SECURITIES
AND EXCHANGE
COMMISSION
Washington,
D.C.
20549
FORM
8-K
CURRENT
REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF
THE SECURITIES EXCHANGE ACT OF
1934
Date
of Report: March 24, 2008 (Date
of earliest event reported)
Commission
File No.:
0-25969
RADIO
ONE, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction of
incorporation
or organization)
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52-1166660
(I.R.S.
Employer Identification No.)
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5900
Princess Garden Parkway,
7th
Floor
Lanham,
Maryland 20706
(Address
of principal executive offices)
(301) 306-1111
Registrant’s
telephone number, including area code
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to
Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to
Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
1.01.
Entry into Material Agreement.
On March 24, 2008, Radio One, Inc. issued a press release announcing the
sale of KRBV-FM, its radio station in Los Angeles, to Bonneville
International Corporation, the Salt Lake City based broadcast and communications
company. The transaction price is approximately $137.5 million. The
transaction is expected to close during the second quarter of 2008. A copy of the Asset
Purchase Agreement is attached hereto as Exhibit 10.1. A copy of the
press release is attached as Exhibit 99.1.
ITEM
8.01.
Other
Events
On
March
24, 2008, Radio One, Inc. issued a press release announcing that its Board of Directors
authorized a stock repurchase program for up to $150 million of Radio
One's Class A and Class D common stock through December 31, 2009. The amount
and
timing of repurchases will be based on pricing, general economic and market
conditions, certain restrictions contained in agreements governing Radio One's
bank credit facilities and subordinated debt and certain other factors. The
repurchase program does not obligate Radio One to repurchase any of its common
stock and may be discontinued or suspended at any time. A copy of the
press release is attached as Exhibit 99.1.
Statements
in this Form 8K which
are other than historical facts are intended to be “forward-looking statements”
within the meaning of the Securities Exchange Act of 1934, the Private
Securities Litigation Reform Act of 1995 and other related laws. While the
Company believes such statements are reasonable, the actual results and effects
could differ materially from those currently anticipated. In providing
forward-looking statements, the Company is not undertaking any duty or
obligation to update these statements publicly as a result of new information,
future events or otherwise.
ITEM
9.01.
Financial Statements
and
Exhibits.
(c) Exhibits
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Exhibit
Number
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Description
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10.1
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Asset
Purchase Agreement by and among Radio One, Inc. and Radio One Licenses,
LLC, as Sellers, and Bonneville International Corporation and Bonneville
Holding Company, as purchasers, dated March 24, 2008
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99.1
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Press
release dated March 24, 2008: Radio One, Inc. Announces the
Sale of KRBV-FM in Los Angeles, California and Board Approval of
Stock
Repurchases
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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RADIO
ONE, INC.
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/s/
Peter D. Thompson
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March
25, 2008
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Peter
D. Thompson
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Chief
Financial Officer and Principal Accounting Officer
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EXECUTION
COPY
ASSET
PURCHASE AGREEMENT
by
and among
RADIO
ONE, INC. and
RADIO
ONE LICENSES, LLC,
as
Sellers
and
BONNEVILLE
INTERNATIONAL CORPORATION and
BONNEVILLE
HOLDING COMPANY
as
Buyers
March
24, 2008
TABLE
OF
CONTENTS
ARTICLE
1 ASSETS TO BE CONVEYED
1.1
Transfer of Assets of the Station
1.2
Excluded Assets
1.3
Assumption of Liabilities and Obligations
1.4
Time Brokerage Agreement; Call Sign Change
1.5
Allocation
ARTICLE
2 PURCHASE PRICE
2.1
Purchase Price
2.2
Escrow of Purchase Price
2.3
Prorations
ARTICLE
3 CLOSING
3.1
Closing
ARTICLE
4 REPRESENTATIONS AND WARRANTIES OF SELLERS
4.1
Organization and Standing
4.2
Authorization and Binding Obligation
4.3
Absence of Conflicting Agreements or Required Consents
4.4
Litigation
4.5
Station Licenses
4.6
Real Property
4.7
Contracts
4.8
Compliance with Laws
4.9
Governmental Consents
4.10
Taxes
4.11
Reports
4.12
Environmental Matters
4.13
Broker’s Fees
4.14
Insurance
4.15
Personal Property
4.16
Disclaimer of Warranties
4.17
Buyers’ Representations and Warranties
ARTICLE
5 REPRESENTATIONS AND WARRANTIES OF BUYERS
5.1
Organization and Standing
5.2
Authorization and Binding Obligation
5.3
Absence of Conflicting Agreements or Required Consents
5.4
Absence of Litigation
5.5
FCC Qualifications
5.6
Broker’s Fees
5.7
Sellers’ Representations and Warranties
ARTICLE
6 GOVERNMENTAL CONSENTS
6.1
FCC Application
6.2
HSR Filings
ARTICLE
7 COVENANTS
7.1
Conduct of Business
7.2
Access
7.3
No Inconsistent Action
7.4
Confidentiality
7.5
Further Assurances
7.6
Transition Efforts
7.7
Press Releases
7.8
FCC Authorizations
7.9
Consents; Benefit of Agreements
ARTICLE
8 CONDITIONS PRECEDENT
8.1
To Buyers’ Obligations Regarding Closing
8.2
To Sellers’ Obligations
ARTICLE
9 DOCUMENTS TO BE DELIVERED AT THE CLOSING
9.1
Documents to be Delivered by Sellers
9.2
Documents to be Delivered by Buyers
ARTICLE
10 INDEMNIFICATION
10.1
Sellers’ Indemnities
10.2
Buyers’ Indemnities
10.3
Procedure for Indemnification
10.4
Limitations
10.5
Exclusive Remedies
ARTICLE
11 TERMINATION RIGHTS
11.1
Termination
11.2
Payment of Escrow Amount
11.3
Exclusive Remedies Upon Default
11.4
Other Effects of Termination
ARTICLE
12 OTHER PROVISIONS
12.1
Survival of Representations, Warranties and Covenants
12.2
Transfer Taxes and Expenses
12.3
Benefit and Assignment
12.4
Additional Documents
12.5
Entire Agreement; Schedules; Amendment; Waiver
12.6
Headings
12.7
Computation of Time
12.8
Governing Law
12.9
Attorneys’ Fees
12.10
Severability
12.11
Notices
12.12
Counterparts
12.13
Facsimile or PDF Signatures
ARTICLE
13 DEFINITIONS
13.1
Defined Terms
13.2
Miscellaneous Terms
ASSET
PURCHASE AGREEMENT
This
Asset Purchase Agreement (“Agreement”)
is made as of the 24th
day of
March, 2008, by and among RADIO ONE, INC., a Delaware corporation (“Radio
One”), RADIO ONE
LICENSES, LLC, a
Delaware limited liability company (“Licensee,”
and together with Radio One, “Sellers”),
BONNEVILLE INTERNATIONAL
CORPORATION, a Utah corporation (“BIC”),
and BONNEVILLE HOLDING
COMPANY, a Utah non-profit corporation (“BHC,”
and together with BIC,
“Buyers”). Reference
herein to a “Party”
or
the “Parties”
shall refer, on the one hand, to the Buyers, and on the other hand, to the
Sellers. Capitalized terms shall have the meanings ascribed to them
in Article 13 of this Agreement.
RECITALS
WHEREAS,
Radio One operates radio station KRBV(FM), licensed to Los Angeles, California
(the “Station”),
and Licensee is the holder of the license and authorizations issued by the
Federal Communications Commission (the “FCC”)
for
the operation of the Station;
WHEREAS,
subject to the terms and conditions of this Agreement, (i) Radio One desires
to
sell and BIC desires to purchase certain of the assets and property used in
the
operation of the Station, and (ii) Licensee desires to assign and BHC desires
to
assume Licensee’s FCC licenses for the Station; and
WHEREAS,
Sellers and Buyers are, simultaneously with the execution and delivery of this
Agreement, entering into a Time Brokerage Agreement for the Station (the “Time
Brokerage
Agreement”), pursuant to which, on the Operational Commencement Date
(defined below), BIC shall provide programming on the Station pending the
Closing of the transaction contemplated in this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants contained herein, Sellers
and Buyers hereby agree as follows:
ARTICLE
1
ASSETS
TO BE CONVEYED
1.1
Transfer of Assets of the Station. Subject
to the terms and conditions set forth in this Agreement, Licensee hereby agrees
to sell, assign, transfer, convey and deliver to BHC on the Closing Date those
items listed in subsection (a) below and Radio One hereby agrees to sell,
assign, transfer, convey and deliver to BIC on the Closing Date those items
listed in subsections (b) through (g) below, together with any replacements
thereof and additions thereto between the date of this Agreement and the Closing
Date, free and clear of all Liens, except as otherwise provided in this
Agreement, but excluding the assets described in Section 1.2 (collectively,
the“Assets”):
(a)
All
licenses, permits and other authorizations issued to Licensee by the FCC listed
on Schedule
1.1(a) attached hereto, together with renewals or modifications thereof
between the date hereof and the Closing Date (the “FCC
Licenses”);
(b) All
right, title and interest held by Sellers in and to each lease or sublease
(including all amendments, modifications or supplements) under which either
Seller leases or subleases an interest in any real property listed in Schedule 1.1(b) (the
“Real
Property”), including but not limited to the Station’s studio location,
main transmitter site and each auxiliary or translator site (each a “Real
Property
Lease” and, collectively, the “Real
Property
Leases”);
(c) The
towers, transmitters, antennas, receivers, spare parts and other tangible
personal property owned by Sellers and located at the Station’s main transmitter
site and each auxiliary or translator site, together with all studio equipment,
office equipment, office furniture, fixtures, materials and supplies,
inventories, and other tangible personal property owned by Sellers and located
at the Station’s studio, including the items listed on Schedule 1.1(c),
together with replacements thereof and additions thereto made between the date
hereof and the Closing Date in accordance with the terms and provisions of
this
Agreement (collectively, the “Personal
Property”);
(d) All
contracts (including the Real Property Leases) of Sellers listed on Schedule 1.1(d)
hereto (the “Assumed
Contracts”);
(e) The
Intellectual Property listed on Schedule
1.1(e);
(f) The
Station’s public inspection file, filings with the FCC relating to the Station,
all records required by the FCC to be kept by the Station, all records relating
to the Real Property and the Personal Property, and such technical information,
engineering data, and, to the extent transferable, rights under
manufacturers’ warranties
as they exist at the Closing and relate to the Assets being conveyed hereunder;
and
(g) Sellers’
proprietary information, technical information and data, operating manuals,
books, studies, records, reports, ledgers, files, correspondence, maps, computer
discs and tapes, plans, diagrams, blueprints and schematics, including filings
with the FCC, relating to the technical operation of the Assets; provided,
however, that Sellers may provide Buyers copies of any such items, if the
original cannot be located or if it relates to Excluded Assets.
1.2
Excluded Assets. Except
for the Assets specifically identified above (which identification,
notwithstanding anything to the contrary set forth herein, shall control in
the
event of any disagreement with the definition of Excluded Assets below), no
other assets shall be transferred to Buyers hereunder, including the following,
which shall not be included in the Assets (collectively, the “Excluded
Assets”):
(a)
All
cash, cash equivalents or similar investments such as certificates of deposit,
treasury bills and other marketable securities on hand and/or in banks and
deposits of either of the Sellers;
(b) All
accounts receivable of Sellers arising from the operation of the Station prior
to the Operational Commencement Date (as defined below) of the Time Brokerage
Agreement (as defined below) (the “Accounts
Receivable”);
(c) Except
as
set forth in Section 12.12 (Casualty), any insurance policies, promissory notes,
amounts due from employees, bonds, letters of credit, or other similar items,
and any cash surrender value in regard thereto of either of the
Sellers;
(d) Any
pension, profit-sharing or cash or deferred (Section 401(k)) plans and trusts
and assets thereof, or any other employee benefit plan or arrangement, and
the
assets thereof;
(e) Duplicate
copies of such records as may be necessary to enable Sellers to prepare and
file
tax returns and reports, all original financial statements and supporting
materials, all books and records that Sellers are required by law to retain,
and
all records of Sellers relating to the purchase and sale of the
Assets;
(f) Any
interest in and to any refunds of federal, state or local franchise, income
or
other taxes of the Sellers for periods prior to the Closing;
(g) All
tangible and intangible personal property of Sellers related to the Station
and
disposed of or consumed between the date of this Agreement and the Closing
in
the ordinary course of business consistent with Section 7.1 hereof;
(h) The
financial records, account books of original entry and general ledgers and
all
corporate records of each of the Sellers, including, but not limited to, tax
returns and transfer books;
(i) All
promotional, sales, marketing and programming agreements and materials related
to the operation of the Station;
(j) All
Intellectual Property used or held for use in the operation of the Station
other
than the Intellectual Property listed on Schedule
1.1(e);
(k) All
assets used or held for use primarily in the operation of Sellers’ other radio
stations; and
(l)
Any
other assets identified on Schedule
1.2(l).
1.3
Assumption of Liabilities and Obligations.
Subject
to obligations
already assumed under the Time Brokerage Agreement, BIC shall assume and
undertake to pay, discharge and perform all obligations and liabilities of
Sellers (as to the Assumed Contracts and other Assets (but not as to the
Licenses)) and BHC shall assume and undertake to discharge and perform all
obligations and liabilities of Licensee (as to the FCC Licenses) arising or
accruing after the Closing. Buyers shall not assume (i) any
obligation or liabilities under Assumed Contracts relating to the period prior
to the Closing, (ii) any obligations or liabilities of Sellers which are
unrelated to the Assets being sold hereunder, (iii) any obligations relating
to
employees of Sellers, (iv) any obligations relating to the Excluded Assets,
(v)
any federal, state or local franchise, income or other taxes of Sellers, or
(vi)
any other obligation or liability of either Seller.
1.4
Time Brokerage Agreement; Call Sign Change.
(a)
Simultaneously with the execution and delivery of this Agreement, the Sellers
and BIC are entering into the Time Brokerage Agreement. BIC’s programming of the
Station under the Time Brokerage Agreement shall commence on the later of April
1, 2008 or that date which is two (2) business days after the expiration or
termination of any waiting period applicable to the proposed transaction under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”)
(the “Operational
Commencement Date”). To the extent that any assets and
liabilities are prorated under the Time Brokerage Agreement, any obligation
of
Sellers under this Agreement to prorate such assets or liabilities shall be
deemed satisfied. Notwithstanding anything to the contrary contained
in this Agreement or otherwise, Sellers shall not be deemed to have breached
or
failed to comply with any representations, warranties, covenants, or agreements
with respect to the Station or the Assets if such breach or failure is caused
by
any act, omission or instruction of BIC under or in connection with the Time
Brokerage Agreement or any activities or transactions by BIC in furtherance
thereof or in connection therewith.
(b)
Buyer has selected (or shall select) new call letters for the Station and has
notified (or shall notify) Sellers of its selection (the “New Call
Letters”). Sellers shall make and diligently prosecute any
such selection at the FCC (requesting the New Call Letters and that the New
Call
Letters will become effective as promptly as possible (i.e., seven (7) days
from
filing), but not earlier than the Operational Commencement Date) until the
New
Call Letters become effective (subject to any FCC denial or prior third-party
filing for the New Call Letters), and shall implement such call letter change
once such change has become effective. In the event that this
Agreement terminates without a Closing, Sellers and Buyers will cooperate to
change the call letters of the Station from the New Call Letters (which may
remain with Buyers) to call letters selected by Sellers, and shall make
application filing with the FCC to effect such change. The previous
sentence will survive any termination of this Agreement.
1.5 Allocation. The
Purchase Price shall be
allocated based upon the fair market value of the Assets. Sellers and
Buyers may each obtain an appraisal of the Assets prepared by Bond & Pecaro,
Inc. using valuation methods of their choosing, and shall provide each other
with a copy of any such appraisal, if obtained, as soon as reasonably possible
following Closing and shall disclose to one another the allocation that each
intends to use in their respective filings and the bases therefor. If
Sellers and Buyers plan to use allocations that are inconsistent with one
another, they will discuss such allocations for a period of up to 60 days
following Closing (or such shorter time period sufficient to allow the Parties
to file their tax returns when due) in an effort to reach an allocation upon
which both agree. If a mutually agreeable allocation is not reached,
then Buyers and Sellers shall each be free to use their own allocation in their
respective filings.
ARTICLE
2
PURCHASE
PRICE
2.1
Purchase Price. The
purchase price for the Assets shall be One Hundred Thirty-Seven Million Five
Hundred Thousand Dollars ($137,500,000) (the “Purchase
Price”), payable in cash at the Closing, less that portion of the Escrow
Amount (as defined below) simultaneously delivered to Sellers, and subject
to
the prorations set forth in Section 2.3, by wire transfer of immediately
available funds to one or more accounts at banks or other financial institutions
pursuant to wire transfer instructions that Sellers shall deliver to Buyers
at
least three (3) days prior to the Closing Date.
2.2
Escrow of Purchase Price. Simultaneously
with the execution and delivery of this Agreement, Buyers will deposit Eleven
Million Dollars ($11,000,000) (the “Escrow
Amount”) into escrow. The Escrow Amount shall be held and
disbursed by Wilmington Trust NA (the “Escrow
Agent”), pursuant to the terms of an Escrow Agreement in the form
attached hereto as Exhibit “A” (the “Escrow
Agreement”), which Escrow Agreement shall be signed by Sellers, Buyers
and Escrow Agent simultaneously with the execution of this
Agreement. At the Closing, the Parties shall cause the Escrow Amount
to be paid to the Sellers and all interest accrued on the Escrow Amount to
be
paid to Buyers. Buyers and Sellers agree to give the Escrow Agent
joint written instructions in accordance with the terms of this Agreement and
the Escrow Agreement.
2.3 Prorations. Income
and Expense
Prorations. Subject to those prorations already made under the
terms of the Time Brokerage Agreement, all income and expenses arising from
the
conduct of the business and operations of the Station shall be prorated between
Buyers and Seller as of 12:01 a.m. local time on the Closing
Date. Except as specifically addressed in the Time Brokerage
Agreement, such prorations shall be based upon the principle that Sellers shall
be entitled to all income earned and shall be responsible for all liabilities
and obligations accruing in connection with the Station’s operations until the
Closing Date, and BIC shall be entitled to such income earned and be responsible
for such liabilities and obligations accruing in connection with such operations
thereafter. Such prorations shall include all ad valorem and other
property taxes (but excluding taxes arising by reason of the transfer of the
Assets as contemplated hereby, which shall be paid as set forth in Section
12.2
of this Agreement), deposits, utility expenses, liabilities and obligations
under all Assumed Contracts, rents and similar prepaid and deferred items,
and
all other expenses attributable to the ownership and operations of the
Station. All real estate taxes and personal property taxes, if any,
shall be apportioned on the basis of the number of days that each Party owned
or
used the Real Property or Personal Property during the relevant tax
year. The aggregate net adjustment amount determined in
accordance with this Section is referred to herein as the “Proration
Amount.”
(a) Specific
Prorations. Subject to those prorations already made under the
terms of the Time Brokerage Agreement, and without limiting the generality
of
the foregoing Section 2.3(a):
(i) Sellers
shall receive a credit for the unapplied portion, as of the Closing, of any
security deposits made by Sellers under the Assumed Contracts; and
(ii) The
Buyers shall receive a prorated credit for any FCC annual regulatory fees
relating to the Station paid in arrears by the Buyers and any security deposits
received by Sellers under the Assumed Contracts.
(b) Proration
Notice. To the extent sufficient information is available
regarding proration items as of the Closing Date, proration shall be made as
of
the Closing Date. Within ninety (90) days after the Closing Date, the
Buyers shall deliver to Sellers in writing and in reasonable detail a good
faith
determination of the Proration Amount determined as of the Closing Date (the
“Proration
Notice”). Sellers shall provide reasonable assistance as
requested by the Buyers in making such determination. Buyers shall
provide Sellers backup documentation supporting the Buyers’ preparation of the
Proration Amount. If Sellers disagree with the Proration Amount
determined by Buyers, Sellers shall so notify the Buyers in writing (the “Proration
Dispute
Notice”) within thirty (30) days after the date of receipt of the
Proration Notice, specifying in detail any point of disagreement and providing
backup documentation supporting Seller’s calculations. After the
receipt of any Proration Dispute Notice, the Buyers and Sellers shall negotiate
in good faith to resolve any disagreements regarding the applicable Proration
Amount. If agreement is reached within thirty (30) days after the
Buyers’ receipt of the Proration Dispute Notice, then upon reaching such
agreement, Sellers shall pay to the Buyers or the Buyers shall pay to Sellers,
as the case may be, the Proration Amount in the manner provided in Section
2.3(c) below.
(c) Payment
of Proration
Amount. Each payment of the Proration Amount required hereunder shall be
paid by wire transfer in immediately available funds to the account of the
payee
at a financial institution in the United States within five (5) business days
of
its final determination. Any payment not received by the Party
entitled thereto within this period shall bear interest from such date until
paid in full at a rate per annum equal to the prime rate in effect at the end
of
such period (as published in the Money Rates column of Eastern Edition of The Wall Street Journal)
plus
four percent (4%).
ARTICLE
3
CLOSING
3.1
Closing. Subject
to satisfaction or waiver of the conditions set forth in Sections 8.1 and 8.2
and subject to the provisions of Section 11.1, the closing (the “Closing”)
of the sale and purchase of the Assets shall take place at a mutually agreeable
location or by electronic exchange of signatures and payments on a date mutually
agreeable to Buyers and Sellers no later than the fifth (5th)
business day after the date of the FCC Consent (defined below); provided that
such date shall be no later than the Upset Date (defined below) (the “Closing
Date”).
ARTICLE
4
REPRESENTATIONS
AND WARRANTIES OF SELLERS
Each
Seller, each as to itself and its Assets, represents and warrants jointly and
severally to Buyers that, subject to the specific terms herein and to the
disclosures in the schedules referenced in this Article 4 (the “Schedule
of
Exceptions”), the following representations and warranties are true and
correct as of the date of this Agreement and will be true and correct as of
the
Closing Date:
4.1 Organization
and Standing. Each
Seller (a) is duly formed, validly existing and in good standing under the
laws
of the State of Delaware, (b) is qualified to do business in all jurisdictions
where failure to do so would have a material adverse effect on the business
of
the Station, and (c) has all necessary power and authority to own, operate
and
lease its respective Assets and carry on the business of the Station.
4.2 Authorization
and Binding
Obligation. Each
Seller has all
necessary power and authority to enter into and perform its respective
obligations under this Agreement and the documents contemplated hereby and
to
consummate the transactions contemplated hereby and thereby. This
Agreement and the Time Brokerage Agreement have been, and each of the other
documents contemplated hereby at or prior to Closing will be, duly executed
and
delivered by Sellers, and have been approved by all necessary corporate or
other
action. This Agreement constitutes (and each of the other documents
contemplated hereby, when executed and delivered, will constitute) valid and
binding obligations enforceable against Sellers in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors’ rights generally or the availability of equitable
remedies.
4.3 Absence
of Conflicting Agreements or Required
Consents. Except
for the FCC Consents, HSR
Clearance (defined below) and necessary consents to assignment indicated on
Schedules 1.1(b)
and
1.1(d), the execution, delivery and performance of this Agreement and the
documents contemplated hereby by each of the Sellers, respectively, do not
and
will not: (a) violate any provisions of the organizational documents
of such Seller; (b) violate any applicable law, judgment, order, ordinance,
injunction, decree, rule, regulation or ruling of any court or governmental
authority; (c) constitute a material default under, or accelerate or permit
the
acceleration of any performance required by the terms of any of the Assumed
Contracts, assuming any necessary consents are obtained; and (d) create any
claim, Lien or encumbrance upon any of the Assets, except in each of the above
instances where such breach or default would not have a material adverse effect
on the Assets or on the ability of the Sellers to consummate the transactions
contemplated by this Agreement.
4.4
Litigation. Except
as disclosed on Schedule 4.4, there
are no claims, litigation, arbitrations or other legal proceedings pending
or,
to the Knowledge of Sellers, threatened against Sellers with respect to the
Assets or operation of the Station, except where such claims, litigation,
arbitrations or other legal proceedings could not reasonably be expected to
have
a material adverse effect on the financial condition of the Station or on the
ability of the Parties to consummate the transactions contemplated by this
Agreement.
4.5
Station Licenses.
(a) Schedule
1.1(a)
contains a true and complete list of the FCC Licenses used or held for use
in
connection with the operation of the Station as currently
operated. Licensee is the authorized legal holder of the FCC Licenses
listed on Schedule
1.1(a). Except as set forth on Schedule
1.1(a), the
FCC Licenses are in good standing and in full force and effect. The
Station and the facilities of the Station are being and have been operated
during Sellers’ ownership and operation of the Stations in material compliance
with the FCC Licenses, the Communications Act and all FCC rules and
policies. Except as set forth on Schedule 1.1(a), the
FCC Licenses are all of the FCC licenses, permits and authorizations required
for the operation of the Station as presently operated.
(b) Except
as
set forth in Schedule
1.1(a), and except for proceedings affecting the radio broadcasting
industry generally, (i) to the Knowledge of Sellers, there are no applications,
petitions, complaints, investigations, notices of violations, notice of apparent
liabilities, pending license terminations, forfeitures, proceedings or other
actions pending or threatened from or before the FCC relating to the Station
or
the FCC Licenses, (ii) Sellers have not filed with the FCC any applications
or
petitions relating to the Station or the FCC Licenses which are pending before
the FCC and (iii) there are no tolling or similar agreements with the FCC
relating to the Station. Sellers and the Assets are in compliance
with all rules and regulations of the Federal Aviation Administration applicable
to the Station. Each antenna structure that is required to be
registered with the FCC has been registered with the FCC. All
material reports and other filings required by the FCC with respect to the
Station have been properly and timely filed.
(c) The
operation of the Station does not expose workers or others to levels of radio
frequency radiation in excess of the “Radio Frequency Protection Guides”
recommended in “American National Standard Safety Levels with Respect to Human
Exposure to Radio Frequency Electromagnetic Fields 3 kHz to 300 GHz” (ANSI/IEEE
C95.1-1992), issued by the American National Standards Institute, and renewal
of
the FCC Licenses would not constitute a “major action” within the meaning of
Section 1.1301, et
seq., of the FCC’s rules.
4.6
Real Property. The
list of Real
Property Leases set forth on Schedule 1.1(b) is a
correct and complete list of all of the interests in real estate used in
connection with the operation of the Station. Sellers have a valid
leasehold interest in and to each Real Property Lease. Sellers have
not received any notice (i) that either the whole or any portion of the Real
Property is to be condemned, requisitioned or otherwise taken by any public
authority, (ii) of violation by Sellers of restrictive covenants, deed
restrictions or governmental requirements on the Real Property which have not
been remedied, or (iii) of any violation by Sellers of any zoning or
similar land use law or restriction, or of any proceedings which would cause
the
change, redefinition or other modification of the zoning
classification. Sellers have not received any notice of any pending
or threatened termination or impairment of access to the Real Property or
discontinuation of sewer, water, electrical, gas telephone or other utilities
or
services to the Real Property. To the Knowledge of Sellers, the Real
Property includes sufficient access to the Station’s facilities from public
roads without need to obtain any other access rights.
4.7
Contracts. Schedules
1.1(b) and
1.1(d) list all agreements with respect to the Station to be conveyed
hereunder. Each of the Assumed Contracts is in full force and effect
and is legally valid, binding and enforceable by Seller in accordance with
their terms, except as limited by laws affecting creditor’s rights or
equitable principles generally. Except as disclosed on Schedule 1.1(d),
neither Sellers nor, to the Knowledge of Sellers, any other party thereto is
in
any material respect in default under the Assumed Contracts.
4.8
Compliance with Laws. Except
as set forth in Schedule 4.8, Sellers
have complied in all material respects with, and are not in any material respect
in violation of, applicable federal, state or local laws, statutes, rules,
regulations or orders relating to the ownership and operation of the Station,
except where such violation would not have a material adverse effect on the
Assets or on the ability of the Parties to consummate the transactions
contemplated by this Agreement. Sellers have
not received any notice asserting any
material noncompliance
with any applicable
statute, rule or regulation, relating to the Assets
or in connection with the
operation of the
Station. There
is no pending or, to the Knowledge of
each of the
Sellers, threatened
investigation, audit, review or other examination of the Station, and
Sellers are
not subject to any order, agreement,
memorandum of understanding or other regulatory enforcement action or proceeding
with or by the FCC or any other federal or state governmental agency having
supervisory or regulatory authority with respect to the Station or the Assets.
4.9
Governmental Consents. Except
for the FCC Consent and the HSR Clearance (defined below), the execution,
delivery and performance by the Sellers of this Agreement and the other
documents contemplated herein, and the consummation by the Sellers of the
transactions contemplated hereby and thereby, do not and will not require the
authorization, consent, approval, exemption, clearance or other action by or
notice or declaration to, or filing with, any court, administrative or other
governmental body.
4.10
Taxes. All
federal, state, local and other Tax returns, reports and declarations required
to be filed by the Sellers have been filed or caused to be filed, and all Taxes
(including, but not limited to, income, franchise, sales, use, unemployment,
personal property, real property, withholding, social security and workers’
compensation taxes and estimated income and franchise tax payments, penalties
and fines) reflected as due on such returns, reports or declarations (whether
or
not shown on such returns, reports or declarations), or pursuant to any
assessment received in connection with such returns, reports or declarations
have been paid, the non-filing or non-payment of which is reasonably likely
to
have a material adverse impact on the Assets. To the Knowledge of the
Sellers, (i) all such returns, reports and declarations are true, complete
and
correct in all material respects; (ii) no deficiency in payment of any Taxes
related to the Assets for any period has been asserted by any taxing authority
which remains unsettled as of the date hereof, no written inquiries have been
received from any taxing authority with respect to possible claims for taxes
or
assessments on the Assets, and there is no basis for any additional claims
or
assessments for Taxes on the Assets, the consequences of which, in each case,
is
reasonably likely to have a material adverse impact on the Assets.
4.11
Reports. All
reports and statements that either of the Sellers are required to file with
the
FCC in respect of the Station have been filed, and all reporting requirements
of
the FCC have been complied with in all material respects.
4.12
Environmental Matters. In
respect of the Real Property:
(a)
Neither
Seller has received any notice from any governmental authority that the Sellers
have ever been in violation or alleged violation of any judgment, decree, order,
law, license, rule or regulation pertaining to environmental matters, including
those arising under the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
as
amended, the Superfund Amendments and Reauthorization Act of 1986, the Federal
Water Pollution Control Act, the Solid Waste Disposal Act, as amended, the
Federal Clean Air Act, the Toxic Substances Control Act, or any federal, state
or local statute, regulation, ordinance, order or decree relating to the
environment (hereinafter collectively “Environmental
Laws”) at the Real Property;
(b) Neither
Seller has received written notice from any third party, including any federal,
state or local governmental authority, that any hazardous waste, as defined
by
42 U.S.C. § 6903(5), any hazardous
substance, as defined by 42 U.S.C. § 9601(33), or any toxic
substance, oil or hazardous material, asbestos containing material or other
hazardous chemical or hazardous substance regulated by any Environmental Laws
(collectively, “Hazardous
Substances”) is or has been used or stored at the Real Property by either
Seller in material violation of Environmental Laws, and the only Hazardous
Substances used or stored at the Real Property by Sellers are used in connection
with the Station’s transmission facilities, customary oils and fuel used in
connection with the Station’s generator, if any;
(c) Neither
Seller has used any portion of any of the Real Property for the handling,
manufacturing, processing, storage or disposal of Hazardous Substances in
material violation of applicable Environmental Laws related to the Real
Property;
(d) Neither
Seller has released (i.e., any past or present releasing, spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
disposing or dumping) Hazardous Substances on, upon, into or from any of the
Real Property in material violation of applicable Environmental
Laws;
(e) Sellers
have complied in all material respects with all Environmental Laws in respect
of
the Real Property; and
(f) To
Seller’s Knowledge (without investigation), the Real Property is not subject to
any order from or agreement with any governmental authority or private party
regarding any Environmental Laws.
4.13
Broker’s Fees. Neither
of the Sellers, nor any person or entity acting on either of the Seller’s
behalf, 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, and no person or entity is entitled to any such payment from either
of
the Sellers in connection with the transactions contemplated by this Agreement,
other than a payment owed by Sellers to Star Media Group pursuant to a separate
agreement with them. The Sellers shall indemnify and hold harmless
the Buyers for any payment due to Star Media Group or any other broker claiming
by, through or under Sellers in connection with the transaction contemplated
by
this Agreement.
4.14
Insurance. Sellers
maintain insurance policies or other arrangements with respect to the Station
and the Assets consistent with its practices for other stations, including
coverage of all buildings, towers, antennas, dishes, transmission lines,
transmitters and other Assets used in the operation of the Station,
and will maintain such policies or arrangements until the
Closing. Sellers have not received notice from any issuer of such
policies of its intention to cancel, terminate or refuse to renew any policy
issued by it with respect to the Station and the Assets. Set forth on
Schedule 4.14
is a true and correct summary of the property insurance policies or arrangements
with respect to the Station and the Station Assets.
4.15
Personal Property. Schedule
1.1(c)
contains a list of material items of Personal Property included in the
Assets. Sellers have good and marketable title to the Personal
Property free and clear of Liens. All items of Personal Property are
in good operating condition, ordinary wear and tear excepted and are suitable
for the purpose for which such items are presently used. The Assets
include all the assets necessary to conduct the broadcasting operations of
the
Station in all material respects as currently operated by Sellers other than
personnel, Excluded Assets and agreements that are not Assumed
Contracts.
4.16
Disclaimer of Warranties. EXCEPT
AS OTHERWISE
SPECIFICALLY SET FORTH HEREIN, THE ASSETS ARE BEING SOLD “AS-IS, WHERE-IS” AND SELLERS
MAKE NO REPRESENTATIONS OR WARRANTY WITH REGARD TO THE SAME. THIS
DISCLAIMER OF WARRANTIES, INCLUDES, BUT IS NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
4.17
Buyers’ Representations and Warranties. Sellers
have not relied on or been induced to enter into this Agreement by any
statement, representation or warranty other than those expressly set forth
in
Article 5 of this Agreement.
ARTICLE
5
REPRESENTATIONS
AND WARRANTIES OF BUYERS
Each
Buyer represents and warrants jointly and severally to Sellers that the
following representations and warranties are true and correct as of the date
of
this Agreement and will be true and correct as of the Closing Date:
5.1
Organization and Standing. BIC
is a corporation and BHC is a non-profit corporation, both of which are formed,
validly existing and in good standing under the laws of the State of
Utah. As of the Closing Date, each Buyer will be qualified to do
business in all jurisdictions where the failure to so qualify would have a
material adverse effect on its business.
5.2 Authorization
and Binding
Obligation. Each
Buyer has all necessary power and authority to enter into and perform its
obligations under this Agreement and the documents contemplated hereby and
to
consummate the transactions contemplated hereby and thereby. This
Agreement and the Time Brokerage Agreement have been, and each of the other
documents contemplated hereby at or prior to Closing will be, duly executed
and
delivered by Buyers, and have been approved by all necessary corporate
action. This Agreement constitutes (and each of the other documents
contemplated hereby, when executed and delivered, will constitute) valid and
binding obligations enforceable against Buyers in accordance with their terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors’ rights generally or the availability of equitable
remedies.
5.3
Absence of Conflicting Agreements or Required Consents. Except
for the FCC Consents and the HSR Clearance, the execution, delivery and
performance of this Agreement by Buyers does not and will not: (a)
violate any provision of either of the Buyers’ organizational documents; (b)
require the consent of any governmental authority; (c) violate any material
law,
judgment, order, injunction, decree, rule, regulation or ruling of any
governmental authority; and (d) either alone or with the giving of notice or
the
passage of time or both, conflict with, constitute grounds for termination
or
acceleration of, or result in a breach of the terms, conditions or provisions
of, or constitute a default under, any agreement, lease, instrument, license
or
permit to which either of the Buyers is now subject.
5.4
Absence of Litigation. There
is no claim, litigation, arbitration or proceeding pending or, to the Knowledge
of Buyers, threatened, before or by any court, governmental authority or
arbitrator relating to Buyers that seeks to enjoin or prohibit, or that could
hinder or impair, the Buyers’ performance of their obligations under this
Agreement.
5.5
FCC Qualifications. To
Buyers’ Knowledge, BHC is qualified under the Communications Act of 1934, as
amended (the “Communications
Act”) and the rules and regulations of the FCC, including without
limitation the multiple ownership rules, as in effect on the date hereof, to
be
an assignee of the FCC Licenses. Buyers are not aware of any fact
that would, under present law (including published policies of the FCC),
disqualify BHC from being the assignee of the Station or that would delay FCC
approval of the assignment of the FCC Licenses.
5.6
Broker’s Fees. Neither
of the Buyers nor any person or entity acting on either of the Buyers’ behalf
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, and
no
person or entity is entitled to any such payment from the Buyers in connection
with the transactions contemplated by this Agreement. The Buyers
shall indemnify and hold harmless the Sellers for any payment due to any broker
or agent based on any agreement made by Buyers.
5.7
Sellers’ Representations and Warranties. Buyers
have not relied on or been induced to enter into this Agreement by any
statement, representation or warranty other than those expressly set forth
in
Article 4 of this Agreement.
ARTICLE
6
GOVERNMENTAL
CONSENTS
6.1
FCC Application.
(a)
The
assignments of the FCC Licenses as contemplated by this Agreement are subject
to
the prior consent and approval of the FCC. Prior to the Closing, Buyers shall
not directly or indirectly control, supervise, direct, or attempt to control,
supervise, or direct, the operation of the Station, and such operation,
including complete control and supervision of all of the Station’s programs,
employees, and policies, shall be the sole responsibility of Sellers as the
operator of the Station until the Closing, subject to the provisions of the
Time
Brokerage Agreement.
(b) Buyers
and Sellers shall prepare and jointly file the FCC Applications within five
(5)
business days after the date of this Agreement. The Parties shall use
commercially reasonable efforts to cause the FCC to accept the FCC Applications
for filing as soon as practicable after such filing; provided, however, that
neither Sellers nor Buyers shall have any obligation to satisfy any complainant
or the FCC by taking any steps which would have a material adverse effect upon
BHC, BIC, Licensee or Radio One, but neither the expense nor inconvenience
to a
Party of defending against a complainant or an inquiry by the FCC shall be
considered a material adverse effect on such Party. Buyers and
Sellers shall thereafter prosecute the FCC Applications in good faith and with
all reasonable diligence and otherwise use their commercially reasonable efforts
to obtain the grant of the FCC Applications as expeditiously as
practicable. Neither Party will take any action that it knows, or
reasonably believes, would disqualify the FCC Applications. If
rehearing, reconsideration or judicial review is sought by a third party or
by
the FCC on its own motion with respect to the FCC Consent, Buyers and Sellers
shall vigorously oppose such efforts for rehearing, reconsideration or judicial
review; provided, however, that nothing herein shall be construed to limit
either Party’s right to terminate this Agreement pursuant to Article 11
(Termination Rights).
(c) Each
Party shall bear one-half of the cost of the FCC filing fees for the FCC
Applications. Each Party shall bear its own costs and expenses
(including the legal fees and disbursements of its counsel) in connection with
the preparation of the portion of the FCC Applications to be prepared by it
and
in connection with the processing and defense of the application.
(d) In
the event
that a court of competent jurisdiction or governmental, regulatory or
administrative agency or commission pursues an order, decree or ruling or takes
any other action that seeks to restrain, enjoin or otherwise prohibit the
transactions contemplated by this Agreement, Buyers and Sellers shall each
use
commercially reasonable efforts to oppose and to prevent the issuance of such
an
order, decree or ruling; provided, however, that nothing herein shall be
construed to limit either Party’s right to terminate this Agreement pursuant to
Article 11 (Termination Rights).
6.2
HSR Filings. If
the Buyers and Sellers have not previously made the filings required under
the
HSR Act in connection with the transactions contemplated by this Agreement
(which shall include a request for early termination of the waiting period
thereunder) (the “HSR
Filings”), the Parties shall, within five (5) business days after the
date of this Agreement, make the HSR Filings following the execution of this
Agreement. Buyers and Sellers will use their commercially reasonable
efforts to obtain early termination of the waiting period under the HSR Act,
and
will promptly take all necessary and proper steps and respond to any requests
for additional information, in order to comply with the requirements of the
HSR
Act; provided, however, that the Buyers will not be required to disclose
financial information relating to Buyers’ Affiliates to any governmental
agency. Buyers agree to use commercially reasonable efforts to
persuade any such governmental agency that any such Affiliate information should
not be required. Expiration or termination of any applicable waiting
period under the HSR Act is referred to herein as “HSR
Clearance.” Each party shall bear one-half of the cost of the
HSR Filings. Each Party shall bear its own costs and expenses
(including the legal fees and disbursements of its counsel) in connection with
the preparation of its portion of the HSR Filings and in connection with the
prosecution of such filings.
ARTICLE
7
COVENANTS
7.1
Conduct of Business.
(a) Affirmative
Covenants of
Sellers. Between the date of this Agreement and the Closing
Date, subject to the Time Brokerage Agreement and except as expressly prohibited
by this Agreement or with the prior written consent of Buyers, which consent
shall not be unreasonably withheld, conditioned or delayed:
(i) Sellers
shall promptly notify Buyers in writing if Sellers have Knowledge prior to
the
Closing of: (1) any representations or warranties contained in
Articles 4 or 5 that are no longer true and correct in any material respect,
(2)
the occurrence of any event that would require any changes or amendments to
the
schedules and exhibits attached to this Agreement, or (3) the occurrence of
any
other event that violates any covenants, conditions or agreements to be complied
with or satisfied by Sellers under this Agreement; provided, however, that
no
such notice shall qualify or otherwise limit in any way Sellers’
representations, warranties, covenants or agreements herein;
(ii) Sellers
will notify Buyers of supplements or amendments to the Schedule of Exceptions
with respect to any matter arising after the date of this Agreement that would
have been required to be set forth, provided, however, that any such supplements
or amendments, shall not relieve Sellers of any liability for inaccuracy of
any
representation or warranty or Sellers’ obligation to remedy any such inaccuracy
in a timely manner.
(iii) Except
as
noted on Schedule 1.1(a), Sellers will comply in all material respects with
all
laws applicable to each Seller’s use of the Assets and operate and maintain the
Station and its operations in conformity with the FCC Licenses, the
Communications Act, and the rules and regulations of the FCC;
(iv) Sellers
will maintain the Assets in customary repair, maintenance and condition, except
for wear and tear incurred in the ordinary course of business;
(v) Except
as
noted on Schedule 1.1(a), Sellers will maintain in full force and effect the
FCC
Licenses relating to the Station and the Assets and take any action necessary
before the FCC, including the preparation and prosecution of applications for
renewal of the FCC Licenses, if necessary, to preserve such licenses in full
force and effect without material adverse change; and
(vi) Sellers
will maintain in full force and effect reasonable property damage and liability
insurance on the Assets in at least the amount provided for by the policies
currently maintained by Sellers.
(b) Negative
Covenants.
Between the date of this Agreement and the Closing Date, subject to the Time
Brokerage Agreement and except as expressly permitted by this Agreement or
with
the prior written consent of Buyers:
(i) Sellers
will not terminate, modify or amend any Assumed Contract or commit to any act
or
fail to take any action that would cause a breach of any Assumed Contract except
in the ordinary course of business consistent with past practice;
(ii) Neither
Seller will create or permit any Lien on any of the Assets;
(iii) Neither
Seller will sell, assign, lease or otherwise transfer or dispose of any of
the
Assets, except for the Assets consumed or disposed of in the ordinary course
of
business and which are replaced by the Sellers in the ordinary course of
business with assets of equivalent or better functionality; and
(iv) Except
as
noted on Schedule 1.1(a), Sellers will not modify or amend, or seek to modify
or
amend, any of the FCC Licenses without Buyers’ prior written consent, provided
that Buyers shall not unreasonably withhold, condition or delay its consent
if
the modification is necessary for the Sellers to be in compliance with the
Communications Act and such modification is not materially adverse to the
interests of Buyers or the Station.
(c) Affirmative
Covenants of
Buyers. Buyers shall promptly notify Sellers in writing if
Buyers have Knowledge prior to the Closing of: (i) any
representations or warranties contained in Articles 4 or 5 that are no longer
true and correct in any material respect, (ii) the occurrence of any event
that
would require any changes or amendments to the schedules or exhibits attached
to
this Agreement, or (iii) the occurrence of any other event that may result
in a
violation of any covenants, conditions or agreements to be complied with or
satisfied by Buyers under this Agreement; provided, however, that no such notice
shall qualify or otherwise limit in any way Buyers’ representations, warranties,
covenants or agreements herein.
7.2
Access. Between
the date hereof and the Closing Date and during regular business hours (so
long
as it would not unreasonably interfere with the operations of Sellers), Sellers
will afford BIC, its counsel, accountants, environmental consultants, appraisers
and other advisers and representatives, upon reasonable advance notice, access
to the Station and Real Property to review and inspect the Assets and the
Station, to inspect and copy all Assumed Contracts, environmental and
engineering studies and reports, and other documents and contracts relating
to
the Assets.
7.3
No Inconsistent Action. Between
the date of this Agreement and the Closing, each Party shall use its
commercially reasonable efforts to cause the fulfillment at the earliest
practicable date of all of the conditions to the obligations of such Party
to
consummate the sale and purchase of the Station and shall take no actions which
are inconsistent with its obligations under this Agreement or that would
materially hinder or delay the consummation of the transactions contemplated
by
this Agreement. In particular, neither Party shall take any action
that would jeopardize the FCC Licenses, result in its disqualification to hold
the FCC Licenses, or in any way delay grant of the FCC Application or
consummation of the transactions contemplated by this Agreement, and Buyers
shall take no action which would impair their financial or other qualifications
to consummate this transaction in accordance with its terms. Should
either Party become aware of any such fact or circumstance, such Party shall
promptly inform the other. In the event that the Upset Date is within
ten (10) business days or less, and either Party is prepared to close the
transaction contemplated by this Agreement and believes that all of the
conditions precedent to the other Party’s obligations to close the transaction
have been fulfilled or waived by such Party, it may provide such Party written
notice indicating the same, and the Party receiving notice shall, within five
(5) business days following receipt thereof, either (i) indicate in writing
its
reasonable, good faith determination that one or more conditions precedent
have
not been fulfilled or waived, or (ii) complete the Closing by the Upset
Date.
7.4
Confidentiality. Each
Party shall keep confidential all information obtained by it with respect to
the
other Parties in connection with this Agreement, except where such information
is known through other lawful sources or where its disclosure is required in
accordance with applicable law, including requirements of the FCC pursuant
to
the FCC Applications. If the transactions contemplated hereby are not
consummated for any reason, Buyers and Sellers shall return to each other,
without retaining a copy thereof in any medium whatsoever, any schedules,
documents or other written information, including all financial information,
obtained from the other in connection with this Agreement and the transactions
contemplated hereby.
7.5
Further Assurances. Sellers
and Buyers shall cooperate and take such actions, and execute such other
documents, at the Closing or thereafter, as may be reasonably requested by
the
other in order to carry out the provisions and purposes of this Agreement,
including, for example, promptly advising each other of all communications
relevant to the transactions contemplated by this Agreement received from the
FCC after the date of this Agreement and furnishing each other with copies
of
all such written communications.
7.6
Transition Efforts. Subject
to the provisions of the Time Brokerage Agreement, beginning at the Closing,
Sellers shall use their respective reasonable best efforts to accomplish a
timely, smooth, uninterrupted and organized transfer of the
Assets. Sellers agree to remove all of its personnel from, and turn
over quiet possession to Buyers of the Real Property pursuant to the Real
Property Leases concurrently with the Closing.
7.7
Press Releases. The
Sellers and the Buyers agree that, from the date hereof through the Closing
Date, or, in the event this Agreement is terminated, for a period of one (1)
year following termination, no public release or announcement concerning the
transactions contemplated hereby shall be issued by either Party without the
prior consent of the other Party, except as such release or announcement may
be
required by any law or the rules or regulations of the United States or any
state therein, in which case the Party required to make the release or
announcement shall, allow the other Party reasonable time to comment on such
release or announcement in advance of such issuance. Notwithstanding
the foregoing, Radio One may elect to issue a press release and/or an 8-K,
or
similar notification, announcing the transaction contemplated in this
Agreement. Radio One will provide Buyers a copy thereof prior to
issuance.
7.8 FCC
Authorizations.
Except
as noted on
Schedule
1.1(a), during the period prior to Closing, Sellers shall not cause or
permit any modification of any FCC License without the Buyers’ advance written
consent, provided that Buyers shall not unreasonably withhold, condition or
delay its consent if the modification is necessary for the Sellers to be in
compliance with the Communications Act and such modification is not materially
adverse to the interests of Buyers or the Station. Sellers shall use
commercially reasonable efforts to correct any known technical deficiencies,
errors or inconsistencies on the FCC Licenses, including those identified on
Schedule
1.1(a), provided that resolution thereof will not be a condition to
Closing.
7.9
Consents; Benefit of Agreements.
The Sellers shall use commercially reasonable efforts (but the Sellers shall
not
be required to make any payment except in connection with the FCC Consents)
to
obtain all consents and approvals required for the assignment of the Assumed
Contracts and an estoppel certificate from the lessor under the Real Property
Leases (if consent to assignment is required thereunder), but no such consents
or estoppel certificates are conditions to Closing except for the Required
Consents (defined below). Receipt of consent to assign to Buyers the
Station’s main tower lease and studio site lease marked with an asterisk (*) on
Schedule
1.1(b), and estoppel certificates reasonably acceptable to BIC and Radio
One in connection therewith, is a condition precedent to Buyers’ obligation to
close under this Agreement, if consent to assignment is required thereunder
(the
“Required
Consent”). Subject to the foregoing, if, with respect to any
lease, commitment or agreement to be assigned to BIC, a required consent to
the
assignment is not obtained, the Sellers shall use commercially reasonable
efforts to keep it in effect and give the Buyers the benefit of it to the same
extent as if it had been assigned, and the Buyers shall perform the Sellers’
obligations under the agreement relating to the benefit obtained by the
Buyers. Nothing in this Agreement shall be construed as an attempt to
assign any agreement or other instrument that is by its terms non-assignable
without the consent of the other party.
ARTICLE
8
CONDITIONS
PRECEDENT
8.1
To Buyers’ Obligations Regarding Closing. The
obligations of Buyers hereunder to complete the Closing are subject to the
satisfaction or to the waiver by Buyers in their sole discretion (except for
Sections 8.1(c) and 8.1(d) below, which may not be waived), at or prior to
the
Closing Date, of each of the following conditions:
(a) Representations,
Warranties
and Covenants.
(i) All
representations and warranties made by the Sellers shall be true and correct
in
all material respects (except any that are already qualified by materiality,
which shall be true and correct in all respects, and except as otherwise
expressly permitted by this Agreement) on and as of the Closing Date as if
made
on and as of that date, except those made as of a specific date, which shall
have been true and correct on and as of such date.
(ii) All
of
the terms, covenants and conditions to be complied with or performed by each
of
the Sellers under this Agreement on or prior to the Closing Date shall have
been
complied with or performed by each of the Sellers in all material
respects.
(b) No
Injunction. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
by
this Agreement in accordance with its terms.
(c) FCC
Consents. The FCC Consents relating to the Station shall have
been obtained without the imposition of any condition materially adverse to
Buyers or the Station except those that are customary in the assignment of
FCC
Licenses generally; provided that if a petition to deny or other third-party
objection is filed by any person with the FCC prior to the Closing Date, and
such petition or objection is not withdrawn as of such date and in the
reasonable judgment of the Buyers’ counsel such petition or objection would
reasonably be expected to result in a reversal or rescission of the FCC
Consents, then the Buyers’ obligation to effect the Closing will be subject to
the further condition that the FCC Consents shall have become a Final
Order.
(d) HSR
Act. The HSR Clearance shall have been received.
(e) Real
Property
Lease. The Real Property Lease for the Station’s main
transmitter shall have been extended or a new lease obtained on terms that
are
reasonably acceptable to Buyers. The Parties hereby agree that
reasonably acceptable terms for such extension or new lease shall mean at least
an additional 5 years, at fair market terms and lease rates.
(f) Deliveries. Sellers
shall have made all deliveries required under Section 9.1.
8.2
To Sellers’ Obligations. The
obligations of each of the Sellers hereunder to complete the Closing are subject
to the satisfaction or to the waiver by Sellers in their sole discretion (except
for Sections 8.1(c) and 8.1(d) below, which may not be waived), at or prior
to
the Closing Date, of each of the following conditions:
(a) Representations,
Warranties
and Covenants.
(i) All
representations and warranties made by Buyers in this Agreement shall be true
and correct in all material respects (except any that are already qualified
by
materiality, which shall be true and correct in all respects, and except as
otherwise expressly permitted by this Agreement) on and as of the Closing Date
as if made on and as of that date, except those made as of a specific date,
which shall have been true and correct on and as of such date.
(ii) All
of
the terms, covenants and conditions to be complied with or performed by Buyers
under this Agreement on or prior to the Closing Date shall have been complied
with or performed by Buyers in all material respects.
(b) No
Injunction. No order of any court or administrative agency
shall be in effect which restrains or prohibits the transactions contemplated
by
this Agreement in accordance with its terms.
(c) FCC
Consents. The FCC Consents relating to the Station shall have
been obtained without the imposition of any condition materially adverse to
Buyers except those that are customary in the assignment of FCC licenses
generally.
(d) HSR
Act. The HSR Clearance shall have been received.
(e) Deliveries. Buyers
shall have made all the deliveries required under Section 9.2 and shall have
paid the applicable Purchase Price as provided in Section 2.1.
ARTICLE
9
DOCUMENTS
TO BE DELIVERED AT THE CLOSING
9.1
Documents to be Delivered by Sellers. At
the Closing, Sellers shall deliver to Buyers the following:
(a)
Copies
of resolutions of each Seller authorizing the execution, delivery and
performance of this Agreement by each Seller and the consummation of the
transactions contemplated hereby, and copies of each Seller’s formation
documents, in each case certified on behalf of each Seller by a duly authorized
officer of each such Seller, as being true, correct, in full force and effect
and complete as of the Closing Date;
(b)
A
certificate for each Seller, dated as of the Closing Date, executed by an
officer of each Seller, certifying on behalf of each Seller that the closing
conditions specified in Section 8.1(a) have been satisfied;
(c)
Duly
executed instruments of conveyance and transfer effecting the sale, transfer,
assignment and conveyance of the Assets to Buyers as contemplated herein,
including the following:
(i)
assignment
by Licensee of the FCC Licenses;
(ii)
a
bill of
sale from Sellers for all Personal Property;
(iii)
assignments
of Sellers’ rights under the Assumed Contracts;
(d)
Any
state
or local filing forms, if any, required in connection with transfer of the
Real
Property Leases, to the extent Sellers are required to execute any such
forms;
(e)
Duly
executed UCC releases, mortgage terminations or other similar documents or
instruments required to transfer the Assets free and clear of
Liens;
(f)
Copies
of
all Required Consents; and
(g)
Such
other
documents, information, certificates and materials as may be required by this
Agreement.
9.2
Documents to be Delivered by Buyers. At
the Closing, Buyers shall deliver to Sellers the following:
(a)
Copies
of resolutions of each Buyer authorizing the execution, delivery and performance
of this Agreement by each Buyer and the consummation of the transactions
contemplated hereby, and copies of each Buyer’s formation documents, in each
case certified on behalf of each Buyer by a duly authorized officer of each
Buyer, as being true, correct, in full force and effect and complete as of
the
Closing Date;
(b) A
certificate for each Buyer, dated as of the Closing Date, executed on behalf
of
each Buyer by a duly authorized representative of each Buyer, certifying that
the closing conditions specified in Section 8.2(a) have been
satisfied;
(c) Assumption
of Sellers’ obligations under the Assumed Contracts;
(d) The
Purchase Price in immediately available wire transferred federal funds as
provided in Section 2.1;
(e) Such
other documents, information, certificates and materials as may be required
by
this Agreement.
ARTICLE
10
INDEMNIFICATION
10.1
Sellers’ Indemnities. From
and after the Closing, Sellers shall indemnify, defend, and hold harmless the
Buyers and their Affiliates, and their respective shareholders, directors,
officers, employees, and representatives from and against, and reimburse them
for, all claims, damages, liabilities, losses, costs and expenses, including
interest, penalties, court costs and reasonable attorneys’ fees and expenses
(each, a “Loss”
and
together, “Losses”),
resulting from:
(a)
Any
breach, misrepresentation, failure or omission to perform, or other violation
by
either Seller of any of its respective representations, warranties, covenants
or
agreements in this Agreement or in any certificate, document or instrument
delivered by Sellers to Buyers under this Agreement;
(b) Any
third-party claims brought against any Buyer or any of its Affiliates to the
extent attributable to Sellers’ operation of the Station prior to the Closing;
or
(c) Any
liability or obligation of any Seller not assumed by any Buyer under this
Agreement, including any liabilities arising at any time under any contract
or
agreement not included in the Assumed Contracts.
10.2
Buyers’ Indemnities. From
and after the Closing, Buyers shall indemnify, defend and hold harmless each
of
the Sellers and its Affiliates, and their respective shareholders, members,
directors, officers, employees, and representatives, and the successors and
assigns of any of them, from and against, and reimburse them for, all Losses
resulting from:
(a)
Any
breach, misrepresentation, failure or omission to perform, or other violation
by
either Buyer of any of its representations, warranties, covenants or agreements
in this Agreement or in any certificate, document or instrument delivered by
Buyers to Sellers under this Agreement;
(b) Any
third-party claims brought against any Seller or any of its Affiliates to the
extent attributable to Buyers’ operation of the Station or use of the Assets
following the Closing; or
(c) Any
liability or obligation assumed by any Buyer under this Agreement, including
any
liabilities arising after Closing under the Assumed Contracts.
10.3
Procedure for Indemnification. The
procedure for indemnification shall be as follows:
(a)
The
Party seeking indemnification under this Article 10 (the “Claimant”)
shall give notice to the Party from whom indemnification is sought (the “Indemnitor”)
of any Loss, reasonably specifying (i) the factual basis for the Loss; and
(ii)
the amount of the Loss if then known. If the Loss relates to an
action, suit or proceeding filed by a third party against Claimant, notice
shall
be given by Claimant within fifteen (15) business days after written notice
of
the action, suit or proceeding was given to Claimant. In all other
circumstances, notice shall be given by Claimant within sixty (60) days after
Claimant becomes aware of the facts giving rise to the
Loss. Notwithstanding the foregoing in this paragraph, delay or
failure to timely give notice of a Loss shall not affect or limit the
Indemnitor’s obligation to indemnify hereunder except to the extent that the
Indemnitor is prejudiced by such delay or failure.
(b) The
Claimant shall make available to Indemnitor and/or its authorized
representatives the information relied upon by the Claimant to substantiate
the
Loss.
(c) With
respect to any Loss resulting from a claim by a third party as to which the
Claimant is entitled to indemnification hereunder, the Indemnitor shall, without
prejudice to its rights to contest the obligation to indemnify, defend against
the claim with counsel reasonably acceptable to Claimant, and the Claimant
shall
cooperate fully with the Indemnitor, subject to reimbursement for reasonable
expenses incurred by the Claimant as the result of a request by the
Indemnitor. The Claimant shall have the right to participate in the
defense of the claim at its own expense. If the Indemnitor does not
assume control of the defense of any third party claim, Claimant may, but shall
have no obligation to, defend or settle such claim or litigation in such a
manner as it deems appropriate, and in such event Indemnitor shall be bound
by
the results obtained by the Claimant with respect to the claim (by default
or
otherwise) and shall promptly reimburse Claimant for the amount of all expenses
(including the amount of any judgment rendered), legal or otherwise, incurred
in
connection with such claim or litigation. The Indemnitor shall be
subrogated to all rights of the Claimant against any third party with respect
to
any Loss for which indemnity was paid.
10.4
Limitations. The
Indemnitor shall only be required to indemnify the Claimant under this Article
10 for breach of representations and warranties if: (i) Claimant’s written
notice of the Loss under this Article 10 is received by the Indemnitor within
one (1) year following Closing (the “Survival
Period”); (ii) the aggregate amount of Losses exceeds $200,000, after
which the Claimant shall be entitled to recover, and the Indemnitor shall be
obligated for, all Losses in excess of $100,000; and (iii) the aggregate amount
of all Losses relating to all claims is less than $7,500,000; provided that
the
limitations set forth in subsection (i), (ii) and (iii) of this Section 10.4
shall not apply to Losses relating to a breach by Sellers of their
representations in Section 4.1 (Organization and Standing), Section 4.2
(Authorization and Binding Obligation), Section 4.3 (Absence of Conflicting
Agreements), or Section 4.5 (Station Licenses, but only as regards holding
the
FCC Licenses), though claims for Losses under such provisions may not be
asserted beyond their applicable statute of limitation periods. In
calculating the amount of Losses of a Claimant under this Article
10: (a) such Losses shall be reduced by any recovery from any third
party (including insurance proceeds) as a result of the facts or circumstances
giving rise to the Losses; and (b) Losses shall only include the Party’s actual
out-of-pocket costs and expenses and not any punitive, special, consequential
(such as lost profits) or other indirect damages.
10.5
Exclusive Remedies. Buyers
and Sellers acknowledge and agree that the foregoing indemnification provisions
in this Article 10 shall be the exclusive remedy of Buyers and Sellers with
respect to Losses after the Closing relating to the transactions contemplated
by
this Agreement. Buyers and Sellers further acknowledge and agree that
the Closing under this Agreement, including any waiver of conditions to Closing,
does not limit or waive in any respect any claim that Buyers or Sellers may
have
under this Article 10. Either Party may pursue injunctive relief to
enforce covenants in the Agreement that survive the Closing and are supportable
under applicable law.
ARTICLE
11
TERMINATION
RIGHTS
11.1
Termination.
(a) In
addition to other remedies available prior to Closing, this Agreement may be
terminated by either Buyers or Sellers, if the Party seeking to terminate is
not
in material default or breach of this Agreement, upon written notice to the
other, if:
(i) the
other
Party is in material breach of this Agreement and such breach has been neither
cured within the cure period allowed under subsection (d) below nor waived
by
the Party giving such termination notice;
(ii) a
court
of competent jurisdiction or governmental, regulatory or administrative agency
or commission shall have issued an order, decree or ruling or taken any other
action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such order, decree, ruling
or
other action shall have become final and non-appealable; or
(iii) the
Closing has not occurred by April 1, 2009 (the “Upset
Date”).
(b)
This
Agreement may be terminated by mutual written consent of Buyers and
Sellers.
(c)
Buyers
may terminate this Agreement by written notice to Sellers in the event that
the
U.S. Department of Justice, the U.S. Federal Trade Commission, or any other
governmental agency, requires the disclosure of any financial information
relating to any of Buyer’s Affiliates in connection with this
transaction. Buyers agree to use reasonable efforts to persuade any
such government agency that any such required Affiliate information should
not
be required prior to exercising this right of termination.
(d) If
either
Party believes the other to be in breach or default of this Agreement, the
non-defaulting Party shall, prior to exercising its right to terminate under
Section 11.1(a)(i), provide the defaulting Party with notice specifying in
reasonable detail the nature of such breach or default. Except for a
failure to pay the Purchase Price or the failure to complete the Closing, the
defaulting Party shall have thirty (30) days, from receipt of such notice to
cure such default. If the cure period set forth in the previous
sentence would extend beyond the Upset Date, then notwithstanding the definition
of Upset Date set forth in Section 11.1(a)(iii) hereof, the term Upset Date
shall mean the date one business day after the 30-day period.
11.2
Payment of Escrow Amount. The
Escrow
Amount shall be promptly released from escrow upon termination of
this Agreement under this Article 11 and delivered as follows:
(a)
to
Sellers as liquidated damages in the event this Agreement is terminated by
Sellers pursuant to Section 11.1(a)(i); or
(b)
to
Buyers in the event this Agreement is terminated due to any other
reason.
11.3 Exclusive
Remedies Upon Default. The
Parties agree that in the event the Sellers terminate this Agreement under
Section 11.1(a)(i) above, Sellers’ exclusive remedy shall be as set forth in
Section 11.2(a) above. Buyers and Sellers agree that it would be
impractical and extremely difficult to estimate the damages which Sellers may
suffer as a result of a termination of this Agreement under the circumstances
described in Section 11.2(a) above, and agree that the Escrow Amount represents
a reasonable estimate of the total net detriment that Sellers would suffer
under
such circumstances and shall be the full, agreed and liquidated damages for
termination under such circumstances. In the event of failure or
threatened failure by Sellers to comply with the terms of this Agreement at
Buyers’ election, in addition to any other remedy available to it, Buyers shall
be entitled to an injunction restraining such failure or threatened failure
and,
subject to obtaining any necessary FCC consent, to enforcement of this Agreement
by a decree of specific performance requiring compliance with this Agreement,
in
each case without the necessity of showing economic loss or other actual damage
and without any bond or other security being required.
11.4
Other Effects of Termination. The
following sections shall survive the termination of this Agreement pursuant
to
this Article 11: 7.4 (Confidentiality), 7.7 (Press Releases), 11.3 (Exclusive
Remedies Upon Default), 11.4 (Other Effects of Termination), and the provisions
in Article 12 (Other Provisions) and Article 13 (Definitions) that by their
terms would survive termination.
ARTICLE
12
OTHER
PROVISIONS
12.1
Survival of Representations, Warranties and Covenants. Each
Party’s representation and warranties shall survive the Closing and continue
until the end of the Survival Period, provided that those Sections cited as
not
being subject to the Survival Period shall continue for the duration of their
applicable statute of limitation periods. Each party’s covenants and
agreements hereunder shall survive Closing and continue until
performed.
12.2
Transfer Taxes and Expenses. All
recordation, transfer, documentary fees, and sales taxes, if any, imposed on
this transaction shall be paid one-half by Buyers and one-half by
Sellers. Except as otherwise provided in this Agreement, each Party
shall be solely responsible for and shall pay all other costs and expenses
(including attorney and accounting fees) incurred by it in connection with
the
negotiation, preparation and performance of and compliance with the terms of
this Agreement.
12.3
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. Neither Buyers
nor either Seller may assign its rights or delegate its obligations under this
Agreement without the prior written consent of the other Party, except that
either Buyers may assign the Agreement in whole or in part to one or more of
its
Affiliates, provided that it shall not be released thereby. Except as
expressly provided in this Agreement, this Agreement is not intended to, nor
shall it, create any rights in any person other than the Parties.
12.4
Additional Documents. The
Parties agree to execute, acknowledge and deliver, before, at or after the
Closing Date, such further instruments and documents as may be reasonably
required to implement, consummate and effectuate the terms of this
Agreement.
12.5
Entire Agreement; Schedules; Amendment; Waiver. This
Agreement and the exhibits and schedules hereto and thereto and the Time
Brokerage Agreement 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. Any
matter that is disclosed in a schedule hereto shall be deemed to have been
included in other pertinent schedules, notwithstanding the omission of an
appropriate cross-reference. 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 or consent is
sought. No failure or delay on the part of Buyers or Sellers in
exercising any right or power under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right or power, or
any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.
12.6
Headings. The
headings set forth in this Agreement are for convenience only and shall not
control or affect the meaning or construction of the provisions of this
Agreement.
12.7
Computation of Time. If
after making computations of time provided for in this Agreement, a time for
action or notice falls on Saturday, Sunday or a federal holiday, then such
time
shall be extended to the next business day.
12.8
Governing Law. The
construction and performance of this Agreement shall be governed by the laws
of
the District of Columbia without regard to any choice or conflicts of law
provision or rule (whether of the District of Columbia or any other
jurisdiction).
12.9
Attorneys’ Fees. In
the event of any dispute between the Parties to this Agreement, Sellers or
Buyers, as the case may be, shall reimburse the prevailing Party for its
reasonable attorneys’ fees and other costs incurred in enforcing its rights or
exercising its remedies under this Agreement. Such right of
reimbursement shall be in addition to any other right or remedy that the
prevailing Party may have under this Agreement.
12.10
Severability. If
any term or provision of this Agreement or the application thereof to any person
or circumstance shall, to any extent, be held invalid or unenforceable, the
remainder of this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each such term and provision
of this Agreement shall be valid and be enforced to the fullest extent permitted
by law.
12.11
Notices. Any
notice, demand or request required or permitted to be given under this Agreement
shall be in writing and shall be addressed to the following addresses or to
such
other address as any Party may request:
|
|
If
to either of the Buyers:
|
Bonneville
International Corporation
|
55
North
Third West, 8th Floor
Salt
Lake
City, Utah 84180
Attention: Bruce
Reese, President & CEO
Telephone:
801-575-7565
Telecopier:
801-575-7567
|
|
with
a copy to:
|
Bonneville
International Corporation
|
55
North
Third West, 8th Floor
Salt
Lake
City, Utah 84180
Attn: General
Counsel
Telephone:
801-575-7517
Telecopier:
801-575-7509
|
|
with
a copy to:
|
Bonneville
Holding Company
|
50
E.
North Temple, 14th Floor
Salt
Lake
City, Utah 84150
Attention: Craig
L. Christensen
Telephone:
801-240-1237
|
|
with
a copy to:
|
Boyd
J. Black, Esq.
|
Second
Floor, West Wing
50
East
North Temple
Salt
Lake
City, Utah 84150
Telecopier:
801-240-6235
|
|
with
a copy to:
|
Kirton
& McConkie, PC
|
60
E.
South Temple, Suite 1800
Salt
Lake
City, Utah 84111
Attention: Randy
K. Johnson
Telephone:
801-328-3600
Telecopier:
801-321-4893
|
|
If
to either of the Sellers:
|
Radio
One, Inc.
|
5900
Princess Garden Parkway
7th
Floor
Lanham,
Maryland 20706
Attn: Linda
Vilardo, Chief Administrative Officer
Telephone:
301-429-2646
Telecopier:
301-429-3502
Radio
One, Inc.
5900
Princess Garden Parkway
5th
Floor
Lanham,
Maryland 20706
Attention: General
Counsel
Telecopier: 301-306-9638
|
|
with
a copy to:
|
Wiley
Rein LLP
|
|
|
1776
K Street, NW
|
|
|
Washington,
DC 20006
|
|
|
Attention:
Brook A. Edinger, Esq.
|
|
|
Telephone:202-719-7279
|
|
|
Telecopier:202-719-7049
|
Any
such
notice, demand or request shall be deemed to have been duly delivered and
received (a) on the date of personal delivery, (b) on the date of transmission
if sent by facsimile, (c) on the date of receipt if mailed by registered or
certified mail, postage prepaid and return receipt requested, or (d) on the
date
of a signed receipt if sent by an overnight delivery service.
Casualty. The
risk of loss, damage or destruction to the Assets shall be on Sellers prior
to
Closing and on Buyers thereafter. If, prior to the Closing, any
material portion of the Assets shall be damaged or destroyed by fire or other
casualty (collectively, “Casualty”),
Sellers shall deliver to Buyers written notice (“Casualty
Loss
Notice”) of such Casualty together with Sellers’ determination as to
whether the damage constitutes a Material Damage. Buyers and Sellers shall
cooperate to repair or replace the Assets affected by such Casualty as promptly
as practicable in a manner reasonably acceptable to both Buyers and Sellers,
provided that the cost of such repairs or replacement shall be borne by
Sellers. For the purposes of this Section 12.12 only, “Material
Damage” shall mean damage to the Assets which is of such nature that the
cost of restoring the same to their condition prior to the Casualty will, in
Sellers’ reasonable determination, exceed $5,000,000, whether or not such damage
is covered by insurance, or any damage which would reduce the value of either
the Assets by $5,000,000 or more. If, prior to the Closing, the
Assets sustain Material Damage by a Casualty, Buyers may, at Buyers’ option,
terminate this Agreement by delivering written notice thereof to Sellers within
fifteen (15) business days after Buyers’ receipt of the Casualty Loss
Notice. If the Assets shall be damaged by a Casualty which is not a
Material Damage, or if the Assets sustain Material Damage by a Casualty, but
the
Buyers elect not to terminate the Agreement as a result thereof, then the
parties shall proceed to the Closing and the Sellers shall (at the Closing)
assign to Buyers all of Sellers’ rights in and to any insurance proceeds which
may become available as a result of the Casualty at issue, and Sellers shall
remain obligated to pay any deductible relating to the claim. If
Buyers elect to terminate this Agreement under this Section 12.12, the entire
Escrow Amount and all interest thereon shall be promptly returned to Buyers,
and
thereafter neither party shall have any further rights or obligations hereunder,
except as otherwise specifically provided in this Agreement.
12.12
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.
12.13
Facsimile or PDF Signatures.
The
Parties agree that transmission to the other Party of this Agreement with its
facsimile or electronic “pdf” signature shall bind the Party transmitting this
Agreement thereby in the same manner as if such Party’s original signature had
been delivered. Without limiting the foregoing, each Party who
transmits this Agreement with its facsimile or “pdf” signature covenants to
deliver the original thereof to the other Party as soon as possible
thereafter.
ARTICLE
13
DEFINITIONS
13.1
Defined Terms. Unless
otherwise
stated in this Agreement, the following terms when used herein shall have the
meanings assigned to them below (such meanings to be equally applicable to
both
the singular and plural forms of the terms defined).
“Accounts
Receivable” shall have the meaning set forth in Section
1.2(b).
“Affiliate”
shall mean, with respect to any specified Person, another Person indirectly
controls, is controlled by, or is under common control Person.
“Agreement”
shall mean this Asset Purchase Agreement.
“Assets”
shall have the meaning set forth in Section 1.1.
“Assumed
Contracts” shall have the meaning set forth in Section
1.1(d).
“BHC”
shall
have the meaning set forth in the preamble to this Agreement.
“BIC”
shall
have the meaning set forth in the preamble to this Agreement.
“Buyers”
shall have the meaning set forth in the preamble to this Agreement.
“Casualty”
shall have the meaning set forth in Section 12.12.
“Casualty
Loss
Notice” shall have the meaning set forth in Section 12.12.
“Claimant”
shall have the meaning set forth in Section 10.3(a).
“Closing”
and “Closing
Date” shall have the meaning set forth in Section 3.1.
“Code”
shall mean the Internal Revenue Code of 1986, as amended, and the regulations
thereunder, or any subsequent legislative enactment thereof, as in effect from
time to time.
“Communications
Act” shall have the meaning set forth in Section 5.5.
“Environmental
Laws” shall have the meaning set forth in Section 4.12(a).
“FCC”
shall
have the meaning set forth in the recitals to this Agreement.
“FCC
Applications” shall mean the application or applications that Sellers and
Buyers must file with the FCC requesting its consent to the assignment of the
FCC Licenses from Licensee to BHC.
“FCC
Consents” shall mean the action or actions by the FCC granting the FCC
Applications.
“FCC
Licenses” shall have the meaning set forth in Section
1.1(a).
“HSR
Act”
shall have the meaning set forth in Section 1.4.
“HSR
Filings” shall have the meaning set forth in Section 6.2.
“Hazardous
Substances” shall have the meaning set forth in Section
4.12(b).
“Indemnitor”
shall have the meaning set forth in Section 10.3(a).
“Intellectual
Property” shall mean trade names, trademarks, service marks, copyrights,
patents, jingles, slogans, symbols, logos, formats, programming
materials and concepts, on air copy, on air talent concepts, telephone numbers,
internet addresses, email addresses, universal resource locators (URLs),
websites and domain names, web-site content, inventions, and any other
proprietary material, process, trade secret, trade dress or trade rights, and
all use rights and registrations, applications and licenses for any of the
foregoing, including the Station’s call letters and all rights to use or refer
to “100.3” as a dial position or frequency of the Station, including any
variations thereof.
“Knowledge”
shall mean, (i) in the case of Radio One, the actual knowledge, after reasonable
inquiry, of the President and Chief Executive Officer, the Executive Vice
President and Chief Financial Officer, Business Manager, Station Manager, or
the
Station’s local engineer, (ii) in the case of Licensee, the actual knowledge,
after reasonable inquiry, of the President and Chief Executive Officer or the
Executive Vice President and Chief Financial Officer, Business Manager, Station
Manager, or the Station’s local engineer, (iii) BIC, the actual knowledge, after
reasonable inquiry, of the President and Chief Executive Officer or the Chief
Financial Officer, and (iv) in the case of BHC, the actual knowledge, after
reasonable inquiry, of the President, Chief Executive Officer or the Chief
Financial Officer.
“Licensee”
shall have the meaning set forth in the preamble to this Agreement.
“Liens”
shall mean mortgages, deeds of trust, liens, security interests, pledges,
collateral assignments, condition sales agreements, leases (other than Assumed
Contracts), encumbrances, claims or other defects of title, but shall not
include (i) liens for current taxes not yet due and payable, or (ii) in respect
of the Real Property, any defects in title or other matters that do not
materially adversely affect the value, marketability or continued use of the
Real Property, in each instance based on how the Real Property is currently
used
by Sellers.
“Loss”
or
“Losses”
shall have the meaning set forth in Section 10.1
“Material
Damage” shall have the meaning set forth in Section 12.12.
“Operational
Commencement Date” shall have the meaning set forth in Section
1.4.
“Party”
or
“Parties”
shall have the meaning set forth in the preamble.
“Person”
shall mean 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).
“Personal
Property” shall have the meaning set forth in Section
1.1(c).
“Proration
Amount” shall have the meaning set forth in Section 2.3(a).
“Proration
Dispute
Notice” shall have the meaning set forth in Section 2.3(c).
“Proration
Notice” shall have the meaning set forth in Section 2.3(c).
“Purchase
Price” shall have the meaning set forth in Section 2.1.
“Radio
One” shall have the meaning set forth in the preamble to this
Agreement.
“Real
Property” shall have the meaning set forth in Section
1.1(b).
“Real
Property
Lease” and “Real
Property
Leases” shall have the meanings set forth in Section 1.1(b).
“Sellers”
shall have the meaning set forth in the preamble to this Agreement.
“Station”
shall have the meaning set forth in the recitals to this Agreement.
“Survival
Period” shall have the meaning set forth in Section 10.4.
“Tax”
shall
mean all federal, state, local and foreign taxes including, without limitation,
income, gains, transfer, unemployment, withholding, payroll, social security,
real property, personal property, excise, sales, use and franchise taxes,
levies, assessments, imposts, duties, licenses and registration fees and charges
of any nature whatsoever, including interest, penalties and additions with
respect thereto and any interest in respect of such additions or
penalties.
“Tax
Return” shall mean any return, filing, report, declaration,
questionnaire or other document required to be filed for any period with any
taxing authority (whether domestic or foreign) in connection with any Taxes
(whether or not payment is required to be made with respect to such
document).
“Time
Brokerage
Agreement” shall have the meaning set forth in the recitals to this
Agreement.
“Upset
Date” shall have the meaning set forth in Section
11.1(a)(iii).
13.2
Miscellaneous Terms. The
term “or” is
disjunctive; the term “and” is conjunctive. The term “shall” is
mandatory; the term “may” is permissive. Masculine terms apply to
females as well as males; feminine terms apply to males as well as
females. The term “includes” or “including” is by way of example and
not limitation.
[signature
page
follows]
12819290.1
IN
WITNESS WHEREOF, the Parties hereto have caused this Asset Purchase Agreement
to
be duly executed as of the date first written above.
“Buyers” BONNEVILLE
INTERNATIONAL
CORPORATION,
a
Utah Corporation
By:
Bruce
Reese
Its:
President and Chief
Executive Officer
BONNEVILLE
HOLDING
COMPANY,
a
Utah
non-profit corporation
By: Bruce
Reese
Its: President
and Chief
Executive Officer
“Sellers” RADIO
ONE, INC.,
a
Delaware corporation
By:
Linda J.
Vilardo
Its:
Executive Vice President and Chief Administrative
Officer
RADIO
ONE LICENSES,
LLC,
a
Delaware limited liability
company
By: Linda
J.
Vilardo
Its: Executive
Vice President and Chief Administrative
Officer
NEWS
RELEASE
March
24,
2008
Contact: Peter D Thompson, EVP and CFO
FOR
IMMEDIATE
RELEASE (301)
429-4638
Washington,
DC
RADIO
ONE INC. ANNOUNCES THE SALE OF KRBV IN LOS ANGELES, CALIFORNIA AND BOARD
APPROVAL OF STOCK REPURCHASES
Washington,
DC: - Radio One,
Inc. (NASDAQ: ROIAK and ROIA) today announced that it has entered into an Asset
Purchase Agreement to sell KRBV – FM, its radio station in Los Angeles,
California, to Bonneville International, the Salt Lake City based broadcast
and
communications company. The transaction price is approximately $137.5 million.
The transaction is expected to close during the second quarter of
2008.
Alfred
C.
Liggins, III, Radio One’s CEO and President stated, “This is an attractive
transaction for Radio One, as it frees-up capital and management resources
which
can be re-deployed to execute our long-term strategy. We expect to use the
proceeds from this transaction to reduce our leverage, accelerate our internet
strategy and re-commence a limited buy-back of our securities.” Rothschild
Inc. acted as financial
advisor to Radio One in connection with the transaction.
The
Company also announced today that its Board of Directors has authorized a stock
repurchase program for up to $150 million of Radio One's Class A and Class
D
common stock through December 31, 2009. The amount and timing of repurchases
will be based on pricing, general economic and market conditions, certain
restrictions contained in agreements governing Radio One's bank credit
facilities and subordinated debt and certain other factors. The repurchase
program does not obligate Radio One to repurchase any of its common stock and
may be discontinued or suspended at any time.
Radio
One, Inc. (www.radio-one.com) is one of the nation's largest radio broadcasting
companies and the largest radio broadcasting company that primarily targets
African-American and urban listeners. Pro forma for recently
announced transactions, Radio One owns and/or operates 53 radio stations located
in 16 urban markets in the United States. Additionally, Radio One
owns Magazine One, Inc. (d/b/a Giant Magazine) (www.giantmag.com), interests
in
TV One, LLC (www.tvoneonline.com), a cable/satellite network programming
primarily to African-Americans and Reach Media, Inc. (www.blackamericaweb.com),
owner of the Tom Joyner Morning Show and other businesses associated with Tom
Joyner.
Cautionary
Note Regarding Forward-Looking Statements
This
press release includes forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act
of 1934. Forward-looking statements represent management's current expectations
and are based upon information available to Radio One at the time of this
release. These forward-looking statements involve known and unknown risks,
uncertainties and other factors, some of which are beyond Radio One's control,
that may cause the actual results to differ materially from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Radio One does not undertake to update any forward-looking
statements.
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