
in Section 7.2.
<PAGE>
"Closing" means the consummation of the Transaction (as hereinafter
defined).
"Closing Date" means the date on which the Closing takes place, as
determined by Section 11.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Collection Period" means the 90-day period following the Closing Date
during which Buyer shall collect the Accounts Receivable of Seller, subject to
the provisions of Section 13.1.
"Commission" means the Federal Communications Commission.
"Communications Act" shall mean the Communications Act of 1934, as amended.
"Contracts" means those contracts, leases and other agreements listed or
described in Schedule 2.1(c)(1) which are in effect on the date hereof and which
Buyer has agreed to assume, but not including Sales Agreements and Trade
Agreements (as hereinafter defined).
"Environmental Law" means any law, rule, order, decree or regulation of any
Governmental Authority relating to pollution or protection of human health and
the environment, including any law or regulation relating to emissions,
discharges, releases or threatened releases of Hazardous Substances (as
hereinafter defined) into ambient air, surface water, groundwater, land or other
environmental media, and including without limitation all laws, regulations,
orders and rules pertaining to occupational health and safety.
"Equipment" means all tangible personal property and fixtures used or
useful in the operation of the Station as described in Section 2.1(b).
"Excluded Assets" means those assets excluded from the Purchased Assets and
retained by the Seller, to the extent in existence on the Closing Date, as
specifically described in Section 2.2.
"FCC Licenses" means all licenses, pending applications, permits and other
authorizations issued by the Commission for the operation of the Station listed
on Schedule 6.5.
"Final Order" means any action that shall have been taken by the Commission
(including action duly taken by the Commission's staff, pursuant to delegated
authority) which shall not have been reversed, stayed, enjoined, set aside,
annulled or suspended; with respect to which no timely request for stay,
petition for rehearing, appeal or certiorari or sua sponte action of the
--- ------
Commission with comparable effect shall be pending; and as to which the time for
filing any such request, petition, appeal, certiorari or for the taking of any
such sua sponte action by the Commission shall have expired or otherwise
--- ------
terminated.
"Financial Statements" means Seller's unaudited financial statements as
described in Section 6.10.
2
<PAGE>
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, court or other entity that
exercises executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Substances" means any hazardous, dangerous or toxic waste,
substance or material, as those or similar terms are defined in or for purposes
of any applicable federal, state or local Environmental Law, and including
without limitation any asbestos or asbestos-related products, oils, petroleum or
petroleum-derived compounds, CFCS, or PCBs.
"Initial Escrow Agent" means Media Venture Partners.
"Initial Escrow Agreement" means the escrow agreement described in Section
3, the form of which is attached as Exhibit 1.
"Initial Escrow Deposit" means the monies deposited with the Initial Escrow
Agent described in Section 3.
"Intangible Property" means all of Seller's right, title and interest in
and to the goodwill and other intangible assets used or useful in or arising
from the business of the Station as described in Section 2.1(f).
"Intellectual Property" means all Seller's right, title and interest in and
to the trademarks, tradenames, service marks, patents, franchises, copyrights,
including registrations and applications for registration of any of them,
slogans, jingles, logos, computer programs and software, trade secrets and
similar materials and rights relating to the Station as listed on Schedule 6.8.
"Knowledge of Buyer" means the actual knowledge, after reasonable inquiry
of Buyer's senior management, and the books and records of Buyer.
"Knowledge of Seller" means the actual knowledge, after reasonable inquiry
of Seller's senior management, the books and records of the Station, and the
actual knowledge of Hubert N. Hoffman, Jr.
"Material Contracts" means those leases, contracts and agreements
specifically designated in Schedule 2.1(c)(1) as being "Material Contracts."
"Permitted Encumbrances" means those permitted liens or encumbrances to the
Purchased Assets described in Section 6.4 and set forth on Schedule 6.4.
"Purchase Price" shall mean the total consideration for the Purchased
Assets as described in Section 4.1.
"Purchased Assets" means those assets which are the subject matter of this
Agreement that Seller shall sell, assign, transfer, convey and deliver to Buyer
at Closing as described in Section 2.1.
3
<PAGE>
"Sales Agreements" means agreements entered into by Seller for the sale of
time on the Station for cash, as described in Section 2.1(c)(2).
"Seller" means Hoffman Communications, Inc., a Virginia corporation.
"Seller Documents" means those documents, agreements and instruments to be
executed and delivered by Seller in connection with this Agreement as described
in Section 6.1.
"Specified Event" means those broadcast transmission failures described in
Section 8.5(b).
"Station" means WDYL-FM, 101.1 MHz, Chester, Virginia, but shall not be
interpreted to mean WGGM-AM or WGCV-AM also owned or operated by Seller.
"Studio Site" means the 1,872 square feet of offices and broadcast
facilities located at Chester, Virginia as more particularly described in
Schedule 6.13.
"Trade Agreements" means agreements entered into by Seller for the sale of
time on the Station in exchange for merchandise or services, including those
listed on Schedule 2.1(c)(1).
"Trade Balance" means the difference between the aggregate value of time
owed pursuant to the Trade Agreements and the aggregate value of goods and
services to be received pursuant to the Trade Agreements, as computed in
accordance with the Station's customary bookkeeping practices. The Trade
Balance is "negative" if the value of time owed as of Closing exceeds the value
of goods and services to be received. The Trade Balance is "positive" if the
value of time owed as of Closing is less than the value of goods and services to
be received.
"Transaction" means the sale and purchase and assignments and assumptions
contemplated by this Agreement and the respective obligations of Seller and
Buyer set forth herein.
"Transmitter Site" means the real estate located at 10300 Brightwood Avenue
& 10610 Jefferson Davis Highway, Chesterfield County, Virginia that is
currently used as the Station's transmitter site.
1.2. Other Definitions. Other capitalized terms used in this Agreement
-----------------
shall have the meanings ascribed to them herein.
1.3. Number and Gender. Whenever the context so requires, words used in
-----------------
the singular shall be construed to mean or include the plural and vice versa,
----------
and pronouns of any gender shall be construed to mean or include any other
gender or genders.
1.4. Headings and Cross-References. The headings of the Sections and
-----------------------------
Paragraphs hereof, the Table of Contents, the Table of Exhibits, and the Table
of Schedules have been included for convenience of reference only, and shall in
no way limit or affect the meaning or interpretation of the specific provisions
of this Agreement. All cross-references to Sections or Paragraphs herein
4
<PAGE>
shall mean the Sections or Paragraphs of this Agreement unless otherwise stated
or clearly required by the context. All references to Schedules herein shall
mean the Schedules to this Agreement. Words such as "herein" and "hereof" shall
be deemed to refer to this Agreement as a whole and not to any particular
provision of this Agreement unless otherwise stated or clearly required by the
context. The term "including" means "including without limitation."
1.5. Computation of Time. Whenever any time period provided for in this
-------------------
Agreement is measured in "business days" there shall be excluded from such time
period each day that is a Saturday, Sunday, recognized federal legal holiday, or
other day on which the Commission's offices are closed and are not reopened
prior to 5:30 p.m. Washington, D.C. time. In all other cases all days shall be
counted.
2.0 ASSETS TO BE CONVEYED.
---------------------
2.1. Purchased Assets. On the Closing Date, Seller shall sell, assign,
----------------
transfer, convey and deliver to Buyer free of all liens, encumbrances,
mortgages, security interests of any kind or type whatsoever, all of Seller's
assets used exclusively in the conduct of the business and operations of the
Station (collectively referred to as the "Purchased Assets"), including, but not
limited to, the following;
(a) Licenses. The FCC Licenses, and all other transferrable
licenses, permits and authorizations issued by any other Governmental Authority
that are used in or necessary for the lawful operation of the Station as
currently operated by Seller.
(b) Equipment. All tangible personal property and fixtures used or
held for the exclusive use in the operation of the Station, including the
property and assets listed or described in Schedule 6.6, together with supplies,
inventory, spare parts and replacements thereof and improvements and additions
thereto made between the date hereof and the Closing Date (the "Equipment").
(c) Contracts and Agreements. The Contracts, Sales Agreements and
Trade Agreements, subject to the following:
(1) Buyer shall be obligated to assume only those Contracts that
are listed in Schedule 2.1(c)(1) or that have been or will have been entered
into in the ordinary course of the Station's business and in accordance with the
terms of this Agreement, between the date hereof and the Closing Date, provided
that --------
- ----
unless otherwise approved in writing by Buyer, the obligations of the Station or
Seller under such Contracts entered into in the ordinary course of business
after the date of this Agreement which do not exceed Five Thousand Dollars
($5,000) per annum per Contract or Twenty-five Thousand Dollars ($25,000) per
annum in the aggregate or are terminable by the Station or Seller on not more
than 30 days' notice.
(2) Buyer shall be obligated to assume only those Sales
Agreements that have been or will have been entered into in the ordinary course
of business and in accordance with the terms of this Agreement at commercially
reasonable rates and with terms of no longer than ten
5
<PAGE>
(10) weeks, or if containing terms of longer than 10 weeks, are terminable by
the Station on not more than 15 days' notice.
(3) Buyer shall be obligated to assume only those Trade
Agreements that are listed in Schedule 2.1(c)(1) or that have been or will have
been entered into in the ordinary course of business and in accordance with the
terms of this Agreement, between the date hereof and the Closing Date, and are
(i) immediately preemptible for cash time sales trade; (ii) require the
provision of air time only on a "run of schedule" basis; and (iii) inure or will
inure to the benefit of the Station. Notwithstanding the foregoing, Buyer shall
not be obligated to assume Trade Agreements (including both those Trade
Agreements listed on Schedule 2.1(c)(1) and those entered into in the ordinary
course of business) that have an aggregate negative Trade Balance exceeding Five
Thousand Dollars ($5,000).
(4) Notwithstanding any provision of this Agreement to the
contrary, this Agreement shall not constitute an agreement to assign any
Contract or other agreement, undertaking or obligation if (i) an attempted
assignment, without the consent required for such assignment, may constitute a
breach thereof or may in any way have a material adverse effect on Seller's
rights thereunder prior to Closing or Buyer's rights thereunder after Closing
and (ii) such consent is notunless otherwise approved in writing by Buyer, the
obligations of the obtained by Seller prior to Closing, provided, however, that
-------- -------
Seller will use its best efforts at its own expense to obtain all such consents
prior to Closing.
(d) Programming Materials. All programs, programming material, and
music libraries in whatever form or nature owned by Seller and used or intended
for use in the operation of the Station.
(e) Intellectual Property. All Seller's right, title and interest
in and to the Intellectual Property used in the operation of the Station.
(f) Intangible Property. All of Seller's right, title and interest
in and to the goodwill and other intangible assets used or useful in or arising
from the business of the Station, including all customer lists, and sales plans.
(g) Business Records. All business records of Seller (including
logs, public file materials and engineering records) relating to or used in the
operation of the Station and not relating solely to Seller's internal corporate
affairs.
(h) Station Records. All of the Station's proprietary information,
technical information and data, machinery and equipment warranties (to the
extent such warranties are assignable), maps, plans, diagrams, blueprints,
schematics, files, records, studies, data, lists, general accounting records,
books of account, in whatever form, used or held for use for the business or
operation of the Station, including filings with the FCC which relate to the
Station.
(i) Real Property Leases. Seller currently holds title to the Real
Property described in Schedule 6.13 which is used as the Station's Studio Site
and Transmitter Site. At Closing, Seller shall, at Buyer's option, lease the
Studio Site to Buyer under a short-term
6
<PAGE>
arrangement and lease the Transmitter Site to Buyer under a long-term
arrangement, pursuant to the terms of the leases attached hereto as Exhibits 2
and 3.
2.2. Excluded Assets. There shall be excluded from the Purchased Assets
---------------
and retained by the Seller, to the extent in existence on the Closing Date, the
following assets (the "Excluded Assets"):
(a) Receivables. All Accounts Receivable, except to the extent
they are assigned on a limited basis pursuant to Section 13.
(b) Cash and Investments. All cash and cash equivalents on hand or
in bank accounts and other cash items and investment securities of Seller on the
Closing Date.
(c) Insurance. All contracts of insurance (including any cash
surrender value thereof) and all insurance proceeds of settlement and insurance
claims made by Seller on or before the Closing Date.
(d) Employee Benefit Assets. All pension, profit sharing and
savings plans and trusts, and any assets thereof, except that any employee
account balances under any plan qualified under Section 401(k) of the Code shall
be promptly transferred to a plan qualified under Section 401(k) and, at Buyer's
request, made available by or on behalf of Buyer if such employee is hired by
Buyer, to the extent allowed under each such plan and applicable law.
(e) Contracts. All contracts that will have terminated or expired
prior to Closing by their terms and all contracts, agreements, instruments,
undertakings and obligations not expressly assumed by Buyer hereunder.
(f) Tax items. All claims, rights and interest in and to any
refunds for federal, state or local taxes to which Seller is entitled for
periods prior to the Closing Date.
(g) Corporate Records. Seller's corporate minute books and other
books and records relating to internal corporate minutes.
(h) Real Property. Title to Seller's Real Property described in
Schedule 6.13 and Seller's other real property and leases.
(i) Book Store Assets. All of Seller's assets used in the conduct of
its business under the tradename of "New Life Christian Bookstore", accounts
receivable, business records, intangible property (including trademarks and
goodwill) and intellectual property.
3.0 INITIAL ESCROW DEPOSIT. Simultaneously with the execution and delivery
----------------------
of this Agreement by both parties, Buyer has deposited with Media Venture
Partners ("Initial Escrow Agent"), a cash deposit of Two Hundred Thousand
Dollars ($200,000) (the "Initial Escrow Deposit"). The Initial Escrow Deposit
shall be held in an interest-bearing account and disbursed by Initial Escrow
Agent pursuant to the terms of an escrow agreement in the form attached hereto
as
7
<PAGE>
Exhibit 1 (the "Initial Escrow Agreement"), which Initial Escrow Agreement has
been entered into by Seller, Buyer and Initial Escrow Agent simultaneously
herewith.
4.0 PURCHASE PRICE AND METHOD OF PAYMENT.
------------------------------------
4.1. Consideration. The total consideration for the Purchased Assets
-------------
(the "Purchase Price") shall be Four Million Six Hundred Thousand Dollars
($4,600,000), payable as set forth in this Section 4.
4.2. Payment at Closing. At Closing, Buyer shall pay:
------------------
(a) Four Million Four Hundred Thousand Dollars ($4,400,000) (as
adjusted pursuant to Sections 8.5 and 12.1) to Seller by wire transfer of same
day funds pursuant to wire transfer instructions which shall be delivered by
Seller to Buyer at least five business days prior to Closing.
(b) Two Hundred Thousand Dollars ($200,000) to Seller by causing the
Initial Escrow Agent to release the Initial Escrow Deposit to Seller by wire
transfer of same day funds, with all interest earned on the Initial Escrow
Deposit remitted to Buyer.
4.3. Allocation. The Purchase Price shall be allocated to the Purchased
----------
Assets in accordance with an allocation schedule prepared by Buyer pursuant to
Section 1060 of the Code and mutually agreed upon by Seller and Buyer. Seller
and Buyer shall use such allocation for tax accounting (including preparation of
IRS Form 8594), and all other purposes. If Seller and Buyer have not agreed
upon the allocation prior to the Closing Date, Closing shall take place as
scheduled and any dispute shall be resolved by a qualified media appraiser
mutually acceptable to Seller and Buyer, whose decision shall be final and whose
fees and expenses shall be paid one-half by Seller and one-half by Buyer. If
the allocation must be determined by a media appraiser, Seller and Buyer agree
to cooperate in good faith so that such appraisal may be completed
expeditiously.
4.4. Seller's Liabilities. Buyer does not and shall not assume or be
--------------------
deemed to assume, pursuant to this Agreement or otherwise, any agreements,
liabilities, undertakings, obligations or commitments of Seller or the Station
of any nature whatsoever except: (i) liabilities accruing after Closing under
the Contracts, Sales Agreements and Trade Agreements listed in Schedule
2.1(c)(1) or otherwise expressly assumed by Buyer pursuant to, and subject to,
Section 2.1(c), provided, that, Buyer shall not assume liability for any
-------- ----
breaches, violations or defaults under the Contracts, Sales Agreements and Trade
Agreements that occurred prior to Closing; and (ii) prorated items that are to
be paid by Buyer after Closing pursuant to Section 12.1.
5.0 HART-SCOTT-RODINO. As promptly as practicable and no later than ten (10)
-----------------
days following the execution of this Agreement, Seller and Buyer shall complete
any filing that may be required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or shall mutually agree that no such
filing is required. Seller and Buyer shall diligently take all necessary and
proper steps and provide any additional information reasonably requested in
order to comply with the requirements of such Act.
8
<PAGE>
6.0 SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller hereby makes
--------------------------------------------------
to and for the benefit of Buyer, the following representations, warranties and
covenants:
6.1. Existence, Power and Identity. Seller is a corporation duly
-----------------------------
organized and validly existing under the laws of the State of Virginia with full
corporate power and authority (a) to own, lease and use the Purchased Assets as
currently owned, leased and used, (b) to conduct the business and operation of
the Station as currently conducted and (c) to execute and deliver this Agreement
and each other document, agreement and instrument to be executed and delivered
by Seller in connection with this Agreement (collectively, the "Seller
Documents"), and to perform and comply with all of the terms, obligations and
covenants to be performed and complied with by Seller hereunder and thereunder.
The addresses of Seller's chief executive office and all of Seller's additional
places of business, and all places where any of the tangible personal property
included in the Purchased Assets is now located, or has been located during the
past 180 days, are correctly listed in Schedule 6.1. Except as set forth in
Schedule 6.1, during the past five years, Seller has not been known by or used,
nor, to the best of Seller's knowledge, has any prior owner of the Station been
known by or used, any corporate, partnership, fictitious or other name in the
conduct of the Station's business or in connection with the ownership, use or
operation of the Purchased Assets.
6.2. Binding Effect. The execution, delivery and performance by Seller
--------------
of this Agreement has been and the Seller Documents will be duly authorized by
all necessary corporate action, and copies of those authorizing resolutions,
certified by Seller's Secretary shall be delivered to Buyer at Closing. No
other corporate action by Seller is required for Seller's execution, delivery
and performance of this Agreement. This Agreement has been duly and validly
executed and delivered by Seller to Buyer and constitutes a legal, valid and
binding obligation of Seller, enforceable against Seller in accordance with its
terms, subject to bankruptcy, reorganization, fraudulent conveyance, insolvency,
moratorium and similar laws relating to or affecting creditors, and other
obligees' rights generally and the exercise of judicial discretion in accordance
with general equitable principles.
6.3. No Violation. Except as set forth on Schedule 6.3, none of (i) the
------------
execution, delivery and performance by Seller of this Agreement or any of the
Seller Documents, (ii) the consummation of the Transaction, or (iii) Seller's
compliance with the terms or conditions hereof will, with or without the giving
of notice or the lapse of time or both, conflict with, breach the terms or
conditions of, constitute a default under, or violate (x) Seller's articles of
incorporation or bylaws, (y) any judgment, decree, order, consent, agreement,
lease or other instrument (including any Contract, Sales Agreement or Trade
Agreement) to which Seller is a party or by which Seller or any of its assets
(including the Purchased Assets) or the Station is or may be legally bound or
affected, or (z) any law, rule, regulation or ordinance of any Governmental
Authority applicable to Seller or any of its assets (including the Purchased
Assets) or the operation of the Station.
6.4. Conveyance of Assets. At Closing, Seller shall convey to Buyer
--------------------
good and marketable title to all the Purchased Assets, free and clear of all
liens, pledges, collateral assignments, security interests, capital or financing
leases, covenants, restrictions and encumbrances or other defects of title
except: (i) the inchoate lien for current taxes or other governmental charges
9
<PAGE>
not yet due and payable and that will be prorated between Seller and Buyer
pursuant to Section 12.1; and (ii) the Permitted Encumbrances.
6.5. Governmental Authorizations. Except for the FCC Licenses, no
---------------------------
licenses, permits, or authorizations from any Governmental Authority are
required to own, use or operate the Purchased Assets, to operate the Station or
to conduct Seller's business as currently operated and conducted by Seller. The
FCC Licenses are all the Commission authorizations held by Seller with respect
to the Station, and are all the Commission authorizations used in or necessary
for the lawful operation of the Station as currently operated by Seller. The
FCC Licenses are in full force and effect, are subject to no conditions or
restrictions other than those which appear on their face and are unimpaired by
any acts or omissions of Seller, Seller's officers, employees or agents. Seller
has delivered true and complete copies of all FCC Licenses to Buyer. There is
not pending or, to the Knowledge of Seller, threatened, any action by or before
the Commission or any other Governmental Authority to revoke, cancel, rescind or
modify any of the FCC Licenses (other than proceedings to amend Commission rules
of general applicability or otherwise affecting the broadcast industry
generally), and there is not now issued, outstanding or pending or, to the
Knowledge of Seller, threatened, by or before the Commission or any other
Governmental Authority, any order to show cause, notice of violation, notice of
apparent liability, or notice of forfeiture or complaint against Seller or
otherwise with respect to the Station. The Station is operating in compliance
with all FCC Licenses, the Communications Act of 1934, as amended (the
"Communications Act"), and the current rules, regulations, policies and
practices of the Commission. The Commission's most recent renewals of the FCC
Licenses were not challenged by any petition to deny or any competing
application. Seller has no knowledge of any facts relating to it that, under
the Communications Act or the current rules, regulations, policies and practices
of the Commission may cause the Commission to deny Commission renewal of the FCC
Licenses or deny Commission consent to the Transaction.
6.6. Equipment. Seller has good and marketable title, both legal and
---------
equitable, to the Equipment. The Equipment, together with any improvements and
additions thereto and replacements thereof less any retirements or other
dispositions as permitted by this Agreement between the date hereof and the
Closing Date, will, at Closing, be all the tangible personal property delivered
at Closing by Seller. Except as specifically indicated to the contrary in
Schedule 6.6, all Equipment is serviceable, in good operating condition
(reasonable wear and tear excepted), and is not in imminent need of repair or
replacement. All items of transmitting and studio equipment included in the
Equipment (i) have been maintained in a manner consistent with generally
accepted standards of good engineering practice and (ii) will permit the Station
to operate in accordance with the terms of the FCC Licenses.
6.7. Contracts. Seller has made available to Buyer or its
---------
representatives complete and correct copies of all Contracts and Trade
Agreements listed on Schedule 2.1(c)(1) hereto. The list of Trade Agreements on
Schedule 2.1(c)(1) is accurate and complete. Except for Sales Agreements and
Trade Agreements that comply with the terms of this Agreement, Schedule
2.1(c)(1) includes all the contracts, leases, and agreements to which Seller is
a party and which Buyer has agreed to assume, other than those contracts that
will be performed in full prior to the Closing. To the Knowledge of Seller,
each Contract is in full force and effect and is unimpaired by any acts or
10
<PAGE>
omissions of Seller, Seller's employees or agents, or Seller's officers. Except
as set forth on Schedule 2.1(c)(1), there has not occurred as to any Contract
any event of default by Seller or any event that, with notice, the lapse of time
or otherwise, could become an event of default by Seller. There has not
occurred as to any Contract any default by any other party thereto or any event
that, with notice, the lapse of time or otherwise, or at the election of any
person other than Seller, could become an event of default by such party. Those
Contracts whose stated duration extends beyond the Closing Date will, at
Closing, be in full force and effect, unimpaired by any acts or omissions of
Seller, Seller's employees or agents, or Seller's officers. If any Contract
requires the consent of any third party in order for Seller to assign that
Contract to Buyer, Seller shall use its best efforts to obtain at its own
expense such consent prior to Closing.
6.8. Promotional Rights. The Intellectual Property set forth on Schedule
------------------
6.8 includes all call signs and trademarks that Seller is transferring to Buyer,
used to promote or identify the Station. Except as set forth on Schedule 6.8,
the Intellectual Property is in good standing and uncontested by any third
party. Except as set forth on Schedule 6.8, Seller has no Knowledge of any
infringement or unlawful or unauthorized use of those promotional rights,
including the use of any call sign, slogan or logo by any broadcast or cable
station in the Richmond metropolitan area that may be confusingly similar to
those currently used by the Station. Except as set forth on Schedule 6.8, to
the Knowledge of Seller, the operations of the Station do not infringe, and no
one has asserted to Seller that such operations infringe, any copyright,
trademark, tradename, service mark or other similar right of any other party.
6.9. Insurance. Schedule 6.9 lists all insurance policies held by
---------
Seller with respect to the Purchased Assets and the business and operation of
the Station. Such insurance policies are in full force and effect, all premiums
with respect thereto are currently paid and Seller is in compliance with the
terms thereof. Seller has not received any notice from any issuer of any such
policies of its intention to cancel, terminate, or refuse to renew any policy
issued by it. Seller will maintain the insurance policies listed on Schedule
6.9 in full force and effect through the Closing Date.
6.10. Financial Statements.
--------------------
(a) Seller has furnished Buyer with unaudited financial statements
used by Seller in the preparation of its Federal tax returns and copies of its
filed Federal tax returns ("Financial Statements") for fiscal years 1995, 1996,
and 1997 as well as unaudited Financial Statements for September 30, 1998 and
most recently available. The Financial Statements : (i) have been prepared on
a consistent basis throughout the periods involved and as compared with prior
periods; and (ii) fairly present Seller's financial position, income, expenses,
assets, liabilities, and the results of operations of the Station as of the
dates and for the periods indicated. Since December 31, 1997, there has been no
material adverse change in the business, assets, properties or condition
(financial or otherwise) of the business since the preparation of the most
recent annual Financial Statement. No event has occurred and, Seller has no
knowledge that prior to Closing, any event will have occurred that would make
such Financial Statements misleading in any respect.
(b) Except as reflected in the most recently available balance sheets,
including the notes thereto or otherwise disclosed in this Agreement or the
Schedules hereto, and except for the current
11
<PAGE>
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 the most recently available balance sheets, there
exist no liabilities or obligations of Seller, contingent or absolute, matured
or unmatured, known or unknown. Except as set forth on Schedule 6.10(b) since
the date of the most recently available balance sheets, (i) Seller has not made
any contract, agreement or commitment or incurred any obligation or liability
(contingent or otherwise), except in the ordinary course of business and
consistent with past business practices, (ii) there has not been any discharge
or satisfaction of any obligation or liability owed by Seller, which is not in
the ordinary course of business or which is inconsistent with past business
practices, (iii) there has not occurred any sale of or loss or material injury
to the business, or any material adverse change in the business or in the
condition (financial or otherwise) of the 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. The monthly balance sheets (i) have been prepared on a consistent basis
throughout the periods involved and as compared with prior periods; and (ii)
fairly present Company's financial position, income, expenses, assets,
liabilities, 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.
6.11. Employees. Except as otherwise listed on Schedule 6.11, (i) no
---------
employee of the Station is represented by a union or other collective bargaining
unit, no application for recognition as a collective bargaining unit has been
filed with the National Labor Relations Board, and, to the Knowledge of Seller,
there has been no concerted effort to unionize any of the Station's employees
and (ii) Seller has no other written or oral employment agreement or arrangement
with any Station employee, and no written or oral agreement concerning bonus,
termination, hospitalization or vacation. Seller has delivered to Buyer a list
of all persons currently employed at the Station together with an accurate
description of the terms and conditions of their respective employment as of the
date of this Agreement. Seller will promptly advise Buyer of any changes that
occur prior to Closing with respect to such information.
6.12. Employee Benefit Plans.
----------------------
(1) Except as described in Schedule 6.12, neither Seller nor any
Affiliates (as defined below) have at any time established, sponsored,
maintained, or made any contributions to, or been parties to any contract or
other arrangement or been subject to any statute or rule requiring them to
establish, maintain, sponsor, or make any contribution to, (i) any "employee
pension benefit plan" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended, and regulations thereunder ("ERISA"))
("Pension Plan"); (ii) any "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) ("Welfare Plan"); or (iii) any deferred compensation,
bonus, stock option, stock purchase, or other employee benefit plan, agreement,
commitment, or arrangement ("Other Plan"). Seller and the Affiliates have no
obligations or liabilities (whether accrued, absolute, contingent, or
unliquidated, whether or not known, and whether due or to become due) with
respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA), or
Other Plan that is not listed in Schedule 6.12. For purposes of this Section
6.12, the term "Affiliate" shall include all persons under common control with
Seller within the meaning
12
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of Sections 4001(a)(14) or (b)(1) of ERISA or any regulations promulgated
thereunder, or Sections 414(b), (c), (m) or (o) of the Internal Revenue Code of
1986, as amended (the "Code").
(2) Each plan or arrangement listed in Schedule 6.12 (and any related
trust or insurance contract pursuant to which benefits under such plans or
arrangements are funded or paid) has been administered in all material respects
in compliance with its terms and in both form and operation is in compliance
with applicable provisions of ERISA, the Code, the Consolidated Omnibus Budget
Reconciliation Act of 1986 and regulations thereunder, and other applicable law.
Each Pension Plan listed in Schedule 6.12 has been determined by the Internal
Revenue Service to be qualified under Section 401(a) and, if applicable, Section
401(k) of the Code, and nothing has occurred or been omitted since the date of
the last such determination that resulted or could result in the revocation of
such determination. Seller and the Affiliates have made all required
contributions or payments to or under each plan or arrangement listed in
Schedule 6.12 on a timely basis and have made adequate provision for reserves to
meet contributions and payments under such plans or arrangements that have not
been made because they are not yet due.
(3) The consummation of this Agreement (and the employment by Buyer of
former employees of Seller or any employees of an Affiliate) will not result in
any carryover liability to Buyer for taxes, penalties, interest or any other
claims resulting from any employee benefit plan (as defined in Section 3(3) of
ERISA) or Other Plan. In addition, Seller and each Affiliate make the following
representations (i) as to all of their Pension Plans: (A) neither Seller nor
any Affiliate has become liable to the PBGC under ERISA under which a lien could
attach to the assets of Seller or an Affiliate; (B) Seller and each Affiliate
has not ceased operations at a facility so as to become subject to the
provisions of Section 4062(e) of ERISA; and (C) Seller and each Affiliate has
not made a complete or partial withdrawal from a multiemployer plan (as defined
in Section 3(37) of ERISA) so as to incur withdrawal liability as defined in
Section 4201 of ERISA, and (ii) all group health plans maintained by the Seller
and each Affiliate have been operated in material compliance with Section
4980B(f) of the Code.
(4) The parties agree that Buyer does not and will not assume the
sponsorship of, or the responsibility for contributions to, or any liability in
connection with, any Pension Plan, any Welfare Plan, or Other Plan maintained by
Seller or an Affiliate for its employees, former employees, retirees, their
beneficiaries or any other person. In addition and not as a limitation of the
foregoing, the parties agree that Seller and such Affiliate shall be liable for
any continuation coverage (including any penalties, excise taxes or interest
resulting from the failure to provide continuation coverage) required by Section
4980B of the Code due to qualifying events that occur after the Closing Date
resulting from the transaction contemplated by this Agreement.
6.13. Real Property. Seller holds title to the real property described in
-------------
Schedule 6.13 (hereinafter "Real Property") which is used as the Station's
Studio Site and Transmitter Site. Except as listed on Schedule 6.13, all of the
improvements, and all heating and air conditioning equipment, plumbing,
electrical and other mechanical facilities, and the roof, walls and other
structural components which are part of, or located in, such improvements, are
in good operating condition and repair, comply in all material respects with
applicable zoning laws and the building, health, fire and environmental
protection codes of all applicable governmental jurisdictions, and do not
require any
13
<PAGE>
repairs other than normal routing maintenance to maintain them in good condition
and repair. None of the improvements have any structural defects. No portion of
the Real Property described in Schedule 6.13 is the subject of any condemnation
or eminent domain proceedings currently instituted or pending, and to the
Knowledge of Seller, no such proceedings are threatened. There are no
condemnation, zoning or other land use regulations proceedings instituted or, to
the Knowledge of Seller, planned to be instituted, which would materially affect
the use and operations of the Real Property for any lawful purpose, and Seller
has not received notice of any special assessment proceedings materially
affecting the Real Property. The Real Property has direct and unobstructed
access to all public utilities necessary for the uses to which the Real Property
is currently devoted by Seller in the operation of the Station.
6.14. Environmental Protection. Except as set forth on Schedule 6.14,
------------------------
(i) no Hazardous Substances have been treated, stored, used, released or
disposed of on the Studio Site or Transmitter Site in any manner that would
cause Buyer to incur material liability under any Environmental Laws; (ii)
Seller is not liable for cleanup or response costs with respect to any present
or past emission, discharge, or release of any Hazardous Substances; (iii) no
"underground storage tank" (as that term is defined in regulations promulgated
by the federal Environmental Protection Agency) is used in the operation of the
Station or is located on the Studio Site or the Transmitter Site; (iv) there are
no pending actions, suits, claims, legal proceedings or any other proceedings
based on environmental conditions or noncompliance at the Studio Site or
Transmitter Site, or any part thereof, or otherwise arising from Seller's
activities involving Hazardous Substances; (v) there are no conditions,
facilities, procedures or any other facts or circumstances at the Studio Site or
Transmitter Site which constitute noncompliance with environmental laws or
regulations; and (vi) there are no structures, improvements, equipment,
activities, fixtures or facilities at the Studio Site or Transmitter Site which
are constructed with, use or otherwise contain Hazardous Substances, including,
but without limitation, asbestos or polychlorinated biphenyls.
6.15. Compliance with Law. There is no outstanding complaint, citation,
-------------------
or notice issued by any Governmental Authority asserting that Seller is in
violation of any law, regulation, rule, ordinance, order, decree or other
material requirement of any Governmental Authority (including any applicable
statutes, ordinances or codes relating to zoning and land use, health and
sanitation, environmental protection, occupational safety and the use of
electric power) affecting the Purchased Assets or the business or operations of
the Station, and Seller is in material compliance with all such laws,
regulations, rules, ordinances, decrees, orders and requirements. Without
limiting the foregoing:
(a) The Station's transmitting and studio equipment is in material
respects operating in accordance with the terms and conditions of the FCC
Licenses, all underlying construction permits, and the rules, regulations,
practices and policies of the Commission, including all requirements concerning
equipment authorization and human exposure to radio frequency radiation.
(b) Seller has, in the conduct of the Station's business, materially
complied with all applicable laws, rules and regulations relating to the
employment of labor, including those concerning wages, hours, equal employment
opportunity, collective bargaining, pension and welfare
14
<PAGE>
benefit plans, and the payment of Social Security and similar taxes, and Seller
is not liable for any arrears of wages or any tax penalties due to any failure
to comply with any of the foregoing.
(c) All ownership reports, employment reports, tax returns and other
material documents required to be filed by Seller with the Commission or other
Governmental Authority have been filed; such reports and filings are accurate
and complete in all material respects; such items as are required to be placed
in the Station's local public records file have been placed in such file; all
proofs of performance and measurements that are required to be made by Seller
with respect to the Station's transmission facilities have been completed and
filed at the Station; and all information contained in the foregoing documents
is true, complete and accurate.
(d) The location of the Station's main studio complies with the FCC's
rules.
(e) Seller has paid to the Commission the regulatory fees due for the
Station for the years 1994-98.
6.16. Litigation. Except for proceedings affecting radio broadcasters
----------
generally and except as set forth on Schedule 6.3, there is no litigation,
complaint, investigation, suit, claim, action or proceeding pending, or to the
Knowledge of Seller, threatened before or by the Commission, any other
Governmental Authority, or any arbitrator or other person or entity relating to
the business or operations of the Station or to the Purchased Assets. Except as
set forth on Schedule 6.3, there is no other litigation, action, suit,
complaint, claim, investigation or proceeding pending, or to the Knowledge of
Seller, threatened that may give rise to any claim against any of the Purchased
Assets or adversely affect Seller's ability to consummate the Transaction as
provided herein. Seller is not aware of any facts that could reasonably result
in any such proceedings.
6.17. Insolvency Proceedings. No insolvency proceedings of any
----------------------
character, including bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller, the
Station Assets or the Purchased Assets are pending or, to the Knowledge of
Seller, threatened. Seller has not made an assignment for the benefit of
creditors.
6.18. Sales Agreements. The Sales Agreements in existence on the date
----------------
hereof have been entered into in the ordinary course of the Station's business,
at rates consistent with Seller's usual past practices and each Sales Agreement
is for a term no longer than 10 weeks or, if longer, is terminable by the
Station upon not more than 15 days notice.
6.19. Liabilities. There are no known liabilities or obligations of
-----------
Seller relating to the Station, whether related to tax or non-tax matters, due
or not yet due, except as and to the extent set forth on the most recent
Financial Statements described in Section 6.10.
6.20. Sufficiency of Assets. The Purchased Assets in conjunction with
---------------------
the leases referred to in Section 2.1(i) are and, on the Closing Date will be,
sufficient to conduct the operation and business of the Station in the manner in
which it is currently being conducted.
15
<PAGE>
6.21. Related Parties. Except as disclosed in Schedule 6.21 neither
---------------
Seller nor any shareholder, officer or director of Seller has any interest
whatsoever in any corporation, firm, partnership or other business enterprise
which has had any business transactions with Seller relating to the Purchased
Assets or the Station, and no shareholder, officer or director of Seller has
entered into any transactions with Seller relating to the Purchased Assets or
the Station.
6.22. Taxes. The Seller has timely filed with all appropriate
-----
Governmental Authority all federal, state, commonwealth, local, and other tax or
information returns and tax reports (including, but not limited to, all income
tax, unemployment compensation, social security, payroll, sales and use, profit,
excise, privilege, occupation, property, ad valorem, franchise, license, school
and any other tax under the laws of the United States or of any state or any
commonwealth or any municipal entity or of any political subdivision with valid
taxing authority) due for all periods ended on or before the date hereof.
Seller has paid in full all federal, state, commonwealth, foreign, local and
other governmental taxes, estimated taxes, interest, penalties, assessments and
deficiencies (collectively, "Taxes") which have become due pursuant to such
returns or without returns or pursuant to any assessments received by Seller.
Such returns and forms are true, correct and complete in all material respects,
and Seller has no liability for any Taxes in excess of the Taxes shown on such
returns. Seller is not a party to any pending action or proceeding and, to the
Knowledge of Seller, there is no action or proceeding threatened by any
Governmental Authority against Seller for assessment or collection of any Taxes,
and no unresolved claim for assessment or collection of any Taxes has been
asserted against Seller.
6.23. No Misleading Statements. No provision of this Agreement relating
------------------------
to Seller, the Station or the Purchased Assets or any other document, Schedule,
Exhibit or other information furnished by Seller to Buyer in connection with the
execution, delivery and performance of this Agreement, or the consummation of
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated in order to make the statement, in light of the
circumstances in which it is made, not misleading. In connection with the
preparation of this Agreement and the documents, descriptions, opinions,
certificates, Exhibits, Schedules or written material prepared by Seller and
appended hereto or delivered or to be delivered hereunder, Seller represents and
warrants that it has disclosed, and agrees it will continue to disclose to
Buyer, any fact that Seller is obligated to disclose to assure the continuing
accuracy of the representations and warranties contained in this Section 6. All
Exhibits and Schedules attached hereto are materially accurate and complete as
of the date hereof.
7.0 BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer hereby makes to
-------------------------------------------------
and for the benefit of Seller, the following representations, warranties and
covenants:
7.1. Existence and Power. Buyer is a corporation duly organized,
-------------------
validly existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to assume and perform this Agreement,
and as of the Closing Date will be authorized to do business in the State of
Virginia.
7.2. Binding Effect. The execution, delivery and performance by Buyer
--------------
of this Agreement, and each other document, agreement and instrument to be
executed and delivered by
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<PAGE>
Buyer in connection with this Agreement (collectively, the "Buyer Documents")
has been or will be duly authorized by all necessary corporate action, and
copies of those authorizing resolutions, certified by Buyer's Secretary shall be
delivered to Seller at Closing. This Agreement has been, and each of the Buyer
Documents will be, duly and validly executed and delivered by Buyer to Seller
and constitutes a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, subject to bankruptcy, reorganization, fraudulent
conveyance, insolvency, moratorium and similar laws relating to or affecting
creditors' and other obligees' rights generally and the exercise of judicial
discretion in accordance with general equitable principles.
7.3. No Violation. None of (i) the execution, delivery and performance
------------
by Buyer of this Agreement or any of the Buyer Documents, (ii) the consummation
of the Transaction, or (iii) Buyer's compliance with the terms and conditions
hereof will, with or without the giving of notice or the lapse of time or both,
conflict with, breach the terms or conditions of, constitute a default under, or
violate (x) Buyer's articles of incorporation or by-laws or (y) any judgment,
decree, order, consent agreement, lease or other instrument to which Buyer is a
party or by which Buyer is legally bound.
7.4. Litigation. There is no litigation, action, suit, complaint,
----------
proceeding or investigation, pending or, to the Knowledge of Buyer, threatened
that may adversely affect Buyer's ability to consummate the Transaction as
provided herein.
7.5. Licensee Qualifications. To the Knowledge of Buyer there is no
-----------------------
fact that would, under the rules and regulations of the Commission, disqualify
Buyer from being the assignee of the FCC Licenses or the owner and operator of
the Station. Should Buyer become aware of any such fact, it will so inform
Seller, and Buyer will use commercially reasonable efforts to remove any such
disqualification.
8.0 PRE-CLOSING OBLIGATIONS. The parties covenant and agree as follows with
-----------------------
respect to the period prior to Closing:
8.1. Application for Commission Consent. Within five (5) business days
----------------------------------
from the date of this Agreement, Seller and Buyer shall join in and file the
Assignment Application, and they shall diligently take all steps necessary or
desirable and proper expeditiously to prosecute the Assignment Application and
to obtain the Commission's determination that grant of the Assignment
Application will serve the public interest, convenience and necessity. The
failure by either party to timely file or diligently prosecute its portion of
the Assignment Application shall be deemed a material breach of this Agreement.
Each party shall promptly provide the other with a copy of any pleading, order
or other document served on the other relating to the Assignment Application.
In the event that Closing occurs prior to a Final Order, then each party's
obligations hereunder shall survive the Closing.
8.2. Access. Between the date hereof and the Closing Date, Seller shall
------
give Buyer and representatives of Buyer reasonable access to the Purchased
Assets, the Station, the employees of Seller and the Station and the books and
records of Seller relating to the business and operations of the Station. It is
expressly understood that, pursuant to this Section, Buyer, at its expense,
shall be entitled to conduct such engineering inspections of the Station, such
environmental assessments and
17
<PAGE>
surveys of the Studio Site and the Transmitter Site, and such reviews of the
Station's financial records as Buyer may desire, so long as the same do not
unreasonably interfere with Seller's operation of the Station. 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.
8.3. Material Adverse Changes; Financial Statements. Through the Closing
-----------------------------------------------
Date:
(a) Seller shall promptly notify Buyer of any event of which Seller
obtains knowledge which has caused or is likely to cause a material adverse
change to the financial condition or operation of the Station.
(b) Seller shall furnish to Buyer (i) monthly Financial Statements for
Seller and (ii) such other reports as Buyer may reasonably request relating to
Seller. Each of the Financial Statements delivered pursuant to this Section
8.3(b) has been prepared consistently during the periods covered (except as
disclosed therein).
8.4. Operations Prior to Closing. Between the date of this Agreement
---------------------------
and the Closing Date:
(a) Seller shall operate the Station in a manner consistent with
Seller's and the Station's past practice and in compliance with all applicable
laws, regulations, rules, decrees, ordinances, orders and requirements of the
Commission and all other Governmental Authority. Seller shall promptly notify
Buyer of any actions or proceedings that from the date hereof are commenced
against Seller or the Station or, to the Knowledge of Seller, against any
officer, director, employee, consultant, agent or other representative of Seller
with respect to the business of the Station or the Purchased Assets.
(b) Seller shall: (i) use the Purchased Assets only for the operation
of the Station; (ii) maintain the Purchased Assets in substantially their
present condition (reasonable wear and tear in normal use and damage due to
unavoidable casualty excepted); (iii) replace and/or repair the Purchased Assets
as necessary in the ordinary course of business; (iv) maintain all inventories
of supplies, tubes and spare parts at levels at least equivalent to those
existing on the date of this Agreement; and (v) promptly give Buyer written
notice of any unusual or materially adverse developments with respect to the
Purchased Assets or the business or operations of the Station.
(c) Seller shall maintain the Station's Business Records in the usual,
regular and ordinary manner, on a basis consistent with prior periods.
(d) Seller shall not: (i) sell, lease, encumber or otherwise dispose
of any Purchased Assets or any interest therein except in the ordinary course of
business and only if any property disposed of is replaced by property of like or
better value, quality and utility prior to Closing; (ii) cancel, terminate,
modify, amend or renew any of the Contracts without Buyer's express prior
written consent; (iii) increase the compensation payable or to become payable to
any employee
18
<PAGE>
of the Station; or (iv) except to the extent expressly permitted in Section
2.1(c), enter into any Contract or other agreement, undertaking or obligation or
assume any liability that may impose any obligation on Buyer after Closing,
whether Seller is acting within or outside of the ordinary course of the
Station's business, without Buyer's prior written consent.
(e) Seller and the Station will enter into Sales Agreements only in
the ordinary course of the Station's business at commercially reasonable rates
and each such Sales Agreement shall have a term not longer than 10 weeks or, if
longer, shall be terminable by the Station upon not more than 15 days notice.
(f) Seller and the Station will enter into Trade Agreements only in
the ordinary course of the Station's business and only if such Trade Agreements
are (i) immediately preemptible for cash time sales trade; (ii) require the
provision of air time only on a "run of schedule", basis; and (iii) inure or
will inure to the benefit of the Station.
(g) Seller shall use its best efforts to preserve the operations,
organization and reputation of the Station intact, by continuing to make
expenditures and engage in activities designed to promote the Station and
encourage the purchase of advertising time on the Station in a manner consistent
with Seller's past practices. Seller shall use its best efforts to preserve the
goodwill and business of the Station's advertisers, suppliers and others having
business relations with the Station, and to continue to conduct financial
operations of the Station, including credit and collection policies, with no
less effort, as in the prior conduct of the business of the Station.
(h) Seller shall not issue, sell or deliver any shares of stock of
Seller or grant any options, warrants or other rights to acquire the stock of
Seller.
(i) Seller shall not make or agree to any material amendment to any
FCC License relating to the Station.
(j) except as required by law, adopt any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, severance or other
employee benefit plan, payment or arrangement or enter into any employment,
consulting or management contract.
(k) merge or consolidate with any other corporation, acquire control
of any other corporation or business entity, or take any steps incident to, or
in furtherance of, any of such actions, whether by entering into an agreement
providing therefore or otherwise.
(l) solicit, either directly or indirectly, initiate, encourage or
accept any offer for the purchase or acquisition of the Purchased Assets by any
party other than Buyer.
(m) terminate without comparable replacement or fail to renew any
insurance coverage applicable to the assets or properties of Seller.
(n) take any action or fail to take any action that would cause the
Seller to breach the representations, warranties and covenants contained in this
Agreement.
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<PAGE>
8.5. Damage.
------
(a) Risk of Loss. The risk of loss or damage, confiscation or
condemnation of the Purchased Assets shall be borne by Seller at all times prior
to Closing. In the event of material loss or damage, Seller shall promptly
notify Buyer thereof and use its best efforts to repair, replace or restore the
lost or damaged property to its former condition as soon as possible. If the
cost of repairing, replacing or restoring any lost or damaged property is Twenty
Thousand Dollars ($20,000) or less, and Seller has not repaired, replaced or
restored such property prior to the Closing Date, Closing shall occur as
scheduled and Buyer may deduct from the Purchase Price paid at Closing the
amount necessary to restore the lost or damaged property to its former
condition. If the cost to repair, replace, or restore the lost or damaged
property exceeds Twenty Thousands Dollars ($20,000), and Seller has not
repaired, replaced or restored such property prior to the Closing Date to the
satisfaction of Buyer, Buyer may, at its option:
(1) elect to consummate the Closing in which event Buyer may deduct
from the Purchase Price paid at Closing the amount necessary to restore the lost
or damaged property to its former condition in which event Seller shall be
entitled to all proceeds under any applicable insurance policies with respect to
such claim; or
(2) elect to postpone the Closing, with prior consent of the
Commission if necessary, for such reasonable period of time (not to exceed
ninety (90) days) as is necessary for Seller to repair, replace or restore the
lost or damaged property to its former condition.
If, after the expiration of such extension period the lost or damaged
property has not been fully repaired, replaced or restored to Buyer's
satisfaction, Buyer may terminate this Agreement, in which event the Initial
Escrow Deposit and all interest earned thereon shall be returned to Buyer and
the parties shall be released and discharged from any further obligation
hereunder.
(b) Failure of Broadcast Transmissions . Seller shall give prompt
written notice to Buyer if any of the following (a "Specified Event") shall
occur and continue for a period of more than four (4) consecutive hours: (i) the
transmission of the regular broadcast programming of the Station in the normal
and usual manner is interrupted or discontinued; or (ii) the Station is operated
at less than its licensed antenna height above average terrain or at less than
eighty percent (80%) of its licensed effective radiated power. If, prior to
Closing, the Station is not operated at its licensed operating parameters for
more than thirty-six (36) hours (or, in the event of force majeure or utility
----- -------
failure affecting generally the market served by the Station, ninety-six (96)
hours), whether or not consecutive, during any period of thirty (30) consecutive
days, or if there are three (3) or more Specified Events each lasting more than
four (4) consecutive hours, then Buyer may, at its option: (i) terminate this
Agreement, or (ii) proceed in the manner set forth in Paragraph 8.5(a)(1) or
8.5(a)(2). In the event of termination of this Agreement by Buyer pursuant to
this Section, the Initial
20
<PAGE>
Escrow Deposit together with all interest accrued thereon shall be returned to
Buyer and the parties shall be released and discharged from any further
obligation hereunder.
(c) Resolution of Disagreements . If the parties are unable to
agree upon the extent of any loss or damage, the cost to repair, replace or
restore any lost or damaged property, the adequacy of any repair, replacement,
or restoration of any lost or damaged property, or any other matter arising
under this Section, the disagreement shall be referred promptly to a qualified
consulting communications engineer mutually acceptable to Seller and Buyer who
is a member of the Association of Federal Communications Consulting Engineers,
whose decision shall be final, and whose fees and expenses shall be paid one-
half each by Seller and Buyer.
8.6. Administrative Violations. If Seller receives any finding, order,
-------------------------
complaint, citation or notice prior to Closing which states that any aspect of
the Station's operation violates or may violate any rule, regulation or order of
the Commission or of any other Governmental Authority (an "Administrative
Violation"), including, any rule, regulation or order concerning environmental
protection, the employment of labor or equal employment opportunity, Seller
shall promptly notify Buyer of the Administrative Violation, use its best
efforts to remove or correct the Administrative Violation, and be responsible
prior to Closing for the payment of all costs associated therewith, including
any fines or back pay that may be assessed.
8.7. Bulk Sales Act. Seller shall be responsible for compliance with
--------------
the provisions of any bulk sales statute applicable to the Transaction, and
shall indemnify and hold Buyer harmless from and against any claims, actions,
liabilities and all costs and expenses, including reasonable legal fees,
incurred or suffered by Buyer as a result of the failure to comply with any such
statute.
8.8. Control of Station. The Transaction shall not be consummated until
------------------
after the Commission has given its written consent thereto and between the date
of this Agreement and the Closing Date, Seller shall control, supervise and
direct the operation of the Station.
8.9. Cooperation with Respect to Financial and Tax Matters. Between the
-----------------------------------------------------
date hereof and the Closing Date, Seller, its shareholders, officers, directors
and employees shall cooperate and Seller shall cause its accountant to cooperate
with Buyer for the purpose of preparing Financial Statements reviewed by Buyer's
independent accountants for purposes of including such statements in any reports
filed by Buyer with any Governmental Authority. Buyer shall be permitted to
disclose the unaudited Financial Statements for 1995, 1996, 1997 and 1998 as
well as unaudited Financial Statements for any period subsequent to 1998
available prior to Closing in any reports filed by the Buyer with any
Governmental Authority.
8.10. Closing Obligations. Seller and Buyer shall make commercially
-------------------
reasonable efforts to satisfy the conditions precedent to Closing.
9.0 STATUS OF EMPLOYEES. All Station employees shall be and remain
-------------------
Seller's employees, with Seller having full authority and control over their
actions, and Buyer shall not assume the status of an employer or a joint
employer of, or incur or be subject to any liability or obligation of an
employer with respect to, any such employees unless and until actually hired by
21
<PAGE>
Buyer. Seller shall be solely responsible for any and all liabilities and
obligations Seller may have to its employees, including, compensation, severance
pay and accrued vacation time and sick leave. Seller shall be solely responsible
for any and all liabilities, penalties, fines or other sanctions that may be
assessed or otherwise due under such laws on account of the Transaction and the
dismissal or termination of any of Seller's employees.
10.0 CONDITIONS PRECEDENT.
--------------------
10.1. Mutual Conditions. The respective obligations of both Buyer and
-----------------
Seller to consummate the Transaction are subject to the satisfaction of each of
the following conditions:
(a) Approval of Assignment Application. The Commission shall have
granted the Assignment Application, and such grant shall be in full force and
effect on the Closing Date.
(b) Absence of Litigation. As of the Closing Date, no litigation,
action, suit or proceeding enjoining, restraining or prohibiting the
consummation of the Transaction shall be pending before any court, the
Commission or any other Governmental Authority or arbitrator; provided, however,
-------- -------
that this Section may not be invoked by a party if any such litigation, action,
suit or proceeding was solicited or encouraged by, or instituted as a result of
any act or omission of, such party.
(c) Hart-Scott-Rodino. All applicable waiting periods under the
-----------------
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired.
10.2. Additional Conditions to Buyer's Obligation. In addition to the
-------------------------------------------
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Buyer to consummate the Transaction is subject, at Buyer's option, to the
satisfaction or waiver by Buyer of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller to Buyer shall be true, complete, and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(b) Compliance with Conditions. All of the terms, conditions and
covenants to be complied with or performed by Seller on or before the Closing
Date under this Agreement and the Seller Documents shall have been duly complied
with and performed in all material respects.
(c) Discharge of Liens. Buyer shall have obtained, at Buyer's
expense, at least 10 days prior to Closing, a report prepared by C.T.
Corporation System (or similar firm reasonably acceptable to Buyer) showing the
results of searches of lien, tax, judgment and litigation records, demonstrating
that the Purchased Assets are being conveyed to Buyer free and clear of all
liens, security interests and encumbrances except for Permitted Encumbrances or
otherwise consented to by Buyer in writing. The record searches described in
the report shall have taken place no more than 15 days prior to the Closing
Date.
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<PAGE>
(d) Third-Party Consents. - Seller shall have obtained (i) all
required third-party consents to Buyer's assumption of the Material Contracts,
such that Buyer will, after Closing, enjoy all the rights and privileges of
Seller under the Material Contracts subject only to the same obligations as are
binding on Seller pursuant to the Material Contracts' current terms; and (ii)
all other requisite third-party consents and approvals which may be necessary to
consummate the Transaction.
(e) Estoppel Certificates. At Closing, Seller shall deliver to
Buyer a certificate executed by the other party to each Material Contract, dated
no more than 15 days prior to the Closing Date, stating (i) that such Contract
is in full force and effect and has not been amended or modified; and (ii) that
Seller is not in breach or default under such Material Contract, and that no
event has occurred that, with notice or the passage of time or both, would
constitute a breach or default thereunder by Seller.
(f) No Material Adverse Change. Neither the Station nor the Purchased
Assets shall have suffered a material adverse change since the date of this
Agreement, and there shall have been no changes since the date of this Agreement
in the business, operations, condition (financial or otherwise), properties,
assets or liabilities of Seller, of the Station or of the Purchased Assets,
except changes contemplated by this Agreement and changes which are not (either
individually or in the aggregate) materially adverse to the Station.
(g) Opinion of Seller's Counsel. At Closing, Seller shall deliver
to Buyer the written opinion or opinions of Seller's counsel, dated the Closing
Date, in scope and form satisfactory to Buyer, to the following effect:
(1) Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Virginia, with all requisite
corporate power and authority to enter into and perform this Agreement.
(2) This Agreement has been duly executed and delivered by Seller and
such action has been duly authorized by all necessary corporate action. This
Agreement constitutes the legal, valid, and binding obligation of Seller,
enforceable against Seller in accordance with its terms subject to bankruptcy,
reorganization, fraudulent conveyance, insolvency, moratorium and similar laws
relating to or affecting creditors' and other obligees' rights generally and the
exercise of judicial discretion in accordance with general equitable principles.
(3) None of (i) the execution and delivery of this Agreement, (ii) the
consummation of the Transaction, or (iii) compliance with the terms and
conditions of this Agreement will, with or without the giving of notice or lapse
of time or both, conflict with, breach the terms and conditions of, constitute a
default under, or violate Seller's articles of incorporation or bylaws, any law,
rule, regulation or other requirement of any Governmental Authority, or any
judgment, decree, order, agreement, lease or other instrument to which Seller is
a party or by which Seller, the Station or any of the Seller's assets, including
the Purchased Assets, may be bound or affected.
23
<PAGE>
(4) To such counsel's knowledge, based on a search of court dockets as
shall be reasonably satisfactory to Buyer's counsel, no suit, action, claim or
proceeding is pending or threatened that questions or may affect the validity of
any action to be taken by Seller pursuant to this Agreement or that seeks to
enjoin, restrain or prohibit Seller from carrying out the Transaction.
(5) To such counsel's knowledge, based on a search of court dockets as
shall be reasonably satisfactory to Buyer's counsel, there is no outstanding
judgment, or any suit, action, claim or proceeding pending, threatened or deemed
by Seller's counsel to be probable of assertion, or any governmental proceeding
or investigation in progress (other than proceedings affecting radio
broadcasters generally) that could reasonably be expected to have an adverse
effect upon the Purchased Assets or upon the business or operations of the
Station after Closing.
(6) Seller is the authorized legal holder of the FCC Licenses, the FCC
Licenses are in full force and effect, and the FCC Licenses are not the subject
of any pending license renewal application. To counsel's knowledge, there are
no applications pending before the Commission with respect to the Station.
(7) The Commission has consented to the assignment of the FCC Licenses
to Buyer and that consent has become a Final Order, unless the requirement for a
Final Order is waived by Buyer.
(8) To counsel's knowledge, there is no Commission investigation,
notice of apparent liability or order of forfeiture, pending or outstanding
against the Station, or any complaint, petition to deny or proceeding against or
involving the Station pending before the Commission, except for rule making
proceedings of general applicability to the broadcast industry.
The foregoing opinions shall be for the benefit of and may be relied on by
Buyer and Buyer's lenders. In rendering such opinions, Seller's counsel may
rely upon such corporate records of Seller and such certificates of public
officials and officers of Seller.
(h) Final Order . The Commission's action granting the Assignment
Application shall have become a Final Order.
(i) Financial Statements. The financial information set forth in the
Station's Financial Statements for the year ending December 31, 1998, and for
the period ending thirty (30) days prior to the Closing Date fairly and
accurately reflect the financial performance and results of operation of the
Station for those periods.
24
<PAGE>
(j) Trade Balance. The Trade Balance, if negative, will not exceed
Five Thousand Dollars ($5,000).
(k) Compensation. Seller shall have satisfied all amounts due
employees for compensation, whether pursuant to the terms of a written agreement
or otherwise, including bonuses, vacation and sick pay and reimbursement of
expenses, that have accrued as of the Closing.
(l) Studio Site Lease. At Buyer's sole option, Seller, the owner of
the Studio Site, shall have entered into a written lease substantially in the
form of Exhibit 2 attached hereto for the real property described in Section
6.13 for a minimum six-month period.
(m) Transmitter Site Lease. Seller, the owner of the Transmitter
Site, shall have entered into a written lease substantially in the form of
Exhibit 3 attached hereto for the real property described in Section 6.13 and
any equipment associated with the operation of the Station at that site for a
minimum of fifteen (15) years, with options to renew.
(n) License Application. The pending license application (File No.
BMLH-981007KA) shall have been granted.
(o) Closing Documents. At the Closing Seller shall deliver to
Buyer (i) such assignments, bills of sale and other instruments of conveyance as
are necessary to vest in Buyer title to the Purchased Assets, all of which
documents shall be dated as of the Closing Date, duly executed by Seller and in
form reasonably acceptable to Buyer; (ii) a certificate, dated the Closing Date,
executed by Seller's President certifying as to those matters set forth in
Section 10.2(a) and (b); and (iii) copies of Seller's corporate resolutions
authorizing the Transaction, each certified as to accuracy and completeness by
Seller's Secretary.
10.3. Additional Conditions to Seller's Obligation. In addition to
--------------------------------------------
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Seller to consummate the Transaction is subject, at Seller's option, to the
satisfaction or waiver by Seller of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Buyer to Seller shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(b) Compliance with Conditions. All of the terms, conditions and
covenants to be complied with or performed by Buyer on or before the Closing
Date under this Agreement shall have been duly complied with and performed in
all material respects.
(c) Assumption of Liabilities. Buyer shall assume and agree to
pay, perform and discharge Seller's obligations under the Contracts, Sales
Agreements and Trade Agreements to the extent Buyer has expressly agreed to
assume such obligations pursuant to Section 4.4.
25
<PAGE>
(d) Payment. Buyer shall pay Seller the Purchase Price due at
Closing, as provided in Section 4.2.
(e) Closing Documents. Buyer shall deliver to Seller at the
Closing (i) copies of Buyer's corporate resolutions authorizing the Transaction
certified as to accuracy and completeness by Buyer's Secretary; and (ii) a
certificate, dated the Closing Date, executed by Buyer's President certifying as
to those matters set forth in Section 10.3(a) and (b).
11.0. CLOSING. The Closing Date shall be on or before the tenth day after the
-------
date on which the Commission grant of the Assignment Application becomes a Final
Order, or, at Buyer's option, if finality is waived, within fifteen (15) days
after grant of the Assignment Application or such other time as Seller and Buyer
shall mutually agree. Closing shall take place at 10:00 a.m. on the Closing
Date at the offices of Buyer's counsel, Kirkland & Ellis, 655 15th Street, NW,
Suite 1200, Washington, D.C. 20005.
12.0. PRORATIONS.
----------
12.1. Apportionment of Expenses. Seller shall be responsible for all
-------------------------
expenses arising out of the business of the Station until 11:59 p.m. on the
Closing Date, and Buyer shall be responsible for all expenses arising out of the
business of the Station after 11:59 p.m. on the Closing Date to the extent such
expenses relate to liabilities assumed by Buyer pursuant to Section 4.4. All
overlapping expenses shall be prorated or reimbursed, as the case may be, as of
11:59 p.m. on the Closing Date.
12.2. Determination and Payment. Prorations shall be made, insofar as
-------------------------
feasible, at Closing and shall be paid by way of adjustment to the Purchase
Price. As to the prorations that cannot be made at Closing, the parties shall,
within ninety (90) days after the Closing Date, make and pay all such
prorations. If the parties are unable to agree upon all such prorations within
that 90-day period, then any disputed items shall be referred to a firm of
independent certified public accountants, mutually acceptable to Seller and
Buyer, whose decision shall be final, and whose fees and expenses shall be
allocated between and paid by Seller and Buyer, respectively, to the extent that
such party does not prevail on the disputed matters decided by the accountants.
13.0. POST-CLOSING OBLIGATIONS. - The parties covenant and agree as follows
------------------------ -
with respect to the period subsequent to Closing:
13.1. Collection of Accounts Receivable. At Closing, Seller shall assign
---------------------------------
to Buyer, for purposes of collection only, all of the Accounts Receivable that
are outstanding and unpaid on the Closing Date, except for those Accounts
Receivable which Seller has instituted litigation to collect as of the date of
this Agreement and which are identified on Schedule 6.3. Buyer shall use such
efforts as are reasonable and in the ordinary course of business to collect
those Accounts Receivable for a period of ninety (90) days following the Closing
Date (the "Collection Period"). This obligation, however, shall not extend to
the institution of litigation, employment of counsel or any other extraordinary
means of collection. So long as those Accounts Receivable are in Buyer's
possession, neither Seller nor its agents shall make any solicitation of them
for collection purposes or institute litigation for the collection of any
amounts due thereunder. All payments received by
26
<PAGE>
Buyer during the Collection Period from any person obligated with respect to
any Accounts Receivable shall be applied first to Seller's account, and only
after full satisfaction thereof, to Buyer's account; provided, however, that if
-------- -------
that if that customer instructs Buyer to apply such payment to amounts owed by
such customer to Buyer or the amount paid correlates to the amount of Buyer's
invoice to such customer, Buyer may apply such payments to its own invoices
without first applying any of such amount to Seller's account; and provided
--------
further that if, during the Collection Period, and provide any account debtor
- --------
contests the validity of its obligation with respect to any Account Receivable,
then Buyer shall return that Account Receivable to Seller after which Seller
shall be solely responsible for the collection thereof. Buyer shall not have the
right to compromise, settle, or adjust the amounts of any of the Accounts
Receivable without Seller's prior written consent. One hundred (100) days after
the Closing Date, Buyer shall furnish Seller with a list of Accounts Receivable
collected during the applicable period accompanied by a payment equal to the
amount of such collections, less any salesperson's, agency, and representative
commissions applicable thereto that are deducted and paid by Buyer from the
proceeds of such collections. Any Accounts Receivable that are not collected
during the Collection Period shall be reassigned to Seller after which Buyer
shall have no further obligation to Seller with respect to the Accounts
provided, however, that all funds subsequently received by Buyer (without time
- -------- -------
limitation) that can be specifically identified, whether by accompanying invoice
or otherwise, as a payment on the Accounts Receivable shall be paid over or
forwarded to Seller.
13.2. Indemnification.
---------------
(a) Buyer's Right to Indemnification. Seller hereby indemnifies
and holds Buyer, its officers, directors, shareholders and assigns harmless from
and against (i) any breach, misrepresentation, or violation of any of Seller's
representations, warranties, covenants, or other obligations contained in this
Agreement or in any Seller Document; (ii) all obligations and liabilities of
Seller and/or the Station not expressly assumed by Buyer pursuant to Section
4.4; and (iii) all claims by third parties (including employees) against Buyer
attributable to the operation of the Station and/or the use or ownership of the
Purchased Assets prior to Closing. This indemnity is intended by Seller to
cover all actions, suits, proceedings, claims, demands, assessments,
adjustments, interest, penalties, costs and expenses (including, reasonable fees
and expenses of counsel), whether suit is instituted or not and, if instituted,
whether at the trial or appellate level, with respect to any and all of the
specific matters set forth in this indemnity.
(b) Seller's Right to Indemnification. Buyer hereby indemnifies
and holds Seller, its officers, directors, shareholders and assigns harmless
from and against (i) any breach, misrepresentation or violation of any of
Buyer's representations, warranties, covenants or obligations contained in this
Agreement; (ii) all obligations and liabilities expressly assumed by Buyer
hereunder pursuant to Section 4.4; and (iii) all claims by third parties against
Seller attributable to Buyer's operation of the Station after Closing. This
indemnity is intended by Buyer to cover all actions, suits, proceedings, claims,
demands, assessments, adjustments, interest, penalties, costs and expenses
(including reasonable fees and expenses of counsel), whether suit is instituted
or not and, if instituted, whether at the trial or appellate level, with respect
to any and all of the specific matters set forth in this indemnity.
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<PAGE>
(c) Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(1) The party claiming indemnification (the "Claimant") shall give
written notice to the party from which indemnification is sought (the
"Indemnitor") promptly after the Claimant learns of any claim or proceeding
covered by the foregoing agreements to indemnify and hold harmless and failure
to provide prompt notice shall not be deemed to jeopardize Claimant's right to
demand indemnification, provided, that, Indemnitor is not prejudiced by the
-------- ----
delay in receiving notice.
(2) With respect to claims between the parties, following receipt of
notice from the Claimant of a claim, the Indemnitor shall have 15 days to make
any investigation of the claim that the Indemnitor deems necessary or desirable,
or such lesser time if a 15-day period would jeopardize any rights of Claimant
to oppose or protest the claim. For the purpose of this investigation, the
Claimant agrees to make available to the Indemnitor and its authorized
representatives the information relied upon by the Claimant to substantiate the
claim. If the Claimant and the Indemnitor cannot agree as to the validity and
amount of the claim within the 15-day period, or lesser period if required by
this section (or any mutually agreed upon extension hereof) the Claimant may
seek appropriate legal remedies.
(3) The Indemnitor shall have the right to undertake, by counsel or
other representatives of its own choosing, the defense of such claim, provided,
--------
that, Indemnitor acknowledges in writing to Claimant that Indemnitor would
- ----
assume responsibility for and demonstrates its financial ability to satisfy the
claim should the party asserting the claim prevail. In the event that the
Indemnitor shall not satisfy the requirements of the preceding sentence or shall
elect not to undertake such defense, or within 15 days after notice of any such
claim from the Claimant shall fail to defend, the Claimant shall have the right
to undertake the defense, compromise or settlement of such claim, by counsel or
other representatives of its own choosing, on behalf of and for the account and
risk of the Indemnitor. Anything in this Section 13.2(c)(3) to the contrary
notwithstanding, (i) if there is a reasonable probability that a claim may
materially and adversely affect the Claimant other than as a result of money
damages or other money payments, the Claimant shall have the right, at its own
cost and expense, to participate in the defense, compromise or settlement of the
claim, (ii) the Indemnitor shall not, without the Claimant's written consent,
settle or compromise any claim or consent to entry of any judgment which does
not include as an unconditional term thereof the giving by the plaintiff to the
Claimant of a release from all liability in respect of such claim, and (iii) in
the event that the Indemnitor undertakes defense of any claim consistent with
this Section, the Claimant, by counsel or other representative of its own
choosing and at its sole cost and expense, shall have the right to consult with
the Indemnitor and its counsel or other representatives concerning such claim
and the Indemnitor and the Claimant and their respective counsel or other
representatives shall cooperate with respect to such claim.
(d) Assignment of Claims. If any payment is made pursuant to this
Section 13.2, the Indemnitor shall be subrogated to the extent of such payment
to all of the rights of recovery of Claimant, and Claimant shall assign to
Indemnitor, for its use and benefit, any and all claims, causes of actions, and
demands of whatever kind and nature that Claimant may have against
28
<PAGE>
the person, firm, corporation or entity giving rise to the loss for which
payment was made. Claimant agrees to reasonably cooperate in any efforts by
Indemnitor to recover such loss from any person, firm, corporation or entity.
(e) Indemnification Not Sole Remedy. The right to indemnification
provided for in this Section shall not be the exclusive remedy of either party
in connection with any breach by the other party of its representations,
warranties, covenants or other obligations hereunder, nor shall such
indemnification be deemed to prejudice or operate as a waiver of any right or
remedy to which either party may otherwise be entitled as a result of any such
breach by the other party.
(f) Threshold Concerning Sections 13.2(a) and (b). Notwithstanding
anything to the contrary in Sections 13.2(a) and (b), the parties shall not be
entitled to indemnity under Sections 13.2(a) and (b) unless the aggregate loss
indemnified against thereunder exceeds $25,000 (in which case, the Claimant
shall be entitled to recovery from the Indemnitor of the full amount of the
loss).
13.3 Cooperation with Respect to Financial and Tax Matters. From the date
------------------------------------------------------
of Closing and for a period of three (3) years thereafter, Seller shall provide
Buyer with such cooperation and information as Buyer shall reasonably request in
Buyer's: (i) analysis and review of the Financial Statements or (ii) preparation
of documentation to fulfill any reporting requirements of Buyer including
reports that may be filed with the Securities and Exchange Commission. Seller
shall make its accountant available, including its opinions and Financial
Statements for the Seller, to provide explanations of any documents or
information provided hereunder and to permit disclosure by Buyer, including
disclosure to any Governmental Authority.
13.4. Liabilities. Following the Closing Date, Seller shall pay
-----------
promptly when due all of the debts and liabilities of Seller relating to the
Station, other than liabilities specifically assumed by Buyer hereunder.
14. DEFAULT AND REMEDIES.
--------------------
14.1. Opportunity to Cure. If either party believes the other to be in
-------------------
breach or in default hereunder, the former party shall provide the other with
written notice specifying in reasonable detail the nature of such default. If
the default has not been cured by the earlier of: (i) the Closing Date, or (ii)
within 10 days after delivery of that notice (or such additional reasonable time
as the circumstances may warrant provided the party in default undertakes
diligent, good faith efforts to cure the default within such 10-day period and
continues such efforts thereafter), then the party giving such notice may
exercise the remedies available to such party pursuant to this Section, subject
to the right of the other party to contest the alleged default through
appropriate proceedings.
14.2. Seller's Remedies. Buyer recognizes that if the Transaction is
-----------------
not consummated as a result of Buyer's default, Seller would be entitled to
compensation, the extent of which is extremely difficult and impractical to
ascertain. To avoid this problem, the parties agree that if the Transaction is
not consummated due to the default of Buyer, Seller, provided that Seller is not
in default and has otherwise complied with its obligations under this Agreement,
shall be entitled to the Initial Escrow
29
<PAGE>
Deposit, with interest earned thereon. The parties agree that this sum shall
constitute liquidated damages and shall be in lieu of any other relief to which
Seller might otherwise be entitled due to Buyer's failure to consummate the
Transaction as a result of a default by Buyer.
14.3. Buyer's Remedies. Seller agrees that the Purchased Assets include
----------------
unique property that cannot be readily obtained on the open market and that
Buyer will be irreparably injured if this Agreement is not specifically
enforced. Therefore, Buyer shall have the right specifically to enforce
Seller's performance under this Agreement, and Seller agrees (i) to waive the
defense in any such suit that Buyer has an adequate remedy at law and (ii) to
interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy. If Buyer elects to terminate this Agreement as a
result of Seller's default instead of seeking specific performance, Buyer shall
be entitled to the return of the Initial Escrow Deposit together with all
interest earned thereon, and in addition thereto, to initiate a suit for damages
with such damages not to exceed $200,000. The parties agree that this sum shall
be the maximum amount to which Buyer might otherwise be entitled due to Seller's
failure to consummate the Transaction as a result of a default by Seller.
15.0. TERMINATION OF AGREEMENT.
------------------------
15.1. Failure to Close. This Agreement may be terminated at the option
----------------
of either party upon written notice to the other if the Commission has not
granted the Assignment Application within nine (9) months after the Commission
accepts the Assignment Application for filing or may be terminated by Buyer if
the Commission's action granting the Assignment Application has not become a
Final Order within twelve (12) months after the Commission accepts the
Assignment Application for filing; provided, however, that a party may not
-------- -------
terminate this Agreement if such party is in default hereunder, or if a delay in
any decision or determination by the Commission respecting the Assignment
Application has been caused or materially contributed to (i) by any failure of
such party to furnish, file or make available to the Commission information
within its control; (ii) by the willful furnishing by such party of incorrect,
inaccurate or incomplete information to the Commission; or (iii) by any other
action taken by such party for the purpose of delaying the Commission's decision
or determination respecting the Assignment Application. This Agreement may also
be terminated upon the mutual agreement of Buyer and Seller. In the event of
termination pursuant to this Section, the Initial Escrow Deposit, together with
all interest earned thereon, shall be returned to Buyer and the parties shall be
released and discharged from any further obligation hereunder unless the failure
to consummate the Transaction is attributable to Buyer's default, and Seller is
not in default and has otherwise complied with its obligations under this
Agreement, in which case the Initial Escrow Deposit plus interest earned thereon
shall be released to Seller as liquidated damages pursuant to Section 14.2.
15.2. Designation for Hearing. The time for approval provided in
-----------------------
Section 15.1 notwithstanding, either party may terminate this Agreement upon
written notice to the other, if, for any reason, the Assignment Application is
designated for hearing by the Commission, provided, however, that written notice
-------- -------
of termination must be given within 10 days after release of the hearing
designation order and that the party giving such notice is not in default and
has otherwise complied with its obligations under this Agreement. Upon
termination pursuant to this Section, the Initial Escrow Deposit together with
all interest earned thereon shall be returned to Buyer and the parties
30
<PAGE>
shall be released and discharged from any further obligation hereunder,provided,
--------
however, that if the designation for hearing is predicated upon breach by either
- -------
party of a representation, warranty or covenant contained in this Agreement, the
nonbreaching party may, in addition to termination, pursue the remedies
available to such non-breaching party provided in Sections 14.2 and 14.3.
16.0. GENERAL PROVISIONS.
------------------
16.1. Brokerage. Seller and Buyer represent to each other that neither
---------
party has dealt with a broker in connection with the Transaction, except that
Seller has retained Media Venture Partners. No finders fee is due to any person
or entity in connection with the Transaction except for Media Venture Partners
and such fee shall be paid by Seller at Closing.
16.2. Fees. All Commission filing fees for the Assignment Application,
----
and all recording costs, transfer taxes, sales tax, document stamps and other
similar charges shall be paid one-half by Seller and one-half by Buyer. Except
as otherwise provided herein, all other expenses incurred in connection with
this Agreement or the Transaction shall be paid by the party incurring those
expenses whether or not the Transaction is consummated.
16.3. Notices. All notices, requests, demands and other communications
-------
pertaining to this Agreement shall be in writing and shall be deemed duly given
when (i) delivered personally (which shall include delivery by Federal Express
or other recognized overnight courier service that issues a receipt or other
confirmation of delivery) to the party for whom such communication is intended,
(ii) delivered by facsimile transmission or (iii) three business days after the
date mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Seller:
Mr. Hubert N. Hoffman, Jr., President
Hoffman Communications, Inc.
2461 Eisenhower Avenue
Alexandria, VA 22331
with a copy (which shall not constitute notice) to:
Michael Perine, Esq.
Hoffman Management, Inc.
2461 Eisenhower Avenue.
Alexandria, VA 22331
31
<PAGE>
If to Buyer:
Mr. Alfred C. Liggins, President
Radio One, Inc.
5900 Princess Garden Parkway
8th Floor
Lanham, MD 20706
Fax: (301) 306-9694
with a copy (which shall not constitute notice) to:
Linda J. Eckard, Esq.
Radio One, Inc.
5900 Princess Garden Parkway
8th Floor
Lanham, MD 20706
Fax: (301) 306-9638
Either party may change its address for notices by written notice to the other
given pursuant to this Section. Any notice purportedly given by a means other
than as set forth in this Section shall be deemed ineffective.
16.4. Assignment. Neither party may assign this Agreement without the
----------
other party's express prior written consent, provided, however, Buyer may assign
-------- -------
its rights and obligations pursuant to this Agreement without Seller's consent
prior to closing to (i) an entity which is a subsidiary or parent of Buyer or to
an entity owned or controlled by Buyer or its principals or (ii) to Buyer's
lenders as collateral for any indebtedness incurred by Buyer; and subsequent to
closing to (x) any entity which acquires all or substantially all of the
Purchased Assets or (y) to Buyer's lenders as collateral for any indebtedness
incurred by Buyer. Subject to the foregoing, this Agreement shall be binding
on, inure to the benefit of, and be enforceable by the original parties hereto
and their respective successors and permitted assignees.
16.5. Exclusive Dealings. For so long as this Agreement remains in
------------------
effect, neither Seller nor any person acting on Seller's behalf shall, directly
or indirectly, solicit or initiate any offer from, or conduct any negotiations
with, any person or entity concerning the acquisition of all or any interest in
any of the Purchased Assets or the Station, other than Buyer or Buyer's
permitted assignees.
16.6. Third Parties. Nothing in this Agreement, whether express or
-------------
implied, is intended to: (i) confer any rights or remedies on any person other
than Seller, Buyer and their respective successors and permitted assignees; (ii)
relieve or discharge the obligations or liability of any third party; or (iii)
give any third party any right of subrogation or action against either Seller or
Buyer.
16.7. Indulgences. Unless otherwise specifically agreed in writing to
-----------
the contrary: (i) the failure of either party at any time to require performance
by the other of any provision of this Agreement shall not affect such party's
right thereafter to enforce the same; (ii) no waiver by either
32
<PAGE>
party of any default by the other shall be taken or held to be a waiver by such
party of any other preceding or subsequent default; and (iii) no extension of
time granted by either party for the performance of any obligation or act by the
other party shall be deemed to be an extension of time for the performance of
any other obligation or act hereunder.
16.8. Survival of Representations and Warranties. The
---------------------------------------------
representations, warranties, and indemnification obligations of Buyer and the
representations, warranties and indemnification obligations of Seller contained
in Section 6.5, but only to the extent such section represents that the Station
is operating in compliance with the FCC Licenses, Communications Act and FCC
rules; Section 6.6, but only to the extent such section represents that all
Equipment is serviceable, in good operating condition and is not in imminent
need of repair; Section 6.13, but only to the extent such section represents
that all mechanical and structural components are in good operating condition
and repair; and Section 6.15 (a) and (b) shall survive for nine (9) months after
the Closing Date except that claims properly asserted within the nine (9) month
period shall survive until finally and fully resolved; provided, however, that
-------- -------
Seller's representations and warranties in all other sections and Sections 6.5,
6.6, 6.13 and 6.15 to the extent not limited above and Buyer's indemnification
rights with respect thereto and with respect to Section 13.2(a)(ii) shall
survive the Closing until the end of the applicable statute of limitations
period.
16.9. Prior Negotiations. This Agreement supersedes in all respects all
------------------
prior and contemporaneous oral and written negotiations, understandings and
agreements between the parties with respect to the subject matter hereof. All
of such prior and contemporaneous negotiations, understandings and agreements
are merged herein and superseded hereby.
16.10. Exhibits and Schedules. The Exhibits and Schedules attached hereto
----------------------
or referred to herein are a material part of this Agreement, as if set forth in
full herein.
16.11. Entire Agreement; Amendment. This Agreement, the Exhibits and
---------------------------
Schedules to this Agreement set forth the entire understanding between the
parties in connection with the Transaction, and there are no terms, conditions,
warranties or representations other than those contained, referred to or
provided for herein and therein. Neither this Agreement nor any term or
provision hereof may be altered or amended in any manner except by an instrument
in writing signed by each of the parties hereto.
16.12. Counsel/Interpretation. Each party has been represented by its own
----------------------
counsel in connection with the negotiation and preparation of this Agreement.
This Agreement shall be fairly interpreted in accordance with its terms and, in
the event of any ambiguities, no inferences shall be drawn against either party.
16.13. Governing Law, Jurisdiction. This Agreement shall be governed by,
---------------------------
and construed and enforced in accordance with the laws of the State of Virginia
without regard to the choice of law rules utilized in that jurisdiction. Buyer
and Seller each (a) hereby irrevocably submit to the jurisdiction of the courts
of that state and (b) hereby waive, and agree not to assert, by way of motion,
as a defense, or otherwise, in any such suit, action or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or
33
<PAGE>
immune from attachment or execution, that the suit, action or proceeding is
brought in an inconvenient forum, that the venue of the suit, action or
proceeding is improper or that this Agreement or the subject matter hereof may
not be enforced in or by such court. Buyer and Seller each hereby consent to
service of process by registered mail at the address to which notices are to be
given. Each of Buyer and Seller agrees that its submission to jurisdiction and
its consent to service of process by mail is made for the express benefit of the
other party hereto. Final judgment against Buyer or Seller in any such action,
suit or proceeding may be enforced in other jurisdictions by suit, action or
proceeding on the judgment, or in any other manner provided by or pursuant to
the laws of such other jurisdiction; provided,however that any party may at its
-------- -------
option bring suit, or institute other proceedings, in any state or federal court
of the United States or of any country or place where the other party or its
assets, may be found.
16.14. Severability. If any term of this Agreement is illegal or
------------
unenforceable at law or in equity, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. Any illegal or unenforceable term shall be deemed to be void
and of no force and effect only to the minimum extent necessary to bring such
term within the provisions of applicable law and such term, as so modified, and
the balance of this Agreement shall then be fully enforceable.
16.15. Counterparts. This Agreement may be signed in any number of
------------
counterparts with the same effect as if the signature on each such counterpart
were on the same instrument. Each fully executed set of counterparts shall be
deemed to be an original, and all of the signed counterparts together shall be
deemed to be one and the same instrument.
16.16. Further Assurances. Seller shall at any time and from time to time
------------------
after the Closing execute and deliver to Buyer such further conveyances,
assignments and other written assurances as Buyer may request to vest and
confirm in Buyer (or its assignee) the title and rights to and in all the
Purchased Assets to be and intended to be transferred, assigned and conveyed
hereunder.
34
<PAGE>
IN WITNESS WHEREOF, and to evidence their assent to the foregoing, Seller
and Buyer have executed this Asset Purchase Agreement under seal as of the date
first written above.
SELLER:
HOFFMAN COMMUNICATIONS, INC.
By: /s/ Hubert N. Hoffman, Jr.
----------------------------
Hubert N. Hoffman, Jr.
President
BUYER:
RADIO ONE, INC.
By: /s/ Alfred C. Liggins
---------------------
Alfred C. Liggins
President
35
<PAGE>
Exhibit 10.44
------------------------------------------------------------------------
ASSET PURCHASE AGREEMENT
------------------------------------------------------------------------
by and between
FM 100, INC.
for the sale and purchase of
Stations WKJS-FM and Station WSOJ-FM
Dated as of February 26, 1999
<PAGE>
TABLE OF EXHIBITS
EXHIBIT 1 -- Initial Escrow Agreement
EXHIBIT 2 -- Noncompetition Agreement
-ii-
<PAGE>
TABLE OF SCHEDULES
SCHEDULE 2.1(c)(1) Contracts
SCHEDULE 2.2 Excluded Assets
SCHEDULE 6.1 Seller's Places of Business
SCHEDULE 6.3 Litigation
SCHEDULE 6.4 Permitted Encumbrances
SCHEDULE 6.5 FCC Licenses
SCHEDULE 6.6 Equipment
SCHEDULE 6.8 Intellectual Property
SCHEDULE 6.9 Insurance
SCHEDULE 6.10(b) Financial Statements
SCHEDULE 6.11 Employees
SCHEDULE 6.12 Employment and Benefits Agreements
SCHEDULE 6.13 Real Property
SCHEDULE 6.14 Environmental
SCHEDULE 6.21 Related Parties
-iii-
<PAGE>
ASSET PURCHASE AGREEMENT
This Agreement, made and entered into as of this 26th day of February,
1999, by and between FM100, Inc., a Virginia corporation ("Seller"), and Radio
One, Inc., a Delaware corporation ("Buyer").
WITNESSETH THAT:
WHEREAS, Seller is the licensee of Stations WKJS-FM, 104.7 MHz, Crewe, and
WSOJ-FM, 100.3 MHz, Petersburg, Virginia (the "Stations"); and
WHEREAS, the parties desire that Buyer purchase certain assets used or held
for use in the operation of the Stations and acquire the authorizations issued
by the Federal Communications Commission (the "Commission") for the operation of
the Stations; and
WHEREAS, the authorizations issued by the Commission may not be assigned to
Buyer without the Commission's prior consent.
NOW THEREFORE, in consideration of the mutual promises and covenants herein
contained, the parties, intending to be legally bound, agree as follows:
1.0 RULES OF CONSTRUCTION.
---------------------
1.1. Defined Terms.
-------------
As used in this Agreement, the following terms shall have the
following meanings:
"Accounts Receivable" means the cash accounts receivable of Seller arising
from Seller's operation of the Stations prior to and immediately before the
Closing.
"Administrative Violation" means those violations described in Section 8.6
hereof.
"Assignment Application" means the application on FCC Form 314 that Seller
and Buyer shall join in and file with the Commission requesting its consent to
the assignment of the FCC Licenses (as hereinafter defined) from Seller to
Buyer.
"Business Records" means all business records of Seller (including logs,
public files materials and engineering records) relating to or used in the
operation of the Stations and not relating solely to Seller's internal corporate
affairs.
"Buyer" means Radio One, Inc., a Delaware corporation.
"Buyer Documents" means those documents, agreements and instruments to be
executed and delivered by Buyer in connection with this Agreement as described
in Section 7.2.
<PAGE>
"Closing" means the consummation of the Transaction (as hereinafter
defined).
"Closing Date" means the date on which the Closing takes place, as
determined by Section 11.
"Code" means the Internal Revenue Code of 1986, as amended, and the rules
and regulations promulgated thereunder.
"Commission" means the Federal Communications Commission.
"Communications Act" shall mean the Communications Act of 1934, as amended.
"Contracts" means those contracts, leases and other agreements listed or
described in Schedule 2.1(c)(1) which are in effect on the date hereof and which
Buyer has agreed to assume, but not including Sales Agreements and Trade
Agreements (as hereinafter defined).
"Environmental Law" means any law, rule, order, decree or regulation of any
Governmental Authority relating to pollution or protection of human health and
the environment, including any law or regulation relating to emissions,
discharges, releases or threatened releases of Hazardous Substances (as
hereinafter defined) into ambient air, surface water, groundwater, land or other
environmental media, and including without limitation all laws, regulations,
orders and rules pertaining to occupational health and safety.
"Equipment" means all tangible personal property and fixtures used or
useful in the operation of the Stations as described in Section 2.1(b).
"Excluded Assets" means those assets excluded from the Purchased Assets and
retained by the Seller, to the extent in existence on the Closing Date, as
specifically described in Section 2.2.
"FCC Licenses" means all licenses, pending applications, permits and other
authorizations issued by the Commission for the operation of the Stations listed
on Schedule 6.5.
"Final Order" means any action that shall have been taken by the Commission
(including action duly taken by the Commission's staff, pursuant to delegated
authority) which shall not have been reversed, stayed, enjoined, set aside,
annulled or suspended; with respect to which no timely request for stay,
petition for rehearing, appeal or certiorari or sua sponte action of the
--- ------
Commission with comparable effect shall be pending; and as to which the time for
filing any such request, petition, appeal, certiorari or for the taking of any
such sua sponte action by the Commission shall have expired or otherwise
--- ------
terminated.
"Financial Statements" means Seller's audited and unaudited financial
statements as described in Section 6.10.
-2-
<PAGE>
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, and any agency, court or other entity that
exercises executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Substances" means any hazardous, dangerous or toxic waste,
substance or material, as those or similar terms are defined in or for purposes
of any applicable federal, state or local Environmental Law, and including
without limitation any asbestos or asbestos-related products, oils, petroleum or
petroleum-derived compounds, CFCS, or PCBs.
"Indebtedness" means any debt or indebtedness, whether evidence by a note
or otherwise, whether secured or unsecured, in each case for borrowed money.
"Initial Escrow Agent" means Media Services Group, Inc..
"Initial Escrow Agreement" means the escrow agreement described in Section
3, the form of which is attached as Exhibit 1.
"Initial Escrow Deposit" means the monies deposited with the Initial Escrow
Agent described in Section 3.
"Intangible Property" means all of Seller's right, title and interest in
and to the goodwill and other intangible assets used or useful in or arising
from the business of the Stations as described in Section 2.1(f).
"Intellectual Property" means all Seller's right, title and interest in and
to the trademarks, tradenames, service marks, patents, franchises, copyrights,
including registrations and applications for registration of any of them,
slogans, jingles, logos, computer programs and software, trade secrets and
similar materials and rights relating to the Stations as listed on Schedule 6.8.
"Knowledge of Buyer" means the actual knowledge, after reasonable inquiry
of Buyer's senior management, and the books and records of Buyer.
"Knowledge of Seller" means the actual knowledge, after reasonable inquiry
of Seller's senior management, the books and records of the Stations, and the
actual knowledge of Dr. Walton M. Belle and Larry Jones.
"Material Contracts" means those leases, contracts and agreements
specifically designated in Schedule 2.1(c)(1) as being "Material Contracts."
"Noncompetition Agreement" means the agreement to be entered into by FM
100, Inc., and all officers, directors and shareholders of FM-100, Inc.
"Permitted Encumbrances" means those permitted liens or encumbrances to the
Purchased Assets described in Section 6.4 and set forth on Schedule 6.4.
"Purchase Price" shall mean the total consideration for the Purchased
Assets as described in Section 4.1.
-3-
<PAGE>
"Purchased Assets" means those assets which are the subject matter of this
Agreement that Seller shall sell, assign, transfer, convey and deliver to Buyer
at Closing as described in Section 2.1.
"Sales Agreements" means agreements entered into by Seller for the sale of
time on the Stations for cash, as described in Section 2.1(c)(2).
"Seller" means FM 100, Inc., a Virginia corporation.
"Seller Documents" means those documents, agreements and instruments to be
executed and delivered by Seller in connection with this Agreement as described
in Section 6.1.
"Specified Event" means those broadcast transmission failures described in
Section 8.5(b).
"Stations" means WKJS-FM, 104.7 MHz, Crewe, Virginia, and WSOJ-FM, 100.3
MHz, Petersburg, Virginia, but shall not be interpreted to mean WREJ(AM),
Richmond, Virginia, which is owned and operated by Fifteen Forty Broadcasting
Corporation, a Virginia corporation ("Fifteen Forty"). Fifteen Forty is an
affiliate of Seller.
"Studio Site" means the real estate located at 6001 Wilkinson Road,
Virginia that is currently used as the Stations' studio and office facilities.
"Trade Agreements" means agreements entered into by Seller for the sale of
time on the Stations in exchange for merchandise or services, including those
listed on Schedule 2.1(c)(1).
"Trade Balance" means the difference between the aggregate value of time
owed pursuant to the Trade Agreements and the aggregate value of goods and
services to be received pursuant to the Trade Agreements, as computed in
accordance with the Station's customary bookkeeping practices. The Trade
Balance is "negative" if the value of time owed as of Closing exceeds the value
of goods and services to be received. The Trade Balance is "positive" if the
value of time owed as of Closing is less than the value of goods and services to
be received.
"Transaction" means the sale and purchase and assignments and assumptions
contemplated by this Agreement and the respective obligations of Seller and
Buyer set forth herein.
"WKJS Transmitter Site" means the real estate located at Crewe, Virginia
that is currently owned by Seller and used as Station WKJS's transmitter site.
-4-
<PAGE>
"WSOJ Transmitter Site" means the real estate located at Petersburg,
Virginia that is currently leased and used as Station WSOJ's transmitter site.
1.2. Other Definitions. Other capitalized terms used in this Agreement
-----------------
shall have the meanings ascribed to them herein.
1.3. Number and Gender. Whenever the context so requires, words used in
-----------------
the singular shall be construed to mean or include the plural and vice versa,
----------
and pronouns of any gender shall be construed to mean or include any other
gender or genders.
1.4. Headings and Cross-References. - The headings of the Sections and
----------------------------- -
Paragraphs hereof, the Table of Contents, the Table of Exhibits, and the Table
of Schedules have been included for convenience of reference only, and shall in
no way limit or affect the meaning or interpretation of the specific provisions
of this Agreement. All cross-references to Sections or Paragraphs herein shall
mean the Sections or Paragraphs of this Agreement unless otherwise stated or
clearly required by the context. All references to Schedules herein shall mean
the Schedules to this Agreement. Words such as "herein" and "hereof" shall be
deemed to refer to this Agreement as a whole and not to any particular provision
of this Agreement unless otherwise stated or clearly required by the context.
The term "including" means "including without limitation."
1.5. Computation of Time. Whenever any time period provided for in this
-------------------
Agreement is measured in "business days" there shall be excluded from such time
period each day that is a Saturday, Sunday, recognized federal legal holiday, or
other day on which the Commission's offices are closed and are not reopened
prior to 5:30 p.m. Washington, D.C. time. In all other cases all days shall be
counted.
2.0 ASSETS TO BE CONVEYED.
---------------------
2.1. Purchased Assets. On the Closing Date, Seller shall sell, assign,
----------------
transfer, convey and deliver to Buyer free of all liens, encumbrances,
mortgages, security interests of any kind or type whatsoever, all of Seller's
assets used in the conduct of the business and operations of the Stations
(collectively referred to as the "Purchased Assets"), including, but not limited
to, the following;
(a) Licenses. The FCC Licenses, and all other transferrable
licenses, permits and authorizations issued by any other Governmental Authority
that are used in or necessary for the lawful operation of the Stations as
currently operated by Seller.
(b) Equipment. All tangible personal property and fixtures used or
held for use in the operation of the Stations, including the property and assets
listed or described in Schedule 6.6, together with supplies, inventory, spare
parts and replacements thereof and improvements and additions thereto made
between the date hereof and the Closing Date (the "Equipment").
-5-
<PAGE>
(c) Contracts and Agreements. The Contracts, Sales Agreements and
Trade Agreements, subject to the following:
(1) Buyer shall be obligated to assume only those Contracts that are
listed in Schedule 2.1(c)(1) or that have been or will have been entered into in
the ordinary course of the Station's business and in accordance with the terms
of this Agreement, between the date hereof and the Closing Date, provided that,
-------- ----
unless otherwise approved in writing by Buyer, the obligations of the Stations
or Buyer under such Contracts entered into in the ordinary course of business do
not exceed Five Thousand Dollars ($5,000) per annum per Contract or Twenty-five
Thousand Dollars ($25,000) per annum in the aggregate or are terminable by the
Stations on not more than 30 days' notice.
(2) Buyer shall be obligated to assume only those Sales Agreements
that have been or will have been entered into in the ordinary course of business
and in accordance with the terms of this Agreement at commercially reasonable
rates and with terms of no longer than ten (10) weeks, or if containing terms of
longer than 10 weeks, are terminable by the Stations on not more than 15 days'
notice.
(3) Buyer shall be obligated to assume only those Trade Agreements
that are listed in Schedule 2.1(c)(1) or that have been or will have been
entered into in the ordinary course of business and in accordance with the terms
of this Agreement, between the date hereof and the Closing Date, and are (i)
immediately preemptible for cash time sales trade; (ii) require the provision of
air time only on a "run of schedule" basis; and (iii) inure or will inure to the
benefit of the Stations. Notwithstanding the foregoing, Buyer shall not be
obligated to assume Trade Agreements (including both those Trade Agreements
listed on Schedule 2.1(c)(1) and those entered into in the ordinary course of
business) that have an aggregate negative Trade Balance exceeding Five Thousand
Dollars ($5,000).
(4) Notwithstanding any provision of this Agreement to the contrary,
this Agreement shall not constitute an agreement to assign any Contract or other
agreement, undertaking or obligation if (i) an attempted assignment, without the
consent required for such assignment, may constitute a breach thereof or may in
any way have a material adverse effect on Seller's rights thereunder prior to
Closing or Buyer's rights thereunder after Closing and (ii) such consent is not
obtained by Seller prior to Closing, provided, however, that Seller will use its
-------- -------
best efforts at its own expense to obtain all such consents prior to Closing.
(5) Notwithstanding any provision of this Agreement to the contrary,
Buyer acknowledges that, with respect to any Contract assumed by Buyer hereunder
which contains a personal guarantee of any shareholder of Seller, Buyer shall
enter into an agreement at Closing to indemnify that individual as to the post-
closing payment obligations of the assumed Contract. Seller agrees to use its
best efforts to obtain any consents or agreements necessary to remove the
requirement of a guarantor on any such Contract provided such renewal does not
inhibit Buyer's ability to assume any such Contract.
-6-
<PAGE>
(d) Programming Materials. All programs, programming material, and
music libraries in whatever form or nature owned by Seller and used or intended
for use in the operation of the Stations.
(e) Intellectual Property. All Seller's right, title and interest
in and to the Intellectual Property used in the operation of the Stations.
(f) Intangible Property. All of Seller's right, title and interest
in and to the goodwill and other intangible assets used or useful in or arising
from the business of the Stations, including all customer lists, and sales
plans.
(g) Business Records. All business records of Seller (including
logs, public file materials and engineering records) relating to or used in the
operation of the Stations and not relating solely to Seller's internal corporate
affairs.
(h) Station Records. All of the Stations' proprietary information,
technical information and data, machinery and equipment warranties (to the
extent such warranties are assignable), maps, plans, diagrams, blueprints,
schematics, files, records, studies, data, lists, general accounting records,
books of account, in whatever form, used or held for use for the business or
operation of the Stations, including filings with the FCC which relate to the
Stations.
(i) Real Property Leases. Seller currently holds a leasehold interest
in the Real Property described in Schedule 6.13, which is used as the Station's
Studio Building. The Studio Site is owned by Fifteen Forty Broadcasting
Corporation ("Fifteen Forty"), a Virginia Corporation, that is an affiliate of
Seller. At Closing, Seller shall cause Fifty Forty to execute a lease for the
Studio Site building to Buyer without charge for a period of twelve months from
the date of Closing. Such lease shall also provide for Fifteen Forty's
continued use and occupancy of the Studio site building for its broadcasting
purposes in connection with Station WREJ(AM) during the term of the lease. In
addition, Buyer shall assume all Seller's rights, title and interest in an
equipment lease with Action Mobile Industries, Inc., dated November 17, 1997,
provided however, that Seller shall prepay lease expenses in the aggregate
amount of $4,500.00 at Closing. Seller also holds a leasehold interest in the
Real Property described in Schedule 6.13, which is used as the WSOJ Transmitter
Site. At Closing, Seller shall assign any and all rights, title and interests
in the WSOJ Transmitter Site lease to Buyer.
(j) Real Property Owned. Seller currently holds title to the Real
Property described in Schedule 6.13 used as the WKJS Transmitter Site. At
Closing, Seller shall convey title to this transmitter site to Buyer.
(k) Receivables. All Accounts Receivable.
2.2. Excluded Assets. There shall be excluded from the Purchased Assets
---------------
and retained by the Seller, to the extent in existence on the Closing Date, the
following assets (the "Excluded Assets"):
-7-
<PAGE>
(a) Cash and Investments. All cash and cash equivalents on hand or
in bank accounts and other cash items and investment securities of Seller on the
Closing Date.
(b) Insurance. All contracts of insurance (including any cash
surrender value thereof) and all insurance proceeds of settlement and insurance
claims made by Seller on or before the Closing Date.
(c) Employee Benefit Assets. All pension, profit sharing and
savings plans and trusts, and any assets thereof, except that any employee
account balances under any plan qualified under Section 401(k) of the Code shall
be promptly transferred to a plan qualified under Section 401(k) and, at Buyer's
request, made available by or on behalf of Buyer if such employee is hired by
Buyer, to the extent allowed under each such plan and applicable law.
(d) Contracts. All contracts that will have terminated or expired
prior to Closing by their terms and all contracts, agreements, instruments,
undertakings and obligations not expressly assumed by Buyer hereunder.
(e) Tax items. All claims, rights and interest in and to any
refunds for federal, state or local taxes to which Seller is entitled for
periods prior to the Closing Date.
(f) Corporate Records. Seller's corporate minute books and other
books and records relating to internal corporate minutes.
(g) Studio Site. Except as provided in Section 2.1(i) herein,
Fifteen Forty Broadcasting will retain all rights, title and leasehold interest,
if any, to the Studio Building.
3.0 INITIAL ESCROW DEPOSIT. Simultaneously with the execution and delivery
----------------------
of this Agreement by both parties, Buyer has deposited with Media Services
Group, Inc. ("Initial Escrow Agent"), a cash deposit of Five Hundred Thousand
Dollars ($500,000) (the "Initial Escrow Deposit"). The Initial Escrow Deposit
shall be held in an interest-bearing account and disbursed by Initial Escrow
Agent pursuant to the terms of an escrow agreement in the form attached hereto
as Exhibit 1 (the "Initial Escrow Agreement"), which Initial Escrow Agreement
has been entered into by Seller, Buyer and Initial Escrow Agent simultaneously
herewith.
4.0 PURCHASE PRICE AND METHOD OF PAYMENT.
------------------------------------
4.1. Consideration. The total consideration for the Purchased Assets at
-------------
Closing (the "Purchase Price") shall be Twelve Million Dollars ($12,000,000),
payable as set forth in this Section 4.
4.2. Payment at Closing. At Closing, Buyer shall pay:
------------------
(a) Eleven Million Five Hundred Thousand Dollars ($11,500,000) (as
adjusted pursuant to Sections 8.5 and 12.1) to Seller by check or wire transfer
of same day funds
-8-
<PAGE>
pursuant to wire transfer instructions which shall be delivered by Seller to
Buyer at least five business days prior to Closing.
(b) Five Hundred Thousand Dollars ($500,000) to Seller by causing the
Initial Escrow Agent to release the Initial Escrow Deposit to Seller, with all
interest earned on the Initial Escrow Deposit remitted to Buyer.
4.3 Additional Contingent Consideration. Additional consideration will
-----------------------------------
be paid to the Seller subject to certain conditions as described herein. In the
event the cash flow of the Stations operating as a combined entity for calendar
year 1999 exceeds One Million Dollars ($1,000,000), then Buyer shall pay to
Seller an amount in cash equal to the product of (x) ten (10) and (y) the dollar
amount of such cash flow in excess of $1,000,000. So, for example, if the cash
flow for calendar year 1999 is $1,200,000, then Seller would be entitled to be
paid an additional $2,000,000 ($1,200,000-$1,000,000 x 10). For purposes of
this calculation, the term cash flow shall be defined as: net income computed
for calendar year 1999 in accordance with generally accepted accounting
principles, consistently applied (excluding (i) extraordinary expenses relating
to debt and equity restructuring, (ii) extraordinary gains from sales, exchanges
and other dispositions of assets not in the ordinary course of business and
(iii) the effect of any Trade Agreements), plus (1) depreciation, (2)
----
amortization of assets, (3) interest expense and (4) taxes, in each case, to the
extent included in the calculation of net income. For purposes of this
calculation, income from the operations of Station WREJ(AM) by Fifteen Forty
Broadcasting shall be excluded. The determination of the amount of cash flow
for the Stations for calendar year 1999 shall be made by Buyer's independent
accounting firm, Arthur Andersen, LLP. Seller shall assist Arthur Andersen, LLP
by providing any relevant information available to Seller that is necessary
and/or useful in computing the amount of cash flow. At Closing, Seller will
terminate the Employment and Option Agreement between FM 100, Inc., Larry D.
Jones, Walton M. Belle, Joseph E. Quash and Charles E. Cumings, dated January 1,
1995. Buyer further agrees to continue the employment of Larry D. Jones as
General Manager of the Stations through December 31, 1999, with all authority
and duty as such title is generally recognized to carry and to conduct the
business of the Stations in a manner similar to the manner in which they have
been conducted prior to the Closing Date. Any determination by Arthur Andersen,
LLP shall be final and binding upon Seller and Buyer. If any payment is
required pursuant to this subsection, such payment shall be due ninety (90) days
after the date that Buyer's final audited financial statements for calendar year
1999 are delivered to Buyer by Arthur Andersen, LLP.
4.4. Allocation. The Purchase Price shall be allocated to the Purchased
----------
Assets and Noncompetition Agreements in accordance with an allocation schedule
prepared by Buyer pursuant to Section 1060 of the Code and mutually agreed upon
by Seller and Buyer. Seller and Buyer shall use such allocation for tax
accounting (including preparation of IRS Form 8594), and all other purposes. If
Seller and Buyer have not agreed upon the allocation prior to the Closing Date,
Closing shall take place as scheduled and any dispute shall be resolved by a
qualified media appraiser mutually acceptable to Seller and Buyer, whose
decision shall be final and whose fees and expenses shall be paid one-half by
Seller and one-half by Buyer. If the allocation must be determined by a media
appraiser, Seller and Buyer agree to cooperate in good faith so that such
appraisal may be completed expeditiously.
-9-
<PAGE>
4.5. Seller's Liabilities. Buyer does not and shall not assume or be
--------------------
deemed to assume, pursuant to this Agreement or otherwise, any agreements,
liabilities, undertakings, obligations or commitments of Seller or the Stations
of any nature whatsoever except: (i) liabilities accruing after Closing under
the Contracts, Sales Agreements and Trade Agreements listed in Schedule
2.1(c)(1) or otherwise expressly assumed by Buyer pursuant to, and subject to,
Section 2.1(c), provided, that, Buyer shall not assume liability for any
-------- ----
breaches, violations or defaults under the Contracts, Sales Agreements and Trade
Agreements that occurred prior to Closing; and (ii) prorated items that are to
be paid by Buyer after Closing pursuant to Section 12.1.
5.0 HART-SCOTT-RODINO. As promptly as practicable and no later than ten (10)
-----------------
days following the execution of this Agreement, Seller and Buyer shall complete
any filing that may be required pursuant to the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or shall mutually agree that no such
filing is required. Seller and Buyer shall diligently take all necessary and
proper steps and provide any additional information reasonably requested in
order to comply with the requirements of such Act. Seller and Buyer shall each
pay one-half of the filing fee.
6.0 SELLER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Seller hereby makes
--------------------------------------------------
to and for the benefit of Buyer, the following representations, warranties and
covenants:
6.1. Existence, Power and Identity. Seller is a corporation duly
-----------------------------
organized and validly existing under the laws of the Commonwealth of Virginia
and licensed to do business in the Commonwealth of Virginia with full corporate
power and authority (a) to own, lease and use the Purchased Assets as currently
owned, leased and used, (b) to conduct the business and operation of the
Stations as currently conducted and (c) to execute and deliver this Agreement
and each other document, agreement and instrument to be executed and delivered
by Seller in connection with this Agreement (collectively, the "Seller
Documents"), and to perform and comply with all of the terms, obligations and
covenants to be performed and complied with by Seller hereunder and thereunder.
The addresses of Seller's chief executive office and all of Seller's additional
places of business, and all places where any of the tangible personal property
included in the Purchased Assets is now located, or has been located during the
past 180 days, are correctly listed in Schedule 6.1. Except as set forth in
Schedule 6.1, during the past five years, Seller has not been known by or used,
nor, to the best of Seller's knowledge, has any prior owner of the Stations been
known by or used, any corporate, partnership, fictitious or other name in the
conduct of the Stations' business or in connection with the ownership, use or
operation of the Purchased Assets.
6.2. Binding Effect. The execution, delivery and performance by Seller
--------------
of this Agreement has been and the Seller Documents will be duly authorized by
all necessary corporate action, and copies of those authorizing resolutions,
certified by Seller's Secretary shall be delivered to Buyer at Closing. No
other corporate action by Seller is required for Seller's execution, delivery
and performance of this Agreement. This Agreement has been duly and
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validly executed and delivered by Seller to Buyer and constitutes a legal, valid
and binding obligation of Seller, enforceable against Seller in accordance with
its terms, subject to bankruptcy, reorganization, fraudulent conveyance,
insolvency, moratorium and similar laws relating to or affecting creditors, and
other obligees' rights generally and the exercise of judicial discretion in
accordance with general equitable principles.
6.3. No Violation. Except as set forth on Schedule 6.3, none of (i) the
------------
execution, delivery and performance by Seller of this Agreement or any of the
Seller Documents, (ii) the consummation of the Transaction, or (iii) Seller's
compliance with the terms or conditions hereof will, with or without the giving
of notice or the lapse of time or both, conflict with, breach the terms or
conditions of, constitute a default under, or violate (x) Seller's articles of
incorporation or bylaws, (y) any judgment, decree, order, consent, agreement,
lease or other instrument (including any Contract, Sales Agreement or Trade
Agreement) to which Seller is a party or by which Seller or any of its assets
(including the Purchased Assets) or the Stations is or may be legally bound or
affected, or to the knowledge of Seller, (z) any law, rule, regulation or
ordinance of any Governmental Authority applicable to Seller or any of its
assets (including the Purchased Assets) or the operation of the Stations.
6.4. Conveyance of Assets. At Closing, Seller shall convey to Buyer
--------------------
good and marketable title to all the Purchased Assets, free and clear of all
liens, pledges, collateral assignments, security interests, capital or financing
leases, easements, covenants, restrictions and encumbrances or other defects of
title except: (i) the inchoate lien for current taxes or other governmental
charges not yet due and payable and that will be prorated between Seller and
Buyer pursuant to Section 12.1; and (ii) the Permitted Encumbrances.
6.5. Governmental Authorizations. Except for the FCC Licenses, no
---------------------------
licenses, permits, or authorizations from any Governmental Authority are
required to own, use or operate the Purchased Assets, to operate the Stations or
to conduct Seller's business as currently operated and conducted by Seller. The
FCC Licenses are all the Commission authorizations held by Seller with respect
to the Stations, and are all the Commission authorizations used in or necessary
for the lawful operation of the Stations as currently operated by Seller. The
FCC Licenses are in full force and effect, are subject to no conditions or
restrictions other than those which appear on their face and are unimpaired by
any acts or omissions of Seller, Seller's officers, employees or agents. Seller
has delivered true and complete copies of all FCC Licenses to Buyer. There is
not pending or, to the Knowledge of Seller, threatened, any action by or before
the Commission or any other Governmental Authority to revoke, cancel, rescind or
modify any of the FCC Licenses (other than proceedings to amend Commission rules
of general applicability or otherwise affecting the broadcast industry
generally), and there is not now issued, outstanding or pending or, to the
Knowledge of Seller, threatened, by or before the Commission or any other
Governmental Authority, any order to show cause, notice of violation, notice of
apparent liability, or notice of forfeiture or complaint against Seller or
otherwise with respect to the Stations. The Stations are operating in
compliance with all FCC Licenses, the Communications Act of 1934, as amended
(the "Communications Act"), and the current rules, regulations, policies and
practices of the Commission. The Commission's most recent renewals of the FCC
Licenses were not challenged by any petition to deny or any competing
application.
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Seller has no knowledge of any facts relating to it that, under the
Communications Act or the current rules, regulations, policies and practices of
the Commission may cause the Commission to deny Commission renewal of the FCC
Licenses or deny Commission consent to the Transaction.
6.6. Equipment. Seller has good and marketable title, both legal and
---------
equitable, to the Equipment. The Equipment, together with any improvements and
additions thereto and replacements thereof less any retirements or other
dispositions as permitted by this Agreement between the date hereof and the
Closing Date, will, at Closing, be all the tangible personal property used or
useful in the lawful operation of the Stations as currently operated by Seller.
Except as specifically indicated to the contrary in Schedule 6.6, all Equipment
is serviceable, in good operating condition (reasonable wear and tear excepted),
and is not in imminent need of repair or replacement. All items of transmitting
and studio equipment included in the Equipment (i) have been maintained in a
manner consistent with generally accepted standards of good engineering practice
and (ii) will permit the Stations to operate in accordance with the terms of the
FCC Licenses.
6.7. Contracts. Seller has made available to Buyer or its
---------
representatives complete and correct copies of all Contracts and Trade
Agreements listed on Schedule 2.1(c)(1) hereto. The list of Trade Agreements on
Schedule 2.1(c)(1) is accurate and complete. Except for Sales Agreements and
Trade Agreements that comply with the terms of this Agreement, Schedule
2.1(c)(1) includes all the contracts, leases, and agreements to which Seller is
a party and which Buyer has agreed to assume, other than those contracts that
will be performed in full prior to the Closing. To the Knowledge of Seller,
each Contract is in full force and effect and is unimpaired by any acts or
omissions of Seller, Seller's employees or agents, or Seller's officers. Except
as set forth on Schedule 2.1(c)(1), there has not occurred as to any Contract
any event of default by Seller or any event that, with notice, the lapse of time
or otherwise, could become an event of default by Seller. There has not
occurred as to any Contract any default by any other party thereto or any event
that, with notice, the lapse of time or otherwise, or at the election of any
person other than Seller, could become an event of default by such party. Those
Contracts whose stated duration extends beyond the Closing Date will, at
Closing, be in full force and effect, unimpaired by any acts or omissions of
Seller, Seller's employees or agents, or Seller's officers. If any Contract
requires the consent of any third party in order for Seller to assign that
Contract to Buyer, Seller shall use its best efforts to obtain at its own
expense such consent prior to Closing.
6.8. Promotional Rights. The Intellectual Property set forth on Schedule
------------------
6.8 includes all call signs and trademarks that Seller is transferring to Buyer,
used to promote or identify the Stations. Except as set forth on Schedule 6.8,
the Intellectual Property is in good standing and uncontested by any third
party. Except as set forth on Schedule 6.8, Seller has no Knowledge of any
infringement or unlawful or unauthorized use of those promotional rights,
including the use of any call sign, slogan or logo by any broadcast or cable
stations in the Richmond metropolitan area that may be confusingly similar to
those currently used by the Stations. Except as set forth on Schedule 6.8, to
the Knowledge of Seller, the operations of the Stations do not infringe, and
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no one has asserted to Seller that such operations infringe, any copyright,
trademark, tradename, service mark or other similar right of any other party.
6.9. Insurance. Schedule 6.9 lists all insurance policies held by
---------
Seller with respect to the Purchased Assets and the business and operation of
the Stations. Such insurance policies are in full force and effect, all
premiums with respect thereto are currently paid and Seller is in compliance
with the terms thereof. Seller has not received any notice from any issuer of
any such policies of its intention to cancel, terminate, or refuse to renew any
policy issued by it. Seller will maintain the insurance policies listed on
Schedule 6.9 in full force and effect through the Closing Date.
6.10. Financial Statements.
--------------------
(a) Seller has furnished Buyer with Compilation Unaudited Financial
Statements for fiscal years 1995, 1996, and 1997 as well as Compilation
Unaudited Financial Statements for December 31, 1998 and most recently available
statements. The Financial Statements: (i) have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved and as compared with prior periods; and (ii)
fairly present Seller's financial position, income, expenses, assets,
liabilities, shareholder's equity and the results of operations of the Stations
as of the dates and for the periods indicated. Since December 31, 1997, there
has been no material adverse change in the business, assets, properties or
condition (financial or otherwise) of the business. No event has occurred and,
Seller has no knowledge that prior to Closing, any event will have occurred that
would make such Financial Statements misleading in any respect.
(b) Except as reflected in the most recently available balance sheets,
including the notes thereto or otherwise disclosed in this Agreement or the
Schedules hereto, and except for the current liabilities and obligations
incurred in the ordinary course of business of the Stations (not including for
this purpose any tort-like liabilities or breach of contract) since the date of
the most recently available balance sheets, there exist no liabilities or
obligations of Seller, contingent or absolute, matured or unmatured, known or
unknown. Except as set forth on Schedule 6.10(b) since the date of the most
recently available balance sheets, (i) Seller has not made any contract,
agreement or commitment or incurred any obligation or liability (contingent or
otherwise), except in the ordinary course of business and consistent with past
business practices, (ii) there has not been any discharge or satisfaction of any
obligation or liability owed by Seller, which is not in the ordinary course of
business or which is inconsistent with past business practices, (iii) there has
not occurred any sale of or loss or material injury to the business, or any
material adverse change in the business or in the condition (financial or
otherwise) of the Stations, (iv) Seller has operated the business in the
ordinary course and (v) Seller has not increased the salaries or any other
compensation of any of its employees or agreed to the payment of any bonuses.
The monthly balance sheets (i) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved and as compared with prior periods; and (ii) fairly present
Company's financial position, income, expenses, assets, liabilities,
shareholder's equity and the results of operations of the Stations as of
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the dates and for the periods indicated, subject to year end adjustments which
do not materially affect the operations of Seller.
6.11. Employees. Except as otherwise listed on Schedule 6.11, (i) no
---------
employee of the Stations is represented by a union or other collective
bargaining unit, no application for recognition as a collective bargaining unit
has been filed with the National Labor Relations Board, and, to the Knowledge of
Seller, there has been no concerted effort to unionize any of the Stations'
employees and (ii) Seller has no other written or oral employment agreement or
arrangement with any Station employee, and no written or oral agreement
concerning bonus, termination, hospitalization or vacation. Seller has
delivered to Buyer a list of all persons currently employed at the Stations
together with an accurate description of the terms and conditions of their
respective employment as of the date of this Agreement. Seller will promptly
advise Buyer of any changes that occur prior to Closing with respect to such
information.
6.12. Employee Benefit Plans.
----------------------
(1) Except as described in Schedule 6.12, neither Seller nor any
Affiliates (as defined below) have at any time established, sponsored,
maintained, or made any contributions to, or been parties to any contract or
other arrangement or been subject to any statute or rule requiring them to
establish, maintain, sponsor, or make any contribution to, (i) any "employee
pension benefit plan" (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended, and regulations thereunder ("ERISA"))
("Pension Plan"); (ii) any "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) ("Welfare Plan"); or (iii) any deferred compensation,
bonus, stock option, stock purchase, or other employee benefit plan, agreement,
commitment, or arrangement ("Other Plan"). Seller and the Affiliates have no
obligations or liabilities (whether accrued, absolute, contingent, or
unliquidated, whether or not known, and whether due or to become due) with
respect to any "employee benefit plan" (as defined in Section 3(3) of ERISA), or
Other Plan that is not listed in Schedule 6.12. For purposes of this Section
6.12, the term "Affiliate" shall include all persons under common control with
Seller within the meaning of Sections 4001(a)(14) or (b)(1) of ERISA or any
regulations promulgated thereunder, or Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code").
(2) Each plan or arrangement listed in Schedule 6.12 (and any
related trust or insurance contract pursuant to which benefits under such plans
or arrangements are funded or paid) has been administered in all material
respects in compliance with its terms and in both form and operation is in
compliance with applicable provisions of ERISA, the Code, the Consolidated
Omnibus Budget Reconciliation Act of 1986 and regulations thereunder, and other
applicable law. Each Pension Plan listed in Schedule 6.12 has been determined by
the Internal Revenue Service to be qualified under Section 401(a) and, if
applicable, Section 401(k) of the Code, and nothing has occurred or been omitted
since the date of the last such determination that resulted or could result in
the revocation of such determination. Seller and the Affiliates have made all
required contributions or payments to or under each plan or arrangement listed
in Schedule 6.12 on a timely basis and have made adequate provision for reserves
to meet contributions and
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<PAGE>
payments under such plans or arrangements that have not been made because they
are not yet due.
(3) The consummation of this Agreement (and the employment by Buyer
of former employees of Seller or any employees of an Affiliate) will not result
in any carryover liability to Buyer for taxes, penalties, interest or any other
claims resulting from any employee benefit plan (as defined in Section 3(3) of
ERISA) or Other Plan. In addition, Seller and each Affiliate make the following
representations (i) as to all of their Pension Plans: (A) neither Seller nor any
Affiliate has become liable to the PBGC under ERISA under which a lien could
attach to the assets of Seller or an Affiliate; (B) Seller and each Affiliate
has not ceased operations at a facility so as to become subject to the
provisions of Section 4062(e) of ERISA; and (C) Seller and each Affiliate has
not made a complete or partial withdrawal from a multiemployer plan (as defined
in Section 3(37) of ERISA) so as to incur withdrawal liability as defined in
Section 4201 of ERISA, and (ii) all group health plans maintained by the Seller
and each Affiliate have been operated in material compliance with Section
4980B(f) of the Code.
(4) The parties agree that Buyer does not and will not assume the
sponsorship of, or the responsibility for contributions to, or any liability in
connection with, any Pension Plan, any Welfare Plan, or Other Plan maintained by
Seller or an Affiliate for its employees, former employees, retirees, their
beneficiaries or any other person. In addition and not as a limitation of the
foregoing, the parties agree that Seller and such Affiliate shall be liable for
any continuation coverage (including any penalties, excise taxes or interest
resulting from the failure to provide continuation coverage) required by Section
4980B of the Code due to qualifying events that occur after the Closing Date
resulting from the transaction contemplated by this Agreement.
6.13. Real Property. Seller has good, valid and marketable fee title to
-------------
the real property described in Schedule 6.13 (hereinafter "Real Property") which
is used as the WKJS Transmitter Site and except as shown on Schedule 6.13, all
improvements are free and clear of all mortgages, liens, claims encumbrances,
leases, title exceptions and rights of others. Except as listed on Schedule
6.13, all of the improvements, and all heating and air conditioning equipment,
plumbing, electrical and other mechanical facilities, and the roof, walls and
other structural components which are part of, or located in, such improvements,
are in good operating condition and repair, comply in all material respects with
applicable zoning laws and the building, health, fire and environmental
protection codes of all applicable governmental jurisdictions, and do not
require any repairs other than normal routing maintenance to maintain them in
good condition and repair. None of the improvements have any structural
defects. No portion of the Real Property described in Schedule 6.13 is the
subject of any condemnation or eminent domain proceedings currently instituted
or pending, and to the Knowledge of Seller, no such proceedings are threatened.
There are no condemnation, zoning or other land use regulations proceedings
instituted or, to the Knowledge of Seller, planned to be instituted, which would
materially affect the use and operations of the Real Property for any lawful
purpose, and Seller has not received notice of any special assessment
proceedings materially affecting the Real Property. The Real Property has
direct and unobstructed access to all public utilities necessary for the uses to
which the Real Property is currently devoted by Seller in the operation of the
Stations.
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6.14. Environmental Protection. Except as set forth on Schedule 6.14,
------------------------
(i) no Hazardous Substances have been treated, stored, used, released or
disposed of on the Studio Site or the WKJS Transmitter Site or WSOJ Transmitter
Site in any manner that would cause Buyer to incur material liability under any
Environmental Laws; (ii) Seller is not liable for cleanup or response costs with
respect to any present or past emission, discharge, or release of any Hazardous
Substances; (iii) no "underground storage tank" (as that term is defined in
regulations promulgated by the federal Environmental Protection Agency) is used
in the operation of the Stations or is located on the Studio Site or the WKJS
Transmitter Site or WSOJ Transmitter Site; (iv) there are no pending actions,
suits, claims, legal proceedings or any other proceedings based on environmental
conditions or noncompliance at the Studio Site or the WKJS Transmitter Site or
WSOJ Transmitter Site, or any part thereof, or otherwise arising from Seller's
activities involving Hazardous Substances; (v) there are no conditions,
facilities, procedures or any other facts or circumstances at the Studio Site or
the WKJS Transmitter Site or WSOJ Transmitter Site which constitute
noncompliance with environmental laws or regulations; and (vi) there are no
structures, improvements, equipment, activities, fixtures or facilities at the
Studio Site or the WKJS Transmitter Site or WSOJ Transmitter Site which are
constructed with, use or otherwise contain Hazardous Substances, including, but
without limitation, asbestos or polychlorinated biphenyls.
6.15. Compliance with Law. There is no outstanding complaint, citation,
-------------------
or notice issued by any Governmental Authority asserting that Seller is in
violation of any law, regulation, rule, ordinance, order, decree or other
material requirement of any Governmental Authority (including any applicable
statutes, ordinances or codes relating to zoning and land use, health and
sanitation, environmental protection, occupational safety and the use of
electric power) affecting the Purchased Assets or the business or operations of
the Stations, and Seller is in material compliance with all such laws,
regulations, rules, ordinances, decrees, orders and requirements. Without
limiting the foregoing:
(a) The Stations' transmitting and studio equipment is in material
respects operating in accordance with the terms and conditions of the FCC
Licenses, all underlying construction permits, and the rules, regulations,
practices and policies of the Commission, including all requirements concerning
equipment authorization and human exposure to radio frequency radiation.
(b) Seller has, in the conduct of the Stations' business, materially
complied with all applicable laws, rules and regulations relating to the
employment of labor, including those concerning wages, hours, equal employment
opportunity, collective bargaining, pension and welfare benefit plans, and the
payment of Social Security and similar taxes, and Seller is not liable for any
arrears of wages or any tax penalties due to any failure to comply with any of
the foregoing.
(c) All ownership reports, employment reports, tax returns and other
material documents required to be filed by Seller with the Commission or other
Governmental Authority have been filed; such reports and filings are accurate
and complete in all material respects; such
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items as are required to be placed in the Stations' local public records files
have been placed in such files; all proofs of performance and measurements that
are required to be made by Seller with respect to the Stations' transmission
facilities have been completed and filed at the Stations; and all information
contained in the foregoing documents is true, complete and accurate.
(d) The location of the Stations' main studio(s) complies with the
FCC's rules.
(e) Seller has paid to the Commission the regulatory fees due for
the Stations for the years 1994-98.
6.16. Litigation. Except for proceedings affecting radio broadcasters
----------
generally and except as set forth on Schedule 6.3, there is no litigation,
complaint, investigation, suit, claim, action or proceeding pending, or to the
Knowledge of Seller, threatened before or by the Commission, any other
Governmental Authority, or any arbitrator or other person or entity relating to
the business or operations of the Stations or to the Purchased Assets. Except
as set forth on Schedule 6.3, there is no other litigation, action, suit,
complaint, claim, investigation or proceeding pending, or to the Knowledge of
Seller, threatened that may give rise to any claim against any of the Purchased
Assets or adversely affect Seller's ability to consummate the Transaction as
provided herein. Seller is not aware of any facts that could reasonably result
in any such proceedings.
6.17. Insolvency Proceedings. No insolvency proceedings of any
----------------------
character, including bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, affecting Seller, the
Stations' Assets or the Purchased Assets are pending or, to the Knowledge of
Seller, threatened. Seller has not made an assignment for the benefit of
creditors.
6.18. Sales Agreements. The Sales Agreements in existence on the date
----------------
hereof have been entered into in the ordinary course of the Stations' business,
at rates consistent with Seller's usual past practices and each Sales Agreement
is for a term no longer than 10 weeks or, if longer, is terminable by the
Stations upon not more than 15 days notice.
6.19. Liabilities. There are no known liabilities or obligations of
-----------
Seller relating to the Stations, whether related to tax or non-tax matters, due
or not yet due, except as and to the extent set forth on the most recent
Financial Statements described in Section 6.10.
6.20. Sufficiency of Assets. The Purchased Assets in conjunction with
---------------------
the leases referred to in Section 2.1(i) are and, on the Closing Date will be,
sufficient to conduct the operation and business of the Stations in the manner
in which it is currently being conducted.
6.21. Related Parties. Except as disclosed in Schedule 6.21 neither
---------------
Seller nor any shareholder, officer or director of Seller has any interest
whatsoever in any corporation, firm, partnership or other business enterprise
which has had any business transactions with Seller
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relating to the Purchased Assets or the Stations, and no shareholder, officer or
director of Seller has entered into any transactions with Seller relating to the
Purchased Assets or the Stations.
6.22. Taxes. The Seller has timely filed with all appropriate
-----
Governmental Authority all federal, state, commonwealth, local, and other tax or
information returns and tax reports (including, but not limited to, all income
tax, unemployment compensation, social security, payroll, sales and use, profit,
excise, privilege, occupation, property, ad valorem, franchise, license, school
and any other tax under the laws of the United States or of any state or any
commonwealth or any municipal entity or of any political subdivision with valid
taxing authority) due for all periods ended on or before the date hereof.
Seller has paid in full all federal, state, commonwealth, foreign, local and
other governmental taxes, estimated taxes, interest, penalties, assessments and
deficiencies (collectively, "Taxes") which have become due pursuant to such
returns or without returns or pursuant to any assessments received by Seller.
Such returns and forms are true, correct and complete in all material respects,
and Seller has no liability for any Taxes in excess of the Taxes shown on such
returns. Seller is not a party to any pending action or proceeding and, to the
Knowledge of Seller, there is no action or proceeding threatened by any
Governmental Authority against Seller for assessment or collection of any Taxes,
and no unresolved claim for assessment or collection of any Taxes has been
asserted against Seller.
6.23. No Misleading Statements. No provision of this Agreement relating
------------------------
to Seller, the Stations or the Purchased Assets or any other document, Schedule,
Exhibit or other information furnished by Seller to Buyer in connection with the
execution, delivery and performance of this Agreement, or the consummation of
the transactions contemplated hereby, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated in order to make the statement, in light of the
circumstances in which it is made, not misleading. In connection with the
preparation of this Agreement and the documents, descriptions, opinions,
certificates, Exhibits, Schedules or written material prepared by Seller and
appended hereto or delivered or to be delivered hereunder, Seller represents and
warrants that it has disclosed, and agrees it will continue to disclose to
Buyer, any fact that Seller is obligated to disclose to assure the continuing
accuracy of the representations and warranties contained in this Section 6. All
Exhibits and Schedules attached hereto are materially accurate and complete as
of the date hereof.
7.0 BUYER'S REPRESENTATIONS, WARRANTIES AND COVENANTS. Buyer hereby makes to
-------------------------------------------------
and for the benefit of Seller, the following representations, warranties and
covenants:
7.1. Existence and Power. Buyer is a corporation duly organized,
-------------------
validly existing and in good standing under the laws of the State of Delaware,
with full corporate power and authority to assume and perform this Agreement,
and as of the Closing Date will be authorized to do business in the State of
Virginia.
7.2. Binding Effect. The execution, delivery and performance by Buyer
--------------
of this Agreement, and each other document, agreement and instrument to be
executed and delivered by
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Buyer in connection with this Agreement (collectively, the "Buyer Documents")
has been or will be duly authorized by all necessary corporate action, and
copies of those authorizing resolutions, certified by Buyer's Secretary shall be
delivered to Seller at Closing. This Agreement has been, and each of the Buyer
Documents will be, duly and validly executed and delivered by Buyer to Seller
and constitutes a legal, valid and binding obligation of Buyer, enforceable in
accordance with its terms, subject to bankruptcy, reorganization, fraudulent
conveyance, insolvency, moratorium and similar laws relating to or affecting
creditors' and other obligees' rights generally and the exercise of judicial
discretion in accordance with general equitable principles.
7.3. No Violation. None of (i) the execution, delivery and performance
------------
by Buyer of this Agreement or any of the Buyer Documents, (ii) the consummation
of the Transaction, or (iii) Buyer's compliance with the terms and conditions
hereof will, with or without the giving of notice or the lapse of time or both,
conflict with, breach the terms or conditions of, constitute a default under, or
violate (x) Buyer's articles of incorporation or by-laws or (y) any judgment,
decree, order, consent agreement, lease or other instrument to which Buyer is a
party or by which Buyer is legally bound.
7.4. Litigation. There is no litigation, action, suit, complaint,
----------
proceeding or investigation, pending or, to the Knowledge of Buyer, threatened
that may adversely affect Buyer's ability to consummate the Transaction as
provided herein.
7.5. Licensee Qualifications. To the Knowledge of Buyer there is no
-----------------------
fact that would, under the rules and regulations of the Commission, disqualify
Buyer from being the assignee of the FCC Licenses or the owner and operator of
the Stations. Should Buyer become aware of any such fact, it will so inform
Seller, and Buyer will use commercially reasonable efforts to remove any such
disqualification.
8.0 PRE-CLOSING OBLIGATIONS. The parties covenant and agree as follows with
-----------------------
respect to the period prior to Closing:
8.1. Application for Commission Consent. Within five (5) business days
----------------------------------
from the date of this Agreement, Seller and Buyer shall join in and file the
Assignment Application, and they shall diligently take all steps necessary or
desirable and proper expeditiously to prosecute the Assignment Application and
to obtain the Commission's determination that grant of the Assignment
Application will serve the public interest, convenience and necessity. The
failure by either party to timely file or diligently prosecute its portion of
the Assignment Application shall be deemed a material breach of this Agreement.
Each party shall promptly provide the other with a copy of any pleading, order
or other document served on the other relating to the Assignment Application.
In the event that Closing occurs prior to a Final Order, then each party's
obligations hereunder shall survive the Closing.
8.2. Access. Between the date hereof and the Closing Date, Seller shall
------
give Buyer and representatives of Buyer reasonable access to the Purchased
Assets, the Stations, the employees of Seller and the Stations and the books and
records of Seller relating to the business and operations of the Stations. It
is expressly understood that, pursuant to this Section, Buyer, at
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its expense, shall be entitled to conduct such engineering inspections of the
Stations, such environmental assessments and surveys of the WKJS Transmitter
Site and WSOJ Transmitter Site, and such reviews of the Stations' financial
records as Buyer may desire, so long as the same do not unreasonably interfere
with Seller's operation of the Stations. No inspection or investigation made by
or on behalf of Buyer, or Buyer's failure to make any inspection or
investigation, shall affect Seller's representations, warranties and covenants
hereunder or be deemed to constitute a waiver of any of those representations,
warranties and covenants.
8.3. Material Adverse changes; Financial Statements. Through the Closing
-----------------------------------------------
Date:
(a) Seller shall promptly notify Buyer of any event of which Seller
obtains knowledge which has caused or is likely to cause a material adverse
change to the financial condition or operation of the Stations.
(b) Seller shall furnish to Buyer (i) monthly Financial Statements for
Seller and (ii) such other reports as Buyer may reasonably request relating to
Seller. Each of the Financial Statements delivered pursuant to this Section
8.3(b) shall be prepared in accordance with GAAP consistently applied during the
periods covered (except as disclosed therein).
8.4. Operations Prior to Closing. Between the date of this Agreement
---------------------------
and the Closing Date:
(a) Seller shall operate the Stations in a manner consistent with
Seller's and the Stations' past practice and in compliance with all applicable
laws, regulations, rules, decrees, ordinances, orders and requirements of the
Commission and all other Governmental Authority. Seller shall promptly notify
Buyer of any actions or proceedings that from the date hereof are commenced
against Seller or the Stations or, to the Knowledge of Seller, against any
officer, director, employee, consultant, agent or other representative of Seller
with respect to the business of the Stations or the Purchased Assets.
(b) Seller shall: (i) use the Purchased Assets only for the operation
of the Stations; (ii) maintain the Purchased Assets in substantially their
present condition (reasonable wear and tear in normal use and damage due to
unavoidable casualty excepted); (iii) replace and/or repair the Purchased Assets
as necessary in the ordinary course of business; (iv) maintain all inventories
of supplies, tubes and spare parts at levels at least equivalent to those
existing on the date of this Agreement; and (v) promptly give Buyer written
notice of any unusual or materially adverse developments with respect to the
Purchased Assets or the business or operations of the Stations.
(c) Seller shall maintain the Stations' Business Records and Financial
Statements in the usual, regular and ordinary manner, on a basis consistent with
prior periods.
(d) Seller shall not: (i) sell, lease, encumber or otherwise dispose
of any Purchased Assets or any interest therein except in the ordinary course of
business and only if any property disposed of is replaced by property of like or
better value, quality and utility prior to
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Closing; (ii) cancel, terminate, modify, amend or renew any of the Contracts
without Buyer's express prior written consent; (iii) increase the compensation
payable or to become payable to any employee of the Stations; or (iv) except to
the extent expressly permitted in Section 2.1(c), enter into any Contract or
other agreement, undertaking or obligation or assume any liability that may
impose any obligation on Buyer after Closing, whether Seller is acting within or
outside of the ordinary course of the Stations' business, without Buyer's prior
written consent.
(e) Seller and the Stations will enter into Sales Agreements only in
the ordinary course of the Stations' business at commercially reasonable rates
and each such Sales Agreements shall have a term not longer than 10 weeks or, if
longer, shall be terminable by the Stations upon not more than 15 days notice.
(f) Seller and the Stations will enter into Trade Agreements only in
the ordinary course of the Stations' business and only if such Trade Agreements
are (i) immediately preemptible for cash time sales trade; (ii) require the
provision of air time only on a "run of schedule", basis; and (iii) inure or
will inure to the benefit of the Stations.
(g) Seller shall use its best efforts to preserve the operations,
organization and reputation of the Stations intact, by continuing to make
expenditures and engage in activities designed to promote the Stations and
encourage the purchase of advertising time on the Stations in a manner
consistent with Seller's past practices. Seller shall use its best efforts to
preserve the goodwill and business of the Stations' advertisers, suppliers and
others having business relations with the Stations, and to continue to conduct
financial operations of the Stations, including credit and collection policies,
with no less effort, as in the prior conduct of the business of the Stations.
(h) Seller shall not issue, sell or deliver any shares of stock of
Seller or grant any options, warrants or other rights to acquire the stock of
Seller.
(i) Seller shall not make or agree to any material amendment to any
FCC License relating to the Stations.
(j) except as required by law, adopt any profit-sharing, bonus,
deferred compensation, insurance, pension, retirement, severance or other
employee benefit plan, payment or arrangement or enter into any employment,
consulting or management contract.
(k) merge or consolidate with any other corporation, acquire control
of any other corporation or business entity, or take any steps incident to, or
in furtherance of, any of such actions, whether by entering into an agreement
providing therefore or otherwise.
(l) solicit, either directly or indirectly, initiate, encourage or
accept any offer for the purchase or acquisition of the Purchased Assets by any
party other than Buyer.
(m) terminate without comparable replacement or fail to renew any
insurance coverage applicable to the assets or properties of Seller.
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(n) take any action or fail to take any action that would cause the
Seller to breach the representations, warranties and covenants contained in this
Agreement.
8.5. Damage.
------
(a) Risk of Loss. The risk of loss or damage, confiscation or
condemnation of the Purchased Assets shall be borne by Seller at all times prior
to Closing. In the event of material loss or damage, Seller shall promptly
notify Buyer thereof and use its best efforts to repair, replace or restore the
lost or damaged property to its former condition as soon as possible. If the
cost of repairing, replacing or restoring any lost or damaged property is Twenty
Five Thousand Dollars ($25,000) or less, and Seller has not repaired, replaced
or restored such property prior to the Closing Date, Closing shall occur as
scheduled and Buyer may deduct from the Purchase Price paid at Closing the
amount necessary to restore the lost or damaged property to its former
condition. If the cost to repair, replace, or restore the lost or damaged
property exceeds Twenty Five Thousand Dollars ($25,000), and Seller has not
repaired, replaced or restored such property prior to the Closing Date to the
satisfaction of Buyer, Buyer may, at its option:
(1) elect to consummate the Closing in which event Buyer may
deduct from the Purchase Price paid at Closing the amount necessary to restore
the lost or damaged property to its former condition in which event Seller shall
be entitled to all proceeds under any applicable insurance policies with respect
to such claim; or
(2) elect to postpone the Closing, with prior consent of the
Commission if necessary, for such reasonable period of time (not to exceed
ninety (90) days) as is necessary for Seller to repair, replace or restore the
lost or damaged property to its former condition.
If, after the expiration of such extension period the lost or damaged
property has not been fully repaired, replaced or restored to Buyer's
satisfaction, Buyer may terminate this Agreement, in which event the Initial
Escrow Deposit and all interest earned thereon shall be returned to Buyer and
the parties shall be released and discharged from any further obligation
hereunder.
(b) Failure of Broadcast Transmissions . Seller shall give prompt
written notice to Buyer if any of the following (a "Specified Event") shall
occur and continue for a period of more than four (4) consecutive hours: (i) the
transmission of the regular broadcast programming of either of the Stations in
the normal and usual manner is interrupted or discontinued; or (ii) either of
the Stations is operated at less than its licensed antenna height above average
terrain or at less than eighty percent (80%) of its licensed effective radiated
power. If, prior to Closing, either of the Stations is not operated at its
licensed operating parameters for more than thirty-six (36) hours (or, in the
event of force majeure or utility failure affecting generally the market served
----- -------
by the Stations, ninety-six (96) hours), whether or not consecutive, during any
period of thirty (30) consecutive days, or if there are three (3) or more
Specified Events each lasting more than four (4) consecutive hours, then Buyer
may, at its option: (i)
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terminate this Agreement, or (ii) proceed in the manner set forth in Paragraph
8.5(a)(1) or 8.5(a)(2). In the event of termination of this Agreement by Buyer
pursuant to this Section, the Initial Escrow Deposit together with all interest
accrued thereon shall be returned to Buyer and the parties shall be released and
discharged from any further obligation hereunder.
(c) Resolution of Disagreements . If the parties are unable to
agree upon the extent of any loss or damage, the cost to repair, replace or
restore any lost or damaged property, the adequacy of any repair, replacement,
or restoration of any lost or damaged property, or any other matter arising
under this Section, the disagreement shall be referred promptly to a qualified
consulting communications engineer mutually acceptable to Seller and Buyer who
is a member of the Association of Federal Communications Consulting Engineers,
whose decision shall be final, and whose fees and expenses shall be paid one-
half each by Seller and Buyer.
8.6. Administrative Violations. If Seller receives any finding, order,
-------------------------
complaint, citation or notice prior to Closing which states that any aspect of
either of the Stations' operations violates or may violate any rule, regulation
or order of the Commission or of any other Governmental Authority (an
"Administrative Violation"), including, any rule, regulation or order concerning
environmental protection, the employment of labor or equal employment
opportunity, Seller shall promptly notify Buyer of the Administrative Violation,
use its best efforts to remove or correct the Administrative Violation, and be
responsible prior to Closing for the payment of all costs associated therewith,
including any fines or back pay that may be assessed.
8.7. Bulk Sales Act. Seller shall be responsible for compliance with
--------------
the provisions of any bulk sales statute applicable to the Transaction, and
shall indemnify and hold Buyer harmless from and against any claims, actions,
liabilities and all costs and expenses, including reasonable legal fees,
incurred or suffered by Buyer as a result of the failure to comply with any such
statute.
8.8. Control of Stations. The Transaction shall not be consummated
-------------------
until after the Commission has given its written consent thereto and between the
date of this Agreement and the Closing Date, Seller shall control, supervise and
direct the operation of the Stations.
8.9. Cooperation with Respect to Financial and Tax Matters. Between the
-----------------------------------------------------
date hereof and the Closing Date, Seller, its shareholders, officers, directors
and employees shall cooperate and Seller shall cause its independent accounting
firm to cooperate with Buyer for the purpose of preparing Financial Statements
reviewed by Buyer's independent accountants for purposes of including such
statements in any reports filed by Buyer with any Governmental Authority. Buyer
shall be permitted to disclose the audited Financial Statements for 1995, 1996,
1997 and 1998 as well as unaudited Financial Statements for any period
subsequent to 1998 available prior to Closing in any reports filed by the Buyer
with any Governmental Authority.
8.10. Closing Obligations. Seller and Buyer shall make commercially
-------------------
reasonable efforts to satisfy the conditions precedent to Closing.
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8.11. Title Insurance and Surveys. Buyer will obtain with respect to each
---------------------------
parcel of Real Property described in Schedule 6.13 which is used as the WKJS
Transmitter Site and WSOJ Transmitter Site (i) within forty-five (45) days of
the date of the execution of this Agreement, an owner's policy by a title
insurer reasonably satisfactory to Seller, in an amount equal to the fair market
value of such Real Property (including all improvements located thereon),
insuring Buyer's fee simple title to such Real Property as of the Closing
without defects in title, together with such endorsements for zoning,
continuity, public access and extended coverage as Buyer or its lender may
reasonably request and (ii) a current survey of each parcel of Real Property
certified to Buyer and its lender, prepared by a licensed surveyor and
conforming to current ALTA Minimum Detail Requirements for Land Title Surveys,
disclosing the location of all improvements, easements, party walls, sidewalks,
roadways, utility lines, and other matters shown customarily on such surveys,
and showing access affirmatively to public streets and roads ("Survey") which
shall not disclose any survey defect or encroachment from or onto any of the
Real Property which has not been cured or insured over prior to the Closing.
Buyer shall pay the cost of such title policies and Survey.
8.12. Environmental Assessment. Within forty-five (45) days after filing
------------------------
the Assignment Application, Buyer may commence, at its expense, a Phase I and
Phase II Environmental Assessment of the Real Property. Seller agrees to
cooperate with Buyer and such firm in performing such Environmental Assessment.
Buyer shall provide a copy of such Environmental Assessment to Seller but such
delivery shall not relieve Seller of any obligation with respect to any
representation, warranty or covenant in this Agreement or waive any condition to
Buyer's obligations under this Agreement.
9.0 STATUS OF EMPLOYEES.
-------------------
9.1. Employment Relationship. All Station employees shall be and remain
-----------------------
Seller's employees, with Seller having full authority and control over their
actions, and Buyer shall not assume the status of an employer or a joint
employer of, or incur or be subject to any liability or obligation of an
employer with respect to, any such employees unless and until actually hired by
Buyer. Seller shall be solely responsible for any and all liabilities and
obligations Seller may have to its employees, including, compensation, severance
pay and accrued vacation time and sick leave. Seller shall be solely responsible
for any and all liabilities, penalties, fines or other sanctions that may be
assessed or otherwise due under such laws on account of the Transaction and the
dismissal or termination of any of Seller's employees.
9.2. Buyer's Right to Employ. Seller consents to Buyer discussing with
-----------------------
the Stations' employees, at any time after ten (10) business days from the
execution of this Agreement the possibility of their employment by Buyer.
Seller agrees and acknowledges, however, that Buyer is under no obligation to
offer employment to any of those employees.
10.0 CONDITIONS PRECEDENT.
--------------------
10.1. Mutual Conditions. The respective obligations of both Buyer and
-----------------
Seller to consummate the Transaction are subject to the satisfaction of each of
the following conditions:
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(a) Approval of Assignment Application. The Commission shall have
granted the Assignment Application, and such grant shall be in full force and
effect on the Closing Date.
(b) Absence of Litigation. As of the Closing Date, no litigation,
action, suit or proceeding enjoining, restraining or prohibiting the
consummation of the Transaction shall be pending before any court, the
Commission or any other Governmental Authority or arbitrator; provided, however,
-------- -------
that this Section may not be invoked by a party if any such litigation, action,
suit or proceeding was solicited or encouraged by, or instituted as a result of
any act or omission of, such party.
(c) Hart-Scott-Rodino. All applicable waiting periods under the
-----------------
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired.
(d) Noncompetition Agreement. On the Closing Date, the Seller shall
------------------------
cause each of its shareholders, officers and directors other than Larry D. Jones
to execute a Noncompetition Agreement with the Buyer in the form of Exhibit 2,
including covenants not to compete with the Buyer in the Richmond or Petersburg
markets, for a period of five (5) years, except that continued ownership and
operation of Station WREJ(AM), Richmond, Virginia, will be permitted.
10.2. Additional Conditions to Buyer's Obligation. In addition to the
-------------------------------------------
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Buyer to consummate the Transaction is subject, at Buyer's option, to the
satisfaction or waiver by Buyer of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Seller to Buyer shall be true, complete, and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(b) Compliance with Conditions. All of the terms, conditions and
covenants to be complied with or performed by Seller on or before the Closing
Date under this Agreement and the Seller Documents shall have been duly complied
with and performed in all material respects.
(c) Discharge of Liens. Seller shall have obtained and delivered
to Buyer, at Seller's expense, at least 10 days prior to Closing, a report
prepared by C.T. Corporation System (or similar firm reasonably acceptable to
Buyer) showing the results of searches of lien, tax, judgment and litigation
records, demonstrating that the Purchased Assets are being conveyed to Buyer
free and clear of all liens, security interests and encumbrances except for
Permitted Encumbrances or otherwise consented to by Buyer in writing. The
record searches described in the report shall have taken place no more than 15
days prior to the Closing Date. Subject to using a portion of the Purchase
Price for payment of all Indebtedness of the Seller, Seller shall have no
Indebtedness and Buyer shall have received a certificate, dated the Closing
Date, and
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signed by the President of the Seller to the effect that the Seller has no such
Indebtedness. In particular, Seller shall have discharged that certain
Consolidated, Amended and Restated Promissory Note dated January 6, 1999, in the
principal amount of $5,000,000 delivered to NationsBank N.A. and secured by deed
of trust dated January 7, 1998 on approximately 100 acres, Nottaway County,
Virginia, and Security Agreement dated January 7, 1998 encumbering all personal
property and intellectual property of FM 100, Inc. and the Installment Note in
the original principal amount of $17,150.00 delivered to Consolidated Bank &
Trust Company and secured by a first lien on the 1995 Chevrolet Van. Buyer shall
also have received such releases and UCC termination statements as it may
reasonably request in connection with the discharge of any such Indebtedness.
(d) Third-Party Consents. - Seller shall have obtained (i) all
required third-party consents to Buyer's assumption of the Material Contracts,
such that Buyer will, after Closing, enjoy all the rights and privileges of
Seller under the Material Contracts subject only to the same obligations as are
binding on Seller pursuant to the Material Contracts' current terms; and (ii)
all other requisite third-party consents and approvals which may be necessary to
consummate the Transaction.
(e) Estoppel Certificates. At Closing, Seller shall deliver to
Buyer a certificate executed by the other party to each Material Contract, dated
no more than 15 days prior to the Closing Date, stating (i) that such Contract
is in full force and effect and has not been amended or modified; (ii) the date
to which all rent and/or other payments due thereunder have been paid; and (iii)
that Seller is not in breach or default under such Material Contract, and that
no event has occurred that, with notice or the passage of time or both, would
constitute a breach or default thereunder by Seller.
(f) No Material Adverse Change. Neither the Stations nor the
Purchased Assets shall have suffered a material adverse change since the date of
this Agreement, and there shall have been no changes since the date of this
Agreement in the business, operations, condition (financial or otherwise),
properties, assets or liabilities of Seller, of the Stations or of the Purchased
Assets, except changes contemplated by this Agreement and changes which are not
(either individually or in the aggregate) materially adverse to the Stations.
(g) Opinion of Seller's Counsel. At Closing, Seller shall deliver to
Buyer the written opinion or opinions of Seller's counsel, dated the Closing
Date, in scope and form satisfactory to Buyer, to the following effect:
(1) Seller is a corporation duly organized, validly existing and
in good standing under the laws of the Commonwealth of Virginia and licensed to
do business in the Commonwealth of Virginia, with all requisite corporate power
and authority to enter into and perform this Agreement.
(2) This Agreement has been duly executed and delivered by
Seller and such action has been duly authorized by all necessary corporate
action. This Agreement constitutes the legal, valid, and binding obligation of
Seller, enforceable against Seller in
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accordance with its terms subject to bankruptcy, reorganization, fraudulent
conveyance, insolvency, moratorium and similar laws relating to or affecting
creditors' and other obligees' rights generally and the exercise of judicial
discretion in accordance with general equitable principles.
(3) None of (i) the execution and delivery of this Agreement, (ii)
the consummation of the Transaction, or (iii) compliance with the terms and
conditions of this Agreement will, with or without the giving of notice or lapse
of time or both, conflict with, breach the terms and conditions of, constitute a
default under, or violate Seller's articles of incorporation or bylaws, any law,
rule, regulation or other requirement of any Governmental Authority, or any
judgment, decree, order, agreement, lease or other instrument to which Seller is
a party or by which Seller, the Stations or any of the Seller's assets,
including the Purchased Assets, may be bound or affected.
(4) To such counsel's knowledge, based on a search of court dockets
as shall be reasonably satisfactory to Buyer's counsel, no suit, action, claim
or proceeding is pending or threatened that questions or may affect the validity
of any action to be taken by Seller pursuant to this Agreement or that seeks to
enjoin, restrain or prohibit Seller from carrying out the Transaction.
(5) To such counsel's knowledge, based on a search of court dockets
as shall be reasonably satisfactory to Buyer's counsel, there is no outstanding
judgment, or any suit, action, claim or proceeding pending, threatened or deemed
by Seller's counsel to be probable of assertion, or any governmental proceeding
or investigation in progress (other than proceedings affecting radio
broadcasters generally) that could reasonably be expected to have an adverse
effect upon the Purchased Assets or upon the business or operations of the
Stations after Closing.
(6) Seller is the authorized legal holder of the FCC Licenses, the
FCC Licenses are in full force and effect, and the FCC Licenses are not the
subject of any pending license renewal application. The FCC Licenses set forth
on Schedule 6.5 constitute all FCC licenses and authorizations issued in
connection with the operation of the Stations and are the only such licenses and
authorizations required for the operation of the Stations, as currently
operated. There are no applications pending before the Commission with respect
to the Stations.
(7) The Commission has consented to the assignment of the FCC
Licenses to Buyer and that consent has become a Final Order, unless the
requirement for a Final Order is waived by Buyer.
(8) To the best of such counsel's knowledge, there is no Commission
investigation, notice of apparent liability or order of forfeiture, pending or
outstanding against the Stations, or any complaint, petition to deny or
proceeding against or involving the Stations pending before the Commission.
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The foregoing opinions shall be for the benefit of and may be relied on by
Buyer and Buyer's lenders. In rendering such opinions, Seller's counsel may
rely upon such corporate records of Seller and such certificates of public
officials and officers of Seller.
(h) Final Order . The Commission's action granting the Assignment
Application shall have become a Final Order.
(i) Financial Statements. The financial information set forth in the
Stations' Financial Statements for the years ending December 31, 1997 and
December 31, 1998, and for the period ending thirty (30) days prior to the
Closing Date fairly and accurately reflect the financial performance and results
of operation of the Stations for those periods.
(j) Trade Balance. The Trade Balance, if negative, will not exceed
Five Thousand Dollars ($5,000).
(k) Compensation. Seller shall have satisfied all amounts due
employees for compensation, whether pursuant to the terms of a written agreement
or otherwise, including bonuses, vacation and sick pay and reimbursement of
expenses, that have accrued as of the Closing.
(l) Studio Site Lease. Seller shall cause Fifteen Forty Broadcasting
Corporation, the owner of the Studio Site, to have entered into a written lease
with Buyer for the use of the real property described in Section 6.13 for a one
(1) year period from the date of Closing at no charge.
(m) WSOJ Transmitter Site Lease. Seller, shall have obtained all
necessary consents for Buyer to assume the WSOJ Transmitter Site Lease with a
termination date no earlier than October 31, 2002 .
(n) Environmental Remediation. Seller shall have cured, to Buyer's
reasonable satisfaction, any deficiency identified in the Environmental
Assessment, provided that in no event shall Seller be required to affect any
-------- ----
cure except to the extent any Hazardous Substances would give rise to liability
under Environmental Law as they apply to the present use of the Real Property,
and provided further that Seller shall not be required to expend more than Fifty
-------- ------- ----
Thousand Dollars ($50,000) to cure such deficiency.
(o) Closing Documents. At the Closing Seller shall deliver to
Buyer (i) such assignments, bills of sale, special warranty deeds and other
instruments of conveyance as are necessary to vest in Buyer title to the
Purchased Assets, all of which documents shall be dated as of the Closing Date,
duly executed by Seller and in form reasonably acceptable to Buyer; (ii) a
certificate, dated the Closing Date, executed by Seller's President certifying
as to those matters set forth in Section 10.2(a) and (b); and (iii) copies of
Seller's corporate resolutions authorizing the Transaction, each certified as to
accuracy and completeness by Seller's Secretary.
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10.3. Additional Conditions to Seller's Obligation. In addition to
--------------------------------------------
satisfaction of the mutual conditions contained in Section 10.1, the obligation
of Seller to consummate the Transaction is subject, at Seller's option, to the
satisfaction or waiver by Seller of each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Buyer to Seller shall be true, complete and correct in all
material respects as of the Closing Date with the same force and effect as if
then made.
(b) Compliance with Conditions. All of the terms, conditions and
covenants to be complied with or performed by Buyer on or before the Closing
Date under this Agreement shall have been duly complied with and performed in
all material respects.
(c) Assumption of Liabilities. Buyer shall assume and agree to
pay, perform and discharge Seller's obligations under the Contracts, Sales
Agreements and Trade Agreements to the extent Buyer has expressly agreed to
assume such obligations pursuant to Section 4.4.
(d) Payment. Buyer shall pay Seller the Purchase Price due at
Closing, as provided in Section 4.2.
(e) Closing Documents. Buyer shall deliver to Seller at the
Closing (i) copies of Buyer's corporate resolutions authorizing the Transaction
certified as to accuracy and completeness by Buyer's Secretary; and (ii) a
certificate, dated the Closing Date, executed by Buyer's President certifying as
to those matters set forth in Section 10.3(a) and (b).
11.0. CLOSING. The Closing Date shall be on or before the tenth day after the
-------
date on which the Commission grant of the Assignment Application becomes a Final
Order, or, at Buyer's option, if finality is waived, within fifteen (15) days
after grant of the Assignment Application or such other time as Seller and Buyer
shall mutually agree. Closing shall take place at 10:00 a.m. on the Closing
Date at the offices of Buyer's counsel, Kirkland & Ellis, 655 15th Street, NW,
Suite 1200, Washington, D.C. 20005.
12.0. PRORATIONS.
----------
12.1. Apportionment of Expenses. Seller shall be responsible for all
-------------------------
expenses arising out of the business of the Stations until 11:59 p.m. on the
Closing Date, and Buyer shall be responsible for all expenses arising out of the
business of the Stations after 11:59 p.m. on the Closing Date to the extent such
expenses relate to liabilities assumed by Buyer pursuant to Section 4.4. All
overlapping expenses shall be prorated or reimbursed, as the case may be, as of
11:59 p.m. on the Closing Date.
12.2. Determination and Payment. Prorations shall be made, insofar as
-------------------------
feasible, at Closing and shall be paid by way of adjustment to the Purchase
Price. As to the prorations that cannot be made at Closing, the parties shall,
within ninety (90) days after the Closing Date, make and pay all such
prorations. If the parties are unable to agree upon all such prorations within
that
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90-day period, then any disputed items shall be referred to a firm of
independent certified public accountants, mutually acceptable to Seller and
Buyer, whose decision shall be final, and whose fees and expenses shall be
allocated between and paid by Seller and Buyer, respectively, to the extent that
such party does not prevail on the disputed matters decided by the accountants.
13.0. POST-CLOSING OBLIGATIONS. The parties covenant and agree as follows
------------------------
with respect to the period subsequent to Closing:
13.1. Liabilities. Following the Closing Date, Seller shall pay
-----------
promptly when due all of the debts and liabilities of Seller relating to the
Stations, other than liabilities specifically assumed by Buyer hereunder.
13.2. Indemnification.
---------------
(a) Buyer's Right to Indemnification. Seller hereby indemnifies
and holds Buyer, its officers, directors, shareholders and assigns harmless from
and against (i) any breach, misrepresentation, or violation of any of Seller's
representations, warranties, covenants, or other obligations contained in this
Agreement or in any Seller Document; (ii) all obligations and liabilities of
Seller and/or the Stations not expressly assumed by Buyer pursuant to Section
4.4; and (iii) all claims by third parties (including employees) against Buyer
attributable to the operation of the Stations and/or the use or ownership of the
Purchased Assets prior to Closing. This indemnity is intended by Seller to
cover all actions, suits, proceedings, claims, demands, assessments,
adjustments, interest, penalties, costs and expenses (including, reasonable fees
and expenses of counsel), whether suit is instituted or not and, if instituted,
whether at the trial or appellate level, with respect to any and all of the
specific matters set forth in this indemnity.
(b) Seller's Right to Indemnification. Buyer hereby indemnifies
and holds Seller, its officers, directors, shareholders and assigns harmless
from and against (i) any breach, misrepresentation or violation of any of
Buyer's representations, warranties, covenants or obligations contained in this
Agreement; (ii) all obligations and liabilities expressly assumed by Buyer
hereunder pursuant to Section 4.4; and (iii) all claims by third parties against
Seller attributable to Buyer's operation of the Stations after Closing. This
indemnity is intended by Buyer to cover all actions, suits, proceedings, claims,
demands, assessments, adjustments, interest, penalties, costs and expenses
(including reasonable fees and expenses of counsel), whether suit is instituted
or not and, if instituted, whether at the trial or appellate level, with respect
to any and all of the specific matters set forth in this indemnity.
(c) Procedure for Indemnification. The procedure for
indemnification shall be as follows:
(1) The party claiming indemnification (the "Claimant") shall
give written notice to the party from which indemnification is sought (the
"Indemnitor") promptly after the Claimant learns of any claim or proceeding
covered by the foregoing agreements to indemnify and hold harmless and failure
to provide prompt notice shall not be deemed to
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<PAGE>
jeopardize Claimant's right to demand indemnification, provided, that,
-------- ----
Indemnitor is not prejudiced by the delay in receiving notice.
(2) With respect to claims between the parties, following
receipt of notice from the Claimant of a claim, the Indemnitor shall have 15
days to make any investigation of the claim that the Indemnitor deems necessary
or desirable, or such lesser time if a 15-day period would jeopardize any rights
of Claimant to oppose or protest the claim. For the purpose of this
investigation, the Claimant agrees to make available to the Indemnitor and its
authorized representatives the information relied upon by the Claimant to
substantiate the claim. If the Claimant and the Indemnitor cannot agree as to
the validity and amount of the claim within the 15-day period, or lesser period
if required by this section (or any mutually agreed upon extension hereof) the
Claimant may seek appropriate legal remedies.
(3) The Indemnitor shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense of such claim,
provided, that, Indemnitor acknowledges in writing to Claimant that Indemnitor
- -------- ----
would assume responsibility for and demonstrates its financial ability to
satisfy the claim should the party asserting the claim prevail. In the event
that the Indemnitor shall not satisfy the requirements of the preceding sentence
or shall elect not to undertake such defense, or within 15 days after notice of
any such claim from the Claimant shall fail to defend, the Claimant shall have
the right to undertake the defense, compromise or settlement of such claim, by
counsel or other representatives of its own choosing, on behalf of and for the
account and risk of the Indemnitor. Anything in this Section 13.2(c)(3) to the
contrary notwithstanding, (i) if there is a reasonable probability that a claim
may materially and adversely affect the Claimant other than as a result of money
damages or other money payments, the Claimant shall have the right, at its own
cost and expense, to participate in the defense, compromise or settlement of the
claim, (ii) the Indemnitor shall not, without the Claimant's written consent,
settle or compromise any claim or consent to entry of any judgment which does
not include as an unconditional term thereof the giving by the plaintiff to the
Claimant of a release from all liability in respect of such claim, and (iii) in
the event that the Indemnitor undertakes defense of any claim consistent with
this Section, the Claimant, by counsel or other representative of its own
choosing and at its sole cost and expense, shall have the right to consult with
the Indemnitor and its counsel or other representatives concerning such claim
and the Indemnitor and the Claimant and their respective counsel or other
representatives shall cooperate with respect to such claim.
(d) Assignment of Claims. If any payment is made pursuant to this
Section 13.2, the Indemnitor shall be subrogated to the extent of such payment
to all of the rights of recovery of Claimant, and Claimant shall assign to
Indemnitor, for its use and benefit, any and all claims, causes of actions, and
demands of whatever kind and nature that Claimant may have against the person,
firm, corporation or entity giving rise to the loss for which payment was made.
Claimant agrees to reasonably cooperate in any efforts by Indemnitor to recover
such loss from any person, firm, corporation or entity.
(e) Indemnification Not Sole Remedy. The right to indemnification
provided for in this Section shall not be the exclusive remedy of either party
in connection with
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<PAGE>
any breach by the other party of its representations, warranties, covenants or
other obligations hereunder, nor shall such indemnification be deemed to
prejudice or operate as a waiver of any right or remedy to which either party
may otherwise be entitled as a result of any such breach by the other party.
(f) Threshold Concerning Sections 13.2(a) and (b). Notwithstanding
anything to the contrary in Sections 13.2(a) and (b), the parties shall not be
entitled to indemnity under Sections 13.2(a) and (b) unless the aggregate loss
indemnified against thereunder exceeds $25,000 (in which case, the Claimant
shall be entitled to recovery from the Indemnitor of the full amount of the
loss).
13.3 Cooperation with Respect to Financial and Tax Matters. From the date
------------------------------------------------------
of Closing and for a period of three (3) years thereafter, Seller shall provide
Buyer with such cooperation and information as Buyer shall reasonably request in
Buyer's: (i) analysis and review of the Financial Statements or (ii) preparation
of documentation to fulfill any reporting requirements of Buyer including
reports that may be filed with the Securities and Exchange Commission. Seller
shall make its independent accounting firm available, the cost of said firm to
be paid by the Buyer, and the information relied upon by that firm, including
its opinions and Financial Statements for the Seller, to provide explanations of
any documents or information provided hereunder and to permit disclosure by
Buyer, including disclosure to any Governmental Authority.
14. DEFAULT AND REMEDIES.
--------------------
14.1. Opportunity to Cure. If either party believes the other to be in
-------------------
breach or in default hereunder, the former party shall provide the other with
written notice specifying in reasonable detail the nature of such default. If
the default has not been cured by the earlier of: (i) the Closing Date, or (ii)
within 10 days after delivery of that notice (or such additional reasonable time
as the circumstances may warrant provided the party in default undertakes
diligent, good faith efforts to cure the default within such 10-day period and
continues such efforts thereafter), then the party giving such notice may
exercise the remedies available to such party pursuant to this Section, subject
to the right of the other party to contest the alleged default through
appropriate proceedings.
14.2. Seller's Remedies. Buyer recognizes that if the Transaction is
-----------------
not consummated as a result of Buyer's breach or default, Seller would be
entitled to compensation, the extent of which is extremely difficult and
impractical to ascertain. To avoid this problem, the parties agree that if the
Transaction is not consummated due to the breach or default of Buyer, Seller,
provided that Seller is not in breach or default and has otherwise complied with
its obligations under this Agreement, shall be entitled to the Initial Escrow
Deposit, with interest earned thereon. The parties agree that this sum shall
constitute liquidated damages and shall be in lieu of any other relief to which
Seller might otherwise be entitled due to Buyer's failure to consummate the
Transaction as a result of a breach or default by Buyer.
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<PAGE>
14.3. Buyer's Remedies. Seller agrees that the Purchased Assets include
----------------
unique property that cannot be readily obtained on the open market and that
Buyer will be irreparably injured if this Agreement is not specifically
enforced. Therefore, Buyer shall have the right specifically to enforce
Seller's performance under this Agreement, and Seller agrees (i) to waive the
defense in any such suit that Buyer has an adequate remedy at law and (ii) to
interpose no opposition, legal or otherwise, as to the propriety of specific
performance as a remedy. If Buyer elects to terminate this Agreement as a
result of Seller's breach or default instead of seeking specific performance,
Buyer shall be entitled to the return of the Initial Escrow Deposit together
with all interest earned thereon, and in addition thereto, to initiate a suit
for damages.
15.0. TERMINATION OF AGREEMENT.
------------------------
15.1. Failure to Close. This Agreement may be terminated at the option
----------------
of either party upon written notice to the other if the Commission has not
granted the Assignment Application within nine (9) months after the Commission
accepts the Assignment Application for filing or may be terminated by Buyer if
the Commission's action granting the Assignment Application has not become a
Final Order within twelve (12) months after the Commission accepts the
Assignment Application for filing; provided, however, that a party may not
-------- -------
terminate this Agreement if such party is in default hereunder, or if a delay in
any decision or determination by the Commission respecting the Assignment
Application has been caused or materially contributed to (i) by any failure of
such party to furnish, file or make available to the Commission information
within its control; (ii) by the willful furnishing by such party of incorrect,
inaccurate or incomplete information to the Commission; or (iii) by any other
action taken by such party for the purpose of delaying the Commission's decision
or determination respecting the Assignment Application. This Agreement may also
be terminated upon the mutual agreement of Buyer and Seller. In the event of
termination pursuant to this Section, the Initial Escrow Deposit, together with
all interest earned thereon, shall be returned to Buyer and the parties shall be
released and discharged from any further obligation hereunder unless the failure
to consummate the Transaction is attributable to Buyer's default, and Seller is
not in default and has otherwise complied with its obligations under this
Agreement, in which case the Initial Escrow Deposit plus interest earned thereon
shall be released to Seller as liquidated damages pursuant to Section 14.2.
15.2. Designation for Hearing. The time for approval provided in
-----------------------
Section 15.1 notwithstanding, either party may terminate this Agreement upon
written notice to the other, if, for any reason, the Assignment Application is
designated for hearing by the Commission, provided, however, that written notice
-------- -------
of termination must be given within 10 days after release of the hearing
designation order and that the party giving such notice is not in default and
has otherwise complied with its obligations under this Agreement. Upon
termination pursuant to this Section, the Initial Escrow Deposit together with
all interest earned thereon shall be returned to Buyer and the parties shall be
released and discharged from any further obligation hereunder, provided,
--------
however, that if the designation for hearing is predicated upon breach by either
- -------
party of a representation, warranty or covenant contained in this Agreement, the
nonbreaching party may, in addition to termination, pursue the remedies
available to such non-breaching party provided in Sections 14.2 and 14.3.
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<PAGE>
15.3. Environmental Remediation. By either Buyer or Seller if the
-------------------------
Environmental Assessment shows the presence of conditions that must be cured or
removed and such remediation will cost in excess of Fifty Thousand Dollars
($50,000) ("Threshold Amount") and Seller declines to pay for remediation in
excess of the Threshold Amount, provided that neither Buyer nor Seller will be
-------- ----
entitled to terminate this Agreement pursuant to this Section 15.3 if Buyer
elects to pay for remediation in excess of the Threshold Amount and such excess
payment does not reduce the Purchase Price.
16. GENERAL PROVISIONS.
------------------
16.1. Brokerage. Seller and Buyer represent to each other that neither
---------
party has dealt with a broker in connection with the Transaction, except that
Seller has retained Media Services Group, Inc. No finders fee is due to any
person or entity in connection with the Transaction except for Media Services
Group, Inc. and such fee as it relates to the Purchase Price shall be paid by
Buyer at Closing. In addition, Seller shall pay the brokerage fee of 1.5%, due
Media Services Group, Inc. on the additional contingent consideration described
in Section 4.3 above on the same date that such additional contingent
consideration, if any, is paid to Seller.
16.2. Fees. All Commission filing fees for the Assignment Application
----
and other similar charges shall be paid one-half by Seller and one-half by
Buyer. With respect to costs associated with the purchase of the Real Property,
Seller shall bear the cost of preparation of the deed and the grantors tax.
Buyer shall pay all other settlement costs associated with the closing on the
purchase of the Real Property. Taxes shall be prorated as of the date of
Settlement on the Real Property. Except as otherwise provided herein, all other
expenses incurred in connection with this Agreement or the Transaction shall be
paid by the party incurring those expenses whether or not the Transaction is
consummated.
16.3. Notices. All notices, requests, demands and other communications
-------
pertaining to this Agreement shall be in writing and shall be deemed duly given
when (i) delivered personally (which shall include delivery by Federal Express
or other recognized overnight courier service that issues a receipt or other
confirmation of delivery) to the party for whom such communication is intended,
(ii) delivered by facsimile transmission or (iii) three business days after the
date mailed by certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Seller:
Dr. Walton M. Belle
President
FM-100, Inc.
6001 Wilkinson Road
Richmond, VA 23227
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<PAGE>
with a copy (which shall not constitute notice) to:
Richard C. Lawrence, Esquire
Meyer, Goergen & Marrs
1301 North Hamilton
Suite 208
Richmond, Virginia 23230-3959
If to Buyer:
Mr. Alfred C. Liggins, President
Radio One, Inc.
5900 Princess Garden Parkway
8th Floor
Lanham, MD 20706
Fax: (301) 306-9694
with copies (which shall not constitute notice) to:
Linda J. Eckard, Esquire
Radio One, Inc.
5900 Princess Garden Parkway
8th Floor
Lanham, MD 20706
Fax: (301) 306-9638
Mr. Scott Royster
Executive Vice President
Radio One, Inc.
5900 Princess Garden Parkway
8th Floor
Lanham, MD 20706
Fax: (301) 306-9426
Either party may change its address for notices by written notice to the other
given pursuant to this Section. Any notice purportedly given by a means other
than as set forth in this Section shall be deemed ineffective.
16.4. Assignment. Neither party may assign this Agreement without the
----------
other party's express prior written consent, provided, however, Buyer may assign
-------- -------
its rights and obligations
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<PAGE>
pursuant to this Agreement without Seller's consent prior to closing to (i) an
entity which is a subsidiary or parent of Buyer or to an entity owned or
controlled by Buyer or its principals or (ii) to Buyer's lenders as collateral
for any indebtedness incurred by Buyer; and subsequent to closing to (x) any
entity which acquires all or substantially all of the Purchased Assets or (y) to
Buyer's lenders as collateral for any indebtedness incurred by Buyer. Subject to
the foregoing, this Agreement shall be binding on, inure to the benefit of, and
be enforceable by the original parties hereto and their respective successors
and permitted assignees.
16.5. Exclusive Dealings. For so long as this Agreement remains in
------------------
effect, neither Seller nor any person acting on Seller's behalf shall, directly
or indirectly, solicit or initiate any offer from, or conduct any negotiations
with, any person or entity concerning the acquisition of all or any interest in
any of the Purchased Assets or the Stations, other than Buyer or Buyer's
permitted assignees.
16.6. Third Parties. Nothing in this Agreement, whether express or
-------------
implied, is intended to: (i) confer any rights or remedies on any person other
than Seller, Buyer and their respective successors and permitted assignees; (ii)
relieve or discharge the obligations or liability of any third party; or (iii)
give any third party any right of subrogation or action against either Seller or
Buyer.
16.7. Indulgences. Unless otherwise specifically agreed in writing to
-----------
the contrary: (i) the failure of either party at any time to require performance
by the other of any provision of this Agreement shall not affect such party's
right thereafter to enforce the same; (ii) no waiver by either party of any
default by the other shall be taken or held to be a waiver by such party of any
other preceding or subsequent default; and (iii) no extension of time granted by
either party for the performance of any obligation or act by the other party
shall be deemed to be an extension of time for the performance of any other
obligation or act hereunder.
16.8. Survival of Representations and Warranties. The
---------------------------------------------
representations, warranties, and indemnification obligations of the parties
contained herein shall survive for eighteen (18) months after the Closing Date
except that claims properly asserted within the eighteen (18) month period shall
survive until finally and fully resolved; provided, however, that Seller's
-------- -------
representations and warranties in Sections 6.2, 6.3, 6.4, 6.5, 6.6, 6.10, 6.12,
6.13 and 6.21 and Buyer's indemnification rights with respect thereto and with
respect to Section 13.2(a)(ii) shall survive the Closing until the end of the
applicable statute of limitations period.
16.9. Prior Negotiations. This Agreement supersedes in all respects all
------------------
prior and contemporaneous oral and written negotiations, understandings and
agreements between the parties with respect to the subject matter hereof. All
of such prior and contemporaneous negotiations, understandings and agreements
are merged herein and superseded hereby.
16.10. Exhibits and Schedules. The Exhibits and Schedules attached hereto
----------------------
or referred to herein are a material part of this Agreement, as if set forth in
full herein.
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<PAGE>
16.11. Entire Agreement; Amendment. This Agreement, the Exhibits and
---------------------------
Schedules to this Agreement set forth the entire understanding between the
parties in connection with the Transaction, and there are no terms, conditions,
warranties or representations other than those contained, referred to or
provided for herein and therein. Neither this Agreement nor any term or
provision hereof may be altered or amended in any manner except by an instrument
in writing signed by each of the parties hereto.
16.12. Counsel/Interpretation. Each party has been represented by its own
----------------------
counsel in connection with the negotiation and preparation of this Agreement.
This Agreement shall be fairly interpreted in accordance with its terms and, in
the event of any ambiguities, no inferences shall be drawn against either party.
16.13. Governing Law, Jurisdiction. This Agreement shall be governed by,
---------------------------
and construed and enforced in accordance with the laws of the State of Maryland
without regard to the choice of law rules utilized in that jurisdiction. Buyer
and Seller each (a) hereby irrevocably submit to the jurisdiction of the courts
of that state and (b) hereby waive, and agree not to assert, by way of motion,
as a defense, or otherwise, in any such suit, action or proceeding, any claim
that it is not subject personally to the jurisdiction of the above-named courts,
that its property is exempt or immune from attachment or execution, that the
suit, action or proceeding is brought in an inconvenient forum, that the venue
of the suit, action or proceeding is improper or that this Agreement or the
subject matter hereof may not be enforced in or by such court. Buyer and Seller
each hereby consent to service of process by registered mail at the address to
which notices are to be given. Each of Buyer and Seller agrees that its
submission to jurisdiction and its consent to service of process by mail is made
for the express benefit of the other party hereto. Final judgment against Buyer
or Seller in any such action, suit or proceeding may be enforced in other
jurisdictions by suit, action or proceeding on the judgment, or in any other
manner provided by or pursuant to the laws of such other jurisdiction; provided,
--------
however, that any party may at its option bring suit, or institute other
- -------
judicial proceedings, in any state or federal court of the United States or of
any country or place where the other party or its assets, may be found.
16.14. Severability. If any term of this Agreement is illegal or
------------
unenforceable at law or in equity, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired thereby. Any illegal or unenforceable term shall be deemed to be void
and of no force and effect only to the minimum extent necessary to bring such
term within the provisions of applicable law and such term, as so modified, and
the balance of this Agreement shall then be fully enforceable.
16.15. Counterparts. This Agreement may be signed in any number of
------------
counterparts with the same effect as if the signature on each such counterpart
were on the same instrument. Each fully executed set of counterparts shall be
deemed to be an original, and all of the signed counterparts together shall be
deemed to be one and the same instrument.
16.16. Further Assurances. Seller shall at any time and from time to time
------------------
after the Closing execute and deliver to Buyer such further conveyances,
assignments and other written assurances as Buyer may request to vest and
confirm in Buyer (or its assignee) the title and rights to and in all the
Purchased Assets to be and intended to be transferred, assigned and conveyed
hereunder.
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<PAGE>
IN WITNESS WHEREOF, and to evidence their assent to the foregoing, Seller
and Buyer have executed this Asset Purchase Agreement under seal as of the date
first written above.
SELLER:
FM100, INC.
By: /s/ Walton M. Belle
---------------------
Dr. Walton M. Belle
President
BUYER:
RADIO ONE, INC.
By: /s/ Alfred C. Liggins
----------------------
Alfred C. Liggins
President
-38-
<PAGE>
EXHIBIT 10.47
SECOND AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT
THIS AMENDMENT (this "Amendment") is executed to be effective as of
----------
November 23, 1998 (the "Effective Date") among ALTA SUBORDINATED DEBT PARTNERS
--------------
III, L.P., BANCBOSTON INVESTMENTS INC., GRANT M. WILSON, SYNCOM CAPITAL
CORPORATION, ALLIANCE ENTERPRISE CORPORATION, ALFRED C. LIGGINS, III, as
successor in interest to Greater Philadelphia Venture Capital Corporation, Inc.,
OPPORTUNITY CAPITAL CORPORATION, MEDALLION CAPITAL, INC., TSG VENTURES L.P. and
FULCRUM VENTURE CAPITAL CORPORATION (collectively, the "Investors"), RADIO ONE,
INC. (the "Company") and RADIO ONE LICENSES, INC., a subsidiary of the Company,
and ALFRED C. LIGGINS, CATHERINE L. HUGHES and JERRY A. MOORE III (the
"Management Stockholders"), with reference to that certain Preferred
-----------------------
Stockholders' Agreement (as amended, supplemented and otherwise modified from
time to time, the "Agreement") entered into as of May 14, 1997 by and among
----------
the Investors, the Company, and the Management Shareholders. Capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to them
in the Agreement.
R E C I T A L S:
- - - - - - - -
WHEREAS, the Agreement imposes certain affirmative and negative covenants on
the Company;
WHEREAS, after reviewing certain information provided by the Company
concerning performance during 1998 and expected expenditures, the Investors are
willing to amend the Agreement to provide for modifications to the covenants
subject to performance and observance in full of each of the covenants,
conditions and other terms set forth below.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
Section 1. AMENDMENTS TO AGREEMENT
Subject to the terms and conditions set forth herein, and in reliance upon the
representations of the Company herein contained, the Agreement is hereby amended
as follows:
(a) Section 4.2 of the Agreement is hereby amended by substituting the
number "$2,850,000" for the number "$1,935,000".
(b) Section 4.3 of the Agreement is hereby deleted in its entirety and is
replaced with the following:
Except for those capital expenditures described on Appendix A hereto, the
----------
Company will not make, incur, assume or otherwise become liable for Capital
Expenditures in excess of $300,000 for any fiscal period, except that the
amount shall be $2,100,000 for fiscal year 1998; provided, however, that if
--------- -------
the Company does not incur Capital Expenditures in an aggregate amount of
$300,000 during any fiscal year period, the Company may add such
- 1 -
<PAGE>
unused portion of permitted Capital Expenditures to the amount of the Capital
Expenditure allotment for the following fiscal year period.
(c) Section 5.9(a) of the Agreement is hereby deleted in its entirety and
is replaced with the following:
(a) ensure that meetings of the Board of Directors of the Company are held
at least four (4) times each year (provided that the number may be reduced to
three (3) for fiscal year 1998) at intervals of not more than four (4) months
(provided that the interval requirement shall not apply to fiscal year 1998)
and that annual meetings (the "Annual Meetings") of the stockholders of the
Company be held each year within 180 days of the Company's fiscal year end;
Section 2. REPRESENTATIONS AND WARRANTIES.
In order to induce the Investors to enter into this Amendment, Company
represents and warrants to the Investors that the representations and warranties
contained in Section 2 of the Agreement are true, correct and complete in all
---------
material respects on and as of the date hereof to the same extent as though made
on and as of such date, except for changes that were consented to in writing by
the Investors and except as disclosed on Attachment A hereto.
Section 3. MISCELLANEOUS
(a) Ratification and Confirmation of Agreement. Except as specifically
amended hereby, the Agreement shall remain in full force and effect and is
hereby ratified and confirmed, and the execution, delivery and performance of
this Amendment shall not, except as expressly provided herein, operate as an
amendment of any provision of the Agreement or as a waiver of any right, power
or remedy of the Investors under the Agreement. Without limiting the generality
of the foregoing, the amendments set forth in Section 1 above shall be limited
---------
precisely as set forth above, and nothing in this Amendment shall be deemed
(i) to constitute a waiver of compliance by the Company with respect to any
other provision or condition of the Agreement or (ii) to prejudice any right or
remedy that the Investors may now have or may have in the future under or in
connection with the Agreement.
(b) Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(c) Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
- 2 -
<PAGE>
(d) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
- 3 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
RADIO ONE, INC.
/s/ Alfred C. Liggins, III
By:_____________________________________
Name: Alfred C. Liggins, III
Title: President
RADIO ONE LICENSES, INC.
/s/ Alfred C. Liggins, III
By:_____________________________________
Name: Alfred C. Liggins, III
Title: President
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt Management III,
L.P., its General Partner
/s/ Brian W. McNeill
By:_____________________________________
Name: Brian W. McNeill
Title: General Partner
BANCBOSTON INVESTMENTS INC.
/s/ Lars A. Swanson
By:_____________________________________
Name: Lars A. Swanson
Title: Assistant Vice President
GRANT WILSON
/s/ Grant M. Wilson
________________________________________
Name: Grant M. Wilson
Title: Individual
- 4 -
<PAGE>
SYNCOM CAPITAL CORPORATION
/s/ Terry L. Jones
By:_____________________________________
Name: Terry L. Jones
Title:
ALLIANCE ENTERPRISE CORPORATION
/s/ Divakar Kamath
By:_____________________________________
Name: Divakar Kamath
Title: Executive Vice President
ALFRED C. LIGGINS, III
/s/ Alfred C. Liggins, III
By:_____________________________________
Name: Alfred C. Liggins, III
Title: Individual
OPPORTUNITY CAPITAL CORPORATION
/s/ J. Peter Thompson
By:_____________________________________
Name: J. Peter Thompson
Title: President
MEDALLION CAPITAL, INC.
/s/ Dean Pickerell
By:_____________________________________
Name: Dean Pickerell
Title: President
TSG VENTURES L.P.
By: TSGVI Associates, Inc., its General
Partner
/s/ Duane Hill
By:_____________________________________
Name: Duane Hill
Title: President
- 5 -
<PAGE>
FULCRUM VENTURE CAPITAL CORPORATION
/s/ Brian Argrett
By:_____________________________________
Name: Brian Argrett
Title: President
MANAGEMENT STOCKHOLDERS
/s/ Alfred C. Liggins, III
____________________________________
Alfred C. Liggins, III, individually
/s/ Catherine L. Hughes
____________________________________
Catherine L. Hughes, individually
/s/ Jerry A. Moore III
____________________________________
Jerry A. Moore III, individually
- 6 -
<PAGE>
EXHIBIT 10.48
THIRD AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT
This THIRD AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT (this
"Amendment"), dated as of December 23, 1998, by and among the investors listed
as Series A Investors on Schedule A hereto (the "Series A Preferred Investors"),
the investors listed as Series B Investors on Schedule B hereto (the "Series B
Preferred Investors"), Radio One, Inc., a Delaware corporation (the "Company"),
Radio One Licenses, Inc., a Delaware corporation ("ROL"), and Alfred C. Liggins
("Liggins"), Catherine L. Hughes ("Hughes") and Jerry A. Moore III ("Moore")
(Liggins, Hughes and Moore are hereinafter collectively referred to as the
"Management Stockholders," and together with the Company and ROL as the
"Interested Parties," and each an "Interested Party").
WHEREAS, the Series A Preferred Investors, the Series B Preferred
Investors, the Company, ROL and the Management Stockholders entered into a
Preferred Stockholders' Agreement (the "Amended Original Agreement") dated as of
May 14, 1997, as amended by that certain First Amendment, dated as of June 30,
1998, and that certain Second Amendment, dated as of November 23, 1998; and
WHEREAS, in connection with the closing of the transactions contemplated by
that certain Stock Purchase Agreement dated as of October 26, 1998, by and among
the Company and Syndicated Communications Venture Partners II, L.P., a Delaware
limited partnership (the "Detroit Allur Acquisition"), as to which the Investors
have previously given their consent by letter agreement dated October 2, 1998,
the Company desires to enter into a First Amendment (the "First Amendment") to
that certain Credit Agreement, dated as of June 30, 1998, by and among the
Company, Several Lenders from time to time thereto, NationsBank, N.A., and
Credit Suisse First Boston (the "CSFB Agreement"); and
WHEREAS, certain approvals, consents and amendments to the Amended Original
Agreement are required in order for the Company to enter into the First
Amendment and to take certain actions in connection therewith and in connection
with the Detroit Allur Acquisition.
NOW, THEREFORE, the parties hereto agree as follows:
1. Formation of Allur Licenses, Inc. The parties hereto hereby consent
pursuant to Section 6.4 of the Amended Original Agreement to the formation
of Allur Licenses, Inc., a Delaware corporation, for the purpose of acting
as a License Subsidiary (as such term is defined in the Amended Original
Agreement) holding the licenses, permits and authorizations required for
and/or used in the ownership and operation of the radio stations to be
acquired in the Detroit Allur Acquisition. It is understood and agreed
that, after the consummation of the Detroit Allur Acquisition, Allur
Licenses, Inc. will be wholly owned by the Company's then direct
subsidiary, Allur-Detroit, Inc.
<PAGE>
2. CSFB Agreement.
(a) The parties hereto hereby consent to the First Amendment to the CSFB
Agreement and to the incurrence of indebtedness in the maximum principal
amount of $57,500,000 on the terms and conditions contemplated by the CSFB
Agreement, together with any and all interests, fees and other charges as
contemplated thereby and documents executed in connection with such First
Amendment.
(b) The Amended Original Agreement is hereby amended to delete Section
6.1(b) thereof in its entirety and replace it with the following:
"(b) Indebtedness in a principal amount not in excess of $57,500,000
outstanding under the Credit Agreement dated as of June 30, 1998 by and
among the Company, Credit Suisse First Boston, as Agent, and the several
lenders from time to time party thereto, as such agreement may be amended,
modified, replaced, renewed or otherwise changed except as respect to the
maximum principal amount of such Indebtedness or its rate of amortization
(the "CSFB Loan Agreement") and any refinancing of the Indebtedness under
the CSFB Loan Agreement on terms substantially similar or more favorable to
the Company than the terms of the CSFB Loan Agreement, provided that such
refinancing shall not (i) increase the interest rates to a rate greater
than the rate provided for under the terms of the CSFB Loan Agreement, (ii)
materially change the rate of amortization of the CSFB Loan Agreement,
(iii) extend the maturity of the CSFB Debt beyond its current maturity or
(iv) increase the principal amount of the CSFB Debt in an amount in excess
of $57,500,000; provided, that the Borrower is not otherwise in violation
of this clause (b)."
3. Miscellaneous.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER, AND SHALL
BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS. EACH OF THE INVESTORS AND THE INTERESTED PARTIES HEREBY
REPRESENTS, WARRANTS AND AGREES THAT THE NEGOTIATION OF THIS AGREEMENT HAS
TAKEN PLACE IN THE COMMONWEALTH OF MASSACHUSETTS. EACH OF THE INTERESTED
PARTIES HEREBY ACKNOWLEDGES THAT IT HAS CAREFULLY REVIEWED AND UNDERSTANDS
THE TERMS OF THIS AGREEMENT, HAS OBTAINED AND CONSIDERED THE ADVICE OF
COUNSEL WITH RESPECT TO SUCH TERMS AND HAS HAD AN OPPORTUNITY TO FULLY
NEGOTIATE SUCH TERMS.
(b) This Amendment may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original, but all such counterparts shall together constitute one and the
same instrument. Each counterpart may consist of a number of copies of
this Amendment, each of which may be signed by less than all of the parties
hereto, but together all such copies are signed by all of the parties
hereto.
(c) This Amendment amends the Amended Original Agreement and wherever
reference is made in the Amended Original Agreement to "the Agreement" or
"this Agreement," such
2
<PAGE>
reference shall refer to the Amended Original Agreement as amended hereby.
The terms of this Amendment shall control any conflict between the Amended
Original Agreement and this Amendment. Otherwise, all other terms and
conditions of the Amended Original Agreement shall remain in full force and
effect.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
3
<PAGE>
SCHEDULE A
Syncom Capital Corporation
Alliance Enterprise Corporation
Opportunity Capital Corporation
Medallion Capital, Inc.
TSG Ventures, L.P.
Fulcrum Venture Capital Corporation
Alfred C. Liggins, III
(successor-in-interest to Greater Philadelphia Venture Capital Corporation,
Inc.)
<PAGE>
SCHEDULE B
Alta Subordinated Debt Partners III, L.P.
BancBoston Investments Inc.
Grant M. Wilson
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Third Amendment to
Preferred Stockholders' Agreement as a sealed instrument as of the day and year
first above written.
COMPANY:
-------
RADIO ONE, INC.
By: /s/ Alfred C. Liggins, III
----------------------------------
Name: Alfred C. Liggins, III
Title: President
SUBSIDIARY:
----------
RADIO ONE LICENSES, INC.
By: Alfred C. Liggins, III
----------------------------------
Name: Alfred C. Liggins, III
Title: President
[Signature Page to First Amendment to Preferred Stockholders' Agreement]
<PAGE>
SERIES B PREFERRED INVESTORS:
----------------------------
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt
Management III, L.P., its
General Partner
By: /s/ Brian W. McNeill
----------------------------------
Name: Brian W. McNeill
Title: General Partner
BANCBOSTON INVESTMENTS INC.
By: /s/ Lars A. Swanson
----------------------------------
Name: Lars A. Swanson
Title: Assistant Vice President
/s/ Grant M. Wilson
----------------------------------
Grant M. Wilson, individually
[Signature Page to First Amendment to Preferred Stockholders' Agreement]
<PAGE>
SERIES A PREFERRED INVESTORS:
----------------------------
SYNCOM CAPITAL CORPORATION
By: /s/ Terry L. Jones
----------------------------------
Name: Terry L. Jones
Title:
ALLIANCE ENTERPRISE CORPORATION
By: /s/ Divakar Kamath
----------------------------------
Name: Divakar Kamath
Title: Executive Vice President
OPPORTUNITY CAPITAL CORPORATION
By: /s/ J. Peter Thompson
----------------------------------
Name: J. Peter Thompson
Title: President
MEDALLION CAPITAL, INC.
By: /s/ Dean Pickerell
----------------------------------
Name: Dean Pickerell
Title: President
TSG VENTURES L.P.
as successor-in-interest to TSG Ventures Inc.
[Signature Page to First Amendment to Preferred Stockholders' Agreement]
<PAGE>
BY: TSGVI Associates, Inc., its General
Partner
By: /s/ Duane Hill
----------------------------------
Name: Duane Hill
Title: President
FULCRUM VENTURE CAPITAL CORPORATION
By: /s/ Brian Argrett
----------------------------------
Name: Brian Argrett
Title: President
/s/ Alfred C. Liggins, III
----------------------------------
Alfred C. Liggins, III, as successor-in-
interest to Greater Philadelphia Venture
Capital Corporation, Inc.
MANAGEMENT STOCKHOLDERS:
-----------------------
/s/ Alfred C. Liggins, III
----------------------------------
Alfred C. Liggins, III, individually
/s/ Catherine L. Hughes
----------------------------------
Catherine L. Hughes, individually
/s/ Jerry A. Moore III
----------------------------------
Jerry A. Moore III, individually
[Signature Page to First Amendment to Preferred Stockholders' Agreement]
<PAGE>
EXHIBIT 10.49
FOURTH AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT
THIS AMENDMENT (this "Amendment") is executed to be effective as of
----------
December 31, 1998 (the "Effective Date") among ALTA SUBORDINATED DEBT PARTNERS
--------------
III, L.P., BANCBOSTON INVESTMENTS INC., GRANT M. WILSON, SYNCOM CAPITAL
CORPORATION, ALLIANCE ENTERPRISE CORPORATION, ALFRED C. LIGGINS, III, as
successor in interest to Greater Philadelphia Venture Capital Corporation, Inc.,
OPPORTUNITY CAPITAL CORPORATION, MEDALLION CAPITAL, INC., TSG VENTURES L.P. and
FULCRUM VENTURE CAPITAL CORPORATION (collectively, the "Investors"), RADIO ONE,
INC. (the "Company") and RADIO ONE LICENSES, INC., a subsidiary of the Company,
and ALFRED C. LIGGINS, CATHERINE L. HUGHES and JERRY A. MOORE III (the
"Management Stockholders"), with reference to that certain Preferred
-----------------------
Stockholders' Agreement (as amended, supplemented and otherwise modified from
time to time, the "Agreement") entered into as of May 14, 1997 by and among the
---------
Investors, the Company, and the Management Shareholders. Capitalized terms used
and not otherwise defined herein shall have the meanings ascribed to them in the
Agreement.
R E C I T A L S:
- - - - - - - -
WHEREAS, the Agreement imposes certain affirmative and negative covenants on
the Company;
WHEREAS, after reviewing certain information provided by the Company
concerning performance during 1998 and expected expenditures, the Investors are
willing to amend the Agreement to provide for modifications to the covenants
subject to performance and observance in full of each of the covenants,
conditions and other terms set forth below.;
WHEREAS, pursuant to Section 12.1 of the Agreement, holders of the majority of
the outstanding shares of Preferred Stock, are permitted to make certain
amendments the Agreement;
WHEREAS, the substance of this amendment is such that the holders of a
majority of the outstanding shares of Preferred Stock are permitted to amend the
Agreement; and
WHEREAS, the undersigned Investors, Alta Subordinated Debt Partners III, L.P.
("Alta") and BancBoston Investments, Inc. ("BancBoston"), together hold a
majority of the outstanding shares of Preferred Stock.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
Section 1. AMENDMENTS TO AGREEMENT
Subject to the terms and conditions set forth herein, and in reliance upon the
representations of the Company herein contained, the Agreement is hereby amended
as follows:
(a) Section 4.3 of the Agreement is hereby deleted in its entirety and is
replaced with the following:
- 1 -
<PAGE>
Except for those capital expenditures described on Appendix A hereto, the
----------
Company will not make, incur, assume or otherwise become liable for Capital
Expenditures in excess of $300,000 for any fiscal period, except that the
amount shall be $2,300,000 for fiscal year 1998; provided, however, that if
--------- -------
the Company does not incur Capital Expenditures in an aggregate amount of
$300,000 during any fiscal year period, the Company may add such unused
portion of permitted Capital Expenditures to the amount of the Capital
Expenditure allotment for the following fiscal year period.
Section 2. REPRESENTATIONS AND WARRANTIES.
In order to induce the Investors to enter into this Amendment, Company
represents and warrants to the Investors that the representations and warranties
contained in Section 2 of the Agreement are true, correct and complete in all
---------
material respects on and as of the date hereof to the same extent as though made
on and as of such date, except for changes that were consented to in writing by
the Investors.
Section 3. MISCELLANEOUS
(a) Ratification and Confirmation of Agreement. Except as specifically
amended hereby, the Agreement shall remain in full force and effect and is
hereby ratified and confirmed, and the execution, delivery and performance of
this Amendment shall not, except as expressly provided herein, operate as an
amendment of any provision of the Agreement or as a waiver of any right, power
or remedy of the Investors under the Agreement. Without limiting the generality
of the foregoing, the amendments set forth in Section 1 above shall be limited
---------
precisely as set forth above, and nothing in this Amendment shall be deemed
(i) to constitute a waiver of compliance by the Company with respect to any
other provision or condition of the Agreement or (ii) to prejudice any right or
remedy that the Investors may now have or may have in the future under or in
connection with the Agreement.
(b) Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(c) Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(d) Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
- 2 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
RADIO ONE, INC.
By: /s/ Alfred C. Liggins, III
------------------------------
Name: Alfred C. Liggins, III
Title: President
RADIO ONE LICENSES, INC.
By: /s/ Alfred C. Liggins, III
---------------------------------
Name: Alfred C. Liggins, III
Title: President
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt Management III,
L.P., its General Partner
By: /s/ Brian W. McNeill
-----------------------------
Name: Brian W. McNeill
Title: General Partner
BANCBOSTON INVESTMENTS INC.
By: /s/ Sanford Anstey
------------------------------
Name: Sanford Anstey
Title:
- 3 -
<PAGE>
Exhibit 10.50
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
CREDIT AGREEMENT
among
RADIO ONE, INC.,
as the Borrower
NATIONSBANK, N.A.,
as Administrative Agent
FIRST UNION NATIONAL BANK
as Co-Arranger and the Syndication Agent
CREDIT SUISSE FIRST BOSTON
as the Documentation Agent
AND
THE SEVERAL LENDERS FROM TIME
TO TIME PARTIES HERETO
DATED AS OF FEBRUARY 26, 1999
- --------------------------------------------------------------------------------
NATIONSBANC MONTGOMERY SECURITIES LLC
Sole Bookrunning Manager and Co-Arranger
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
-----------------
Page
SECTION 1. CERTAIN DEFINITIONS AND TERMS................................2
1.1 Defined Terms................................................2
1.2 Other Definitional Provisions...............................37
1.3 Computation of Time Periods.................................37
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.............................38
2.1 Commitments.................................................38
2.2 Intentionally Deleted.......................................38
2.3 Procedure for Borrowing.....................................38
2.4 Repayment of Loans..........................................39
SECTION 3. LETTERS OF CREDIT...........................................40
3.1 L/C Commitment..............................................40
3.2 Procedure for Issuance of Letters of Credit.................40
3.3 Fees, Commissions and Other Charges.........................40
3.4 L/C Participations..........................................41
3.5 Reimbursement Obligation of the Borrower....................42
3.6 Obligations Absolute........................................43
3.7 Letter of Credit Payments...................................43
3.8 Application.................................................43
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS AND
LETTERS OF CREDIT..........................................44
4.1 Interest Rates and Payment Dates............................44
4.2 Optional and Mandatory Commitment Reductions
and Prepayments.............................................44
4.3 Commitment Fees, etc........................................48
4.4 Computation of Interest and Fees............................49
4.5 Conversion and Continuation Options.........................49
4.6 Minimum Amounts of Eurodollar Tranches......................50
4.7 Inability to Determine Interest Rate........................50
4.8 Pro Rata Treatment and Payments.............................51
4.9 Requirements of Law.........................................52
4.10 Taxes.......................................................53
4.11 INDEMNITY...................................................55
4.12 Change of Lending Office....................................56
i
<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES..............................56
5.1 Financial Condition.........................................56
5.2 No Change...................................................57
5.3 Existence; Compliance with Law..............................57
5.4 Power; Authorization; Enforceable Obligations...............57
5.5 No Legal Bar................................................58
5.6 No Material Litigation......................................58
5.7 No Default..................................................59
5.8 Ownership of Property; Intellectual Property................59
5.9 No Burdensome Restrictions..................................59
5.10 Taxes.......................................................59
5.11 Federal Regulations.........................................60
5.12 ERISA.......................................................60
5.13 Investment Company Act; Other Regulations...................61
5.14 Restricted Subsidiaries.....................................61
5.15 Insurance...................................................62
5.16 Authorization Matters.......................................63
5.17 Environmental Matters.......................................63
5.18 Accuracy of Information.....................................65
5.19 Security Documents..........................................65
5.20 Solvency....................................................66
5.21 Labor Matters...............................................66
5.22 Prior Names.................................................66
5.23 Chief Executive Office; Chief Place of Business.............66
5.24 Real Property; Leases.......................................67
5.25 Ownership of Stations.......................................67
5.26 Possession of Necessary Authorizations......................67
5.27 FCC, Copyright, Patent and Trademark Matters................68
5.28 License Subsidiaries........................................68
SECTION 6. CONDITIONS PRECEDENT........................................68
6.1 Conditions to Effectiveness of this Agreement...............68
6.2 Conditions to All Extensions of Credit......................74
SECTION 7. AFFIRMATIVE COVENANTS.......................................75
7.1 Financial Statements........................................75
7.2 Certificates; Other Information.............................76
7.3 Payment of Obligations......................................77
7.4 Conduct of Business and Maintenance of Existence, etc. .....77
7.5 Maintenance of Property; Insurance..........................77
7.6 Inspection of Property; Books and Records; Discussions......78
7.7 Notices.....................................................78
7.8 Environmental Laws..........................................80
ii
<PAGE>
7.9 Collateral..................................................80
7.10 Use of Proceeds.............................................82
7.11 New Restricted Subsidiaries.................................82
7.12 Taxes.......................................................82
7.13 Further Assurances..........................................82
7.14 Appraisals of Collateral....................................83
SECTION 8. NEGATIVE COVENANTS..........................................83
8.1 Financial Condition Covenants...............................83
8.2 Limitation on Indebtedness and Preferred Stock..............85
8.3 Limitation on Liens.........................................86
8.4 Limitation on Fundamental Changes...........................87
8.5 Limitation on Sale of Assets................................87
8.6 Limitation on Restricted Payments;
Other Payment Limitations...................................88
8.7 Limitation on Acquisitions..................................88
8.8 Investments.................................................89
8.9 Limitation on Transactions with Affiliates..................90
8.10 Limitation on Restrictions on Restricted
Subsidiary Distributions....................................91
8.11 Limitation on Lines of Business.............................92
8.12 Limitation on Sale or Issuance of Equity Interests..........92
8.13 Limitation on Material Agreements...........................93
8.14 Certain Intercompany Matters................................93
8.15 Preferred Stock Documents and New Preferred Stock...........93
SECTION 9. EVENTS OF DEFAULT...........................................94
SECTION 10. AGENT.......................................................98
10.1 Appointment.................................................98
10.2 Delegation of Duties........................................99
10.3 EXCULPATORY PROVISIONS......................................99
10.4 Reliance by the Administrative Agent........................99
10.5 Notice of Default..........................................100
10.6 Non-Reliance on the Administrative Agent and
the Other Lenders..........................................100
10.7 INDEMNIFICATION............................................101
10.8 The Administrative Agent in Its Individual
Capacity...................................................101
10.9 Successor Administrative Agent.............................101
10.10 Other Agents...............................................103
iii
<PAGE>
SECTION 11. MISCELLANEOUS..............................................103
11.1 Amendments and Waivers.....................................103
11.2 Notices....................................................104
11.3 No Waiver; Cumulative Remedies.............................105
11.4 Survival of Representations and Warranties.................105
11.5 Payment of Expenses and Taxes..............................105
11.6 Successors and Assigns; Participations
and Assignments............................................106
11.7 Adjustments; Set-off.......................................109
11.8 Counterparts; When Effective...............................110
11.9 Severability...............................................110
11.10 Integration................................................110
11.11 GOVERNING LAW..............................................110
11.12 Submission To Jurisdiction; Waivers........................110
11.13 Acknowledgments............................................111
11.14 WAIVERS OF JURY TRIAL......................................111
11.15 Maximum Interest Rate......................................112
11.16 Confidentiality............................................112
11.17 Agreement of Lenders.......................................113
11.18 References to Credit Agreement.............................113
11.19 FINAL AGREEMENT............................................113
iv
<PAGE>
Exhibits
- --------
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Compliance Certificate
Exhibit C - Form of Guaranty
Exhibit D - Form of Operating Agreement
Exhibit E - Form of Perfection Certificate
Exhibit F-1 - Form of Pledge Agreement [Borrower]
Exhibit F-2 - Form of Pledge Agreement [Restricted Subsidiaries]
Exhibit F-3 - Form of Pledge Agreement [Warrantholders]
Exhibit F-4 - Form of Pledge Agreement [Management Stockholders]
Exhibit F-5 - Form of Pledge Agreement [ROA Stockholders]
Exhibit G-1 - Form of Intellectual Property Security Agreement
Exhibit G-2 - Form of Security Agreement [Borrower]
Exhibit G-3 - Form of Security Agreement [Restricted Subsidiaries]
Exhibit H - Form of Note
Exhibit I - Form of Notice of Borrowing
Exhibit J - Form of Notice of Conversion/Continuation
Exhibit K - Form of Closing Certificate
Exhibit L - Form of Legal Opinion of Kirkland & Ellis
Exhibit M - Form of Legal Opinion of FCC counsel
Exhibit N - Form of Fifth Amendment to Preferred Stockholders' Agreement
Exhibit O - Form of Alternative Note
v
<PAGE>
Schedules
- ---------
Schedule 1.1A - Commitments and Addresses of Lenders
Schedule 1.1B - EBITDA Expense Add Backs
Schedule 5.1(c) - Pro Forma Financial Information, Budgets and Projections
Schedule 5.4 - Required Consents and Approvals
Schedule 5.14(a) - List of Restricted Subsidiaries and Owners of Equity
Interests
Schedule 5.14(b) - List of Shareholder and Voting Agreements, Warrants,
Restrictions on Transfer of Equity Interests
Schedule 5.22(a) - Prior Trade Names
Schedule 5.22(b) - Current Trade Names
Schedule 5.23 - Chief Executive Office; Chief Place of Business
Schedule 5.24(a) - List of Real Property Owned and Leased
Schedule 5.24(b) - List of Mortgaged Properties
Schedule 5.25 - Stations Owned
Schedule 5.27 - Patents and Trademarks
Schedule 6.1(a)(a) - Atlanta Existing Indebtedness
Schedule 8.2 - Indebtedness
Schedule 8.7 - Terms of WKJS Acquisition and WSOJ Acquisition
Schedule 8.9 - Existing Affiliate Transactions
vi
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is entered into effective
as of February 26, 1999 among Radio One, Inc., a Delaware corporation (the
"Borrower"), the several lenders from time to time parties hereto (the
--------
"Lenders") , NationsBank, N.A., as a Lender and as the administrative agent for
-------
the Lenders (in such capacity, the "Administrative Agent"), First Union National
--------------------
Bank, as a Lender and as the syndication agent for the Lenders (in such
capacity, the "Syndication Agent") and Credit Suisse First Boston as the
-----------------
documentation agent for the Lenders (in such capacity, the "Documentation
-------------
Agent").
PRELIMINARY STATEMENT
On June 30, 1998, the Borrower, Credit Suisse First Boston (as a
Lender and Agent), and NationsBank, N.A. (as a Lender and as Documentation Agent
(hereinafter defined)) entered into that certain Credit Agreement (as amended,
modified, restated, supplemented, renewed, extended, increased, rearranged,
and/or substituted from time to time), (the "Credit Agreement") providing for a
----------------
$32,500,000 revolving credit facility.
The Credit Agreement was amended by that certain First Amendment to
Credit Agreement dated as of December 23, 1998 (the "First Amendment"),
---------------
increasing the Aggregate Commitment of the Lenders under the Credit Agreement
from $32,500,000 to $57,500,000 and making certain other modifications to the
Credit Agreement, including, but not limited to, the addition of First Union
National Bank as a Lender thereto.
The Credit Agreement was subsequently amended by that certain Second
Amendment to Credit Agreement dated as of February 9, 1999 (the "Second
------
Amendment"), increasing the aggregate amount of fiscal year 1998 Capital
- ---------
Expenditures permitted under the Credit Agreement (the Credit Agreement as so
amended by the First Amendment and the Second Amendment called herein the
"Amended Credit Agreement") and making certain other modifications to the Credit
- -------------------------
Agreement.
The Borrower wishes to acquire all of the outstanding stock of Radio
One of Atlanta, Inc.
Accordingly, the Borrower has requested a $42,500,000 increase (the
"Second Increased Commitment") in the amount of the Aggregate Commitment
---------------------------
provided for in the Amended Credit Agreement.
In order to accommodate the Borrower's request for the Second
Increased Commitment to enable Borrower to consummate the Acquisitions, (i)
NationsBank, N.A. and First Union National Bank (both in their capacity as
lenders) have agreed to increase their respective Commitments under the Amended
Credit Agreement, and (ii) Administrative Agent (in its capacity as such) has
agreed to become the administrative agent for the lenders, as of the Effective
Date of this Agreement.
<PAGE>
The parties hereto desire to amend and restate the Amended Credit
Agreement with this Amended and Restated Credit Agreement in order to increase
the commitments under and make certain other modifications to the Amended Credit
Agreement.
In consideration of the premises, the mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS AND TERMS
1.1 Defined Terms. For purposes of this Agreement, the following
-------------
terms shall have the following meanings:
"ABR" means the fluctuating rate of interest per annum as shall be in
---
effect from time to time equal to the greater of (i) the rate of interest
announced publicly by the Administrative Agent from time to time as its U.S.
dollar prime commercial lending rate (which rate may or may not be the lowest
rate of interest charged by the Administrative Agent) and (ii) the sum of 0.5%
plus the Federal Funds Rate. The ABR shall be adjusted automatically as of the
opening of business on the effective date of each change in the prime commercial
lending rate or Federal Funds Rate to account for such change.
"ABR Loan" means any Loan that bears interest computed on the basis of
--------
the ABR.
"Acquisitions" has the meaning set forth in Section 8.7.
------------ -----------
"Affiliate" means, with respect to any specified Person, any other
---------
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person. For purposes of this
definition, "control of" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with") any Person means
the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise; provided that
--------
beneficial ownership of 10% or more of the voting securities of a Person shall
be deemed to be control.
"Affiliate Transaction" has the meaning set forth in Section 8.9.
--------------------- -----------
"Administrative Agent" means NationsBank, N.A., as administrative
--------------------
agent for the Lenders pursuant to this Agreement, and its successors and assigns
in such capacity as appointed pursuant to Section 10.9.
------------
"Aggregate Commitment" means the sum of all of the Commitments of all
--------------------
of the Lenders (in each case, as the same may be increased, reduced or otherwise
adjusted from time to time as provided herein).
2
<PAGE>
"Aggregate Outstandings of Credit" means, as to any Lender at any
--------------------------------
time, an amount equal to the sum of (a) the aggregate principal amount of all
Loans made by such Lender then outstanding and (b) such Lender's Specified
Percentage of the L/C Obligations then outstanding.
"Agreement" means this Amended and Restated Credit Agreement,
---------
including the Schedules and Exhibits, as the same may be amended, modified,
restated, supplemented, renewed, extended, increased, rearranged or substituted
from time to time.
"Agreement and Plan of Warrant Recapitalization" means that certain
----------------------------------------------
Agreement and Plan of Warrant Recapitalization dated as of February 25, 1999,
among the Borrower, the Investors and the Management Stockholders.
"Allied" has the meaning set forth in the definition of Allied
------
Warrant.
"Allied Note" has the meaning set forth in the definition of Allied
-----------
Warrant.
"Allied Warrant" means that certain Warrant issued by Borrower to
--------------
Allied Capital Financial Corporation ("Allied") in connection with the
------
acquisition of station WYCB-AM, Washington, D.C. by certain Unrestricted
Subsidiaries of the Borrower, to be exercised for the number of shares of 15%
Series A Senior Cumulative Redeemable Preferred Stock of the Borrower having a
liquidation value of up to Four Million Dollars ($4,000,000) but only to be
exercised upon a default under that certain promissory note in the original
principal amount of $3,750,000 (the "Allied Note") given by Broadcast Holdings,
-----------
Inc. to Allied.
"Allur Acquisition" means the acquisition by the Borrower of all of
-----------------
the outstanding Equity Interests of Allur-Detroit, Inc., a Delaware corporation,
pursuant to the terms and conditions of that certain Stock Purchase Agreement by
and between the shareholder of Allur and the Borrower, dated as of October 26,
1998.
"Alternative Note" has the meaning set forth in Section 11.6(d).
---------------- ---------------
"Alternative Noteholder" has the meaning set forth in Section
---------------------- -------
11.6(e).
"Amended and Restated Certificate of Incorporation" means that certain
-------------------------------------------------
Amended and Restated Certificate of Incorporation of Radio One, Inc. filed with
the Secretary of State of Delaware on February 25, 1999, and as further amended
or restated from time to time in accordance with the terms hereof and thereof.
"Applicable Margin" means, at the time of any determination thereof,
-----------------
for purposes of all Loans, the margin of interest over the ABR or the Eurodollar
Rate, as the case may be, which is applicable at the time of any determination
of interest rates under this Agreement, which Applicable Margin shall be subject
to adjustment (upwards or downwards, as appropriate) based on the Leverage
Ratio, as follows:
3
<PAGE>
- --------------------------------------------------------------------------------
Leverage Ratio Applicable Margin Applicable Margin for
prior to a Qualifying for ABR Loans Eurodollar Rate Loans
Public Equity Offering
- -------------------------------------------------------------------------------
Greater than 6.75 to 1.00 1.750% 2.750%
- -------------------------------------------------------------------------------
Less than or equal to 6.75 to 1.00
but greater than 6.50 to 1.00 1.500% 2.500%
- -------------------------------------------------------------------------------
Less than or equal to 6.50 to 1.00
but greater than 6.00 to 1.00 1.250% 2.250%
- -------------------------------------------------------------------------------
Less than or equal to 6.00 to 1.00
but greater than 5.50 to 1.00 1.000% 2.000%
- -------------------------------------------------------------------------------
Less than or equal to 5.50 to 1.00
but greater than 5.00 to 1.00 0.875% 1.875%
- -------------------------------------------------------------------------------
Less than or equal to 5.00 to 1.00
but greater than 4.50 to 1.00 0.625% 1.625%
- -------------------------------------------------------------------------------
Less than or equal to 4.50 to 1.00
but greater than 4.00 to 1.00 0.375% 1.375%
- -------------------------------------------------------------------------------
Less than or equal to 4.00 to 1.00 0.250% 1.250%
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Leverage Ratio Applicable Margin Applicable Margin for
after a Qualifying for ABR Loans Eurodollar Rate Loans
Public Equity Offering
- -------------------------------------------------------------------------------
Greater than 6.75 to 1.00 1.625% 2.625%
- -------------------------------------------------------------------------------
Less than or equal to 6.75 to 1.00
but greater than 6.50 to 1.00 1.375% 2.375%
- -------------------------------------------------------------------------------
Less than or equal to 6.50 to 1.00
but greater than 6.00 to 1.00 1.125% 2.125%
- -------------------------------------------------------------------------------
Less than or equal to 6.00 to 1.00
but greater than 5.50 to 1.00 1.000% 2.000%
- -------------------------------------------------------------------------------
Less than or equal to 5.50 to 1.00
but greater than 5.00 to 1.00 0.875% 1.875%
- -------------------------------------------------------------------------------
Less than or equal to 5.00 to 1.00
but greater than 4.50 to 1.00 0.625% 1.625%
- -------------------------------------------------------------------------------
Less than or equal to 4.50 to 1.00
but greater than 4.00 to 1.00 0.375% 1.375%
- -------------------------------------------------------------------------------
Less than or equal to 4.00 to 1.00 0.250% 1.250%
- -------------------------------------------------------------------------------
4
<PAGE>
For the purposes of this definition, the Applicable Margin shall be determined
as at the end of each of the first three quarterly periods of each fiscal year
of the Borrower and as at the end of each fiscal year of the Borrower, based on
the relevant financial statements delivered pursuant to Section 7.1(a) or (b)
and the Compliance Certificate delivered pursuant to Section 7.2(b); changes in
the Applicable Margin shall become effective on the date which is the earlier of
(i) two Business Days after the date the Administrative Agent receives such
financial statements and the corresponding Compliance Certificate and (ii) the
45th day after the end of each of the first three quarterly periods of each
fiscal year or the 90th day after the end of each fiscal year, as the case may
be, and shall remain in effect until the next change to be effected pursuant to
this definition; provided, that (a) until the first such financial statements
--------
and Compliance Certificate are delivered after the Effective Date, the
Applicable Margin shall be determined by reference to the Leverage Ratio set
forth in the Compliance Certificate delivered to the Administrative Agent
pursuant to Section 6.2(g), and (b) if any financial statements or the
Compliance Certificate referred to above are not delivered within the time
periods specified above, then, for the period from and including the date on
which such financial statements and Compliance Certificate are required to be
delivered to but not including the date on which such financial statements and
Compliance Certificate are delivered, the Applicable Margin as at the end of the
fiscal period that would have been covered thereby shall be deemed to be the
Applicable Margin which would be applicable when the Leverage Ratio is greater
than 6.75 to 1.00. Notwithstanding anything to the contrary contained herein,
during the fiscal quarter in which the Borrower closes its initial Public Equity
Offering, the Borrower shall have the right to resubmit to the Administrative
Agent and each Lender a new Compliance Certificate which recalculates the
"Indebtedness" component of the Leverage Ratio as of such date and, to the
extent there is a change in the Leverage Ratio reflected therein, a new
Applicable Margin for the then occurring fiscal quarter shall become effective
two Business Days after the date the Administrative Agent receives such new
Compliance Certificate and such new Applicable Margin shall remain in effect
until the next change, to be effected pursuant to this definition.
"Application" means an application, in form and substance consistent
-----------
with this Agreement and mutually satisfactory to the Borrower and the Issuing
Lender, requesting the Issuing Lender to open a Letter of Credit.
"Assignee" has the meaning set forth in Section 11.6(c).
-------- ---------------
"Assignment and Acceptance" means an Assignment and Acceptance
-------------------------
substantially in the form of Exhibit A.
---------
"Atlanta" means Radio One of Atlanta, Inc., a Delaware corporation.
-------
"Atlanta Acquisition" means the acquisition by the Borrower of all or
-------------------
substantially all of the outstanding shares of stock of Radio One of Atlanta,
Inc.
5
<PAGE>
"Atlanta Acquisition Agreement" means that certain Merger Agreement
-----------------------------
by and among Atlanta, the shareholders of Atlanta, ROA Merger Subsidiary, Inc.,
and the Borrower, dated as of March 29, 1999, as in effect on the Effective
Date.
"Atlanta Existing Indebtedness" means all Indebtedness of Atlanta or
-----------------------------
Dogwood and all Indebtedness of any Person secured by a Lien on any Equity
Interests of Atlanta or Dogwood or any property of Atlanta or Dogwood (including
without limitation that listed in the Atlanta Acquisition Agreement) not
permitted by Section 8.2, including such indebtedness arising under the
instruments listed in Schedule 6.1(a)(a) and the documents executed in
----
connection therewith.
"Atlanta Licenses" means ROA Licenses, Inc., a Delaware corporation.
----------------
"Authorizations" means all filings, recordings and registrations with,
--------------
and all validations or exemptions, approvals, orders, authorizations, consents,
Licenses, certificates and permits from, the FCC and other Governmental
Authorities.
"Available Commitment" means at any time, as to any Lender, an amount
--------------------
equal to (a) the amount of such Lender's Commitment at such time, minus (b) such
-----
Lender's Aggregate Outstandings of Credit at such time.
"Bell" means Bell Broadcasting Company, a Michigan corporation.
----
"Bell Acquisition" means the acquisition by the Borrower of all of the
----------------
outstanding Equity Interests of Bell pursuant to the terms and conditions of
that certain Stock Purchase Agreement by and among all of the shareholders of
Bell more specifically identified therein and Radio One, Inc., dated as of
December 23, 1997 (the "Bell Acquisition Agreement").
--------------------------
"Board" means the Board of Governors of the Federal Reserve System.
-----
"Borrower" has the meaning set forth in the introductory paragraph of
--------
this Agreement.
"Borrowing Date" means any Business Day (i) specified in a Notice of
--------------
Borrowing pursuant to Section 2.3 as a date on which the Borrower requests the
-----------
Lenders to make Loans hereunder or (ii) specified in an Application pursuant to
Section 3.2 as a date on which the Borrower requests the Issuing Lender to issue
- -----------
Letters of Credit hereunder.
"Broadcast Assets" means assets used or useful in the ownership or
----------------
operation of a Station.
"Budget" has the meaning set forth in Section 7.2(e).
------ --------------
"Business" has the meaning set forth in Section 5.17(c).
-------- ---------------
6
<PAGE>
"Business Day" means (a) for all purposes other than as provided in
------------
clause (b) below, any day other than a Saturday, Sunday or other day on which
commercial banks in Dallas, Texas or New York, New York are authorized or
required by law to close and (b) with respect to all notices and determinations
in connection with any borrowings in respect of Eurodollar Loans, any day that
is a Business Day described in clause (a) above and that is also a day for
trading between prime banks in the London interbank market.
"Capital Expenditure" means with respect to any Person any liability
-------------------
incurred or expenditure made (net of any casualty insurance proceeds or
condemnation awards used to replace fixed assets following a casualty event or
condemnation with respect thereto) by such Person that, in conformity with GAAP,
is required to be accounted for as a capital expenditure on the cash flow
statements of such Person; provided, however, that Capital Expenditures shall
--------
not include the consideration paid by the Borrower and/or Restricted
Subsidiaries in connection with the Atlanta Acquisition or the Dogwood
Acquisition, Permitted Acquisitions and any other Acquisitions consented to by
the Majority Lenders.
"Capital Lease Obligations" means with respect to any Person, at any
-------------------------
time any determination thereof is to be made, the amount of the liability in
respect of a capital lease that would at such time be required to be capitalized
on the consolidated balance sheet of such Person in accordance with GAAP.
"Cash Collateral Account" has the meaning set forth in Section 4.2(d).
----------------------- --------------
"Cash Equivalents" means (i) United States dollars, (ii) securities
----------------
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of less
than one year from the date of acquisition, (iii) certificates of deposit and
Eurodollar time deposits with maturities of less than one year from the date of
acquisition, bankers' acceptances with maturities of less than one year and
overnight bank deposits, in each case with any Lender party to the Credit
Agreement or with any domestic commercial bank having capital and surplus in
excess of $500,000,000 and a Keefe Bank Watch Rating of "B" or better, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (ii) and (iii) entered into with
any financial institution meeting the qualifications specified in clause (iii)
immediately above, (v) commercial paper having the highest rating obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Ratings Services and
in each case maturing within nine months after the date of acquisition and (vi)
interests in money market mutual funds which invest solely in assets in
securities of the type described in clauses (i) through (v) immediately above.
"Change of Control" means the occurrence of any of the following:
-----------------
(i) the sale, lease or transfer, in one or a series of related
transactions, of all or substantially all of the Borrower's assets to any
Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than any or all of the Principal Shareholders);
7
<PAGE>
(ii) the adoption of a plan relating to the liquidation or
dissolution of the Borrower;
(ii) prior to the initial Public Equity Offering of the Borrower
and the exercise of any of the Warrants, either (x) Hughes and Liggins
(individually or collectively) cease to be the beneficial owner (within the
meaning of rule 13d-3 promulgated under the Exchange Act) of at least 51%
of the voting power of the voting stock of the Borrower or (y) any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act)
other than the Warrantholders acquires, directly or indirectly, 35% or more
of the voting power of the voting stock of the Borrower by way of merger,
consolidation or otherwise;
(iv) prior to the initial Public Equity Offering of the Borrower
but after the exercise of the Warrants, either (x) Hughes and Liggins
(individually or collectively) cease to be the beneficial owner (within the
meaning of rule 13d-3 promulgated under the Exchange Act) of at least 40%
of the voting power of the voting stock of the Borrower or (y) any Person
or group (as such term is used in Section 13(d)(3) of the Exchange Act)
other than the Warrantholders acquires, directly or indirectly, 35% or more
of the voting power of the voting stock of the Borrower by way of merger,
consolidation or otherwise;
(v) following the initial Public Equity Offering of the Borrower,
either (1) any Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) (other than Hughes or Liggins) acquires, directly or
indirectly, 35% or more of the voting power of the voting stock of the
Borrower by way of merger or consolidation or otherwise; (2) Hughes or
Liggins cease to be the beneficial owners, individually or collectively, of
at least 35% of the voting power of the voting stock of the Borrower, (3)
the Principal Shareholders cease to be the beneficial owners, individually
or collectively, of at least 20% of the common stock of the Borrower on a
fully diluted basis or (4) Hughes and Liggins (individually or
collectively) cease to have the right to elect (and do so elect) a majority
of the board of directors of the Borrower; or
(vi) the Continuing Directors cease for any reason to constitute
a majority of the directors of the Borrower then in office.
For purposes of this definition, any transfer of an Equity Interest of an entity
that was formed for the purpose of acquiring voting stock of the Borrower shall
be deemed to be a transfer of such portion of such voting stock as corresponds
to the portion of the equity of such entity that has been so transferred.
"Charter Documents" means with respect to any Person (a) the
-----------------
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person and (b) the bylaws (or the equivalent governing
documents) of such Person.
"Closing Certificate" has the meaning set forth in Section 6.1(b).
------------------- --------------
8
<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended, and all
----
regulations promulgated and rulings issued thereunder.
"Collateral" means (a) all assets of the Borrower and the Restricted
----------
Subsidiaries (other than the Equity Interests of Unrestricted Subsidiaries) ;
(b) all common stock and voting securities or securities convertible or
exchangeable into common stock or voting securities and all warrants or options
or other securities to purchase such common stock and voting securities of the
Borrower, other than such common stock not exceeding 14.32 shares of class A
common stock of the Borrower, representing less than 15% of the shares of class
A common stock outstanding and representing less than 3.37% of the fully diluted
equity interests in the Company, which stock is or is to be issued to Allied
Capital Corporation or Allied Investment Corporation on or about March 29, 1999,
provided that a Responsible Officer of the Borrower delivers a certificate to
- --------
and in favor of the Administrative Agent and the Lenders certifying that no
Default or Event of Default then exists and is continuing, concurrent with (i)
the closing of the initial Public Equity Offering of the Borrower, (ii) the
repurchase or redemption of the Senior Preferred Stock outstanding on the
Effective Date and (iii) the exercise of all of the Warrants (outstanding on the
Effective Date) for common stock of the Borrower pursuant to the terms and
provisions of the Warrant Certificates as in effect on the Effective Date, the
liens in favor of the Administrative Agent for the benefit of the Lenders on all
such securities of the Borrower shall be released; and (c) all Equity Interests
of each of the Restricted Subsidiaries, in each case whether now owned or
hereinafter acquired.
"Commitment" means, as to any Lender, its obligation, if any, to make
----------
Loans to, and/or issue or participate in Letters of Credit issued on behalf of,
the Borrower in an aggregate amount not to exceed at any one time outstanding
the amount set forth opposite such Lender's name in Schedule 1.1A under the
-------------
heading "Commitment" or, in the case of any Lender that is an Assignee, the
amount of the assigning Lender's Commitment assigned to such Assignee pursuant
to Section 11.6(c) and set forth in the applicable Assignment and Acceptance (in
---------------
each case, as the same may be increased, reduced or otherwise adjusted from time
to time as provided herein).
"Common Equity" means the Common Stock and Non-Voting Common Stock of
-------------
the Borrower, collectively.
"Common Stock" means the voting class A common stock, par value $.01
------------
per share, of the Borrower, and the voting class B common stock, par value $.01
per share.
"Commonly Controlled Entity" means an entity, whether or not
--------------------------
incorporated, which is under common control with the Borrower within the meaning
of Section 4001 of ERISA or is part of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of the Code.
"Communications Act" means the Communications Act of 1934, as amended,
------------------
and the rules and regulations and published policies thereunder, as amended and
in effect from time to time.
9
<PAGE>
"Compliance Certificate" means a certificate of a Responsible Officer
----------------------
of the Borrower, substantially in the form of Exhibit B.
---------
"Consolidated Interest Expense" means, without duplication, with
-----------------------------
respect to any period, the sum of (a) the interest expense and all capitalized
interest of the Borrower and the Restricted Subsidiaries for such period, on a
consolidated basis, including, without limitation, (i) amortization of debt
discount (but excluding original issue discount on the Senior Subordinated Notes
and the New Exchange Debentures), (ii) the net cost under interest rate
contracts (including amortization of debt discount), (iii) the interest portion
of any deferred payment obligation and (iv) accrued interest, plus (b) the
----
interest component of any Capital Lease Obligation paid or accrued or scheduled
to be paid or accrued by the Borrower or any of the Restricted Subsidiaries
during such period, plus (c) the aggregate amount of all fees, including but not
----
limited to agency fees, letter of credit fees and commitment fees incurred by
the Borrower or any of the Restricted Subsidiaries during such period in respect
of Indebtedness, determined on a consolidated basis in accordance with GAAP;
provided, however, that any dividends with respect to the Senior Preferred Stock
- -------- -------
shall not be considered for purposes of this definition.
"Continuing Director" means any member of the Board of Directors of
-------------------
the Borrower who (i) is a member of that Board of Directors of the Borrower on
the Initial Effective Date or (ii) was nominated for election by either (a) one
or more of the Principal Shareholders or (b) the Board of Directors of the
Borrower a majority of whom were directors on the Initial Effective Date or
whose election or nomination for election was previously approved by one or more
of the Principal Shareholders or such directors.
"Contractual Obligation" of any Person means any provision of any
----------------------
security issued by such Person or subordination agreement, indenture, mortgage,
deed of trust, security agreement, lease agreement, guaranty, contract,
undertaking, instrument or other agreement to which such Person is a party or by
which it or any of its property, assets or revenues is bound or to which any of
its property, assets or revenues is subject, including, without limitation, with
respect to the Loan Parties, obligations in respect of Material Leases, LMA
Agreements, the Senior Subordinated Debt Documents, the Preferred Stock
Documents and the documents and instruments executed in connection with the
Atlanta Acquisition or the Dogwood Acquisition, and for any date after the New
Preferred Stock is issued, the New Exchange Debenture Indenture and related
documents pursuant to which the New Exchange Debentures may be issued.
"Corporate Overhead Expense" means all general and administrative
--------------------------
expenses incurred during any fiscal period which are not associated with, or
attributable to, the particular operations of one or more of the Stations and
which are properly classified as general and administrative expenses on the
Borrower's financial statements, including compensation paid to Senior
Management, insurance, rent, professional fees, travel and entertainment
expenses; notwithstanding any generally accepted accounting principles to the
contrary, Corporate Overhead Expense shall include all compensation and
distributions paid to or for the benefit of the
10
<PAGE>
Management Stockholders (other than Moore), directly or indirectly in their
respective capacity as employees of the Borrower.
"Customary Permitted Liens" means Liens on the property or assets of
-------------------------
any Person (other than Liens arising pursuant to any Environmental Law and Liens
in favor of the PBGC):
(a) with respect to the payment of Taxes, assessments or governmental
charges or levies which are not yet due or which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves are being maintained in accordance with GAAP;
(b) of landlords arising by statute and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other Liens imposed by
Law created in the ordinary course of business of such Person for amounts
not yet due or which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves or other
appropriate provisions are being maintained in accordance with GAAP;
(c) incurred, or pledges and deposits made, in the ordinary course of
business of such Person in connection with worker's compensation,
unemployment insurance, pensions or other types of social security
benefits;
(d) arising with respect to zoning restrictions, licenses, covenants,
building restrictions and other similar charges or encumbrances on the use
of real property of such Person which do not materially interfere with the
ordinary conduct of such Person's business; and
(e) minor defects and irregularities in titles, survey exceptions,
encumbrances, easements or reservations of others for rights-of-way, roads,
pipelines, railroad crossings, services, utilities or other similar
purposes which do not adversely affect the value of the property, or
outstanding mineral rights or reservations (including rights with respect
to the removal of mineral resource) which do not materially diminish the
value of the surface estate, assuming usage of such surface estate similar
to that being carried on by any Loan Party as of the Effective Date.
"Debt Service" means for the most recently completed four fiscal
------------
quarters for which financial statements are available, the sum of (a)
Consolidated Interest Expense (other than the amount of any interest accrued,
but not yet due and payable in cash during such period) and (b) scheduled
maturities of the principal amount of Indebtedness and/or cash payments in
respect of the principal amount of Indebtedness due in connection with required
permanent reductions of commitments for borrowed money, whether or not made.
"Default" means any of the events specified in Section 9, whether or
------- ---------
not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"Disposition" has the meaning set forth in Section 8.5.
----------- -----------
11
<PAGE>
"Disqualified Stock" means any Equity Interest that, by its terms (or
------------------
by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part.
"Documentation Agent" means Credit Suisse First Boston.
-------------------
"Dogwood" means Dogwood Communications, Inc., a Delaware corporation.
-------
"Dogwood Acquisition" means the acquisition by the Borrower
-------------------
(indirectly through the acquisition by Atlanta) of all of the outstanding Equity
Interests of Dogwood.
"Dogwood Licenses" means Dogwood Licenses, Inc., a Delaware
----------------
corporation.
"Dollars" and "$" means dollars in lawful currency of the United
------- -
States of America.
"EBITDA" of a specified Person means, for any period, the consolidated
------
net income of such specified Person and its Restricted Subsidiaries for such
period:
(a) plus (without duplication and to the extent involved in computing
----
such consolidated net income) (i) Consolidated Interest Expense, (ii)
provision for taxes on income or profits and (iii) depreciation,
amortization and other non-cash items (including non-cash employee and
officer equity compensation expenses, amortization of goodwill and other
intangibles and barter expenses), and
(b) minus (without duplication and to the extent involved in computing
-----
such consolidated net income) (i) any gains (or plus losses), together with
any related provision for taxes on such gains (or losses), realized in
connection with any sale of assets (including, without limitation,
dispositions pursuant to Sale and Leaseback Transactions), (ii) any non-
cash or extraordinary gains (or plus losses), together with any related
provision for taxes on such extraordinary gains (or losses), (iii) the
amount of any cash payments related to non-cash charges that were added
back in determining EBITDA in any prior period and (iv) barter revenues,
provided, however, that
-------- -------
(1) the net income of any other Person that is accounted for by
the equity method of accounting shall be included only to the extent of the
amount of dividends or distributions paid in cash to such specified Person
whose EBITDA is being determined or a Wholly Owned Restricted Subsidiary
thereof;
(2) the net income of any other Person that is a Restricted
Subsidiary (other than a Wholly Owned Restricted Subsidiary) or is an
Unrestricted Subsidiary shall be included only to the extent of the amount
of dividends or distributions paid in cash to such
12
<PAGE>
specified Person whose EBITDA is being determined or a Wholly Owned
Restricted Subsidiary thereof;
(3) the net income (loss) of any other Person acquired after the
Initial Effective Date in a pooling of interests transaction for any period
prior to the date of such acquisition shall be excluded (to the extent
otherwise included); and
(4) gains or losses from sales of assets other than sales of
assets acquired and held for resale in the ordinary course of business
shall be excluded (to the extent otherwise included).
All of the foregoing will be determined in accordance with GAAP.
In addition, for purposes of calculating the Leverage Ratio and the
Senior Leverage Ratio, (a) with respect to Acquisitions not owned at all times
during the period involved in determining the EBITDA for the Leverage Ratio and
the Senior Leverage Ratio, there shall be (i) included the EBITDA of any
Acquisitions acquired by the Borrower or any Restricted Subsidiary during the
period involved in such determination and (ii) excluded the EBITDA of any
Dispositions by the Borrower or any Restricted Subsidiary during the period
involved in such determination, assuming in each such case that such
Acquisitions or Dispositions were acquired or disposed of, as the case may be,
on the first day of such period; and (b) with respect to the Bell Acquisition
and the Allur Acquisition, the Borrower shall be entitled to certain expense add
backs to EBITDA in the amounts and during the periods set forth in Schedule 1.1B
-------------
and (c) with respect to any other Permitted Acquisitions, the Lenders agree to
enter into good faith negotiations with the Borrower to consider pro forma
adjustments to EBITDA to eliminate costs which would be nonrecurring expense
items after giving effect to such Permitted Acquisitions.
"Effective Date" has the meaning set forth in Section 11.8.
-------------- ------------
"Environmental Laws" means any and all Federal, state, local or
------------------
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
regulating, relating to or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect.
"Equity Interest" of any Person means any and all shares, interests,
---------------
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any preferred
stock, but excluding any debt securities convertible into such equity, and
including, in the case of a partnership, partnership interests (whether general
or limited) and any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions of
assets of, such partnership.
"Equity Proceeds" has the meaning set forth in Section 4.2(e).
--------------- --------------
13
<PAGE>
"ERISA" means the Employee Retirement Income Security Act of 1974, as
-----
amended from time to time.
"Eurocurrency Reserve Requirements" means, for any day as applied to a
---------------------------------
Eurodollar Loan, the aggregate (without duplication) of the rates (expressed as
a decimal fraction) of reserve requirements in effect on such day (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
------------------------
Regulation D of such Board) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Base Rate" means the rate per annum determined by the
--------------------
Administrative Agent at approximately 11:00 a.m. (London time) on the date which
is two Business Days prior to the beginning of the relevant Interest Period by
reference to the British Bankers' Association Interest Settlement Rates for
deposits in Dollars (as set forth by any service selected by the Administrative
Agent which has been nominated by the British Bankers' Association as an
authorized information vendor for the purpose of displaying the rates) for a
period equal to such Interest Period; provided that, to the extent that an
interest rate is not ascertainable pursuant to the foregoing provisions of this
definition, the "Eurodollar Base Rate" shall be the interest rate per annum
determined by the Administrative Agent to be the average of the rates per annum
at which deposits in Dollars are offered for such relevant Interest Period to
major banks in the London interbank market in London, England at approximately
11:00 a.m. (London time) on the date which is two Business Days prior to the
beginning of such Interest Period.
"Eurodollar Loans" means any Loan that bears interest computed on the
----------------
basis of the Eurodollar Rate.
"Eurodollar Rate" means, with respect to each day during each Interest
---------------
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula:
Eurodollar Base Rate
---------------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Eurodollar Tranche" means the collective reference to Eurodollar
------------------
Loans made by the Lenders, the then current Interest Periods of which begin on
the same date and end on the same later date (whether or not such Loans shall
originally have been made on the same day).
"Event of Default" means any of the events specified in Section 9,
---------------- ---------
provided that any requirement for the giving of notice, the lapse of time, or
- --------
both, or any other condition, has been satisfied.
"Excess Proceeds" has the meaning set forth in Section 4.2(d).
--------------- --------------
14
<PAGE>
"Exchange Act" means the Securities Exchange Act of 1934, as amended
------------
from time to time, and any successor statutes.
"Exchange Agreement" means that certain Exchange Agreement, dated as
------------------
of June 6, 1995, by and among the Borrower and the Series A Preferred Investors
(as such term is defined in the Preferred Stockholders' Agreement), as amended
from time to time in accordance with the terms hereof and thereof.
"Fair Market Value" means with respect to any asset or property, the
-----------------
sale value that would be obtained in an arm's length transaction between an
informed and willing seller under no compulsion to sell and an informed and
willing buyer under no compulsion to buy. All determinations in the covenants
of Fair Market Value shall be made by the Board of Directors of the Borrower and
shall be evidenced by a resolution of such Board set forth in a certificate of a
Responsible Officer delivered to the Administrative Agent, upon which the
Administrative Agent may conclusively rely.
"FCC" means the Federal Communications Commission (or any successor
---
agency, commission, bureau, department or other political subdivision of the
United States of America).
"FCC License" means any radio broadcast service, community antenna
-----------
relay service, broadcast auxiliary license, earth station registration, business
radio, microwave or special safety radio service license issued by the FCC
pursuant to the Communications Act of 1934, as amended.
"Federal Funds Rate" means for any day the rate per annum (rounded
------------------
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
--------
Federal Funds Rate for such day shall be such rate on such transactions on the
preceding Business Day as so published on the next succeeding Business Day and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent on such day on such transactions as reasonably determined
by the Administrative Agent.
"Fee Letter" means that certain letter agreement or letter agreements,
----------
each dated as of February 26, 1999, to which the Administrative Agent and the
Borrower are parties, as amended, modified, restated, supplemented, renewed,
extended, increased, rearranged and/or substituted from time to time.
"Final Order" means an action by the FCC or other Tribunal that has
-----------
not been vacated, reversed, stayed, enjoined, set aside, annulled or suspended
and with respect to which no requests by any Person are pending for
administrative or judicial review, reconsideration, appeal or stay and the time
for filing any such requests and the time to review or comment with respect to
any such action and for the FCC or other Tribunal to set aside such action on
its own order have expired.
15
<PAGE>
"Fixed Charge Coverage Ratio" means the ratio of (i) EBITDA of the
---------------------------
Borrower and the Restricted Subsidiaries for the most recently completed four
fiscal quarters for which financial statements are available to (ii) Fixed
Charges for such four fiscal quarters.
"Fixed Charges" means, for any period, the sum of (a) Debt Service of
-------------
the Borrower and the Restricted Subsidiaries for such period, plus (b) cash
----
taxes paid by the Borrower and the Restricted Subsidiaries for such period, plus
----
(c) Capital Expenditures of the Borrower and the Restricted Subsidiaries for
such period, plus (d) cash Restricted Payments (other than Restricted Payments
----
made pursuant to Section 8.6(b)) made during such period.
--------------
"GAAP" means generally accepted accounting principles in the United
----
States of America as in effect as of the Initial Effective Date, including those
set forth in (i) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants, (ii) statements
and pronouncements of the Financial Accounting Standards Board, (iii) such other
statements by such other entity as approved by a significant segment of the
accounting profession and (iv) the rules and regulations of the SEC governing
the inclusion of financial statements (including pro forma financial statements)
in periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Governmental Authority" means any nation or government, any state or
----------------------
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Guaranty" means each Guaranty of a Restricted Subsidiary,
--------
substantially in the form of Exhibit C, executed and delivered as required
---------
pursuant to the terms hereof, as the foregoing may be amended, modified,
restated, supplemented, renewed, extended, rearranged or substituted from time
to time.
"Guaranty Obligation" means for any Person, without duplication, any
-------------------
obligation, contingent or otherwise, of such Person guaranteeing or otherwise
becoming liable for any Indebtedness of any other Person ("primary obligor") in
---------------
any manner, whether directly or indirectly, and including, without limitation,
any obligation of such Person, direct or indirect (a) to purchase or pay, or to
advance or supply funds for the purchase or payment of such Indebtedness or to
purchase, or to advance or supply funds for the purchase of, any security for
the payment of such Indebtedness, (b) to purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness of the
payment of such Indebtedness or (c) to maintain working capital, equity capital
or other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Indebtedness; provided that the term
--------
Guaranty Obligation shall not include endorsements for collection or deposit, in
each case in the ordinary course of the endorser's business.
"Highest Lawful Rate" shall mean at the particular time in question
-------------------
the maximum rate of interest which, under applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest which,
under applicable Law, the Lenders are permitted to charge
16
<PAGE>
on the Obligations shall change after the Effective Date, the Highest Lawful
Rate shall be automatically increased or decreased, as the case may be, from
time to time as of the effective time of each change in the Highest Lawful Rate
without notice to the Borrower.
"Hughes" means Catherine L. Hughes.
------
"Hughes-Liggins Entities" means the Catherine L Hughes Revocable
-----------------------
Trust, the Alfred C. Liggins, III Revocable Trust, Hughes-Liggins and Company,
L.L.C., a Delaware limited liability company, and Hughes-Liggins Family
Partners, L.P., a Delaware limited partnership.
"Indebtedness" means, with respect to any Person, whether or not
------------
contingent, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
accordance with customary practices) or which is evidenced by a note, bond,
debenture or similar instrument, (ii) all Capital Lease Obligations of such
Person, (iii) all obligations of such Person in respect of surety bonds, letters
of credit, bankers' acceptances and similar instruments issued or created for
the account of such Person, (iv) all liabilities in respect of Interest Hedge
Agreements of such Person, (v) any liability secured by any Lien on any property
owned by such Person even if such Person has not assumed or otherwise become
liable for the payment thereof to the extent of the value of the property
subject to such Lien, (vi) all Disqualified Stock of such Person, and (vii) to
the extent not otherwise included, any Guaranty Obligation of such Person;
provided, however, in no event shall the Senior Preferred Stock (including any
- -------- -------
and all accrued dividends thereon) be considered "Indebtedness."
"Information" means written information, including, without
-----------
limitation, certificates, reports, statements (other than financial statements,
budgets, projections and similar financial data) and documents.
"Initial Effective Date" means June 30, 1998.
----------------------
"Insolvency" means with respect to any Multiemployer Plan, the
----------
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
---------
"Intellectual Property Security Agreement" means each Intellectual
----------------------------------------
Property Security Agreement and Assignment, substantially in the form of Exhibit
-------
G-1, executed and delivered by the Borrower and the Restricted Subsidiaries as
- ---
required by the terms hereof, as the foregoing may be amended, modified,
restated, supplemented, renewed, extended, rearranged or substituted from time
to time.
"Interest Coverage Ratio" means, as of the date of any determination,
-----------------------
the ratio of (a) EBITDA of the Borrower and the Restricted Subsidiaries for the
most recently completed four fiscal quarters for which financial statements are
available to (b) Consolidated Interest Expense (other than
17
<PAGE>
the amount of any interest accrued, but not yet due and payable during such
period) of the Borrower and the Restricted Subsidiaries for such four fiscal
quarters.
"Interest Hedge Agreements" means any interest rate swap agreements,
-------------------------
interest rate cap agreements, interest rate collar agreements, or any similar
agreements, or arrangements designed to hedge the risk of variable interest rate
volatility.
"Interest Payment Date" means (a) as to any ABR Loan, (i) the last
---------------------
Business Day of each March, June, September and December prior to the
Termination Date and (ii) the Termination Date, (b) as to any Eurodollar Loan
(i) having an Interest Period of three months or less, the last day of such
Interest Period, (ii) having an Interest Period longer than three months, each
day which is three months or a whole multiple thereof, after the first day of
such Interest Period and the last day of such Interest Period and (iii) the
Termination Date.
"Interest Period": with respect to any Eurodollar Loan:
---------------
(a) initially, the period commencing on the borrowing or conversion
date, as the case may be, with respect to such Eurodollar Loan and ending
one, two, three or six months thereafter (or, to the extent available from
all Lenders, nine or twelve months thereafter), as selected by the Borrower
in its Notice of Borrowing or Notice of Conversion/Continuation, as the
case may be, given with respect thereto; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Eurodollar Loan and ending
one, two, three or six months thereafter (or, to the extent available from
all Lenders, nine or twelve months thereafter), as selected by the Borrower
by irrevocable notice to the Administrative Agent not less than three
Business Days prior to the last day of the then current Interest Period
with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
- --------
subject to the following:
(i) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date; and
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding
day in the calendar month at the end of such Interest Period) shall end on
the last Business Day of a calendar month.
"Investment" means, in any Person, any direct or indirect advance,
----------
loan (other than advances to customers in the ordinary course of business that
are recorded as accounts receivable
18
<PAGE>
on the balance sheet of the lender) or other extensions of credit (including by
way of a Guaranty Obligation or similar arrangement) or capital contribution to
(by means of any transfer of cash or other property to others or any payment for
property or services for the account or use of others), or any purchase or
acquisition of Equity Interests, Indebtedness or other similar instruments
issued by such Person. For purposes of Section 8.8, any property transferred to
-----------
or from an Unrestricted Subsidiary shall be valued at its Fair Market Value at
the time of such transfer, in each case as determined in good faith by the Board
of Directors of the Borrower.
"Investors" means Alta Subordinated Debt Partners III, L.P.,
---------
BancBoston Investments Inc., Grant M. Wilson, Syncom Capital Corporation,
Alliance Enterprise Corporation, Liggins (successor in interest to Greater
Philadelphia Venture Capital Corporation, Inc.), Opportunity Capital
Corporation, Medallion Capital, Inc. (successor in interest to Capital
Dimensions Venture Fund, Inc.), TSG Ventures L.P. (successor in interest to TSG
Ventures, Inc.) and Fulcrum Venture Capital Corporation.
"Issuing Lender" means NationsBank, provided that, in the event that
-------------- --------
NationsBank shall be replaced as the Administrative Agent pursuant to Section
-------
10.9, no Letter of Credit shall be issued by NationsBank on or after the date of
- ----
such replacement and (ii) the replacement Administrative Agent shall be the
Issuing Lender from and after the date of such replacement.
"LMA Agreements" means any time brokerage agreement, local marketing
--------------
agreement, local market affiliation agreement, joint sales agreement, joint
operating agreement or joint operating venture for the operation of a radio
station or related or similar agreements entered into, directly or indirectly,
between any Loan Party and any other Person other than another Loan Party.
"Law" means all applicable statutes, laws, ordinances, regulations,
---
rules, guidelines, orders, writs, injunctions, or decrees of any state,
commonwealth, nation, territory, province, possession, township, county, parish,
municipality or Tribunal.
"L/C Fee Payment Date" means (i) the last Business Day of each March,
--------------------
June, September and December prior to the Termination Date and (ii) the
Termination Date.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
---------------
the aggregate then undrawn and unexpired amount of the then outstanding Letters
of Credit and (b) the aggregate amount of all unpaid Reimbursement Obligations.
"Lender" has the meaning set forth in the introductory paragraph of
------
this Agreement.
"Letters of Credit" has the meaning set forth in Section 3.1(a).
----------------- --------------
"Leverage Ratio" means, as of any date, the ratio of (i) the sum of
--------------
all Indebtedness of the Borrower and the Restricted Subsidiaries as of such date
to (ii) EBITDA of the Borrower and the Restricted Subsidiaries for the most
recently completed four fiscal quarters for which financial statements are
available.
19
<PAGE>
"License" means as to any Person, any license, permit, certificate of
-------
need, authorization, certification, accreditation, franchise, approval, or grant
of rights by any Governmental Authority or other Person necessary or appropriate
for such Person to own, maintain, or operate its business or property, including
FCC Licenses.
"License Subsidiaries" means any Wholly Owned Restricted Subsidiary of
--------------------
the Borrower organized by the Borrower for the sole purpose of holding FCC
Licenses and other Necessary Authorizations.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
----
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including, without limitation, any
conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).
"Liggins" means Alfred C. Liggins, III.
-------
"Liggins Credit Agreement" means that certain loan agreement, dated as
------------------------
of October 23, 1997, among Liggins, as the borrower thereunder, and NationsBank
of Texas, N.A., as the lender thereunder (the "Loan Agreement") and the
--------------
promissory note, of even date therewith, executed by Liggins in favor of
NationsBank of Texas, N.A. in connection with such Loan Agreement, in the
original principal amount of $367,000, and any and all other Loan Documents (as
such term is defined in such Loan Agreement) relating thereto.
"Loan" has the meaning set forth in Section 2.1.
---- -----------
"Loan Documents" means this Agreement, the Notes, the Security
--------------
Documents, all UCC financing statements, the Standstill Agreement, any
Application, any Interest Hedge Agreements with any Lenders relating to the
Loans, the Fee Letter, all certificates executed and delivered by any Loan Party
in connection with any Loan Document, any agreements between any Loan Party and
the Administrative Agent or any Lender in respect of fees or the reimbursement
of costs and expenses in connection with the transactions contemplated hereby
and any and all other documents, instruments, certificates and agreements now or
hereafter executed and delivered by any Person pursuant to or in connection with
any of the foregoing, and any and all present or future amendments,
modifications, supplements, renewals, extensions, increases, restatements,
rearrangements or substitutions from time to time of all or any part of any of
the foregoing.
"Loan Parties" means the collective reference to the Borrower and the
------------
Restricted Subsidiaries.
"Majority Lenders" means (i) initially, in the event that there are no
----------------
more than two Lenders and until such time as there are more than two Lenders, at
any time when no Loans or L/C Obligations are outstanding, the Lenders having
Commitments equal to or more than 66-2/3% of the Aggregate Commitment, and at
any time when Loans or L/C Obligations are outstanding, the Lenders with
outstanding Loans and participations in L/C Obligations having an unpaid
principal
20
<PAGE>
balance and face amount, respectively, equal to or more than 66-2/3% of all
Loans and L/C Obligations outstanding, excluding from such calculation the
Lenders which have failed or refused to fund a Loan or their respective portion
of an unpaid Reimbursement Obligation; and (ii) at any time on or after there
are more than two Lenders and continuing at all times thereafter whether or not
there are only two Lenders, at any time when no Loans or L/C Obligations are
outstanding, the Lenders having Commitments more than 50% of the Aggregate
Commitment, and at any time when Loans or L/C Obligations are outstanding, the
Lenders with outstanding Loans and participations in L/C Obligations having an
unpaid principal balance and face amount, respectively, more than 50% of all
Loans and L/C Obligations outstanding, excluding from such calculation the
Lenders which have failed or refused to fund a Loan or their respective portion
of an unpaid Reimbursement Obligation.
"Management Stockholders" means Hughes, Liggins, Moore and Royster.
-----------------------
"Margin Stock" has the meaning assigned to such term in Regulation U
------------
of the Board.
"Material Adverse Effect" means (i) any adverse effect upon the
-----------------------
validity or enforceability of any Loan Document or the rights and remedies of
the Lenders thereunder, (ii) any material adverse effect on the business,
condition (financial or otherwise), operations, performance, property or assets
of (x) the Borrower and the Restricted Subsidiaries taken as a whole or (y) any
License Subsidiary or (iii) any material adverse effect upon the ability of any
Loan Party to perform its obligations under any Loan Document.
"Materials of Environmental Concern" means any gasoline or petroleum
----------------------------------
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Material Lease" means each lease of real property by any Loan Party,
--------------
as lessee, sublessee or lessor, which is a radio studio location or antenna,
tower or transmitter site.
"Moore" means Jerry A. Moore III.
-----
"Mortgaged Properties" means the owned real properties and leasehold
--------------------
and subleasehold interests of the Loan Parties specified on Schedule 5.24(b) and
----------------
any other real property or interests in real property hereafter subject to any
Mortgage.
"Mortgages" means each deed of trust, leasehold deed of trust,
---------
mortgage, deed to secure debt, leasehold mortgage, collateral assignment of
leases or other real estate security document securing the Obligations or any
portion thereof and all modifications and supplements to any of the foregoing
that are executed and delivered by any Loan Party pursuant to or in connection
with any of the Loan Documents, and any and all amendments, modifications,
restatements, supplements, renewals, extensions, rearrangements or substitutions
from time to time of any of the foregoing.
21
<PAGE>
"Multiemployer Plan" means a multiemployer plan as defined in sections
------------------
3(37) or 4001(a)(3) of ERISA or section 414 of the Code to which the Borrower or
any Common Controlled Entity is making, or has made, or is accruing, or has
accrued, an obligation to make contributions.
"NationsBank" means NationsBank, N.A.
-----------
"Necessary Authorization" means any license, permit, consent,
-----------------------
franchise, order approval or authorization from, or any filing, recording or
registration with, any Tribunal (including, without limitation, the FCC)
necessary to the conduct of any Loan Party's business or for the ownership,
maintenance and operation by any Loan Party of its Stations and other properties
or to the performance by any Loan Party of its obligations under any LMA
Agreement to which it is a party.
"Net Proceeds" means, with respect to any Disposition or Recovery
------------
Event, the aggregate cash proceeds received by the Borrower or a Restricted
Subsidiary in respect of such Disposition or Recovery Event, which amount is
equal to the excess, if any, of:
(i) the cash received by the Borrower or a Restricted Subsidiary
(including any cash payments received by way of deferred payment pursuant
to, or monetization of, a note or installment receivable or otherwise, but
only as and when received) in connection with such Disposition or Recovery
Event, over
----
(ii) the sum of
(a) the amount of any Indebtedness including any premium thereon
and fees and expenses associated therewith which is required to be
repaid by the Borrower or a Restricted Subsidiary in connection with
such Disposition, plus
(b) the out-of-pocket expenses incurred by the Borrower or a
Restricted Subsidiary in connection with such Disposition or Recovery
Event, plus
(c) provision for taxes, including income taxes, attributable to
the Disposition or Recovery Event or attributable to required
prepayments or repayments of Indebtedness with the proceeds of such
Disposition or Recovery Event, plus
(d) a reasonable reserve for the after-tax costs of any
indemnification payments (fixed or contingent) attributable to the
seller's indemnities to the purchaser in respect of such Disposition
or Recovery Event undertaken by the Borrower or any of the Restricted
Subsidiaries in connection with such Disposition or Recovery Event.
For purposes of this definition and amounts due under Section 4.2(d),
--------------
the following are deemed to be cash: (x) the assumption of Indebtedness of the
Borrower or any Restricted Subsidiary and the release of the Borrower or such
Restricted Subsidiary from all liability on such Indebtedness in connection with
such Disposition (other than customary indemnification provisions
22
<PAGE>
relating thereto that do not involve the repayment of funded Indebtedness) and
(y) securities or notes received by the Borrower or any Restricted Subsidiary
from the transferee that are promptly converted by the Borrower or such
Restricted Subsidiary into cash.
"Net Revenues" means gross revenues less agency commissions, after all
------------
proper charges and reserves, as determined in accordance with GAAP.
"New Exchange Debentures" means debentures of the Borrower in
-----------------------
aggregate principal amount not to exceed the liquidation value of $50,000,000
of the New Preferred Stock as initially issued (increasing for additional
issuance of like debentures or preferred stock in lieu, respectively, of
interest or dividends thereon, not exceeding an additional $40,000,000), to be
issued by the Borrower, at its option, only in exchange for New Preferred Stock,
and having the terms set forth in the Registration Statement on Form S-1 filed
by the Borrower with the SEC on March 19, 1999 (with such changes in such
Registration Statement as are reasonably acceptable to the Administrative Agent
and the Lenders).
"New Exchange Debenture Indenture" means a trust indenture, having
--------------------------------
terms reasonably satisfactory to the Administrative Agent and the Lenders,
pursuant to which the New Exchange Debentures are to be issued, and not
providing for the issuance of any other Indebtedness or Equity Interests of the
Borrower.
"New Preferred Stock" means Preferred Stock, Series ____, of the
-------------------
Borrower to be issued by the Borrower in connection with a Qualifying Public
Equity Offering for gross proceeds of not less than $50,000,000, and having the
terms set forth in the Registration Statement on Form S-1 filed by the Borrower
with the SEC on March 19, 1999 (with such changes in such Registration Statement
as are reasonably acceptable to the Administrative Agent and the Lenders).
"New Radio Market" means a radio market (as defined by Arbitron) that
----------------
is not served by a radio station owned or operated by the Borrower or a
Restricted Subsidiary before the Effective Date.
"Non-Excluded Taxes" has the meaning set forth in Section 4.10(a).
------------------ ---------------
"Non-U.S. Lender" has the meaning set forth in Section 4.10(b).
--------------- ---------------
"Non-Voting Common Stock" means the non-voting class C common stock,
-----------------------
par value $.01 per share of the Borrower.
"Notes" has the meaning set forth in Section 2.1.
----- -----------
"Notice of Borrowing" has the meaning set forth in Section 2.3.
------------------- -----------
"Notice of Conversion/Continuation" has the meaning set forth in
---------------------------------
Section 4.5.
- -----------
23
<PAGE>
"Obligations" means the unpaid principal of and interest on
-----------
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to any Loan Party, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans and Reimbursement Obligations and all other obligations and
liabilities of any Loan Party to the Administrative Agent or to any Lender (or,
in the case of any Interest Hedge Agreement, any Affiliate of any Lender),
whether direct or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, the Letters of Credit, any
Interest Hedge Agreement entered into with any Lender (or any Affiliate of any
Lender) or any other document executed and delivered by any Loan Party in
connection herewith or therewith, whether on account of principal, interest,
reimbursement obligations, fees, indemnities, costs, expenses (including,
without limitation, all reasonable fees, charges and disbursements of counsel to
the Administrative Agent or to any Lender that are required to be paid by any
Loan Party pursuant hereto) or otherwise.
"Operating Agreement" means an agreement substantially in the form of
-------------------
Exhibit D.
- ---------
"Operating Lease" means any lease that is an operating lease in
---------------
accordance with GAAP and that has an initial or remaining noncancellable lease
term in excess of one year.
"OSHA" means the Occupational Safety and Health Act, 29 U.S.C.
----
(S)(S)651 et seq., as amended.
-------
"Participant" has the meaning set forth in Section 11.6(b).
----------- ---------------
"PBGC" means the Pension Benefit Guaranty Corporation established
----
pursuant to Subtitle A of Title IV of ERISA.
"Perfection Certificate" means a Perfection Certificate duly executed
----------------------
by each Loan Party, in the form of Exhibit E and delivered to the Administrative
---------
Agent pursuant to Section 6.1(r).
--------------
"Permitted Acquisitions" has the meaning set forth in Section 8.7(b).
---------------------- --------------
"Permitted Investments" means:
---------------------
(i) any Investment in the Borrower or any Wholly Owned
Restricted Subsidiary;
(ii) any Investment in Cash Equivalents;
24
<PAGE>
(iii) any Investment in a Person if, as a result of such
Investment, (a) such Person becomes a Wholly Owned Restricted Subsidiary of
the Borrower, or (b) such Person either (1) is merged, consolidated or
amalgamated with or into the Borrower or one of its Wholly Owned Restricted
Subsidiaries and the Borrower or such Wholly Owned Restricted Subsidiary is
the Surviving Person or the Surviving Person becomes a Wholly Owned
Restricted Subsidiary, or (2) transfers or conveys all or substantially all
of its assets to, or is liquidated into, the Borrower or one of its Wholly
Owned Restricted Subsidiaries;
(iv) any Investment in accounts and notes receivable acquired
in the ordinary course of business;
(v) loans and advances to employees of the Borrower or any
Restricted Subsidiary in the ordinary course of business not in excess of
$500,000 in the aggregate at any time outstanding; and
(vi) a one-time term loan from the Borrower to Liggins made in
connection with the pay-off and termination of the Liggins Credit
Agreement, in an original principal amount not to exceed $380,000.
"Permitted Line of Business" has the meaning set forth in Section
-------------------------- -------
8.11.
"Permitted Sale Representations" means commercially reasonable
------------------------------
representations, warranties and indemnities with respect to properties or assets
of the Borrower or any Restricted Subsidiary that are normal and customary in
the business of the Borrower or such Restricted Subsidiary, as the case may be.
"Person" means an individual, partnership, corporation, limited
------
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Plan" means at a particular time, any employee benefit plan which is
----
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) a "contributing sponsor" as defined in Section
4001(a)(13) of ERISA or a member of such contributing sponsor's "control group"
as defined in Section 4001(a)(14) of ERISA.
"Pledge Agreements" means each Pledge Agreement, substantially in the
-----------------
form of (i) Exhibit F-1 with respect to the Borrower, (ii) Exhibit F-2 with
----------- -----------
respect to Restricted Subsidiaries, (iii) Exhibit F-3 with respect to the
-----------
Warrantholders (the "Warrantholders' Pledge"), and (iv) Exhibit F-4 with respect
---------------------- -----------
to Management Stockholders, as each of the foregoing may be amended, modified,
restated, supplemented, renewed, extended, rearranged and substituted from time
to time.
25
<PAGE>
"Preferred Stock", as applied to the Equity Interests of any Person,
---------------
means Equity Interests of any class or classes (however designated) that is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Equity Interests of any other class of such
Person.
"Preferred Stock Documents" means all of the documents, agreements,
-------------------------
instruments, proxies and certificates executed and delivered by any Loan Party
in connection with the Senior Preferred Stock or otherwise relating to the
Senior Preferred Stock, including but not limited to the Securities Purchase
Agreement, the Warrant Agreement, the Exchange Agreement, the Amended and
Restated Certificate of Incorporation, the Preferred Stockholders' Agreement,
the Warrant Certificates and all security agreements, guaranties, pledge
agreements, collateral assignments, mortgages, deeds of trust and other security
documents relating to any of the foregoing, all certificates and proxies
executed and delivered in connection with any of the foregoing and all other
documents, agreements and instruments now or hereafter executed or delivered by
any Person in connection with or as security for the payment and performance of
the Senior Preferred Stock, as amended, in each case, with the consent (to the
extent necessary) of the Lenders required pursuant to the Subordination
Agreement.
"Preferred Stockholders' Agreement" means that certain Preferred
---------------------------------
Stockholders' Agreement, dated as of May 14, 1997 by and among the Investors,
the Borrower, Radio One Licenses, Inc. (the surviving corporation of the merger
of Radio One License LLC) and the Management Stockholders, as amended by that
certain First Amendment to Preferred Stockholders' Agreement, dated as of June
30, 1998, by that certain Second Amendment to Preferred Stockholders' Agreement,
dated as of December 23, 1998, by that certain Third Amendment to Preferred
Stockholders' Agreement, dated as of December 23, 1998, by that certain Fourth
Amendment to Preferred Stockholders' Agreement dated as of December 31, 1998,
and by that certain Fifth Amendment to Preferred Stockholders' Agreement dated
as of the Effective Date and as otherwise amended from time to time and in
accordance with the terms hereof and thereof.
"Prime Rate" has the meaning set forth in the definition of ABR.
----------
"Principal Shareholders" means (i) Hughes and Liggins, (ii) any
----------------------
foundation or trust in which Hughes or Liggins has a beneficial interest,
provided that for purposes of determining compliance with clause (v)(3) of the
definition of Change of Control set forth in Section 1.1, only to the extent of
-----------
such beneficial interests of Hughes and/or Liggins in such foundation or trust
or (iii) a partnership, limited liability company or other business combination
in which Hughes or Liggins has an interest, provided that for purposes of
determining compliance with clause (v)(3) of the definition of Change of Control
set forth in Section 1.1, only to the extent of the interests of Hughes and/or
-----------
Liggins in such partnership, limited liability company or other business
combination.
"Properties" has the meaning set forth in Section 5.17(e).
---------- ---------------
"Public Equity Offering" means an underwritten primary public offering
----------------------
of common stock of the Borrower pursuant to an effective registration statement
under the Securities Act.
26
<PAGE>
"Purchase Agreement" means that certain Purchase Agreement, dated as
------------------
of May 14, 1997, among the Borrower, as the issuer thereunder, Radio One
Licenses, Inc., as a guarantor thereunder, and Credit Suisse First Boston
Corporation and NationsBanc Capital Markets, Inc., acting on behalf of
themselves and as the representatives of the several initial purchasers
thereunder, regarding the sale by the Borrower of the Senior Subordinated Notes.
"Purchase Money Indebtedness" means Indebtedness of the Borrower and
---------------------------
the Restricted Subsidiaries incurred in connection with the purchase of property
or assets for the business of the Borrower and the Restricted Subsidiaries.
"Purchase Money Lien" means any Lien securing solely Purchase Money
-------------------
Indebtedness; provided that (i) any such Lien attaches concurrently with the
--------
acquisition of the subject property, (ii) such Lien attaches solely to the
property so acquired in such transaction and (iii) the principal amount of the
Indebtedness secured thereby does not exceed 100% of the cost of such property.
"Qualifying Public Equity Offering" means an initial Public Equity
---------------------------------
Offering that results in cash proceeds to the Borrower (net of all associated
fees, costs, and commissions) of at least $50,000,000.
"Recovery Event" means any settlement of or payment in respect of a
--------------
condemnation or taking or a property insurance claim or casualty insurance claim
relating to any property or asset or rights therein of the Borrower or any of
the Restricted Subsidiaries.
"Register" has the meaning set forth in Section 11.6(g).
-------- ---------------
"Reimbursement Obligations" means the obligations of the Borrower to
-------------------------
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
-----------
Letters of Credit.
"Reorganization" means with respect to any Multiemployer Plan, the
--------------
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
"Reportable Event" means any of the events set forth in Section
----------------
4043(b) of ERISA, other than those events as to which the thirty day notice
period is waived under Sections .13, .14, .16, .18, .19 or .20 of PBGC Reg. (S)
2615.
"Requirement of Law" means as to any Person, the Charter Documents of
------------------
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority (including any
Authorization), in each case applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.
"Responsible Officer" means the chief executive officer, the president
-------------------
or the chief financial officer of the relevant Loan Party.
27
<PAGE>
"Restricted Payment" means, with respect to any Person, (i) the
------------------
declaration or payment of any dividends or any other distributions of any sort
in respect of its Equity Interests (including any payment in connection with any
merger or consolidation involving such Person) or similar payment to the direct
or indirect holders of its Equity Interests (other than in each such case
distributions payable solely in its Equity Interests that is not Disqualified
Stock and dividends or distributions payable solely to the Borrower or a Wholly
Owned Restricted Subsidiary), (ii) the purchase, redemption or other acquisition
or retirement for value of any Equity Interests of the Borrower held by any
Person or of any Equity Interests of a Restricted Subsidiary held by any Person
(other than a Wholly Owned Restricted Subsidiary), including the exercise of any
option to exchange any Equity Interests (other than its Equity Interests of the
Borrower that is not Disqualified Stock), or (iii) the purchase, repurchase,
redemption, defeasance (including without limitation, any payment or deposit in
respect of defeasance) or other acquisition or retirement for value, prior to
scheduled maturity, scheduled repayment or scheduled sinking fund payment of any
Disqualified Stock or Subordinated Debt.
"Restricted Subsidiaries" means each direct and indirect Subsidiary of
-----------------------
the Borrower other than an Unrestricted Subsidiary.
"Rights" means rights, remedies, powers and privileges.
------
"ROA Stockholders" means Alta Subordinated Debt Partners III, L.P.,
----------------
Allied Capital Corporation, Allied Investment Corporation, and Syndicated
Communications Venture Partners II, L.P.
"Royster" means Scott R. Royster.
-------
"Sale and Leaseback Transaction" means a transaction whereby any Loan
------------------------------
Party becomes liable with respect to any lease, whether an Operating Lease or a
capital lease, or any property (whether real, personal or mixed), whether now
owned or hereafter acquired, which (a) any Loan Party has sold or transferred or
is to sell or transfer to any other Person or (b) any Loan Party intends to use
for substantially the same purposes as any other property which has been or is
to be sold or transferred by any Loan Party to any other Person in connection
with such lease.
"SEC" means the Securities and Exchange Commission.
---
"Securities Act" means the Securities Act of 1933, as amended from
--------------
time to time, and any successor statute.
"Securities Purchase Agreement" means that certain Agreement for
-----------------------------
Purchase and Sale of $17,000,000 Subordinated Secured Promissory Notes Due 2003
and Warrants to Purchase Common Stock of Radio One, Inc., dated as of June 6,
1995, among the Borrower, the Subsidiaries of the Borrower party thereto,
Liggins, Hughes, Moore and the Investors, as amended with the consent of the
Lenders required pursuant to the Subordination Agreement.
28
<PAGE>
"Security Agreements" means each Security Agreement, substantially in
-------------------
the form of Exhibit G-2, with respect to the Borrower, and Exhibit G-3, with
----------- -----------
respect to the Restricted Subsidiaries, executed and delivered as required
pursuant to the terms hereof, as each of the foregoing may be amended, modified,
restated, supplemented, renewed, extended, rearranged and substituted from time
to time.
"Security Documents" means the Security Agreements, the Pledge
------------------
Agreements, the Intellectual Property Security Agreements, the Mortgages, each
Guaranty and any and all other agreements, deeds of trust, mortgages, chattel
mortgages, security agreements, pledges, guaranties, assignments of proceeds,
assignments of income, assignments of contract rights, assignments of
partnership interest, assignments of royalty interests, assignments of
performance or other collateral assignments, completion or surety bonds, standby
agreements, subordination agreements, undertakings and other documents,
agreements, instruments and financing statements now or hereafter executed and
delivered by any Person in connection with, or as security for the payment or
performance of, the Obligations or any part thereof.
"Senior Debt" means for the Borrower and the Restricted Subsidiaries
-----------
on a consolidated basis as of the date of any determination, the aggregate
amount of all outstanding Indebtedness other than Subordinated Debt.
"Senior Leverage Ratio" means, as of any date, the ratio of (i) the
---------------------
sum of all Senior Debt of the Borrower and the Restricted Subsidiaries as of
such date to (ii) EBITDA of the Borrower and the Restricted Subsidiaries for the
most recently completed four fiscal quarters for which financial statements are
available.
"Senior Management" shall mean Hughes, Liggins and Royster.
-----------------
"Senior Preferred Stock" means (i) 84,843.03 shares of the 15% Series
----------------------
A Senior Cumulative Redeemable Preferred Stock, par value $.01 per share, (ii)
124,467.10 shares of the 15% Series B Senior Cumulative Redeemable Preferred
Stock, par value $.01 per share and (iii) if exercised, the number of shares of
15% Series A Senior Cumulative Redeemable Preferred Stock to which the holder of
the Allied Warrant is entitled thereunder not to exceed an original liquidation
value of $4,000,000, provided that the holder of such Allied Warrant has assumed
--------
all the obligations and liabilities under, and become a party to, the Standstill
Agreement as an "Investor" thereunder.
"Senior Subordinated Debt Documents" means any and all agreements
----------------------------------
relating to the Senior Subordinated Indebtedness, including but not limited to
the Senior Subordinated Notes, the Purchase Agreement, the Senior Subordinated
Notes Indenture, the Standstill Agreement and the Senior Subordinated
Guaranties.
"Senior Subordinated Guaranties" means any and all guaranties of the
------------------------------
Senior Subordinated Indebtedness.
29
<PAGE>
"Senior Subordinated Indebtedness" means the Indebtedness owed by the
--------------------------------
Loan Parties to the Senior Subordinated Note Holders in an original principal
amount not to exceed $85,478,000 which bears interest and has a maturity as set
forth in the Senior Subordinated Notes Indenture.
"Senior Subordinated Note Holders" means the holders of the Senior
--------------------------------
Subordinated Notes.
"Senior Subordinated Notes" means (a) those certain 12% Senior
-------------------------
Subordinated Notes due 2004, from the Borrower in the aggregate original
principal amount of $85,478,000, issued pursuant to the Senior Subordinated
Notes Indenture; and (b) all senior subordinated notes of the Borrower issued in
exchange for the Senior Subordinated Notes on terms substantially identical to
the terms of the Senior Subordinated Notes.
"Senior Subordinated Notes Indenture" means that certain Indenture,
-----------------------------------
dated as of May 15, 1997, among the Borrower, the Restricted Subsidiaries and
United States Trust Company of New York, as trustee for the Senior Subordinated
Note Holders, as amended from time to time in accordance with the terms hereof
and thereof.
"Single Employer Plan" means any Plan which is covered by Title IV of
--------------------
ERISA, but which is not a Multiemployer Plan.
"Solvent" means, with respect to any Person as of the date of any
-------
determination, that on such date (a) the fair value of the property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Specified Percentage" means at any time, as to any Lender, the
--------------------
percentage of the Aggregate Commitment then constituted by such Lender's
Commitment.
"Standstill Agreement" means that certain Standstill Agreement, dated
--------------------
as of June 30, 1998, between the Borrower, Radio One Licenses, Inc., the
Investors, United States Trust Company of New York, as trustee on behalf of the
Senior Subordinated Note Holders, the Management
30
<PAGE>
Stockholders and the Administrative Agent, which Standstill Agreement replaces
that certain Standstill Agreement, dated as of May 19, 1997, among each of the
foregoing parties.
"Station" or "Stations" has the meaning set forth in Section 5.25.
------- -------- ------------
"Subordinated Debt" means any Indebtedness of the Borrower or any
-----------------
Restricted Subsidiary if the instrument creating or evidencing such Indebtedness
or pursuant to which such Indebtedness is outstanding expressly provides that
such Indebtedness is (i) if incurred by the Borrower, subordinated in right of
payment to the Obligations or (ii) if incurred by a Restricted Subsidiary,
subordinated in right of payment to the Guaranty and/or the Obligations, as the
same relate to a Restricted Subsidiary.
"Subordination Agreement" means the Standstill Agreement, which
-----------------------
Standstill Agreement was given in replacement of that certain Intercreditor and
Subordination Agreement, dated as of June 6, 1995, executed by the Loan Parties,
the Investors, the Management Stockholders and the Administrative Agent.
Accordingly, all references in any Loan Document or any other agreement or
document to the Subordination Agreement shall mean the Standstill Agreement.
"Subsidiary" means, with respect to any Person, any corporation,
----------
association or other business entity of which more than 50% of the total voting
power of all Voting Equity Interests entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees
or other governing body thereof is at the time owned or controlled by such
Person (regardless of whether such Equity Interests are owned directly or
through one or more other Subsidiaries of such Person or a combination thereof).
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower. "Wholly Owned Subsidiary" shall mean (a) any such corporation of
-----------------------
which all of such shares, other than directors' qualifying shares, are so owned
or controlled, directly or indirectly, and (b) any such partnership,
association, joint venture or other entity in which such Person owns or
controls, directly or indirectly, 100% of such interests.
"Surviving Person" means, with respect to any Person involved in or
----------------
that makes any Disposition, the Person formed by or surviving such Disposition
or the Person to which such Disposition is made.
"Syndication Agent" means First Union National Bank.
-----------------
"Tax Return" means, with respect to any Person, any return,
----------
declaration, report, claim for refund, or information return or statement
relating to Taxes of such Person, including any schedule or attachment thereto
and including any amendment thereof.
31
<PAGE>
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
-----
deductions, withholdings or other charges of any nature whatsoever from time to
time or at any time imposed by any Law or Tribunal, excluding, in the case of
each Lender and the Administrative Agent, taxes based on or measured by its net
income, and franchise taxes and any doing business taxes imposed on it, by any
jurisdiction (or political subdivisions thereof) in which the Administrative
Agent or such Lender or any applicable lending office is organized, located or
doing business.
"Termination Date" means the earlier of (i) December 31, 2003, (ii)
----------------
the date the Commitments under this Agreement are otherwise canceled or
terminated in their entirety and (iii) the date all of the Obligations shall
become due and payable whether at stated maturity, by acceleration or otherwise
in accordance with the term hereof.
"Total Available Commitment" means the sum of the Available
--------------------------
Commitments of all of the Lenders.
"Tribunal" means any court or governmental department, commission,
--------
board, bureau, agency or instrumentality of the United States of America or any
state, commonwealth, nation, territory, province, possession, township, county,
parish or municipality, whether now or hereafter constituted or existing.
"UCC" means the Uniform Commercial Code as enacted in the State of New
---
York or other applicable jurisdiction, as amended from time to time.
"Uniform Customs" means the Uniform Customs and Practice for
---------------
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"Unrestricted Subsidiary" means (i) WYCB Acquisition Corporation, a
-----------------------
Delaware corporation and Broadcast Holdings, Inc., a Washington, D.C.
corporation and (ii) any Subsidiary of the Borrower that is formed or acquired
after the Initial Effective Date, which is funded through Investments as
permitted by Section 8.8(b) (as designated by the Board of Directors of the
--------------
Borrower, as provided below) and (iii) any direct or indirect Subsidiary of an
Unrestricted Subsidiary; provided that at the time of the Investment by the
--------
Borrower to such Unrestricted Subsidiary and at all times thereafter (a) neither
the Borrower nor any of the Restricted Subsidiaries provides credit support for
any Indebtedness of such Unrestricted Subsidiary (including any undertaking,
agreement or instrument evidencing such Indebtedness) other than Investments
permitted under Section 8.8, (b) such Subsidiary is not liable, directly or
-----------
indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness, (c) such Unrestricted Subsidiary is not a party to any agreement,
contract, arrangement or understanding at such time with the Borrower or any
Restricted Subsidiary of the Borrower except for transactions with Affiliates
permitted by the terms of this Agreement unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Borrower or
such Restricted Subsidiary than those that might be obtained at the time from
Persons who are not Affiliates of the Borrower and (d) such Unrestricted
Subsidiary does not own any Equity Interest in or Indebtedness of any Subsidiary
of the Borrower that has not theretofore been and is not simultaneously being
designated an Unrestricted Subsidiary. Any such
32
<PAGE>
designation by the Board of Directors of the Borrower shall be evidenced to the
Administrative Agent by delivering to the Administrative Agent a board
resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions.
"Unrestricted Subsidiary Indebtedness" means of any Unrestricted
------------------------------------
Subsidiary, Indebtedness of such Unrestricted Subsidiary (other than a guarantee
of Indebtedness of the Borrower or any Restricted Subsidiary which is non-
recourse to the Borrower and the Restricted Subsidiaries) (i) as to which
neither the Borrower nor any Restricted Subsidiary is directly or indirectly
liable (by virtue of the Borrower or any such Restricted Subsidiary being the
primary obligor on, guarantor of, or otherwise liable in any respect to, such
Indebtedness) and (ii) which, upon the occurrence of a default with respect
thereto, does not result in, or permit any holder of any Indebtedness of the
Borrower or any Restricted Subsidiary to declare a default on such Indebtedness
of the Borrower or any Restricted Subsidiary or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Voting Equity Interests" means, with respect to any Person, all
-----------------------
classes of Equity Interest or other interests (including partnership interests)
of such Person then outstanding and normally entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers or
trustees thereof.
"Voting Stock" means the total voting power of all classes of capital
------------
stock then outstanding of the Borrower and normally entitled (without regard to
the occurrence of any contingency) to vote in elections of directors of the
Borrower.
"Warrant Agreement" means that certain Warrantholders' Agreement,
-----------------
dated as of June 6, 1995 among the Borrower, the Management Stockholders and the
Investors, as amended by that certain First Amendment to the Warrantholders'
Agreement (the "First Amendment to Warrant Agreement"), dated as of May 19, 1997
------------------------------------
and as otherwise amended from time to time with the consent of the Lenders to
the extent required pursuant to the Standstill Agreement.
"Warrant Certificates" means those certain warrant certificates issued
--------------------
to the Investors pursuant to the Securities Purchase Agreement and the Exchange
Agreement which warrant certificates were replaced by replacement certificates
(entitled "Amended and Restated Warrants") issued in connection with the First
-----------------------------
Amendment to Warrant Agreement and any and all other warrant certificates issued
in replacement or substitution therefor including the "Recapitalization
Warrants" and the "Contingent Warrants" issued pursuant to the Agreement and
Plan of Warrant Recapitalization.
"Warrantholders" means the holders of Warrants issued pursuant to the
--------------
Securities Purchase Agreement and the Exchange Agreement or shares of Common
Equity issued in exchange therefor.
"Warrantholders' Pledge" has the meaning set forth in the definition
----------------------
of Pledge Agreements.
33
<PAGE>
"Warrants" means those certain Series B Amended and Restated Warrants
--------
and those certain Series A Amended and Restated Warrants given in replacement
for the warrants issued to the Investors pursuant to the Securities Purchase
Agreement and the Exchange Agreement, and the "Recapitalization Warrants" and
the "Contingent Warrants" issued in replacement for the foregoing pursuant to
the Agreement and Plan of Warrant Recapitalization, to purchase an aggregate of
147.04 shares of the Common Equity of the Borrower on a fully diluted basis
subject to the terms and provisions of the Warrant Certificates.
"Wholly Owned Restricted Subsidiary" means each Restricted Subsidiary
----------------------------------
which is a Wholly Owned Subsidiary.
"Wholly Owned Subsidiary" has the meaning set forth in the definition
-----------------------
of Subsidiary.
"WDYL Acquisition" means the acquisition by the Borrower of all or
----------------
substantially all of the assets, property and business used in the operation of
Station WDYL-FM, Chester, Virginia.
"WFUN Acquisition" means the acquisition by the Borrower of all or
----------------
substantially all of the assets, property and business used in the operation of
Station WFUN-FM, Bethalto, Illinois.
"WKJS Acquisition" means the acquisition by the Borrower of all or
----------------
substantially all of the assets, property and business used in the operation of
Station WKJS-FM, Crewe, Virginia.
"WENZ Acquisition" means the acquisition by the Borrower of all or
----------------
substantially all of the assets, property and business used in the operation of
Stations WENZ-FM and WERE-AM, Cleveland, Ohio.
"WSOJ Acquisition" means the acquisition by the Borrower of all or
----------------
substantially all of the assets, property and business used in the operation of
Station WSOJ-FM, Petersburg, Virginia.
1.2 Other Definitional Provisions.
-----------------------------
(a) Unless otherwise specified therein, all terms defined in this
Agreement shall have the same defined meanings when used in the Notes or other
Loan Documents.
(b) As used in any Loan Document, accounting terms relating to the
Borrower and its Subsidiaries not defined in Section 1.1 and accounting terms
-----------
partly defined in Section 1.1, to the extent not defined, shall have the
-----------
respective meanings given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
34
<PAGE>
(d) The meanings given to terms defined in any Loan Document shall be
equally applicable to both the singular and plural forms of such terms.
(e) Unless stipulated otherwise (i) all references in any of the Loan
Documents to "dollars", "money", "payments" or other similar financial or
monetary terms, are references to currency of the United States of America and
(ii all references to interest are to simple not compound interest.
(f) The headings and captions used in any of the Loan Documents are
for convenience only and shall not be deemed to limit, amplify or modify the
terms of the Loan Documents nor affect the meaning thereof.
(g) References in this Agreement or any other Loan Document to
knowledge by the Borrower or any Subsidiary of events or circumstances shall be
deemed to refer to events or circumstances of which any Responsible Officer has
actual knowledge or reasonably should have knowledge.
(h) References in this Agreement or any other Loan Document to
financial statements shall be deemed to include all related schedules and notes
thereto.
1.3 Computation of Time Periods. For purposes of computation of
---------------------------
periods of time hereunder, the word "from" means "from and including" and the
words "to" and "until" each mean "to but excluding".
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 Commitments. (a) Subject to and in reliance upon the terms,
-----------
conditions, representations and warranties contained in the Loan Documents, each
Lender severally agrees to make Loans under its Available Commitment to the
Borrower from time to time until the Termination Date ("Loans"), provided that
----- --------
in no event shall the Aggregate Outstandings of Credit of any Lender at any time
exceed such Lender's Commitment. Until the Termination Date, the Borrower may
use the Available Commitments by borrowing, prepaying the Loans in whole or in
part, and reborrowing, all in accordance with the terms and conditions hereof.
(b) The Loans may from time to time be (i) Eurodollar Loans, (ii) ABR
Loans or (iii) a combination thereof, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.3 and 4.5, provided
------------ --- --------
that no Loan shall be made as a Eurodollar Loan after the day that is one month
prior to the Termination Date.
(c) In order to evidence the Loans, the Borrower will execute and
deliver to each Lender a promissory note substantially in the form of Exhibit H,
---------
with appropriate insertions as to payee, date and principal amount (each, as
amended, supplemented, replaced or otherwise modified from time to time, a
"Note"), payable to the order of each Lender and in a principal amount equal to
----
each such Lender's Commitment. Each Note shall (x) be dated the Effective Date
or the date of
35
<PAGE>
any reissuance of such Note, (y) be stated to mature on the Termination Date and
(z) provide for the payment of interest in accordance with Section 4.1.
-----------
2.2 Intentionally Deleted.
---------------------
2.3 Procedure for Borrowing. Subject to the applicable terms and
-----------------------
conditions contained in Section 6 of this Agreement, the Borrower may borrow
---------
under the Commitments at any time prior to the Termination Date, on any Business
Day by delivery to the Administrative Agent of an irrevocable notice
substantially in the form of Exhibit I (a "Notice of Borrowing"). A Notice of
--------- -------------------
Borrowing must be received by the Administrative Agent prior to 10:00 A.M.,
Dallas, Texas time, (a) three Business Days prior to the requested Borrowing
Date, if all or any part of the requested Loans are to be initially Eurodollar
Loans, or (b) on the requested Borrowing Date. A Notice of Borrowing shall
specify (i) the amount to be borrowed, (ii) the requested Borrowing Date, (iii)
whether the borrowing is to be of Eurodollar Loans, ABR Loans or a combination
thereof and (iv) if the borrowing is to be entirely or partly of Eurodollar
Loans, the respective amounts of each Eurodollar Tranche and the respective
lengths of the initial Interest Periods therefor. Borrowings under the
Commitments shall be in an amount equal to (x) in the case of ABR Loans,
$500,000 or a whole multiple of $100,000 in excess thereof (or, if the then
available amount of the Commitments is less than $500,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of
$100,000 in excess thereof. Upon receipt of any such Notice of Borrowing from
the Borrower, the Administrative Agent shall promptly notify each Lender
thereof. Each such Lender will make the amount of its pro rata share of each
applicable borrowing available to the Administrative Agent for the account of
the Borrower at the office of the Administrative Agent specified as the Funding
Office in Schedule 1.1A prior to noon, Dallas, Texas time, on the Borrowing Date
-------------
requested by the Borrower in funds immediately available to the Administrative
Agent. Such borrowing will then be made available to the Borrower by the
Administrative Agent crediting the account of the Borrower as so directed by the
Borrower in a Notice of Borrowing with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds as
received by the Administrative Agent.
2.4 Repayment of Loans. (a) The Borrower hereby unconditionally
------------------
promises to pay to the Administrative Agent for the account of each Lender, (i)
the then unpaid principal amount of each Loan of such Lender on the Termination
Date (or such earlier date on which the Loans become due and payable pursuant to
Section 9) and (ii) the amounts specified in Section 4.2 on the dates specified
- --------- -----------
in Section 4.2. The Borrower hereby further agrees to pay interest on the
-----------
unpaid principal amount of the Loans from time to time outstanding until payment
in full thereof at the rates per annum, and on the dates, set forth in Section
-------
4.1.
- ---
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the amounts
of principal and interest payable and paid to such Lender from time to time
under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
Section 11.6(g), and a subaccount therein for each Lender, in which shall be
- ---------------
recorded (i) the amount
36
<PAGE>
of each Loan made hereunder the type thereof and each Interest Period, if any,
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Borrower to each Lender hereunder and
(iii) both the amount of any sum received by the Administrative Agent hereunder
from the Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 11.6(g) shall, to the extent permitted by
---------------
applicable law, be prima facie evidence of the existence and amounts of the
----- -----
obligations of the Borrower therein recorded; provided, however, that the
-------- -------
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, shall not in any manner affect the obligation of the Borrower
to repay (with applicable interest) the Loans made to the Borrower by such
Lender in accordance with the terms of this Agreement.
SECTION 3. LETTERS OF CREDIT
3.1 L/C Commitment. (a) Subject to the terms and conditions hereof,
--------------
Issuing Lender, in reliance on the agreements of the other Lenders set forth in
Section 3.4(a), agrees to issue letters of credit ("Letters of Credit") for the
- -------------- -----------------
account of the Borrower on any Business Day in such customary form as may be
approved from time to time by such Issuing Lender; provided that Issuing Lender
--------
shall not issue any Letter of Credit if, after giving effect to such issuance,
the L/C Obligations would exceed the lesser of (x) $5,000,000 or (y) the Total
Available Commitment at such time. Each Letter of Credit shall (i) be
denominated in Dollars and (ii) expire no later than the earlier of (x) the
Termination Date and (y) the date which is 12 months after its date of issuance.
(b) Each Letter of Credit shall be subject to the Uniform Customs
and, to the extent not inconsistent therewith, the laws of the State of New
York.
(c) The Issuing Lender shall not at any time be obligated to issue
any Letter of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any other Lender to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Borrower may
-------------------------------------------
from time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender, at the office of the Issuing Lender specified
in Section 11.2, an application therefor, completed to the reasonable
------------
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may reasonably request. Upon
receipt of any Application, the Issuing Lender will process such Application and
the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower promptly
following the issuance thereof.
37
<PAGE>
3.3 Fees, Commissions and Other Charges. (a) The Borrower shall pay
-----------------------------------
to the Issuing Lender, for the account of each Lender, a letter of credit fee
with respect to each Letter of Credit, for the period from and including the
date of issuance of such Letter of Credit to the date such Letter of Credit is
no longer outstanding, computed at a percentage rate per annum equal to the
Applicable Margin from time to time applicable to Loans bearing interest at the
Eurodollar Rate, calculated on the basis of a 360-day year, on the aggregate
average daily amount available to be drawn under such Letter of Credit for the
period as to which payment of such fee is made. Such letter of credit fee shall
be payable on each L/C Fee Payment Date occurring while a Letter of Credit
remains outstanding and on the date each Letter of Credit expires, is canceled
or is drawn upon. Such letter of credit fee once paid shall be nonrefundable.
(b) The Borrower shall pay to the Issuing Lender, a letter of credit
fee with respect to each Letter of Credit equal to 1/4 of 1% per annum on the
face amount of each such Letter of Credit, payable on each Interest Payment Date
(for an ABR Loan) to the Issuing Lender for its own account. Such fee once paid
shall be nonrefundable.
(c) In addition, the Borrower shall pay customary administrative,
issuance, amendment, payment and negotiation charges to the Issuing Lender for
its own account.
3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to
------------------
grant and hereby grants to each Lender, and, to induce the Issuing Lender to
issue Letters of Credit hereunder, each Lender irrevocably agrees to accept and
purchase and hereby accepts and purchases from the Issuing Lender, for such
Lender's own account and risk an undivided interest equal to such Lender's
Specified Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued by the Issuing Lender and the amount of each draft paid
by the Issuing Lender thereunder. Each Lender unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit issued by the Issuing Lender for which the Issuing Lender is not
reimbursed in full by the Borrower in accordance with Section 3.5(a), such
--------------
Lender shall pay to the Issuing Lender upon demand at the office of the Issuing
Lender specified in Schedule 1.1A an amount equal to such Lender's Specified
-------------
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any Lender to the Issuing
Lender pursuant to this Section 3.4 in respect of any unreimbursed portion of
-----------
any payment made by the Issuing Lender under any Letter of Credit is paid to the
Issuing Lender within three Business Days after the date such payment is due,
such Lender shall pay to the Issuing Lender on demand an amount equal to the
product of (i) such amount, times (ii) the daily average Federal Funds Effective
-----
Rate during the period from and including the date such payment is required to
the date on which such payment is immediately available to the Issuing Lender,
times (iii) a fraction the numerator of which is the number of days that elapse
- -----
during such period and the denominator of which is 360. If any such amount
required to be paid by any Lender pursuant to this Section 3.4 is not in fact
-----------
made available to the Issuing Lender by such Lender within three Business Days
after the date such payment is due, the Issuing Lender shall be entitled to
recover from such Lender, on demand, such amount with interest thereon
calculated from and including the date such payment is required to the date on
which such payment is immediately available to the Issuing Lender at a rate per
annum equal
38
<PAGE>
to the ABR plus the Applicable Margin. A certificate of the Issuing
----
Lender submitted to any Lender with respect to any amounts owing under this
Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any Lender its pro rata share
--- ----
of such payment in accordance with this Section 3.4, the Issuing Lender receives
-----------
any payment related to such Letter of Credit (whether directly from the Borrower
or otherwise, including proceeds of Collateral applied thereto by the Issuing
Lender), or any payment of interest on account thereof, the Issuing Lender will,
if such payment is received prior to 11:00 A.M., Dallas, Texas time, on a
Business Day, distribute to such Lender its pro rata share thereof on the same
--- ----
Business Day or if received later than 11:00 A.M., Dallas, Texas time, on the
next succeeding Business Day; provided, however, that in the event that any such
-------- -------
payment received by the Issuing Lender shall be required to be returned by the
Issuing Lender, such Lender shall return to the Issuing Lender the portion
thereof previously distributed by the Issuing Lender to it.
(d) Notwithstanding anything to the contrary in this Agreement, each
Lender's obligation to make the Loans referred to in Section 3.5(b) and to
--------------
purchase and fund participating interests pursuant to Section 3.4(a) shall be
--------------
absolute and unconditional and shall not be affected by any circumstance,
including, without limitation, (i) any setoff, counterclaim, recoupment, defense
or other right which such Lender or the Borrower may have against the Issuing
Lender, the Borrower or any other Person for any reason whatsoever, (ii) the
occurrence or continuance of a Default or an Event of Default or the failure to
satisfy any of the other conditions specified in Section 6, (iii) any adverse
---------
change in the condition (financial or otherwise) of any Loan Party, (iv) any
breach of this Agreement or any other Loan Document by any Loan Party or any
Lender, or (v) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing.
3.5 Reimbursement Obligation of the Borrower. (a) The Borrower
----------------------------------------
agrees to reimburse the Issuing Lender (it being understood that such
reimbursement shall be effected by means of a borrowing of Loans unless the
Administrative Agent shall determine in its sole discretion that such Loans may
not be made for such purpose as a result of a Default or Event of Default
pursuant to Section 9(f)), upon receipt of notice from the Issuing Lender of the
------------
date and amount of a draft presented under any Letter of Credit and paid by the
Issuing Lender, for the amount of (i) such draft so paid and (ii any taxes,
fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment. Each such payment shall be made to the Issuing
Lender, at the office of the Issuing Lender specified in Schedule 1.1A in
-------------
Dollars and in immediately available funds, on the date on which the Borrower
receives such notice, if received prior to 11:00 A.M., Dallas, Texas, time, on a
Business Day and otherwise on the next succeeding Business Day.
(b) Interest shall be payable on any and all amounts remaining unpaid
by the Borrower under this Section 3.5, (i) from the date the draft under the
-----------
affected Letter of Credit is paid by the Issuing Bank to the date on which the
Borrower is required to pay such amounts pursuant to paragraph (a) above at a
rate per annum equal to the ABR plus the Applicable Margin and (ii) thereafter
----
until payment in full at the rate which would be payable on any Loans which were
then overdue. Except as otherwise specified in Section 3.5(a), each drawing
--------------
under any Letter of Credit
39
<PAGE>
shall constitute a request by the Borrower to the Administrative Agent for a
borrowing of Loans that are ABR Loans pursuant to Section 2.3 in the amount of
-----------
such drawing. The Borrowing Date with respect to such borrowing shall be the
date of payment of such drawing and the proceeds of such Loans shall be applied
by the Administrative Agent to reimburse the Issuing Lender for the amounts paid
under such Letter of Credit.
3.6 Obligations Absolute. Subject to the penultimate sentence of
--------------------
this Section 3.6, the Borrower's obligations under this Section 3 shall be
----------- ---------
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrower may have or
have had against the Issuing Lender, any Lender or any beneficiary of a Letter
of Credit. The Borrower also agrees with the Issuing Lender that the Issuing
Lender and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
-----------
other things, (i) the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or (ii) any dispute between or among the Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or (iii) any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee. So long as the Issuing Lender acts in accordance with the standards
of care specified in the Uniform Commercial Code of the State of New York, the
Issuing Lender and the Lenders shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit, except for
errors or omissions caused by such Person's gross negligence or willful
misconduct. The Borrower agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the Uniform Commercial
Code of the State of New York, shall be binding on the Borrower and shall not
result in any liability of either the Issuing Lender or any Lender to the
Borrower.
3.7 Letter of Credit Payments. If any draft shall be presented for
-------------------------
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower and the Lenders of the date and amount thereof. Subject to Section
-------
3.6, the responsibility of the Issuing Lender to the Borrower in connection with
- ---
any draft presented for payment under any Letter of Credit shall, in addition to
any payment obligation expressly provided for in such Letter of Credit, be
limited to determining that the documents (including each draft) delivered under
such Letter of Credit in connection with such presentment appear on their face
to be in conformity with such Letter of Credit.
3.8 Application. To the extent that any provision of any Application
-----------
related to any Letter of Credit is inconsistent with the provisions of this
Agreement, the provisions of this Agreement shall apply.
40
<PAGE>
SECTION 4. GENERAL PROVISIONS APPLICABLE TO LOANS
AND LETTERS OF CREDIT
4.1 Interest Rates and Payment Dates. (a) Subject to Section 11.15,
-------------------------------- -------------
each Eurodollar Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the Eurodollar Rate
plus the Applicable Margin determined for such day.
- ----
(b) Subject to Section 11.15, each ABR Loan shall bear interest for
-------------
each day that it is outstanding at a rate per annum equal to the ABR plus the
----
Applicable Margin for such day.
(c) (i) Subject to Section 11.15, after the occurrence and during the
-------------
continuance of an Event of Default under Section 9(a) of this Agreement, all
------------
Loans and Reimbursement Obligations shall bear interest at a rate per annum
which is equal to (x) in the case of the Loans, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this Section 4.1 plus
----------- ----
2% or (y) in the case of Reimbursement Obligations, at a rate per annum equal to
the ABR plus the Applicable Margin plus 2% and (ii) if all or a portion of any
---- ----
interest payable on any Loan or Reimbursement Obligation or any commitment fee,
letter of credit fee or other amount payable hereunder shall not be paid when
due (whether at the stated maturity, by acceleration or otherwise), such overdue
amount shall bear interest at a rate per annum equal to the ABR plus the
----
Applicable Margin plus 2%, in each case, with respect to clauses (i) and (ii)
----
above, from the date of such non-payment until such amount is paid in full (as
well after as before judgment).
(d) Interest shall be payable in arrears on each Interest Payment
Date, provided that interest accruing pursuant to paragraph (c) of this Section
--------
shall be payable from time to time on demand.
4.2 Optional and Mandatory Commitment Reductions and Prepayments.
------------------------------------------------------------
(a) The Borrower may at any time and from time to time prepay the Loans, in
whole or in part, without premium or penalty (it being understood that amounts
payable pursuant to Section 4.11 do not constitute premium or penalty), upon at
------------
least three Business Days' irrevocable notice to the Administrative Agent (in
the case of Eurodollar Loans) or at least one Business Day's irrevocable notice
to the Administrative Agent (in the case of ABR Loans), specifying the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans, ABR
Loans or a combination thereof, and, in each case if a combination thereof, the
principal amount allocable to each. Upon the receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with (if a Eurodollar Loan is prepaid other
than at the end of the Interest Period applicable thereto) any amounts payable
pursuant to Section 4.11. Partial prepayments of Loans shall be in an aggregate
------------
principal amount of $500,000 or a whole multiple of $100,000 in excess thereof
(unless the entire balance thereof is being prepaid).
(b) The Borrower shall have the right, upon not less than three
Business Days' notice to the Administrative Agent (which will promptly notify
the Lenders thereof), to terminate the Commitments or, from time to time, to
reduce the amount of the Commitments; provided that no such termination or
--------
reduction of the Commitments shall be permitted if, after giving effect thereto
41
<PAGE>
and to any prepayments of the Loans made on the effective date thereof, (x) the
sum of the Aggregate Outstandings of Credit of all Lenders would exceed the
Total Available Commitment then in effect. Any such reduction in the Commitments
shall be in a minimum amount of $1,000,000 or a whole multiple of $500,000 in
excess thereof (unless the Aggregate Commitment is being terminated) and shall
reduce permanently the Commitments then in effect.
(c) If at any time the sum of the Aggregate Outstandings of Credit of
all Lenders exceeds the Total Available Commitment then in effect, the Borrower
shall, without notice or demand, immediately repay the Loans in an aggregate
principal amount equal to such excess, together with interest accrued to the
date of such payment or repayment and any amounts payable under Section 4.11. To
------------
the extent that, after giving effect to any prepayment of the Loans required by
the preceding sentence, the sum of the L/C Obligations still exceeds the Total
Available Commitment (the amount of such excess being herein referred to as the
"Overfunded Amount"), the Borrower shall, without notice or demand, immediately
-----------------
pay an amount equal to such Overfunded Amount to the Administrative Agent for
deposit in the Cash Collateral Account. Any amounts deposited in the Cash
Collateral Account shall be invested in Cash Equivalents having a one day
maturity or such other Cash Equivalents as shall be acceptable to the
Administrative Agent and the Borrower.
(d) Concurrently with the consummation of any Disposition or the
receipt of Net Proceeds from any Recovery Event by the Borrower or any
Restricted Subsidiary, the Borrower shall cause the Net Proceeds therefrom to be
promptly paid to the Administrative Agent, in immediately available funds, for
deposit in an account maintained by the Administrative Agent for the benefit of
the Lenders (the "Cash Collateral Account"), which Net Proceeds shall be held by
-----------------------
the Administrative Agent in such Cash Collateral Account as security for the
Obligations, in accordance with Section 4.2(h), and shall be distributed by the
--------------
Administrative Agent pursuant to this Section 4.2(d) and Section 4.2(i). In the
-------------- --------------
event that the Borrower and/or a Restricted Subsidiary (i) in the case of a
Recovery Event, uses the Net Proceeds therefrom to restore or replace assets in
respect of which a Recovery Event has occurred within 360 days after the date of
receipt of the Net Proceeds from such Recovery Event (the "Recovery Reinvestment
---------------------
Deadline"), or (ii) in the case of a Disposition, subject to the provisions of
- --------
Sections 8.7 and 8.8, (A) enters into a binding contract for the reinvestment of
- ------------ ---
such Net Proceeds in Broadcast Assets within 270 days after the date of such
Disposition (the "Contract Deadline Date") and (B) actually reinvests such Net
----------------------
Proceeds in Broadcast Assets within 360 days after the date of such Disposition
(the "Reinvestment Deadline Date"), then the Administrative Agent shall release
--------------------------
from the Cash Collateral Account (concurrently with the consummation of the
applicable reinvestment transaction) that portion of such Net Proceeds which are
to be used by the Borrower for such reinvestment transaction, provided such
--------
reinvestment occurs on or before the Recovery Reinvestment Deadline or the
Reinvestment Deadline Date, as applicable. In the event that either (i) in the
case of a Recovery Event, the Borrower and/or a Restricted Subsidiary does not
restore or replace assets in respect of which a Recovery Event has occurred on
or before the Recovery Reinvestment Deadline or (ii) in the case of a
Disposition, the Borrower and/or a Restricted Subsidiary (A) does not enter into
a binding contract for the reinvestment of such Net Proceeds in Broadcast Assets
on or before the Contract Deadline Date or (B) does not actually reinvest such
Net Proceeds on or before the Reinvestment Deadline Date (any such Net Proceeds,
or portion thereof, not so used to restore or replace assets by the Recovery
Reinvestment Deadline,
42
<PAGE>
not subject to a binding contract on the Contract Deadline Date or not so
reinvested on the Reinvestment Deadline Date being herein referred to as "Excess
------
Proceeds"), then (x) the Administrative Agent shall, on the Recovery
- --------
Reinvestment Deadline, Contract Deadline Date or the Reinvestment Deadline Date,
as the case may be, apply all Excess Proceeds held in the Cash Collateral
Account toward the repayment of the Loans, together with interest accrued to the
date of such payment and any amounts payable under Section 4.11 and (y) the then
------------
Aggregate Commitment shall be permanently reduced on such applicable date by an
amount equal to the aggregate amount of such Excess Proceeds. In addition, to
the extent that, after giving effect to any repayment of the Loans and reduction
of the Aggregate Commitment required by the preceding sentence, the sum of the
Aggregate Outstandings of Credit of all Lenders exceeds the Total Available
Commitment (as reduced), then (in addition to the Borrower's obligations under
Section 4.2(c) above) any amounts remaining of such Excess Proceeds shall
- --------------
continue to be held by the Administrative Agent in the Cash Collateral Account.
Notwithstanding the foregoing provisions of this Section 4.2(d), the Borrower
--------------
and the Restricted Subsidiaries shall not be required to apply any Net Proceeds
in accordance with this Section 4.2(d) unless or until such Net Proceeds either
singularly or when aggregated with all other Net Proceeds from all Dispositions
and Recovery Events exceeds $1,000,000. Notwithstanding anything to the contrary
set forth herein, in the event (i) a Default or Event of Default exists and is
continuing or (ii) the aggregate Excess Proceeds realized since May 19, 1997
equals or exceeds $4,750,000, then (A) any and all Net Proceeds received on or
after such events by the Borrower or any Restricted Subsidiary shall be
immediately paid to the Administrative Agent for deposit in the Cash Collateral
Account and the Administrative Agent shall apply all such Net Proceeds toward
the repayment of the Loans and to cash collateralize the L/C Obligations as
aforesaid and (B) the then Aggregate Commitment shall be permanently reduced by
an amount equal to the amount of all such Net Proceeds received on or after such
events.
(e) In the event that the Borrower or any Restricted Subsidiary issues
or sells any Equity Interests of the Borrower or a Restricted Subsidiary (other
than Disqualified Stock, the New Preferred Stock or Senior Preferred Stock
issued in respect of the Allied Warrant), then no later than the third Business
Day following the date of receipt of the cash proceeds from any such issuance or
sale of such Equity Interests (other than proceeds from the issuance or sale of
such Equity Interests to the Borrower or any Wholly Owned Restricted Subsidiary
of the Borrower by any Person that was a Restricted Subsidiary of the Borrower
immediately prior to such issuance), the Borrower shall repay the Loans in an
amount equal to the cash proceeds of such Equity Interests, net of underwriting
discounts and commissions and other reasonable costs associated therewith (the
"Equity Proceeds"); provided that the Borrower shall not be required to repay
--------------- --------
the Loans under this Section 4.2(e) with any such Equity Proceeds that (i) are
--------------
reinvested in Permitted Acquisitions or permitted Capital Expenditures by the
Borrower or a Restricted Subsidiary within 30 days of the receipt of such Equity
Proceeds or (ii) are received by the Borrower from the initial Public Equity
Offering.
(f) In the event that any Loan Party creates, incurs, acquires or
issues any Indebtedness or Disqualified Stock other than Indebtedness permitted
under Section 8.2, then no later than the third Business Day following the date
-----------
of receipt of the proceeds (the "Debt Proceeds") from the creation, incurrence,
-------------
acquisition or issuance of any such Indebtedness or Disqualified Stock, the
Borrower shall (i) repay the Loans in an amount equal to the amount of such Debt
Proceeds and (ii) the then Aggregate Commitment shall be permanently reduced by
the amount of
43
<PAGE>
such Debt Proceeds. To the extent that, after giving effect to any repayment of
the Loans and reduction of the Aggregate Commitment required by the preceding
sentence, the sum of the Aggregate Outstandings of Credit of all Lenders exceeds
the Total Available Commitment (as reduced), then (in addition to the Borrower's
obligations under Section 4.2(c) above) any amounts remaining of such Debt
Proceeds shall be deposited in the Cash Collateral Account.
(g) In the case of any reduction of the Aggregate Commitment, the
Borrower shall, if applicable, comply with the requirements of Section 4.2(c).
--------------
The application of any prepayment to the Loans pursuant to this Section 4.2
-----------
shall be made first to ABR Loans and second to Eurodollar Loans. Each repayment
of the Loans under this Section 4.2 shall be accompanied by accrued interest to
-----------
the date of such repayment on the amount repaid and any amounts payable under
Section 4.11.
- ------------
(h) As security for the Obligations, the Borrower hereby grants,
conveys, assigns, pledges, sets over and transfers to the Administrative Agent,
for the benefit of the Lenders, and creates in the Administrative Agent's favor
for the benefit of the Lenders, a security interest in, all money (including
interest), instruments and securities at any time held in or acquired in
connection with the Cash Collateral Account together with all proceeds thereof.
The Cash Collateral Account shall be under the sole dominion and control of the
Administrative Agent, and the Borrower shall not have any right to withdraw or
cause the Administrative Agent to withdraw any funds deposited in the Cash
Collateral Account except as provided in Sections 4.2(d) and 4.2(i). At any
--------------- ------
time and from time to time, upon the Administrative Agent's request, the
Borrower promptly shall execute and deliver any and all such further agreements,
documents, instruments and certificates, including financing statements, as may
be necessary, appropriate or desirable in the Administrative Agent's reasonable
judgment to obtain the full benefits (including perfection and priority) of the
security interest created or intended to be created by this Section 4.2(h) and
--------------
of the rights and powers herein granted. The Borrower shall not create or
suffer to exist any Lien on any amounts or investments held in the Cash
Collateral Account other than the Lien granted under this Section 4.2(h).
--------------
(i) The Administrative Agent shall, after the date on which the
Aggregate Commitment shall have been terminated, apply any proceeds held in the
Cash Collateral Account first to pay any unpaid Obligations then outstanding
-----
hereunder in such order as the Administrative Agent may determine and then to
----
refund any remaining amount to the Borrower.
4.3 Commitment Fees, etc. (a) The Borrower agrees to pay to the
--------------------
Administrative Agent for the account of each Lender, a commitment fee, on the
average daily amount of the Available Commitment of such Lender computed at a
rate per annum based on the Leverage Ratio in effect for the fiscal quarter (for
which financial statements are available) preceding the payment date determined
as follows:
44
<PAGE>
Leverage Ratio Commitment Fee
-------------- --------------
Greater than 5.00 to 1.00 0.500%
Less than or equal to 5.00 to 1.00 but
greater than 4.00 to 1.00 0.375%
Less than or equal to 4.00 to 1.00 0.250%
For purposes of calculating the commitment fee due hereunder, the Leverage Ratio
shall be determined as at the end of each of the first three quarterly periods
of each fiscal year of the Borrower and as at the end of each fiscal year of the
Borrower, based on the relevant financial statements delivered pursuant to
Section 7.1(a) or (b) and the Compliance Certificate delivered pursuant to
Section 7.2(b); changes in the Leverage Ratio shall become effective on the date
- --------------
which is the earlier of (i) two Business Days after the date the Administrative
Agent receives such financial statements and the corresponding Compliance
Certificate and (ii) the 45th day after the end of each of the first three
quarterly periods of each fiscal year or the 90th day after the end of each
fiscal year, as the case may be, and shall remain in effect until the next
change to be effected pursuant to this Section 4.3; provided, that (a) until the
----------- --------
first such financial statements and Compliance Certificate are delivered after
the Effective Date, the commitment fee shall be determined by reference to the
Leverage Ratio set forth in the Compliance Certificate delivered to the
Administrative Agent pursuant to Section 6.2(h), and (b) if any financial
--------------
statements or the Compliance Certificates referred to above are not delivered
within the time periods specified above, then, for the period from and including
the date on which such financial statements and Compliance Certificate are
required to be delivered until the date on which such financial statements and
Compliance Certificate are delivered, the commitment fee as at the end of the
fiscal period that would have been covered thereby shall be deemed to be the
commitment fee which would be applicable when the Leverage Ratio is greater than
6.50 to 1.00. Notwithstanding anything to the contrary contained herein, during
the fiscal quarter in which the Borrower closes its initial Public Equity
Offering, the Borrower shall have the right to resubmit to the Administrative
Agent and each Lender a new Compliance Certificate which recalculates the
"Indebtedness" component of the Leverage Ratio as of such date and, to the
extent there is a change in the Leverage Ratio reflected therein, a new
commitment fee for the then occurring fiscal quarter shall begin to accrue,
effective two Business Days after the date the Administrative Agent receives
such new Compliance Certificate and shall remain in effect until the next change
to be effected pursuant to this definition.
Such commitment fee shall be (i) payable quarterly in arrears on the last
Business Day of each March, June, September and December and on the Termination
Date and (ii) fully earned and non-refundable upon payment thereof.
(b) The Borrower shall pay (without duplication of any fee payable
under Section 4.3(a)) to the Administrative Agent the fees provided for in the
--------------
Fee Letter on the dates and in the amounts provided for therein.
45
<PAGE>
4.4 Computation of Interest and Fees. (a) Interest based on the
--------------------------------
Eurodollar Rate and fees shall be calculated on the basis of a 360-day year for
the actual days elapsed; and interest based on the ABR shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed. The Administrative Agent shall as soon as practicable notify the
Borrower and the Lenders of each determination of a Eurodollar Rate. Any change
in the interest rate on a Loan resulting from a change in the ABR or the
Eurocurrency Reserve Requirements shall become effective as of the opening of
business on the day on which such change becomes effective. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Administrative
Agent pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing in reasonable detail the calculations used by the
Administrative Agent in determining any interest rate pursuant to Section 4.1
-----------
(a).
- ---
(c) The fees described in this Agreement and the Fee Letter represent
compensation for services rendered and to be rendered separate and apart from
the lending of money or the provision of credit and do not constitute
compensation for the use, detention, or forbearance of money, and the obligation
of the Borrower to pay each fee described herein shall be in addition to, and
not in lieu of, the obligation of the Borrower to pay interest, other fees
described in the Loan Documents, and expenses otherwise described in the Loan
Documents. Fees shall be payable when due in Dollars and in immediately
available funds. All such fees shall be non-refundable.
4.5 Conversion and Continuation Options. (a) The Borrower may elect
-----------------------------------
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent an irrevocable notice substantially in the form of Exhibit
-------
J (a "Notice of Conversion/Continuation"), by 10:00 A.M. Dallas, Texas time at
- - ---------------------------------
least one Business Day prior to such election, provided that any such conversion
--------
of Eurodollar Loans may only be made on the last day of an Interest Period with
respect thereto. The Borrower may elect from time to time to convert ABR Loans
to Eurodollar Loans or to continue Eurodollar Loans as Eurodollar Loans by
giving the Administrative Agent a Notice of Conversion/Continuation by 10:00
A.M. Dallas, Texas, time at least three Business Days' prior to such election.
Any such Notice of Conversion/Continuation to Eurodollar Loans shall specify the
length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such Notice of Conversion/Continuation the Administrative Agent
shall promptly notify each Lender thereof. All or any part of outstanding
Eurodollar Loans and ABR Loans may be converted as provided herein, provided
--------
that (i) no Loan may be converted into a Eurodollar Loan when any Event of
Default has occurred and is continuing and (ii) no Loan may be converted into a
Eurodollar Loan if the Interest Period selected therefor would expire after the
Termination Date.
(b) Any Eurodollar Loans may be continued as such upon the expiration
of the then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, of the length of the next
Interest Period to be applicable to such Loans, determined in accordance with
the applicable provisions of the term "Interest Period" set forth in Section
-------
1.1, provided that no Eurodollar Loan may be continued as such (i) when any
- --- --------
Event of
46
<PAGE>
Default has occurred and is continuing or (ii) after the date that is
one month prior to the Termination Date, and provided, further, that if the
-------- -------
Borrower shall fail to give any required notice as described above in this
paragraph or if such continuation is not permitted pursuant to the preceding
proviso such Loans shall be automatically converted to ABR Loans on the last day
of such then expiring Interest Period. Upon receipt of any such notice of
continuation pursuant to this Section 4.5(b), the Administrative Agent shall
--------------
promptly notify each Lender thereof.
4.6 Minimum Amounts of Eurodollar Tranches. All borrowings,
--------------------------------------
conversions, continuations and payments of Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Eurodollar Loans comprising (i) each Eurodollar Tranche of Loans shall be
equal to $1,000,000 or a whole multiple of $100,000 in excess thereof. In no
event shall there be more than six Eurodollar Tranches outstanding at any time.
4.7 Inability to Determine Interest Rate. If prior to the first day
------------------------------------
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be made in good faith and shall be conclusive and
binding upon the Borrower absent manifest error) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period;
or
(b) the Administrative Agent shall have received notice from the
Majority Lenders that the Eurodollar Rate determined or to be determined
for such Interest Period will not adequately and fairly reflect the cost to
such Lenders (as conclusively certified by such Lenders) of making,
maintaining or converting that portion of the outstanding principal balance
of their affected Loans during such Interest Period,
the Administrative Agent shall give facsimile notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is given (x) any
Eurodollar Loans requested to be made on the first day of such Interest Period
shall be made as ABR Loans, (y) any Loans that were to have been converted on
the first day of such Interest Period to Eurodollar Loans shall be continued as
ABR Loans and (z) any outstanding Eurodollar Loans shall be converted, on the
first day of such Interest Period, to ABR Loans. Until such notice has been
withdrawn by the Administrative Agent or the Majority Lenders, as the case may
be, no further Eurodollar Loans shall be made or continued as such, nor shall
the Borrower have the right to convert Loans to Eurodollar Loans.
4.8 Pro Rata Treatment and Payments. (a) Each borrowing of Loans
-------------------------------
hereunder shall be made, each payment by the Borrower on account of any
commitment fee hereunder shall be allocated by the Administrative Agent, and any
reduction of the Commitments shall be allocated by the Administrative Agent, pro
---
rata according to the respective Specified Percentages of the Lenders. Each
- ----
payment (including each prepayment) by the Borrower on account of principal of
and interest on, or commitment fees related to, the Loans or Reimbursement
Obligations shall be allocated by the Administrative Agent pro rata according to
--- ----
the respective Specified Percentages of
47
<PAGE>
such Loans and Reimbursement Obligations then held by the Lenders. All payments
(including prepayments) to be made by the Borrower hereunder and under any
Notes, whether on account of principal, interest, fees, Reimbursement
Obligations or otherwise, shall be made without set-off or counterclaim and
shall be made prior to noon, Dallas, Texas time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Administrative
Agent's office specified in Section 11.2, in Dollars and in immediately
------------
available funds. Payments received by the Administrative Agent after such time
shall be deemed to have been received on the next Business Day. If any payment
hereunder becomes due and payable on a day other than a Business Day, the
maturity of such payment shall be extended to the next succeeding Business Day,
(and, with respect to payments of principal, interest thereon shall be payable
at the then applicable rate during such extension) unless, with respect to
payments of Eurodollar Loans only, the result of such extension would be to
extend such payment into another calendar month, in which event such payment
shall be made on the immediately preceding Business Day.
(b) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this Section 4.8 shall be
-----------
conclusive in the absence of manifest error. If such Lender's share of such
borrowing is not made available to the Administrative Agent by such Lender
within three Business Days of such Borrowing Date, the Administrative Agent
shall notify the Borrower of the failure of such Lender to make such amount
available to the Administrative Agent and the Administrative Agent shall also be
entitled to recover, on demand from the Borrower, such amount with interest
thereon at a rate per annum equal to the ABR plus the Applicable Margin in
----
effect on the Borrowing Date.
4.9 Requirements of Law. (a) If the adoption of or any change in
-------------------
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the Initial Effective Date:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Note or any
Eurodollar Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 4.10, net income taxes and franchise taxes (imposed in lieu of net
------------
income taxes);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities
48
<PAGE>
in or for the account of, advances, loans or other extensions of credit by,
or any other acquisition of funds by, any office of such Lender which is
not otherwise included in the determination of the Eurodollar Rate; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or to reduce any amount receivable
hereunder in respect thereof, then, in any such case, within five Business Days
following receipt by the Borrower of notice from such Lender, through the
Administrative Agent, in accordance herewith, the Borrower shall pay such Lender
such additional amount or amounts as will compensate such Lender for such
increased cost or reduced amount receivable.
(b) If any Lender shall have determined in good faith that the
adoption of or any change in any Requirement of Law regarding capital adequacy
or in the interpretation or application thereof or compliance by such Lender or
any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the Initial Effective Date shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such adoption, change or
compliance (taking into consideration such Lender's or such corporation's
policies with respect to capital adequacy) by an amount reasonably deemed by
such Lender to be material, then from time to time, the Borrower shall promptly
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction.
(c) If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 4.9, it shall promptly deliver a certificate to the
-----------
Borrower (with a copy to the Administrative Agent), setting forth in reasonable
detail an explanation of the basis for requesting such compensation. Such
certificate as to any additional amounts payable pursuant to this Section 4.9
-----------
submitted by such Lender to the Borrower (with a copy to the Administrative
Agent) shall be conclusive in the absence of manifest error provided such
determinations are made on a reasonable basis. The Borrower shall pay each
Lender the amount shown as due on any such certificate delivered by it within 15
days after the Borrower's receipt thereof. The agreements in this Section 4.9
-----------
shall survive the termination of this Agreement and the payment of the Loans and
all other amounts payable hereunder.
4.10 Taxes. (a) All payments made by the Borrower under this
-----
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding (i) net income taxes; (ii) franchise and doing
business taxes imposed on the Administrative Agent or any Lender as a result of
a present or former connection between the Administrative Agent or such Lender
and the jurisdiction of the Governmental Authority imposing such tax or any
political subdivision or taxing authority thereof or therein (other
49
<PAGE>
than any such connection arising solely from the Administrative Agent or such
Lender having executed, delivered or performed its obligations or received a
payment under, or enforced, this Agreement or any Note); (iii) any Taxes,
levies, imposts, deductions, charges or withholdings that are in effect and that
would apply to a payment to such Lender as of the Initial Effective Date; and
(iv) if any Person acquires any interest in this Agreement or any Note pursuant
to the provisions hereof, including without limitation a participation (whether
or not by operation of law), or a foreign Lender changes the office in which the
Loan is made, accounted for or booked (any such Person or such foreign Lender in
that event being referred to as a "Tax Transferee"), any Taxes, levies, imposts,
--------------
deductions, charges or withholdings to the extent that they are in effect and
would apply to a payment to such Tax Transferee as of the date of the
acquisition of such interest or change in office, as the case may be. If any
such non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from any amounts
------------------
payable to the Administrative Agent or any Lender hereunder or under any Note,
the amounts so payable to the Administrative Agent or such Lender shall be
increased to the extent necessary to yield to the Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
-------- -------
increase any such amounts payable to any Non-U.S. Lender if such Lender fails to
comply with the requirements of paragraph (b) of this Section. Whenever any Non-
Excluded Taxes are payable by the Borrower, as promptly as possible thereafter
the Borrower shall send to the Administrative Agent for its own account or for
the account of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower showing payment thereof. If, when the
Borrower is required by this Section 4.10(a) to pay any Non-Excluded Taxes, the
---------------
Borrower fails to pay such Non-Excluded Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(b) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America, or any estate
or trust that is subject to federal income taxation regardless of the source of
its income (a "Non-U.S. Lender") shall deliver to the Borrower and the
---------------
Administrative Agent (or, in the case of a Participant, to the Lender from which
the related participation shall have been purchased) two copies of either U.S.
Internal Revenue Service Form 1001 or Form 4224, or, in the case of a Non-U.S.
Lender claiming exemption from U.S. federal withholding tax under Section 871(h)
or 881(c) of the Code with respect to payments of "portfolio interest", a Form
W-8, or any subsequent versions thereof or successors thereto (and, if such Non-
U.S. Lender delivers a Form W-8, an annual certificate representing that such
Non-U.S. Lender (i) is not a "bank" for purposes of Section 881(c) of the Code
(and is not subject to regulatory or other legal requirements as a bank in any
jurisdiction, and has not been treated as a bank in any filing with or
submission made to any Governmental Authority or rating agency), (ii) is not a
10-percent shareholder (within the meaning of Section 871(h)(3)(B) of the Code)
of the Borrower and (iii) is not a controlled foreign corporation related to the
Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
(or, in the case of a Non-U.S. Lender entitled to a reduced treaty rate, a
partial exemption)
50
<PAGE>
from, U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents, along with such other additional forms
as the Borrower, the Administrative Agent (or, in the case of a Participant, the
Lender from which the related participation shall have been purchased) may
reasonably request to establish the availability of such exemption. Such forms
shall be delivered by each Non-U.S. Lender on or before the date it becomes a
party to this Agreement (or, in the case of any Participant, on or before the
date such Participant purchases the related participation). In addition, each
Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-
U.S. Lender shall promptly notify the Borrower at any time it determines that it
is no longer in a position to provide any previously delivered certificate to
the Borrower (or any other form of certification adopted by the U.S. taxing
authorities for such purpose). Notwithstanding any other provision of Section
-------
4.10, a Non-U.S. Lender shall not be required to deliver any form pursuant to
- ----
this Section 4.10(b) that such Non-U.S. Lender is not legally able to deliver,
--------------
it being understood and agreed that, in the event that a Non-U.S. Lender fails
to deliver any forms otherwise required to be delivered pursuant to this Section
-------
4.10(b), or notifies the Borrower that any previously delivered certificate is
- ------
no longer in force, the Borrower shall withhold such amounts as the Borrower
shall reasonably determine are required by law and shall not be required to make
any additional payment with respect thereto to the Non-U.S. Lender, unless such
failure to deliver or notify is a result of change in law subsequent to the
Initial Effective Date.
(c) If a Lender (or Transferee) or the Administrative Agent shall
become aware that it is entitled to receive a refund in respect of Non-Excluded
Taxes paid by the Borrower, or as to which it has been indemnified by the
Borrower, which refund in the good faith judgment of such Lender (or Transferee)
is allocable to such payment made pursuant to this Section 4.10, it shall
------------
promptly notify the Borrower of the availability of such refund and shall,
within 30 days after receipt of a request by the Borrower, apply for such
refund. If any Lender (or Transferee) or the Administrative Agent receives a
refund in respect of any Non-Excluded Taxes paid by the Borrower, or as to which
it has been indemnified by the Borrower, it shall promptly notify the Borrower
of such refund and shall, within 15 days after receipt, repay such refund to the
Borrower. The agreements in this Section 4.10 shall survive the termination of
------------
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
4.1 INDEMNITY. THE BORROWER AGREES TO INDEMNIFY EACH LENDER AND TO
---------
HOLD EACH LENDER HARMLESS FROM ANY LOSS OR EXPENSE WHICH SUCH LENDER MAY SUSTAIN
OR INCUR AS A CONSEQUENCE OF (A) DEFAULT BY THE BORROWER IN MAKING A BORROWING
OF, CONVERSION INTO OR CONTINUATION OF EURODOLLAR LOANS AFTER THE BORROWER HAS
GIVEN A NOTICE REQUESTING THE SAME IN ACCORDANCE WITH THE PROVISIONS OF THIS
AGREEMENT, (B) DEFAULT BY THE BORROWER IN MAKING ANY PREPAYMENT OF EURODOLLAR
LOANS AFTER THE BORROWER HAS GIVEN A NOTICE THEREOF IN ACCORDANCE WITH THE
PROVISIONS OF THIS AGREEMENT OR (C) THE MAKING OF A PREPAYMENT OF EURODOLLAR
LOANS ON A DAY WHICH IS NOT THE LAST DAY OF AN INTEREST PERIOD WITH RESPECT
THERETO. SUCH INDEMNIFICATION MAY INCLUDE AN AMOUNT EQUAL TO THE EXCESS, IF
ANY, OF (i) THE AMOUNT OF INTEREST WHICH
51
<PAGE>
WOULD HAVE ACCRUED ON THE AMOUNT SO PREPAID, OR NOT SO BORROWED, CONVERTED OR
CONTINUED, FOR THE PERIOD FROM THE DATE OF SUCH PREPAYMENT OR OF SUCH FAILURE TO
BORROW, CONVERT OR CONTINUE TO, BUT NOT INCLUDING, THE LAST DAY OF SUCH INTEREST
PERIOD (OR, IN THE CASE OF A FAILURE TO BORROW, CONVERT OR CONTINUE, THE
INTEREST PERIOD THAT WOULD HAVE COMMENCED ON THE DATE OF SUCH FAILURE) IN EACH
CASE AT THE APPLICABLE RATE OF INTEREST FOR SUCH LOANS PROVIDED FOR HEREIN OVER
(ii) THE AMOUNT OF INTEREST (AS REASONABLY DETERMINED BY SUCH LENDER) WHICH
WOULD HAVE ACCRUED TO SUCH BANK ON SUCH AMOUNT BY PLACING SUCH AMOUNT ON DEPOSIT
FOR A COMPARABLE PERIOD WITH LEADING BANKS IN THE INTERBANK EURODOLLAR MARKET.
THIS COVENANT SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT AND THE PAYMENT OF
THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.
4.12 Change of Lending Office. Each Lender agrees that if it makes
------------------------
any demand for payment under Section 4.9 or 4.10(a), it will use reasonable
----------- -------
efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its sole discretion) to designate a different lending office if
the making of such a designation would reduce or obviate the need for the
Borrower to make payments under Sections 4.9 or 4.10(a) or would eliminate or
------------ -------
reduce the effect of any adoption or change described in Section 4.9.
-----------
SECTION 5. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and to issue Letters of Credit, the Borrower
hereby represents and warrants to the Administrative Agent and each Lender that:
5.1 Financial Condition. (a) The consolidated balance sheet of the
-------------------
Borrower and the Restricted Subsidiaries at December 31, 1998, and the related
consolidated statements of income and of cash flows for the fiscal year ended on
such date, reported on by Arthur Andersen L.L.P., copies of which have
heretofore been furnished to each Lender, present fairly in all material
respects the consolidated financial condition of the Borrower and the Restricted
Subsidiaries, taken as a whole, as at such date, and the consolidated results of
their operations and their consolidated cash flows for the fiscal year then
ended. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants and as
disclosed therein and except for interim financial statements, which are subject
to normal year-end adjustments and lack footnotes). Except as set forth in
Schedule 5.1 and except for the Atlanta Acquisition and the Dogwood Acquisition,
- ------------
during the period from December 31, 1998, to and including the Effective Date
there has been no sale, transfer or other disposition by the Borrower or any of
the Restricted Subsidiaries of any material part of its business, assets or
property and no purchase or other acquisition of any business, assets or
property (including any Equity Interests of any other Person) material in
relation
52
<PAGE>
to the consolidated financial condition of the Borrower and the Restricted
Subsidiaries at December 31, 1998
(b) The financial statements of the Borrower and the Restricted
Subsidiaries and other information most recently delivered under Sections 7.1(a)
---------------
and (b) were prepared in accordance with GAAP and present fairly in all material
---
respects the consolidated financial condition, results of operations, and cash
flows of the Borrower and the Restricted Subsidiaries, taken as a whole, as of,
and for the portion of the fiscal year ending on the date or dates thereof
(subject in the case of interim statements only to normal year-end audit
adjustments and the absence of footnotes).
(c) (i) The pro forma financial information, Budgets and projections
attached hereto as Schedule 5.1(c) furnished to the Administrative Agent by or
---------------
on behalf of the Borrower in connection with this Agreement, the Atlanta
Acquisition, the Dogwood Acquisition and the transactions contemplated hereby
and thereby and (ii) all pro forma financial information, Budgets and
projections furnished to the Administrative Agent or any Lender in connection
with or pursuant to this Agreement or any other Loan Document after the date of
this Agreement and on or prior to the date on which this representation and
warranty is made or deemed made, were in each case prepared and furnished to the
Administrative Agent or such Lender in good faith and were based on estimates
and assumptions that were believed by the management of the Borrower to be
reasonable in light of the then current and foreseeable business conditions of
the Borrower and the Restricted Subsidiaries and represented the Borrower's
management's good faith estimate of the consolidated projected financial
performance of the Borrower and the Restricted Subsidiaries based on the
information available to the Responsible Officers at the time so furnished.
(d) All Information made available to the Administrative Agent or any
Lender by or on behalf of the Borrower in connection with or pursuant to this
Agreement or any other Loan Document on or prior to the date on which this
representation and warranty is made or deemed made did not, as of the date such
Information was made available, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, taken as a whole, not materially misleading in light of the
circumstances under which such statements were made.
5.2 No Change. Since December 31, 1998, there has been no
---------
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
5.3 Existence; Compliance with Law. The Borrower and each Subsidiary
------------------------------
(a) is duly organized, validly existing and in good standing under the laws of
the jurisdiction of its organization, (b) has the corporate or partnership power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified and, where applicable, in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified could not reasonably be expected to have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not reasonably
be expected to have a Material Adverse Effect.
53
<PAGE>
5.4 Power; Authorization; Enforceable Obligations. Each Loan Party
---------------------------------------------
has the power and authority, and the legal right, to make, deliver and perform
each of the Loan Documents to which it is a party and to grant any security
interests provided for therein and, in the case of the Borrower, to borrow
hereunder, and has taken all necessary action to authorize the execution,
delivery and performance of each of the Loan Documents to which it is a party
and, in the case of the Borrower, to authorize the borrowings on the terms and
conditions of this Agreement. Except as set forth on Schedule 5.4, no consent
------------
or authorization of, filing with, notice to or other act by or in respect of,
any Governmental Authority or any other Person (including any partner or
shareholder of any Loan Party or any Affiliate of any Loan Party) is required to
be obtained or made by any Loan Party or any other Person, in connection with
the borrowings hereunder or with the execution, delivery, performance, validity
or enforceability of the Loan Documents other than (a) the recording of the
Mortgages required by Section 6.1(t) or Section 7.9 and the filings and notices
-------------- -----------
required by the Pledge Agreements and Security Agreements and (b) such as have
been obtained or made and are in full force and effect or which are immaterial.
No consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person (including any
partner or shareholder of any Loan Party or any Affiliate of any Loan Party) is
required to be obtained or made by any Loan Party or any Subsidiary of any Loan
Party in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of the Loan Documents other
than such as have been obtained or made and are in full force and effect or
which are immaterial. Each Loan Document to which each Loan Party is a party
has been duly executed and delivered on behalf of each such Loan Party. Each
Loan Document constitutes a legal, valid and binding obligation of each Loan
Party thereto enforceable against each such Loan Party in accordance with its
terms, subject to the effects of bankruptcy, insolvency, fraudulent transfer or
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
5.5 No Legal Bar. The execution, delivery and performance of the
------------
Loan Documents, the borrowings hereunder and the use of the proceeds thereof
will not (a) violate, result in a default under or conflict with any Requirement
of Law or any material Contractual Obligation, in any material respect, of the
Borrower or of any of the Restricted Subsidiaries or (b) violate any provision
of the charter or bylaws of the Borrower or the Restricted Subsidiaries and will
not result in a default under, or result in or require the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any such Requirement of Law or material Contractual Obligation
(other than pursuant to the Security Documents).
5.6 No Material Litigation. No litigation, investigation or
----------------------
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of the Borrower, threatened by or against the Borrower, any of
the Restricted Subsidiaries or against any of its or their respective properties
or revenues (a) with respect to any of the Loan Documents, the Atlanta
Acquisition, the Dogwood Acquisition or any of the transactions contemplated
hereby or thereby or (b) as to which there is a reasonable possibility of an
adverse determination and, that if adversely determined, could, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
54
<PAGE>
5.7 No Default. Neither the Borrower nor any of the Restricted
----------
Subsidiaries is in breach of or default under or with respect to any of its
Contractual Obligations in any respect which could reasonably be expected to
have a Material Adverse Effect. No Default or Event of Default has occurred and
is continuing.
5.8 Ownership of Property; Intellectual Property. (a) Each of the
--------------------------------------------
Borrower and the Restricted Subsidiaries has good record and indefeasible title
in fee simple to, or a valid leasehold interest in, all its material real
property, and good title to, or a valid leasehold interest in, all its other
material property, and none of such property is subject to any Lien except as
permitted by Section 8.3. Schedule 5.24 (as supplemented from time to time)
----------- -------------
accurately describes the location of all real property owned or leased by the
Borrower or any Restricted Subsidiary and the location, by State and County of
all material tangible personal property associated with Stations owned by the
Borrower or any Restricted Subsidiary.
(b) The Borrower and the Restricted Subsidiaries have the right to use
all trademarks, tradenames, copyrights, technology, know-how or processes
("Intellectual Property") that are materially necessary for the conduct of the
- -----------------------
business of the Borrower or any of the Restricted Subsidiaries, as applicable.
(c) As of the date of this Agreement, (i) neither the Borrower nor any
Restricted Subsidiary has received any notice of, nor has any knowledge of, any
pending or contemplated condemnation proceeding affecting the Mortgaged
Properties or any sale or disposition thereof in lieu of condemnation and (ii)
neither the Borrower nor any Restricted Subsidiary is obligated under any right
of first refusal, option or other contractual right to sell, assign or otherwise
dispose of any Mortgaged Property or any interest therein.
5.9 No Burdensome Restrictions. No Requirement of Law or Contractual
--------------------------
Obligation of the Borrower or any of the Restricted Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
5.10 Taxes. (a) All United States federal income Tax Returns of each
-----
Loan Party required by law to be filed have been filed and all taxes shown by
such returns or otherwise assessed, which are due and payable, have been paid,
except assessments which are being contested in good faith by appropriate
proceedings, and with respect to which adequate reserves are maintained in
accordance with GAAP. Each Loan Party (i) has filed all other Tax Returns that
are required to have been filed by it pursuant to applicable foreign, state,
local or other law, except where the failure to so file could not reasonably be
expected to have a Material Adverse Effect and (ii) has paid all taxes and other
assessments due pursuant to such returns or pursuant to any assessment received
by any Loan Party, except for such taxes and other assessments, if any, as are
being contested in good faith, for which the criteria for Customary Permitted
Liens have been satisfied, including, without limitation, for which adequate
reserves are maintained in accordance with GAAP and which could not reasonably
be expected to have a Material Adverse Effect.
(b) All Taxes and other assessments and levies which the Loan Parties
were or are required to withhold or collect have been withheld and collected and
have been paid over or will
55
<PAGE>
be paid over when due to the proper governmental authorities except to the
extent the failure to withhold, collect or pay could not reasonably be expected
to have a Material Adverse Effect. Neither the Internal Revenue Service nor any
other taxing authority is now asserting or, to the knowledge of Borrower,
threatening to assert against any Loan Party any deficiency or claim for
additional Taxes or interest thereon or penalties in connection therewith which
could reasonably be expected to have a Material Adverse Effect. No Loan Party is
a party to any Tax allocation or sharing arrangement with any Person other than
another Loan Party, except as required in connection with the sale of property
under that certain Lease Agreement between Great Lakes Radio, Inc. and Bell as
in effect on the Initial Effective Date, or in connection with the proration of
Taxes in connection with Dispositions and Acquisitions. There are no Liens on
any of the assets of any Loan Party that arose in connection with any failure
(or alleged failure) to pay any Taxes except as permitted under Section 8.3.
-----------
5.11 Federal Regulations. Neither the Borrower nor any Subsidiary is
-------------------
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. No
part of the proceeds of any Loan has been or will be used by the Borrower or any
Subsidiary, whether directly or indirectly, and whether immediately,
incidentally or ultimately, (i) to purchase or carry Margin Stock or to extend
credit to others for the purpose of purchasing or carrying Margin Stock or to
refund indebtedness originally incurred for such purpose, or (ii) for any
purpose that entails a violation of, or that is inconsistent with, the
provisions of the regulations of the Board including Regulations T, U and X. If
requested by any Lender or the Administrative Agent, the Borrower will furnish
to the Administrative Agent and each Lender a statement to the foregoing effect
in conformity with the requirements of FR Form U-1 referred to in said
Regulation U, as the case may be.
5.12 ERISA. Except as, in the aggregate, could not reasonably be
-----
expected to result in a Material Adverse Effect: (a) neither a Reportable Event
nor an "accumulated funding deficiency" (within the meaning of Section 412 of
the Code or Section 302 of ERISA) has occurred during the five-year period prior
to the date on which this representation is made or deemed made with respect to
any Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code; (b) no termination of a Single
Employer Plan has occurred, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period; (c) the present value of all accrued
benefits under each Single Employer Plan (based on those assumptions used to
fund such Plans) did not, as of the last annual valuation date prior to the date
on which this representation is made or deemed made, exceed the value of the
assets of such Plan allocable to such accrued benefits; (d) neither the Borrower
nor any Commonly Controlled Entity has had a complete or partial withdrawal from
any Multiemployer Plan, and neither the Borrower nor any Commonly Controlled
Entity would become subject to any liability under ERISA if the Borrower or any
such Commonly Controlled Entity were to withdraw completely from all
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made; and (e) no such Multiemployer
Plan is in Reorganization or Insolvent.
5.13 Investment Company Act; Other Regulations. No Loan Party is (a)
-----------------------------------------
an "investment company" or a company "controlled by" an "investment company," as
such terms are defined in the Investment Company Act of 1940, as amended, and
the rules and regulations
56
<PAGE>
thereunder or (b) a "holding company" or a "subsidiary" or "affiliate" of a
"holding company" or a "public utility," as such terms are defined in the Public
Utility Holding Company Act of 1935, as amended, and the rules and regulations
thereunder. None of the transactions contemplated by this Agreement will violate
or result in a violation of Section 7 of the Exchange Act or any regulations
thereunder, including, without limitation, Regulations T, U and X of the Federal
Reserve Board. The making of the Loans and the issue and acquisition of the
Notes do not constitute "purpose credit" within the meaning of Regulation U of
the Federal Reserve Board, and the Lenders are not required to obtain a
statement from Borrower on any Federal Reserve Board form with respect to the
extension of credit hereunder. Loan Parties do not intend to apply, nor will it
apply, any part of the proceeds of the Loans in any manner that is unlawful or
would involve a violation of the Foreign Assets Control Regulations or the Cuban
Assets Control Regulations of the United States Treasury Department.
5.14 Restricted Subsidiaries. (a) Schedule 5.14(a) (as supplemented
----------------------- ----------------
from time to time) sets forth a true and complete list of (i) all of the
Restricted Subsidiaries and (ii) all of the issued and outstanding Equity
Interests (and related percentages of ownership of the Common Equity) and the
owners thereof, of the Borrower and each Restricted Subsidiary. The outstanding
shares of Equity Interests of each Restricted Subsidiary and the Borrower have
been duly authorized and validly issued and are fully paid and non-assessable,
and all of the outstanding shares of each class of the Equity Interests of each
Restricted Subsidiary are owned, directly or indirectly, beneficially and of
record, by the Borrower, free and clear of all Liens other than the Liens
created by the Security Documents.
(b) Except for changes otherwise permitted by this Agreement, the duly
authorized Equity Interests of the Borrower consists of (i) 3,000 authorized
shares of common stock, par value $.01 per share, which consists of (a) 1,000
shares of class A common stock of which 58.03 shares are outstanding as of the
Effective Date, and fully-paid and non-assessable, (b) 1,000 shares of class B
common stock of which 84.36 shares are outstanding as of the Effective Date, and
fully-paid and non-assessable, and (c) 1,000 shares of Non-Voting Common Stock
of which 93.8 shares are outstanding as of the Effective Date, and fully-paid
and non-assessable, and (ii) 290,000 authorized shares of Preferred Stock, $.01
par value per share, which consists of (a) 140,000 shares of 15% Series A Senior
Cumulative Redeemable Preferred Stock of which 84,843.03 shares are outstanding
as of the Effective Date and all of which are fully-paid and non-assessable, and
(b) 150,000 shares of 15% Series B Senior Cumulative Redeemable Preferred Stock
of which 124,467.10 shares are outstanding as of the Effective Date and all of
which are fully-paid and non-assessable. All the outstanding shares of Equity
Interests of each Loan Party are duly authorized, validly issued, fully paid and
nonassessable, and none of such shares has been issued in violation of any
preemptive or preferential Rights of any Persons. Until the closing of the
initial Public Equity Offering of the Borrower, no voting trusts, agreements or
other voting arrangements or any other agreements exist with respect to the
Common Equity of the Borrower other than those agreements relating to the sale
of Common Equity and New Preferred Stock of the Borrower which may be entered
into in contemplation of and in connection with the initial Public Equity
Offering of the Borrower (provided that any such agreements are terminated in
the event the Borrower does not close its initial Public Equity Offering) and
other than those listed on Schedule 5.14(b). No voting trusts, agreements or
----------------
other voting arrangements or any other agreements exist with respect to the
57
<PAGE>
Equity Interests of any Restricted Subsidiary. Until the closing of the initial
Public Equity Offering of the Borrower, no outstanding subscription, contract,
convertible or exchangeable security, option, warrant, call or other Rights
(whether absolute or contingent, statutory or otherwise) (collectively, "Equity
------
Agreements") obligating or permitting the Borrower to issue, sell, exchange or
- ----------
otherwise dispose of or to purchase, redeem or otherwise acquire shares of, or
securities convertible into or exchangeable for, Equity Interests of the
Borrower (excluding the Senior Preferred Stock) exists other than Equity
Agreements relating to the sale of Common Equity and New Preferred Stock of the
Borrower entered into in contemplation of and in connection with the initial
Public Equity Offering of the Borrower (provided that all such Equity Agreements
are terminated in the event the Borrower does not close its initial Public
Equity Offering), the Warrants, the Allied Warrant and any options to purchase
Common Equity of the Borrower granted to employees of the Borrower or any
Restricted Subsidiary, provided such options are concurrently pledged to the
Lenders as security for the Obligations. No Equity Agreements obligating or
permitting any Restricted Subsidiary to issue, sell, exchange or otherwise
dispose of or to purchase, redeem or otherwise acquire shares of, or securities
convertible into or exchangeable for, Equity Interests of any Restricted
Subsidiary exists. No Equity Interest of any Loan Party is subject to any
restriction on transfer thereof except as set forth on Schedule 5.14(b) and
----------------
except for restrictions set forth in the Loan Documents and those imposed by
federal or state securities Laws or which may arise as a result of any Loan
Party being subject to the Communications Act. Pursuant to the Pledge
Agreements, until (i) the closing of the initial Public Equity Offering of the
Borrower, (ii) the repurchase or redemption of the outstanding Senior Preferred
Stock and (iii) the exercise of all of the outstanding Warrants for common stock
of the Borrower pursuant to the terms and provisions of the Warrant Certificates
as in effect on the date hereof, the Lenders will at all times hold a valid and
perfected first priority Lien on all of the issued and outstanding Equity
Interests of each Loan Party (other than the Senior Preferred Stock and Equity
Interests of Borrower issued to Allied Capital Corporation or Allied Investment
Corporation in connection with the Atlanta Acquisition), on a fully diluted
basis and on all warrants (other than the Allied Warrant) and options to
purchase such Equity Interests. Each Restricted Subsidiary of the Borrower is,
directly or indirectly, a Wholly Owned Subsidiary.
5.15 Insurance. Each Loan Party maintains with financially sound,
---------
responsible, and reputable insurance companies or associations (or, as to
workers' compensation or similar insurance, with an insurance fund or by self-
insurance authorized by the jurisdictions in which it operates) insurance
covering its properties and businesses against such casualties and contingencies
and of such types and in such amounts (and with co-insurance and deductibles) as
is customary in the case of same or similar businesses.
5.16 Authorization Matters. Except as could not reasonably be
---------------------
expected to result in a Material Adverse Effect:
(a) the Borrower and the Restricted Subsidiaries possess all
Authorizations necessary to own, operate and construct the Broadcast Assets
or otherwise for the operations of their businesses and are not in
violation thereof and all such Authorizations are in full force and effect
and no event has occurred that permits, or after notice or lapse of time
could permit, the revocation, termination or material and adverse
modification of any such
58
<PAGE>
Authorization, other than the renewal of FCC Licenses in accordance with
the procedures of the FCC from time to time;
(b) neither the Borrower nor any of the Restricted Subsidiaries is in
violation of any duty or obligation required by the Communications Act of
1934, as amended, or any FCC rule or regulation applicable to its or their
operations;
(c) there is not pending or, to the best knowledge of the Borrower,
threatened, any action by the FCC to revoke, cancel, suspend or refuse to
renew any FCC License held by the Borrower or any of the Restricted
Subsidiaries and there is not pending or, to the best knowledge of the
Borrower, threatened, any action by the FCC to modify adversely, revoke,
cancel, suspend or refuse to renew any other Authorization; and
(d) there is not issued or outstanding or, to the best knowledge of
the Borrower, threatened, any notice of any hearing, violation or complaint
against the Borrower or any of the Restricted Subsidiaries with respect to
the Authorizations of the Borrower or of any of the Restricted Subsidiaries
and the Borrower has no knowledge that any Person intends to contest
renewal of any Authorization.
5.17 Environmental Matters. Except as could not reasonably be
---------------------
expected to result in a Material Adverse Effect:
(a) the facilities and properties owned by the Borrower or any of its
Subsidiaries (the "Owned Properties") do not contain, and, to the knowledge
----------------
of the Borrower to the extent not owned, leased or operated during the past
five years, have not contained during the past five years, any Materials of
Environmental Concern in amounts or concentrations which constitute or
constituted a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law;
(b) the facilities and properties leased or operated by the Borrower
or any of its Subsidiaries, but not owned by them (the "Leased and Operated
-------------------
Properties"), to the knowledge of the Borrower, do not contain and have not
----------
contained during the past five years, any Materials of Environmental
Concern in amounts or concentrations which constitute or constituted a
violation of, or could reasonably be expected to give rise to liability
under, any Environmental Law;
(c) the Owned Properties and all operations at the Owned Properties
are in compliance, and, to the knowledge of the Borrower to the extent not
owned, leased or operated during the past five years, have in the last five
years been in compliance, with all applicable Environmental Laws, and there
is no contamination at, under or about the Owned Properties or violation of
any Environmental Law with respect to the Owned Properties or the business
operated by the Borrower or any of its Subsidiaries (the "Business") which
--------
could interfere with the continued operation of the Owned Properties or
impair the fair saleable value thereof;
59
<PAGE>
(d) to the knowledge of the Borrower, the Leased and Operated
Properties and all operations at the Leased and Operated Properties are in
compliance, and, in the last five years been in compliance, with all
applicable Environmental Laws, and to the knowledge of the Borrower there
is no contamination at, under or about the Leased and Operated Properties
or violation of any Environmental Law with respect to the Leased and
Operated Properties or the Business operated by the Borrower or any of its
Subsidiaries which could interfere with the continued operation of the
Leased and Operated Properties or impair the fair saleable value thereof;
(e) neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Owned Properties or the Leased
and Operated Properties (together, the "Properties") or the Business, nor
----------
does the Borrower have any knowledge that any such notice will be received
or is being threatened;
(f) the Borrower has not transported or disposed of Materials of
Environmental Concern nor, to the Borrower's knowledge, have Materials of
Environmental Concern been transported or disposed of from the Properties
in violation of, or in a manner or to a location which could reasonably be
expected to give rise to liability to the Borrower or any Subsidiary under,
any Environmental Law, nor has the Borrower generated any Materials of
Environmental Concern nor, to the Borrower's knowledge, have Materials of
Environmental Concerns been generated, treated, stored or disposed of at,
on or under any of the Properties in violation of, or in a manner that
could reasonably be expected to give rise to liability to the Borrower or
any Subsidiary under, any applicable Environmental Law;
(g) no judicial proceeding or governmental or administrative action is
pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any applicable Environmental Law with respect to the
Properties or the Business; and
(h) the Borrower has not released, nor, to the Borrower's knowledge,
has there been any release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws.
60
<PAGE>
5.18 Accuracy of Information. (a) All material Information made
-----------------------
available to the Administrative Agent or any Lender by the Borrower pursuant to
this Agreement or any other Loan Document did not, as of the date such
Information was made available, contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein not materially misleading in light of the circumstances under
which such statements were made.
(b) All pro forma financial information and projections made available
--- -----
to the Administrative Agent or any Lender by the Borrower pursuant to this
Agreement or any other Loan Document have been prepared and furnished to the
Administrative Agent or such Lender in good faith and were based on estimates
and assumptions that were believed by the management of the Borrower to be
reasonable in light of the then current and foreseeable business conditions of
the Borrower and the Subsidiaries. The Administrative Agent and the Lenders
recognize that such pro forma financial information and projections and the
--- -----
estimates and assumptions on which they are based may or may not prove to be
correct.
5.19 Security Documents. (a) Each Pledge Agreement is effective to
------------------
create in favor of the Administrative Agent, for the ratable benefit of the
Lenders and other secured parties named therein, a legal, valid and enforceable
security interest in that portion of the Collateral described therein and
proceeds thereof and, when such Collateral is delivered to the Administrative
Agent, such Pledge Agreement shall constitute a fully perfected first priority
Lien on, and security interest in, all right, title and interest of the pledgors
thereunder in such Collateral and the proceeds thereof, in each case prior and
superior in right to any other Person.
(b) Each Security Agreement is effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders and other secured
parties named therein, a legal, valid and enforceable security interest in that
portion of the Collateral described therein and proceeds thereof and, when
financing statements in appropriate form as filed in the offices specified in
the Perfection Certificates, such Security Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the grantors thereunder in such Collateral and the proceeds thereof, in each
case prior and superior in right to any other Person, to the extent provided in
such Security Agreement, other than with respect to the rights of Persons
pursuant to Liens expressly permitted by Section 8.3.
-----------
(c) The Mortgages are effective to create in favor of the
Administrative Agent, for the ratable benefit of the Lenders and other secured
parties named therein, a legal, valid and enforceable Lien on all of the right,
title and interest of the grantor named therein in and to the Mortgaged
Properties thereunder and the proceeds thereof, and when the Mortgages are filed
in the offices specified in the Perfection Certificates, the Mortgages shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the such grantor in such Mortgaged Property and the proceeds
thereof, in each case prior and superior in right to any other Person, other
than with respect to the rights of Persons pursuant to Liens expressly
permitted by Section 8.3.
-----------
61
<PAGE>
5.20 Solvency. As of the date on which this representation and
--------
warranty is made or deemed made, each Loan Party is Solvent, both before and
after giving effect to the transactions contemplated hereby consummated on such
date and to the incurrence of all Indebtedness and other obligations incurred on
such date in connection herewith and therewith.
5.21 Labor Matters. There are no actual or overtly threatened
-------------
strikes, labor disputes, slow downs, walkouts, or other concerted interruptions
of operations by the employees of any Loan Party which could reasonably be
expected to have a Material Adverse Effect. Hours worked by and payment made to
employees of the Loan Parties have not been in violation of the Fair Labor
Standards Act or any other applicable law dealing with such matters, other than
any such violations, individually or collectively, which could not reasonably be
expected to have a Material Adverse Effect. All payments due from any Loan
Party on account of employee health and welfare insurance have been paid or
accrued as a liability on its books, other than any such nonpayments which could
not, individually or collectively, reasonably be expected to have a Material
Adverse Effect.
5.22 Prior Names. (a) As of the Initial Effective Date, neither the
-----------
Borrower nor any Restricted Subsidiary has used or transacted business under any
other corporate or trade name in the five-year period preceding the Initial
Effective Date except as set forth on Schedule 5.22(a) hereto (as supplemented
----------------
from time to time).
(b) Neither the Borrower nor any Restricted Subsidiary uses or
transacts business under any corporate or trade names other than those set forth
in Schedule 5.22(b) (as supplemented from time to time).
----------------
5.23 Chief Executive Office; Chief Place of Business. Schedule 5.23
----------------------------------------------- -------------
(as supplemented from time to time) accurately sets forth the location of the
chief executive office and chief place of business (as such terms are used in
the Uniform Commercial Code of each state whose law would purport to govern the
attachment and perfection of the security interests granted by the Security
Documents) of the Borrower and each Restricted Subsidiary.
5.24 Real Property; Leases. Schedule 5.24(a) (as supplemented from
--------------------- ----------------
time to time) sets forth a correct and complete listing of (a) all real property
owned by each Loan Party, (b) all leases and subleases of real property leased
by each Loan Party, and (c) all leases and subleases of real property by each
Loan Party with annual lease payments to be received therefor in excess of
$50,000. Each Loan Party has good and marketable title to, or a valid and
subsisting leasehold interest in, all its material real property, subject to no
Liens except those permitted in Section 8.3. Each Loan Party enjoys peaceful and
-----------
undisturbed possession of its owned and leased real property and the
improvements thereon and no Material Lease or other lease material to the
operation of any Loan Party's business contains any unusual provisions that
might adversely affect or impair such Loan Party's use and enjoyment of the
property covered thereby or the operation of such Loan Party's business or, in
either case, which could reasonably be expected to have a Material Adverse
Effect. All Material Leases are in full force and effect and no default or
potential default exists thereunder which could reasonably be expected to have a
Material Adverse Effect, except as disclosed in Schedule 5.24.
-------------
62
<PAGE>
5.25 Ownership of Stations. Schedule 5.25 (as supplemented from time
--------------------- -------------
to time) completely and correctly lists each radio broadcast station owned
directly or indirectly by any Loan Party (individually, a "Station" and
-------
collectively, the "Stations"). No Loan Party owns any radio broadcast stations
--------
other than the Stations.
5.26 Possession of Necessary Authorizations Each Loan Party possesses
--------------------------------------
all Necessary Authorizations (or rights thereto) used or to be used in its
business as presently conducted and as proposed to be conducted or necessary to
permit it to own its properties and to conduct its business as presently
conducted and as proposed to be conducted, except to the extent the failure to
so possess could not reasonably be expected to have a Material Adverse Effect,
free and clear of all Liens other than those permitted under Section 8.3. No
-----------
Loan Party is in violation of any Necessary Authorization and no event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any Necessary Authorization or right which
could reasonably be expected to have a Material Adverse Effect. The Necessary
Authorizations for the Stations are valid and in full force and effect
unimpaired by any act, omission or condition which could reasonably be expected
to have a Material Adverse Effect. The applicable Loan Parties have timely
filed all applications for renewal or extension of all Necessary Authorizations,
except to the extent that the failure to so file could not reasonably be
expected to have a Material Adverse Effect. Except for actions or proceedings
(i) affecting the broadcasting industry generally or (ii) which could not
reasonably be expected to have a Material Adverse Effect, no petition, action,
investigation, notice of violation or apparent liability, notice of forfeiture,
orders to show cause, complaint or proceeding is pending or, to the best
knowledge of the Borrower, threatened before the FCC or any other forum or
agency with respect to any Loan Party or any of the Stations or seeking to
revoke, cancel, suspend or modify any of the Necessary Authorizations. The
Borrower does not know of any fact that is likely to result in the denial of an
application for renewal, or the revocation, modification, nonrenewal or
suspension of any of the Necessary Authorizations, or the issuance of a cease-
and-desist order, or the imposition of any administrative or judicial sanction
with respect to any of the Stations, which could reasonably be expected to have
a Material Adverse Effect.
5.27 FCC, Copyright, Patent and Trademark Matters. No Loan Party is
--------------------------------------------
liable to any Person for copyright infringement under the Federal Copyright Act
or any state copyright Laws which could reasonably be expected to have a
Material Adverse Effect. To the best knowledge of the Loan Parties, each Loan
Party and each Station is in material compliance with all state and federal laws
relating to copyright, including the Copyright Revision Act of 1976, 17 U.S.C.
(S) 101 et. seq., and have all performing arts licenses which are materially
-- ---
necessary for the conduct of their business. To the best knowledge of each Loan
Party, no Loan Party owns any patents or trademarks that have been registered
with any Tribunal and no applications for registration are pending with respect
to any patents or trademarks owned by any Loan Party, except as set forth in
Schedule 5.27 (as supplemented from time to time).
- -------------
5.28 License Subsidiaries. All FCC Licenses and other Authorizations
--------------------
relating to the Stations are held by a License Subsidiary. No License
Subsidiary (a) owns or holds any assets (including the ownership of stock or any
other interest in any Person) other than Operating Agreements and FCC Licenses
and other Authorizations relating to the Stations, (b) is engaged in any
business other than the holding, acquisition and maintenance of FCC Licenses and
other
63
<PAGE>
Authorizations, (c) has any investments in any other Person other than the
Borrower or (d) owes any Indebtedness (other than Guaranty Obligations to the
Senior Subordinated Note Holders and the Lenders with respect to the Senior
Subordinated Indebtedness and the Obligations, respectively) to any Person other
than the Borrower.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Effectiveness of this Agreement. The effectiveness
---------------------------------------------
of this Agreement is subject to the satisfaction of the following conditions
precedent:
(a) Loan Documents. The Administrative Agent shall have received (i)
--------------
this Agreement duly executed and delivered by the Borrower; (ii) Notes,
duly executed and delivered by the Borrower and payable to the order of
each Lender, (iii) a Pledge Agreement duly executed and delivered by the
Borrower and each Restricted Subsidiary, including Atlanta and Dogwood,
(iv) Pledge Agreements duly executed and delivered by the Hughes-Liggins
Entities, the Management Stockholders and Mary Catherine Sneed, (v) a
Pledge Agreement duly executed and delivered by the Warrantholders, (vi)
Pledge Agreements duly executed and delivered by the ROA Stockholders other
than Allied Capital Corporation and Allied Investment Corporation, (vii) a
Security Agreement duly executed and delivered by the Borrower and each
Restricted Subsidiary, including Atlanta, Dogwood, Atlanta Licenses and
Dogwood Licenses, (viii) an Intellectual Property Security Agreement duly
executed by the Borrower and each Restricted Subsidiary, including Atlanta,
Dogwood, Atlanta Licenses and Dogwood Licenses, and (ix) a Guaranty duly
executed and delivered by each Restricted Subsidiary, including Atlanta,
Dogwood, Atlanta Licenses and Dogwood Licenses.
(b) Closing Certificates. The Administrative Agent shall have
--------------------
received a certificate (the "Closing Certificate") for each Loan Party and
-------------------
each of the Hughes-Liggins Entities, dated the Effective Date,
substantially in the form of Exhibit K, with appropriate insertions and
---------
attachments (including the Charter Documents of such Loan Party), in each
case reasonably satisfactory in form and substance to the Administrative
Agent, executed by a Responsible Officer and the Secretary or any Assistant
Secretary of each Loan Party, which certificate shall state that the
consent or approval thereby certified has not been amended, modified,
revoked or rescinded.
(c) Fees. The Administrative Agent shall have received:
----
(i) all fees and expenses required to be paid at such time under
Sections 3.3 and 4.3;
------------ ---
(ii) all fees required to paid at such time under the Fee
Letter; and
(iii) all reasonable fees and expenses of counsel to the
Administrative Agent in connection with this Agreement and the other
Loan Documents.
64
<PAGE>
(d) Legal Opinions. The Administrative Agent shall have received,
--------------
with a counterpart for each Lender, the following executed legal opinions:
(i) the executed legal opinions of Kirkland & Ellis,
substantially in the forms of Exhibit L-1 and L-2;
-------------------
(ii) the executed legal opinion of Davis Wright Tremaine LLP,
FCC counsel to the Borrower, substantially in the form of Exhibit M;
---------
and
(iii) from such local counsel to the Loan Parties as the
Administrative Agent may require in respect of the Mortgages and other
Security Documents, each in form and substance satisfactory to the
Administrative Agent.
(e) Financial Statements. The Lenders shall have received (i) audited
--------------------
consolidated financial statements of the Borrower and its consolidated
Subsidiaries and audited consolidated financial statements of Atlanta and
Dogwood for the 1998 fiscal year, which financial statements shall have
been prepared in accordance with GAAP and shall be accompanied by an
unqualified report thereon prepared by Arthur Andersen L.L.P.
(f) Governmental and Third Party Approvals. All material
--------------------------------------
Authorizations and third-party approvals (including, without limitation,
all FCC Licenses and consents) necessary or appropriate in connection with
the Atlanta Acquisition, the Dogwood Acquisition, the financing thereof and
the other transactions contemplated by the Loan Documents shall have been
obtained and shall be in full force and effect, and all applicable waiting
periods (except with respect to the Borrower's acquisition of control of
Atlanta and Dogwood and the simultaneous transfer by Atlanta of its FCC
Licenses to Atlanta Licenses and the simultaneous transfer by Dogwood of
its FCC Licenses to Dogwood Licenses) shall have expired without any action
being taken or threatened by any competent authority which would restrain,
prevent or otherwise impose materially adverse conditions on the Atlanta
Acquisition, the Dogwood Acquisition, the financing thereof or the other
transactions contemplated by the Loan Documents and copies of all such
Authorizations and third-party approvals shall be delivered to the
Administrative Agent.
(g) No Material Adverse Information. The Lenders shall not have
-------------------------------
become aware of any previously undisclosed materially adverse information
with respect to (i) the ability of the Loan Parties to perform their
respective obligations under the Loan Documents or in connection with the
transactions contemplated hereunder in any material respect or (ii) the
rights and remedies of the Lenders.
(h) No Material Default Under Other Agreements. There shall exist no
------------------------------------------
material breach or event of default (or condition which would constitute
such breach or an event of default with the giving of notice or the passage
of time) under any agreements relating to Equity Interests, or any material
financing agreements, lease agreements or other material Contractual
Obligation, to which the Borrower, any of the Restricted Subsidiaries or
Atlanta or Dogwood is a party or by which any of them is bound.
65
<PAGE>
(i) Pledged Securities and Instruments of Transfer. The
----------------------------------------------
Administrative Agent shall have received the certificates representing the
shares of Equity Interests (other than the Senior Preferred Stock) pledged
pursuant to each Pledge Agreement, accompanied by duly executed instruments
of transfer or assignments in blank for each such certificate.
(j) Actions to Perfect Liens. (i) All filing documents, necessary or,
------------------------
in the opinion of the Administrative Agent, desirable to perfect or
continue to protect the Liens created by the Security Documents shall have
been executed and delivered by the pledgors or grantors thereunder; and
(ii) all Collateral shall be free and clear of Liens except for Liens
permitted by Section 8.3 and other Liens approved by the Lenders.
-----------
(k) Material Adverse Change. There shall exist no material adverse
-----------------------
change in the financial condition or business operations of the Borrower,
the Restricted Subsidiaries or Atlanta or Dogwood since December 31, 1998.
(l) Projections and Certified Pro Forma Financial Information. The
---------------------------------------------------------
Administrative Agent shall have received (i) a pro forma consolidated
balance sheet for the Borrower and the Restricted Subsidiaries (giving
effect to the Atlanta Acquisition, the extensions of credit to be made
hereunder and the use of proceeds hereunder) dated as of December 31, 1998,
certified to by a Responsible Officer, and (ii) management's five year
projections for the Borrower and the Restricted Subsidiaries, after giving
effect to the Atlanta Acquisition and the Dogwood Acquisition.
(m) Lien Searches. The Administrative Agent shall have received the
-------------
results of a recent search by a Person reasonably satisfactory to the
Administrative Agent, of the Uniform Commercial Code, judgment and tax lien
filings which may have been filed with respect to personal property of the
Borrower and the Restricted Subsidiaries, Atlanta, Dogwood and Atlanta
Licenses in each of the jurisdictions where such personal property is
located or in which financing statements will be filed to perfect the
security interests granted pursuant to the Security Documents, and such
search shall reveal no Liens relating to the personal property of the
Borrower, the Restricted Subsidiaries, Atlanta, Dogwood, or to the
Collateral, except for Liens which will be terminated on or before the
Effective Date, Liens referred to in Section 6.1(j), Liens permitted by
--------------
Section 8.3, and other Liens approved by the Lenders.
-----------
(n) Insurance. The Administrative Agent shall have received
---------
certificates of insurance naming (i) the Administrative Agent as loss payee
for the benefit of the Lenders and (ii) each of the Lenders as an
additional insured, as required by Section 7.5(b).
--------------
(o) Standstill Agreement. (i) The Administrative Agent shall have
--------------------
received an original fully executed copy of the Standstill Agreement, (ii)
the Borrower shall have caused each Investor's certificate representing the
Senior Preferred Stock to contain the legend required in the Standstill
Agreement, and (iii) the Borrower shall have caused each Warrant
Certificate to contain the legend required in the Standstill Agreement.
66
<PAGE>
(p) License Subsidiaries and Operating Agreements. The Borrower shall
---------------------------------------------
have caused all Necessary Authorizations relating to the Stations
(including Station WHTA, Fayetteville, Georgia) to have been transferred
to a License Subsidiary, which License Subsidiary shall (i) be a Wholly
Owned Restricted Subsidiary, (ii) shall have no Indebtedness (other than
Guaranty Obligations to the Senior Subordinated Note Holders and the
Lenders with respect to the Senior Subordinated Indebtedness and the
Obligations, respectively), (iii) shall have no assets, other than the
Necessary Authorizations and (iv) shall otherwise be in compliance with the
representations and warranties set forth in Section 5.28. The Borrower and
------------
each License Subsidiary shall have entered into an Operating Agreement and
the Administrative Agent shall have received a fully executed copy of each
such Operating Agreement.
(q) FCC Consents. The Borrower (i) shall have received all of the
------------
Necessary Authorizations (A) for the consummation of the transactions
contemplated herein (including the Atlanta Acquisition and the transfer of
Atlanta's FCC Licenses to Atlanta Licenses and the Dogwood Acquisition and
the transfer of Dogwood's FCC Licenses to Dogwood Licenses) and in any
related agreements or documents, (B) the period for seeking
reconsideration, review or appeal of such Necessary Authorizations shall
have expired, except with respect to: (1) the Borrower's acquisition of
control of Allur-Detroit, Inc., and the simultaneous transfer by Allur-
Detroit, Inc. of its FCC Licenses to a License Subsidiary, (2) the
Borrower's acquisition of control of Atlanta and the simultaneous transfer
by Atlanta of its FCC Licenses to a License Subsidiary and (3) the
Borrower's acquisition of control of Dogwood and the simultaneous transfer
by Dogwood of its FCC Licenses to a License Subsidiary and (C) no such
reconsideration, review or appeal shall have been sought by any party; and
(ii) shall have delivered to the Administrative Agent copies of Form 732,
evidencing: (A) the initial consent by the FCC of the transfer to Atlanta
Licenses of FCC Licenses previously held by Atlanta; (B) the initial
consent by the FCC of the transfer to Dogwood Licenses of the FCC Licenses
previously held by Dogwood; and (C) the consent by the FCC to the ownership
by Hughes and Liggins, considered together, of more than 50% of the Equity
Interests in the Borrower.
(r) Perfection Certificate. The Administrative Agent shall have
----------------------
received a Perfection Certificate, dated the date of this Agreement, duly
executed by each Loan Party.
(s) Amendment to Preferred Stockholders' Agreement. The
----------------------------------------------
Administrative Agent shall have received a Fifth Amendment to the Preferred
Stockholders' Agreement in the form attached hereto as Exhibit N.
---------
(t) Mortgages. The Mortgages covering the Mortgaged Properties
---------
specified on Schedule 5.24(b), duly executed and delivered by the Borrower
----------------
and each applicable Restricted Subsidiary, including Atlanta.
(u) Mortgagee Policies of Title Insurance/Surveys. To the extent
---------------------------------------------
reasonably required by the Administrative Agent (A) mortgagee policies of
title insurance and endorsements of existing mortgagee policies of title
insurance, in such amounts as are
67
<PAGE>
approved by the Administrative Agent, insuring that the Mortgages create in
favor of the Administrative Agent for the benefit of the Lenders a first
priority Lien on the real property and interests in real property covered
by the Mortgages and reflecting a state of title and exceptions thereto, if
any, reasonably acceptable to the Administrative Agent and containing such
endorsements as the Administrative Agent may require and (B) copies of
recent surveys with respect to each tract of real property covered by each
Mortgage, dated and certified in a manner reasonably satisfactory to the
Administrative Agent and the title insurance company issuing the mortgagee
policies of title insurance and prepared in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and American Congress on
Surveying and Mapping in 1992 by an independent professional licensed land
surveyor satisfactory to such title insurance company.
(v) Copies of Exception Documents. To the extent required by the
-----------------------------
Administrative Agent, copies of all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies and a copy,
certified by such parties as the Administrative Agent may reasonably deem
appropriate, of all other documents affecting the property covered by each
Mortgage.
(w) Landlord Waivers and Consents. To the extent required by the
-----------------------------
Administrative Agent, Landlord Waivers and Consents signed by each lessor
of real property leased by the Borrower or any Restricted Subsidiary
(including Atlanta and Dogwood), waiving such lessor's liens in and to the
equipment or fixtures of the applicable Loan Party located on the leased
premises and consenting to an assignment of the applicable lease to the
Lenders or purchasers of the Lenders after an Event of Default.
(x) Cancellation of Liens. Evidence that all Liens other than Liens
---------------------
permitted by Section 8.3 have been canceled and released, including duly
-----------
executed releases and UCC-3 financing statements in recordable form and
otherwise in form and substance satisfactory to the Administrative Agent.
(y) Consummation of Atlanta Acquisition and the Dogwood Acquisition.
---------------------------------------------------------------
The Lenders shall have received satisfactory evidence that the Atlanta
Acquisition and the Dogwood Acquisition shall have been consummated prior
to or concurrently with the making of the initial Loans pursuant to and in
accordance with the terms and conditions of the Atlanta Acquisition
Agreement and related acquisition documentation reasonably satisfactory in
form and substance to the Lenders (no material provision thereof having
been amended, supplemented, waived or otherwise modified, without the prior
written consent of the Lenders).
(z) Appointment of Service Agent. Evidence that Corporation Service
----------------------------
Company has accepted its appointment as agent for the Borrower and the
Restricted Subsidiaries (including Atlanta and Dogwood) to receive service
of process in any legal action or proceeding relating to the Loan Documents
brought in the State of New York during the period from the Effective Date
through two years following the Termination Date.
68
<PAGE>
(aa) Repayment and Cancellation of Certain Indebtedness. (i) All
--------------------------------------------------
Atlanta Existing Indebtedness and all Indebtedness not permitted by Section
-------
8.2 shall have been paid or otherwise discharged in full, and all Liens
---
created in connection therewith shall have been terminated and (ii) the
Lenders shall have received satisfactory evidence (including receipt by the
Agent of copies of canceled instruments and securities) that such
Indebtedness has been paid and loan documentation, security interests,
guaranties and Liens with respect thereto have been terminated and released
concurrently with the making of the initial Loans.
6.2 Conditions to All Extensions of Credit. The obligation or
--------------------------------------
agreement of each Lender to make any Loan or to issue any Letter of Credit
requested to be made or issued by it on any date (including, without limitation,
its initial extension of credit under this Agreement) is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loans
or the issuing of such Letters of Credit, of the following conditions precedent:
(a) No Material Litigation. No litigation, inquiry, injunction or
----------------------
restraining order shall be pending, entered or threatened in writing which
could reasonably be expected to have a Material Adverse Effect.
(b) No Material Adverse Effect. There shall not have occurred any
--------------------------
change, development or event which could reasonably be expected to have a
Material Adverse Effect.
(c) Representations and Warranties. Each of the representations and
------------------------------
warranties made by any Loan Party in or pursuant to the Loan Documents to
which it is a party shall be true and correct in all material respects on
and as of such date as if made on and as of such date, after giving effect
to the Loans requested to be made or the Letters of Credit to be issued on
such date and the proposed use of the proceeds thereof.
(d) No Default. No Default or Event of Default shall have occurred
----------
and be continuing on such date or will occur immediately after giving
effect to the extension of credit requested to be made on such date and the
proposed use of the proceeds thereof.
(e) Notice of Borrowing; Application. The Borrower shall have
--------------------------------
submitted a Notice of Borrowing in accordance with Section 2.3 and/or an
-----------
Application in accordance with Section 3.2 and certifying to the matters
-----------
set forth in Section 6.2(a) through and including (d).
-------------- ---
(f) Consent to Extensions of Credit. The Administrative Agent shall
-------------------------------
have received (i) a consent in writing signed by Investors holding a
majority of the outstanding shares of Senior Preferred Stock and the
Borrower with respect to any extensions of credit requested hereunder
which, when aggregated with all other extensions of credit hereunder
outstanding at such time, causes the Aggregate Outstandings of Credit of
all Lenders to exceed $57,500,000, and (ii) the execution by at least two
directors of the Borrower representing the interests of the Investors as
elected pursuant to Article 8 of the Warrant Agreement (the "Independent
--------- -----------
Directors") of a directors' consent authorizing each extension of credit
---------
requested hereunder, in each case until the earlier to occur of (x) the
date of the
69
<PAGE>
closing of the initial Public Equity Offering of the Borrower and the
repurchase and/or redemption of all of the Senior Preferred Stock
outstanding on the Effective Date and (y) the date the Administrative Agent
has received a written notice from at least two Independent Directors that
no such further consent is required.
(g) Compliance Certificate. The Administrative Agent shall have
----------------------
received a pro forma Compliance Certificate duly executed by a Responsible
Officer of the Borrower and each of the Restricted Subsidiaries giving
effect to the requested extension of credit, the use of proceeds thereof
and any transaction to be consummated in connection therewith certifying to
the Lenders that (i) no Default or Event of Default exists both before and
immediately after giving effect to such extension of credit, the uses
thereof and transactions to be consummated in connection therewith and (ii)
the Borrower can incur such Indebtedness under the Senior Subordinated Debt
Documents and any other documents evidencing Subordinated Debt permitted to
be incurred by the Borrower under this Agreement.
Each borrowing by or issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the applicable conditions contained in
this Section 6.2 have been satisfied.
-----------
SECTION 7. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment remains in
effect, any Loan or L/C Obligation or any other monetary obligation under any
other Loan Document shall be outstanding or is due and payable to any Lender or
the Administrative Agent hereunder or under any other Loan Document, the
Borrower shall and shall cause each of the Restricted Subsidiaries to:
7.1 Financial Statements. Furnish to each of the Lenders:
--------------------
(a) as soon as available, but in any event no later than 90 days after
the end of each fiscal year of the Borrower, a copy of the audited
consolidated balance sheets of the Borrower and the Restricted
Subsidiaries as at the end of such year and the related audited
consolidated statements of income and shareholders' capital (deficit) and
of cash flows for such year, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope
of the audit, by Arthur Andersen LLP or other independent certified public
accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three fiscal quarterly periods of each
fiscal year of the Borrower, the unaudited consolidated balance sheet of
the Borrower and the Restricted Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by
70
<PAGE>
a Responsible Officer as fairly presenting in all material respects the
financial condition of the Borrower and the Restricted Subsidiaries, taken
as a whole (subject to normal year- end audit adjustments and the absence
of footnotes); and
(c) within thirty (30) days after the end of each of the first two
months for each quarter (i) statements of operation comparing such results
to (A) the Budget for that period and (B) the results of the statements of
operation for the prior year, and (ii) a balance sheet for such first two
months, and (iii) a brief written discussion and analysis by management of
such statements, including a comparison of the results versus the budgeted
results and results for comparable periods in the preceding fiscal year and
an explanation for any variances therein.
All such financial statements (not including the Budget) shall be prepared in
accordance with GAAP (except for the absence of footnotes and year end
adjustment in the case of interim financials) applied consistently throughout
the periods reflected therein and with prior periods (except as approved by such
accountants or officer, as the case may be, and disclosed therein).
7.2 Certificates; Other Information. Furnish to each of the Lenders:
-------------------------------
(a) concurrently with the delivery of the financial statements
referred to in Section 7.1(a), a certificate of the independent certified
--------------
public accountants reporting on such financial statements stating that in
making the examination necessary therefor they did not become aware of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) or (b), a Compliance Certificate executed by
--------------- ---
a Responsible Officer of the Borrower and each of the Restricted
Subsidiaries;
(c) without duplication of the financial statements delivered pursuant
to Section 7.1, within five days after the same are sent, copies of all
-----------
financial statements and reports which the Borrower sends to all of the
holders of the Senior Subordinated Notes, and within five days after the
same are filed, copies of all financial statements and reports which the
Borrower files with, the Securities and Exchange Commission or any
successor or analogous Governmental Authority;
(d) promptly, such additional financial and other information as any
Lender may from time to time reasonably request;
(e) on or before the end of each fiscal year (and in any event within
the month of December), (i) the budget for the Borrower and the Restricted
Subsidiaries, prepared on a monthly basis (the "Budget"), for the next
------
succeeding fiscal year setting forth in satisfactory detail the projected
revenues and expenses, including, without limitation, Capital Expenditures,
broadcast cash flow, Corporate Overhead Expense, EBITDA, Fixed Charges,
Funded Debt, and Consolidated Interest Expense and the underlying
assumptions therefor
71
<PAGE>
and the latest quarterly Arbitron ratings for each Station showing the 12+
share of audience (as designated by Arbitron) and the Borrower's target
demographic share of audience;
(f) within 10 days of any changes thereto, supplements to Schedules
---------
5.14(a), 5.22(b), 5.23, 5.24, 5.25 and 5.27; and
------- ------- ---- ---- ---- ----
(g) on or before the 90th day after the end of each fiscal year of the
Borrower, updated versions of the five year projections for the Borrower
and the Restricted Subsidiaries delivered to the Administrative Agent
pursuant to Section 6.1(l)(ii), setting forth in satisfactory detail the
------------------
changes to such financial projections and the underlying assumptions
thereto.
7.3 Payment of Obligations. Pay, discharge or otherwise satisfy at
----------------------
or before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature, except (a) where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or the relevant Restricted Subsidiary, as the case may
be or (b) where the failure to so pay, discharge or satisfy, could not
reasonably be expected to have a Material Adverse Effect.
7.4 Conduct of Business and Maintenance of Existence, etc. (a)
------------------------------------------------------
Preserve, renew and keep in full force and effect its organizational existence
and take all reasonable action to maintain all material rights, privileges and
franchises necessary for the conduct of its business except as otherwise
permitted pursuant to Section 8.4.
-----------
(b) Comply with all Contractual Obligations and applicable
Requirements of Law, except to the extent that failure to comply therewith could
not reasonably be expected to have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance. (a) Keep all material
----------------------------------
property useful and necessary in its business in good working order and
condition (ordinary wear and tear excepted) consistent with customary practices
in the industry of the Borrower; maintain with financially sound and reputable
insurance companies insurance on all its property in at least such amounts and
against at least such risks as are usually insured against in the same general
area by companies engaged in the same or a similar business; and furnish to the
Administrative Agent certificates of insurance from time to time received by it
for each such policy of insurance including insurance policies evidencing the
Borrower's compliance with Section 7.5(b).
--------------
(b) The Borrower shall cause (i) the Administrative Agent to be
named, in a manner reasonably satisfactory to the Administrative Agent, (a) as
lender loss payee for the benefit of the Lenders under all policies of casualty
insurance maintained by the Borrower and the Restricted Subsidiaries with
respect to Collateral and (b) the Lenders to be named as an additional insured
on all policies of liability insurance maintained by the Borrower and the
Restricted Subsidiaries; and (ii) all insurance policies to contain a provision
that the policy may not be canceled, terminated or modified without thirty (30)
days' prior written notice to the Administrative Agent.
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7.6 Inspection of Property; Books and Records; Discussions. Keep and
------------------------------------------------------
maintain a system of accounting established and administered in accordance with
sound business practices and keep and maintain proper books of record and
accounts; and permit representatives of any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books and records
during normal business hours and as often as may reasonably be requested and
upon reasonable notice and to discuss the business, operations, properties and
financial and other condition of the Borrower and the Restricted Subsidiaries
with officers and employees of the Borrower and the Restricted Subsidiaries and
with their independent certified public accountants; provided that
representatives of the Borrower designated by a Responsible Officer may be
present at any such meeting with such accountants.
7.7 Notices. Promptly after the Borrower obtains knowledge thereof,
-------
give notice to the Administrative Agent and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of the Restricted Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time between
the Borrower or any of the Restricted Subsidiaries and any Governmental
Authority, which in either case could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of the
Restricted Subsidiaries (i) which could reasonably be expected to result in
an adverse judgment of $1,000,000 or more and which is not covered by
insurance or (ii) in which injunctive or similar relief is sought which in
the case of this clause (ii) could reasonably be expected to materially
interfere with the ordinary conduct of business of the Borrower or any of
the Restricted Subsidiaries;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a
Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the Borrower
or any Commonly Controlled Entity or any Multiemployer Plan with respect to
the withdrawal from, or the terminating, Reorganization or Insolvency of,
any Plan;
(e) promptly after the filing or mailing thereof, and in any event
within five days thereafter, a copy of each material application,
statement, report, registration statement, notice or other filing which is
(i) filed with the FCC by or on behalf of any Loan Party, or of which any
Loan Party has knowledge, with respect to or affecting a Station owned
directly or indirectly by any Loan Party, (ii) made with the Securities and
Exchange Commission or (iii) distributed to the public shareholders or
debtholders of the Borrower generally, and, promptly on the request of any
Lender, a copy of any other statement, report, notice or other
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filing filed or made with (x) the FCC by or on behalf of any Loan Party, or
of which any Loan Party has knowledge or (y) any other Tribunal;
(f) promptly after such occurrence, and in any event within five days
thereafter, notice of any situation in which on-air broadcasting operations
of any Station are interrupted for more than 24 consecutive hours;
(g) promptly after any officer of any Loan Party becomes aware
thereof, and in any event within five days thereafter, information and a
copy of any notice received by any Loan Party from the FCC or other
Tribunal or any Person that concerns (i) any event or circumstance that
could reasonably be expected to materially adversely affect any Necessary
Authorization and (ii) any notice of abandonment, expiration, revocation,
material impairment, nonrenewal or suspension of any Necessary
Authorization, together with a written explanation of any such event or
circumstance or the circumstances surrounding such abandonment, expiration,
revocation, material impairment, nonrenewal or suspension;
(h) promptly after any officer of any Loan Party becomes aware
thereof, and in any event within five days thereafter, notice of any
default or breach of any term or provision by any Person in connection with
any LMA Agreement, any Material Lease or any other material Contractual
Obligation of such Loan Party, together with a written explanation of the
circumstances surrounding such default or breach and what action any Loan
Party plans to take with respect thereto; and
(i) any development or event which could reasonably be expected to
have a Material Adverse Effect.
Each notice pursuant to this Section (other than pursuant to clause (e)) shall
be accompanied by a statement of a Responsible Officer setting forth details of
the occurrence referred to therein and stating what action is proposed to be
taken with respect thereto.
7.8 Environmental Laws. (a) Comply with, and use reasonable
------------------
efforts to require compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and maintain, and use
reasonable efforts to require that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws except, in each case, to
the extent that failure to do so could not be reasonably expected to have a
Material Adverse Effect.
(b) Comply with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate proceedings diligently pursued or
could not reasonably be expected to have a Material Adverse Effect.
7.9 Collateral. (a) To secure full and complete payment and
----------
performance of the Obligations, the Borrower shall, and shall cause each of the
Restricted Subsidiaries to, grant and convey to and create in favor of, the
Administrative Agent for the ratable benefit of the Lenders a
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continuing first priority (subject, except for Equity Interests, to any prior
Liens permitted by Section 8.3) perfected Lien and security interest in, to
-----------
and on all of the Collateral (other than: (A) the Equity Interests of
Unrestricted Subsidiaries; and (B) minority Equity Interests in Persons that are
not Subsidiaries, acquired in accordance with and pursuant to Sections 8.8(b)
and 8.8(d) if the Borrower or Restricted Subsidiary, as the case may be, is
contractually prohibited from creating a Lien in such minority Equity
Interests), of the Borrower and such Restricted Subsidiaries (except to the
extent prohibited by law or as otherwise provided by law or as otherwise
provided in the Security Agreements or Intellectual Property Security
Agreements) including but not limited to the following: (i) all of the
Borrower's and such Restricted Subsidiaries' present and future assets (other
than (A) Equity Interests in Unrestricted Subsidiaries; and (B) minority Equity
Interests in Persons that are not Subsidiaries, acquired in accordance with and
pursuant to Sections 8.8(b) and 8.8(d) if the Borrower or Restricted Subsidiary,
as the case may be, is contractually prohibited from creating a Lien in such
minority Equity Interests), including, without limitation, their equipment,
inventory, accounts receivable, instruments, general intangibles, intellectual
property and real estate (in each case, unless otherwise agreed by the
Administrative Agent); and (ii) all of the Equity Interests of each Restricted
Subsidiary owned by the Borrower or any other Restricted Subsidiary, now owned
or hereafter acquired by the Borrower or such other Restricted Subsidiary.
(b) With respect to any new Restricted Subsidiary created or acquired
after the Initial Effective Date, (i) the Borrower, and/or any Restricted
Subsidiary owning the Equity Interests of such new Restricted Subsidiary, shall
promptly execute and deliver to the Administrative Agent such amendments to the
Pledge Agreements of the applicable Loan Party as the Administrative Agent deems
necessary or advisable in order to grant to the Administrative Agent, for the
benefit of the Lenders, a perfected first priority security interest in the
Equity Interests of such new Restricted Subsidiary, (ii) in the case of any such
new Restricted Subsidiary, such new Restricted Subsidiary shall promptly execute
and deliver to the Administrative Agent a Guaranty, Pledge Agreement, Security
Agreement and, if necessary, an Intellectual Property Security Agreement, (iii)
the applicable Loan Party owning Equity Interests of the new Restricted
Subsidiary and such new Restricted Subsidiary shall deliver any certificates
representing the Equity Interests of such new Restricted Subsidiary and any
Restricted Subsidiary of such new Restricted Subsidiary, respectively, together
with undated stock powers, in blank, executed and delivered by a duly authorized
officer of the applicable Loan Party, (iv) the applicable Loan Party owning
Equity Interests of the new Restricted Subsidiary and such new Restricted
Subsidiary shall take such other actions as shall be necessary or advisable to
grant to the Administrative Agent for the benefit of the Lenders a perfected
first priority security interest in the assets of, and Equity Interests in, such
new Restricted Subsidiary, including, without limitation, the filing of such
Uniform Commercial Code financing statements as may be requested by the
Administrative Agent, and (v) if requested by the Administrative Agent, the
Borrower shall cause to be delivered to the Administrative Agent legal opinions
relating to the matters described in the preceding clauses (i), (ii), (iii) and
(iv), which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(c) With respect to any newly acquired assets or transfers of assets
to the Borrower or a Restricted Subsidiary (other than: (A) Equity Interests in
Unrestricted Subsidiaries, and (B) minority Equity Interests in Persons that are
not Subsidiaries, acquired in accordance with and pursuant to Section 8.8(b), if
the Borrower or Restricted Subsidiary, as the case
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may be, is contractually prohibited from creating a Lien in such minority Equity
Interests), promptly after acquiring or receiving any such asset, execute and
deliver or cause to be delivered to the Administrative Agent in a form
reasonably acceptable to the Administrative Agent (i) one or more Mortgages
(unless otherwise agreed by the Administrative Agent), Pledge Agreements,
Security Agreements and/or Intellectual Property Security Agreements which grant
to the Administrative Agent a first priority perfected security interest in such
assets (subject, except for Equity Interests, to any prior Liens permitted by
Section 8.3 and as otherwise provided in the Security Agreements and
- -----------
Intellectual Property Security Agreements) and (ii) such additional agreements
and other documents as the Administrative Agent reasonably deems necessary to
establish a valid, enforceable and perfected first priority security interest in
such Collateral including but not limited to Collateral consisting of
Intellectual Property (subject, except for Equity Interests, to any Liens
permitted by Section 8.3 and as otherwise provided in the Security
-----------
Agreements and Intellectual Property Security Agreements).
(d) Upon request of the Administrative Agent, promptly execute and
deliver or cause to be executed and delivered to the Administrative Agent in a
form reasonably acceptable to the Administrative Agent (i) one or more
Mortgages, Pledge Agreements, Security Agreements and/or Intellectual Property
Security Agreements which grant to the Administrative Agent a first priority
perfected security interest (subject, except for Equity Interests, to any Liens
permitted by Section 8.3 and as otherwise provided in the Security Agreements
-----------
and Intellectual Property Security Agreements) in such Collateral of the
Borrower or a Restricted Subsidiary, including Equity Interests of direct or
indirect Restricted Subsidiaries, as shall be specified by the Administrative
Agent and (ii) such additional agreements and other documents as the
Administrative Agent reasonably deems necessary to establish a valid,
enforceable and perfected first priority security interest in such property or
Equity Interests.
7.10 Use of Proceeds. The Borrower shall use the proceeds of the
---------------
Loans and the Letters of Credit only (i) to finance a portion of the costs for
the acquisition of all of the stock of Atlanta, (ii) to fund Permitted
Acquisitions and (iii) for working capital and general corporate purposes.
7.11 New Restricted Subsidiaries. Immediately upon the creation or
---------------------------
acquisition thereof, the Borrower shall notify the Administrative Agent about
any newly created or acquired Restricted Subsidiary and shall provide the
Administrative Agent with the Loan Documents required pursuant to Section 7.9
-----------
and an updated Schedule 5.14.
-------------
7.12 Taxes. The Loan Parties shall file all necessary and material
-----
Tax Returns and pay when due and any and all material Taxes. Notwithstanding
anything to the contrary contained in the Mortgages, the Loan Parties shall not
be in default of any Mortgage for the failure to pay any Taxes due with respect
to the property covered thereby so long as such Taxes are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves are being maintained in accordance with GAAP.
7.13 Further Assurances. Each Loan Party shall make, execute or
------------------
endorse, and acknowledge and deliver or file, or cause the same to be done, all
such notices, certifications,
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documents, instruments and agreements, and shall take or cause to be taken such
other actions as the Administrative Agent may, from time to time, deem
reasonably necessary or appropriate in connection with this Agreement or any of
the other Loan Documents and the obligation of such Loan Party to carry out the
terms and conditions of this Agreement and the other Loan Documents to which it
is a party, including, without limitation, each Loan Party shall perform such
acts and duly authorize, execute, acknowledge, deliver, file and record such
additional assignments, security agreements, pledge agreements, deeds of trust,
mortgages, financing statements, and other agreements, documents, instruments
and certificates as the Administrative Agent may deem reasonably necessary or
appropriate in order to create, perfect and maintain the Liens in favor of the
Administrative Agent for the ratable benefit of the Lenders in and to the
Collateral and preserve and protect the Rights of the Lenders hereunder, under
the other Loan Documents and in and to the Collateral. Each Loan Party
acknowledges that certain transactions contemplated by this Agreement and the
other Loan Documents, and certain actions which may be taken by the
Administrative Agent or the Lenders in the exercise of their Rights under this
Agreement or any other Loan Document, may require the consent of the FCC. If the
Administrative Agent reasonably determines that the consent of the FCC is
required in connection with the execution, delivery or performance of any of the
aforesaid documents or any documents delivered to the Administrative Agent or
the Lenders in connection therewith or as a result of any action which may be
taken or be proposed to be taken pursuant thereto, then each Loan Party, at its
sole cost and expense, shall use its best efforts to secure such consent and to
cooperate with the Administrative Agent and the Lenders in any such action taken
or proposed to be taken by the Administrative Agent or any Lender.
7.14 Appraisals of Collateral. If at any time the Administrative
------------------------
Agent reasonably determines that it must have current appraisals of any of the
Collateral to comply with any Law, upon request by the Administrative Agent
(which request shall not be made more frequently than once every 12 months), the
Borrower shall cooperate with the Administrative Agent to enable the
Administrative Agent to obtain appraisals of the Collateral, the cost of which
shall be paid by the Borrower.
SECTION 8. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as any Commitment remains in
effect, any Loan or L/C Obligation or any other monetary Obligation under any
other Loan Document is outstanding, or is due and payable to any Lender or the
Administrative Agent hereunder or under any other Loan Document, the Borrower
shall not, and the Borrower shall not permit any of the Restricted Subsidiaries
to:
8.1 Financial Condition Covenants.
-----------------------------
(a) Capital Expenditures. Permit Capital Expenditures of the
--------------------
Borrower and the Restricted Subsidiaries at any time to exceed the sums of:
(i) $1,000,000 for each New Radio Market, provided that such amount is
expended within two calendar years of the Borrower's or Restricted
Subsidiary's entry into such market, (ii) during any fiscal year set forth
below to be greater than the amounts set forth opposite such fiscal years
below:
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Fiscal Year Ended Amount
----------------- ------
1999 $3,500,000
2000 and thereafter $1,000,000
In the event that the amount of Capital Expenditures made by the
Borrower and the Restricted Subsidiaries during any period set out in
clause (ii) above is less than the Capital Expenditure limitation for such
period set forth above, then the difference between such limitation and the
amount of Capital Expenditures actually expended shall be added to the
Capital Expenditure limitation for the next such period, provided that in
--------
no event shall any such addition be used in determining any additions to
any subsequent period.
(b) Interest Coverage Ratio. Permit the Interest Coverage Ratio at
-----------------------
any time during any period set forth below to be less than the ratio set
forth opposite such period:
Period Ratio
------ -----
January 1, 1999 through and including 2.00 to 1.00
December 31, 2001
January 1, 2002 and thereafter 2.25 to 1.00
(c) Leverage Ratio. Permit the Leverage Ratio at any time during any
--------------
period set forth below to be more than the ratio set forth opposite such
period:
Period Ratio
------ -----
January 1, 1999, through and 7.00 to 1.00
including
December 30, 1999
December 31, 1999, through and 6.75 to 1.00
including March 30, 2000
March 31, 2000 through and 6.50 to 1.00
including
June 29, 2000
June 30,2000 through and 6.00 to 1.00
including
September 30, 2000
October 1, 2000 through and 5.50 to 1.00
including
March 31, 2001
April 1, 2001 through and 5.00 to 1.00
including
September 30, 2001
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October 1, 2001 through and 4.75 to 1.00
including
March 31, 2002
April 1, 2002 through and 4.50 to 1.00
including
December 31, 2002
January 1, 2003 4.00 to 1.00
and thereafter
(d) Senior Leverage Ratio. Permit the Senior Leverage Ratio at any
---------------------
time during any period set forth below to be more than the ratio set forth
opposite such period:
Period Ratio
January 1, 1999 through and including 4.00 to 1.00
September 30, 1999
October 1, 1999 through and including 3.75 to 1.00
December 31, 1999
January 1, 2000 through and including 3.50 to 1.00
December 31, 2000
January 1, 2001 and thereafter 2.25 to 1.00
(e) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
---------------------------
Ratio at any time to be less than 1.25 to 1.00
8.2 Limitation on Indebtedness and Preferred Stock.
-----------------------------------------------
Create, incur, assume or suffer to exist any Indebtedness of the Borrower
or any Restricted Subsidiary of the Borrower or issue any Preferred Stock,
except:
(a) Indebtedness under this Agreement or any other Loan Document;
(b) intercompany Indebtedness by and among the Borrower and any of its
Wholly Owned Restricted Subsidiaries;
(c) in the case of the Borrower, Interest Hedge Agreements entered
into with the Lenders or any of them for the purpose of hedging against
interest rate fluctuations with respect to variable rate Indebtedness of
the Borrower or any of the Restricted Subsidiaries;
(d) (i) in the case of the Borrower, Indebtedness in respect of the
Senior Subordinated Indebtedness and (ii) in the case of the Restricted
Subsidiaries, Indebtedness in respect of the Senior Subordinated Guaranties
as in effect on the date hereof;
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(e) provided no Default or Event of Default shall have occurred and be
--------
continuing either before or immediately after giving effect to the
incurrence thereof, the Borrower may issue the New Exchange Debentures so
long as (i) such Debentures (A) are unsecured, (B) have a final maturity
and a weighted average life no earlier and no shorter than the Senior
Subordinated Indebtedness, (C) the terms and conditions applicable thereto
(including but not limited to the subordination provisions thereof) shall
be no more favorable to the holders or lenders of such Subordinated Debt
than the terms, conditions and provisions as are applicable to the Senior
Subordinated Indebtedness, (D) the Guaranty Obligations of the Restricted
Subsidiaries, if any, relating thereto are no more favorable to the lenders
of such Subordinated Debt than the Senior Subordinated Guaranties, and (F)
the New Exchange Debentures are issued only in exchange for, and against
the cancellation of, shares of New Preferred Stock and (ii) the Borrower
has previously delivered to each of the Lenders updated versions of the
five year projections for the Borrower and the Restricted Subsidiaries
delivered to the Administrative Agent pursuant to Section 6.1(l)(ii),
------------------
demonstrating that the Borrower will be in compliance with the Interest
Coverage Ratio for the 12 month period following the issuance of such New
Exchange Debentures;
(f) Indebtedness of the Borrower and the Restricted Subsidiaries of up
to $2,500,000 in the aggregate at any time outstanding consisting of
Purchase Money Indebtedness and/or Capital Lease Obligations;
(g) Indebtedness existing on the Effective Date and set forth on
Schedule 8.2;
------------
(h) Indebtedness of the Borrower or any Restricted Subsidiary
consisting of Permitted Sales Representations in each case incurred in
connection with the disposition of any assets of the Borrower or any
Restricted Subsidiary;
(i) without duplication of the terms of Section 8.12, New Preferred
------------
Stock, and
(j) unsecured Indebtedness of the Borrower of up to $5,000,000 in the
aggregate at any time outstanding.
8.3 Limitation on Liens. Create, incur, assume or suffer to exist
-------------------
any Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Customary Permitted Liens;
(b) Liens created pursuant to the Security Documents;
(c) any attachment, prejudgment or judgment Lien in existence less
than sixty consecutive calendar days after the entry thereof, or with
respect to which execution has been stayed, or with respect to which
payment in full above any applicable customary deductible is covered by
insurance or a bond;
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(d) Liens securing up to $2,500,000 in the aggregate at any time
outstanding of Purchase Money Indebtedness and Capital Lease Obligations
permitted under Section 8.2(f); and
--------------
(e) Liens securing up to $100,000 of Indebtedness in the aggregate at
any time outstanding.
8.4 Limitation on Fundamental Changes. Enter into any merger,
---------------------------------
consolidation or amalgamation with any Person, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), or convey, sell, lease,
assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets to any Person, except:
(a) a Restricted Subsidiary (other than a License Subsidiary) may
merge into or be acquired by the Borrower if the Borrower is the survivor
thereof;
(b) a Restricted Subsidiary (other than a License Subsidiary) may
merge into or be acquired by a Wholly Owned Restricted Subsidiary if the
Wholly Owned Restricted Subsidiary is the survivor thereof;
(c) the Borrower or any Restricted Subsidiary (other than a License
Subsidiary) may sell, lease, transfer or otherwise dispose of any or all of
its assets in a transaction permitted under Section 8.5;
-----------
(d) in connection with Permitted Acquisitions where the Borrower or a
Wholly Owned Restricted Subsidiary is the survivor thereof; and
(e) a License Subsidiary may merge into or be acquired by another
License Subsidiary.
Notwithstanding anything to the contrary contained in the foregoing, no License
Subsidiary shall own or hold any assets other than Operating Agreements and FCC
Licenses and other Necessary Authorizations relating to the Stations or engage
in any business other than the ownership (or holding) and maintenance of
Operating Agreements and FCC Licenses.
8.5 Limitation on Sale of Assets. Convey, sell, lease, assign,
----------------------------
exchange, transfer or otherwise dispose of any of its property, business or
assets (including, without limitation, receivables and leasehold interests but
excluding Equity Interests of the Borrower) (including by way of a Sale and
Leaseback Transaction) other than in the ordinary course of business, or issue
or sell Equity Interests of any of the Restricted Subsidiaries (other than in
connection with its formation and then only to the Borrower or another
Restricted Subsidiary), in each case, whether by a single transaction or a
series of related transactions, to any Person (each of the foregoing, a
"Disposition"), except:
- ------------
(a) Dispositions of property or assets (other than Equity Interests)
between the Borrower and Wholly Owned Restricted Subsidiaries or between
Wholly Owned Restricted
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Subsidiaries provided that in the case of the Borrower, such Disposition is
--------
less than substantially all of its assets;
(b) the sale of capital stock of Unrestricted Subsidiaries; and
(c) other Dispositions of property or assets (other than Equity
Interests), provided that such Disposition is less than substantially all
--------
of the assets of the Borrower or any Restricted Subsidiary, as the case may
be, and provided further that all of the following conditions are
--------
satisfied: (i) the Borrower or such Restricted Subsidiary receives
consideration at the time of such Disposition at least equal to the Fair
Market Value of the assets subject to such Disposition, as determined and
approved by the Board of Directors of the Borrower in the case of such
Dispositions with a Fair Market Value of $1,000,000 or more, and at least
80% of the consideration thereof received by the Borrower or such
Restricted Subsidiary is in the form of cash, (ii) any such Disposition
shall be on a non-recourse basis, except that the Borrower or such
Restricted Subsidiary may make Permitted Sale Representations, (iii) no
Default or Event of Default shall have occurred and be continuing either
before or immediately after the consummation of such transaction and (iv)
the Borrower shall, to the extent required, pay the proceeds to the
Administrative Agent in accordance with Section 4.2(d) when and if due.
--------------
Upon request by and at the expense of the Borrower, the Administrative Agent
shall immediately release any Liens arising under the Security Documents with
respect to any Collateral which is sold or otherwise disposed of in compliance
with the terms of Section 8.5(b).
--------------
8.6 Limitation on Restricted Payments; Other Payment Limitations.
------------------------------------------------------------
Make any Restricted Payments, except (a) repurchases of Common Equity of the
Borrower from any employee of the Borrower (other than a Principal Shareholder)
whose employment with the Borrower or any Restricted Subsidiary has ceased,
provided that the aggregate amount of such repurchases shall not exceed
- --------
$1,000,000 in the aggregate during any fiscal year and provided further that a
--------
Responsible Officer of the Borrower delivers a certificate to and in favor of
the Administrative Agent and the Lenders certifying that no Default or Event of
Default shall have occurred and be continuing either before or immediately after
the making of such Restricted Payment; and (b) the repurchase or redemption of
all of the Senior Preferred Stock and accrued dividends thereon outstanding on
the Initial Effective Date, concurrently with the closing of the initial Public
Equity Offering of the Borrower and with a portion of the proceeds therefrom.
8.7 Limitation on Acquisitions. Purchase or enter into any agreement
--------------------------
(including letters of intent other than letters of intent that do not provide
for a deposit or payment by the Borrower or any Restricted Subsidiary of more
than $20,000 individually or $100,000 in the aggregate at any time for all such
letters of intent then in effect) to purchase or option to purchase any stock,
bonds, notes, debentures or other securities of, or any assets of, in each case
to the extent such purchase would involve all or substantially all of a radio
broadcasting station of, or a business unit of, any Person (collectively,
"Acquisitions") without the prior written consent of the Majority Lenders;
- -------------
provided, however, that: (a) the Borrower may enter into purchase contracts for
- --------
(i) the WDYL Acquisition on the terms set out in the in the Second Amendment to
Credit Agreement and
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Limited Waiver among the Lenders and the Borrower dated February 9, 1999, (iii)
the WFUN Acquisition on the terms set out in the Limited Waiver among the
Lenders and the Borrower dated November 23, 1998, (iv) the WKJS Acquisition and
the WSOJ Acquisition on the terms described in Schedule 8.7, and (v) the WENZ
------------
Acquisition on the terms set out in the Limited Waiver among the Lenders and the
Borrower (the foregoing permissions being limited to the entering into such
contracts and the payment of earnest money deposits, but not extending to the
Borrower's closing of any such Acquisition), provided in the case of the WENZ
--------
Acquisition that the terms and provisions of the related Asset Purchase
Agreement, escrow deposit agreement and related documentation are satisfactory
in form and substance to the Administrative Agent and the Lenders; (b) the
Borrower may consummate the Atlanta Acquisition and the Dogwood Acquisition, and
(c) so long as (i) no Default or Event of Default shall have occurred and be
continuing either immediately before or immediately after such Acquisition, (ii)
the Borrower has closed or is closing concurrently with such Acquisition its
initial Public Equity Offering and received net cash proceeds therefrom in an
amount not less than $50,000,000 (excluding any amounts expended out of the
proceeds of such Offering used to repurchase the Senior Preferred Stock and the
Warrants referred to in clause (iii) below) and (iii) all of the Senior
Preferred Stock and accrued dividends thereon outstanding on the Initial
Effective Date shall have been repurchased or is being repurchased concurrently
with such Acquisition and all of the Warrants outstanding on the Initial
Effective Date shall have been exercised for common stock of the Borrower
pursuant to the terms and provisions of the Warrant Certificates as in effect on
the Initial Effective Date:
(A) the Borrower may make Acquisitions of radio broadcasting stations (or
100% of the capital stock of any Person owning radio broadcasting stations)
("Industry Acquisitions"), provided that, (x) concurrently with such
--------------------- --------
Acquisition, such Person becomes a Wholly Owned Restricted Subsidiary of
the Borrower, (y) the total consideration for Industry Acquisitions
(excluding the Allur Acquisition and the Bell Acquisition) singly or in the
aggregate do not exceed $50,000,000 in the aggregate in the period
beginning on the Initial Effective Date and continuing through the term of
this Agreement and (z) such Acquisitions are in markets ranked by Arbitron
as one of the 30 largest markets in the United States
(the transactions described in clause (A) above or otherwise permitted by the
Majority Lenders being herein referred to collectively as "Permitted
---------
Acquisitions").
- ------------
8.8 Investments. Make any Investment in any Person, other than:
-----------
(a) Permitted Investments;
(b) provided no Default or Event of Default shall have occurred and be
--------
continuing both before and immediately after the making of such Investment,
Investments after the Initial Effective Date in an amount not to exceed
$5,000,000 in the aggregate over the term of this Agreement; and
(c) Permitted Acquisitions.
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8.9 Limitation on Transactions with Affiliates. (a) The Borrower
------------------------------------------
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly, sell, lease, transfer or otherwise dispose of any of its properties
or assets to, or purchase any property or assets from, or enter into any
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Borrower or any Restricted Subsidiary (each of
the foregoing, an "Affiliate Transaction"), unless (i) such Affiliate
---------------------
Transaction is on terms that are no less favorable to the Borrower or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Borrower or such Restricted Subsidiary with a non-
Affiliated Person, (ii) such Affiliate Transaction is approved by a majority of
the disinterested members of the Borrower's Board of Directors and (iii) the
Borrower delivers to the Administrative Agent (A) with respect to any Affiliate
Transaction involving aggregate payments in excess of $1,000,000, an Officers'
Certificate certifying that such Affiliate Transaction complies with clauses (i)
and (ii) above and (B) with respect to any Affiliate Transaction (or series of
related transactions) with an aggregate value in excess of $5,000,000, an
opinion from a nationally recognized investment bank to the effect that the
transaction is fair to the Borrower or the Restricted Subsidiary, as the case
may be, from a financial point of view.
(b) The provisions of paragraph (a) above shall not prohibit:
(i) employment arrangements (including customary benefits
thereunder) entered into by the Borrower or any of its Restricted
Subsidiaries in the ordinary course of business and consistent with the
past practice of the Borrower or such Restricted Subsidiary;
(ii) transactions solely between or among the Borrower and its
Wholly Owned Restricted Subsidiaries or solely between or among Wholly
Owned Restricted Subsidiaries;
(iii) transactions permitted under Section 8.6;
-----------
(iv) any agreement as in effect on the Initial Effective Date and
listed on Schedule 8.9 or any amendment thereto or any transaction
------------
contemplated thereby (including pursuant to any amendment thereto) and any
replacement agreement thereto so long as any such amendment or replacement
agreement is not more disadvantageous to the Lenders in any material
respect than the original agreement as in effect on the Initial Effective
Date;
(v) the existence of, or the performance by the Borrower or any
of the Restricted Subsidiaries of its obligations under the terms of, any
stockholders agreement (including any registration rights agreement or
purchase agreement related thereto) to which it is a party on the Initial
Effective Date;
(vi) services provided to any Unrestricted Subsidiary of the
Borrower for fees approved by a majority of the disinterested members of
the Board of Directors of the Borrower; and
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(vii) subject to the terms of this Agreement, including but not
limited to Sections 4.2(e), 8.2, 8.5 and 8.12, the issuance, sale or other
--------------- --- --- ----
disposition of any Equity Interest (other than Disqualified Stock) of the
Borrower, including any equity-related agreements relating thereto such as
registration rights and voting agreements so long as such agreements do not
result in such Equity Interests being Disqualified Stock.
8.10 Limitation on Restrictions on Restricted Subsidiary
---------------------------------------------------
Distributions. Enter into or suffer to exist or become effective any consensual
encumbrance or restriction on the ability of any Restricted Subsidiary of the
Borrower to (a) pay dividends or make any other distributions in respect of any
Equity Interests of such Restricted Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Restricted Subsidiary of the Borrower, (b)
make loans or advances to the Borrower or any other Restricted Subsidiary of the
Borrower or (c) transfer any of its assets to the Borrower or any other
Restricted Subsidiary of the Borrower, except any encumbrance or restriction
existing under or by reason of:
(i) applicable Law;
(ii) by reason of customary nonassignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices;
(iii) Purchase Money Indebtedness for property acquired in the
ordinary course of business that only impose restrictions on the property
so acquired;
(iv) this Agreement;
(v) agreements relating to the financing of the acquisition of
real or tangible personal property acquired after the Initial Effective
Date, provided that such encumbrance or restriction relates only to the
--------
property that is acquired and, in the case of any encumbrance or
restriction that constitutes a Lien, such Lien constitutes a Purchase Money
Lien; or
(vi) any restriction or encumbrance contained in contracts for
sale of assets in respect of the assets being sold pursuant to such
contract.
8.11 Limitation on Lines of Business. Enter into any business, either
-------------------------------
directly or through any Restricted Subsidiary other than the radio broadcast
business and activities directly related thereto (each, a "Permitted Line of
-----------------
Business"); provided, however, that no more than 3% of the fair market value of
- --------
the assets of the Borrower and the Restricted Subsidiaries (without duplication)
may, at any time, be in other media or entertainment businesses.
8.12 Limitation on Sale or Issuance of Equity Interests. Issue, sell,
--------------------------------------------------
assign, pledge or otherwise encumber or dispose of any shares of Equity
Interests of the Borrower or the Restricted Subsidiaries, except (a) the
Restricted Subsidiaries may issue or sell Equity Interests to the Borrower, (b)
the Equity Interests of the Borrower and the Restricted Subsidiaries may be
pledged pursuant to the Pledge Agreements, (c) the Borrower may issue common
stock in connection with
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its initial Public Equity Offering, provided that concurrently with the closing
--------
of such initial Public Equity Offering, the Borrower shall have repurchased all
of the Senior Preferred Stock outstanding on the Effective Date (other than the
Senior Preferred Stock issued in connection with exercise of the Allied Warrant)
with a portion of the proceeds from such initial Public Equity Offering or the
sale of the New Preferred Stock and provided, further that all of the Warrants
--------
outstanding on the Initial Effective Date shall have been exercised for common
stock of the Borrower pursuant to the terms and provisions of the Warrant
Certificates as in effect on the Initial Effective Date, (d) prior to the
closing of the Borrower's initial Public Equity Offering, the Borrower may issue
common stock of the Borrower to employees of the Borrower or the Restricted
Subsidiaries or to the Investors upon the exercise of their Warrants, and in
connection with the Atlanta Acquisition so long as all such common stock (other
than common stock issued to Allied Capital Corporation or Allied Investment
Corporation in connection with the Atlanta Acquisition) is pledged to the
Administrative Agent for the benefit of the Lenders as security for the
Obligations, (e) in connection with the exercise by Allied of the Allied
Warrant, the Borrower may issue to Allied a number of shares of the Series A 15%
Cumulative Redeemable Preferred Stock of Borrower, par value $0.01 having a
liquidation value of up to $4,000,000, provided, that no such Senior Preferred
--------
Stock shall be issued until Allied has assumed in writing all the obligations
and liabilities under, and become a party to, the Standstill Agreement as an
"Investor" thereunder and (f) provided that (i) no Default or Event of Default
--------
shall have occurred and be continuing either before or immediately after such
issuance or sale, (ii) the Borrower has closed its initial Public Equity
Offering, (iii) all of the Senior Preferred Stock outstanding on the Initial
Effective Date (other than the Senior Preferred Stock issued in connection with
the exercise of the Allied Warrant) has been (or, concurrently with the sale of
the New Preferred Stock will be) repurchased or redeemed and all of the Warrants
outstanding on the Initial Effective Date have been exercised, the Borrower may
issue or sell common stock or New Preferred Stock, subject to the Borrower's
compliance with the provisions of Sections 4.2(e).
-------- ------
8.13 Limitation on Material Agreements. (a) No Loan Party will enter
---------------------------------
into any amendment, modification or waiver without the prior written consent of
the Majority Lenders (i) of any term or provision of the Senior Subordinated
Debt Documents, the Standstill Agreement, the New Exchange Debenture Indenture,
or the Amended and Restated Certificate of Incorporation that is adverse in any
material respect to rights of the Lenders under the Loan Documents, or (ii) of
any term or provision of the Securities Purchase Agreement, the Warrant
Agreement, the Exchange Agreement, the Preferred Stockholders' Agreement or any
other Preferred Stock Document (or document governing the rights and preferences
of the New Preferred Stock or of the holders thereof) that adds more
restrictions upon, or events of default with respect to, or is otherwise less
favorable in any respect to, the Borrower or that otherwise is in conflict with
any of the covenants of the Borrower set forth in this Agreement and the other
Loan Documents, other than waivers of compliance by any Loan Party of the terms
of any of such agreements. Notwithstanding anything to the contrary contained
in this Section 8.13, the Borrower may amend the Amended and Restated
------------
Certificate of Incorporation in order to authorize additional shares of common
stock of the Borrower in connection with the initial Public Equity Offering of
the Borrower and to authorize the New Preferred Stock.
(b) No Loan Party will (i) enter into any LMA Agreement other than (w)
a LMA Agreement with Broadcast Holdings, Inc. covering Station WYCB-AM (x) a
Time Brokerage
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Agreement between Atlanta and Dogwood dated April ___, 1997 and
(y) LMA Agreements allowing the Borrower or any Restricted Subsidiary to operate
radio stations to be acquired in connection with Permitted Acquisitions, or (ii)
except as required by the FCC, agree to any extension or termination of or
amendment, modification or waiver of any material term of any such LMA
Agreement, in each case without the prior written consent of the Majority
Lenders. The Borrower agrees to promptly deliver to the Administrative Agent a
copy of each LMA Agreement entered into by a Borrower or a Restricted Subsidiary
on or after the Initial Effective Date.
(c) No Restricted Subsidiary shall operate, manage or direct the day-
to-day operations of any Station unless it has entered into an Operating
Agreement with a License Subsidiary and such Operating Agreement is in full
force and effect.
8.14 Certain Intercompany Matters. Fail to (i) satisfy customary
----------------------------
formalities with respect to organizational separateness, including, without
limitation, (x) the maintenance of separate books and records and (y) the
maintenance of separate bank accounts in its own name; (ii) act solely in its
own name and through its authorized officers and agents, (iii) commingle any
money or other assets of any Unrestricted Subsidiary with any money or other
assets of the Borrower or any of the Restricted Subsidiaries; or (iv) take any
action, or conduct its affairs in a manner, which could reasonably be expected
to result in the separate organizational existence of the Borrower, each
Unrestricted Subsidiary and the Restricted Subsidiaries being ignored under any
circumstance.
8.15 Preferred Stock Documents and New Preferred Stock. After the
-------------------------------------------------
closing of the initial Public Equity Offering, permit any of the Preferred Stock
Documents, or any of the documents governing the rights and preferences of the
New Preferred Stock or of the holders thereof, to contain any redemption rights
with respect to the holders of the Senior Preferred Stock or of the New
Preferred Stock prior to one year after the Termination Date (except with
respect to a change of control as defined in the Preferred Stockholders'
Agreement) or to contain any rights whatsoever to cause a sale of any Loan
Party.
SECTION 9. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder, on or prior to the date
which is five days (or, if later, three Business Days) after any such
interest or other amount becomes due in accordance with the terms hereof;
or
(b) Any representation or warranty made or deemed made by the Borrower
or any other Loan Party herein or in any other Loan Document shall prove to
have been incorrect in any material respect on or as of the date made or
deemed made; or
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(c) The Borrower or any other Loan Party shall default in the
observance or performance of any agreement contained in Sections 7.4, 7.7,
------------ ---
7.9, 7.10 and 7.11 or Section 8 of this Agreement or in the Pledge
--- ---- ---- ---------
Agreements; or
(d) The Borrower or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in paragraphs
(a) through (c) of this Section), and such default shall continue
unremedied for a period of 30 days after the Administrative Agent shall
have given the Borrower notice thereof; or
(e) (i) The Borrower or any of the Subsidiaries shall default in
making any payment of any principal of any Indebtedness (including, without
limitation, any Guarantee Obligation, but excluding the Loans and
Reimbursement Obligations) beyond the period of grace or cure, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (ii) the Borrower or any of the Subsidiaries shall default in
making any payment of any interest on any such Indebtedness beyond the
period of grace or cure, if any, provided in the instrument or agreement
under which such Indebtedness was created; or (iii) the Borrower or any of
the Subsidiaries shall default in the observance or performance of any
other agreement or condition relating to any such Indebtedness or contained
in any instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which default
or other event or condition is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required,
such Indebtedness to become due or to be purchased or repurchased prior to
its stated maturity (or, in the case of any such Indebtedness constituting
a Guarantee Obligation, to become payable prior to the stated maturity of
the primary obligation covered by such Guarantee Obligation); provided that
--------
a default, event or condition described in clause (i), (ii) or (iii) of
this paragraph (e) shall not constitute a Default or an Event of Default
under this Agreement unless, at the time of such default, event or
condition one or more defaults, events or conditions of the type described
in clauses (i), (ii) and (iii) of this paragraph (e) shall have occurred
with respect to Indebtedness the outstanding principal amount of which
exceeds in the aggregate $1,000,000; or
(f) (i) The Borrower or any of the Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial
part of its assets, or the Borrower or any of the Subsidiaries shall make a
general assignment for the benefit of its creditors; or (ii) there shall be
commenced against the Borrower or any of the Subsidiaries any case,
proceeding or other action of a nature referred to in clause (i) above
which (A) results in the entry of an order for relief or any such
adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a
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period of 60 days; or (iii) there shall be commenced against the Borrower
or any of the Subsidiaries any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets which results in
the entry of an order for any such relief which shall not have been
vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) the Borrower or any of the Subsidiaries shall
take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (i), (ii), or
(iii) above; or (v) the Borrower or any of the Subsidiaries shall generally
not, or shall be unable to, or shall admit in writing its inability to, pay
its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302
of ERISA), whether or not waived, shall exist with respect to any Plan or
any Lien in favor of the PBGC or a Plan shall arise on the assets of the
Borrower or any Commonly Controlled Entity, (iii) a Reportable Event shall
occur with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to terminate,
any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of
the Majority Lenders, likely to result in the termination of such Plan for
purposes of Title IV of ERISA, (iv) any Single Employer Plan shall
terminate for purposes of Title IV of ERISA, (v) the Borrower or any
Commonly Controlled Entity shall, or in the reasonable opinion of the
Majority Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect
to a Plan; and in each case in clauses (i) through (vi) above, such event
or condition, together with all other such events or conditions, if any,
could reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against the
Borrower or any of the Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance or indemnities) of $1,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days after the entry
thereof; or
(i) (i) Any material provision of the Loan Documents shall cease, for
any reason, to be in full force and effect, or the Borrower or any other
Loan Party shall so assert or (ii) the Lien created by any of the Security
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby; or
(j) A Change of Control shall occur or the Borrower; or
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<PAGE>
(k) The occurrence of any of the following: (i) Borrower or any Loan
Party shall lose, fail to keep in force, suffer the termination, suspension
or revocation of or terminate, forfeit or suffer an amendment to any FCC
License or other material license at any time held by it, the loss,
termination, suspension or revocation of which could reasonably be expected
to have a Material Adverse Effect on the operations of any Loan Party or
any Loan Party's ability to perform its obligations under this Agreement or
the other Loan Documents; (ii) any proceeding shall be brought by any
Person challenging the validity or enforceability of any Necessary
Authorization of a Loan Party except when such proceeding could not
reasonably be expected to result in the loss of such Necessary
Authorization or to have a Material Adverse Effect; (iii) appropriate
proceedings for the renewal of any Necessary Authorization shall not be
commenced prior to the expiration thereof or if such Necessary
Authorization is not renewed or otherwise made available for the use of the
applicable Loan Party; (iv) any Loan Party shall fail to comply with the
Communications Act or any rule or regulation promulgated by the FCC and
such failure to comply results in a fine in excess of $1,000,000; (v) the
FCC shall materially and adversely modify any Necessary Authorization or
shall suspend, revoke or terminate or shall commence proceedings to
materially and adversely modify, suspend, revoke or terminate any Necessary
Authorization and such proceedings shall not be dismissed or discharged
within the earlier of twelve months from the commencement of such
proceeding or 30 days prior to any date set for any suspension, revocation
or termination; or (vi) any Contractual Obligation which is materially
necessary to the operation of the broadcasting operations of any Loan Party
shall be revoked or terminated and not replaced by a substitute reasonably
acceptable to the Majority Lenders within 30 days after such revocation or
termination; or
(l) Any breach or default shall occur under any of the Senior
Subordinated Debt Documents or the Senior Subordinated Indebtedness is
accelerated; or
(m) The occurrence of any of the following: (i) the Borrower shall
redeem, or the Investors shall exercise any right to demand that the
Borrower redeem, any shares of the Senior Preferred Stock, except as
otherwise expressly permitted hereunder, (ii) the occurrence of a
Redemption Event under the Preferred Stockholders' Agreement (unless
waived, at any time prior to an Acceleration hereunder, by the requisite
Investors thereunder) or (iii) the occurrence of any other event which
entitles the Investors to cause a sale of the Borrower; or
(n) the death, disability and/or incapacity (which disability or
incapacity renders such Person unable to discharge their respective duties
as an officer and/or director of the Borrower as previously performed by
such Person for a period of 90 consecutive days) of Liggins and Hughes, and
a successor satisfactory to the Majority Lenders does not assume their
respective responsibilities and positions within 60 days of such death,
disability and/or incapacities;
(o) any Loan Party's on-the-air broadcasting operations are
interrupted at any time for more than 5 consecutive days, unless the
broadcasting operations of all or substantially all the radio stations in
the relevant market are also interrupted for a like period of time;
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(p) the Borrower shall fail to cause any computer application that is
material to its or any of the Restricted Subsidiaries' business and
operations to be year 2000 compliant, except to the extent that such
failure could not reasonably be expected to have a Material Adverse Effect;
(q) the consent of the FCC with respect to the Allur Acquisition shall
not have become a Final Order on or before June 30, 1999; or
(r) the consent of the FCC with respect to the Atlanta Acquisition or
the consent of the FCC with respect to the Dogwood Acquisition shall not
have become a Final Order on or before August 31, 1999.
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section 9 with respect to the
---------
Borrower, automatically the Commitments shall immediately terminate and the
Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Loan Documents (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder) shall immediately become due and payable, and (B) if such
event is any other Event of Default, either or both of the following actions may
be taken: (i) with the consent of the Majority Lenders, the Administrative
Agent may, or upon the request of the Majority Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Commitments to be terminated
forthwith, whereupon such Commitments shall immediately terminate; and (ii) with
the consent of the Majority Lenders, the Administrative Agent may, or upon the
request of the Majority Lenders, the Administrative Agent shall, by notice to
the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith (an
"Acceleration"), whereupon the same shall immediately become due and payable.
- -------------
With respect to all Letters of Credit with respect to which presentment for
honor shall not have occurred at the time of an Acceleration pursuant to this
paragraph, the Borrower shall at such time deposit in a cash collateral account
opened by the Administrative Agent an amount equal to the aggregate then undrawn
and unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay other Obligations of the Borrower hereunder and
under the other Loan Documents. After all such Letters of Credit shall have
expired or been fully drawn upon, all Reimbursement Obligations shall have been
satisfied, all Loans shall have been paid in full and no other Obligations shall
be due and payable, the balance, if any, in such cash collateral account shall
be returned to the Borrower (or such other Person as may be lawfully entitled
thereto).
Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
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SECTION 10. AGENTS
10.1 Appointment. Each Lender hereby irrevocably designates and
-----------
appoints the Administrative Agent as the administrative agent of such Lender
under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Loan
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. Notwithstanding any provision to the contrary elsewhere in
this Agreement or any other Loan Document, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
10.2 Delegation of Duties. The Administrative Agent may execute any
--------------------
of its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
10.3 EXCULPATORY PROVISIONS. NEITHER THE AGENT NOR ANY OF ITS
----------------------
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS-IN-FACT OR AFFILIATES SHALL BE
(i) LIABLE FOR ANY ACTION LAWFULLY TAKEN OR OMITTED TO BE TAKEN BY IT OR SUCH
PERSON UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
(EXCEPT FOR ITS OR SUCH PERSON'S OWN GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
BREACH OF THIS AGREEMENT) OR (ii) RESPONSIBLE IN ANY MANNER TO ANY OF THE
LENDERS FOR ANY RECITALS, STATEMENTS, REPRESENTATIONS OR WARRANTIES MADE BY THE
BORROWER OR ANY OFFICER THEREOF CONTAINED IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR IN ANY CERTIFICATE, REPORT, STATEMENT OR OTHER DOCUMENT REFERRED TO
OR PROVIDED FOR IN, OR RECEIVED BY THE AGENT UNDER OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT OR FOR THE VALUE, VALIDITY, EFFECTIVENESS,
GENUINENESS, ENFORCEABILITY OR SUFFICIENCY OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR FOR ANY FAILURE OF THE BORROWER TO PERFORM ITS OBLIGATIONS HEREUNDER
OR THEREUNDER. THE AGENT SHALL NOT BE UNDER ANY OBLIGATION TO ANY LENDER TO
ASCERTAIN OR TO INQUIRE AS TO THE OBSERVANCE OR PERFORMANCE OF ANY OF THE
AGREEMENTS CONTAINED IN, OR CONDITIONS OF, THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, OR TO INSPECT THE PROPERTIES, BOOKS OR RECORDS OF THE BORROWER.
10.4 Reliance by the Administrative Agent. The Administrative Agent
------------------------------------
shall be entitled to rely, and shall be fully protected in relying, upon any
Note, writing, resolution, notice,
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consent, certificate, affidavit, letter, facsimile, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Majority Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans.
10.5 Notice of Default. The Administrative Agent shall not be deemed
-----------------
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender
(except in the case of a Default under Section 9(a)) or the Borrower referring
------------
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Administrative
Agent receives such a notice, the Administrative Agent shall give notice thereof
to the Lenders. The Administrative Agent shall take such action with respect to
such Default or Event of Default as shall be reasonably directed by the Majority
Lenders; provided that unless and until the Administrative Agent shall have
--------
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
10.6 Non-Reliance on the Administrative Agent and the Other Lenders.
--------------------------------------------------------------
Each Lender expressly acknowledges that neither the Administrative Agent nor any
of its officers, directors, employees, agents, attorneys-in-fact or affiliates
has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of
the Borrower, shall be deemed to constitute any representation or warranty by
the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrower and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender also represents
that it will, independently and without reliance upon the Administrative Agent
or any other Lender, and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigation as it deems necessary
to inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the
Administrative
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Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrower which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE AGENT IN ITS
---------------
CAPACITY AS SUCH (TO THE EXTENT NOT REIMBURSED BY THE BORROWER AND WITHOUT
LIMITING THE OBLIGATION OF THE BORROWER TO DO SO), RATABLY ACCORDING TO THEIR
RESPECTIVE SPECIFIED PERCENTAGES IN EFFECT ON THE DATE ON WHICH INDEMNIFICATION
IS SOUGHT (OR, IF INDEMNIFICATION IS SOUGHT AFTER THE DATE UPON WHICH THE LOANS
SHALL HAVE BEEN PAID IN FULL, RATABLY IN ACCORDANCE WITH THEIR SPECIFIED
PERCENTAGES IMMEDIATELY PRIOR TO SUCH DATE), FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND WHATSOEVER WHICH MAY AT ANY TIME
(INCLUDING, WITHOUT LIMITATION, AT ANY TIME FOLLOWING THE PAYMENT OF THE LOANS)
BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO
OR ARISING OUT OF, THE COMMITMENTS, THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY DOCUMENTS CONTEMPLATED BY OR REFERRED TO HEREIN OR THEREIN OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY ACTION TAKEN OR OMITTED
BY THE AGENT UNDER OR IN CONNECTION WITH ANY OF THE FOREGOING; PROVIDED THAT NO
--------
LENDER SHALL BE LIABLE FOR THE PAYMENT OF ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS RESULTING FROM THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE THE PAYMENT OF THE
LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.
10.8 The Administrative Agent in Its Individual Capacity. The
---------------------------------------------------
Administrative Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Administrative Agent were not the Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it, the Administrative
Agent shall have the same rights and powers under this Agreement and the other
Loan Documents as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. (a) The Administrative Agent may
------------------------------
resign as the Administrative Agent upon 30 days' notice to the Lenders and the
appointment of a successor Administrative Agent as hereinafter provided. If the
Administrative Agent shall resign as the Administrative Agent under this
Agreement and the other Loan Documents, then, unless an Event
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<PAGE>
of Default shall have occurred and be continuing (in which case, the Majority
Lenders shall appoint a successor), the Borrower shall appoint from among the
Lenders a successor Administrative Agent for the Lenders, which successor
Administrative Agent shall be approved by the Majority Lenders (which approval
shall not be unreasonably withheld). If no successor Administrative Agent shall
have been so appointed by the Borrower (or in the case of an Event of Default,
by the Majority Lenders) and such successor Administrative Agent has not
accepted such appointment within 30 days after such resignation, then the
resigning Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent, which successor Administrative Agent hereunder
shall be either a Lender or, if none of the Lenders is willing to serve as
successor Administrative Agent, a major international bank having combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as the Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall succeed to the rights, powers
and duties of the Administrative Agent, and the term "Administrative Agent"
shall mean such successor Administrative Agent effective upon such appointment
and approval, and the former Administrative Agent's rights, powers and duties as
the Administrative Agent shall be terminated, without any other or further act
or deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Loans. After any retiring Administrative
Agent's resignation as the Administrative Agent, the provisions of this Section
-------
10 shall inure to its benefit as to any actions taken or omitted to be taken by
- --
it while it was the Administrative Agent under this Agreement and the other Loan
Documents.
(b) In the event that the Administrative Agent shall have breached any
of its material obligations to the Lenders hereunder, the Majority Lenders may
remove the Administrative Agent, effective on the date specified by them, by
written notice to the Administrative Agent and the Borrower. Upon any such
removal, the Borrower, provided that no Event of Default shall have occurred and
--------
be continuing (in which case the Majority Lenders shall make the appointment),
shall have the right to appoint a successor Administrative Agent, which
successor Administrative Agent shall be approved by the Majority Lenders (which
approval shall not be unreasonably withheld). If no successor Administrative
Agent shall have been so appointed by the Borrower (or in the case of an Event
of Default, by the Majority Lenders) and such successor Administrative Agent has
not accepted such appointment within 30 days after notification to the
Administrative Agent of its removal, then the retiring Administrative Agent may,
on behalf of the Lenders, appoint a successor Administrative Agent, which
successor Administrative Agent hereunder shall be either a Lender or, if none of
the Lenders is willing to serve as successor Administrative Agent, a major
international bank having combined capital and surplus of at least $500,000,000.
Such successor Administrative Agent, provided that no Event of Default shall
--------
have occurred and be continuing, shall be reasonably satisfactory to the
Borrower. Upon the acceptance of any appointment as the Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the retiring
Administrative Agent shall be discharged from its duties and obligations under
this Agreement. The Borrower and the Lenders shall execute such documents as
shall be necessary to effect such appointment. After any retiring
Administrative Agent's removal hereunder as the Administrative Agent, the
provisions of this Section 10.9 shall inure to its benefit as to any actions
------------
taken or omitted to be taken by it while it was the Administrative Agent under
this Agreement and the other Loan Documents. If at any time there shall not be
a duly
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<PAGE>
appointed and acting Administrative Agent, the Borrower agrees to make each
payment due hereunder and under the Notes directly to the Lenders entitled
thereto during such time.
10.10 Other Agents. The Borrower and each Lender hereby covenant and
------------
agree that the Administrative Agent, the Syndication Agent and the Documentation
Agent shall not have any duties or responsibilities hereunder, or any fiduciary
relationship with the Borrower, the Administrative Agent or any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or otherwise exist against the
Administrative Agent and the Syndication Agent, each in its capacity as such.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. Neither this Agreement nor any other
----------------------
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 11.1. The
------------
Majority Lenders and each relevant Loan Party may, or, with the written consent
of the Majority Lenders, the Administrative Agent and each relevant Loan Party
may, from time to time, (a) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents for the purpose of adding
any provisions to this Agreement or the other Loan Documents or changing in any
manner the rights of the Lenders or of the Loan Parties hereunder or thereunder
or (b) waive, on such terms and conditions as the Majority Lenders or the
Administrative Agent, as the case may be, may specify in such instrument, any of
the requirements of this Agreement or the other Loan Documents or any Default or
Event of Default and its consequences; provided, however, that no such waiver
-------- -------
and no such amendment, supplement or modification shall (i) reduce the amount or
extend the scheduled date of maturity of any Loan or of any installment thereof,
or reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or increase the amount or extend the
expiration date of any Commitment of any Lender, or make any change in the
method of application of any payment of the Loans specified in Section 4.2 or
-----------
Section 4.8, (ii) waive, extend or reduce any mandatory Commitment reduction
- -----------
pursuant to Section 4.2, (iii) amend, modify or waive any provision of, this
-----------
Section 11.1 or reduce any percentage specified in the definition of Majority
- ------------
Lenders, or consent to the assignment or transfer by any Loan Party of any of
its rights and obligations under this Agreement and the other Loan Documents,
(iv) release the Collateral, except as expressly permitted in the Security
Documents and except for any Collateral which is permitted to be disposed of
pursuant to Section 8.5, all of which Collateral may be released by the
-----------
Administrative Agent pursuant to such applicable Security Document and pursuant
to Section 8.5, (v) amend, modify or waive any condition precedent to any
-----------
extension of credit set forth in Section 6, in each case of (i), (ii), (iii),
---------
(iv) and (v) above, without the written consent of all of the Lenders, (vi)
amend, modify or waive any provision of Section 10 without the written consent
----------
of the then Administrative Agent, or (vii) amend, modify or waive any provision
of Section 3 without the written consent of the Issuing Lender. Any such waiver
---------
and any such amendment, supplement or modification shall apply equally to each
of the Lenders and shall be binding upon the Loan Parties, the Lenders, the
Administrative Agent and all future holders of the Notes. In the case of any
waiver, the Loan Parties, the Lenders and the Administrative Agent shall be
restored to their former position and rights hereunder and under the other Loan
Documents, and any Default or Event of Default
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<PAGE>
waived shall be deemed to be cured and not continuing; but no such waiver shall
extend to any subsequent or other Default or Event of Default, or impair any
right consequent thereon.
11.2 Notices. All notices, requests and demands to or upon the
-------
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three Business Days after
being deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrower, the Subsidiaries and the Administrative
Agent, and as set forth in Schedule 1.1A (or, with respect to any Lender that is
-------------
an Assignee, in the applicable Assignment and Acceptance) in the case of the
other parties hereto, or to such other address as may be hereafter notified by
the respective parties hereto:
The Borrower: Radio One, Inc.
5900 Princess Garden Parkway, 8th Floor
Lanham, Maryland 20706
Attention: Scott R. Royster, Chief Financial Officer
Fax: (301) 306-9426
with copies to:
Alfred C. Liggins, President
Fax: (301) 306-9694
and
Linda Eckard, General Counsel
Fax: (301) 306-9426
The Administrative
Agent/Issuing Lender: NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Todd Shipley
Fax: (214) 508- 9390
provided that any notice, request or demand to or upon the Administrative Agent
- --------
or the Lenders pursuant to Sections 2 or 3 shall not be effective until
---------- -
received.
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<PAGE>
11.3 No Waiver; Cumulative Remedies. No failure to exercise and no
------------------------------
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All representations
------------------------------------------
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans hereunder.
11.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay
-----------------------------
or reimburse the Administrative Agent for all its reasonable out-of-pocket costs
and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Loan Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses reasonably incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any such other
documents, including, without limitation, the reasonable fees and disbursements
of counsel to each Lender and of counsel to the Administrative Agent, (c)
without duplication of amounts payable pursuant to Sections 4.9 and 4.10, TO
------------ ----
PAY, INDEMNIFY, AND HOLD EACH LENDER AND THE AGENT HARMLESS FROM, ANY AND ALL
RECORDING AND FILING FEES AND ANY AND ALL LIABILITIES WITH RESPECT TO, OR
RESULTING FROM ANY DELAY IN PAYING, STAMP, EXCISE AND OTHER TAXES, IF ANY, WHICH
MAY BE PAYABLE OR DETERMINED TO BE PAYABLE IN CONNECTION WITH THE EXECUTION AND
DELIVERY OF, OR CONSUMMATION OR ADMINISTRATION OF ANY OF THE TRANSACTIONS
CONTEMPLATED BY, OR ANY AMENDMENT, SUPPLEMENT OR MODIFICATION OF, OR ANY WAIVER
OR CONSENT UNDER OR IN RESPECT OF, THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND
ANY SUCH OTHER DOCUMENTS, AND (D) WITHOUT DUPLICATION OF AMOUNTS PAYABLE
PURSUANT TO SECTIONS 4.9 AND 4.10, TO PAY, INDEMNIFY, AND HOLD EACH LENDER, EACH
------------ ----
ISSUING LENDER AND THE AGENT, AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AFFILIATES, ADVISORS, AGENTS AND CONTROLLING PERSONS (EACH, AN
"INDEMNITEE"), HARMLESS FROM AND AGAINST ANY AND ALL OTHER LIABILITIES,
- -----------
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE
EXECUTION, DELIVERY, ENFORCEMENT, PERFORMANCE AND ADMINISTRATION OF THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS AND ANY SUCH OTHER DOCUMENTS OR THE USE OF
THE PROCEEDS OF THE LOANS (ALL THE FOREGOING IN THIS CLAUSE
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(D), COLLECTIVELY, THE "INDEMNIFIED LIABILITIES"), PROVIDED, THAT IT IS THE
----------------------- --------
INTENTION OF THE BORROWER TO INDEMNIFY THE INDEMNIFIED PARTIES HEREUNDER AGAINST
THEIR OWN NEGLIGENCE, AND FURTHER PROVIDED THE BORROWER SHALL HAVE NO OBLIGATION
HEREUNDER TO ANY INDEMNITEE WITH RESPECT TO INDEMNIFIED LIABILITIES ARISING FROM
THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF OR BREACH OF THIS AGREEMENT BY
SUCH INDEMNITEE. THE AGREEMENTS IN THIS SECTION SHALL SURVIVE REPAYMENT OF THE
LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER.
11.6 Successors and Assigns; Participations and Assignments. (a)
------------------------------------------------------
This Agreement shall be binding upon and inure to the benefit of the Borrower,
the Lenders, the Administrative Agent and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of each
Lender.
(b) Any Lender may, in accordance with applicable law, at any time
sell to one or more banks or other entities ("Participants") participating
------------
interests in any Loan or L/C Obligation owing to such Lender, any Commitment of
such Lender or any other interest of such Lender hereunder and under the other
Loan Documents. In the event of any such sale by a Lender of a participating
interest to a Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Administrative Agent shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. In no event
shall any Participant under any such participation have any right to approve any
amendment or waiver of any provision of any Loan Document, or any consent to any
departure by any Loan Party therefrom, except to the extent that such amendment,
waiver or consent would reduce the principal of, or interest on, the Loans or
any fees payable hereunder, or postpone the date of the final scheduled maturity
of the Loans, in each case to the extent subject to such participation. The
Borrower agrees that if amounts outstanding under this Agreement are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, provided that, in purchasing
--------
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 11.7(a) as
---------------
fully as if it were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 4.9, 4.10 and 4.11
------------ ---- ----
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if it were a Lender; provided that, in the case of Section
-------- -------
4.10, such Participant shall have complied with the requirements of said Section
- ----
and provided, further, that no Participant shall be entitled to receive any
-------- -------
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
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(c) Any Lender may, in accordance with applicable law, at any time and
from time to time assign to any Person (an "Assignee") all or any part of its
--------
rights and obligations under this Agreement and the other Loan Documents
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
-------
A, executed by such Assignee and such assigning Lender and delivered to the
- -
Administrative Agent for its acceptance and recording in the Register (with a
copy to the Borrower) and upon payment to the Administrative Agent of a
processing fee in the amount of $3,500 by the applicable Lender and/or Assignee;
provided that, (i) no such assignment shall be in an amount less than $5,000,000
- --------
or a whole multiple of $100,000 in excess thereof or, if less than $5,000,000,
the entire amount of such Lender's applicable Commitment; and (ii) no such
assignment shall be made without the prior consent of the Administrative Agent
and the Borrower (which consent shall not be unreasonably withheld or delayed)
unless such assignment is to another Lender or an Affiliate of a Lender, in
which event no such consent shall be required. Upon such execution, delivery,
acceptance and recording, from and after the effective date determined pursuant
to such Assignment and Acceptance, (x) the Assignee thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Commitment as set forth
therein, and (y) the assigning Lender thereunder shall, to the extent provided
in such Assignment and Acceptance, be released from its obligations under this
Agreement.
(d) Any Non-U.S. Lender that could become completely exempt from
withholding of any tax, assessment or other charge or levy imposed by or on
behalf of the United States or any taxing authority thereof ("U.S. Taxes") in
----------
respect of payment of any Obligations due to such Non-U.S. Lender under this
Agreement if the Obligations were in registered form for U.S. federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees thereupon, to exchange any promissory note(s) evidencing such
Obligations for promissory note(s) registered as provided in paragraph (f) below
and substantially in the form of Exhibit O (an "Alternative Note"). Alternative
--------- ----------------
Notes may not be exchanged for promissory notes that are not Alternative Notes.
(e) Each Non-U.S. Lender that could become completely exempt from
withholding of U.S. Taxes in respect of payment of any Obligations due to such
Non-U.S. Lender if the Obligations were in registered form for U.S. Federal
income tax purposes and that holds Alternative Note(s) (an "Alternative
-----------
Noteholder") (or, if such Alternative Noteholder is not the beneficial owner
- ----------
thereof, such beneficial owner) shall deliver to the Borrower prior to or at the
time such Non-U.S. Lender becomes an Alternative Noteholder a Form W-8
(Certificate of Foreign Status of the U.S. Department of Treasury) (or any
successor or related form adopted by the U.S. taxing authorities), together with
an annual certificate stating that (i) such Alternative Noteholder or beneficial
owner, as the case may be, is not a "bank" within the meaning of Section 881(c)
of the Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Code) of the Borrower and is not a controlled foreign
corporation related to the Company (within the meaning of Section 864(d)(4) of
the Code) and (ii) such Alternative Noteholder or beneficial owner, as the case
may be, shall promptly notify the Borrower if at any time such Alternative
Noteholder or beneficial owner, as the case may be, determines that it is no
longer in a position to provide such certification to the Borrower (or any other
form of certification adopted by the U.S. taxing authorities for such purposes).
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(f) An Alternative Note and the Obligation(s) evidenced thereby may be
assigned or otherwise transferred in whole or in part only by registration of
such assignment or transfer of such Alternative Note and the Obligation(s)
evidenced thereby on the Register (and each Alternative Note shall expressly so
provide). Any assignment or transfer of all or part of such Obligation(s) and
the Alternative Note(s) evidencing the same shall be registered on the Register
only upon surrender for registration of assignment or transfer of the
Alternative Note(s) evidencing such Obligation(s), duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed by)
the Alternative Noteholder thereof, and thereupon one or more new Alternative
Note(s) in the same aggregate principal amount shall be issued to the designated
Assignee(s). No assignment of an Alternative Note and the Obligation(s)
evidenced thereby shall be effective unless it has been recorded in the Register
as provided in this Section 11.6(f).
---------------
(g) The Administrative Agent, on behalf of the Borrower, shall
maintain at the address of the Administrative Agent referred to in Section 11.2
------------
a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders
--------
(including Alternative Noteholders) and the Commitments of, and principal
amounts of the Loans owing to, each Lender from time to time. The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Administrative Agent and the Lenders may (and, in the case of any
Loan or other obligation hereunder not evidenced by a Note, shall) treat each
Person whose name is recorded in the Register as the owner of a Loan or other
obligation hereunder as the owner thereof for all purposes of this Agreement and
the other Loan Documents, notwithstanding any notice to the contrary. Any
assignment of any Loan or other obligation hereunder not evidenced by a Note
shall be effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the Borrower
or any Lender at any reasonable time and from time to time upon reasonable prior
notice.
(h) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an Assignee and the Borrower, if applicable, together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 from the applicable Lender and/or Assignee, the Administrative Agent
shall (i) promptly accept such Assignment and Acceptance and (ii) on the
effective date determined pursuant thereto record the information contained
therein in the Register and give notice of such acceptance and recordation to
the Lenders and the Borrower.
(i) Subject to Section 11.16, the Borrower authorizes each Lender to
-------------
disclose to any Participant or Assignee (each, a "Transferee") and any
----------
prospective Transferee, subject to the Transferee agreeing to be bound by the
provisions of Section 11.16, any and all financial information in such Lender's
-------------
possession concerning the Borrower and the Subsidiaries which has been delivered
to such Lender by or on behalf of the Borrower pursuant to this Agreement or
which has been delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower and its
Subsidiaries prior to becoming a party to this Agreement.
(j) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section concerning assignments of Loans and Notes
relate only to absolute assignments and that such provisions do not prohibit
assignments creating security interests,
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including, without limitation, any pledge or assignment by a Lender of any Loan
or Note to any Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "benefitted Lender")
-------------------- -----------------
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 9(f), or otherwise), in a greater proportion than any
------------
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Loans, or interest thereon, such benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or benefits
- -------- -------
is thereafter recovered from such benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) to set-
off and appropriate and apply against such amount, to the extent permitted by
applicable law, any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower. Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such Lender,
provided that, to the extent permitted by applicable law, the failure to give
- --------
such notice shall not affect the validity of such set-off and application.
11.8 Counterparts; When Effective. This Agreement may be executed by
----------------------------
one or more of the parties to this Agreement on any number of separate
counterparts (including by facsimile transmission), and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrower and the Administrative Agent. This Agreement shall become
effective when the Administrative Agent has received original counterparts
hereof executed by the Borrower, the Administrative Agent and each Lender named
on Schedule 1.1A on the date of the initial extension of credit made under this
-------------
Agreement (such date herein referred to as the "Effective Date").
--------------
11.9 Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
102
<PAGE>
11.10 Integration. This Agreement and the other Loan Documents
-----------
represent the agreement of the Borrower, the Administrative Agent and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agent or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
11.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
-------------
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
11.12 Submission To Jurisdiction; Waivers. The Borrower hereby
-----------------------------------
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgement in
respect thereof, to the non-exclusive general jurisdiction of the Courts of
the State of New York, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) designates and appoints Corporation Service Company, with offices
at 375 Hudson Street, New York, New York 10014, as agent to receive for
and on behalf of the Borrower service of process in New York. In the event
that C T Corporation System resigns or ceases to serve as the Borrower's
agent for service of process hereunder, the Borrower agrees forthwith (i)
to designate another agent for service of process in the State of New York
and (ii) to give prompt written notice to the Administrative Agent of the
name and address of such agent. In addition, the Borrower agrees that
service of process in any such action or proceeding may also be effected by
mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to it at its address
set forth in Section 11.2 or at such other address of which the
------------
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section 11.12 any special, exemplary, punitive or consequential
-------------
damages.
103
<PAGE>
11.13 Acknowledgments. The Borrower and each Subsidiary hereby
---------------
acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower or any Subsidiary arising out of
or in connection with this Agreement or any of the other Loan Documents,
and the relationship between the Administrative Agent and the Lenders, on
one hand, and the Borrower or any Subsidiary, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower, the Subsidiaries and the Lenders.
11.14 WAIVERS OF JURY TRIAL. THE LENDERS, THE BORROWER AND ITS
---------------------
SUBSIDIARIES, FOR THEMSELVES AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, HEREBY
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW, THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY DEALINGS WITH LENDERS
RELATING TO THE SUBJECT MATTER OF THE LOAN TRANSACTIONS CONTEMPLATED HEREBY AND
THEREBY AND THE RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including, without limitation, contract claims, tort claims, breach of duty
claims, and all other common Law and statutory claims. The Borrower and its
Subsidiaries acknowledge that this waiver is a material inducement to Lenders'
agreement to enter into a business relationship, that Lenders have already
relied on this waiver in entering into this Agreement, and that Lenders will
continue to rely on this waiver in related future dealings. The Borrower and
its Subsidiaries further warrant and represent that they have knowingly and
voluntarily waived their jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
MODIFICATIONS, RENEWALS, EXTENSIONS, RESTATEMENTS, REARRANGEMENTS, SUPPLEMENTS
OR SUBSTITUTIONS TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS OR THE NOTES. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.
104
<PAGE>
11.15 Maximum Interest Rate. Regardless of any provision contained
---------------------
in any of the Loan Documents, Lenders shall never be entitled to contract for,
charge, take, reserve, receive, or apply, as interest on the Obligations, or any
part thereof, any amount in excess of the Highest Lawful Rate, and, in the event
any Lender ever contracts for, charges, takes, reserves, receives, or applies as
interest any such excess, it shall be deemed a partial prepayment of principal
and treated hereunder as such and any remaining excess shall be refunded to the
Borrower. In determining whether or not the interest paid or payable, under any
specific contingency, exceeds the Highest Lawful Rate, the Borrower, its
Subsidiaries, and Lenders shall, to the maximum extent permitted under
applicable Law, (a) treat all Loans as but a single extension of credit (and
Lenders, the Borrower and the Borrower's Subsidiaries agree that such is the
case and that provision herein for multiple Loans and for one or more Notes is
for convenience only), (b) characterize any nonprincipal payment as an expense,
fee, or premium rather than as interest, (c) exclude voluntary prepayments and
the effects thereof, and (d) "spread" the total amount of interest throughout
the entire contemplated term of the Obligation; provided that, if the Obligation
-------- ----
is paid and performed in full prior to the end of the full contemplated term
thereof, and if the interest received for the actual period of existence thereof
exceeds the Highest Lawful Rate, Lenders shall refund such excess, and, in such
event, Lenders shall not be subject to any penalties provided by any laws for
contracting for, charging, taking, reserving, or receiving interest in excess of
the Highest Lawful Rate.
11.16 Confidentiality. Each Lender agrees to keep confidential all
---------------
non-public information provided to it by or on behalf of the Borrower or any of
the Subsidiaries pursuant to this Agreement or any other Loan Document; provided
--------
that nothing herein shall prevent any Lender from disclosing any such
information (i) to the Administrative Agent or any other Lender, (ii) to any
Assignee or Participant or prospective transferee, if such transferee has agreed
in writing to be bound by this Section 11.16, (iii) to its employees, directors,
-------------
agents, attorneys, accountants and other professional advisors, (iv) as may be
required or appropriate in any report, statement or testimony submitted to the
NAIC or any Governmental Authority having or claiming jurisdiction over such
Lender (including the Board and the Federal Deposit Insurance Corporation or any
similar organization, whether in the United States or elsewhere, and their
respective successors), (v) as may be required or appropriate in response to any
summons or subpoena or in connection with any litigation, (vi) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vii) which has been publicly
disclosed other than in breach of this Agreement, or (viii) in connection with
the exercise of any remedy hereunder.
11.17 Agreement of Lenders. The Administrative Agent and the Lenders
--------------------
agree to comply with their respective covenants, if any, set forth in the
Security Documents.
11.18 References to Credit Agreement. All references to this Credit
-------------------------------
Agreement herein or in any Loan Document or other document, instrument or
certificate or other writing executed or delivered in connection herewith will
be deemed for all purposes to refer to this Credit Agreement as among the
Borrower, the Lenders, the Administrative Agent, the Syndication Agent and the
Documentation Agent as the same may be amended, modified, restated,
supplemented, renewed, extended, increased, rearranged and/or substituted from
time to time.
105
<PAGE>
11.19 FINAL AGREEMENT. THIS WRITTEN AGREEMENT, THE NOTES AND THE
---------------
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN OR ORAL AGREEMENTS
BETWEEN THE PARTIES.
[Remainder of Page Intentionally Left Blank; Signature Pages Follow.]
106
<PAGE>
EXECUTED as of the day and year first mentioned.
RADIO ONE, INC., the Borrower
By: /s/ Alfred C. Liggins, III
-----------------------------------------
Alfred C. Liggins
President
NATIONSBANK, N.A.,
as the Administrative Agent and as a Lender
By: /s/ Todd Shipley
-----------------------------------------
Name: Todd Shipley
Title: Senior Vice President
FIRST UNION NATIONAL BANK,
as the Syndication Agent and as a Lender
By: /s/ David B. Craybill
-----------------------------------------
Name: David B. Craybill
---------------------------------------
Title: Vice President
--------------------------------------
CREDIT SUISSE FIRST BOSTON,
as a Lender
By: /s/ Kristin Lepri
-----------------------------------------
Name: Kristin Lepri
---------------------------------------
Title: Associate
--------------------------------------
By: /s/ Todd C. Morgan
-----------------------------------------
Name: Todd C. Morgan
---------------------------------------
Title: Director
--------------------------------------
<PAGE>
Schedule 1.1A
Commitments and Addresses of Lenders
FUNDING OFFICE OF ADMINISTRATIVE AGENT:
- --------------------------------------
NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Sahar Sharkawy
Fax: (214) 508-2118
OFFICE OF ISSUING LENDER:
- ------------------------
NationsBank, N.A.
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Sahar Sharkawy
Fax: (214) 508-2118
<PAGE>
NAME AND ADDRESS OF LENDERS:
- ---------------------------
Specified
NAME AND ADDRESS OF LENDER Commitment Percentage
- -----------------------------------------------------------
Credit Suisse First Boston $20,000,000 20%
Eleven Madison Avenue
New York, New York 10010
Attn: Todd Morgan
Fax: (212) 325-8314
- -----------------------------------------------------------
First Union National Bank $40,000,000 40%
301 S. College St. DC-5
Charlotte, NC 28288
Attn: David Kraybill
Fax: (212) 383-5292
- -----------------------------------------------------------
NationsBank, N.A. $40,000,000 40%
901 Main Street, 64th Floor
Dallas, Texas 75202
Attn: Todd Shipley
Fax: (214) 508-9390
- -----------------------------------------------------------
<PAGE>
Schedule 1.1B
Expense Add Backs to EBITDA
With respect to the financial calculations based on the four fiscal
quarter period ending March 31, 1998, to be delivered by the Borrower hereunder,
the Borrower shall be entitled to a one time expense add back to EBITDA in
connection with the Bell Acquisition for such four fiscal quarter period ending
March 31, 1998 in an amount equal to $680,112. With respect to the financial
calculations based on the four fiscal quarter period ending December 31, 1998,
the Borrower shall be entitled to a one time expense add back to EBITDA in
connection with the Allur Acquisition for such four fiscal quarter period ending
December 31, 1998, in an amount equal to $200,000. With respect to the
-------
financial calculations including the fiscal quarter ended December 31, 1998, the
Borrower shall be entitled to a one time expense add back to EBITDA in
connection with the Allur Acquisition in an amount not exceeding $800,000
representing the payment of employee bonuses and contributions related to Allur,
provided that: (i) the funds for such payment are paid out of the purchase price
paid by the Borrower in the Allur Acquisition; and (ii) such payment does not
lower the net worth of the Borrower or any of its Subsidiaries (including Allur)
after giving effect to the reduction in such purchase price resulting from such
payment. It is understood by the Borrower that any further add backs to EBITDA
for any other four fiscal quarter period shall be negotiated with the Lenders.
<PAGE>
Schedule 5.1(c)
Pro Forma Financial Information, Budgets and Projections
<PAGE>
Schedule 5.4
Required Consents and Approvals
<PAGE>
Schedule 5.14(a)
List of Restricted Subsidiaries and Owners of Equity Interests
<PAGE>
Schedule 5.14(b)
List of Shareholder and Voting Agreements, Warrants,
Restrictions on Transfer of Equity Interests
<PAGE>
Schedule 5.22(a)
Prior Trade Names
<PAGE>
Schedule 5.22(b)
Current Trade Names
<PAGE>
Schedule 5.23
Chief Executive Office; Chief Place of Business
<PAGE>
Schedule 5.24(a)
List of Real Property Owned and Leased
<PAGE>
Schedule 5.24(b)
List of Mortgaged Properties
<PAGE>
Schedule 5.25
Stations Owned
<PAGE>
Schedule 5.26
Necessary Authorizations
<PAGE>
Schedule 5.27
Patents and Trademarks
<PAGE>
Schedule 6.1(a)(a)
1. Subordinated Purchase Money Note, dated as of June 20, 1995, payable to
order of Design Media, Inc. in the original principal amount of $235,000
2. Promissory Note in the original principal amount of $1,000,000 payable to
the order of Alfred Liggins, dated as of June 20, 1995
3. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Capital Corporation in the original principal amount of $1,350,000
4. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Investment Corporation in the original principal amount of $2,450,000
5. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Capital Financial Corporation in the original principal amount of
$1,900,000
6. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Capital Corporation II in the original principal amount of $2,650,000
7. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Investment Corporation II in the original principal amount of $1,500,000
8. Senior Secured Debenture dated March 31, 1997, payable by Radio One of
Atlanta, Inc. and Dogwood Communications Inc. to the order of Allied
Capital Financial Corporation II in the original principal amount of
$150,000
9. Accrued Interest Note dated March 31, 1997, made by Radio One of Atlanta,
Inc. and Dogwood Communications Inc., payable to the order of Allied
Capital Financial Corporation II, in the original principal amount of
$9,156.75
10. Accrued Interest Note dated March 31, 1997, made by Radio One of Atlanta,
Inc. and Dogwood Communications Inc., payable to the order of Allied
Investment Corporation, in the original principal amount of $53,109.17
11. Accrued Interest Note dated March 31, 1997, made by Radio One of Atlanta,
Inc. and Dogwood Communications Inc., payable to the order of Allied
Capital Corporation II, in the original principal amount of $38,458.37
12. Accrued Interest Note dated March 31, 1997, made by Radio One of Atlanta,
Inc. and Dogwood Communications Inc., payable to the order of Allied
Investment Corporation II, in the original principal amount of $109,881.05
13. Accrued Interest Note dated March 31, 1997, made by Radio One of Atlanta,
Inc. and Dogwood Communications Inc., payable to the order of Allied
Capital Financial Corporation, in the original principal amount of
$155,664.82
14. Senior Secured Debenture dated September 30, 1998, made by Radio One of
Atlanta, Inc. and Dogwood Communications Inc., in the amount of $2,000,000,
payable to the order of Allied Capital Corporation
<PAGE>
15. Senior Secured Subordinated Promissory Note due April 1, 2001, made by
Radio One of Atlanta, Inc. and Dogwood Communications Inc., dated April 7,
1997, payable to the order of Alta Subordinated Debt Partner III, L.P., in
the original principal amount of $1,576,959.91
16. Promissory Note in the original principal amount of $1,000,000, increasing
to $1,388,878.63, issued by Radio One of Atlanta, Inc., dated June 20,
1995, payable to the order of Syndicated Communications Venture Partners
II, L.P.
<PAGE>
Schedule 8.2
Indebtedness
<PAGE>
Schedule 8.7
Terms of WKJS Acquisition and WSOJ Acquisition
Borrower may enter into an agreement to enable the Borrower (provided the
Borrower can otherwise fully comply with the terms and conditions of the Credit
Agreement and the other Loan Documents) to acquire all or substantially all of
the assets, property and business used in the operation of Stations WKJS-FM,
Crewe, Virginia, and WSOJ-FM, Petersburg, Virginia (the "Stations"), as more
--------
specifically set forth in Section 1 of the below-described Asset Purchase
Agreement (collectively, the "Assets"), from FM 100, Inc., a Virginia (the
------
"Seller"), for a total consideration of $12,000,000 (the "Richmond II
- ------- -----------
Acquisition"), plus additional contingent consideration as specified in the
- -----------
Richmond II Asset Purchase Agreement identified below pursuant to (i) an Asset
Purchase Agreement, to be dated on or about February 26, 1999, by and between
the Borrower and the Seller (the "Richmond II Asset Purchase Agreement") in the
------------------------------------
form delivered to the Administrative Agent and the Lenders on the Effective
Date, and (ii) an Escrow Agreement, to be dated on or about February 26, 1999,
by and among the Borrower, the Seller and Media Services Group, Inc., as escrow
agent thereunder in the form delivered to the Administrative Agent and Lenders
on the Effective Date (the "Richmond II Escrow Agreement" and, together with the
----------------------------
Richmond II Asset Purchase Agreement, the "Richmond II Acquisition Agreements"),
----------------------------------
and (b) to, in connection with entering into such Richmond II Acquisition
Agreements, and as required thereunder, deposit into escrow, pursuant to the
Richmond II Escrow Agreement, a nonrefundable deposit of $500,000 (the "Richmond
--------
II Earnest Money Deposit") simultaneously with the execution and delivery of the
- ------------------------
Richmond II Acquisition Agreements, which will be applied to the Richmond II
Acquisition purchase price upon consummation of the Richmond II Acquisition.
Nothing in the permission granted in Section 8.7 to the Borrower's entering in
to the Richmond II Acquisition Agreements: (a) waives any conditions precedent
or covenants required to be met by the Borrower under the Credit Agreement or
the other Loan Documents with respect to the consummation of the Richmond II
Acquisition; or (b) constitutes an undertaking or commitment on the part of any
Lender to increase its Commitment under the Credit Agreement or otherwise amend
the Credit Agreement in order to facilitate or permit consummation of the
Richmond II Acquisition.
The Borrower has represented to the Lenders that no consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person (including any stockholder of the Borrower) is
required to be obtained or made by the Borrower or any other Loan Party in
connection with the Borrower's execution and delivery of the Richmond II
Acquisition Agreements or its tender of the Richmond II Earnest Money Deposit
other than such as have been obtained or made and are in full force and effect
or which are immaterial.
Unless the Borrower fully complies with all conditions precedent, covenants,
terms and conditions of the Credit Agreement and the other Loan Documents prior
to or contemporaneously with the consummation of the Richmond II Acquisition,
then the Borrower may not consummate the Richmond II Acquisition and the
Borrower may, among other things, forfeit the Richmond II Earnest Money Deposit.
<PAGE>
Schedule 8.9
Existing Affiliate Transactions
<PAGE>
Exhibit 10.51
FIFTH AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT
This FIFTH AMENDMENT TO PREFERRED STOCKHOLDERS' AGREEMENT (this
"Amendment"), dated as of February 26, 1999, by and among the investors listed
as Series A Investors on Schedule A hereto (the "Series A Preferred Investors"),
the investors listed as Series B Investors on Schedule B hereto (the "Series B
Preferred Investors", and together with the Series A Preferred Investors, the
"Investors"), Radio One, Inc., a Delaware corporation (the "Company"), Radio One
Licenses, Inc., a Delaware corporation ("ROL"), and Alfred C. Liggins
("Liggins"), Catherine L. Hughes ("Hughes") and Jerry A. Moore III ("Moore")
(Liggins, Hughes and Moore are hereinafter collectively referred to as the
"Management Stockholders," and together with the Company and ROL as the
"Interested Parties," and each an "Interested Party").
WHEREAS, the Series A Preferred Investors, the Series B Preferred
Investors, the Company, ROL and the Management Stockholders entered into a
Preferred Stockholders' Agreement dated as of May 14, 1997, as amended by that
certain First Amendment, dated as of June 30, 1998, that certain Second
Amendment, dated as of November 23, 1998, that certain Third Amendment, dated
as of December 23, 1998, and that certain Fourth Amendment, dated as of
December 31, 1998 (the "Amended Original Agreement"); and
WHEREAS, the Company intends to enter into a Merger Agreement (the "Merger
Agreement") dated as of March 30, 1999, by and among the Company, ROA Merger
Subsidiary, Inc., Alta Subordinated Debt Partners III, L.P. ("Alta"), Allied
Capital Corporation, Allied Investment Corporation, Syndicated Communications
Venture Partners II, L.P. ("Syncom"), Mary Catherine Sneed ("Sneed") and Alfred
C. Liggins, III ("Liggins") (collectively, the "Sellers") and Radio One of
Atlanta, Inc. ("ROA"), which Merger Agreement will be substantially in the form
attached hereto as Exhibit A and pursuant to which the Company will acquire all
of the capital stock of ROA in exchange for, in the case of ROA Class A Common
Stock, capital stock of the Company, and in the case of ROA Class B Common
Stock, capital stock of the Company and cash through a reverse subsidiary merger
of ROA Merger Subsidiary, Inc., with and into the Company (the "ROA
Acquisition"); and
WHEREAS, Alta and Syncom are stockholders of the Company, Sneed is Chief
Operating Officer of the Company, Liggins is a stockholder, director, and Chief
Executive Officer and President of the Company; and
WHEREAS, in connection with the closing of the transactions contemplated by
the Merger Agreement, the Company desires to enter into an Amended and Restated
Credit Agreement, dated as of February 26, 1999, by and among the Company,
Several Lenders from time to time thereto, NationsBank, N.A. and First Union
National Bank (the "Nationsbank Agreement"); and
<PAGE>
WHEREAS, the Company has agreed to grant to Scott R. Royster, the Chief
Financial Officer and Executive Vice President of the Company ("Royster"), as a
restricted stock award subject to certain vesting provisions, 1.503 shares of
the Company's Class C Non-Voting Common Stock (the "Stock Award"); and
WHEREAS, the Company desires to amend the Amended Original Agreement to
increase certain permitted corporate overhead expense and capital expenditure
limits contained therein; and
WHEREAS, certain approvals, consents and amendments to the Amended Original
Agreement are required in order for the Company to enter into the Merger
Agreement and to take certain actions in connection with the ROA Acquisition, to
enter into the Amended and Restated Credit Agreement and to take certain actions
in connection therewith, to make the Stock Award to Royster, and to increase
permitted corporate overhead expense and capital expenditure limits; and
WHEREAS, the Investors are willing to provide such approvals and consents
and to amend the Amended Original Agreement to provide for modifications to the
covenants subject to performance and observance in full of each of the
covenants, conditions and other terms set forth below;
NOW, THEREFORE, the parties hereto agree as follows:
1. ROA Acquisition and Merger Agreement. The parties hereto hereby consent
pursuant to Section 6.10 and Section 6.11 of the Amended Original Agreement
to the ROA Acquisition.
2. Formation of ROA Licenses, Inc. The parties hereto hereby consent pursuant
to Section 6.4 of the Amended Original Agreement to the formation of ROA
Licenses, Inc., a Delaware corporation, for the purpose of acting as a
License Subsidiary (as such term is defined in the Amended Original
Agreement) holding the licenses, permits and authorizations required for
and/or used in the ownership and operation of the radio stations to be
acquired in the ROA Acquisition. It is understood and agreed that, after
the consummation of the ROA Acquisition, ROA Licenses, Inc. will be wholly
owned by the Company's then direct subsidiary, ROA.
3. Amended and Restated Credit Agreement.
(a) The parties hereto hereby consent to the Amended and Restated Credit
Agreement and to the incurrence of indebtedness in the maximum principal
amount of $100,000,000 on the terms and conditions contemplated by such
Amended and Restated Credit Agreement, together with any and all interest,
fees and other charges as contemplated thereby and documents executed in
connection with such Amended and Restated Credit Agreement.
<PAGE>
(b) The Amended Original Agreement is hereby amended to delete Section
6.1(b) thereof in its entirety and replace it with the following:
"(b) Indebtedness in a principal amount not in excess of $100,000,000 (the
"Nationsbank Debt") outstanding under the Amended and Restated Credit
Agreement dated as of February 26, 1999 by and among the Company,
NationsBank N.A., as Administrative Agent, and the several lenders from
time to time party thereto, as such agreement may be amended, modified,
replaced, renewed or otherwise changed except as respect to the maximum
principal amount of such Indebtedness or its rate of amortization (the
"Nationsbank Loan Agreement") and any refinancing of the Indebtedness under
the NationsBank Loan Agreement on terms substantially similar or more
favorable to the Company than the terms of the NationsBank Loan Agreement,
provided that such refinancing shall not (i) increase the interest rates to
a rate greater than the rate provided for under the terms of the
NationsBank Loan Agreement, (ii) materially change the rate of amortization
of the NationsBank Loan Agreement, (iii) extend the maturity of the
NationsBank Debt beyond its current maturity or (iv) increase the principal
amount of the NationsBank Debt in an amount in excess of $100,000,000;
provided, that the Borrower is not otherwise in violation of this clause
(b)."
4. Stock Award. The parties hereto hereby consent pursuant to Section 6.11
of the Amended Original Agreement to the Stock Award to Royster.
5. Amendments to Expense/Expenditure Limits. The Amended Original Agreement
is hereby amended as follows:
(a) Section 4.2 of the Amended Original Agreement is hereby amended by
substituting the number "$3,500,000" for the number "$2,850,000".
(b) Section 4.3 of the Agreement is hereby deleted in its entirety and is
replaced with the following:
"Except for those capital expenditures described on Appendix A hereto, the
----------
Company will not make, incur, assume or otherwise become liable for Capital
Expenditures in excess of the sum of (i) $1,000,000 New Radio Market (as
defined in the NationsBank Loan Agreement) and $250,000 for each radio
station acquired by the Company after February 28, 1999, and (ii)$1,000,000
for any fiscal period, except that the amount shall be $3,500,000 for
fiscal year 1999; provided, however, that if the Company does not incur
-------- -------
Capital Expenditures in an aggregate amount of $1,000,000 during any fiscal
year period, the Company may add such unused portion of permitted Capital
Expenditures to the amount of the Capital Expenditure allotment for the
following fiscal year period."
6. Representations and Warranties. In order to induce the Investors to enter
into this Amendment, Company represents and warrants to the Investors that
the representation and warranties contained in Section 2 of the Amended
---------
Original Agreement are true, correct and complete in all material respects
on and as of the date hereof to the same extent as though made on and as of
such date, except for changes that were consented to in writing by the
Investors.
<PAGE>
7. Miscellaneous.
(a) Ratification and Confirmation of Agreement. Except as specifically
amended hereby, the Amended Original Agreement shall remain in full force
and effect and is hereby ratified and confirmed, and the execution,
delivery and performance of this Amendment shall not, except as expressly
provided herein, operate as an amendment of any provision of the Amended
Original Agreement or as a waiver of any right, power or remedy of the
Investors under the Amended Original Agreement. Without limiting the
generality of the foregoing, the amendments and consents set forth in
Section 1 through Section 5 above shall be limited precisely as set forth
--------- ---------
above, and nothing in this Amendment shall be deemed (i) to constitute a
waiver of compliance by the Company with respect to any other provision or
condition of the Amended Original Agreement or (ii) to prejudice any right
or remedy that the Investors may now have or may have in the future under
or in connection with the Amended Original Agreement.
(b) Headings. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose or be given any substantive
effect.
(c) Governing Law and Advice of Counsel. THIS AMENDMENT SHALL BE DEEMED TO
BE A CONTRACT MADE UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. EACH OF THE INVESTORS AND THE
INTERESTED PARTIES HEREBY REPRESENTS, WARRANTS AND AGREES THAT THE
NEGOTIATION OF THIS AMENDMENT HAS TAKEN PLACE IN THE COMMONWEALTH OF
MASSACHUSETTS. EACH OF THE INTERESTED PARTIES HEREBY ACKNOWLEDGES THAT IT
HAS CAREFULLY REVIEWED AND UNDERSTANDS THE TERMS OF THIS AMENDMENT, HAS
OBTAINED AND CONSIDERED THE ADVICE OF COUNSEL WITH RESPECT TO SUCH TERMS
AND HAS HAD AN OPPORTUNITY TO FULLY NEGOTIATE SUCH TERMS.
(d) Counterparts. This Amendment may be executed by the parties hereto in
separate counterparts, each of which when so executed and delivered shall
be an original, but all such counterparts shall together constitute one and
the same instrument. Each counterpart may consist of a number of copies of
this Amendment, each of which may be signed by less than all of the parties
hereto, but together all such copies are signed by all of the parties
hereto.
(e) Order of Precedence. This Amendment amends the Amended Original
Agreement and wherever reference is made in the Amended Original Agreement
to "the Agreement" or "this Agreement," such reference shall refer to the
Amended Original Agreement as amended hereby. The terms of this Amendment
shall control any conflict between the Amended Original Agreement and this
Amendment. Otherwise, all other terms and conditions of the Amended
Original Agreement shall remain in full force and effect.
<PAGE>
SCHEDULE A
Syncom Capital Corporation
Alliance Enterprise Corporation
Opportunity Capital Corporation
Medallion Capital, Inc.
TSG Ventures, L.P.
Fulcrum Venture Capital Corporation
Alfred C. Liggins, III
(successor-in-interest to Greater Philadelphia Venture Capital Corporation,
Inc.)
<PAGE>
SCHEDULE B
Alta Subordinated Debt Partners III, L.P.
BancBoston Investments Inc.
Grant M. Wilson
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Fifth Amendment to
Preferred Stockholders' Agreement as a sealed instrument as of the day and year
first above written.
COMPANY:
-------
RADIO ONE, INC.
By: /s/ Alfred C. Liggins, III
----------------------------------
Name: Alfred C. Liggins, III
Title: President
SUBSIDIARY:
----------
RADIO ONE LICENSES, INC.
By: /s/ Alfred C. Liggins, III
----------------------------------
Name: Alfred C. Liggins, III
Title: President
[Signature Page to Fifth Amendment to Preferred Stockholders' Agreement]
<PAGE>
SERIES B PREFERRED INVESTORS:
----------------------------
ALTA SUBORDINATED DEBT
PARTNERS III, L.P.
By: Alta Subordinated Debt
Management III, L.P., its
General Partner
By: /s/ Eileen McCarthy
---------------------------------
Name: Eileen McCarthy
Title: General Partner
BANCBOSTON INVESTMENTS INC.
By: /s/ Lars A. Swanson
---------------------------------
Name: Lars A. Swanson
Title: Vice President
GRANT M. WILSON
By: /s/ Grant M. Wilson
---------------------------------
Grant M. Wilson, individually
[Signature Page to Fifth Amendment to Preferred Stockholders' Agreement]
<PAGE>
SERIES A PREFERRED INVESTORS:
----------------------------
SYNCOM CAPITAL CORPORATION
By: /s/ Terry L. Jones
---------------------------------
Name: Terry L. Jones
Title: President
ALLIANCE ENTERPRISE CORPORATION
By: /s/ Divakar Kamath
---------------------------------
Name: Divakar Kamath
Title: Executive Vice President
OPPORTUNITY CAPITAL CORPORATION
By: /s/ J. Peter Thompson
---------------------------------
Name: J. Peter Thompson
Title: President
MEDALLION CAPITAL, INC.
By: /s/ Dean Pickerell
---------------------------------
Name: Dean Pickerell
Title: President
TSG VENTURES L.P.
as successor-in-interest to TSG Ventures Inc.
BY: TSGVI Associates, Inc., its General
Partner
By: /s/ Duane Hill
---------------------------------
Name: Duane Hill
Title: President
[Signature Page to Fifth Amendment to Preferred Stockholders' Agreement]
<PAGE>
FULCRUM VENTURE CAPITAL CORPORATION
By: /s/ Brian Argrett
---------------------------------
Name: Brian Argrett
Title: President
ALFRED C. LIGGINS, III.
/s/ Alfred C. Liggins III
--------------------------------------------------
Alfred C. Liggins III, as successor-in-interest to
Greater Philadelphia Venture Capital Corporation,
Inc.
MANAGEMENT STOCKHOLDERS:
-----------------------
ALFRED C. LIGGINS, III
/s/ Alfred C. Liggins III
-------------------------------------------------
Alfred C. Liggins III, individually
CATHERINE L. HUGHES
/s/ Catherine L. Hughes
------------------------------------------------
Catherine L. Hughes, individually
JERRY A. MOORE III
/s/ Jerry A. Moore III
------------------------------------------------
Jerry A. Moore III, individually
[Signature Page to Fifth Amendment to Preferred Stockholders' Agreement]
