SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
Commission File No. 333-30795
RADIO ONE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1166660
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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5900 Princess Garden Parkway,
8th Floor
Lanham, Maryland 20706
(Address of principal executive offices)
(301) 306-1111
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding at May 10, 2000
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Class A Common Stock, $.01 Par Value 22,272,622
Class B Common Stock, $.01 Par Value 2,867,463
Class C Common Stock, $.01 Par Value 3,132,458
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Form 10-Q For the Quarter Ended March 31, 2000
Page
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PART I FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements 3
Consolidated Condensed Balance Sheets as of 4
December 31, 1999 and March 31, 2000 (Unaudited)
Consolidated Statements of Operations for the 5
Three months ended March 31, 1999 and 2000 (Unaudited)
Consolidated Statements of Changes in Stockholders' Equity for the 6
three months ended March 31, 2000 (Unaudited)
Consolidated Statements of Cash Flows for the 7
Three months ended March 31, 1999 and 2000 (Unaudited)
Notes to Consolidated Financial Statements 8
Item 2 Management's Discussion and Analysis of Financial 10
Condition and Results of Operations
PART II OTHER INFORMATION
Item 1 Legal Proceedings 13
Item 2 Changes in Securities 14
Item 3 Defaults upon Senior Securities 14
Item 4 Submission of Matters to a Vote of Security Holders 14
Item 5 Other Information 14
Item 6 Exhibits and Reports on Form 8-K 14
Signature 16
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(See pages 4-9 -- This page intentionally left blank.)
December 31, March 31,
1999 2000
-------------- -------------
ASSETS (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 6,221,000 $125,588,000
Investments, available for sale 256,390,000 274,154,000
Trade accounts receivable, net of allowance for doubtful accounts of $2,429,000 and
$2,877,000, respectively 19,833,000 15,635,000
Prepaid expenses and other 1,035,000 1,061,000
Deferred income taxes 984,000 987,000
-------------- -------------
Total current assets 284,463,000 417,425,000
PROPERTY AND EQUIPMENT, NET 15,512,000 16,797,000
INTANGIBLE ASSETS, NET 218,460,000 292,883,000
OTHER ASSETS 9,101,000 141,199,000
-------------- -------------
Total assets $527,536,000 $868,304,000
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,663,000 $ 1,498,000
Accrued expenses 6,941,000 7,324,000
Income taxes payable 1,532,000 1,369,000
Other current liabilities -- 2,182,000
-------------- -------------
Total current liabilities 10,136,000 12,373,000
LONG-TERM DEBT AND DEFERRED INTEREST, NET OF CURRENT
PORTIONS: 82,626,000 83,697,000
DEFERRED INCOME TAX LIABILITY 14,518,000 14,208,000
-------------- -------------
Total liabilities 107,280,000 110,278,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock - Class A, $.001 par value, 30,000,000 shares authorized,
17,221,000 and 22,273,000 shares issued and outstanding 17,000 22,000
Common stock - Class B, $.001 par value, 30,000,000 shares authorized,
2,867,000 and 2,867,000 shares issued and outstanding 3,000 3,000
Common stock - Class C, $.001 par value, 30,000,000 shares authorized,
3,184,000 and 3,132,000 shares issued and outstanding 3,000 3,000
Accumulated comprehensive income adjustments 40,000 (233,000)
Additional paid-in capital 446,400,000 782,377,000
Accumulated deficit (26,207,000) (24,146,000)
-------------- -------------
Total stockholders' equity 420,256,000 758,026,000
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Total liabilities and stockholders' equity $527,536,000 $868,304,000
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The accompanying notes are an integral part of these balance sheets.
Three Months Ended March 31,
--------------------------------
1999 2000
-------------- --------------
(Unaudited)
REVENUE:
Broadcast revenue, including barter revenue of $298,000 and $853,000, respectively $ 13,390,000 $ 25,124,000
Less: agency commissions 1,573,000 2,972,000
--------------- --------------
Net broadcast revenue 11,817,000 22,152,000
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OPERATING EXPENSES:
Program and technical 2,472,000 4,240,000
Selling, general and administrative 5,144,000 8,299,000
Corporate expenses 858,000 1,118,000
Stock-based compensation 225,000 --
Depreciation and amortization 3,128,000 5,489,000
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Total operating expenses 11,827,000 19,146,000
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Operating (loss) income (10,000) 3,006,000
INTEREST EXPENSE, INCLUDING AMORTIZATION OF DEFERRED FINANCING COSTS 3,737,000 3,582,000
OTHER INCOME, net 63,000 4,237,000
--------------- --------------
(Loss) income before provision for income taxes (3,684,000) 3,661,000
PROVISION FOR INCOME TAXES 251,000 1,600,000
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NET (LOSS) INCOME $ (3,935,000) $ 2,061,000
=============== ==============
NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS $ (4,940,000) $ 2,061,000
=============== ==============
BASIC AND DILUTED NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO COMMON STOCKHOLDERS $ (.52) $ .08
=============== ==============
SHARES USED IN COMPUTING BASIC NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO COMMON 9,429,000 24,536,000
=============== ==============
SHARES USED IN COMPUTING DILUTED NET (LOSS) INCOME PER COMMON SHARE APPLICABLE TO
COMMON STOCK HOLDERS 9,429,000 24,636,000
=============== ==============
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The accompanying notes are an integral part of these consolidated statements.
Common Common Stock Common Stock Comprehensive
Stock Class A Class B Class C Income
------------- ------------- ------------- -------------
BALANCE, AS OF
DECEMBER 31,1998 $ - $ 2,000 $ 3,000
Comprehensive income:
Net income - - - $ 133,000
Unrealized gain on securities - - - 40,000
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Comprehensive income - - - $ 173,000
==============
Preferred stock dividends - - -
Issuance of stock for
acquisition 2,000 1,000 -
Stock issued to an officer - - -
Conversion of warrants 5,000 - -
Issuance of common stock 10,000 - -
---------- ---------- ----------
BALANCE, AS OF
DECEMBER 31, 1999 17,000 3,000 3,000
Comprehensive income: - - -
Net income - - - $ 2,061,000
Unrealized loss on securities - - - (273,000)
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Comprehensive income - - - $ 1,788,000
==============
Issuance of common stock 5,000 - -
---------- ---------- ----------
BALANCE, AS OF MARCH 31, $ 22,000 $ 3,000 $ 3,000
========== ========== ==========
2000(Unaudited)
Accumulated
Comprehensive Total
Income Additional Paid Accumulated Stockholders'
Adjustments In Capital Deficit Equity
------------ -------------- -------------- --------------
BALANCE, AS OF
DECEMBER 31,1998 $ - $ - $ (24,864,000) (24,859,000)
Comprehensive income:
Net income - 133,000 133,000
Unrealized gain on securities 40,000 - - 40,000
Comprehensive income - - - -
Preferred stock dividends - - (1,476,000) (1,476,000)
Issuance of stock for
acquisition - 34,191,000 - 34,194,000
Stock issued to an officer - 225,000 - 225,000
Conversion of warrants - (5,000) - -
Issuance of common stock - 411,989,000 - 411,999,000
------------ -------------- -------------- --------------
BALANCE, AS OF
DECEMBER 31,1999 40,000 446,400,000 (26,207,000) 420,256,000
Comprehensive income: - - - -
Net income - - 2,061,000 2,061,000
Unrealized loss on securities (273,000) - - (273.000)
Comprehensive income - - - -
Issuance of common stock - 335,977,000 - 335,982,000
------------ -------------- --------------
BALANCE, AS OF MARCH 31, $ (233,000) $ 782,377,000 $ (24,146,000) $ 758,026,000
============ ============== ============== ==============
2000(Unaudited)
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The accompanying notes are an integral part of these consolidated statements.
Three Months Ended March 31,
----------------------------------
1999 2000
---------------- ---------------
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (3,935,000) $ 2,061,000
Adjustments to reconcile net loss to net cash from operating activities:
Depreciation and amortization 3,128,000 5,489,000
Amortization of debt financing costs, unamortized discount and deferred interest 1,088,000 1,258,000
Deferred income taxes and reduction in valuation reserve on deferred taxes -- (313,000)
Non-cash compensation to officer 225,000 --
Non-cash advertising revenue in exchange for equity investments -- (322,000)
Effect of change in operating assets and liabilities-
Trade accounts receivable 1,858,000 4,191,000
Prepaid expenses and other 44,000 59,000
Other assets (178,000) (113,000)
Accounts payable (358,000) (168,000)
Accrued expenses and other 2,080,000 211,000
---------------- ---------------
Net cash flows from operating activities 3,952,000 12,353,000
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (1,285,000) (568,000)
Equity investments (1,000,000) (114,000)
Purchase of available-for-sale investments, net -- (18,037,000)
Deposits and payments for station purchases (5,826,000) (210,231,000)
--------------- ---------------
Net cash flows from investing activities (8,111,000) (228,950,000)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of debt (16,365,000) (18,000)
Proceeds from debt issuances 22,650,000 --
Deferred financing costs (276,000) --
Proceeds from issuance of common stock, net of issuance costs -- 335,982,000
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Net cash flows from financing activities 6,009,000 335,964,000
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INCREASE IN CASH AND CASH EQUIVALENTS 1,850,000 119,367,000
CASH AND CASH EQUIVALENTS, beginning of period 4,455,000 6,221,000
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CASH AND CASH EQUIVALENTS, end of period $ 6,305,000 $ 125,588,000
=============== ===============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest $ 1,011,000 $ 656,000
=============== ===============
Income taxes $ 212,000 $ 2,051,000
=============== ===============
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The accompanying notes are an integral part of these consolidated statements.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Radio One, Inc. (a Delaware corporation referred to as Radio One) and its subsidiaries, Radio One Licenses, Inc., WYCB Acquisition Corporation, Radio One of Detroit, Inc., Allur-Detroit, Inc. and Allur Licenses, Inc. (Delaware corporations), Broadcast Holdings, Inc. (a Washington, D.C., corporation), Bell Broadcasting Company (a Michigan corporation) and Radio One of Atlanta, Inc. and its wholly owned subsidiaries, ROA Licenses, Inc., and Dogwood Communications, Inc. (Delaware corporations), and its wholly owned subsidiary, Dogwood Licenses, Inc. (a Delaware corporation) (collectively referred to as the Company) were organized to acquire, operate and maintain radio broadcasting stations. The Company owns and operates radio stations in the Washington, D.C.; Baltimore, Maryland; Philadelphia, Pennsylvania; Detroit, Michigan; Kingsley, Michigan; Atlanta, Georgia; Cleveland, Ohio; St. Louis, Missouri; Richmond, Virginia; and Boston, Massachusetts, markets. The Company also operates radio stations in Richmond, Virginia, through a time brokerage agreement. The Company's operating results are significantly affected by its market share in the markets that it has stations.
The accompanying consolidated financial statements include the accounts of Radio One and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The accompanying consolidated financial statements are presented on the accrual basis of accounting in accordance with generally accepted accounting principles. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
The interim consolidated financial statements included herein for Radio One and its wholly owned subsidiaries have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In management's opinion, the interim financial data presented herein include all adjustments (which include only normal recurring adjustments) necessary for a fair presentation. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.
Results for interim periods are not necessarily indicative of results to be expected for the full year. It is suggested that these consolidated financial statements be read in conjunction with the Company's December 31, 1999, financial statement and notes thereto included in the Company's annual report on Form 10-K.
Radio One did not have comprehensive income adjustments for the three months ended March 31, 1999.
2. ACQUISITIONS:
On March 11, 2000, the Company entered into agreements to acquire 21 radio stations in 10 markets for approximately $1.4 billion. The Company expects to finance these acquisitions with available cash and other third-party financings.
On February 28, 2000, the Company completed its acquisition of WPLY-FM, located in the Philadelphia, Pennsylvania market, for approximately $80.0 million. The acquisition of WPLY-FM resulted in the recording of approximately $78.7 million of intangible assets.
3. PUBLIC OFFERING:
In March 2000, the Company completed a public offering of 5.0 million shares of Class A common stock at $70.00 per share. The proceeds from this offering, net of offering costs, were approximately $336.0 million.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following information should be read in conjunction with the unaudited consolidated financial statements and notes thereto included in this Quarterly Report and the audited financial statements and Management's Discussion and Analysis combined in the Company's Form 10-K filed for the year ended December 31, 1999.
Comparison of periods ended March 31, 1999 to the periods ended March 31, 2000 (all periods are unaudited - all numbers in 000s except per share data).
Three months ended Three months ended
March 31, March 31,
1999 2000
------------------------- -------------------------
STATEMENT OF OPERATIONS DATA:
REVENUE:
Broadcast revenue $ 13,390 $ 25,124
Less: Agency commissions 1,573 2,972
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Net broadcast revenue 11,817 22,152
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OPERATING EXPENSES:
Programming and technical 2,472 4,240
Selling, G&A 5,144 8,299
Corporate expenses 858 1,118
Stock-based compensation 225 -
Depreciation & amortization 3,128 5,489
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Total operating expenses 11,827 19,146
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Operating income (loss) (10) 3,006
INTEREST EXPENSE 3,737 3,582
OTHER INCOME, net 63 4,237
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Income (loss) before
Provision for income taxes (3,684) 3,661
PROVISION FOR INCOME TAXES 251 1,600
------------------------- -------------------------
Net income (loss) $ (3,935) $ 2,061
========================= =========================
Net income (loss) applicable
to common shareholders $ (4,940) $ 2,061
========================= =========================
DILUTED PER SHARE DATA:
Net income (loss) per share $ (0.42) $ 0.08
Preferred dividends per share $ (0.10) -
Net income (loss) per share applicable to
After-tax cash flow per share $ (0.06) $ 0.30
BASIC PER SHARE DATA:
Net income (loss) per share $ (0.42) $ 0.08
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Preferred dividends per share $ (0.10) -
Net income (loss) per share applicable to common
shareholders $ (0.52) $ 0.08
After-tax cash flow per share $ (0.06) $ 0.30
OTHER DATA:
Broadcast cash flow (a) $ 4,201 $ 9,613
Broadcast cash flow margin 35.6% 43.4%
EBITDA (b) $ 3,343 $ 8,495
EBITDA margin 28.3% 38.3%
After-tax cash flow (c) $ (582) $ 7,450
Weighted average shares outstanding - basic (d) 9,429 24,536
Weighted average shares outstanding - diluted (d) 9,429 24,636
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Net broadcast revenue increased to approximately $22.2 million for the quarter ended March 31, 2000 from approximately $11.8 million for the quarter ended March 31, 1999 or 88%. This increase in net broadcast revenue was the result of continuing broadcast revenue growth in all of the Company's markets in which it has operated for at least one year as the Company benefited from historical ratings increases at certain of its radio stations, improved power ratios at these stations as well as industry growth in each of these markets. Additional revenue gains were derived from the Company's mid-1999 acquisitions in Cleveland and Richmond (where the Company also operates stations under a time brokerage agreement), as well as the March 1999 acquisition of Radio One of Atlanta, Inc., and the acquisition of WPLY-FM in Philadelphia which closed on February 28, 2000.
Operating expenses excluding depreciation, amortization and stock-based compensation increased to approximately $13.7 million for the quarter ended March 31, 2000 from approximately $8.5 million for the quarter ended March 31, 1999 or 61%. This increase in expenses was related to the Company's rapid expansion within all of the markets in which it operates including increased variable costs associated with increased revenue, as well as start-up and expansion expenses in its newer markets of Cleveland and Richmond, as well as higher costs associated with operating as a public company.
Broadcast operating income increased to approximately $3.0 million for the quarter ended March 31, 2000 from a loss of approximately $10,000 for the quarter ended March 31, 1999. This increase for the quarter was attributable to proportionately higher revenue as described above partially offset by higher depreciation and amortization expenses associated with the Company's several acquisitions made in 1998 and 1999.
Interest expense decreased to approximately $3.6 million for the quarter ended March 31, 2000 from approximately $3.7 million for the quarter ended March 31, 1999 or 3%. This decrease relates primarily to the pay-down of debt under the Company's bank credit facility with proceeds raised in a follow-on equity offering in November 1999.
Other income (almost exclusively interest income) increased to approximately $4.2 million for the quarter ended March 31, 2000 from approximately $0.1 million for the quarter ended March 31, 1999 or 4,100%. This increase was due to the Company's high cash balances and investment instruments following its equity offerings in November 1999 and March 2000.
Income before provision for income taxes increased to approximately $3.7 million for the quarter ended March 31, 2000 from a loss of approximately $3.7 million for the quarter ended March 31, 1999. This increase was due to higher operating income enhanced by higher interest income, as described above.
Net income increased to approximately $2.1 million for the quarter ended March 31, 2000 from a loss of approximately $3.9 million for the quarter ended March 31, 1999. This increase in net income for the quarter was due to higher income before taxes partially offset by an increased provision for income taxes.
Broadcast cash flow increased to approximately $9.6 million for the quarter ended March 31, 2000 from approximately $4.2 million for the quarter ended March 31, 1999 or 129%. This increase was attributable to the increases in broadcast revenue partially offset by higher operating expenses as described above.
Earnings before interest, taxes, depreciation, and amortization (EBITDA), and excluding stock-based compensation expense, increased to approximately $8.5 million for the quarter ended March 31, 2000 from approximately $3.3 million for the quarter ended March 31, 1999 or 158%. This increase was attributable to the increase in broadcast revenue and interest income partially offset by higher operating expenses and higher corporate expenses partially associated with the costs of operating as a public company.
After-tax cash flow increased to approximately $7.5 million for the quarter ended March 31, 2000 from a loss of approximately $0.6 million for the quarter ended March 31, 1999. This increase was attributable to the increase in operating income and interest income partially offset by higher interest charges associated with the financings of various acquisitions as well as the provision for income taxes, as described above.
(a) "Broadcast cash flow" is defined as broadcast operating income plus
corporate expenses (including stock-based compensation) and
depreciation and amortization of both tangible and intangible assets.
(b) "EBITDA" is defined as earnings before interest, taxes, depreciation,
amortization and stock-based compensation.
(c) "After-tax cash flow" is defined as income before income taxes and
extraordinary items plus depreciation, amortization and stock-based
compensation, less the current income tax provision.
(d) As of March 31, 2000 the Company had 28,272,543 shares of common stock
outstanding.
The capital structure of the Company consists of the Company's outstanding long-term debt and stockholders' equity. The stockholders' equity consists of common stock, additional paid-in capital and accumulated deficit. The Company's balance of cash and cash equivalents was approximately $6.2 million as of December 31, 1999. The Company's balance of cash and cash equivalents was approximately $125.6 million as of March 31, 2000. This increase resulted primarily from the Company's stronger cash flow from operating activities during the first three months of 2000 as well as the Company's public offering on March 3, 2000 from which it raised approximately $336.0 million, partially offset by cash paid for the acquisition of WPLY-FM on February 28, 2000. At March 31, 2000 the entire amount of $100.0 million remained available (based on various covenant restrictions) to be drawn down from the Company's bank credit facility. In general, the Company's primary source of liquidity is cash provided by operations and, to the extent necessary, on undrawn commitments available under the Company's bank credit facility.
Net cash flow from operating activities increased to approximately $12.4 million for the three months ended March 31, 2000 from approximately $3.9 million for the three months ended March 31, 1999 for an increase of 218%. This increase was due to a higher net income resulting from increased revenue and interest income partially offset by higher depreciation and amortization charges associated with the various acquisitions made by the Company in the past year and a higher provision for income taxes as compared to the first three months of 1999. Non-cash expenses of depreciation and amortization increased to approximately $5.5 million for the three months ended March 31, 2000 from approximately $3.1 million for the three months ended March 31, 1999 or 77% due to various acquisitions made by the Company within the past year.
Net cash flow used in investing activities increased to approximately $229.0 million for the three months ended March 31, 2000 compared to approximately $8.1 million for the three months ended March 31, 1999 or 2,727%. During the three months ended March 31, 2000 the Company acquired radio station WPLY-FM in the Philadelphia, Pennsylvania market for approximately $80.0 million. The company also made escrow deposits of approximately $133.1 million on anticipated acquisitions including 12 radio stations in seven markets in the United States from Clear Channel Communications, Inc. and AMFM, Inc., six radio stations in the Charlotte, North Carolina and Augusta, Georgia markets through an acquisition of Davis Broadcasting, Inc., and three radio stations in the Indianapolis, Indiana market from Shirk, Inc. and IBL, L.L.C. Also during the three months ended March 31, 2000 the Company made purchases of capital equipment totaling approximately $0.6 million and net purchases of investment instruments available for sale for approximately $18.0 million.
Net cash flow from financing activities was approximately $336.0 million for the three months ended March 31, 2000. During the three months ended March 31, 2000, the Company completed a public offering of common stock and raised net proceeds of approximately $336.0 million. A portion of the proceeds was used to fund the escrow deposits mentioned above, with the balance to be used in part for general operating expenses and to fund future acquisitions.
As a result of the aforementioned, cash and cash equivalents increased by $119.4 million during the three months ended March 31, 2000 compared to an approximate $1.9 million increase during the three months ended March 31, 1999.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is from time to time engaged in legal proceedings incidental to its business. The Company does not believe that any legal proceedings that it is currently engaged in, either individually or in the aggregate, will have a material adverse effect on the Company.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
On February 28, 2000 the Company acquired the assets of radio station WPLY-FM in the Philadelphia, Pennsylvania market, for approximately $80.0 million.
On March 8, 2000 the Company completed an offering of 5,000,000 shares of Class A Common Stock at an offering price of $70.00 per share. From this offering, the Company received net proceeds of approximately $336.0 million after deducting offering costs.
On March 11, 2000 the Company entered into agreements to acquire a total of 21 radio stations in three separate transactions: (i) we agreed to acquire from Clear Channel Communications, Inc. and AMFM, Inc. the assets of 12 radio stations located in seven markets in the United States for approximately $1.3 billion; (ii) we agreed to acquire Davis Broadcasting, Inc. owner of six radio stations in the Charlotte, North Carolina and Augusta, Georgia markets for approximately $24.0 million in cash and stock; and (iii) we agreed to acquire from Shirk, Inc. and IBL, L.L.C. the assets of three radio stations located in the Indianapolis, Indiana market for approximately $40.0 million in cash and stock.
Item 6. Exhibits and Reports on Form 8-K
EXHIBITS
3.1 Amended and Restated Certificate of Incorporation of Radio One, Inc. (dated as of May 4, 2000), as filed with the State of Delaware on May 9, 2000.
3.2 Amended and Restated By-laws of Radio One, Inc., amended as of March 17, 2000 (incorporated by reference to Radio One's Annual Report on Form 10-K for the period ended December 31, 1999 (File No. 000-25969; Film No. 582596)).
4.1 Indenture dated as of May 15, 1997 among Radio One, Inc., Radio One Licenses, Inc. and United States Trust Company of New York (incorporated by reference to Radio One's Annual Report on Form 10-K for the period ended December 31, 1997 (File No. 333-30795; Film No. 98581327)).
4.2 First Supplemental Indenture dated as of June 30, 1998, to Indenture dated as of May 15, 1997, by and among Radio One, Inc., as Issuer and United States Trust Company of New York, as Trustee, by and among Radio One, Inc., Bell Broadcasting Company, Radio One of Detroit, Inc., and United States Trust Company of New York, as Trustee (incorporated by reference to Radio One's Current Report on Form 8-K filed July 13, 1998 (File No. 333-30795; Film No. 98665139)).
4.3 Second Supplemental Indenture dated as of December 23, 1998,
to Indenture dated as of May 15, 1997, by and among Radio One,
Inc., as Issuer and United States Trust Company of New York,
as Trustee, by and among Radio One, Inc., Allur-Detroit, Allur
Licenses, Inc., and United States Trust Company of New York,
as Trustee (incorporated by reference to Radio One's Current
Report on Form 8-K filed January 12, 1999 (File No. 333-30795;
Film No. 99504706)).
4.7 Standstill Agreement dated as of June 30, 1998 among Radio
One, Inc., the subsidiaries of Radio One, Inc., United States
Trust Company of New York and the other parties thereto
(incorporated by reference to Radio One's Quarterly Report on
Form 10-Q for the period ended June 30, 1998 (File No. 333-
30795; Film No. 98688998)).
4.9 Stockholders Agreement dated as of March 2, 1999 among
Catherine L. Hughes and Alfred C. Liggins, III (incorporated
by reference to Radio One's Quarterly Report on Form 10-Q for
the period ended June 30, 1999 (File No. 000-25969; Film No.
99686684)).
10.58 Asset Purchase Agreement dated as of March 11, 2000 relating
to the acquisition of KMJQ-FM and KBXX-FM, licensed to
Houston, Texas, WVCG(AM), licensed to Coral Gables, Florida,
WZAK-FM, licensed to Cleveland, Ohio, WJMO-AM, licensed to
Cleveland Heights, Ohio, KKBT-FM, licensed to Los Angeles,
California, KBFB-FM, licensed to Dallas, Texas, WJMZ-FM ,
licensed to Anderson, South Carolina, WFXC-FM, licensed to
Durham, North Carolina, WFXK-FM, licensed to Tarboro, North
Carolina, WNNL-FM, licensed to Farquay-Varina, North Carolina
and WQOK-FM, licensed to South Boston, Virginia.
10.59 Agreement and Plan of Merger dated as of March 11, 2000
relating to the acquisition of WCCJ-FM, licensed to
Harrisburg, North Carolina, WFXA-FM and WTHB-AM, licensed to
Augusta, Georgia, WAKB-FM, licensed to Wrens, Georgia,
WAEG-FM, licensed to Evans, Georgia and WAEJ-FM, licensed to
Waynesboro, Georgia.
10.60 Asset Purchase Agreement dated as of March 11, 2000 relating
to the acquisition of WHHH-FM, licensed to Indianapolis,
Indiana, WBKS-FM, licensed to Greenwood, Indiana, WYJZ-FM,
licensed to Lebanon, Indiana and W53AV, licensed to
Indianapolis, Indiana.
27.1 Financial data schedule (EDGAR version only).
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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.
RADIO ONE, INC.
(Principal Accounting Officer)
Exhibit 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
RADIO ONE, INC.
This Amended and Restated Certificate of Incorporation of Radio One, Inc., was duly adopted in accordance with the provisions of Sections 141, 242 and 245 of the Delaware General Corporation Law. The original Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on July 15, 1996, and an Amended and Restated Certificate of Incorporation was filed with the Secretary of State of the State of Delaware on May 6, 1999. The text of the Corporation's Certificate of Incorporation as heretofore amended is hereby restated and further amended to read in its entirety as follows:
ARTICLE I
Name
The name of the corporation is Radio One, Inc. (hereinafter referred to as the "Corporation").
ARTICLE II
Registered Office
The post office address of the registered office of the Corporation in the State of Delaware is 1013 Centre Road, Wilmington, New Castle County, Delaware 19805. The name of the registered agent of the Corporation at that address is Corporation Service Company.
ARTICLE III
Purpose
The purpose of the Corporation is to acquire, operate, and maintain radio stations and television stations and to engage in any other lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware (the "DGCL").
ARTICLE IV
Capital Stock
Section IV.1. Authorized Shares. The total number of shares of capital stock which the Corporation has authority to issue is 481,000,000 shares, consisting of: (i) 30,000,000 shares of Class A Common Stock, par value $.001 per share (the "Class A Common"), (ii) 150,000,000 shares
of Class B Common Stock, par value $.001 per share (the "Class B Common"), (iii) 150,000,000 shares of Class C Common Stock, par value $.001 per share (the "Class C Common"), (iv) 150,000,000 shares of Class D Common Stock, par value $.001 per share (the "Class D Common" and together with the Class A Common, the Class B Common, and the Class C Common, the "Common Stock"), and (v) 1,000,000 shares of Preferred Stock, par value $.001 per share . The Preferred Stock and the Common Stock are hereinafter sometimes collectively referred to as "Capital Stock." Certain capitalized terms used herein are defined in Section 4.7(c) of ARTICLE IV.
Section IV.2. Preferred Stock The Board of Directors of the Corporation (the "Board") is hereby authorized, by resolution or resolutions from time to time adopted and subject to the limitations provided by law, to establish and designate one or more series of preferred stock (the "Preferred Stock"), and to fix the designations, powers, preferences, rights, qualifications, limitations or restrictions thereof and the variations and relative rights, preferences and limitations as between series. The authority of the Board with respect to each series of Preferred Stock shall include, but shall not be limited to, determination of the following:
(a) the designation of such series, which may be by distinguishing number or letter;
(b) the number of shares initially constituting such series;
(c) the increase, and the decrease to a number not less than the number of the then outstanding shares of such series, of the number of shares constituting such series theretofore fixed;
(d) the rate or rates, and the conditions upon and the times at which dividends on the shares of such series shall be paid, the preference or relation which such dividends shall bear to the dividends payable on any other class or classes or on any other series of stock of the Corporation, and whether or not such dividends shall be cumulative, and, if such dividends shall be cumulative, the date or dates from and after which they shall accumulate;
(e) whether or not the shares of such series shall be redeemable and, if such shares shall be redeemable, the terms and conditions of such redemption, including, but not limited to, the date or dates upon or after which such shares shall be redeemable and the amount per share which shall be payable upon such redemption, which amount may vary under different conditions and at different redemption dates;
(f) the rights to which the holders of the shares of such series shall be entitled upon the voluntary or involuntary liquidation, dissolution or winding up of, or upon any distribution of the assets of, the Corporation, which rights may be different in the case of a voluntary liquidation, dissolution or winding up than in the case of such an involuntary event;
(g) whether or not the shares of such series shall have voting rights, in addition to the voting rights provided by law and, if such shares shall have such voting rights, the terms and conditions thereof, including, but not limited to, the right of the holders of such shares to vote as a separate class either alone or with the holders of shares of one or more other series of Preferred Stock and the right to have more than one vote per share;
(h) whether or not a sinking or a purchase fund shall be provided for the redemption or purchase of the shares of such series and, if such a sinking fund or purchase fund shall be provided, the terms and conditions thereof;
(i) whether or not the shares of such series shall be convertible into, or exchangeable for, shares of any other class or classes or any other series of the same or any other class or classes of stock or any other security of the Corporation or any other entity and, if provision be made for conversion or exchange, the terms and conditions of conversion or exchange, including, but not limited to, any provision for the adjustment of the conversion or exchange rate or price; and
(j) any other relative rights, preferences and limitations.
Section IV.3. Common Stock. Except as otherwise provided in Section 4.3 of this ARTICLE IV or as otherwise required by applicable law, all shares of Class A Common, Class B Common, Class C Common and Class D Common shall be identical in all respects and shall entitle the holders thereof to the same rights and privileges and shall be subject to the same qualifications, limitations and restrictions.
(a) Voting Rights. At every meeting of the stockholders, except as specifically otherwise required by law, the holders of Class A Common shall be entitled to one vote per share, and the holders of Class B Common shall be entitled to ten votes per share, on all matters presented for a vote of the stockholders of the Corporation, provided that, at every meeting of the stockholders called for the election of directors the holders of Class A Common, voting separately as a class, shall be entitled to elect two of the directors to be elected at such meeting. The holders of Class A Common and Class B Common, voting together as a class, shall be entitled to elect the remaining number of directors to be elected at such meeting. Directors elected by the holders of a class or classes of Common Stock may be removed, with or without cause, only by a majority vote of the holders of the shares of such class or classes of Common Stock then outstanding. If, during the interval between annual meetings of stockholders for the election of directors, the number of directors who have been elected by the holders of any class or classes of Common Stock shall, by reason of resignation, death or removal, be reduced, the vacancy or vacancies in the directors elected by the holders of such class or classes of Common Stock may be filled by a majority vote of the remaining directors elected by the holders of such class or classes of Common Stock then in office. Any director elected to fill any such vacancy by the remaining directors then in office may be removed from office by a majority vote of the holders of the shares of such class or classes of Common Stock then outstanding. Except as otherwise required by law, the holders of the Class A Common and the holders of the Class B Common shall in all matters not specified in this Section 4.3(a) vote together as a single class, provided that the holders of shares of the Class A Common shall be entitled to one (1) vote per share and the holders of shares of the Class B Common shall be entitled to ten (10) votes per share. Except to the extent provided in ARTICLE VII of this Amended and Restated Certificate of Incorporation or as required by applicable law, the holders of Class C Common and Class D Common shall have no right to vote on any matter presented for a vote of the stockholders of the Corporation (including, without limitation, the election or removal of directors of the Corporation), and Class C Common and Class D Common shall not be included in determining the number of shares voting or entitled to vote on such matters. The Board of Directors of the Corporation shall have concurrent power with the holders of Class A Common and Class B
Common to adopt, amend or repeal the Bylaws of the Corporation. A consolidation or merger, or the sale, lease, exchange, mortgage, pledge, or other disposition of all, or substantially all, of the property or assets of the Corporation, if not made in the usual and regular course of its business, shall require a resolution adopted by a majority of the Board of Directors of the Corporation and the authorization of an affirmative vote of at least two-thirds of the outstanding shares of Class A Common.
(b) Dividends. As and when dividends are declared or paid with respect to shares of Common Stock, whether in cash, property or securities of the Corporation, the holders of Class A Common, the holders of Class B Common, the holders of Class C Common and the holders of Class D Common shall be entitled to receive such dividends pro rata at the same rate per share for each such class of Common Stock; provided that, if such dividends are declared or paid in shares of Common Stock, such dividends may be paid only (i) in shares of Class D Common, or (ii) if holders of any class of Common Stock are to receive payment in shares of any class of Common Stock other than Class D Common, then holders of shares of each class of Common Stock must receive payment only in shares of such respective class of Common Stock. The rights of the holders of Common Stock to receive dividends are subject to the provisions of the Preferred Stock.
(c) Reservation. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock: (i) Class A Common in a quantity sufficient to provide for the conversion of all outstanding shares of the Class B Common and Class C Common into Class A Common; and (ii) Class C Common in a quantity sufficient to provide for the conversion of all outstanding shares of the Class A Common into Class C Common.
(d) Conversion of Common Stock.
(i) Conversion of Class A Common. Subject to the terms and conditions stated herein, the holder of any shares of Class A Common shall have the right at any time, at such holder's option, to convert all or a portion of the shares of Class A Common so held into the same number of shares of Class C Common. Such right of conversion shall be exercised (A) by giving written notice (the "Notice") to the Corporation at least ten (10) days prior to the Conversion Date (as defined below) specified therein that the holder elects to convert a stated number of shares of Class A Common into shares of Class C Common on the date specified in such Notice (the "Conversion Date") and (B) by surrendering the certificate or certificates representing at least the number of shares of Class A Common to be converted to the Corporation at its principal office at any time during the usual business hours on or before the Conversion Date, duly endorsed in blank by the owner of the certificate so surrendered, together with a statement of the name or names (with addresses) of the Person or Persons in whose name or names the certificate or certificates for shares issued on conversion shall be registered. Shares of Class A Common that have been converted hereunder shall not be canceled but shall remain as treasury shares unless retired by resolution of the Board of Directors.
(ii) Conversion of Class B Common. Each share of Class B Common shall
also be convertible, at the option of the holder thereof, into one fully paid
and nonassessable share of Class A Common. The procedures for conversion of
Class A Common into Class C Common, as set forth in paragraph (i) of this
Section 4.3(d), shall also be applicable to the conversion of Class B Common
into Class A Common. Shares of Class B Common that have been converted hereunder
shall not be canceled but shall remain as treasury shares unless retired by resolution of the Board of Directors.
(iii) Class B Stockholders. Class B Stockholders (as hereinafter defined) and Class B Permitted Transferees (as hereinafter defined) may exercise their respective rights as a holder of shares of Class C Common to convert such shares into shares of Class A Common, or otherwise acquire shares of Class A Common, only in the event that: (A) the Corporation shall merge or consolidate with or into, or otherwise acquire, any other Person and such Class B Stockholder or Class B Permitted Transferee receives shares of Class A Common in exchange for such Class B Stockholder's or Class B Permitted Transferee's interest in such other Person; (B) such Class B Stockholder or Class B Permitted Transferee desires to sell shares of Class A Common into which all or part of its shares of Class C Common are to be converted in connection with any proposed purchase of Class A Common by another Person (other than a Class B Stockholder or a Class B Permitted Transferee); or (C) such Class B Stockholder or Class B Permitted Transferee intends to sell shares of Class A Common into which all or part of its shares of Class C Common are to be converted pursuant to a registration statement which has been declared effective.
(iv) Conversion of Class C Common. Each share of Class C Common shall
also be convertible, at the option of the holder thereof, into one fully paid
and nonassessable share of Class A Common. The procedures for conversion of
Class A Common into Class C Common, as set forth in paragraph (i) of this
Section 4.3(d), shall also be applicable to the conversion of Class C Common
into Class A Common. Shares of Class C Common that have been converted hereunder
shall not be canceled but shall remain as treasury shares unless retired by
resolution of the Board of Directors.
(v) Surrender of Certificates. Subject to the other provisions of this Section 4.3 and of ARTICLE IX of this Amended and Restated Certificate of Incorporation, promptly after (A) the Conversion Date and (B) the surrender of such certificate or certificates representing the share or shares of Class A Common, Class B Common or Class C Common to be converted, the Corporation shall issue and deliver, or cause to be issued and delivered, to the holder requesting conversion, registered in such name or names as such holder may direct, a certificate or certificates for the number of shares of the class of Common Stock issuable upon the conversion of such share or shares, together with a certificate or certificates evidencing any balance of the shares of the class surrendered to the Corporation but not then being converted. To the extent permitted by law, such conversion shall be deemed to have been effected as of the close of business on the later of the Conversion Date or the date upon which the Corporation shall have received the certificate or certificates representing the shares to be converted, and at such time the rights of the holder of such share or shares as such holder shall cease, and the person or persons in whose name or names any certificate or certificates for shares shall be issuable upon such conversion shall be deemed to have become the holder or holders of record of such shares of Class A Common or Class C Common, as the case may be.
(vi) Listing. If the shares of Common Stock required to be reserved for the purpose of conversion hereunder require listing on any national securities exchange, before such shares are issued upon conversion, the Corporation will, at its expense and as expeditiously as possible, use its commercially reasonable best efforts to cause such shares to be listed or duly approved for listing on such national securities exchange.
(e) No Charge. The issuance of certificates representing Common Stock upon conversion of Class A Common, Class B Common or Class C Common, as hereinabove set forth shall be made without charge or any expense or issuance tax in respect thereof; provided, however, that the Corporation shall not be required to pay any taxes which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than that of the holder of the shares converted.
(f) Transfer of Class B Common.
(i) A Beneficial Owner (as hereinafter defined) of shares of Class B Common (herein referred to as a AClass B Stockholder") may transfer, directly or indirectly, Beneficial Ownership (as hereinafter defined) of shares of Class B Common, whether by sale, assignment, gift or otherwise, only to a Class B Permitted Transferee (as hereinafter defined) and no Class B Stockholder may otherwise transfer Beneficial Ownership of any shares of Class B Common. In the event of any attempted transfer of the Beneficial Ownership of any shares of Class B Common in violation of the limitation provided in the preceding sentence, the shares of Class B Common with respect to which the transfer of such Beneficial Ownership has been attempted shall be deemed to have been converted automatically, without further deed or action by or on behalf of any person, into shares of Class A Common. A "Class B Permitted Transferee" shall be, if the Class B Stockholder is an individual:
(A) the estate of the Class B Stockholder or any legatee, heir or distributees thereof;
(B) the spouse or former spouse of the Class B Stockholder;
(C) any parent or grandparent and any lineal descendant (including any adopted child) of any parent or grandparent of the Class B Stockholder or of the Class B Stockholder's spouse or former spouse;
(D) any guardian or custodian (including a custodian for purposes of the Uniform Gift to Minors Act or Uniform Transfers to Minors Act) for, or any executor, administrator, conservator and/or other legal representative of, the Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof;
(E) a trust (including a voting trust), and any savings or retirement account, such as an individual retirement account for purposes of federal income tax laws, whether or not involving a trust, principally for the benefit of such Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof, including any trust in respect of which such Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof has any general or special power of appointment or general or special non-testamentary power or special testamentary power of appointment limited to any Class B Permitted Transferee or Class B Permitted Transferees;
(F) any corporation, partnership or other business entity if Substantial Beneficial Ownership thereof is held by such Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof; provided, however, that if
such Class B Stockholder, and all Class B Permitted Transferees thereof, cease, for whatever reason, to hold Substantial Beneficial Ownership of such corporation, partnership or other business entity, then any and all shares of Class B Common that such corporation, partnership or other business entity is the Beneficial Owner of shall be deemed to be converted automatically, without further deed or action by or on behalf of any person, into shares of Class A Common;
(G) any Founding Investor and/or any Class B Permitted Transferee or Class B Permitted Transferees of a Founding Investor; and
(H) the Corporation.
A "Class B Permitted Transferee" shall be, if the Class B Stockholder is a corporation, partnership or other business entity:
(1) any employee benefit plan, or trust thereunder or therefor, sponsored by the Class B Stockholder;
(2) any trust (including any voting or liquidating trust) principally for the benefit of the Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof;
(3) any corporation, partnership or other business entity if Substantial Beneficial Ownership thereof is held by such Class B Stockholder and/or any Class B Permitted Transferee or Class B Permitted Transferees thereof; provided, however, that if such Class B Stockholder, and all Class B Permitted Transferees thereof, cease, for whatever reason, to hold Substantial Beneficial Ownership of such corporation, partnership or other business entity, then any and all shares of Class B Common that such corporation, partnership or other business entity is the Beneficial Owner of shall be deemed to be converted automatically, without further deed or action by or on behalf of any person, into shares of Class A Common;
(4) the stockholders of the corporation, partners of the partnership or other owners of equity interests in any other business entity, who receive such shares, by way of dividend or distribution (upon dissolution, liquidation or otherwise), provided that such transfer will not result in Beneficial Ownership of any of such shares by any person who did not have the power to control such corporation, partnership or business entity at the time such corporation, partnership or business entity first acquired Beneficial Ownership of such shares of Class B Common (other than by any person who qualifies as a Class B Permitted Transferee pursuant to any other provision of this paragraph (i) of this Section 4.3(g));
(5) the Corporation; and
(6) any Founding Investor and/or any Class B Permitted Transferee or Class B Permitted Transferees of a Founding Investor.
(ii) Any person who holds shares of Class B Common for the Beneficial Ownership of another, including (A) any broker or dealer in securities; (B) any clearing house; (C) any bank, trust company, savings and loan association or other financial institution; (D) any other nominee; and (E) any savings plan or account or related trust, such as an individual retirement account, principally for the benefit of any individual, may transfer such shares to the person or persons for whose benefit it holds such shares. Notwithstanding anything to the contrary set forth herein, any holder of Class B Common may pledge such shares to a pledgee pursuant to a bona fide pledge of such shares as collateral security for indebtedness due to the pledgee, provided that such shares may not be transferred to or registered in the name of the pledgee unless such pledgee is a Class B Permitted Transferee. In the event of foreclosure or other similar action by the pledgee, such pledged shares shall automatically, without any act or deed on the part of the Corporation or any other person, be converted into shares of Class A Common unless within five business days after such foreclosure or similar event such pledged shares are returned to the pledgor or transferred to a Class B Permitted Transferee. The foregoing provisions of this paragraph shall not be deemed to restrict or prevent any transfer of such shares by operation of law upon incompetence, death, dissolution or bankruptcy of any Class B Stockholder or any provision of law providing for, or judicial order of, forfeiture, seizure or impoundment.
(iii) Any transferee of shares of Class B Common pursuant to a transfer made in violation of paragraphs (i) and (ii) of this Section 4.3(g) shall have no rights as a stockholder of the Corporation and no other rights against or with respect to the Corporation except the right to receive, in accordance with paragraph (ii) of Section 4.3(d) or paragraphs (i) and (ii) of this Section 4.3(g), as applicable, shares of Class A Common upon the conversion of such transferred shares. Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation, the Corporation shall, to the full extent permitted by law, be entitled to issue shares of Class B Common to any person from time to time.
(iv) The Corporation and any transfer agent of Class B Common may as a condition to the transfer or the registration of any transfer of shares of Class B Common permitted by paragraphs (i) and (ii) of this Section 4.3(g) require the furnishing of such affidavits or other proof as they deem necessary to establish that such transferee is a Class B Permitted Transferee.
(v) For purposes of paragraph (i) of this Section 4.3(g): (A) the term "Beneficial Ownership," in respect of shares of Class B Common, shall mean possession of the power and authority, either singly or jointly with another, to vote or dispose of or to direct the voting or disposition of such shares and the term "Beneficial Owner," in respect of shares of Class B Common, shall mean the person or persons who possess such power and authority; and (B) the term "Substantial Beneficial Ownership," in respect of any corporation, partnership or other business entity, shall mean possession of the power and authority, either singly or jointly with another, to vote or dispose of or to direct the voting or disposition of at least 80% of each class of equity ownership interest in such corporation, partnership or other business entity.
Section IV.4. No Interference. Except as otherwise provided in ARTICLE IX of this Amended and Restated Certificate of Incorporation, the Corporation will not close its books against the transfer of any share of Common Stock or of any of the shares of Common Stock issued or issuable upon the conversion of such shares of Common Stock in any manner which interferes with the timely conversion of any of such shares.
Section IV.5. Mergers, Consolidations. In the case of a merger or consolidation which reclassifies or changes the shares of Common Stock, or in the case of the consolidation or merger of the Corporation with or into another corporation or corporations or the transfer of all or substantially all of the assets of the Corporation to another corporation or corporations, each share of each class of Common Stock shall thereafter be convertible into the greatest number or amount of shares of stock or other securities or property to which a holder of a share of the class of Common Stock entitled to receive the greatest number or amount of such stock or other securities or property would have been entitled upon such reclassification, change, consolidation, merger or transfer, and, in any such case, appropriate adjustment (as determined in good faith by the Corporation's Board of Directors) shall be made in the application of the provisions herein set forth with respect to the rights and interests thereafter of the holders of each class of Common Stock to the end that the provisions set forth herein shall thereafter be applicable, as nearly as reasonably may be practicable, in relation to any shares of stock or other securities on property thereafter deliverable upon the conversion of shares of each class of Common Stock. In case of any such merger or consolidation, the resulting or surviving corporation (if not the Corporation) shall expressly assume the obligation to deliver, upon conversion of each class of Common Stock, such stock or other securities or property as the holders of the each class of Common Stock remaining outstanding shall be entitled to receive pursuant to the provisions hereof, and to make provisions for the protection of the conversion rights provided for in this ARTICLE IV.
Section IV.6. Liquidation, Dissolution or Winding Up. Subject to the provisions of the Preferred Stock, in the event of any Liquidation of the Corporation, all remaining assets of the Corporation shall be distributed to holders of the Common Stock pro rata at the same rate per share of each class of Common Stock according to their respective holdings of shares of the Common Stock.
Section IV.7. Miscellaneous. Subject to the provisions of ARTICLE IX of this Amended and Restated Certificate of Incorporation:
(a) Registration of Transfer. The Corporation shall keep at its principal office a register for the registration of Capital Stock. Upon the surrender of any certificate representing Capital Stock at such place, the Corporation shall, at the request of the record holder of such certificate, execute and deliver (at the Corporation's expense) a new certificate or certificates in exchange therefor representing in the aggregate the number of shares represented by the surrendered certificate. Each such new certificate shall be registered in such name and shall represent such number of shares as is requested by the holder of the surrendered certificate and shall be substantially identical in form to the surrendered certificate, and dividends shall accrue on the Capital Stock represented by such new certificate from the date to which dividends have been fully paid on such Capital Stock represented by the surrendered certificate. The issuance of new certificates shall be made without charge to the original holders of the surrendered certificates for any issuance tax in respect thereof or other cost incurred by the Corporation in connection with such issuance.
(b) Replacement. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit of the registered holder shall be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate evidencing shares of any class or series of Capital Stock, and in the case of any such loss, theft or destruction, upon receipt of an indemnity reasonably
satisfactory to the Corporation (provided that if the holder is a financial institution or other institutional investor its own agreement shall be satisfactory), or, in the case of any such mutilation upon surrender of such certificate, the Corporation shall (at its expense) execute and deliver in lieu of such certificate a new certificate of like kind representing the number of shares of such class or series represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on the Capital Stock represented by such new certificate from the date to which dividends have been fully paid on such lost, stolen, destroyed or mutilated certificate.
(c) Definitions. The following terms shall have the following meanings:
"Advance of Expenses" has the meaning set forth in Section 8.2.
"Beneficial Ownership" has the meaning set forth in Section 4.3(g)(v).
"Capital Stock" has the meaning set forth in Section 4.1.
"Class A Common" has the meaning set forth in Section 4.1.
"Class B Common" has the meaning set forth in Section 4.1.
"Class B Permitted Transferee" has the meaning set forth in Section 4.3(g).
"Class B Stockholder" has the meaning set forth in Section 4.3(g).
"Class C Common" has the meaning set forth in Section 4.1.
"Class D Common" has the meaning set forth in Section 4.1.
"Common Stock" has the meaning set forth in Section 4.1.
"Communications Act" has the meaning set forth in Section 9.1.
"Conversion Date" has the meaning set forth in Section 4.2(d)(i).
"Corporation" has the meaning set forth in ARTICLE I.
"DGCL" has the meaning set forth in ARTICLE III.
"FCC" has the meaning set forth in Section 9.1.
"Final Adjudication" has the meaning set forth in Section 8.2.
"Founding Investor" means Alfred C. Liggins, III or Catherine L. Hughes.
"Indemnitee" has the meaning set forth in Section 8.2.
"Liquidation" with respect to the Corporation, means the liquidation, dissolution or winding up of the Corporation.
"Notice" has the meaning set forth in Section 4.3(d)(i).
"Person" means an individual, a partnership, a joint venture, a corporation, an association, a joint stock company, a limited liability company, a trust, an unincorporated association and any other entity or organization.
"Preferred Stock" has the meaning set forth in Section 4.2.
"Proceeding" has the meaning set forth in Section 8.2.
"Subsidiary" means any corporation with respect to which another specified corporation has the power to vote or direct the voting of sufficient securities to elect directors having a majority of the voting power of the board of directors of such corporation.
"Substantial Beneficial Ownership" has the meaning set forth in
Section 4.3(g)(v).
"Undertaking" has the meaning set forth in Section 8.2.
ARTICLE V
Existence
The Corporation is to have a perpetual existence.
ARTICLE VI
General Provisions
Section VI.1. Dividends. The Board of Directors of the Corporation shall have authority from time to time to set apart out of any assets of the Corporation otherwise available for dividends a reserve or reserves as working capital or for any other purpose or purposes, and to abolish or add to any such reserve or reserves from time to time as said Board may deem to be in the interest of the Corporation; and said Board shall likewise have power to determine in its discretion, except as herein otherwise provided, what part of the assets of the Corporation available for dividends in excess of such reserve or reserves shall be declared in dividends and paid to the stockholders of the Corporation.
Section VI.2. Issuance of Stock. The shares of all classes and series of Capital Stock of the Corporation may be issued by the Corporation from time to time for such consideration as from time to time may be fixed by the Board of Directors of the Corporation, provided that shares having a par value shall not be issued for a consideration less than such par value, as determined by the Board. At any time, or from time to time, the Corporation may grant rights or options to purchase from the Corporation any shares of its Capital Stock of any class or series to run for such period of time, for
such consideration, upon such terms and conditions, and in such form as the Board of Directors of the Corporation may determine. The Board of Directors of the Corporation shall have authority, as provided by law, to determine that only a part of the consideration which shall be received by the Corporation for the shares of its Capital Stock having a par value be capital, provided that the amount of the part of such consideration so determined to be capital shall at least be equal to the aggregate par value of such shares. The excess, if any, at any time, of the total net assets of the Corporation over the amount so determined to be capital, as aforesaid, shall be surplus. All classes and series of Capital Stock of the Corporation shall be and remain at all times nonassessable.
The Board of Directors of the Corporation is hereby expressly authorized, in its discretion, in connection with the issuance of any obligations or Capital Stock of the Corporation (but without intending hereby to limit its general power so to do in other cases), to grant rights or options to purchase Capital Stock of the Corporation of any class or series upon such terms and during such period as the Board of Directors of the Corporation shall determine, and to cause such rights to be evidenced by such warrants or other instruments as it may deem advisable.
Section VI.3. Inspection of Books and Records. The Board of Directors of the Corporation shall have power from time to time to determine to what extent and at what times and places and under what conditions and regulations the accounts and books of the Corporation, or any of them, shall be open to the inspection of the stockholders; and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or the stockholders of the Corporation.
Section VI.4. Location of Meetings, Books and Records. Except as otherwise provided in the Bylaws, the stockholders of the Corporation and the Board of Directors of the Corporation may hold their meetings and have an office or offices outside of the State of Delaware, and, subject to the provisions of the laws of said State, may keep the books of the Corporation outside of said State at such places as may, from time to time, be designated by the Board of Directors.
Section VI.5. Board of Directors Meeting. The Board of Directors shall be comprised of the number of directors specified in the Corporation's Bylaws, and such directors shall be elected in the manner contemplated by such Bylaws.
ARTICLE VII
Amendments
The Corporation reserves the right to amend, alter, change or repeal any provision contained in this Amended and Restated Certificate of Incorporation in the manner now or hereinafter prescribed herein and by the laws of the State of Delaware, and all rights conferred upon stockholders herein are granted subject to this reservation. Notwithstanding the foregoing or anything contained in this Amended and Restated Certificate of Incorporation to the contrary, (i) no amendment, modification or waiver shall be binding or effective with respect to Article VIII or clause (i) of this Article VII without the affirmative vote of the holders of at least two-thirds of the outstanding shares of Class A Common of the Corporation, and (ii) no such action under this
ARTICLE VII shall change (A) the redemption, conversion, voting or other rights of any class or series of Preferred Stock without the affirmative vote of the holders of a majority of each such class or series of Preferred Stock then outstanding, (B) the conversion or voting rights of any class of Common Stock without the affirmative vote of the holders of a majority of each class of Common Stock then outstanding, and (C) the percentage required to approve any amendment, modification or waiver described herein, without the affirmative vote of holders of that percentage of the class or series of Capital Stock then required to approve such amendment, modification or waiver.
ARTICLE VIII
Liability
Section VIII.1. Limitation of Liability.
(a) To the fullest extent permitted by the DGCL as it now exists or may hereafter be amended (but, in the case of any such amendment, only to the extent that such amendment permits the Corporation to provide broader indemnification rights than permitted as of the date this Amended and Restated Certificate of Incorporation is filed with the State of Delaware), and except as otherwise provided in the Corporation's Bylaws, no director of the Corporation shall be liable to the Corporation or its stockholders for monetary damages arising from a breach of fiduciary duty owed to the Corporation or its stockholders.
(b) Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director of the Corporation existing at the time of such repeal or modification.
Section VIII.2. Right to Indemnification. Each person who was or is made
party or is threatened to be made a party to or is otherwise involved (including
involvement as a witness) in any action, suit or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "Proceeding"), by
reason of the fact that he or she is or was a director or officer of the
Corporation or, while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to an employee benefit plan
(hereinafter, an "Indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer or in any other capacity
while serving as a director or officer, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the DGCL, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide for broader
indemnification rights than permitted as of the date this Amended and Restated
Certificate of Incorporation is filed with the State of Delaware), against all
expense, liability and loss (including attorneys' fees, judgments, fines, excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith and such indemnification
shall continue as to an indemnitee who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the indemnitee's heirs,
executors and administrators; provided, however, that except as provided in
Section 8.3 of this ARTICLE VIII with respect to proceedings to enforce rights
to indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part
thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation. The right to indemnification conferred in this Section 8.2 of this ARTICLE VIII shall be a contract right and shall include the obligation of the Corporation to pay the expenses incurred in defending any such proceeding in advance of its final disposition (hereinafter an "Advance of Expenses"); provided, however, that if and to the extent that the Board of Directors of the Corporation requires, an advance of expenses incurred by an indemnitee in his or her capacity as a director or officer (and not in any other capacity in which service was or is rendered by such indemnitee, including, without limitation, service to an employee benefit plan) shall be made only upon delivery to the Corporation of an undertaking (hereinafter an "Undertaking"), by or on behalf of such indemnitee, to repay all amounts so advanced if it shall ultimately be determined by final judicial decision from which there is no further right to appeal (hereinafter a "Final Adjudication") that such indemnitee is not entitled to be indemnified for such expenses under this Section 8.2 or otherwise. The Corporation may, by action of its Board of Directors, provide indemnification to employees and agents of the Corporation with the same or lesser scope and effect as the foregoing indemnification of directors and officers.
Section VIII.3. Procedure for Indemnification. Any indemnification of a director or officer of the Corporation or advance of expenses under Section 8.2 of this ARTICLE VIII shall be made promptly, and in any event within forty-five days (or, in the case of an advance of expenses, twenty days) upon the written request of the director or officer. If a determination by the Corporation that the director or officer is entitled to indemnification pursuant to this ARTICLE VIII is required, and the Corporation fails to respond within sixty days to a written request for indemnity, the Corporation shall be deemed to have approved the request. If the Corporation denies a written request for indemnification or advance of expenses, in whole or in part, or if payment in full pursuant to such request is not made within forty-five days (or, in the case of an advance of expenses, twenty days), the right to indemnification or advances as granted by this ARTICLE VIII shall be enforceable by the director or officer in any court of competent jurisdiction. Such person's costs and expenses incurred in connection with successfully establishing his or her right to indemnification, in whole or in part, in any such action shall also be indemnified by the Corporation. It shall be a defense to any such action (other than an action brought to enforce a claim for the advance of expenses where the undertaking required pursuant to Section 8.2 of this ARTICLE VIII, if any, has been tendered to the Corporation) that the claimant has not met the standards of conduct which make it permissible under the DGCL for the Corporation to indemnify the claimant for the amount claimed, but the burden of such defense shall be on the Corporation. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such action that indemnification of the claimant is proper in the circumstances because he or she has met the applicable standard of conduct set forth in the DGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the claimant has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct. The procedure for indemnification of other employees and agents for whom indemnification is provided pursuant to Section 8.2 of this ARTICLE VIII shall be the same procedure set forth in this Section 8.3 for directors or officers, unless otherwise set forth in the action of the Board of Directors of the Corporation providing for indemnification for such employee or agent.
Section VIII.4. Insurance. The Corporation may purchase and maintain insurance on its own behalf and on behalf of any person who is or was a director, officer, employee or agent of the
Corporation or was serving at the request of the Corporation as a director, officer, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss asserted against him or her and incurred by him or her in any such capacity, whether or not the Corporation would have the power to indemnify such person against such expenses, liability or loss under the DGCL.
Section VIII.5. Service for Subsidiaries. Any person serving as a director, officer, employee or agent of another Corporation, partnership, limited liability company, joint venture or other enterprise, at least 50% of whose equity interests are owned by the Corporation (hereinafter a "subsidiary" for this ARTICLE VIII) shall be conclusively presumed to be serving in such capacity at the request of the Corporation.
Section VIII.6. Reliance. Persons who after the date of the adoption of this provision become or remain directors or officers of the Corporation or who, while a director or officer of the Corporation, become or remain a director, officer, employee or agent of a subsidiary, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this ARTICLE VIII in entering into or continuing such service. The rights to indemnification and to the advance of expenses conferred in this ARTICLE VIII shall apply to claims made against an indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof.
Section VIII.7. Non-Exclusivity of Rights. The rights to indemnification and to the advance of expenses conferred in this ARTICLE VIII shall not be exclusive of any other right which any person may have or hereafter acquire under this Amended and Restated Certificate of Incorporation or under any statute, Bylaw, agreement, vote of stockholders or disinterested directors or otherwise.
Section VIII.8. Merger or Consolidation. For purposes of this ARTICLE VIII, references to "the Corporation" shall include any constituent corporation (including any constituent of a constituent) absorbed into the Corporation in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, and employees or agents, so that any person who is or was a director, officer, employee or agent of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, shall stand in the same position under this ARTICLE VIII with respect to the resulting or surviving corporation as he or she would have with respect to such constituent corporation if its separate existence had continued.
ARTICLE IX
Alien Ownership of Stock
Section IX.1. Applicability. This ARTICLE IX shall be applicable to the Corporation so long as the provisions of Section 310 of the Communications Act of 1934, as the same may be amended from time to time (the "Communications Act") (or any successor, provisions thereto) are applicable to the Corporation. As used herein, the term "alien" shall have the meaning ascribed
thereto by the Federal Communications Commission ("FCC") on the date hereof and in the future as Congress or the FCC may change such meaning form time to time. If the provisions of Section 310 of the Communications Act (or any successor provisions thereto) are amended, the restrictions in this ARTICLE IX shall be amended in the same way, and as so amended, shall apply to the Corporation. The Board of Directors of the Corporation may make such rules and regulations as it shall deem necessary or appropriate to enforce the provisions of this ARTICLE IX.
Section IX.2. Voting. Except as otherwise provided by law, not more than twenty percent of the aggregate number of shares of Capital Stock of the Corporation outstanding in any class or series entitled to vote on any matter before a meeting of stockholders of the Corporation shall at any time be for the account of aliens or their representatives or for the account of a foreign government or representative thereof, or for the account of any corporation organized under the laws of a foreign country.
Section IX.3. Stock Certificates. Shares of Capital Stock issued to or held by or for the account of aliens and their representatives, foreign governments and representatives thereof, and corporations organized under the laws of foreign countries shall be represented by Foreign Share Certificates. All other shares of Capital Stock shall be represented by Domestic Share Certificates. All of such certificates shall be in such form not inconsistent with this Amended and Restated Certificate of Incorporation as shall be prepared or approved by the Board of Directors of the Corporation.
Section IX.4. Limitation on Foreign Ownership. Except as otherwise provided by law, not more than twenty percent of the aggregate number of shares of Capital Stock of the Corporation outstanding shall at any time be owned of record by or for the account of aliens or their representatives or by or for the account of a foreign government or representatives thereof, or by or for the account of any corporation organized under the laws of a foreign country. Shares of Capital Stock shall not be transferable on the books of the Corporation to aliens or their representatives, foreign governments or representatives thereof, or corporations organized under the laws of foreign countries if, as a result of such transfer, the aggregate number of shares of Capital Stock owned by or for the account of aliens and their representatives, foreign governments and representatives thereof, and corporations organized under the laws of foreign countries shall be more than twenty percent of the number of shares of Capital Stock then outstanding. If it shall be found by the Corporation that Capital Stock represented by a Domestic Share Certificate is, in fact, held by or for the account of aliens or their representative, foreign governments or representatives thereof, or corporations organized under the laws of foreign countries, then such Domestic Share Certificate shall be canceled and a new certificate representing such Capital Stock marked "Foreign Share Certificate" shall be issued in lieu thereof, but only to the extent that after such issuance the Corporation shall be in compliance with this ARTICLE IX; provided, however, that if, and to the extent, such issuance would violate this ARTICLE IX, then, the holder of such Capital Stock shall not be entitled to vote, to receive dividends, or to have any other rights with regard to such Capital Stock to such extent, except the right to transfer such Capital Stock to a citizen of the United States.
Section IX.5. Transfer of Foreign Share Certificates. Any Capital Stock represented by Foreign Share Certificates may be transferred either to aliens or non-aliens. In the event that any Capital Stock represented by a certificate marked "Foreign Share Certificate" is sold or transferred to a non-alien, then such non-alien shall be required to exchange such certificate for a certificate
marked "Domestic Share Certificate." If the Board of Directors of the Corporation reasonably determines that a Domestic Share Certificate has been or is to be transferred to or for the account of aliens or their representatives, foreign governments or representatives thereof, or corporations organized under the laws of foreign countries, the Corporation shall issue a new certificate for the shares of Capital Stock transferred to the transferee marked "Foreign Shares Certificate," cancel the old Domestic Share Certificate, and record the transaction upon its books, but only to the extent that after such transfer is complete, the Corporation shall be in compliance with this ARTICLE IX.
Notwithstanding any other provision of this Amended and Restated Certificate of Incorporation, the transfer or conversion of the Corporation's Capital Stock, whether voluntary or involuntary, shall not be permitted, and shall be ineffective, if such transfer or conversion would (i) violate (or would result in violation of) the Communications Act or any of the rules or regulation promulgated thereunder or (ii) require the prior approval of the FCC, unless such prior approval has been obtained.
ARTICLE X
Section 203 Election
The Corporation expressly elects not to be governed by Section 203 of Title 8 of the DGCL.
IN WITNESS WHEREOF, said Radio One, Inc. has caused its corporate seal to be hereunto affixed and this Amended and Restated Certificate of Incorporation to be signed by Alfred C. Liggins, III, its President, and attested to by Scott R. Royster, one of its Vice Presidents, this _____ day of May, 2000.
RADIO ONE, INC.
[SEAL]
ATTEST:
Scott R. Royster, Vice President
Exhibit 10.58
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of March 11, 2000, among the company or companies designated as Seller on the signature page hereto (collectively, "Seller") and the company or companies designated as Buyer on the signature page hereto (collectively, "Buyer").
A. Seller owns and operates the following radio broadcast stations (collectively, the "Stations" and each a "Station") pursuant to certain authorizations issued by the Federal Communications Commission (the "FCC"):
KMJQ(FM), Houston, Texas
KBXX(FM), Houston, Texas
WVCG (AM), Coral Gables, Florida
WZAK(FM), Cleveland, Ohio
WJMO(AM), Cleveland Heights, Ohio
KKBT(FM), Los Angeles (excluding the FCC licenses, transmitter/antenna equipment
and transmitter/tower site)
KCMG(FM), Los Angeles (FCC licenses (excluding call letters),
transmitter/antenna equipment and transmitter/tower site only to be conveyed to
Buyer)
KBFB(FM), Dallas, Texas
WJMZ-FM, Anderson, South Carolina
WFXC-FM, Durham, North Carolina
WFXK-FM, Tarboro, North Carolina
WNNL-FM, Farquay-Varina, North Carolina
WQOK-FM, South Boston, Virginia
The definition of "Stations" with respect to KKBT(FM) does not refer to the FCC licenses, transmitter/antenna equipment and transmitter/tower site, and with respect to KCMG(FM) refers only to the FCC licenses (excluding call letters), transmitter/antenna equipment and transmitter/tower site.
B. Subject to the terms and conditions set forth herein, Buyer desires to acquire the Station Assets (defined below).
C. Clear Channel Communications, Inc. and AMFM Inc. (Seller's parents) and CCU Merger Sub, Inc. are parties to an Agreement and Plan of Merger dated October 2, 1999 (the "AMFM Agreement").
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows
(d) all of Seller's rights in and to the Stations' call letters and Seller's rights in
(e) Seller's rights in and to all the files, documents, records,
and books of account (or copies thereof) relating exclusively to the operation
of the Stations, including the Stations' local public files, programming
information and studies, blueprints, technical information and engineering data,
advertising studies, marketing and demographic data, sales correspondence, lists
of advertisers, credit and sales reports, and logs, but excluding records
relating to Excluded Assets (defined below), and access to records described in
Section 1.2(e) that pertain to the Stations; and
(a) all cash and cash equivalents of Seller, including without limitation certificates of deposit, commercial paper, treasury bills, marketable securities, asset or money market accounts and all such similar accounts or investments;
(b) all accounts receivable or notes receivable arising in the operation of the Stations prior to Closing;
(c) all tangible and intangible personal property of Seller disposed of or consumed in the ordinary course of business and consistent with past practices of Seller between the date of this Agreement and Closing;
(d) all Station Contracts that terminate or expire prior to Closing in the ordinary course of business of Seller, except which Seller is required to extend pursuant to
Section 9.1(g);
(e) Seller's name, corporate minute books, charter documents, corporate stock record books and such other books and records as pertain to the organization, existence or share capitalization of Seller, duplicate copies of the records of the Stations, and all records not relating exclusively to the operation of the Stations;
(f) contracts of insurance, and all insurance proceeds or claims
made thereunder except to the extent such proceeds are paid to Buyer pursuant to
Section 17.1;
(g) except as provided in Section 10.4, all pension, profit sharing or cash or deferred (Section 401(k)) plans and trusts and the assets thereof and any other employee benefit plan or arrangement and the assets thereof, if any, maintained by Seller;
(i) all of Seller's right, title and interest in and to the call letters KCMG-FM and all intellectual property currently used in the operation of KCMG-FM by Seller;
(j) all of Seller's right, title and interest in and to the KKBT tower and/or transmitter site; and
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hereto.
1.4. KKBT Intellectual Property. At Closing, Buyer and Seller to enter
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of Seller (the "Assumed Obligations") arising after Closing under the Station Contracts, including without limitation all agreements for the sale of advertising time on the Stations for cash at commercially reasonable rates in the ordinary course of business ("Time Sales Agreements") and all agreements for the sale of advertising time on the Stations for non-cash consideration ("Trade Agreements").
become due under Station Contracts, rents, lease payments and similar prepaid
and deferred items. Real estate taxes shall be apportioned on the basis of taxes
assessed for the preceding year, with a reapportionment, if any, as soon as the
new tax rate and valuation can be ascertained. Except as otherwise provided
herein, the prorations and adjustments contemplated by this Section 3.3, to the
extent practicable, shall be made on the Closing Date. As to those prorations
and adjustments not capable of being ascertained on the Closing Date, an
adjustment and proration shall be made within ninety (90) calendar days of the
Closing Date. In the event of any disputes between the parties as to such
adjustments, the amounts not in dispute shall nonetheless be paid at the time
provided herein and such disputes shall be conclusively determined within thirty
(30) days thereafter by an independent certified public accountant mutually
acceptable to the parties, and the fees and expenses of such accountant shall be
paid one-half by Seller and one-half by Buyer.
Closing is subject to and conditioned upon (i) prior FCC consent (the "FCC Consent") to
the assignment of the FCC Licenses to Buyer, (ii) United States Department of Justice ("DOJ") prior approval (the "DOJ Consent") of the transactions contemplated hereby, including without limitation any such approval as may be necessary to enable Seller to consummate the merger under the AMFM Agreement, and (iii) expiration or termination of any applicable waiting period ("HSR Clearance") under the HSR Act (defined below).
Buyer hereby makes the following representations and warranties to Seller:
necessary action of Buyer and do not require any further authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Seller makes the following representations and warranties to Buyer:
to be executed and delivered by Seller pursuant hereto (collectively, the "Seller Ancillary Agreements"), to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof.
or propriety of the transactions contemplated by this Agreement. To Seller's knowledge, there are no governmental claims or investigations pending or threatened against Seller in respect of the Stations (except those affecting the industry generally).
Accounts Receivable that are paid directly to Seller shall be retained by Seller, with notice to Buyer. Within twenty calendar days after the end of each month, Buyer shall make a payment to Seller equal to the amount of all collections of Accounts Receivable during the preceding month less any commissions owing and paid to salespersons or agencies for ads to which such Accounts Receivable related. At the end of the Collection Period, any remaining Accounts Receivable shall be returned to Seller for collection.
(a) operate the Stations in the ordinary course of business consistent with past practice and in compliance with Section 1.1(c) with respect to the Station Contracts, and in all material respects in accordance with FCC rules and regulations, in compliance with the Communications Act, and with all other applicable laws, regulations, rules and orders;
(b) not, other than in the ordinary course of business in accordance with past practice, sell, lease or dispose of or agree to sell, lease or dispose of any of the Station Assets, or create, assume or permit to exist any Liens upon the Station Assets, except for Permitted Liens, or apply for material modification of any FCC Licenses;
(c) furnish Buyer with such information relating to the Station Assets as Buyer may reasonably request, and permit Buyer's on-site access to the Station Assets with Seller's prior approval after the FCC Application is filed, including access to conduct any environmental assessment or survey of the real property, at Buyer's expense and provided such request and on-site visits do not interfere unreasonably with the business of the Stations;
(d) give or cause the Stations to give Buyer and Buyer's accountants, at Buyer's expense, and reasonable request and upon reasonable notice, full and reasonable access during normal business hours to Seller's financial records that Buyer may reasonably request. The rights of Buyer under this Section shall not be exercised in such a manner as to interfere unreasonably with the business of the Stations. Any investigation by Buyer in accordance with the foregoing shall not diminish or negate, in any way, any of the representations or warranties of Seller set forth in this Agreement or in connection herewith;
(e) cooperate, and use its reasonable best efforts to cause its independent auditors to reasonably cooperate, with Buyer in order to enable Buyer to have independent auditors selected by Buyer, and at Buyer's expense, prepare audited financial statements for the Stations for the three (3) most recently completed fiscal year-ends and any quarter and related year to date period during the current fiscal year. Without limiting the generality of the foregoing, Seller agrees that it will: (i) consent to the use of and execute documents in support of such audited financial statements in any registration statement or other document filed by Buyer
under Securities Act of 1933 and the Securities and Exchange Act of 1934 or any document relating to a private placement of Buyer's securities;
(f) upon the written request of Buyer, promptly send notices of non-renewal or early termination in respect of any Station Contract in which such notice would not constitute a breach of such Station Contract; and
(g) exercise any rights it has to renew the terms of the KBFB tower/transmitter lease, the KCMG tower/transmitter lease and the KCMG translator lease as identified on Schedule 1.1(f).
Buyer and Seller hereby covenant and agree that between the date hereof and Closing:
Stations' signals are broadcast twelve (12) months after the Closing Date, except to the extent that written notice of such indemnification claim is given by Buyer to Seller within the twelve month time period.
(a) Prior to Closing, Seller shall deliver to Buyer a list of: (i) all of the employees who work exclusively for the Stations including all employees as of the date of this Agreement, and (ii) pro rata distribution of certain "shared" employees selected by Seller. Buyer may interview and elect to hire such listed employees. Buyer is obligated to hire only those employees that are under employment contracts (and assume Seller's obligations and liabilities under such employment contracts) which are included in the Station Contracts. With respect to employees hired by Buyer ("Transferred Employees"), to the extent permitted by law, Seller shall provide Buyer access to its personnel records and such other information as Buyer may reasonably request prior to Closing and transfer such records to Buyer at Closing. With respect to such hired employees, Seller shall be responsible for the payment of all compensation and accrued employee benefits payable by it until Closing and thereafter Buyer shall be responsible for all such obligations payable by it. Buyer shall cause all employees it hires to be eligible to participate in its "employee welfare benefit plans" and "employee pension benefit plans" (as defined in Section 3(1) and 3(2) of ERISA, respectively) in which similarly situated employees are generally eligible to participate; provided, however, that all such employees and their spouses and dependents shall be eligible for coverage immediately after Closing (and shall not be excluded from coverage on account of any pre- existing condition) to the extent permitted under such plans. For purposes of any length of service requirements, waiting periods or vesting periods based on length of service in any such plan for which such employees may be eligible after Closing, Buyer shall ensure that service with Seller shall be deemed to have been service with the Buyer. In addition, Buyer shall ensure that each such employee receives credit under any insured or self-insured plan of Buyer for any deductibles or co-payments paid by such employees and dependents for the current plan year under a plan maintained by Seller to the extent permitted by such plans. Notwithstanding any other provision contained herein, Buyer shall grant credit to each such employee for all unused sick leave accrued as of Closing as an employee of Seller. Buyer shall receive a credit at Closing for the payment of all unused vacation leave accrued by such employees as of Closing.
(b) At such time as the Seller can represent to the Buyer as to the tax-qualified status of the 401(k) savings plan(s) (as to form and operation) in which Transferred Employees retain account balances with the Seller or its subsidiaries (the "Saving Plan(s)") and furnish to Buyer a favorable Internal Revenue Service determination letter as to the tax-qualified status of such Savings Plan(s) under Section 401(a) of the Code (or an opinion of counsel that the form of the Savings Plan(s) is so qualified), Buyer and Seller to negotiate in good faith to enter into a 401(k) plan asset transfer agreement pursuant to which Buyer's existing 401(k) plan shall accept a transfer of assets from Seller's Savings Plan(s)attributable to the accounts of Transferred Employees provided that if the Savings Plan(s) have protected benefits under (S)411(d)(6) of the
Code which are inconsistent with Buyer's existing 401(k) saving plan(s), then, in its sole discretion, Buyer need not agree to such transfer.
(c) Following execution of the agreement contemplated in clause (b)
above, Seller shall cause to be transferred from the Savings Plan(s) to the plan
covering the Savings Plan Employees (the "Transferee Savings Plan") the
liability for the account balances of the Savings Plan Employees (including
outstanding loan balances of Savings Plan Employees), together with cash or
other mutually acceptable property, the value of which on such transfer date is
equal to such liability, and Buyer shall cause the Transferee Savings Plan to
accept such transfer, all in accordance with the rules and regulations under
Section 414(l) of the Code.
(d) Pending completion of the transfers described in this Section, Seller and Buyer shall make arrangements for distributions, if any, to the Savings Plan Employees from the Savings Plan(s). Seller and Buyer shall provide each other with access to information reasonably necessary in order to carry out the provisions of this paragraph. In addition, until the asset transfer is effectuated, Buyer shall cooperate with the reasonable requests of Seller to continue to withhold established loan payments from the pay checks of Transferred Employees' who have outstanding loan balances in the Savings Plan(s) and Buyer shall remit such withheld amounts to the Seller in a timely fashion such that the outstanding loans do not go into default.
The obligations of Buyer hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions:
The obligations of Seller hereunder are, at its option, subject to satisfaction, at or prior to Closing, of each of the following conditions:
of Buyer made in this Agreement shall be true and correct in all material respects as of the Closing Date except for changes permitted or contemplated by the terms of this Agreement, and the covenants and agreements to be complied with and performed by Buyer at or prior to Closing shall have been complied with or performed in all material respects. Seller shall have received a certificate dated as of the Closing Date from Buyer, executed by an authorized officer of Buyer, to the effect that the conditions set forth in this Section have been satisfied.
(i) certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby;
(ii) the certificate described in Section 11.1;
(iii) such bills of sale, assignments, special warranty deeds, documents of title and other instruments of conveyance, assignment and transfer as may be necessary to convey, transfer and assign the Station Assets to Buyer, free and clear of Liens, except for Permitted Liens;
(v) a written opinion of AMFM Operating, Inc., AMFM Ohio, Inc., AMFM Houston, Zebra Broadcasting Corporation, AMFM Radio Licenses, LLC, Cleveland Radio
(vi) the leases described in Section 1.3.
(i) the certified copies of resolutions authorizing its execution, delivery and performance of this Agreement, including the consummation of the transactions contemplated hereby;
(ii) the certificate described in Section 12.1; and
(iii) such documents and instruments of assumption as may be necessary to assume the Assumed Obligations, and the Purchase Price in accordance with Section 3.1 hereof.
(a) From and after the Closing, Seller shall defend, indemnify and
hold harmless Buyer from and against any and all losses, costs, damages,
liabilities and expenses, including reasonable attorneys' fees and expenses
("Damages") incurred by Buyer arising out of or resulting from: (i) any breach
or default by Seller under this Agreement; (ii) the Retained Obligations; or
(iii) the business or operation of the Stations before Closing; provided,
however, that (i) Seller shall have no liability to Buyer hereunder until, and
only to the extent that, Buyer's aggregate Damages exceed $500,000 and (ii) the
maximum liability of Seller hereunder shall be $25,000,000, except that such
limitations in (i) and (ii) shall not apply to Seller's obligations under
Section 10.3 with respect to consent to assignment for the transmitter site
leases or Section 7.5 with respect to tax payments and liens.
(b) From and after the Closing, Buyer shall defend, indemnify and hold
harmless Seller from and against any and all Damages incurred by Seller arising out of or resulting from: (i) any breach or default by Buyer under this Agreement; (ii) the Assumed Obligations; or (iii) the business or operation of the Stations after Closing provided, however, that Buyer shall have no liability to Seller hereunder until, and only to the extent that, Seller's aggregate Damages exceed $500,000 and (ii) the maximum liability of Buyer hereunder shall be $25,000,000.
(a) The indemnifying party shall have the right to undertake, by
counsel or other representatives of its own choosing, the defense or opposition
to such Claim, except with respect to any Claim brought by Buyer pursuant to
Section 10.3 above which Buyer shall have the right to undertake, by counsel or
other representatives of its own choosing, the defense or opposition to such
Claim at its own expense.
(b) In the event that the indemnifying party shall elect not to undertake such defense or opposition, or, within twenty (20) days after written notice (which shall include sufficient description of background information explaining the basis for such Claim) of any such Claim from the indemnified party, the indemnifying party shall fail to undertake to defend or oppose, the indemnified party (upon further written notice to the indemnifying party) shall have the right to undertake the defense, opposition, compromise or settlement of such Claim, by counsel or other representatives of its own choosing, on behalf of and for the account and risk of the indemnifying party (subject to the right of the indemnifying party to assume defense of or opposition to such Claim at any time prior to settlement, compromise or final determination thereof).
(c) Anything herein to the contrary notwithstanding and except as
set forth in the exception of 15.3(a) above: (i) the indemnified party shall
have the right, at its own cost and expense, to participate in the defense,
opposition, compromise or settlement of the Claim; (ii) the indemnifying party
shall not, without the indemnified party's written consent, settle or compromise
any Claim or consent to entry of any judgment which does not include as an
unconditional term thereof the giving by the claimant or the plaintiff to the
indemnified party of a release from all liability in respect of such Claim; and
(iii) in the event that the indemnifying party undertakes defense of or
opposition to any Claim, the indemnified party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to
consult with the indemnifying party and its counsel or other representatives concerning such Claim and the indemnifying party and the indemnified party and their respective counsel or other representatives shall cooperate in good faith with respect to such Claim.
(d) All claims not disputed shall be paid by the indemnifying party within thirty (30) days after receiving notice of the Claim. "Disputed Claims" shall mean claims for Damages by an indemnified party which the indemnifying party objects to in writing within thirty (30) days after receiving notice of the Claim. In the event there is a Disputed Claim with respect to any Damages, the indemnifying party shall be required to pay the indemnified party the amount of such Damages for which the indemnifying party has, pursuant to a final determination, been found liable within ten (10) days after there is a final determination with respect to such Disputed Claim. A final determination of a Disputed Claim shall be (i) a judgment of any court determining the validity of a Disputed Claim, if no appeal is pending from such judgment and if the time to appeal therefrom has elapsed; (ii) an award of any arbitration determining the validity of such disputed claim, if there is not pending any motion to set aside such award and if the time within which to move to set aside such award has elapsed; (iii) a written termination of the dispute with respect to such claim signed by the parties thereto or their attorneys; (iv) a written acknowledgment of the indemnifying party that it no longer disputes the validity of such claim; or (v) such other evidence of final determination of a disputed claim as shall be acceptable to the parties. No undertaking of defense or opposition to a Claim shall be construed as an acknowledgment by such party that it is liable to the party claiming indemnification with respect to the Claim at issue or other similar Claims.
(a) by mutual written consent of Buyer and Seller;
(b) by written notice of Buyer to Seller if Seller (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below);
(c) by written notice of Seller to Buyer if Buyer (i) does not satisfy the conditions or perform the obligations to be satisfied or performed by it on the Closing Date; or (ii) otherwise breaches in any material respect any of its representations or warranties or defaults in any material respect in the performance of any of its covenants or agreements herein contained and such breach or default is not cured within the Cure Period (defined below);
(d) by written notice of Buyer to Seller, or by Seller to Buyer, if the FCC
denies the FCC Application;
(e) by written notice of Seller to Buyer if the Closing shall not have been consummated on or before the date four months after the date of this Agreement; (j)
(f) by written notice of Seller to Buyer if the AMFM Agreement is terminated or expires; or
(g) by written notice of Buyer to Seller or Seller to Buyer if the Closing is not consummated on or before the date thirteen months after the date of this Agreement.
The term "Cure Period" as used herein means a period commencing the date
Buyer or Seller receives from the other written notice of breach or default
hereunder and continuing until the earlier of (i) thirty (30) days thereafter or
(ii) the Closing Date; provided, however, that if the breach or default cannot
reasonably be cured within such period but can be cured before the Closing Date,
and if diligent efforts to cure promptly commence, then the Cure Period shall
continue as long as such diligent efforts to cure continue, but not beyond the
Closing Date. Except as set forth below, the termination of this Agreement shall
not relieve any party of any liability for breach or default under this
Agreement prior to the date of termination. Notwithstanding anything contained
herein to the contrary, Section 13.1 shall survive any termination of this
Agreement.
liquidated damages amount represents Buyer's and Seller's reasonable estimate of actual damages and does not constitute a penalty.
(a) After the Closing, Seller shall from time to time, at the request of and without further cost or expense to Buyer, execute and deliver such other instruments of conveyance and transfer and take such other actions as may reasonably be requested in order to more effectively consummate the transactions contemplated hereby to vest in Buyer good title to the Station Assets, and Seller shall cooperate with Buyer and cause its independent accountant to cooperate, at Buyer's expense, to assist Buyer with its reporting requirements to governmental agencies, and Buyer shall from time to time, at the request of and without further cost or expense to Seller, execute and deliver such other instruments and take such other actions as may reasonably be requested in order to more effectively to relieve Seller of any obligations being assumed by Buyer hereunder.
(b) Following the Closing, Buyer and Seller shall cooperate with each other in the event and for so long as any party is actively contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim or demand in connection with this Agreement or any transaction contemplated under the Agreement all at the sole cost of the contesting or defending party (unless the contesting party or defending party is entitled to indemnification therefor under Article 15 above).
Seller. With respect to any permitted assignment, the parties shall take all such actions as are reasonably necessary to effectuate such assignment, including but not limited to cooperating in any appropriate filings with the FCC or other governmental authorities. All covenants, agreements, statements, representations, warranties and indemnities in this Agreement by and on behalf of any of the parties hereto shall bind (except under a Collateral Assignment) and inure to the benefit of their respective successors and permitted assigns of the parties hereto.
if to Seller: c/o Clear Channel Broadcasting, Inc.
200 Concord Plaza, Suite 600
San Antonio, Texas 78216
Attention: President
Facsimile: (210) 822-2299
with a copy (which shall not
constitute notice) to: Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: John J. Kropp, Esq.
Facsimile: (513) 651-3836
if to Buyer: Radio One, Inc.
5900 Princess Garden Parkway - 8/th/ Floor
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Lanham, MD 20706
Attention: Alfred C. Liggins
Facsimile: (301) 306-9694
with a copy (which shall not
constitute notice) to: Radio One, Inc.
5900 Princess Garden Parkway - 8/th/ Floor
Lanham, MD 20706
Attention: Linda J. Eckard, Esq.
Facsimile: (301) 306-9638
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, DC 20005
Attention: Terrance L. Bessey, Esq.
Facsimile: (202) 879-5200
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[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
SELLER: CLEAR CHANNEL BROADCASTING, INC.
By: /s/ Jerome L. Kerstine
------------------------------------
Name: Jerome L. Kerstine
-----------------------------
Title: SVP
-----------------------------
CLEAR CHANNEL BROADCASTING LICENSES, INC.
By: /s/ Jerome L. Kerstine
------------------------------------
Name: Jerome L. Kerstine
-----------------------------
Title: SVP
-----------------------------
AMFM OPERATING, INC.
By: ____________________________________
Name: _____________________________
Title: _____________________________
AMFM OHIO, INC.
By: ____________________________________
Name: _____________________________
Title: _____________________________
AMFM HOUSTON, INC.
By: ____________________________________
Name: _____________________________
Title: _____________________________
AMFM RADIO LICENSES, LLC
By: ____________________________________
Name: _____________________________
Title: _____________________________
ZEBRA BROADCASTING CORPORATION
By: ____________________________________
Name: _____________________________
Title: _____________________________
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above.
SELLER: CLEAR CHANNEL BROADCASTING, INC.
By: ____________________________________
Name: _____________________________
Title: _____________________________
CLEAR CHANNEL BROADCASTING LICENSES, INC.
By: ____________________________________
Name: _____________________________
Title: _____________________________
AMFM OPERATING, INC.
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
AMFM OHIO, INC.
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
AMFM HOUSTON, INC.
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
AMFM RADIO LICENSES, LLC
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
ZEBRA BROADCASTING CORPORATION
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
CLEVELAND RADIO LICENSE, LLC
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name:
Title: _____________________________
CAPSTAR TX LIMITED PARTNERSHIP
By: /s/ William S. Banowsky, Jr.
------------------------------------
Name: William S. Banowsky, Jr.
-----------------------------
Title: Executive Vice President
-----------------------------
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BUYER: RADIO ONE, INC.
By: /s/ Alfred C. Liggins
-----------------------------
Name: Alfred C. Liggins
----------------------
Title: President
----------------------
|
Schedules --------- 1.1(a) - FCC Licenses 1.1(b) - Tangible Personal Property 1.1(c) - Station Contracts 1.1(d) - Intangible Property 1.1(f) - Real Property 1.2(h) - Excluded Assets Exhibit A Tower Lease Exhibit A-1 WZAK Tower Lease Exhibit A-2 Studio Lease Exhibit B Clear Channel Opinion Letter Exhibit C Escrow Agreement Exhibit D AMFM Opinion Letter |
Exhibit 10.59
By and Among
Davis Broadcasting, Inc.
Gregory A. Davis
and
Radio One, Inc.
March 11, 2000
Recitals............................................................................ 1
Agreement........................................................................... 2
ARTICLE 1: THE MERGERS......................................................... 2
1.1 The Mergers........................................................... 2
1.2 Effective Time........................................................ 2
1.3 Effect of the Mergers................................................. 2
1.4 Certificates of Incorporation and of Formation and Company Agreement.. 2
1.5 Managers, Members, Directors and Officers............................. 3
1.6 Stock................................................................. 3
1.7 Merger Consideration.................................................. 3
1.8 Post-Closing Escrow................................................... 4
1.9 Deposit............................................................... 4
1.10 Adjustment............................................................ 5
1.11 Closing............................................................... 5
1.12 FCC Applications...................................................... 6
1.13 Hart-Scott-Rodino..................................................... 6
1.14 Employment Agreement.................................................. 6
1.15 Preclosing Reorganizations............................................ 6
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ARTICLE 2: COMPANY REPRESENTATIONS AND WARRANTIES.............................. 6
2.1 Organization.......................................................... 6
2.2 Capitalization........................................................ 7
2.3 Subsidiaries and Investments.......................................... 7
2.4 Books and Records..................................................... 7
2.5 Authority............................................................. 7
2.6 No Conflicts.......................................................... 7
2.7 Financial Statements.................................................. 8
2.8 Tax Matters........................................................... 9
2.9 Assets................................................................ 10
2.10 FCC Authorizations................................................... 10
2.11 Personal Property.................................................... 11
2.12 Real Property........................................................ 11
2.13 Contracts............................................................ 12
2.14 Intangible Property.................................................. 12
2.15 Employees............................................................ 12
2.16 Employee Benefit Matters............................................. 13
2.17 Compliance with Law; Litigation...................................... 13
2.18 Insurance............................................................ 13
2.19 Environmental........................................................ 13
2.20 Affiliates........................................................... 14
2.21 Guaranties, Indemnities, Etc......................................... 14
2.22 No Finder............................................................ 14
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2.23 Powers of Attorney.................................................. 14
2.24 Year 2000 Compliance................................................ 14
2.25 Disclosure.......................................................... 14
ARTICLE 3: MAJORITY SHAREHOLDER REPRESENTATIONS AND WARRANTIES................ 14
3.1 Authority............................................................ 14
3.2 Binding Effect....................................................... 15
3.3 No Conflicts......................................................... 15
ARTICLE 4: RADIO ONE REPRESENTATIONS AND WARRANTIES........................... 15
4.1 Organization......................................................... 15
4.2 Authority............................................................ 15
4.3 No Conflicts......................................................... 15
4.4 No Finder............................................................ 16
4.5 Qualification........................................................ 16
4.6 Reorganizations...................................................... 16
ARTICLE 5: COVENANTS OF COMPANY AND THE SHAREHOLDERS.......................... 16
5.1 Operation of the Business............................................ 16
5.2 Reports.............................................................. 17
5.3 Access............................................................... 17
5.4 Confidentiality...................................................... 18
5.5 Consents............................................................. 18
5.6 Estoppel Certificates; Title Insurance; Liens........................ 18
5.7 Environmental........................................................ 18
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5.8 Employment Matters................................................... 19
5.9 Exclusive Dealing.................................................... 19
5.10 Shareholders' Approval.............................................. 19
5.11 Inter-Davis Companies Debt.......................................... 19
5.12 Cancellation of Subordinated Lenders' Conversion, Purchase Option
and Put Rights Agreement............................................ 19
5.13 Qualification....................................................... 20
5.14 FCC Compliance...................................................... 20
5.15 Bank Accounts....................................................... 20
ARTICLE 6: ADDITIONAL COVENANTS............................................... 20
6.1 Representations and Warranties....................................... 20
6.2 Notice of Proceedings................................................ 20
ARTICLE 7: SHAREHOLDERS CONDITIONS............................................ 20
7.1 Representations, Warranties and Covenants............................ 20
7.2 Proceedings.......................................................... 21
7.3 FCC Consent.......................................................... 21
7.4 Hart-Scott-Rodino.................................................... 21
7.5 Deliveries........................................................... 21
7.6 Columbus Sub......................................................... 21
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ARTICLE 8: RADIO ONE CONDITIONS........................................... 21
8.1 Representations, Warranties and Covenants........................ 21
8.2 Proceedings...................................................... 21
8.3 FCC Consent...................................................... 21
8.4 Hart-Scott-Rodino................................................ 21
8.5 Deliveries....................................................... 21
8.6 Required Consents................................................ 22
8.7 Material Adverse Change.......................................... 22
8.8 Title Commitments................................................ 22
8.9 Surveys.......................................................... 22
8.10 Estoppel Certificates........................................... 22
8.11 Environmental................................................... 22
8.12 Net Operating Losses............................................ 22
8.13 Subordinated Lenders' Conversion Rights......................... 22
8.14 Inter-Company Debt.............................................. 22
8.15 Shareholders' Approval.......................................... 22
8.16 Liens........................................................... 22
ARTICLE 9: ITEMS TO BE DELIVERED AT THE CLOSING........................... 23
9.1 Deliveries by the Company and the Shareholders................... 23
9.2 Deliveries by Radio One.......................................... 24
9.3 Satisfaction of Davis Companies Indebtedness for Long Term Debt.. 24
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ARTICLE 10: SURVIVAL; RELEASE; INDEMNIFICATION............................ 24
10.1 Survival; Release............................................... 24
10.2 Indemnification................................................. 24
10.3 Deficiencies.................................................... 25
10.4 Exceptions...................................................... 26
10.5 Procedures...................................................... 26
(a) Third Party Claims.......................................... 26
(b) Direct Claims............................................... 26
10.6 Payment......................................................... 26
10.7 Legal Expenses.................................................. 27
10.8 Sole Remedy..................................................... 27
ARTICLE 11: MISCELLANEOUS................................................ 27
11.1 Termination..................................................... 27
11.2 Specific Performance............................................ 27
11.3 Expenses........................................................ 28
11.4 Further Assurances.............................................. 28
11.5 Broadcast Transmission Interruption............................. 28
11.6 Risk of Loss.................................................... 28
11.7 Cooperation..................................................... 29
11.8 Tax Matters..................................................... 29
ARTICLE 12: GENERAL PROVISIONS........................................... 30
12.1 Successors and Assigns.......................................... 30
12.2 Amendments; Waivers............................................. 30
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12.3 Notices......................................................... 30 12.4 Captions........................................................ 31 12.5 Governing Law................................................... 31 12.6 Entire Agreement................................................ 31 12.7 Counterparts.................................................... 31 |
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of March 11, 2000 among Davis Broadcasting, Inc., a Delaware corporation (the "Company"), Gregory A. Davis (the "Majority Shareholder"), and Radio One, Inc., a Delaware corporation ("Radio One").
The Station Subs own and operate the following radio broadcast stations (the "Davis Stations") pursuant to certain licenses, permits and authorizations issued by the Federal Communications Commission (the "FCC"):
DBC: WCCJ(FM), Harrisburg, North Carolina
DBA: WFXA-FM, Augusta, Georgia
WTHB(AM), Augusta, Georgia
WAKB(FM), Wrens, Georgia
DBE: WAEG(FM), Evans, Georgia
WAEJ(FM), Waynsboro, Georgia
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The Company also owns all of the issued and outstanding shares of capital stock of Davis Broadcasting, Inc. of Columbus, a Delaware corporation (the "Columbus Sub"). The Columbus Sub owns and operates the following radio broadcast station and the Company owns and operates the following Columbus radio broadcast stations (the "Columbus Stations") pursuant to licenses, permits and authorizations issued by the FCC:
Company: WFXE(FM), Columbus, Georgia
WOKS(AM), Columbus, Georgia
Columbus Sub: WKZJ(FM), Greenville, Georgia
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The parties have determined that it is in their respective best interests to merge the Company with and into a limited liability company to be formed ("Radio One of Charlotte, LLC"), which will be a subsidiary of a new corporation to be formed ("NewCo"), which NewCo just prior to the Merger of the Company into Radio One of Charlotte, LLC, will be a wholly-owned subsidiary of the Company. On the day following the merger of the Company with and into Radio One of Charlotte, LLC, NewCo will be merged with and into Radio One, all in accordance with the Delaware Limited Liability Company Act and the Delaware General Corporation Law (the "Delaware Laws") on the terms and conditions of this Agreement. The parties have, or their respective boards of directors have, approved such mergers (the "Mergers").
The parties intend that the Mergers shall constitute a reorganization under Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code"), and the respective boards of directors have adopted this Agreement as a plan of reorganization under the treasury regulations.
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:
(a) As of the Effective Time of the Company/LLC Merger, the Certificate of Formation of Radio One of Charlotte, LLC, as in effect immediately prior to the Effective Time, shall be the Certificate of Formation of the Surviving Company, until thereafter amended as provided by law and such Certificate of Formation. As of the Effective Time of the Company/LLC Merger, the limited liability company agreement of Radio One of Charlotte, LLC, as in effect immediately prior to the Effective Time, shall be the limited liability company agreement of the Surviving Company, until thereafter amended as provided by law, the Certificate of Formation of Radio One of Charlotte, LLC, and such limited liability company agreement.
(b) As of the Effective Time of the NewCo/ROI Merger, the Certificate of Incorporation of Radio One, as in effect immediately prior to the Effective Time shall be the Certificate of Incorporation of the Surviving Company, until thereafter amended as provided by law and such Certificate of Incorporation. As of the Effective Time of the NewCo/ROI Merger, the by-laws of Radio One, as in effect immediately prior to the Effective Time, shall be the by-laws of the Surviving Company, until thereafter amended as provided by law, the Certificate of Incorporation of Radio One and such by-laws.
(a) As of the Effective Time of the Company/LLC Merger, the managers designated by Radio One shall be the managers of Radio One of Charlotte, LLC, each to hold office in accordance with the Certificate of Formation and limited liability company agreement of Radio One of Charlotte, LLC, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. As of the Effective Time of the Company/LLC Merger, the officers designated by Radio One shall be the officers of Radio One of Charlotte, LLC, each to hold office in accordance with the Certificate of Formation and limited liability company agreement of Radio One of Charlotte, LLC, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be. As of the Effective Time of the Company/LLC Merger, the sole member of Radio One of Charlotte, LLC, shall be NewCo.
(b) The officers and directors of Radio One immediately prior to the Effective Time of the NewCo/ROI Merger shall be the officers and directors of Radio One as of the Effective Time of the NewCo/ROI Merger, until the earlier of their resignation or removal or until their respective successors are duly elected or appointed and qualified, as the case may be, in accordance with the Certificate of Incorporation and by-laws of Radio One.
(a) As of the Closing, each Shareholder shall cease to have any rights with respect to its shares of Company Stock, and for all purposes, the Company Stock shall be converted into the right to receive the consideration provided for pursuant to Sections 1.7(b) and 1.7(c) below (the "Merger Consideration").
(d) Radio One shall issue the Stock Consideration and pay the Cash Amount on the Closing Date upon presentation and surrender to Radio One of the certificates representing all of the issued and outstanding Company Stock duly endorsed in blank or with separate executed stock powers attached. Payment of the Cash Amount shall be in immediately available funds pursuant to written instructions of the Majority Shareholder to be delivered to Radio One no later than three (3) business days prior to Closing.
(a) Not later than five (5) business days before Closing, the Majority Shareholder shall deliver to Radio One a statement (the "Preliminary Adjustment Statement") that sets forth a good faith estimate of the amount of the Consolidated Accounts Payable, the Consolidated Accounts Receivable, the Consolidated Current Assets, the Consolidated Liabilities (including the Transaction Fees and Costs) at Closing and the Majority Shareholder's calculation of the Adjusted Consideration and the Merger Consideration. The Preliminary Adjustment Statement shall show the Majority Shareholder's calculations in reasonable detail and shall be accompanied by a good faith, estimated balance sheet of the Davis Companies (as of the date of the Preliminary Adjustment Statement) prepared by the Company Accountant in accordance with GAAP and other supporting documentation. The Preliminary Adjustment Statement shall also be accompanied by a certificate of the Majority Shareholder (the "Preliminary Adjustment Certificate") certifying that the Shareholders' calculations are in accordance with the provisions of this Agreement.
(b) Not later than 90 days after Closing, Radio One shall deliver to the Majority Shareholder a statement (the "Final Adjustment Statement") that sets forth the amount of the Consolidated Accounts Payable, the Consolidated Accounts Receivable, the Consolidated Current Assets and the Consolidated Liabilities at Closing and Radio One's calculation of the Adjusted Consideration and the Merger Consideration for each Shareholder. The Final Adjustment Statement shall show Radio One's calculations in reasonable detail and shall be accompanied by a balance sheet of the Company (as of the Closing Date) prepared by Radio One's Accountant in accordance with GAAP and other supporting documentation. The Final Adjustment Statement shall also be accompanied by a certificate of Radio One certifying that Radio One's calculations are in accordance with the provisions of this Agreement.
(c) If the Majority Shareholder disputes any item in the Final Adjustment Statement, the Majority Shareholder shall notify Radio One in writing thereof (specifying the amount of each item in dispute and setting forth in detail the basis for each item in dispute) within ten (10) business days of the Majority Shareholder's receipt of the Final Adjustment Statement. If the Majority Shareholder does not notify Radio One of any such dispute within such time, then the Final Adjustment Statement shall be deemed to be final and binding on the parties. In the event of such a dispute, the parties shall negotiate in good faith to attempt to reconcile their differences. If such dispute has not been resolved within twenty (20) business days, the parties shall submit the items remaining in dispute for resolution to the Independent Accounting Firm, which shall, as promptly as practicable but in any event within twenty (20) business days, resolve the disputed items and report to the parties, and such report shall have the effect of an arbitral award and shall be final and binding on the parties. The fees and disbursements of the Independent Accounting Firm shall be allocated between the parties in the same proportion as the award of the amount in dispute.
(d) If the Merger Consideration as determined in accordance with
Section 1.10(c) differs from the amount calculated at the Effective Time, then
within five (5) business days of such determination, the parties shall make
appropriate settlement thereof. In any such settlement, the number of shares of
Radio One stock subject to settlement shall be determined by dividing the amount
of the settlement by the Closing Price.
ten business days after the date the FCC Consent becomes Final, or (c) at Radio One's election, upon ten business days notice after the date the FCC Consent is granted by initial order, in any case subject to the satisfaction or waiver of the last of the conditions required to be satisfied or waived pursuant to Articles 7 or 8 below (other than those requiring a delivery of a certificate or other document, or the taking of other action, at the Closing). Alternatively, the Closing may take place at such other place, time or date as the parties may mutually agree upon in writing. The date on which the Closing is to occur is referred to herein as the "Closing Date."
To induce Radio One to enter into this Agreement and to consummate the transactions contemplated hereby, the Majority Shareholder and the Company represent and warrant to Radio One as follows:
(i) conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a loss of rights under, or result in the creation or imposition of
any Lien upon any of the Assets under, the charter or other organizational documents of any of the Davis Companies, or any contract, lease, agreement or instrument, or any governmental license, permit or authorization, or any judgment, order, award or decree to which any of the Davis Companies are a party or any of the Assets are subject or by which any of the Davis Companies are bound, or any statute, other law or regulatory provision affecting any of the Davis Companies or the Assets; or
(ii) require the approval, consent, authorization or act of, or the making by any of the Davis Companies of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR Act and the Communications Act.
(a) The Majority Shareholder has furnished Radio One with audited financial statements used by the Davis Companies in the preparation of its federal and state tax returns and copies of its filed federal and state tax returns for fiscal years ending June 30, 1996, 1997, 1998 and 1999 as well as unaudited monthly financial statements for the period from July 1, 1999 through February 29, 2000. The financial statements described in the preceding sentences and in Section 5.2 shall be collectively referred to as "Financial Statements." The Financial Statements: (x) have been and will be prepared in accordance with GAAP applied on a consistent basis throughout the periods involved and as compared with prior periods subject in the case of unaudited statements to the absence of notes and normal year-end adjustments after audit; and (y) fairly present the Davis Companies' financial position, income, expenses, assets, liabilities, and the results of operations of the Davis Companies as of the dates and for the periods indicated. There has been no sale of material properties or assets, other than broadcast time, or loss or material injury to the business and no material adverse change in the business, assets, properties or condition (financial or otherwise) of the Davis Companies since the preparation of the most recent annual or monthly Financial Statement. No event has occurred that would make any Financial Statement misleading in any material respect.
(b) Except as reflected in the balance sheets included in the
Financial Statements dated January 31, 2000 (the "Balance Sheet Date"),
including the notes thereto or otherwise disclosed in this Agreement or the
schedules hereto, and except for the current liabilities and obligations
incurred in the ordinary course of business of the Davis Companies (not
including for this purpose any tort-like liabilities or breach of contract)
since the Balance Sheet Date, there exist no liabilities or obligations of the
Davis Companies, contingent or absolute, matured or unmatured, known or unknown
of the type that would, in accordance with GAAP, consistently applied, be
required to be set forth in the Financial Statements. Since the Balance Sheet
Date: (i) the Davis Companies have not made any contract, agreement or
commitment or incurred any liability or obligation of any kind or nature except
in the ordinary course of business and consistent with past business practices;
(ii) there has not been any discharge or satisfaction of any obligation or
liability owed by the Davis Companies, which is not in the ordinary course of
business or which is inconsistent with past business practices; (iii) there has
been no material damage, destruction or loss to any of the Assets or any asset
or property, tangible or intangible, of the Davis Companies; (iv) the Davis
Companies have operated their business in the ordinary course; and (v) the Davis
Companies have not increased the salaries or any other compensation of any of
its employees or agreed to the payment of any bonuses, except in the ordinary
course of business consistent with existing employment practices. The monthly
balance sheets: (x) have been and will be prepared on a consistent basis
throughout the periods involved and as compared with prior periods; and (y)
fairly present the Davis Companies' financial position, income, expenses,
assets, liabilities, and
results of operations as of the dates and for the periods indicated, subject to year end adjustments which do not materially affect the operations of the Davis Companies.
(a) The Davis Companies have been corporations for U.S. federal income tax purposes at all times since their formation up to and including the Closing Date and have never elected to be treated as another kind or type of entity.
(b) The Davis Companies have duly filed or caused to be filed all Tax Returns required to have been filed by or with respect to the Davis Companies, and each such Tax Return correctly and completely reports the Tax liability required to be reported thereon. The Davis Companies have paid all Taxes (whether or not shown on any Tax Return) owed by or with respect the Davis Companies.
(c) The amount of the liability of the Davis Companies for unpaid Taxes as of the Balance Sheet Date did not exceed the current liability accruals for Taxes (excluding any reserves for deferred Taxes) set forth on the Financial Statements dated as of the Balance Sheet Date. The amount of the liability of the Davis Companies for unpaid Taxes as of the date of any Financial Statements provided pursuant to Section 5.2 will not exceed the current liability accruals for Taxes (excluding any reserves for deferred Taxes) set forth on such Financial Statements. The amount of the liability of the Davis Companies for unpaid Taxes as of the Closing Date will not exceed the current liability accruals for Taxes (excluding any reserves for deferred Taxes) set forth on the Financial Statements dated as of the Balance Sheet Date, as such accruals are adjusted on the books and records of the Davis Companies through the Closing Date in accordance with past custom and practice, excluding, however, Taxes arising from the spinoff of the Columbus Stations and the Columbus Sub.
(d) The Davis Companies are not a party or subject to any agreement extending the time within which to file any Tax Return. No claim has ever been made by any Tax Authority in any jurisdiction in which the Davis Companies do not file Tax Returns that they are or may be subject to taxation by that jurisdiction. The Davis Companies have not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to any Tax assessment or deficiency.
(e) The Davis Companies have withheld and paid over all Taxes required to have been withheld and paid over, and complied with all information reporting and record-keeping requirements with respect to, any amounts paid or owing to any employee, creditor, independent contractor or other third party.
(f) No Tax Proceedings are pending with regard to any Tax Returns or Taxes of the Davis Companies, and no notice has been received by the Davis Companies (whether in writing or orally) of the expected commencement of a Tax Proceeding. No issues have been raised in any audit or examination by or with respect to the Davis Companies which, by application of similar principles, could be reasonably expected to result in a proposed deficiency for any other period not so examined. The Davis Companies have neither received any written ruling of a Tax Authority relating to Taxes nor entered into any closing agreement or similar written binding agreement with a Tax Authority relating to Taxes.
federal, state, local and foreign income and franchise Tax Returns filed by or with respect to, and all Tax examination reports and statements of deficiencies assessed against or agreed to by, the Davis Companies for the prior three Taxable Periods.
(h) The Davis Companies are neither a party to any Tax allocation, Tax indemnity, Tax sharing agreement, or any similar arrangement pursuant to which any of them have agreed to be liable for Taxes of any other person or entity nor do any of them have any liability for Taxes of any other person or entity as a transferee or successor.
(i) Except for an adjustment of not more than $200,000 to convert from the cash to the accrual method of accounting, the Davis Companies will not be required to include any adjustment in taxable income in any Taxable Period ending after the Closing Date under Section 481 of the Code (or any similar provision of the Tax laws of any jurisdiction) as a result of any change in any method of accounting occurring in a Taxable Period ending on or before the Closing Date. No Tax Authority has proposed any such change in any accounting method. The Davis Companies use the cash method of accounting for income Tax purposes.
(j) There are (and immediately following the Closing there will be) no Liens on any of the assets of the Davis Companies relating or attributable to Taxes (other than liens for Taxes not yet due and payable). No deficiencies for any Taxes have been asserted or assessed against the Davis Companies which, if unpaid, might result in a Lien on any of the assets of the Davis Companies relating or attributable to the taxes (other than Liens for Taxes not yet due and payable).
(k) There is no contract or agreement covering any employee or former employee of the Davis Companies that, individually or collectively, could give rise to the payment of any amount (or portion thereof) that would not be deductible pursuant to Sections 280G, 404 or 162 of the Code.
Companies with respect to the Davis Stations have been timely filed and paid;
(ii) all such reports and filings are accurate and complete; (iii) the Davis
Companies maintain public files for the Davis Stations as required by FCC rules;
(iv) with respect to FCC licenses, permits and authorizations, the Davis
Companies are operating only those facilities for which an appropriate FCC
Authorization has been obtained and is in effect, and the Davis Companies are
meeting the conditions of each such FCC Authorization; and (v) the Davis
Stations are operating in compliance in all material respects with the FCC
Authorizations, the Communications Act, and the rules, regulations and policies
of the FCC.
(c) The Majority Shareholder and the Davis Companies are aware of no facts indicating that the Shareholders, the Davis Companies or the Davis Stations are not in compliance with all requirements of the FCC, the Communications Act, or any other applicable federal, state and local statutes, regulations and ordinances. The Majority Shareholder and the Davis Companies are aware of no facts and Company has received no notice or communication, formal or informal, indicating that the FCC is considering revoking, suspending, canceling, rescinding or terminating any FCC Authorization.
(e) Each communications tower structure used in the operation of the Davis Stations (whether owned or leased) has been registered under the rules and regulations of the FCC, and the Federal Aviation Administration has issued a determination of no hazard to air navigation with respect to each such tower for which such a determination is required.
Companies have never maintained, sponsored or contributed to, or been
obligated to contribute to, any employee pension benefit plan as defined in
Section 3(2) of ERISA. All employee benefit plans (including those defined in
Section 3(3) of ERISA) and all benefits arrangements that have been maintained,
sponsored or contributed to by the Davis Companies have been maintained,
administered and funded in material compliance with their terms and, both as to
form and operation, with the requirements prescribed by any and all statutes,
orders, rules and regulations which are applicable to such plans, including but
not limited to ERISA and the Code. There are no unfunded benefit liabilities
and no accumulated funding deficiencies in respect of any such employee benefit
plans. As to each employee benefit for which an annual report, including
schedules, or comparable report is required to be filed under ERISA or the Code,
no liabilities, with respect to such plan, existed on the dates of such annual
report except as disclosed therein, and no material adverse change has occurred
with respect to the financial data covered by such annual report since the date
thereof. Neither the Davis Companies nor any such employee benefit plan will
have at Closing any present or future obligation to make any payment to or with
respect to any present or former employee of the Davis Companies pursuant to any
retiree medical benefit plan, or other retiree welfare plan (within the meaning
of Section 3(1) of ERISA), and no condition exists which would prevent the Davis
Companies from amending or terminating any such employee benefit plan, including
any such welfare plan. Each such welfare plan has been operated in compliance
with the provisions of Part 6 of Title I of ERISA and Sections 162 and 4980B of
the Code at all times.
surveys, analyses and assessments in their possession relating to any of the Real Property.
To induce Radio One to enter into this Agreement and to consummate the transactions contemplated hereby, the Majority Shareholder represents and warrants to Radio One as follows:
and delivered by each such Shareholder and the other parties thereto will be, a legal, valid and binding agreement of each such Shareholder enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
To induce the Majority Shareholder and the Company to enter into this Agreement and to perform and consummate the transactions contemplated hereby, Radio One represents and warrants to the Shareholders and the Company as follows:
The Company and the Majority Shareholder covenant and agree that from the date hereof until the completion of the Closing:
(b) Subject to Section 1.15 and notwithstanding Section 5.1(a), the Davis Companies shall not, without the prior written consent of Radio One: (i) sell, lease, transfer, or agree to sell, lease or transfer, any Assets except for non-material sales or leases, in the ordinary course of business of items which are being replaced by assets of comparable or superior kind, condition and value; (ii) grant any raises to employees, pay any substantial bonuses or enter into any contract of employment with any employee or employees other than in the ordinary course of business consistent with existing employment practices; (iii) adopt or increase any profit sharing, bonus, deferred compensation, savings, insurance, pension, retirement, or other employee benefit plan for or with any of its employees; (iv) amend or terminate any existing Time Sales Agreements except in the ordinary course of business; (v)
amend or terminate any of the Station Contracts or enter into any contract,
lease or agreement except those entered into in the ordinary course of business
consistent with past practices and except for barter time sales agreements that
will be paid and performed in full before Closing; (vi) by any act or omission
cause any representation or warranty made herein to become untrue or inaccurate;
(vii) discount, or otherwise reduce the amount receivable in respect of, any
accounts receivable; (viii) increase its indebtedness for borrowed money, except
current borrowings in the ordinary course of business; (ix) cancel, compromise
or waive any claim or right of substantial value; (x) except as set forth in
Section 1.15, declare or make any dividend or other distribution of any kind or
for any purpose to any stockholder; (xi) redeem, purchase or otherwise acquire
any of its capital stock; (xii) make any change in accounting methods or
practices, except as required by law or generally accepted accounting
principles; (xiii) issue or sell any shares of capital stock or any other
securities, or issue any securities convertible into, or options, warrants or
rights to purchase or subscribe to, or enter into any arrangement or contract
with respect to the issue or sale of, any shares of its capital stock or any
other securities, or make any other changes in its capital structure; or (xiv)
amend or modify its certificate of incorporation or bylaws.
(c) The Majority Shareholder and the Davis Companies shall not, and shall not solicit, negotiate or enter into any agreement to, sell, transfer, assign, encumber or pledge the Company Stock or any of the other Davis Company Shares.
statements provided or created hereunder in reports filed by Radio One with any governmental or regulatory authority, including the Securities and Exchange Commission.
blank or with separate executed stock powers attached, and with signatures guaranteed if requested by Radio One.
Radio One, the Company and the Majority Shareholder covenant and agree that from the date hereof until the completion of the Closing:
hereunder; or (b) receiving any notice from any governmental department, court, agency or commission of its intention (i) to institute an investigation into, or institute a suit or proceeding to restrain or enjoin, the consummation of this Agreement or such transactions, or (ii) to nullify or render ineffective this Agreement or such transactions if consummated.
The obligations of Radio One under this Agreement are, at its option, subject to the fulfillment of the following conditions prior to or on the Closing Date:
(a) the certificates representing (i) the Company Stock accompanied by stock powers duly endorsed in blank, sufficient to cancel all right, title and interest in and to the Company Stock and (ii) the other Davis Company Shares;
(b) certified copies of resolutions duly adopted by the Shareholders and the board of directors of the Company, which shall be in full force and effect at the time of the Closing, authorizing the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby;
(c) the certificate referred to in Section 8.1;
(d) the corporate minute book, stock ledger and all other original and duplicate corporate records of the Davis Companies;
(e) copies of the certificate of incorporation of the Davis Companies, including all amendments thereto, certified by the Secretary of State or other appropriate official of the jurisdiction of incorporation of the Davis Companies dated within 10 business days of the Closing Date;
(f) copies of the bylaws of the Davis Companies, certified by an officer of the Company as being true and correct and in effect on the Closing Date;
(g) certificates from the Secretaries of State or other appropriate officials of the jurisdiction of incorporation of the Davis Companies and any jurisdiction in which the Davis Companies have qualified to do business, dated within 10 business days of the Closing Date and showing that the Davis Companies are duly incorporated and in good standing in its jurisdiction of incorporation and that it is in good standing in each jurisdiction in which it has qualified to do business;
(h) a certificate as to the tax status of the Davis Companies from the appropriate official of the jurisdiction of incorporation of the Davis Companies and each jurisdiction in which the Davis Companies have qualified to do business;
(i) resignations and releases of all officers and directors of the Davis Companies and releases of the Shareholders of the Davis Companies;
(j) the Required Consents and any other consents obtained by Shareholders and Company under Section 5.4;
(l) the Preliminary Adjustment Statement and the Preliminary Adjustment Certificate;
(m) the Estoppel Certificates obtained by Majority Shareholder and Company and Lien Search Reports;
(n) the Subscriptions and the Registration Rights Agreements; and
(o) the Post-Closing Escrow Agreement.
(a) certified copies of resolutions authorizing the execution, delivery and performance by Radio One of this Agreement, which shall be in full force and effect at the time of the Closing;
(b) the certificate referred to in Section 7.1;
(c) at the Effective Time, the Merger Consideration as provided by Sections 1.7 and 1.8;
(d) the Post-Closing Escrow Agreement; and
(e) the Registration Rights Agreements.
statements in all required jurisdictions.
(a) From and after Closing, subject to the limitation set forth in Section
5.7, if applicable, the Majority Shareholder (an "Indemnifying Party") hereby
agrees to indemnify and hold harmless Radio One and Radio One of Charlotte, the
shareholders, directors, officers and employees of Radio One and Radio One of
Charlotte, LLC, and all persons which directly or indirectly, through one or
more intermediaries, control, are controlled by, or are under common control
with Radio One, and their respective successors and assigns (collectively, the
"Radio One Indemnitees") from, against and in respect of, and to reimburse the
Radio One Indemnitees for, the amount of any and all Deficiencies (as defined in
Section 10.3(a)). Effective upon Closing, the Majority Shareholder hereby
assumes and agrees to pay and perform when due any and all such Deficiencies.
Notwithstanding anything to the contrary set forth in this Agreement, the
Majority Shareholder shall have no obligation to indemnify any Radio One
Indemnitees on account of (i) any Taxes required to be paid by, or on behalf of,
any Davis Company as a result of the Mergers not being treated as
reorganizations under Section 368(a) of the Code, or (ii) any breach of Section
2.8 resulting from the Mergers not being treated as reorganizations under
Sections 368(a) of the Code.
(b) From and after Closing, Radio One (an "Indemnifying Party") hereby agrees to indemnify and hold harmless the Majority Shareholder and its respective successors and assigns (collectively, the "Majority Shareholder Indemnitees") from, against and in respect of, and to reimburse the Majority Shareholder Indemnitees for, the amount of any and all Deficiencies (as defined in Section 10.3(b)). Radio One shall have no obligation whatsoever to indemnify any of the Minority Shareholders for any Deficiencies.
(a) As used in this Article 10, the term "Deficiencies" when asserted by Radio One Indemnitees or arising out of a third party claim against Radio One Indemnitees shall mean any and all losses, damages, liabilities and claims sustained by the Radio One Indemnitees and arising out of, based upon or resulting from: (i) any misrepresentation, breach of warranty, or any failure to comply with any covenant, obligation or agreement on the part of the Majority Shareholder or the Company contained in or made pursuant to this Agreement to the extent not
covered by proceeds of insurance; (ii) any obligation or liability arising from
the business or operations of the Davis Companies prior to Closing of a nature
or type required to be reflected on the Closing Date consolidated balance sheet
of the Davis Companies in accordance with GAAP to the extent not covered by
proceeds of insurance, except for Assumed Obligations and except for
Consolidated Liabilities that are taken into account in calculating the Merger
Consideration; (iii) without limiting the foregoing, any litigation, proceeding
or claim by any third party relating to the business or operation of the Davis
Companies prior to Closing to the extent not covered by proceeds of insurance;
or (iv) any obligation or liability arising from the business or operations of,
and any litigation proceeding or claim by any third party relating to the
business or operations of, the Columbus Stations and the Columbus Sub, whether
prior to or after Closing. Such Deficiencies include without limitation any and
all acts, suits, proceedings, demands, assessments and judgments, and all fees,
costs and expenses of any kind, related or incident to any of the foregoing
(including, without limitation, any and all Legal Expenses (as defined in
Section 10.6 below)).
(b) As used in this Article 10, the term "Deficiencies" when asserted by the Majority Shareholder Indemnitees or arising out of a third party claim against the Majority Shareholder Indemnitees shall mean any and all losses, damages, liabilities and claims sustained by the Majority Shareholder Indemnitees and arising out of, based upon or resulting from: (i) any misrepresentation, breach of warranty, or any failure to comply with any covenant, obligation or agreement on the part of Radio One contained in or made pursuant to this Agreement to the extent not covered by proceeds of insurance; (ii) any failure by the Radio One Indemnitees to pay or perform any of the Assumed Obligations and Consolidated Liabilities that are taken into account in calculating the Merger Consideration to the extent not covered by proceeds of insurance; or (iii) any litigation, proceeding or claim by any third party relating to the business or operation of the Davis Companies after Closing to the extent not covered by proceeds of insurance. Such Deficiencies include without limitation any and all acts, suits, proceedings, demands, assessments and judgments, and all fees, costs and expenses of any kind, related or incident to any of the foregoing (including, without limitation, any and all Legal Expenses (as defined in Section 10.6 below)).
claim, shall notify the Indemnifying Party of such claim, and shall extend to the Indemnifying Party a reasonable opportunity to defend against such claim, at the Indemnifying Party's sole expense and through legal counsel reasonably acceptable to the Indemnitees, provided that the Indemnifying Party proceeds in good faith, expeditiously and diligently. The Indemnitees shall, at their option and expense, have the right to participate in any defense undertaken by the Indemnifying Party with legal counsel of their own selection. No settlement or compromise of any claim which may result in a Deficiency may be made by the Indemnifying Party without the prior written consent of the Indemnitees unless: (A) prior to such settlement or compromise the Indemnifying Party acknowledges in writing its obligation to pay in full the amount of the settlement or compromise and all associated expenses; (B) the Indemnitees are furnished with a full release from the party or parties asserting the claim; and (C) the Indemnifying Party has the ability (financial or otherwise) to pay or perform such settlement or compromise.
(c) The Indemnitees and the Indemnifying Party may agree in writing, at any time, as to the existence and amount of a Deficiency, and, upon the execution of such agreement such Deficiency shall be deemed established.
certified public accountant who is acceptable to both Radio One and the Majority Shareholder. The parties shall treat the spin-off of Davis Broadcasting of Columbus, Inc. as a Code Section 355 transaction, and for purposes of determining taxable gain under Code Section 355(e), shall value the stock of such corporation at $2,500,000. The Majority Shareholder shall not file or cause to be filed any amended tax return without the prior written consent of Radio One, which consent shall not be unreasonably withheld. The Majority Shareholder and Radio One shall cooperate with one another in connection with the preparation, filing and any inquiries relating to any tax returns. Any refund of taxes relating to the Davis Companies received by the Shareholders after Closing shall be paid by the Shareholders to Radio One within ten business days after such refund is received by the Shareholders.
if to the Company or the Majority Shareholder: c/o Davis Broadcasting, Inc. 2203 Wynnton Road
Columbus, GA 31906 Attn: Gregory A. Davis Facsimile No.: (704) 358-1612
with a copy (which shall not constitute notice) to:
Robinson, Bradshaw & Hinson, P.A.
101 North Tryon Street
Suite 1900
Charlotte, N.C. 28246
Attn: Robin L. Hinson
Facsimile No.: (704) 378-4000
and
Fleishman and Walsh, L.L.P.
1400 Sixteenth Street, N.W.
Washington, D.C. 20036
Attn: Howard A. Topel
Facsimile No.: (202) 745-0916
if to Radio One: Radio One, Inc.
5900 Princess Garden Parkway, Suite 800
Lanham, MD 20706
Attn: Alfred C. Liggins, President
Facsimile No.: (301) 306-9638
|
with a copy (which shall not constitute notice) to:
Radio One, Inc.
5900 Princess Garden Parkway, Suite 800
Lanham, MD 20706
Attn: Linda J. Eckard, General Counsel
Facsimile No.: (301) 306-9638
and Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Attn: Dominic T. Bodensteiner
Facsimile No.: (202) 719-7049
|
Any party may alter the address to which communications are to be sent by giving
notice of such change of address in conformity with the provisions of this
Section providing for the giving of notice.
interpretation, performance and enforcement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of laws.
[SIGNATURE PAGE FOLLOWS]
SIGNATURE PAGE TO MERGER AGREEMENT
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
RADIO ONE:
RADIO ONE, INC.
COMPANY: DAVIS BROADCASTING, INC.
MAJORITY SHAREHOLDER:
ANNEX A
Certain Defined Terms
For the purposes of this Agreement, the following terms have the meanings set forth below.
"Adjusted Consideration" means the Total Consideration less the Consolidated Liabilities and (i) plus one half of the amount by which Consolidated Current Assets exceed the Consolidated Accounts Payable, or (ii) less the amount by which Consolidated Accounts Payable exceed Consolidated Current Assets, as the case may be.
"Affiliate" of any particular person means any other person controlling, controlled by, or under common control with, such particular person, where "control" means the possession, directly or indirectly, of the power to direct the management and policies of a person whether through the ownership of voting securities, contract or otherwise.
"Assets" means all right, title and interest of the Davis Companies in all properties, assets, privileges, rights, interests and claims, real and personal, tangible and intangible, of every type and description, wherever located, including its business and goodwill, including, without limitation, the FCC Authorizations, Tangible Personal Property, Real Property, the DBC Stock, Time Sales Agreements, Station Contracts, Intangible Property, Programming and Copyrights, Files and Records and Websites.
"Assumed Obligations" means the obligations arising on and after the Closing for Consolidated Accounts Payable and under the Station Contracts other than those required by this Agreement to be terminated at or prior to Closing.
"Barter Balance" on a given date means the difference between the value of air time (based upon the Davis Stations' then prevailing rates) to be provided and the fair market value of goods or services to be received therefor pursuant to trade, barter or similar agreements for the sale of time for goods or services.
"Cash Amount" means the amount of Two Million Dollars ($2,000,000).
"Closing Price" means $61.89 per share of Radio One's common stock.
"Company Accountant" means Sievers & Knopf.
"Consolidated Accounts Payable" means the trade account payable of the Davis Companies incurred in the usual and ordinary course of business consistent with past practices with maturities of less than thirty (30) days.
"Consolidated Accounts Receivable" means the trade accounts receivable of the Davis Companies net after the deduction of reserve for bad debts equal to two percent (2%) of net sales for the prior 12 month period.
"Consolidated Current Assets" means the sum of the cash and Consolidated Accounts Receivable of the Davis Companies.
"Consolidated Liabilities" means all Indebtedness of the Davis Companies other than the Assumed Obligations, including without limitation all indebtedness of the Davis Companies owing to Radio One, all other indebtedness for borrowed money, all change of control payments the Davis Companies are obligated to make as a result of the transaction contemplated by this Agreement, the amount of any negative Barter Balance and Transaction Fees and Costs.
"Davis Companies" means the Company and the Station Subs collectively.
"ERISA" means the Employee Retirement Income Security act of 1974, as amended.
"Escrow Amount" means $850,000, being an amount equal to (i) five percent (5%) of the Total Consideration less (ii) the $350,000 principal amount of indebtedness for borrowed money owed by the Company to Radio One.
"Escrowed Shares" means the number of shares of Radio One common stock equal to $1,200,000 based on the Closing Price, which shares issued in the name of the Majority Shareholder shall be deposited by Radio One into the post-closing Escrow Account pursuant to Section 1.8 from the Stock Consideration.
"Files and Records" means all FCC logs and all files and other records of the Davis Companies (other than duplicate copies of such files ("Duplicate Records")), including
without limitation all schematics, blueprints, engineering data, customer lists, reports, specifications, projections, statistics, promotional graphics, original art work, mats, plates, negatives and other advertising, marketing or related materials, and all other technical and financial information.
"GAAP" means generally accepted accounting principles as of the date hereof consistently applied throughout the specified period and in prior periods.
"Indebtedness" means all indebtedness, liabilities and obligations of every kind and nature, both current and long term, which are vested, absolute, and accrued, including but not limited to, all indebtedness for borrowed money (and interest thereon and prepayment penalties incurred as a result of prepaying such indebtedness, if any, pursuant to Section 9.3) of the Davis Companies, all determined in accordance with GAAP on a consolidated basis.
"Independent Accounting Firm" means a "big-five" accounting firm other than the Company Accountant and Radio One's Accountant.
"Knowledge", including the phrases "to the knowledge of" or "to the best knowledge of" any person and any similar phrase means, with respect to the Company the actual knowledge of Greg Davis, Bill Yeager and Bernie Corcoran.
"Liens" means any mortgages, liens, deeds of trust, security interests, pledges, restrictions, prior assignments, charges, claims, defects in title and encumbrances of any kind or type whatsoever.
"Permitted Encumbrances" means: (i) liens for real estate taxes not yet due and payable (all such taxes for the periods prior to Closing being a part of the Consolidated Liabilities); (ii) the Assumed Obligations (iii) statutory or common law liens to secure landlords, lessors or renters under leases or rental agreements confined to the premises rented to the extent that no payment or performance under any such lease or rental agreement is in
arrears or is otherwise past due, (iv) deposits or pledges made in connection with, or to secure payment of, workers' compensation, unemployment insurance or old age pension programs mandated under applicable laws or other social security regulations, (v) statutory or common law liens to secure claims for labor, materials or supplies and other liens, which secure obligations to the extent the payment thereof is not in arrears or otherwise past due, (vi) non-monetary easements, rights of way or other reservations or imperfections of title and encumbrances of record that do not, individually or in the aggregate, materially impair the continued use and operation of the Assets.
"Post-Closing Escrow Agreement" means a Post-Closing Escrow Agreement in the form of C Attached hereto.
"Programming and Copyrights" means all interests of the Davis Companies as of the date of this Agreement in all programs and programming materials and elements of whatever form or nature, whether recorded on tape or any other substance or intended for live performance, and whether completed or in production, and all related common-law and statutory copyrights, together with all such programs, materials, elements and copyrights acquired by the Davis Companies between the date hereof and the Closing Date.
"Radio One's Accountant" means Arthur Andersen LLP.
"Registration Rights Agreements" means registration rights agreements in the form of Exhibit E attached hereto.
"Stock Consideration" means a number of shares of Radio One's common stock equal to the Adjusted Consideration less the Cash Amount divided by the Closing Price.
"Subsidiary" means any other corporation, partnership, limited liability company or other business entity in which a person owns, directly or indirectly, any equity security or other equity interest and which is controlled, directly or indirectly, by such person.
"Tax" (including with correlative meaning the terms "Taxes" and "Taxable")
shall mean (a) all foreign, federal, state, local and other income, gross receipts, sales, use, entertainment, ticket, ad valorem, value-added, intangible, unitary, withholding, transfer, franchise, license, payroll, employment, estimated, excise, environmental, stamp, occupation, premium, property, prohibited transactions, windfall or excess profits, customs, duties or other taxes, levies, fees, assessments or charges of any kind whatsoever, together with any interest and any penalties, additions to tax or additional amounts with respect thereto, (b) any liability for payment of amounts described in clause (a) as a result of transferee liability, of being a member of an affiliated, consolidated, combined or unitary group for any period, or otherwise through operation of law, and (c) any liability for payment of amounts described in clause (a) or (b) as a result of any tax sharing, tax indemnity or tax allocation agreement or any other express or implied agreement to indemnify any other Person or Taxes.
"Tax Proceeding" shall mean any audit, examination, claim or other administrative or judicial proceeding relating to Taxes or Tax Returns.
"Tax Return" shall mean any return (including any information return), report, statement, schedule, notice, form, estimate or declaration of estimated tax relating to or required to be filed with any governmental authority in connection with the determination, assessment, collective or payment of any Tax.
"Tax Authority" shall mean any governmental agency, board, bureau, body, department or authority of any United States federal, state or local jurisdiction or any foreign jurisdiction, having jurisdiction with respect to any Tax.
"Taxable Period" shall mean any taxable year or any other period that is treated as a taxable year with respect to which any Tax may be imposed under any applicable statute, rule or regulation.
"Time Sales Agreements" means those obligations of the Davis Companies that exist on the Closing Date for the sale of air time on the Davis Stations for cash entered in the ordinary course of business, at customary rates for the periods in question and cancelable on 30 days notice or less without penalty.
"Total Consideration" means the sum of Twenty Four Million Dollars ($24,000,000).
"Transaction Fees and Costs" means fees and costs incurred by the Davis Companies in connection with the transactions contemplated by this Agreement for outside legal and accounting services and disbursements, recording and filing fees and expenses.
"Websites" means all interests of the Davis Companies in any Internet domain leases and domain names relating to the Davis Stations, the unrestricted right to the use of HTML content located and publicly accessible from those domain names, and the "visitor" email data base for those sites.
Schedules --------- 1.15 Merger Reorganizations 2.2 Capitalization 2.6 Consents 2.8 Taxes 2.9 Liens 2.10 FCC Authorizations 2.11 Tangible Personal Property 2.12 Real Property 2.13 Station Contracts 2.14 Intangible Property 2.15 Employment Matters 2.17 Litigation 2.18 Insurance Policies 5.12 Subordinated Lenders' Waivers Exhibit ------- A Employment Agreement B Company's Counsel Opinions C Post-Closing Escrow Agreement D Subscriptions E Registration Rights Agreements |
Exhibit 10.60
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made as of the 11th day of March, 2000 among Shirk, Inc., an Indiana corporation ("Shirk"), IBL, L.L.C., an Indiana limited liability company ("IBL") (Shirk and IBL, collectively, "Seller"), and (only as to Section 11.9) William Shirk Poorman and William G. Mays, each an individual residing in the State of Indiana, and Radio One, Inc., a Delaware corporation ("Buyer").
Seller owns and operates the following broadcast stations (collectively, the "Stations") pursuant to certain licenses, permits and authorizations (the "FCC Authorizations") issued by the Federal Communications Commission (the "FCC"):
Radio Stations:
WHHH(FM), Indianapolis, Indiana
WBKS(FM), Greenwood, Indiana
WYJZ(FM), Lebanon, Indiana
Television Station:
W53AV, Indianapolis, Indiana (Channel 53)
Construction Permit for W65DW, Indianapolis, Indiana (Channel 65) (W53AV and the Construction Permit for W65DW may sometimes be referred to collectively herein as "Station W53AV/W65DW")
Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, the Station Assets (defined below), subject to the terms and conditions of this Agreement.
NOW, THEREFORE, taking the foregoing into account, and in consideration of the mutual covenants and agreements set forth herein, the parties, intending to be legally bound, hereby agree as follows:
business or operation of the Stations, together with all such programs, materials, elements and copyrights acquired by Seller in the business or operation of the Stations between the date hereof and the Closing Date.
sewer, gas, electric, cable television, and telephone lines or easements of record or as presently installed; (d) other imperfections of title which do not materially detract from the value or impair the use of the property subject thereto (collectively, the "Ordinary Exceptions").
(i) $10 million, as adjusted pursuant to Section 1.7 (the "Shirk Amount") to Shirk for the WHHH(FM) Station Assets; and
(ii) $30 million, as adjusted pursuant to Section 1.7 (the "IBL Amount") to IBL for the other Station Assets, of which amount $27 million (as adjusted pursuant to Section 1.7) shall be allocated to the WBKS(FM) and WYJZ(FM) Station Assets and $3 million (as adjusted) shall be allocated to the Station W53AV/W65DW Station Assets.
"Closing Price" means $68 per share of Buyer's Class A common stock (as appropriately adjusted to reflect any stock splits, stock dividends, or reclassifications of Buyer's Class A common stock, including a merger, consolidation or recapitalization).
"Stock Consideration" means a number of shares of Buyer's Class A common stock equal to the Shirk Amount divided by the Closing Price.
(i) Seller shall, at its option and expense, have an audit conducted by an accounting firm of its choice of the Cash Flow Amount (the "Audit"), provided that the Audit shall be completed by March 17, 2000. A copy of the Audit, together with copies of all working papers and other materials used in and generated by the Audit, and such other items
relating to the Audit as Buyer shall reasonably request, shall be provided promptly to Buyer. If the Audit results in a Cash Flow Amount that is at least $1,700,000 and Buyer disagrees with such result, then Buyer may have an audit of the Cash Flow Amount conducted by an accounting firm of its choice (the "Buyer Audit") promptly after the results of the Audit are provided to Buyer, provided that the Buyer Audit shall be ordered no later than ten business days after the results of the Audit are provided to Buyer. In the event that the Buyer Audit results in a Cash Flow Amount that is less than $1,700,000, Seller and Buyer shall negotiate in good faith to attempt to agree on the Cash Flow Amount. If such an agreement is not reached within five (5) days of the date of completion of the Buyer Audit, then Buyer may terminate this Agreement upon written notice to Seller without further liability hereunder and the Deposit together with interest thereon shall be returned to Buyer.
(ii) Without limiting Buyer's other rights under this Agreement, Seller shall timely make available to Buyer for review and/or audit all books and records necessary to calculate the Cash Flow Amount.
(a) The operation of the Stations and the income and normal operating expenses attributable thereto through the date preceding the Closing Date (the "Adjustment Date") shall be for the account of Seller and thereafter for the account of Buyer, and, if any income or expense is properly allocable or credited, then it shall be allocated, charged or
prorated accordingly. Expenses for goods or services received both before and after the Adjustment Date, power and utilities charges, frequency discounts, and rents and similar prepaid and deferred items shall be prorated between Seller and Buyer as of the Adjustment Date in accordance with generally accepted accounting principles. All special assessments and similar charges or liens imposed against the Owned Real Property and Tangible Personal Property in respect of any period of time through the Adjustment Date, whether payable in installments or otherwise, shall be the responsibility of Seller, and amounts payable with respect to such special assessments, charges or liens in respect of any period of time after the Adjustment Date shall be the responsibility of Buyer, and such charges shall be adjusted accordingly. One-half of the total amount owing as of the Adjustment Date pursuant to all leases of equipment or other personal property included in the Station Contracts (including without limitation for remaining rental payments due, early termination fees, amounts owing upon termination for purchase of equipment or other personal property leased or other costs incurred in connection with purchasing such leased equipment or other personal property free and clear of Liens) shall be the responsibility of Seller. To the extent that any of the foregoing prorations and adjustments cannot be determined as of the Closing Date, Buyer and Seller shall conduct a final accounting and make any further payments, as required on a date mutually agreed upon, within ninety (90) days after the Closing.
(b) With respect to trade, barter or similar agreements for the sale
of time for goods or services ("Barter Agreements") assumed by Buyer pursuant to
Section 1.1(e), if any, if there exists on the date of assumption an aggregate
negative barter balance (i.e., the amount by which the value of air time (based
upon the Stations' then prevailing rates) to be provided exceeds the fair market
value of goods or services to be received therefor), then, to the extent such
excess is greater than $50,000 in the aggregate for all Stations, it will be
treated as prepaid time sales and adjusted for as a proration in Buyer's favor.
If, however, there exists on such date an aggregate positive barter balance
(i.e., the amount by which the value of air time (based upon the Stations' then
prevailing rates) to be provided is less than the fair market value of goods or
services to be received therefor) with respect to Barter Agreements assumed by
Buyer, there shall be no proration in Seller's favor.
(c) Anything herein to the contrary notwithstanding, all sales commissions with respect to amounts collected by Seller with respect to the stations on or prior to the Adjustment Date shall be the responsibility of Seller and all sales commissions with respect to amounts collected by Buyer after the Adjustment Date shall be the responsibility of Buyer.
or other document, or the taking of other action, at the Closing). Alternatively, the Closing may take place at such other place, time or date as the parties may mutually agree upon in writing. The date on which the Closing is to occur is referred to herein as the "Closing Date."
(a) As soon as possible (but in no event later than ten business days after the date of this Agreement) Seller and Buyer shall file an application with the FCC (the "FCC Application") requesting the FCC's written consent to the assignment of the FCC Authorizations from Seller to Buyer or, at Buyer's option, to Buyer's wholly-owned subsidiary Radio One Licenses, Inc., pursuant to this Agreement. Seller and Buyer shall diligently take all steps that are necessary, proper or desirable to expedite the prosecution of the FCC Application to a favorable conclusion. Each party shall promptly provide the other with a copy of any pleading, order or other document served on it relating to the FCC Application, shall furnish all information required by the FCC, and shall be represented at all meetings or hearings scheduled to consider the FCC Application.
To induce Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, Seller represents and warrants to Buyer as follows:
(i) conflict with, result in a breach of the terms, conditions or provisions of, or constitute a default, an event of default or an event creating rights of acceleration, termination or cancellation or a loss of rights under, or result in the creation or imposition of any Lien upon any of the Station Assets under, the charter or other organizational documents of Seller, or, to the knowledge of Seller, any contract, lease, agreement or instrument, or any governmental license, permit or authorization, or any judgment, order, award or decree to which Seller is a party or any of the Station Assets is subject or by which Seller is bound, or any statute, other law or regulatory provision affecting Seller or the Station Assets; or
(ii) require the approval, consent, authorization or act of, or the making by Seller of any declaration, filing or registration with, any third party or any foreign, federal, state or local court, governmental or regulatory authority or body, except for such of the foregoing as are necessary pursuant to the HSR Act and the Communications Act (defined below).
(a) Seller has furnished Buyer with audited financial statements used
by Seller in the preparation of its federal and state tax returns and copies of
its filed federal and state tax returns for fiscal years 1996, 1997 and 1998 as
well as unaudited monthly financial statements for the period from January 1,
1999 through December 31, 1999. Pursuant to Section 4.2, Seller will, each
month, furnish to Buyer unaudited monthly financial statements for the preceding
calendar month as well as financial statements for the year to date period. In
addition, Seller will deliver financial statements for the comparable month and
year to date period for the previous calendar year. So, for example, on January
30, Seller would deliver financial statements for the following periods: (i)
December, 1999; (ii) January 1, 1999 through December 31, 1999; (iii) December,
1998; and (iv) January 1, 1998 through December 31, 1998. The financial
statements described in the preceding sentences and in Section 4.2 shall be
collectively referred to as "Financial Statements". Except in the case of
interim and monthly financial statements for normal year end adjustments, the
Financial Statements: (x) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved and as compared with prior periods; (y) fairly present Seller's
financial position, income, expenses, assets, liabilities, and the results of
operations of the Stations as of the dates and for the periods indicated; and
(z) properly and fairly disclose and allocate all transactions by or between
Seller and any affiliate. There has been no material adverse change in the
business, assets, properties or condition (financial or otherwise) of the
Stations since the preparation of the most recent annual or monthly Financial
Statement. To the knowledge of Seller, no event has occurred that would make
any Financial Statement misleading in any material respect.
expenses, assets, liabilities, and the results of operations of the Stations as of the dates and for the periods indicated, subject to year end adjustments which do not materially affect the operations of Seller.
(b) All reports and filings required to be filed with, and all regulatory fees required to be paid to, the FCC by Seller with respect to the Stations have been timely filed and paid. All such reports and filings are accurate and complete in all material respects. Seller maintains public files for the Stations as required by FCC rules. With respect to FCC licenses, permits and authorizations, Seller is operating only those facilities for which an appropriate FCC Authorization has been obtained and is in effect, and Seller is meeting the conditions of each such FCC Authorization in all material respects.
(c) Seller is aware of no facts indicating that Seller is not in material compliance with all requirements of the FCC, the Communications Act, or any other applicable federal, state and local statutes, regulations and ordinances. To Seller's knowledge, there are no facts, and Seller has received no notice or communication, formal or informal, indicating that the FCC is considering revoking, suspending, canceling, rescinding or terminating any FCC Authorization.
(g) Each communications tower structure used in the operation of the Stations (whether owned or leased) has been registered under the rules and regulations of the FCC, and the Federal Aviation Administration has issued a determination of no hazard to air navigation with respect to each such tower for which such a determination is required.
Property or the use thereof conflicts with, or infringes upon, any rights of any third party (and there is no basis for any such claim of conflict). The Stations have the sole and exclusive right, or a license, to use the Intangible Property. To the knowledge of the Seller, no service provided by the Stations or any programming or other material used, broadcast or disseminated by the Stations infringes upon any copyright, patent or trademark of any other party.
removal, prevention or other remedial action or (iii) any obligation or liability arising from the Release of a Contaminant. Neither the Stations nor any of the assets or properties of the Stations includes any underground storage tanks or surface impoundments or any polychlorinated biphenyls. To the knowledge of Seller, neither the Stations nor any of the assets or properties of the Stations includes any asbestos containing material. Seller has not received in respect of the Stations or any assets or properties of the Stations any notice or claim to the effect that it is or may be liable as a result of the Release of a Contaminant. To the knowledge of Seller, neither the Stations nor any of their assets or properties are the subject of any investigation by any governmental authority with respect to a Release of a Contaminant. Seller has delivered to Buyer copies of all environmental surveys, analyses and assessments in its possession relating to any of the Real Property, if any.
To induce Seller to enter into this Agreement and to consummate the transactions contemplated hereby, Buyer represents and warrants to Seller as follows:
(a) The execution, delivery and performance of this Agreement and the Buyer Ancillary Agreements by Buyer have been duly authorized and approved by all necessary action of Buyer and do not require any further authorization or consent of Buyer. This Agreement is, and each Buyer Ancillary Agreement when executed and delivered by Buyer and the other parties thereto will be, a legal, valid and binding agreement of Buyer enforceable in accordance with its respective terms, except in each case as such enforceability may be limited by bankruptcy, moratorium, insolvency, reorganization or other similar laws affecting or limiting the enforcement of creditors' rights generally and except as such enforceability is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
(b) Upon issuance of the Stock Consideration at Closing, the shares comprising the Stock Consideration will be duly authorized, validly issued and fully paid and non-assessable.
Seller covenants and agrees that from the date hereof until the completion of the Closing:
(a) Seller shall: (i) continue to carry on the business of the
Stations and keep their books and accounts, records and files in the usual and
ordinary manner in which the business has been conducted in the past; (ii)
operate the Stations in accordance with the terms of the FCC Authorizations and
in material compliance with the Communications Act, FCC rules, regulations and
policies, and all other applicable laws, rules and regulations, and maintain the
FCC Authorizations in full force and effect and timely file and prosecute any
necessary applications for renewal of the FCC Authorizations; (iii) use
commercially reasonable efforts to (1) preserve the business organization of the
Stations intact, (2) retain substantially as at present the Stations' employees,
consultants and agents, and (3) preserve the goodwill of the Stations'
suppliers, advertisers, customers and others having business relations with it;
(iv) keep all Tangible Personal Property and Real Property in good operating
condition (ordinary wear and tear excepted) and repair and maintain adequate and
usual supplies of inventory, office supplies, spare parts and other materials as
have been customarily maintained in the past; (v) preserve intact the Station
Assets and maintain in effect its current insurance policies with respect to the
Stations and the Station Assets; and (vi) collect the Stations' accounts
receivable only in the ordinary course of business consistent with past
practice. Nothing contained in this Agreement shall give Buyer any right to
control the programming, operations or any other matter relating to the Stations
prior to the Closing, and Seller shall have complete control of the programming,
operations and all other matters relating to the Station up to the Closing.
(b) Notwithstanding Section 4.1(a), Seller shall not, without the prior written consent of Buyer: (i) sell, lease, transfer, or agree to sell, lease or transfer, any Station Assets, except for non-material sales or leases in the ordinary course of business of items which are being replaced by assets of comparable or superior kind, condition and value; (ii) grant any raises to employees of the Stations or pay any substantial bonuses, except in the ordinary course of business and consistent with past practices, or enter into any contract of employment with any employee or employees of the Stations; (iii) amend or terminate any existing time sales contracts with respect to the Stations except in the ordinary course of business; (iv) amend, terminate or, by any act or omission, breach or default on any of the Station Contracts, or enter into any contract, lease or agreement with respect to the Stations except those entered into in the ordinary course of business and with parties other than affiliates of Seller which have an obligation of no more than $5,000 individually and $50,000 in the aggregate; (v) by any act or omission cause any representation or warranty set forth in
Article 2 to become untrue or inaccurate; or (vi) settle, discount or otherwise reduce the amount receivable in respect of any of the Stations' accounts receivable, except in the ordinary course of business and consistent with past practice.
(c) Without limiting the foregoing:
(i) Seller shall continue to diligently prosecute, and at the Closing shall assign to the Buyer its rights to prosecute, its pending FCC application to improve the facilities of radio station WBKS(FM) (FCC File No. BPH-980904IE) (the "Improvement Application"), and shall take no action to dismiss, and shall vigorously oppose the dismissal of, such application.
(ii) for all FCC applications with respect to the Stations, including the Improvement Application, Seller shall timely respond to all FCC inquiries, timely provide Buyer copies of all documents prepared or received by it that relate thereto, otherwise keep Buyer informed of the status thereof, and consult with Buyer in advance regarding Seller's actions in connection therewith.
(iii) Seller shall timely make all filings necessary to preserve the rights of Station W53AV/W65DW arising out of the FCC's transition to DTV, including without limitation any filings necessary for Station W53AV/W65DW to obtain a Class A television license. If Station W53AV/W65DW will be adversely affected by other DTV facilities, prior to Closing Seller shall file and prosecute at the FCC a displacement application requesting a new channel at maximum allowable power.
(iv) Seller shall cooperate with Buyer with respect to each of the foregoing matters in this Section 4.1(c), provide Buyer with copies of all material items of correspondence relating thereto, and provide Buyer with copies of all documents, reports, analyses or other items relating thereto requested by Buyer.
expressly understood that, pursuant to this Section, Buyer, at its expense, shall be entitled to conduct such inspections and reviews of the Stations, the Station Assets, and financial records relating to the Stations as Buyer may desire, so long as the same do not unreasonably interfere with Seller's operation of the Stations. No inspection or investigation made by or on behalf of Buyer, or Buyer's failure to make any inspection or investigation, shall affect Seller's representations, warranties and covenants hereunder or be deemed to constitute a waiver of any of those representations, warranties and covenants. Immediately after the date hereof, Seller shall also cooperate, and shall cause its accountants to cooperate, with Buyer to conduct an audit by Buyer's independent accountants at Buyer's expense of the Financial Statements for the Stations for the years 1996, 1997, 1998 and 1999, and Buyer may disclose such financial statements provided or created hereunder in reports filed by Buyer with any governmental or regulatory authority, including the Securities and Exchange Commission. Buyer shall provide copies of any such financial statements in advance of disclosure and, in the event Seller shall reasonably object to the contents of such disclosure of its financial statements, Seller and Buyer shall negotiate in good faith to attempt to agree on the form of such disclosure, provided that Buyer shall in all events have the right to proceed with such disclosure in the event an agreement is not reached. Seller acknowledges that in responding and negotiating as set forth in the previous sentence, time is of the essence.
Property shall also cooperate, with Buyer and such firms in performing the Environmental Assessments. The Environmental Assessments shall initially be ordered promptly, but not later than thirty (30) days after the date hereof, it being understood that, so long as the initial Environmental Assessment for a piece of property has been ordered within such time, any follow-up Environmental Assessments need not be ordered within such time. Receipt of the Environmental Assessments shall not relieve Seller of any obligation with respect to any representation, warranty or covenant of Seller herein or waive any condition to Buyer's obligations herein. If any Environmental Assessment, including any follow-up Environmental Assessment, reveals the existence of Environmental Noncompliance (defined as any condition that renders Section 2.15 hereof untrue, misleading or inaccurate in any material respect) that can be remedied by the expenditure of One Million Dollars or less, Seller shall remedy the Environmental Noncompliance at its expense prior to the Closing and the Closing will otherwise take place in the manner and at the time provided for herein. In the event that the cost of remedying the Environmental Noncompliance will exceed One Million Dollars, Buyer may elect to: (a) proceed with the Closing with a Purchase Price reduction in the amount of One Million Dollars, any additional cost of remedying the Environmental Noncompliance to be contributed by Buyer, and Seller shall have no further liability or obligation to Buyer with respect thereto, or (b) terminate this Agreement. Nothing in this Section or otherwise in this Agreement shall be construed as creating any third-party beneficiaries or any other rights in parties other than the parties hereto.
Buyer and Seller covenant and agree that from the date hereof until the completion of the Closing:
The obligations of Seller under this Agreement are, at its option, subject to the fulfillment of the following conditions prior to or on the Closing Date:
The obligations of Buyer under this Agreement are, at its option, subject to the fulfillment of the following conditions prior to or on the Closing Date:
or injunction restraining or prohibiting the consummation of the transactions contemplated hereby. In the event such a restraining order or injunction is in effect, this Agreement may not be abandoned by Buyer pursuant to this Section 7.2 prior to the Final Closing Date, but the Closing shall be delayed during such period. This Agreement may be abandoned after such date if such restraining order or injunction remains in effect.
(a) bills of sale, certificates of title, endorsements, assignments, general warranty deeds and other good and reasonably sufficient instruments of sale, conveyance, transfer and assignment, in form and substance reasonably satisfactory to Buyer, sufficient to sell, convey, transfer and assign the Station Assets to Buyer free and clear of Liens (other than Permitted Encumbrances) and to quiet Buyer's title thereto;
(b) the Required Consents and any other consents obtained by Seller under Section 4.4;
(c) certified copies of Seller's articles of incorporation, bylaws and resolutions authorizing the execution, delivery and performance by Seller of this Agreement, which shall be in full force and effect;
(d) the certificate referred to in Section 7.1;
(e) the Estoppel Certificates, Title Commitments and Surveys;
(g) a tower site lease in form and substance reasonably satisfactory to Buyer for the antenna, STL and related transmission equipment at the tower site identified in the Construction Permit issued with respect to Station W53AV/W65DW (FCC File No. BPTTL-19981014JB).
(a) the Purchase Price, which shall be paid in the manner specified in
Section 1.4;
(b) an instrument or instruments of assumption of the Assumed Obligations in form and substance reasonably satisfactory to Buyer;
(c) certified copies of Buyer's articles of incorporation, bylaws and resolutions authorizing the execution, delivery and performance by Buyer of this Agreement, including without limitation, the due authorization and issuance of the Stock Consideration, which shall be in full force and effect at the time of the Closing;
(d) the certificate referred to in Section 6.1; and
(a) From and after Closing, Seller (an "Indemnifying Party") hereby agrees to indemnify and hold harmless Buyer, the shareholders, directors, officers and employees of Buyer and all persons which directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with Buyer, and their respective successors and assigns (collectively, the "Buyer Indemnitees") from, against and in respect of, and to reimburse the Buyer Indemnitees for, the amount of any and all Deficiencies (as defined in Section 9.3(a)); provided that, (i) except for the Fundamental Provisions (which shall not be subject to such limitation), Seller shall have no liability to Buyer hereunder until Buyer's aggregate Deficiencies exceed $250,000, provided that, once such amount is exceeded, all such Deficiencies shall be paid, (ii) the maximum liability of Seller to Buyer for breaches of the representations and warranties set forth in Section 2.15 shall be $1,000,000, and (iii) the maximum aggregate liability of Seller hereunder for Deficiencies shall be $3,000,000.
(b) From and after Closing, Buyer (an "Indemnifying Party") hereby agrees to indemnify and hold harmless Seller, the shareholders, directors, officers and employees of Seller and all persons which directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with Seller, and their respective successors and assigns (collectively, the "Seller Indemnitees") from, against and in respect of, and to reimburse the Seller Indemnitees for, the amount of any and all Deficiencies (as defined in Section 9.3(b)); provided that, (i) except for the Fundamental Provisions (which shall not be subject to such limitation), Buyer shall have no liability to Seller hereunder until Seller's aggregate Deficiencies exceed $250,000, provided that, once such amount is exceeded, all such Deficiencies shall be paid, and (ii) the maximum aggregate liability of Buyer hereunder for Deficiencies shall be $3,000,000 (provided that such aggregate liability limitation shall be increased to $10,000,000 for Deficiencies arising solely from a breach of Section 3.2(b) hereof).
(a) As used in this Article 9, the term "Deficiencies" when asserted by Buyer Indemnitees or arising out of a third party claim against Buyer Indemnitees shall mean any and all losses, damages, liabilities and claims sustained by the Buyer Indemnitees and arising out of, based upon or resulting from: (i) any misrepresentation, breach of warranty, or any failure to comply with any covenant, obligation or agreement on the part of Seller contained in or made pursuant to this Agreement, including without limitation the Seller Ancillary Agreements; (ii) any failure by Seller to pay or perform any of the Retained Liabilities or any other liability or obligation relating to the operation of the Stations by Seller prior to Closing; or (iii) any litigation, proceeding or claim by any third party relating to the business or operation of the Stations prior to Closing. Such Deficiencies include without limitation any and all acts, suits, proceedings, demands, assessments and judgments, and all fees, costs and expenses of any kind, related or incident to any of the foregoing (including, without limitation, any and all Legal Expenses (as defined in Section 9.6 below)).
(b) As used in this Article 9, the term "Deficiencies" when asserted by Seller Indemnitees or arising out of a third party claim against Seller Indemnitees shall mean any and all losses, damages, liabilities and claims sustained by the Seller Indemnitees and arising out of, based upon or resulting from: (i) any misrepresentation, breach of warranty, or any failure to comply with any covenant, obligation or agreement on the part of Buyer contained in or made pursuant to this Agreement, including without limitation the Buyer Ancillary Agreements; (ii) any failure by Buyer to pay or perform any of the Assumed Obligations or any other liability or obligation relating to the operation of the Stations by Buyer after Closing; or (iii) any litigation, proceeding, or claim by any third party relating to the business or operation of the Stations after Closing. Such Deficiencies include without limitation any and all acts, suits, proceedings, demands, assessments and judgments, and all fees, costs and expenses of any kind, related or incident to any of the foregoing (including, without limitation, any and all Legal Expenses (as defined in Section 9.6 below)).
(a) In the event that any claim shall be asserted by any third party
against the Buyer Indemnitees or Seller Indemnitees (Buyer Indemnitees or Seller
Indemnitees, as the case may be, hereinafter, the "Indemnitees"), which, if
sustained, would result in a Deficiency, then the Indemnitees, as promptly as
practicable after learning of such claim, shall notify the Indemnifying Party of
such claim, and shall extend to the Indemnifying Party a reasonable opportunity
to defend against such claim, at the Indemnifying Party's sole expense and
through legal counsel reasonably acceptable to the Indemnitees, provided that
the Indemnifying Party proceeds in good faith, expeditiously and diligently.
The Indemnitees shall, at their option and expense, have the right to
participate in any defense undertaken by the Indemnifying Party with legal
counsel of their own selection at the expense of the Indemnitees. No settlement
or compromise of any claim which may result in a Deficiency may be made by the
Indemnifying Party, without the prior written consent of the Indemnitees,
unless: (A) prior to such settlement or compromise the Indemnifying Party
acknowledges in writing its obligation to pay in full the amount of the
settlement or compromise and all associated expenses; (B) the Indemnitees are
furnished with a full release from the party or parties asserting the claim; and
(C) the Indemnifying Party has the ability (financial or otherwise) to pay or
perform such settlement or compromise. Unless the Indemnifying Party has
elected not to defend against a claim, no settlement or compromise of any claim
which may result in a Deficiency may be made by the Indemnitees without the
prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld, conditioned or delayed. If the Indemnifying Party has elected to
defend against a claim, but the Indemnitee determines in good faith that there
is a reasonable probability that such claim may adversely affect it or its
affiliates other than as a result of monetary damages for which it would be
entitled to indemnification under this Agreement, the Indemnitee may, by notice
to the Indemnifying Party, assume the exclusive right to defend, compromise, or
settle such claim, but the Indemnifying Party will not be bound by any
determination of a claim so defended or any compromise or settlement effected
without its consent, which shall not be unreasonably withheld, conditioned or
delayed.
(b) In the event that the Indemnitees assert the existence of any
claim for Deficiency against the Indemnifying Party, they shall give written
notice to the Indemnifying Party of the nature and amount of the Deficiency
asserted. The parties agree that all such claims not disputed by the
Indemnifying Party shall be paid in cash by the Indemnifying Party within thirty
(30) days after receiving notice of the claim. "Disputed Claims" shall mean
claims by an Indemnitee which the Indemnifying Party objects to in good faith in
writing within twenty (20) days after receiving notice of the claim. At the
option of the Indemnitees, the Indemnitees may offset any established Deficiency
or any portion thereof that has not been paid by the Indemnifying Party to the
Indemnitees against any obligation the Indemnitees, or any of them, may have to
the Indemnifying Party.
(c) In the event there is a Disputed Claim, the parties shall attempt for a period of at least 20 days to negotiate in good faith a resolution of such Disputed Claim, including at least one meeting in person among an executive officer of Buyer and each Seller. In connection with resolution of such Disputed Claim, each party shall provide to the other such information, documents, records, engineering, schematics, compilations, analyses and reports relating to the Disputed Claim as shall be reasonably requested.
ARTICLE 10: MISCELLANEOUS
any representation, warranty, covenant or agreement under this Agreement, at Buyer's election, in addition to any other remedy available to it, Buyer shall be entitled to an injunction restraining any such breach or threatened breach and, subject to obtaining any requisite approval of the FCC, to enforcement of this Agreement by a decree of specific performance requiring Seller to fulfill its obligations under this Agreement, in each case without the necessity of showing economic loss or other actual damage and without any bond or other security being required. The remedies provided Buyer in this Agreement shall be cumulative and shall not preclude the assertion by Buyer of any other rights or the seeking of any other remedies against Seller.
interruption. If regular broadcast transmission in the normal and usual manner is interrupted for a continuous period of eighteen (18) hours or more at any time prior to Closing (other than interruptions resulting from the loss of electrical power due to an act of God including, but not limited to, storms and lightning which do not exceed an aggregate of 48 hours), then (a) Seller immediately shall give written notice thereof to Buyer and (b) Buyer shall have the right, by giving written notice to Seller, to (i) terminate this Agreement, or (ii) postpone the Closing as provided above.
if to Seller: Shirk, Inc.
IBL, L.L.C.
6264 Lapas Trail
Indianapolis, IN 46268
Attn: Bill Shirk Poorman
Facsimile No.: 317-328-3870
and Mays Chemical Company, Inc.
P.O. Box 50915
Indianapolis, IN 46250-0915
Attn: William G. Mays
Facsimile No.: 317-845-8410
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with a copy (which shall not constitute notice) to:
Barnes & Thornburg
1313 Merchants Bank Building
11 South Meridian Street
Indianapolis, IN 46204
Attn: Catherine L. Bridge
Facsimile No.: (317) 231-7344
Richard Hayes, Esq.
8404 Lee's Ridge Road
Warrenton, VA 20186
Facsimile: 202-478-0048
Richard Carr, Esq.
5528 Trent Street
Chevy Chase, MD 20815
Facsimile: 301-718-8407
if to Buyer: Radio One, Inc.
5900 Princess Garden Parkway, Suite 800
Lanham, MD 20706
Attn: Alfred C. Liggins, President
Facsimile No.: (301) 306-9638
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with a copy (which shall not constitute notice) to:
Radio One, Inc.
5900 Princess Garden Parkway, Suite 800
Lanham, MD 20706
Attn: Linda J. Eckard, General Counsel
Facsimile No.: (301) 306-9638
and Wiley, Rein & Fielding
1776 K Street, N.W.
Washington, D.C. 20006
Attn: Dominic T. Bodensteiner
Facsimile No.: (202) 719-7049
Any party may alter the address to which communications are to be sent by
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giving notice of such change of address in conformity with the provisions of this Section providing for the giving of notice.
provisions of this Agreement.
[SIGNATURE PAGE FOLLOWS]
857808
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written.
BUYER: RADIO ONE, INC.
By: ________________________________
Name:
Title:
SELLER: SHIRK, INC.
By: ________________________________
Name:
Title:
IBL, L.L.C.
By: ________________________________
Name:
|
Title:
GUARANTORS (as to Section 11.9 only):
Schedules:
---------
1.1(a) FCC Authorizations
1.1(b) Tangible Personal Property
1.1(c) Real Property
1.1(d) Time Sale Contracts
1.1(e) Station Contracts
1.1(f) Intangible Property
1.1(j) Prepaid Items
1.2 Excluded Assets
2.3 Consents
2.4 Financial Statements
2.6 Exceptions to Title
2.7(a),(d),(e) & (f) FCC Matters
2.10 Station Contracts with Affiliates
2.12 Employees
2.14 Insurance Policies
Exhibits:
--------
Exhibit A Cash Flow Addbacks
Exhibit B Subscription
Exhibit C Registration Rights Agreement
|
| ARTICLE 5 |
| THE SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 2000, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| PERIOD TYPE | 3 MOS | 3 MOS | 3 MOS |
| FISCAL YEAR END | DEC 31 1999 | MAR 31 1999 | MAR 31 2000 |
| PERIOD START | JAN 01 1999 | JAN 01 1999 | JAN 01 2000 |
| PERIOD END | DEC 31 1999 | MAR 31 1999 | MAR 31 2000 |
| CASH | 6,221,000 | 0 | 125,588,000 |
| SECURITIES | 256,390,000 | 0 | 274,154,000 |
| RECEIVABLES | 22,262,000 | 0 | 18,512,000 |
| ALLOWANCES | (2,429,000) | 0 | (2,877,000) |
| INVENTORY | 0 | 0 | 0 |
| CURRENT ASSETS | 284,463,000 | 0 | 417,425,000 |
| PP&E | 22,497,000 | 0 | 24,583,000 |
| DEPRECIATION | 6,985,000 | 0 | 7,786,000 |
| TOTAL ASSETS | 527,536,000 | 0 | 868,304,000 |
| CURRENT LIABILITIES | 10,136,000 | 0 | 12,373,000 |
| BONDS | 82,626,000 | 0 | 83,697,000 |
| PREFERRED MANDATORY | 0 | 0 | 0 |
| PREFERRED | 0 | 0 | 0 |
| COMMON | 23,000 | 0 | 28,000 |
| OTHER SE | 420,233,000 | 0 | 757,998,000 |
| TOTAL LIABILITY AND EQUITY | 527,536,000 | 0 | 868,304,000 |
| SALES | 0 | 13,390,000 | 25,124,000 |
| TOTAL REVENUES | 0 | 13,390,000 | 25,124,000 |
| CGS | 0 | (1,573,000) | (2,972,000) |
| TOTAL COSTS | 0 | (1,573,000) | (2,972,000) |
| OTHER EXPENSES | 0 | 11,817,000 | 19,146,000 |
| LOSS PROVISION | 0 | 141,000 | 57,000 |
| INTEREST EXPENSE | 0 | 3,737,000 | 3,582,000 |
| INCOME PRETAX | 0 | (3,684,000) | 3,661,000 |
| INCOME TAX | 0 | 251,000 | 1,600,000 |
| INCOME CONTINUING | 0 | (3,935,000) | 2,061,000 |
| DISCONTINUED | 0 | 0 | 0 |
| EXTRAORDINARY | 0 | 0 | 0 |
| CHANGES | 0 | 0 | 0 |
| NET INCOME | 0 | (3,935,000) | 2,061,000 |
| EPS BASIC | 0.00 | (0.52) | 0.08 |
| EPS DILUTED | 0.00 | (0.52) | 0.08 |