Exhibit 2.6
ASSET PURCHASE AGREEMENT
By and Among
▇▇▇▇▇▇▇ BROADCASTING OF AUGUSTA, INC.
Buyer
and
GHB OF AUGUSTA, INC.
and
GHB OF CLEARWATER, INC.
Sellers
Dated as of NOVEMBER 13, 2000
TABLE OF CONTENTS
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Page
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ASSET PURCHASE AGREEMENT..................................................... 1
ARTICLE I. ASSETS TO BE CONVEYED............................................. 1
1.1 Licenses and Authorizations.......................................... 1
1.2 Station Equipment.................................................... 2
1.3 Contracts............................................................ 2
1.4 Real Property........................................................ 2
1.5 Call Signs, Promotional Materials and Intangibles.................... 2
1.6 Records.............................................................. 3
1.7 Accounts Receivable.................................................. 3
1.8 Non-Compete Agreement................................................ 3
1.9 Excluded Assets...................................................... 4
ARTICLE II. ASSUMPTION OF LIABILITIES........................................ 5
ARTICLE III. PURCHASE PRICE AND PAYMENT...................................... 5
3.1 Purchase Price....................................................... 5
3.2 Allocation........................................................... 5
ARTICLE IV. PRORATIONS AND ADJUSTMENTS 6
ARTICLE V. REPRESENTATIONS AND WARRANTIES OF SELLER 7
5.1 Organization......................................................... 7
5.2 Authorization........................................................ 7
5.3 No Breach............................................................ 7
5.4 Station Licenses..................................................... 8
5.5 Station Applications................................................. 8
5.6 Title to Assets...................................................... 8
5.7 Condition of Equipment............................................... 9
5.8 Condition of Real Property........................................... 9
5.9 Contracts............................................................ 10
5.10 Employees............................................................ 11
5.11 Employee Benefit Plans............................................... 11
5.12 Litigation........................................................... 12
5.13 Payment of Taxes..................................................... 12
5.14 Compliance With Laws................................................. 13
5.15 Insolvency Proceedings............................................... 14
5.16 Citizenship.......................................................... 14
5.17 Patents, Trademarks, Copyrights...................................... 14
5.18 Financial Statements................................................. 15
5.19 Sufficiency of Assets................................................ 15
5.20 No Misleading Statements............................................. 15
ARTICLE VI. REPRESENTATIONS AND WARRANTIES OF BUYER.......................... 16
6.1 Organization......................................................... 16
6.2 Authorization........................................................ 16
6.3 No Breach............................................................ 16
6.4 Litigation........................................................... 17
6.5 No Misleading Statements............................................. 17
6.6 Qualification as Broadcast Licensee.................................. 17
ARTICLE VII. ENVIRONMENTAL MATTERS........................................... 17
7.1 Compliance with Law.................................................. 17
7.2 Site Contamination................................................... 17
7.3 Additional Provisions Regarding Hazardous or Toxic Materials......... 18
7.4 No Notice of Lack of Compliance with Environmental Statutes.......... 18
ARTICLE VIII. PRE-CLOSING OBLIGATIONS........................................ 18
8.1 Application for Commission Consent................................... 18
8.2 Other Governmental Consents.......................................... 19
8.4 Financial Information................................................ 19
8.5 Third Party Consents................................................. 19
8.6 Environmental Site Assessment........................................ 19
8.7 Title Insurance...................................................... 20
8.8 Surveys.............................................................. 20
8.9 Confidentiality...................................................... 20
8.10 Access............................................................... 20
8.11 Employee Matters..................................................... 21
8.12 Operations Prior to Closing.......................................... 21
8.13 Adverse Developments................................................. 23
8.14 Administrative Violations............................................ 23
8.15 Bulk Sales Act....................................................... 23
8.16 Control of Stations.................................................. 23
8.17 Buyer's Financing: Other Documents and Acts......................... 23
8.18 Additional Covenant.................................................. 23
ARTICLE IX. CONDITIONS PRECEDENT............................................. 24
9.1 Mutual Conditions.................................................... 24
9.1.1 Governmental Consents......................................... 24
9.1.2 Absence of Litigation......................................... 24
9.2 Conditions to Buyer's Obligation..................................... 24
9.2.1 Representations and Warranties................................ 24
9.2.2 Compliance with Conditions.................................... 24
9.2.3 No Material Adverse Development............................... 24
9.2.4 Title Commitment and Surveys.................................. 24
9.2.5 Validity of Station Licenses.................................. 25
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9.2.6 Closing Documents............................................. 25
9.2.7 Third Party Consents.......................................... 25
9.2.8 Settlement of Claims.......................................... 25
9.2.9 Finality...................................................... 25
9.2.10 Satisfactory Environmental Assessment......................... 26
9.2.11 Estoppel Certificates........................................ 26
9.3 Conditions to Seller's Obligation.................................... 26
9.3.1 Representations and Warranties................................ 26
9.3.2 Compliance with Conditions.................................... 26
9.3.3 Payment....................................................... 26
9.3.4 Closing Documents............................................. 26
ARTICLE X. CLOSING........................................................... 26
10.1 Closing Date......................................................... 26
10.2 Performance at Closing............................................... 27
10.2.1 Seller shall deliver to Buyer:............................... 27
10.2.2 Buyer shall deliver to Seller:............................... 28
10.2.3 Other Documents and Acts..................................... 28
ARTICLE XI. POST-CLOSING OBLIGATIONS......................................... 28
11.1 Indemnification...................................................... 28
11.1.1 Buyer's Right to Indemnification............................. 28
11.1.2 Seller's Right to Indemnification............................ 29
11.1.3 Conduct of Proceedings....................................... 29
11.1.4 Indemnification As Remedy.................................... 30
11.2 Post-Closing Access.................................................. 30
ARTICLE XII. DEFAULT AND REMEDIES............................................ 30
12.1 Termination by Seller Upon Buyer's Default........................... 30
12.2 Termination by Buyer Upon Seller's Default........................... 31
12.3 Letter of Credit..................................................... 31
12.4 Seller's Remedies.................................................... 32
12.5 Buyer's Remedies..................................................... 32
ARTICLE XIII. TERMINATION.................................................... 32
13.1 Designation for Hearing.............................................. 32
13.2 Damage............................................................... 33
13.2.1 Risk of Loss................................................. 33
13.2.2 Failure of Broadcast Transmission............................ 33
13.2.3 Resolution of Disagreements.................................. 34
13.3 Legal Actions........................................................ 34
ARTICLE XIV. POST-CLOSING OBLIGATIONS OF SELLER.............................. 34
14.1 Future Financings.................................................... 34
14.2 Removal of Liens..................................................... 35
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ARTICLE XV. GENERAL PROVISIONS............................................... 35
15.1 Brokerage............................................................ 35
15.2 Expenses............................................................. 35
15.3 Notices.............................................................. 35
15.4 Attorneys' Fees...................................................... 37
15.5 Survival of Representations, Warranties and Indemnification Rights... 37
15.6 Exclusive Dealings................................................... 37
15.7 Waiver............................................................... 37
15.8 Assignment........................................................... 37
15.9 Entire Agreement..................................................... 38
15.10 Counterparts......................................................... 38
15.11 Construction......................................................... 38
15.12 Schedules and Exhibits............................................... 38
15.13 Severability......................................................... 38
15.14 Choice of Law........................................................ 38
15.15 Counsel.............................................................. 39
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DEFINED TERMS
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As used herein, the following terms shall have the meanings defined in
the introduction, background or section indicated below:
Adjustment Time Article IV
Administrative Violation Section 8.14
Agreement Introduction
Assets Article I
Assignment Applications Section 8.1
Barter Agreements Section 1.3
Buyer Introduction
Buyer Indemnitees Section 11.1.1
Buyer Statement Article V
Closing Article II
Closing Date Section 10.1
Code Section 5.11
Commission Background
Contract Date Introduction
Contracts Section 1.3
Covenant Section 1.8
Credit Agreement Section 6.3
Employee Plan Section 5.11
Environmental Assessment Section 8.6
Environmental Statutes Section 7.4
ERISA Section 5.11
EST Article IV
Estoppel Certificates Section 9.2.11
FAA Section 5.14(e)
FCC Background
FCC Consent Section 9.1.1
Final Order Section 9.2.9
Financial Statements Section 5.18
GAAP Section 5.18
Hazardous Substance Section 8.2
Hired Employees Section 8.11(b)
HSR Act Section 9.2
Indemnified Party Section 11.1.3
Indemnitor Section 11.1.3
Intangible Property Section 1.5
Lease Agreements Section 5.8(c)
Letter of Credit Section 12.3
Licensee Introduction
License Sub Section 16.8
Liens Section 5.6
Losses Section 11.1.1
Material Contracts Section 8.5
Operating Contracts Section 1.3
Payment Date Article IV
Permitted Liens Section 5.6
Promotional Rights Section 5.17
Public Filings Article XV
Purchase Price Section 3.1
Real Property Section 1.4
Real Property-Leased Section 5.8(a)
Real Property-Owned Section 5.8(a)
Receivables Section 1.7
Required Consent Section 9.2.7
Sales Agreements Section 1.3
Seller Introduction
Seller Indemnitees Section 11.1.2
Senior Lenders Section 6.3
Specified Event Section 14.3.2
Stations Background
Station Applications Section 1.1
Station Equipment Section 1.2
Station Licenses Section 1.1
Station Records Section 1.6
Title Commitment Section 8.7
Trade Agreements Section 1.3
Transaction Background
TABLE OF SCHEDULES
Schedule Title
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1.1 Licenses and Authorizations
1.2 Station Equipment
1.3(a) Operating Contracts
1.3(c) Sales Agreements
1.3(d) Trade Agreements
1.3(e) Barter Agreements
1.4 Real Property
1.5 Call Signs, Promotional Materials and
Intangibles
5.1 Organization
5.6(a) Liens
5.6(b) Permitted Liens
5.8(c) Liens on Leases; Assignment Restrictions on
Lease Agreements
5.10 Employees
5.11 Employee Benefits Plans
5.12 Litigation
5.18 Financial Statements
7.1 Compliance with Law
7.2 Site Contamination
7.3 Hazardous and Toxic Materials
7.4 Lack of Compliance with Environmental Statutes
Statutes
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is made and entered on
November __, 2000 (the "Contract Date"), by and among ▇▇▇▇▇▇▇ BROADCASTING OF
AUGUSTA, INC., a Delaware corporation ("▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇"), and WGAC License, LLC
, a Delaware limited liabilty company ("License LLC," and together with ▇▇▇▇▇▇▇
Broadcasting of Augusta, Inc., "Buyer") and GHB OF AUGUSTA, INC., a South
Carolina corporation ("Augusta"), and GHB OF CLEARWATER, INC., a South Carolina
corporation ("Clearwater"), (and, together with Augusta, being collectively
referred to as "Seller," or each individually as an "Owner") and ▇▇▇▇▇ ▇. ▇▇▇▇▇
("▇▇▇▇▇").
BACKGROUND:
Augusta is the licensee, owner and operator of Broadcast Station
WKXC(FM), Aiken, South Carolina. Clearwater is the licensee, owner and operator
of Broadcast Station WSLT(FM), Clearwater, South Carolina (together, the
"Stations"), pursuant to certain authorizations issued by the Federal
Communications Commission (the "Commission" or "FCC"), and the Owners each own
certain assets used or held for use solely in connection with the operation of
each of the Stations. Seller desires to sell and assign and Buyer desires to
purchase and acquire substantially all of the property and assets used or held
for use in the operation of the Stations upon the terms set forth in this
Agreement (the "Transaction"). The parties acknowledge that the licenses issued
by the Commission for the operation of the Stations may not be assigned without
the prior written consent of the Commission. Accordingly, in consideration of
the foregoing and of the mutual promises, covenants, and conditions set forth
below, the parties agree as follows:
ARTICLE I.
ASSETS TO BE CONVEYED
On the Closing Date (as defined below), subject to and in reliance
upon the covenants, representations, warranties and agreements set forth herein,
and subject to the terms and conditions contained herein, Seller shall sell,
assign, transfer and deliver to Buyer and Buyer shall purchase from Seller, all
of the assets used or held for use in the operation of the Stations, other than
Excluded Assets (as defined below), including without limitation, the following
(collectively, the "Assets"):
1.1 Licenses and Authorizations. All licenses, permits, permissions
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and other authorizations issued to Seller for the operation of the Stations by
the Commission or any other governmental agencies, including, but not limited
to, those listed on Schedule 1.1 and the right to use the Stations' call letters
(the "Station Licenses"), and all applications for modification, extension or
renewal thereof, and any pending applications for any new licenses, permits,
permissions or authorizations pending on the Closing Date, including, but not
limited to, those listed on Schedule 1.1 (the "Station Applications").
1.2 Station Equipment. All the fixed and tangible personal property
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used or held for use in the operation of each of the Stations including, but not
limited to, the
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transmitters, towers, ground system and studio equipment listed on Schedule 1.2
together with any replacements, improvements, or additions thereto made between
the Contract Date and the Closing Date (the "Station Equipment").
1.3 Contracts. All rights of Seller for the benefit of the Stations
---------
including, without limitation, those rights under (a) all agreements, contracts
or leases described on Schedule 1.3(a); (b) such other contracts, agreements or
leases entered into (i) with the written consent of Buyer, or (ii) in the
ordinary course of business and consistent with past practice, between the date
hereof and the Closing Date, that do not, in the aggregate, impose obligations
in excess of Ten Thousand Dollars ($10,000) on Buyer (the contracts, agreements
and leases described in clauses (a) and (b) are collectively referred to as the
"Operating Contracts"); (c) all contracts for the sale of time on the Stations
for cash (i) at rates substantially in accordance with Stations' past practices
with a remaining term at Closing of twelve (12) months or less, and a
cancellation option in favor of Seller on fifteen days notice (ii) set forth on
Schedule 1.3(c), or (iii) entered into with the written consent of Buyer ("Sales
Agreements"); (d) contracts for the sale of time on the Stations in exchange for
merchandise or services used or useful for the benefit of the Stations set forth
on Schedule 1.3(d) or entered into after the date hereof to the extent that such
contracts (i) were entered into in the ordinary course of business, (ii) are
pre-emptible for cash time sales, and (iii) obligate Buyer to provide
advertising time only on a "run of schedule" basis ("Trade Agreements"); and (e)
contracts for the sale of time on the Stations in exchange for programming set
forth on Schedule 1.3(e) or entered into after the Contract Date with the
written consent of Buyer ("Barter Agreements"). (The Operating Contracts, Sales
Agreements, Trade Agreements, and Barter Agreements are referred to collectively
as the "Contracts.")
1.4 Real Property. All right, title and interest in the real
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property used or held for use or necessary in the operation of the Stations and
owned, leased, or licensed by Seller or its affiliates, as described in Schedule
1.4 (including the Studio Lease as described in Section 1.9), or acquired for
the benefit of the Stations by Seller or its affiliates with the written consent
of Buyer between the Contract Date and Closing Date (the "Real Property").
1.5 Call Signs, Promotional Materials and Intangibles. All of
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Seller's or its affiliates' rights in the Stations' call signs, copyrights,
patents, trademarks, trade names, slogans, logos, service marks, computer
software, magnetic media, data processing files, systems and programs, business
lists, trade secrets, sales and operating plans, all goodwill of the Stations
and other similar intangible property rights used or held for use in the
operation of the Stations, including but not limited to the intangible property
identified on Schedule 1.5 (the "Intangible Property").
1.6 Records. All records, including but not limited to all books of
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account, customer lists, supplier lists, computer programs and software,
employee personnel files, local public inspection file materials, engineering
data, logs, programming records, consultants' reports, ratings reports, budgets,
marketing and demographic data, financial reports and projections, lists of
advertisers, promotional materials, and sales, operating and business plans,
relating to or used in the operation of the Stations or necessary or desirable
to show compliance with any law or regulation applicable to the Stations or the
operation of the Stations and not
3
pertaining solely to Seller's internal corporate affairs or its other stations
or interests (the "Station Records").
1.7 Accounts Receivable. At the consummation of the transaction
-------------------
contemplated by this Agreement on the Closing Date, Seller shall assign to
Buyer, for purpose of collection only, all of Seller's accounts receivable
outstanding as of the Closing Date arising from the operation of the Stations
before the Closing Date (the "Receivables"). For a period of one hundred twenty
days (120) after the Closing Date, Buyer will collect in the normal course of
business the Receivables for Seller's benefit. Seller will furnish Buyer with a
complete list of the Receivables at or as soon as is reasonably possible after
the Closing. Buyer will not adjust, compromise or settle any dispute concerning
the Receivables without prior written consent of Seller. Thirty-five (35),
sixty-five (65), ninety-five (95) and one hundred twenty-five (125) days after
the Closing Date, Buyer shall pay to Seller all amounts collected on account of
the Receivables during the first sixty (60), ninety (90) and one hundred twenty
(120) days following the Closing Date, respectively, provided, however, that any
payment received by Buyer during the one hundred thirty (130) day period
(described below) from any customer which continues to be serviced by Buyer
shall be applied to the invoice (if any) specified by the customer and, failing
specification by the customer, to the oldest accounts receivable outstanding.
The obligation of Buyer hereunder will be to collect such accounts receivable in
the ordinary and normal course of business and does not extend to the
institution of litigation, employment of counsel or a collection agency, or any
other extraordinary means of collection. Within one hundred thirty (130) days of
the Closing Date, Buyer will deliver to Seller the balance of amounts collected
on account of the Receivables. Buyer shall then reassign to Seller the
Receivables that remain uncollected. If Buyer receives following the termination
of the collection period any payments with respect to the Receivables, Buyer
shall promptly remit to Seller such payments. Non-Compete and Consulting
--------------------------
Agreements. Upon the Closing, and for a period of five years thereafter, ▇▇▇▇▇
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will not, and shall not become, directly or indirectly, associated in any way
with any entity, whether as a principal, owner, partner, consultant, advisor,
agent, employee, independent contractor, member, shareholder or otherwise (other
than as a holder of less than five percent of the outstanding shares of any
class of equity securities), that is actively engaged in the ownership,
management or operation of any radio broadcast station the transmitter site of
which is within 75 miles of the legal boundaries of Augusta, Georgia. Upon the
Closing and for a period of twenty-four months thereafter ▇▇▇▇▇ (a) shall not,
directly or indirectly, induce any employee of either of the Stations to
terminate his or her employment with either Station and (b) shall not, directly
or indirectly, either as a principal, owner, partner, consultant, advisor,
agent, employee, independent contractor, member, shareholder or otherwise,
employ or solicit the employment of any person employed by the Buyer during the
period twenty-four months after the Closing for employment. Buyer shall pay
▇▇▇▇▇ at Closing the sum of Six Hundred Thousand Dollars ($600,000) for the
performance of his obligations under the immediately preceding two sentences
(such obligations the "Covenant.") .In addition, ▇▇▇▇▇ will be available to
Buyer for consulting at Buyer's request on matters pertaining to the Augusta,
Georgia radio market and the operation of the Stations for a period of one year
after Closing in exchange for the payment at Closing of .One Hundred Thousand
Dollars ($100,000).
4
1.9 Studio Lease.
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At Closing, Seller shall sublet to Buyer the studio portion of the
real property described in the lease agreement listed on Schedule 1.4 under Real
Property Leased (the "Studio Lease")on terms to be agreed on by the parties
prior to Closing for a term of 6 months from the date of Closing in exchange for
the amount of Forty-four Thousand One Hundred Dollars ($44,100) to be paid by
Buyer to Seller at Closing. Buyer shall have no other financial obligations
under the Studio Lease. The parties agree that the terms to be agreed upon are
not material to the agreement set forth herein and neither party will maintain
that this Agreement is not enforceable by reason of the agreement of the parties
to agree on the terms of the Studio Lease prior to Closing.
1.10 Excluded Assets. It is understood and agreed that the following
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assets shall not be among the Assets purchased pursuant to this Agreement:
(a) Seller's cash on hand as of the Closing and any of Seller's
interests in its bank accounts and all of Seller's other cash, cash equivalents,
security funds, securities, investments, deposits, prepayments (including
prepaid taxes and insurance), tax refunds and overpayments;
(b) Any insurance policies and proceeds thereof, promissory
notes, amounts due from employees, bonds, letters of credit, certificates of
deposits or other similar items and cash surrender value in regard thereto;
(c) Any pension, profit-sharing, or employee benefit plans,
including all of Seller's interest in any Employee Plan (as defined in Section
5.11), and any collective bargaining agreements;
(d) Any accounts receivable outstanding on the Closing Date,
subject to Section 1.7 hereof.
(e) Any agreements not included among the Contracts;
(f) All tax returns and supporting materials, all original
financial statements and supporting materials, all books and records that Seller
is required by law to retain, all corporate minutes and records, and all records
of Seller relating to the sale of the Assets; and
(g) Any interest in and to any refunds of federal, state, or
local franchise, income or other taxes for periods prior to the Closing Date.
ARTICLE II.
ASSUMPTION OF LIABILITIES
On the Closing Date, Buyer shall assume the liabilities which accrue
under the Contracts on and after the closing of the transactions contemplated
herein (the "Closing"), and the liabilities which result from the operation of
the Stations by Buyer after Closing. Buyer
5
shall not assume or undertake to pay, satisfy or discharge any other
liabilities, obligations, commitments or responsibilities of Seller, including,
without limitation, (i) any obligations or liabilities under any contract,
agreement or lease not included in the Contracts, (ii) any obligations or
liabilities under the Contracts relating to the period prior to the Closing
except for those obligations or liabilities arising out of the Trade Agreements
or Barter Agreements assumed by Buyer and subject to adjustment pursuant to
Article IV, (iii) any obligations or liabilities relating to or arising out of
any claims or pending litigation proceedings, (iv) any obligations or
liabilities of Seller under any agreement or arrangement, written or oral, with
salaried or non-salaried employees of the Stations, other than those obligations
or liabilities of Seller under the employment agreements set forth on Schedule
1.3 and agreements or arrangements with employees of the Stations that Buyer has
identified pursuant to Section 8.10(b) as agreements or arrangements that Buyer
will assume from Seller and provided further, that Buyer actually hires such
employees pursuant to such agreements or arrangements (as opposed to entering
into new employee agreements or arrangements with such employees), (v) any
Employee Plan and (vi) any obligations or liabilities to any employee of the
Stations for accrued commissions, vacation time or sick leave, and all such
obligations and liabilities shall remain and be the obligations and liabilities
of Seller. If any Contract requires the consent of third parties for assignment,
but (i) such consent has not been obtained as of the Closing Date, as required
by Section 9.2.7, and (ii) in the case of Material Contracts, Buyer waives such
condition precedent to the Closing in its sole discretion, then Buyer shall
assume Seller's obligations under such Contract only for the period after
Closing during which Buyer receives the benefits to which Seller is currently
entitled under such Contract (unless consent is subsequently obtained and such
delay has not prejudiced Buyer, and unless the failure of Buyer to receive
benefits under such Contract is due to Buyer's failure to perform Seller's
obligations thereunder after Closing).
ARTICLE III.
PURCHASE PRICE AND PAYMENT
3.1 Purchase Price. The purchase price for the Assets and the
--------------
Covenant shall be Twelve Million Dollars ($12,000,000) (the "Purchase Price").
At Closing, Buyer will pay to Seller by wire transfer of federal funds (pursuant
to wire instructions that Seller shall deliver to Buyer at least three (3) days
prior to Closing) the Purchase Price plus or minus any adjustments, as set forth
in Article IV, and Section 8.5 (Environmental Site Assessment).
3.2 Allocation. Six Hundred Thousand Dollars ($600,000) of the
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Purchase Price shall be allocated to the payment to ▇▇▇▇▇ for his performance of
the Covenant in Section 1.8 hereof, One Hundred Thousand Dollars ($100,000)
shall be paid to ▇▇▇▇▇ for his consulting services as set forth in Section 1.8
hereof and Eleven Million Three Hundred Thousand Dollars ($11,300,000) shall be
allocated among the Assets. The Purchase Price shall be allocated among the
Assets, the Covenant and the consulting services in accordance with an appraisal
performed by either Bond & ▇▇▇▇▇▇ or BIA. The fees of the appraiser shall be
paid for one-half by Buyer and one-half by Seller. Each of Seller and Buyer
agree (i) to jointly complete and separately file Form 8594 with its federal
income tax return for the tax year in which the Closing occurs and (ii) that
neither Seller nor Buyer will take a position on any income, transfer or gains
tax return
6
inconsistent with the values set forth in the appraisal and the requirements of
section 1060 of the Internal Revenue Code without the written consent of the
other.
ARTICLE IV.
PRORATIONS AND ADJUSTMENTS
Current real estate taxes, rent, utilities and all other normal income
and expense items related to the Assets shall be apportioned between the parties
to reflect the principle that all expenses and income arising from the operation
of the Assets up through 11:59 p.m. Eastern Standard Time ("EST") of the day
prior to the Closing Date (the "Adjustment Time") shall be for the account of
Seller, and all expenses and income arising from the operation of the Assets
after the Adjustment Time shall be for the account of Buyer. All special
assessments and similar charges or liens, imposed against the Assets in respect
of any period of time up until the Adjustment Time, whether payable in
installments or otherwise, shall be the responsibility of Seller, and amounts
payable with respect to such special assessments, charges or liens imposed in
respect of any period of time after the Adjustment Time shall be the
responsibility of Buyer, and such charges shall be adjusted as required
hereunder. Three (3) days prior to the Closing Date Seller shall estimate all
apportionments pursuant to this Article IV and shall deliver a statement of its
estimates to Buyer (which statement shall set forth in reasonable detail the
basis for those estimates). To the extent that, as of the Closing Date, the
aggregate value of the unfulfilled obligations under Trade Agreements or Barter
Agreements, including any "time bank" provision thereof, exceeds the aggregate
value of consideration to be received by the Stations related to such Trade
Agreements or Barter Agreements (determined as of the Closing Date), Buyer
shall be entitled to a positive cash adjustment in the amount equal to the
excess, if any. At the Closing, Buyer shall pay to Seller, or Seller shall pay
to Buyer, as the case may be, the net amount due as a result of the estimated
apportionments (excluding any item that is in good faith in dispute). Within
sixty (60) days after the Closing, Buyer shall deliver to Seller a statement
(the "Buyer Statement") of any adjustments to Seller's estimate of the
apportionments, and within twenty (20) days of the delivery to Seller of the
Buyer Statement (the "Payment Date"), Buyer shall pay to Seller, or Seller shall
pay to Buyer, as the case may be, any amount due as a result of the adjustment
(or, if there is any dispute, the undisputed amount). Except with respect to
items that Seller notifies Buyer that it objects to within such twenty (20) day
period, the adjustments set forth in the Buyer Statement shall be final and
binding on the parties effective on the expiration of such twenty (20) day
period. If Seller disputes Buyer's determinations, or if at any time after
delivery of Buyer's statement of determinations, either party determines that
any item included in the apportionments is inaccurate, or that an additional
item should be included in the apportionments, the parties shall confer with
regard to the matter and an appropriate adjustment and payment shall be made as
agreed upon by the parties (or, if they are unable to resolve the matter, they
shall select a firm of independent certified public accountants to resolve the
matter, whose decision on the matter shall be binding and whose fees and
expenses shall be borne equally by the parties). All amounts due pursuant to
this subsection that are not paid on the Payment Date or such later date when
any disputed amounts are finally determined, as applicable, shall bear interest
from such date until paid at a rate per annum equal to the generally prevailing
prime interest rate (as reported by The Wall Street Journal) plus five percent
(5%).
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller makes the following representations and warranties, all of
which have been relied upon by Buyer in entering into this Agreement and, except
as otherwise specifically provided, all of which shall be true and correct at
Closing.
5.1 Organization. Each Owner is a corporation duly organized,
------------
validly existing and in good standing under the laws of the State of South
Carolina, and is duly qualified to do business in, and is in good standing
under, the laws of the State of South Carolina. Each Owner has full corporate
power and authority to own, lease and operate its Assets and to conduct the
business and operations of the Stations as currently conducted and to enter into
and perform this Agreement. The address of each Owner's chief executive offices,
and the locations of all tangible personal property included in the Assets are
listed in Schedule 5.1. Except as set forth in Schedule 5.1, during the past
five (5) years, none of the Owners have, nor to the best of any of the Owner's
knowledge, has any prior owner of any of the Stations been known by or used any
corporate, partnership, fictitious or other name in the conduct of the Stations'
business or in connection with the use or operation of the Assets.
5.2 Authorization. The execution, delivery and performance of this
-------------
Agreement by each of the Owners has been duly authorized by all necessary
corporate action on each of their parts. Each of the Owners shall deliver
evidence of such authorization at Closing. ▇▇▇▇▇ has full power and authority to
execute and deliver this Agreement and to perform his obligations hereunder.
This Agreement has been duly executed by Seller and delivered to Buyer and
constitutes the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as limited by laws affecting
the enforcement of creditors' rights generally or equitable principles.
5.3 No Breach. None of (i) the execution, delivery and performance
---------
of this Agreement by Seller, (ii) the consummation by Seller of this Agreement
and all other documents or instruments related thereto or executed in connection
therewith or in contemplation of the Transaction, or (iii) Seller's compliance
with the terms and conditions hereof will, with or without the giving of notice
or the lapse of time or both, conflict with, breach the terms and conditions of,
constitute a default under, or violate any of the Owners' certificates of
incorporation or bylaws, any judgment, decree, order, injunction, agreement,
lease or other instrument to which Seller is a party or by which Seller is
legally bound, or any law, rule, or regulation applicable to Seller or the
operation of the Stations.
5.4 Station Licenses. The Station Licenses are all of the licenses,
----------------
permits, and other authorizations used or necessary to lawfully operate the
Stations in the manner and to the full extent as they are now operated, and the
Station Licenses are validly issued in the name of Seller. Seller has delivered
to Buyer true and complete copies of the Station Licenses, including any and all
amendments and other modifications thereto. The Station Licenses are in full
force and effect, are valid for the balance of the current license term
applicable generally to radio stations licensed to communities in the state
where the each of the Stations is located, are unimpaired by any acts or
omissions of Seller or any of its affiliates, or the employees, agents,
8
officers, directors, or shareholders of Seller or any of its affiliates, and are
free and clear of any restrictions which might limit the full operation of the
Stations in the manner and to the full extent as it is now operated (other than
restrictions under the terms of the licenses themselves or generally applicable
under the rules and regulations of the FCC). There are no applications,
proceedings, or complaints pending or, to the knowledge of Seller, threatened
which may have an adverse effect on the business or operation of the Stations
(other than rulemaking proceedings that apply to the radio broadcasting industry
generally). Seller is not aware of any reason why those of the Station Licenses
subject to expiration might not be renewed in the ordinary course for a full
term without material qualifications or of any reason why any of the Station
Licenses might be revoked. Each of the Stations is in compliance with the
Commission's policy on exposure to radio frequency radiation. No renewal of any
Station License would constitute a major environmental action under the rules of
the Commission. There are no facts which, under the Communications Act of 1934,
as amended, or the existing rules of the Commission, would disqualify Seller
from assigning the Station Licenses or from consummating the transactions
contemplated herein within the times contemplated herein. Seller maintains an
appropriate public inspection file at each Station's studio in accordance with
Commission rules. Access to the Stations' transmission facilities are restricted
in accordance with the policies of the Commission.
5.5 Station Applications. All information contained in any Station
--------------------
Application (as described on Schedule 1.1 hereto) pending with the Commission is
true, complete and accurate in all material respects.
5.6 Title to Assets. Except as set forth on Schedule 5.6, Seller has
---------------
good and marketable title to the Assets, in the case of owned Assets, and a
valid leasehold interest, in the case of leased Assets, in each case free and
clear of all debts, liens, charges, security interests, mortgages, deeds of
trust, pledges, judgments, trusts, adverse claims, liabilities, collateral
assignments, leases, easements, covenants, encumbrances and other impairments of
title other than liens that will be removed at or prior to Closing ("Liens"),
liens for taxes not yet due and payable, mechanics' liens and similar statutory
liens not in default and recorded easements, rights of way and other similar
liens which do not adversely affect the value of any Real Property or the use of
any Real Property as it is currently used in the operation of the Assets (the
"Permitted Liens"). At Closing, Seller shall convey to Buyer good and marketable
title to the Assets owned by Seller and a valid leasehold interest in the Assets
leased by Seller, free and clear of all Liens other than Permitted Liens.
5.7 Condition of Equipment. The Station Equipment listed on Schedule
----------------------
1.2 constitutes all of the personal property that is used, held by the Seller or
others for use by the Stations, or necessary to operate the Stations as they are
now operated. The Station Equipment is in good operating condition and repair
(reasonable wear and tear excepted), is maintained in compliance with good
engineering practice, is performing satisfactorily, is not in need of repair,
has been properly maintained in accordance with reasonably prudent industry
practices, is available for immediate use and is otherwise sufficient to permit
the Stations to operate in accordance with the Station Licenses and the rules
and regulations of the Commission. All Station Equipment is type-approved or
type-accepted where such type-approval or type-acceptance is required.
9
5.8 Condition of Real Property.
--------------------------
(a) The Real Property listed on Schedule 1.4 constitutes
all the real property owned ("Real Property-Owned") or leased ("Real Property-
Leased") by Seller or others in connection with the operation of the Stations as
they are now operated. Seller has marketable fee simple title (free and clear of
any liens other than Permitted Liens) to the Real Property-Owned.
(b) There are no encroachments upon the Real Property by
any buildings, structures, or improvements located on adjoining real estate.
None of the buildings, structures, or improvements (including without limitation
any ground radials, guy wires or guy anchors) constructed on the Real Property
encroach upon adjoining real estate, and all such buildings, structures, and
improvements are constructed in conformity with or are "grandfathered" with
respect to all "setback" lines, easements, and other restrictions, or rights of
record, or that have been established by any applicable building or safety code
or zoning ordinance. Such "grandfathered" approvals shall survive indefinitely
the transfer of the Real Property to Buyer. No utility lines serving the Real
Property pass over the lands of others except where appropriate easements have
been obtained. There are no pending or, to the best of Seller's knowledge,
threatened or contemplated condemnation or eminent domain proceedings that may
affect the Real Property. There exists no writ, injunction, decree, order or
judgment, nor any litigation, pending, or to the best of Seller's knowledge,
threatened, relating to the ownership, use, lease, occupancy or operation of any
of the Real Property. Seller's use and occupancy of the Real Property complies
in all material respects with all regulations, codes, ordinances, and statutes
of all applicable governmental authorities, including without limitation all
environmental protection and sanitary laws and regulations, occupational safety
and health regulations, and electrical codes. There are no material structural
defects in the buildings, structures, and improvements located on the Real
Property. Roofs are in good condition and repair, and all plumbing equipment,
heating, ventilating and air conditioning equipment, electrical wiring, and
water and sewage systems are operating properly and are free of any material
defects.
(c) The leased premises are leased at the rates and for
terms ending on the dates shown on Schedule 1.4 pursuant to the agreements
described in Schedule 1.4 (the "Lease Agreements"), which are the sole and
complete agreements concerning Seller's use of the leased premises. Each Lease
Agreement is legal, valid, binding, enforceable and in full force and effect.
Neither Seller nor any other party is in default, violation or breach in any
respect under any Lease Agreement, and no event has occurred and is continuing
that constitutes or, with notice or the passage of time or both, would
constitute a default, violation or breach thereunder. No amount payable under
any Lease Agreement is past due. Seller has not received any notice of a
default, offset or counterclaim under any Lease Agreement or any other
communication asserting non-compliance with any Lease Agreement. Seller has the
exclusive right to use and occupy the premises leased under each Lease Agreement
as they are now currently being used and occupied and for the purposes necessary
to operate the Stations. Seller enjoys peaceful and undisturbed possession of
the premises leased by Seller under the Lease
10
Agreement. Except as set forth on Schedule 5.6(b), the Lease Agreements are
free and clear of all Liens, except for lessors' interests in the leases.
Seller has delivered to Buyer, true and complete copies of the Lease
Agreements, together, in the case of any subleases or similar occupancy
agreements, with copies of all overleases. Except as disclosed in Schedule
5.6(b), Seller has full legal power and authority to assign its rights
under the Lease Agreements to Buyer in accordance with this Agreement on
terms and conditions no less favorable than those in effect on the date
hereof, and such assignment will not affect the validity, enforceability
and continuity of any such lease.
(d) All utilities that are required for the full and complete
occupancy and use of the Real Property for the purposes for which such
properties are presently being used by Seller, including without limitation
electric, water, sewer, telephone (if any) and similar services, have been
connected and are in good working order. By the Closing Date, Seller will
have paid all charges for such utilities, including without limitation any
"tie-in" charges or connection fees, except for those charges that will not
become due until after the Closing Date and that are to be prorated between
Seller and Buyer pursuant to Article IV.
5.9 Contracts. Except as set forth on Schedule 6.9, the Contracts
---------
are assignable to Buyer on terms and conditions no less favorable than
those in effect on the date hereof without consent, or, if consent of the
other contracting party to the assignment is required, such consent for
Material Contracts will be secured at Seller's sole expense prior to the
Closing Date, and Seller shall use commercially reasonable efforts to
secure all other required consents prior to Closing. Each Contract is in
full force and effect and is unimpaired by any acts or omissions of Seller,
Seller's employees, agents, officers, directors or shareholders. Seller has
complied in all material respects will all Contracts to be assigned to
Buyer hereunder, and there has not occurred as to any Contract any default
by Seller or any event that, with notice or the lapse of time or otherwise,
could become a default by Seller. Seller has not granted or been granted
any waiver or forbearance with respect to any of the Contracts. To the best
knowledge of Seller, there has not occurred as to any Contract any default
by any other party thereto or any event that, with notice or the lapse of
time or at the election of any person other than Seller, could become a
default by such party. Those Contracts whose stated duration extends beyond
the Closing Date will, at Closing, be in full force and effect and will be
unimpaired by any acts or omissions of Seller, Seller's agents, employees,
officers, directors or shareholders. Seller has provided to Buyer true and
correct copies of all written Contracts, as modified to date, or true and
complete memoranda describing the terms of all oral Contracts, and all
liabilities and obligations under such Contracts can be ascertained from
such copies or memoranda. The Contracts as amended through the date of this
Agreement will not be modified without Buyer's written consent, which
consent shall not be unreasonably withheld.
5.10 Employees.
---------
(a) Schedule 5.10 contains a true and complete list of all
persons employed at the Stations, each such person's compensation and bonus
arrangements and the Employee Plans listed in Schedule 5.11, if any,
applicable to each such person. Seller is not a party to any agreement or
arrangement, written or oral, with
11
salaried or non-salaried employees except as described in Schedules 5.10
and 5.11 or included among the Operating Contracts. Except as described in
Schedule 5.10, Seller has no knowledge that any employee identified in
Schedule 5.10 currently plans to terminate employment, whether by reason of
the transactions contemplated by this Agreement or otherwise.
(b) Except as disclosed in Schedule 5.10, Seller is not a party
to or subject to any contract with any labor organization, nor has Seller
agreed to recognize any union or other collective bargaining unit, nor has
any union or other collective bargaining unit been certified as
representing any of Seller's employees at the Stations. Seller has no
knowledge of any organizational effort currently being made or threatened
by or on behalf of any labor union with respect to employees of Seller at
the Stations. There are no unfair labor practice charges pending or, to the
best of Seller's knowledge, threatened against Seller; there are no pending
or threatened strikes, arbitration proceedings involving labor matters or
other labor disputes affecting Seller or the Stations; and Seller has not
experienced any strikes, work stoppages or other significant labor
difficulties of any nature at the Stations in the past two (2) years.
5.11 Employee Benefit Plans. Schedule 5.11 sets forth a true and
----------------------
complete list of each employee or retiree benefit or compensation plan
within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or compensation, bonus,
incentive, deferral, equity based, severance, termination, retention,
change in control, employment or other similar program, agreement,
arrangement, trust or other funding arrangement, whether or not subject to
the provisions of ERISA, to which Seller is bound or that is or has been
established or maintained or in respect of which Seller has ever had any
obligation to contribute (each, an "Employee Plan"). Except pursuant to an
Employee Plan, Seller has no fixed or contingent liability or obligation to
or in respect of any person now or formerly employed at the Stations or any
beneficiary or dependent of any such person, including, without limitation,
in respect of pension or thrift benefits or payments, individual or
supplemental pension benefits or payments or compensation arrangements,
contributions to hospitalization or other health, life or other welfare
benefits, incentive benefits or payments, bonus benefits or payments or
vacation, sick leave, disability and termination benefits or payments,
including workers' compensation. No trade or business (whether or not
incorporated) is or has been as of any date within the preceding six (6)
years treated as a single employer together with Seller pursuant to Section
414 of the Internal Revenue Code of 1986, as amended, and the regulations
thereunder (the "Code"). Seller has not incurred or does not reasonably
expect to incur (either directly or indirectly, including as a result of
any indemnification obligation) any liability that could become a liability
of Buyer or, following the Closing, remain a liability of the Stations
under or pursuant to Title I or IV of ERISA or the penalty, excise tax or
joint and several liability provisions of the Code relating to employee
benefit plans and, to the best knowledge of Seller, no event, transaction
or condition has occurred or exists which could result in any such
liability. Each of the Employee Plans has been operated and administered in
all respects in accordance with all applicable laws, including but not
limited to ERISA and the Code. It is expressly understood that Buyer is not
assuming any obligation of Seller under or with respect to any Employee
Plan.
12
5.12 Litigation. Except as set forth on Schedule 5.12 and proceedings
----------
affecting the broadcast industry generally, there is no unsatisfied
judgment outstanding and no litigation, proceeding, claim or investigation
of any nature pending or, to Seller's best knowledge, threatened against
Seller or any of the Assets which might adversely affect the continued
operation of the Stations or impair the value of the Assets or which might
adversely affect Seller's ability to perform in accordance with the terms
of this Agreement. Seller has no knowledge of any facts that could
reasonably result in any such proceedings. With respect to each matter set
forth therein, Schedule 5.12 sets forth a description of the forum for the
matter, the parties thereto and the type and amount of relief sought.
5.13 Payment of Taxes. Seller has, or by the Closing Date will have,
----------------
duly filed all tax returns and forms required to be filed in respect of the
Stations and paid in full or discharged all taxes, assessments, excises,
interest, penalties, deficiencies and other levies relating to the Assets
or that could give rise to a lien or other encumbrances on the Assets in
the hands of the Buyer, excepting such taxes, assessments, and other levies
as will not be due until after the Closing Date or that are to be prorated
between Seller and Buyer pursuant to Article IV. No event has occurred that
could impose on Buyer any liability for any taxes, penalties, or interest
due or to become due from Seller from any taxing authority.
5.14 Compliance With Laws. Seller has complied in all material
--------------------
respects with, and is not in violation of any federal, state or local laws,
regulations or orders (including any applicable statutes, ordinances or
codes relating to zoning and land use, health and sanitation, environmental
protection, occupational safety, and the use of electrical power) affecting
the Assets, Seller's business, or the operation of the Stations. Without
limiting the generality of the foregoing:
(a) The Stations' transmitting and studio equipment is operating
in accordance with the terms and conditions of the Station Licenses, and
the rules, regulations and policies of the Commission, including without
limitation all regulations concerning equipment authorization and human
exposure to radio frequency radiation. The Stations are not causing
interference in violation of Commission rules to the transmission of any
other broadcast station or communications facility and neither Station has
received any complaints with respect thereto and (ii) no other broadcast
station or communications facility is causing interference in violation of
Commission rules to the Stations' transmissions or the public's reception
of such transmissions. Seller has no outstanding construction permits with
respect to the Stations.
(b) Seller has, in the conduct of the Stations' business,
complied in all material respects with all applicable laws, rules and
regulations relating to the employment of labor, including those concerning
wages, hours, equal employment opportunity, collective bargaining, pension
and welfare benefit plans, and the payment of Social Security and similar
taxes, and Seller is not liable for any arrearages of wages or any tax
penalties due to any failure to comp ly with any of the foregoing.
(c) Seller has received no notification from the Commission that
Seller's employment practices fail to comply with Commission rules and
policies.
13
(d) All ownership reports, employment reports, tax returns and
other documents required to be filed by Seller with the Commission or other
governmental authorities have been filed. Such items as are required to be
placed in each Station's local public inspection files have been placed in
such files. All proofs of performance and measurements that are required to
be made by Seller with respect to each Station's transmission facilities
have been completed and filed at the Stations. All information contained in
the foregoing documents is true, complete and accurate in all material
respects.
(e) The towers used in the operation of the Stations are
painted, obstruction marked and lighted to the extent required by, and in
accordance with the rules and regulations of the Federal Aviation
Administration (the "FAA"), the Commission and any other applicable
requirements of law. Appropriate notifications to the FAA have been filed
for such towers where required by the Commission's rules and regulations.
5.15 Insolvency Proceedings. Neither Seller nor the Assets are the
----------------------
subject of any pending or threatened insolvency proceedings of any
character, including without limitation bankruptcy, receivership,
reorganization, composition or arrangement with creditors, voluntary or
involuntary. Seller has not made an assignment for the benefit of creditors
or taken any action in contemplation of or which would constitute a valid
basis for the institution of any such insolvency proceedings. After giving
effect to the Transaction, Seller (i) will have sufficient capital to carry
on its business and transactions, (ii) will be able to pay its debts as
they mature or become due, and (iii) will own assets the fair value of
which will be greater than the sum of all liabilities (including contingent
liabilities) of Seller not specifically assumed by Buyer pursuant to the
terms of this Agreement. Seller is not insolvent nor will it become
insolvent as a result of entering into this Transaction.
5.16 Citizenship. Neither Owner is a "foreign person" as defined in
-----------
Section 1445(f)(3) of the Code. On the Closing Date, each Owner will
deliver to Buyer an affidavit to that effect, verified as true and sworn to
under penalty of perjury by a duly-authorized officer of the Owner. The
Owner's affidavite shall also set forth the Owner's name, address, taxpayer
identification number, and such additional information as may be required
to exempt the Transaction from the withholding provisions of Section 1445
of the Code. Buyer shall have the right to furnish copies of the affidavit
to the Internal Revenue Service.
5.17 Patents, Trademarks, Copyrights. The call signs and all
-------------------------------
slogans, logos, copyrights, patents, trademarks, trade names, service
marks, and other similar intangible property rights, including
registrations and applications to register or renew the registrations of
any of the foregoing, currently used to promote or identify the Stations,
or otherwise used in connection with each Station's business, are listed or
described on Schedule 1.5 (the "Promotional Rights"). The Promotional
Rights are either owned or validly licensed by Seller, and Schedule 1.5
identifies which Promotional Rights are so owned and which are licensed,
and if licensed, the royalties paid thereon and the parties paid
thereunder. Seller does not have any knowledge, nor has Seller received any
notice to the effect that its use of any of the Promotional Rights may be
or are claimed to infringe on the right of another. Seller has no knowledge
of any
14
infringement or unlawful or unauthorized use of such Promotional Rights,
including without limitation the use of any call sign, slogan or logo by
any broadcast or cable station in the radio market areas that may be
confusingly similar to the call signs, slogans, and logos currently used by
the Stations. The operations of the Stations do not infringe any copyright,
patent, trademark, trade name, service ▇▇▇▇, or other similar right of any
third party. Seller has not sold, licensed or otherwise disposed of any
Promotional Rights to any person or entity and Seller has not agreed to
indemnify any person or entity for any patent, trademark or copyright
infringement. Schedule 1.5 lists all of the Promotional Rights which have
been duly registered with, filed in or issued by, as the case may be, the
United States Patent and Trademark Office and United States Copyright
Office or other filing offices, domestic or foreign.
5.18 Financial Statements. Seller has furnished Buyer with the
--------------------
financial statements listed or described on Schedule 5.18 (the "Financial
Statements"). The Financial Statements include (i) unaudited balance sheets
as of December 31, 1997, 1998 and 1999 and the related audited consolidated
statements of income and cash flows for such fiscal years (including the
related notes and schedules thereto) of Seller, (ii) an unaudited balance
sheet as of September 30, 2000 of the Stations, (iii) unaudited statements
of income of the Stations for the nine month period ended September 30,
2000 and (iv) unaudited monthly financial statements covering the period
beginning January 1, 1999 and ending September 30, 2000. The year-end
Financial Statements: (i) have been prepared in accordance with United
States Generally Accepted Accounting Principles ("GAAP") on a consistent
basis throughout the periods involved and as compared with prior periods
and (ii) fairly and accurately reflect the financial condition and the
results of operations and cash flows of the Stations as of the dates and
for the periods indicated. The monthly and other interim Financial
Statements: (i) have been prepared in accordance with GAAP on a consistent
basis throughout the periods involved (except to the extent noted thereon)
and on a basis consistent with the year-end Financial Statements, and (ii)
fairly and accurately reflect the financial condition and the results of
operations and cash flows of the Stations as of the dates and for the
periods indicated in all material respects. Except as reflected in the
Financial Statements or otherwise disclosed to Buyer in writing, no event
has occurred since the preparation of the most recent Financial Statements
that would make such Financial Statements misleading in any material
respect.
5.19 Sufficiency of Assets. The Assets are sufficient to operate the
---------------------
Stations as they are now operated.
5.20 No Misleading Statements. No statement made by Seller to Buyer
------------------------
and no information provided or to be provided by Seller to Buyer pursuant
to this Agreement or in connection with the negotiations covering the
transaction, contains or will contain any untrue statement of a material
fact or omits or will omit a material fact necessary in order to make such
statements or information not misleading.
5.21 Transactions with Affiliates. All Assets to be assumed by Buyer
----------------------------
are owned, leased or held by Seller, and no Affiliate of Seller or any
other Person owns or leases property or is a party to any Contract
affecting or relating to the operation of the Station. "Affiliate" shall
mean a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control
with, the Person specified.
15
5.22 Insurance. Schedule 5.23 is a true and complete list of all
--------- -------------
insurance policies of the Station. The coverage under such policies is
adequate to cover the value of any loss of any of the Assets between the
date hereof and the Closing All policies of insurance listed in Schedule
--------
5.23 are in full force and effect as of the date of this Agreement.
----
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer makes the following representations and warranties, all of
which have been relied upon by Seller in entering into this Agreement and,
except as otherwise specifically provided, all of which shall be true and
correct as of Closing.
6.1 Organization. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is a corporation duly organized,
------------
validly existing, and in good standing, under the laws of the State of
Delaware. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ is, or by Closing will be, duly qualified to do
business in and is in good standing under the laws of the States of Georgia
and South Carolina. License LLC is a limited liability company duly formed
and in good standing under the laws of the State of Delaware.
6.2 Authorization. The execution, delivery and performance of this
-------------
Agreement by each of the Buyers (and each agreement, document or instrument
required to be executed, delivered and performed by Buyer pursuant to this
Agreement) has been duly authorized by all necessary corporate or
partnership action on their part. Buyer shall deliver evidence of such
authorization at Closing. This Agreement has been duly executed by Buyer
and delivered to Seller and constitutes the legal, valid and binding
obligation of Buyer, enforceable against Buyer in accordance with its
terms, except as limited by laws affecting the enforcement of creditors'
rights generally or equitable principles.
6.3 No Breach. Except for Buyer's obligations to comply with
---------
certain requirements of that certain Credit Agreement, as amended, (the
"Credit Agreement") dated as of August 11, 1998 among Buyer, certain
affiliates of Buyer, the lenders named therein (the "Senior Lenders") and
the Bank of Montreal, Chicago Branch, as agent, including obtaining the
consent of the Senior Lenders all of which obligations will be complied
with in all material respects at or prior to Closing , none of (i) the
execution, delivery and performance of this Agreement by Buyer, (ii) the
consummation by Buyer of this Agreement and all other documents or
instruments related thereto or executed in connection therewith if in
contemplation of the Transaction, or (iii) Buyer's compliance with the
terms and conditions hereof will, with or without the giving of notice or
the lapse of time or both, conflict with, breach the terms and conditions
of, constitute a default under, or violate Buyer's articles of
incorporation, bylaws, any judgment, decree, order, agreement, lease or
other instrument to which Buyer is a party or by which Buyer is legally
bound, or any law, rule or regulation applicable to Buyer.
6.4 Litigation. There is no action, suit, investigation or other
----------
proceedings pending or, to Buyer's best knowledge, threatened which may
adversely affect Buyer's ability to perform in accordance with the terms of
this Agreement, and Buyer is unaware of any facts which could reasonably
result in any such proceeding.
16
6.5 No Misleading Statements. No statement made by Buyer to Seller
------------------------
and no information provided or to be provided by Buyer to Seller pursuant
to this Agreement or in connection with the negotiations covering the
purchase and sale contemplated herein contains or will contain any untrue
statement of a material fact or omits or will omit a material fact
necessary in order to make such statements or information not misleading.
6.6 Qualification as Broadcast Licensee. License LLC is financially
-----------------------------------
and legally qualified under the Communications Act of 1934, as amended, and
the rules, regulations and policies of the FCC to become the licensee of
the Stations. There are no proceedings, complaints, notices of forfeiture,
claims, investigations pending or, to the knowledge of Buyer, threatened
against any or in respect of any of the broadcast stations licensed to
Buyer or its affiliates that would materially impair the qualifications of
License LLC to become a licensee of the Stations.
ARTICLE VII.
ENVIRONMENTAL MATTERS
7.1 Compliance with Law. Except as listed and described on Schedule
-------------------
7.1 to this Agreement, all activities of Seller at or on the Real Property
and all operations of the Stations by the Seller (whether or not conducted
at the Real Property), have been and are being conducted in compliance with
all applicable federal, state and local statutes, ordinances, rules,
regulations, permits, orders and policies concerning (i) manufacturing,
processing, handling, storage, treatment and/or disposal of any hazardous
or toxic materials or of any wastes, (ii) discharges or releases into the
air, ground, surface water or groundwater, and (iii) employee health and
safety.
7.2 Site Contamination. Except as listed and described in Schedule
------------------
7.2, Seller has no knowledge that any Hazardous Substance is present at, on
or under the Real Property or has been disposed of by Seller in such a
manner as may require remediation under any Environmental Statute. No
claims have been asserted or threatened against Seller relating to the
presence or disposal of such Hazardous Substances. "Hazardous Substance"
means any substance regulated under any federal, state, or local statute,
regulation, ordinance, order, permit, or policy relating to environmental
protection, environmental pollution, liability for environmental
contamination, or protection of worker health and safety ("Environmental
Statutes").
7.3 Additional Provisions Regarding Hazardous or Toxic Materials.
-------------------------------------------------------------
Except as listed and described on Schedule 7.3, Seller has no
knowledge that (i) any polychlorinated biphenyls or substances containing
polychlorinated biphenyls are present at, on or under the Real Property;
(ii) any asbestos or materials containing asbestos exist at, on or under
the Real Property; and (iii) any underground storage tanks exist or existed
at, on or under the Real Property.
7.4 No Notice of Lack of Compliance with Environmental Statutes.
-----------------------------------------------------------
Seller has not been notified by any governmental authority of any
violation of any Environmental Statute in connection with the operation of
the Stations or the conduct of any activities on or at
17
the Real Property. Seller has no knowledge of notices of violation of
Environmental Statutes, notices of noncompliance with Environmental
Statutes or environmental enforcement, response, removal or remediation
actions issued for or undertaken at the Real Property. Further, Seller has
no knowledge of investigations or inspections by governmental authorities
into Seller's compliance with Environmental Statutes. Schedule 7.4 includes
a correct and complete list of Seller's registrations with, licenses from,
or permits issued by governmental agencies or authorities pursuant to
Environmental Statutes. All such registrations, licenses or permits are in
full force and effect.
ARTICLE VIII.
PRE-CLOSING OBLIGATIONS
The parties covenant and agree as follows with respect to the period
prior to the Closing Date:
8.1 Application for Commission Consent. Within five days after the
----------------------------------
date of this Agreement, Seller and License LLC shall join in and file an
application or applications requesting the Commission's written consent to
the assignment of the Station Licenses from Seller to Buyer (the
"Assignment Applications"), and they will diligently take all steps
necessary or desirable and proper to prosecute expeditiously the Assignment
Applications and to obtain the Commission's determination that approval of
the Assignment Applications will serve the public interest, convenience,
and necessity, including, without limitation, compliance with the public
notice requirements of the Communications Act of 1934, as amended. Each
party shall bear its own expenses in connection with the preparation,
filing and prosecution of the Assignment Applications.
8.2 Other Governmental Consents. Promptly following the execution of
---------------------------
this Agreement, Seller and Buyer shall proceed to prepare and file with the
appropriate governmental authorities (other than the Commission) such
requests, if any, for approval or waiver as may be required from such
governmental authorities in connection with the Transaction, and shall
jointly, diligently and expeditiously prosecute, and shall cooperate fully
with each other in the prosecution of, such requests for approval or waiver
and all proceedings necessary to secure such approvals and waivers.
8.3 Financial Information. Between the date hereof and the Closing
---------------------
Date, Seller shall furnish Buyer with monthly financial statements within
twenty (20) days after the end of each calendar month, and with such
additional data concerning the Stations' financial condition as are
prepared by Seller in the ordinary course of business, in the same form as
the Financial Statements contained in Schedule 5.18. Such financial
statements and additional data shall be accompanied by a certificate
executed by an officer of Seller certifying that such financial statements
and data: (i) have been prepared on a consistent basis throughout the
periods involved (except to the extent noted thereon) and on a basis
consistent with the year-end Financial Statements, and (ii) fairly and
accurately reflect the financial condition and the results of operations
and cash flows of the Stations as of the dates and for the periods
indicated in all material respects. Between the date hereof and the Closing
Date, the president of Seller or other properly informed officer shall make
himself available to Buyer, upon prior notice, to discuss and
18
explain the compilation and preparation of the Financial Statements and the
monthly financial statements and such other additional data provided pursuant to
this Section 8.4, and each of the constituent elements reflected thereon.
8.4 Third Party Consents. Seller shall use its best efforts to obtain
--------------------
the consents of the other contracting parties to the assignment from Seller to
Buyer of the Material Contracts (as defined below) requiring such consent, and
shall use comercially reasonable efforts to obtain other consents required under
the Contracts for the assignment from Seller to Buyer of the Contracts. The
delivery of such consents to the assignment of Contracts that are identified on
Schedules 1.3(a), 1.3(c), 1.3(d) and 1.3(e) to be material to the operation of
the Stations ("Material Contracts") shall be a condition to Buyer's obligation
to close under Section 9.2.7.
8.5 Environmental Site Assessment. Within forty-five (45) days of the
-----------------------------
execution of this Agreement, Buyer may obtain a Phase I Environmental Assessment
for each of the parcels of the Real Property (the "Environmental Assessment").
In the event the Environmental Assessment discloses any recognized environmental
conditions or any potential that such conditions may exist, then Buyer may
conduct or have conducted at its expense additional testing to confirm or negate
the existence of any such conditions. If any such Environmental Assessment or
additional testing reflects the existence of any such conditions, Seller shall
cause the conditions to be remedied as quickly as possible (and in all events
prior to Closing) such that no recognized environmental conditions exist;
provided, however, that Seller shall not be obligated to expend in the aggregate
in excess of One Hundred Thousand Dollars ($100,000) to effect such remediation.
In the event that such remedial action(s) does cost in the aggregate in excess
of One Hundred Thousand Dollars ($100,000), Seller may elect not to take such
remedial action. In such event, Buyer may require Seller to proceed to Closing
and Buyer shall receive a proration at Closing, in the amount of of One Hundred
Thousand Dollars ($100,000). Alternatively, Buyer may terminate this Agreement
and Seller shall have no liability to Buyer as a result of such termination.
Such Environmental Assessment shall not relieve Seller of any obligation with
respect to any representation, warranty or covenant of Seller in this Agreement
or waive any condition to Buyer's obligations under this Agreement. The cost of
completing the Environmental Assessment shall be paid by Buyer.
8.6 Title Insurance. Promptly following execution of this Agreement,
---------------
Seller shall deliver to Buyer its existing title insurance policies. Seller
shall cooperate with Buyer to extent necessary for Buyer to obtain a commitment
of a title insurance company reasonably satisfactory to Buyer to issue to Buyer,
at standard rates, ALTA 1992 Form extended coverage title insurance policies,
insuring Buyer's interest in the Real Property (the "Title Commitment"). The
costs of the Title Commitment shall be paid by Seller and cost of the policy to
be issued pursuant to the Title Commitment shall be paid by Buyer.
8.7 Surveys. Within sixty (60) days of the date of this Agreement,
-------
Seller shall deliver to Buyer surveys of the Real Property to be certified to
Buyer and the Senior Lenders and sufficient to remove any "survey exception"
from the title insurance policies to be issued pursuant to the Title
Commitments. The cost of such surveys shall be paid one-half by Buyer and one-
half by Seller.
19
8.8 Confidentiality. Each party agrees that any and all information
---------------
learned or obtained by it from the other (and that is not otherwise public or
known in the radio broadcast industry) shall be confidential and agrees not to
disclose any such information to any person whatsoever other than as is
necessary for the purpose of effecting the Transaction or as otherwise required
by law.
8.9 Access. Between the date hereof and the Closing Date, Seller
------
shall give, upon prior notice, Buyer or representatives of Buyer (including
lenders, consultants and accountants) reasonable access to the Assets and to the
books and records of Seller relating to the business and operation of the
Stations. It is expressly understood that, pursuant to this Section, Buyer, at
its sole expense, shall be entitled to make such engineering inspections of the
Stations, and such audits of the Stations' financial records as Buyer may
desire, so long as the same do not unreasonably interfere with Seller's
operation of the Stations.
8.10 Employee Matters.
----------------
(a) As set forth on Schedule 5.10, Seller has provided to
Buyer an accurate list of all current employees of the Stations together with a
description of the terms and conditions of their respective employment and their
duties as of the date of this Agreement. Seller shall promptly notify Buyer of
any changes that occur prior to Closing with respect to such information.
(b) Buyer may extend offers of employment to those employees
of Seller whom it desires to hire (such employees are hereinafter referred to as
the "Hired Employees"), which offers shall be on terms and conditions that Buyer
shall determine in its sole discretion. Buyer shall provide notice to Seller at
least ten (10) days prior to Closing identifying those employees to whom Buyer
intends to extend offers of employment. Nothing contained in this Agreement
shall obligate Buyer to hire any employee of Seller. Seller waives any claims
against Buyer or any of the Hired Employees arising from such employment,
including without limitation any claims arising from any employment agreement or
non-compete agreement. On or prior to Closing, Seller shall compensate each
Station's employees for all accrued commissions, accrued vacations, sick leave
and other accrued benefits, or if Buyer assumes such obligations, such
liabilities shall be prorated between Seller and Buyer pursuant to Article IV.
Seller shall terminate the employment of all employees effective on the Closing
Date. Seller shall give Buyer reasonable access to employees for the purpose of
determining to whom Buyer wishes to extend offers of employment and shall do
nothing to discourage or otherwise interfere with Buyer in its efforts to secure
satisfactory employment arrangements with the Hired Employees to whom Buyer
makes offers of employment.
(c) Nothing contained in this Agreement shall confer upon
any employee of Seller any right with respect to continued employment by Buyer,
nor shall anything herein interfere with the right of Buyer to terminate the
employment of any of the Hired Employees at any time, with or without cause.
20
8.11 Operations Prior to Closing. Between the date of this
---------------------------
Agreement and the Closing Date:
(a) Seller shall operate the Stations in the normal
and usual manner, consistent with Seller's past practice and the rules,
regulations, and policies of the Commission, and shall conduct the Stations'
business only in the ordinary course. To the extent consistent with such
operations, Seller shall use its best efforts to: (i) maintain the present
character and entertainment format of the Stations and the quality of their
programs; (ii) keep available for Buyer the services and number of each
Station's present employees reasonably necessary for the operation of the
Stations; (iii) preserve each Station's present customers and business
relations; (iv) continue to make expenditures and engage in activities designed
to promote the Stations; and (v) continue making capital expenditures, in the
case of both (iv) and (v) of this Section 8.12(a), all consistent with past
practices of the Stations.
(b) Seller shall: (i) subject to Section 13.2,
maintain the Assets in their present condition (reasonable wear and tear in
normal use excepted); and (ii) maintain all inventories of supplies, tubes, and
spare parts at levels consistent with each Station's prior practices.
(c) Seller shall maintain its books and records in the
usual and ordinary manner, on a basis consistent with prior periods.
(d) Seller shall comply with all laws, rules,
ordinances and regulations applicable to it, to the Assets and to the business
and operation of the Stations.
(e) Seller shall perform all Contracts without default
and shall pay all of Seller's trade accounts payable in a timely manner;
provided, however, that Seller may dispute, in good faith, any alleged
obligation of Seller.
(f) Seller shall not, without the express written
consent of Buyer which shall not be unreasonably withheld, and which shall be
deemed given in the event Buyer has not responded to a written request therefor
within ten (10) days: (i) sell or agree to sell or otherwise dispose of any of
the Assets (A) other than in the ordinary course of business, and (B) unless
such Assets are replaced prior to Closing by assets of equal or greater worth,
quality and utility; (ii) acquiesce in any infringement, unauthorized use or
impairment of the Intangible Property or change the Stations' call signs; (iii)
enter into any employment contract on behalf of the Stations unless the same is
terminable at will and without penalty; or (iv) enter into any other contract,
lease or agreement that will be binding on Buyer after Closing unless Seller has
entered into such contract, lease or agreement in the ordinary course of
business and consistent with past practice and such contract, lease or agreement
does not, in the aggregate, impose obligations in excess of Ten Thousand Dollars
($10,000), provided, however, that the limitation in this clause (iv) shall not
apply to time sales agreements entered into by Seller in the ordinary course of
business, consistent with past practice and in exchange for cash
21
but only if such time sales agreements provide for termination upon sixty (60)
days notice by Seller (or by any party to which Seller assigns such agreement)
without financial penalty.
8.12 Adverse Developments. Seller shall promptly notify Buyer of any
--------------------
unusual or materially adverse developments that occur prior to Closing with
respect to the Assets or the operation of the Stations; provided, however, that
Seller's compliance with the disclosure requirements of this Section 8.13 shall
not relieve Seller of any obligation with respect to any representation,
warranty or covenant of Seller in this Agreement or waive any condition to
Buyer's obligations under this Agreement.
8.13 Administrative Violations. If Seller receives any finding,
-------------------------
order, complaint, citation or notice prior to the Closing Date which states that
any aspect of the Stations' operations violates any rule or regulation of the
Commission or of any other governmental authority (an "Administrative
Violation"), including without limitation any rule or regulation concerning
environmental protection, the employment of labor, or equal employment
opportunity, Seller shall promptly notify Buyer of the Administrative Violation,
remove or correct the Administrative Violation, and be responsible for the
payment of all costs associated therewith, including any fines or back pay that
may be assessed.
8.14 Bulk Sales Act. Seller agrees to jointly and severally
--------------
indemnify, defend, and hold Buyer harmless against any claims, liabilities,
costs, or expenses, including reasonable attorneys' fees, that Buyer may incur
as a result of the failure to comply with the bulk sales provisions of the
Uniform Commercial Code or similar laws.
8.15 Control of Stations. This Agreement shall not be consummated
-------------------
until after the Commission has given its written consent thereto, and
notwithstanding anything herein to the contrary, between the date of this
Agreement and the Closing Date, Buyer shall not directly or indirectly control,
supervise or direct, or attempt to control, supervise or direct the operation of
the Stations. Such operations shall be the sole responsibility of Seller.
8.16 Buyer's Financing: Estoppel Certificates. Seller shall use its
----------------------------------------
reasonable commercial efforts to obtain estoppel certificates from its landlords
of its Real Property-Leased for the benefit of Buyer's senior lender.
8.17 Additional Covenant. Buyer and Seller shall take all
-------------------
commercially reasonable efforts to cause the consummation of the transactions
contemplated by this Agreement. Buyer and Seller shall not take any action that
would conflict with this Agreement, and each party shall notify the other if any
of its representations and warranties are no longer true and correct.
ARTICLE IX.
CONDITIONS PRECEDENT
9.1 Mutual Conditions. The obligation of both Seller and Buyer to
-----------------
consummate this Agreement is subject to the satisfaction of each of the
following conditions:
22
9.1.1 Governmental Consents. The Commission shall have granted its
---------------------
consent to the Assignment Applications (the "FCC Consent").
9.1.2 Absence of Litigation. As of the Closing Date, no action,
---------------------
claim, suit or proceeding seeking to enjoin, restrain, or prohibit the
consummation of the Transaction shall be pending before any court, the
Commission, or any other governmental authority; provided, however, that this
condition may not be invoked by a party if any such action, suit, or proceeding
was solicited or encouraged by, or instituted as a result of any act or omission
of, such party.
9.2 Conditions to Buyer's Obligation. In addition to satisfaction of the
--------------------------------
mutual conditions contained in Section 9.1, the obligation of Buyer to
consummate this Agreement is subject to the satisfaction of each of the
following conditions:
9.2.1 Representations and Warranties. The representations and
------------------------------
warranties of Seller to Buyer shall be true, complete, and correct in all
material respects (without regard to any materiality limitation contained in any
representation or warranty) as of the Closing Date with the same force and
effect as if then made, except to the extent expressly made as of an earlier
date.
9.2.2 Compliance with Conditions. All of the terms, conditions and
--------------------------
covenants to be complied with or performed by Seller on or before the Closing
Date shall have been timely complied with and performed in all material respects
(without regard to any materiality limitation contained in any term, condition
and covenant).
9.2.3 Title Commitment and Surveys. Buyer shall have timely received
----------------------------
the surveys specified in Section 8.7, which shall reveal nothing inconsistent
with Seller's representations and warranties hereunder.
9.2.4 Validity of Station Licenses. On the Closing Date, Seller shall
----------------------------
be the owner and holder of the Station Licenses to the extent that such
authorizations can be owned or held by Seller under the Communications Act of
1934, as amended; the Station Licenses shall be in unconditional full force and
effect, valid for the balance of the current license term applicable generally
to radio stations licensed to communities in the state where the Stations are
located; and the Station Licenses shall be unimpaired by any acts or omissions
of Seller or Seller's employees, agents, officers, directors or shareholders.
9.2.5 Closing Documents. Seller shall deliver to Buyer all of the
-----------------
closing documents specified in Section 10.2.1, all of which documents shall be
dated as of the Closing Date, duly executed, and in a form customary in
transactions of this type and reasonably acceptable to Buyer.
9.2.6 Third Party Consents. Seller shall have obtained all consents
--------------------
to the assignment of Material Contracts (a "Required Consent"), such that Buyer
will enjoy all of the rights and privileges of Seller under the Contracts
subject only to the same obligations as are binding on Seller thereunder,
pursuant to the present terms thereof. In the event any of the
23
Contracts not identified as Material Contract in Schedule 1.3 are not assignable
or any consent to such assignment is not obtained on or prior to the Closing
Date, the Seller shall continue to use commercially reasonable efforts to obtain
any such assignment or consent after the Closing Date. Until such time as such
assignment or approval has been obtained, the Seller will cooperate with Buyer
in any lawful and economically feasible arrangement to provide that the Buyer
shall receive the Seller's interest in the benefits under any such Contract,
including performance by the Seller as agent, if economically feasible;
provided, however, that the Buyer shall undertake to pay or satisfy the
corresponding liabilities for the enjoyment of such benefit to the extent that
Buyer would have been responsible therefor if such consent or assignment had
been obtained.
9.2.7 Settlement of Claims. Seller shall have settled any and all
--------------------
claims against Seller that affect or concern the Assets.
9.2.8 Finality. The FCC Consent shall have become a Final Order.
--------
"Final Order" means an order or action of the Commission that, by reason of
expiration of time or exhaustion of remedies, is no longer subject to
administrative or judicial reconsideration or review.
9.2.9 Satisfactory Environmental Assessment. To the extent that the
-------------------------------------
Environmental Assessment or additional testing conducted pursuant to Section 8.5
hereof reflects the existence of conditions contrary to any representation or
warranty in this Agreement, either (i) Seller shall have completed the
remediation of such conditions in accordance with Section 8.5 hereof or (ii)
Buyer shall have provided notice to Seller of Buyer's election to proceed to
Closing with the proration to the Purchase Price specified in Section 8.5
hereof.
9.3 Conditions to Seller's Obligation. In addition to satisfaction of the
---------------------------------
mutual conditions contained in Section 9.1, the obligation of Seller to
consummate this Agreement is subject to satisfaction of each of the following
conditions:
9.3.1 Representations and Warranties. The representations and
------------------------------
warranties of Buyer to Seller shall be true, complete and correct in all
material respects (without regard to any materiality limitation contained in any
representation or warranty) as of the Closing Date with the same force and
effect as if then made, except to the extent expressly made as of an earlier
date.
9.3.2 Compliance with Conditions. All of the terms, conditions and
--------------------------
covenants to be complied with or performed by Buyer on or before the Closing
Date shall have been timely complied with and performed in all material respects
(without regard to any materiality limitation contained in any term, condition
and covenant).
9.3.3 Payment. Buyer shall have paid to Seller the Purchase Price as
-------
adjusted in accordance with Article III, IV and Section 8.5 hereof.
9.3.4 Closing Documents. Buyer shall deliver to Seller all the
-----------------
closing documents specified in Section 10.2.2, all of which documents shall be
dated as of the Closing
24
Date, duly executed, and in a form customary in transactions of this type and
reasonably satisfactory to Seller.
ARTICLE X.
CLOSING
10.1 Closing Date. The Closing hereunder shall occur on a date
------------
mutually agreeable to Buyer and Seller within fifteen (15) business days after
the later of (i) the date that the Commission's action granting its consent to
the Assignment Applications has become a Final Order, or, the satisfaction of
all the conditions precedent to Closing (the "Closing Date"); provided, however,
that the Closing shall occur no later than one year after the date on which the
parties file the Assignment Applications (the "Upset Date"). The Closing shall
be effective as of 12:00 a.m. EST on the Closing Date. The Closing shall take
place on the Closing Date at (i) the offices of Buyer's counsel in Washington,
D.C., commencing at 10:00 a.m. EST or (ii) such other mutually acceptable time
or place. If, as of the Closing Date, any condition precedent described in
Article IX has not been satisfied, the party that is entitled to require that
such condition be satisfied may (in its sole discretion) notify the other party
of the absence of such condition precedent at or before the Closing and
simultaneously therewith postpone the Closing until a date ten (10) days after
all such conditions have been (or are able to be) performed, and such postponed
date shall constitute the new Closing Date for all purposes hereunder except
that such postponed closing date shall occur no later than the Upset Date. Each
of the parties shall use its reasonable best efforts to obtain any FCC authority
necessary to schedule the Closing Date as contemplated in this Section.
10.2 Performance at Closing. The following documents shall be
----------------------
executed and delivered at Closing:
10.2.1 Seller shall deliver to Buyer:
-----------------------------
(a) A certificate executed by the Seller attesting to the
Seller's compliance with the matters set forth in Sections 9.2.1, 9.2.2 and
9.2.3 together with (i) certified copies of the Certificates of Incorporation of
the Seller and (ii) appropriate evidence of the Seller's authorization to enter
into and consummate this Agreement.
(b) One or more assignments transferring to Buyer all of
the interests of Seller in and to the Station Licenses, the Station
Applications, and all other licenses, permits, and authorizations issued by any
other governmental authorities that are used in or necessary for the lawful
operation of the Stations.
(c) One or more bills of sale conveying to Buyer the
Station Equipment.
(d) One or more assignments, together with all Required
Consents assigning to Buyer all of the Contracts, the Station Records and the
Intangible Property.
25
(e) One or more assignments, general warranty deeds or other
appropriate instruments conveying to Buyer all rights of Seller in the Real
Property and all consents to such assignments necessary for the legally
enforceable assignment of such interests.
(f) The Covenant.
(g) An opinion of Seller's corporate and FCC Counsel, dated the
Closing Date, in form and substance reasonably satisfactory to Buyer, and to be
for the benefit of and to be relied upon by Buyer and the Senior Lenders.
(h) The affidavit described in Section 5.16.
(i) The Estoppel Certificates obtained in accordance with
Seller's covenant in Section 8.16 hereof.
(j) UCC-3 termination statements executed by each of the Owners'
creditors, along with such other documents and instruments as may be necessary
in order to evidence the termination, discharge and release of all Liens that
such creditors maintain on the Assets.
10.2.2 Buyer shall deliver to Seller:
-----------------------------
(a) A certificate executed by Buyer attesting to Buyer's
compliance with the matters set forth in Sections 9.3.1 and 9.3.2, together with
(i) certified copies of the Certificate of Incorporation of Buyer and (ii)
appropriate evidence of Buyer's authorization to enter into and consummate this
Agreement.
(b) The Purchase Price as adjusted in accordance with
Articles III, IV and Section 8.5 hereof.
(c) Such assumption agreements and other instruments and
documents as are required to make, confirm, and evidence Buyer's assumption of
and obligation to pay, perform, or discharge Seller's obligations under the
Contracts and the Station Licenses to the extent the same are to be assumed by
Buyer pursuant to the terms of this Agreement.
10.2.3 Other Documents and Acts. The parties will also execute
------------------------
such other documents and perform such other acts, before and after the Closing
Date, as may be reasonable necessary for the complete implementation and
consummation of this Agreement.
ARTICLE XI.
POST-CLOSING OBLIGATIONS
The parties covenant and agree as follows with respect to the period
subsequent to the Closing Date:
26
11.1 Indemnification.
----------------
11.1.1 Buyer's Right to Indemnification. Seller undertakes and
--------------------------------
agrees to jointly and severally indemnify, defend by counsel reasonably
acceptable to Buyer, and hold harmless Buyer, its parent, subsidiaries,
affiliates, successors and assigns and their respective directors, officers,
employees, shareholders, representatives and agents (hereinafter referred to
collectively as "Buyer Indemnitees") from and against and in respect of any and
all losses, costs, liabilities, claims, obligations, diminution in value and
expenses, including reasonable attorneys' fees, incurred or suffered by a Buyer
Indemnitee ("Losses") arising from (i) the claims of third parties with respect
to operation of the Stations or ownership of the Assets prior to Closing not
expressly assumed by Buyer pursuant to this Agreement or otherwise consented to
by Buyer in writing; (ii) a breach, misrepresentation, or other violation of any
of Seller's covenants, warranties or representations contained in this
Agreement; (iii) all liabilities of Seller or the Stations not expressly assumed
by Buyer pursuant to this Agreement or otherwise consented to by Buyer in
writing; (iv) all liens, charges, or encumbrances on any of the Assets which are
not expressly permitted by this Agreement or otherwise consented to by Buyer in
writing; and (v) all Administrative Violations and alleged Administrative
Violations occurring prior to Closing; (vi) any breach or default by Seller
under any Contract prior to Closing. The foregoing indemnity is intended by
Seller to cover all acts, suits, proceedings, claims, demands, assessments,
adjustments, diminution in value, costs, and expenses with respect to any and
all of the specific matters in this indemnity set forth.
11.1.2 Seller's Right to Indemnification. Buyer undertakes and
---------------------------------
agrees to indemnify, defend by counsel reasonably acceptable to Seller, and hold
harmless Seller, its parent, subsidiaries, affiliates, successors and assigns
and their respective directors, officers, employees, shareholders,
representatives and agents (hereinafter referred to collectively as "Seller
Indemnitees") against any and all Losses incurred or suffered by a Seller
Indemnitee arising from (i) the claims of third parties with respect to the
operation of the Stations or ownership of the Assets after Closing; (ii) a
breach, misrepresentation, or other violation of any of Buyer's covenants,
warranties or representations contained in this Agreement; (iii) all liabilities
under the Contracts and the Station Licenses to the extent specifically assumed
by Buyer pursuant to this Agreement; and (iv) any breach or default by Buyer
under any Contract after Closing. The foregoing indemnity is intended by Buyer
to cover all acts, suits, proceedings, claims, demands, assessments,
adjustments, costs, and expenses with respect to any and all of the specific
matters in this indemnity set forth.
11.1.3 Conduct of Proceedings. If any claim or proceeding covered by
----------------------
the foregoing agreements to indemnify and hold harmless shall arise, the party
who seeks indemnification (the "Indemnified Party") shall give written notice
thereof to the other party (the "Indemnitor") promptly after the Indemnified
Party learns of the existence of such claim or proceeding; provided, however,
that the Indemnified Party's failure to give the Indemnitor prompt notice shall
not bar the Indemnified Party's right to indemnification unless such failure has
materially prejudiced the Indemnitor's ability to defend the claim or
proceeding. The Indemnitor shall have the right to employ counsel reasonably
acceptable to the Indemnified Party to defend against any such claim or
proceeding, or to compromise, settle or otherwise dispose of the same, if the
Indemnitor deems it advisable to do so, all at the expense of the Indemnitor;
27
provided that the Indemnitor shall not have the right to control the defense of
any such claim or proceeding unless it has acknowledged in writing its
obligation to indemnify the Indemnified Party fully from all liabilities
incurred as a result of such claim or proceeding and then and periodically
thereafter provides the Indemnified Party with reasonably sufficient evidence of
the ability of the Indemnitor to satisfy any such liabilities. The parties will
fully cooperate in any such action, and shall make available to each other any
books or records useful for the defense of any such claim or proceeding. If the
Indemnitor fails to acknowledge in writing its obligation to defend against or
settle such claim or proceeding within twenty (20) days after receiving notice
thereof from the Indemnified Party (or such shorter time specified in the notice
as the circumstances of the matter may dictate), the Indemnified Party shall be
free to dispose of the matter, at the expense of the Indemnitor, in any way in
which the Indemnified Party deems to be in its best interest.
11.1.4 Indemnification As Remedy. The right to indemnification
-------------------------
hereunder shall not be the exclusive remedy of any party in connection with any
breach by another party of its representations, warranties, or covenants, nor
shall such indemnification be deemed to prejudice or operate as a waiver of any
remedy to which any party may otherwise be entitled as a result of any such
breach.
11.2 Post-Closing Access. Each party agrees that it will cooperate
-------------------
with and make available to the other party, during normal business hours and
upon reasonable notice, all books and records which are necessary or useful in
connection with any tax inquiry, audit, investigation or dispute, any litigation
or investigation or any other matter requiring any such books and records,
information or employees for any reasonable business purpose. The party
requesting any such books and records, information or employees shall bear all
of the out-of-pocket costs and expenses reasonably incurred in connection with
providing such books and records, information or employees. All information
received pursuant to this Section 11.2 shall be kept confidential by the party
receiving it. If Buyer or Seller is required by legal process or operation of
law to disclose any confidential information, it shall provide the other party
with prompt written notice of such request so that such other party may seek an
appropriate protective order. In the event Buyer wishes to destroy or discard
any books or records within 5 years of Closing it shall provide Seller 30 days
notice prior to such destruction or discarding. Seller may choose to take
possession of such records prior to their destruction or discarding.
ARTICLE XII.
DEFAULT AND REMEDIES
12.1 Termination by Seller Upon Buyer's Default. This Agreement may
------------------------------------------
be terminated by Seller and the purchase and sale of the Stations abandoned, if
Seller is not then in material default, upon written notice to Buyer, upon the
occurrence of any of the following:
(a) If on the date that would otherwise be the Closing Date any
of the conditions precedent to the obligations of Seller set forth in this
Agreement have not been satisfied in all material respects or waived in writing
by Seller and Buyer shall not have cured such failure to satisfy such conditions
within ten (10) days thereafter.
28
(b) If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree or order that would prevent
or make unlawful the Closing.
(c) If the Closing shall not have occurred by the Upset Date.
(d) If there shall have been any material breach of any
representation, warranty, covenant or agreement made herein on the part of Buyer
and Buyer shall not have cured such breach within twenty (20) days after Seller
has given notice to Buyer of such breach.
12.2 Termination by Buyer Upon Seller's Default. This Agreement may
------------------------------------------
be terminated by Buyer and the purchase and sale of the Stations abandoned, if
Buyer is not then in material default, upon written notice to Seller, upon the
occurrence of any of the following:
(a) If on the date that would otherwise be the Closing Date any
of the conditions precedent to the obligations of Buyer set forth in this
Agreement have not been satisfied in all material respects or waived in writing
by Buyer and Seller shall not have cured such failure to satisfy such conditions
within ten (10) days thereafter.
(b) If there shall be in effect on the date that would
otherwise be the Closing Date any judgment, decree or order that would prevent
or make unlawful the Closing.
(c) If the Closing shall not have occurred by the Upset Date.
(d) If there shall have been any material breach of any
representation, warranty, covenant or agreement made herein on the part of
Seller and Seller shall not have cured such breach within twenty (20) days after
Buyer has given notice to Seller of such breach.
12.3 Letter of Credit. Upon execution and delivery of this
----------------
Agreement, Buyer shall deliver to Seller an irrevocable letter of credit naming
Seller as the beneficiaries in the amount of One Million Dollars ($1,000,000)
(the "Letter of Credit") to Seller. The Letter of Credit shall provide that the
issuing bank shall make payment on the Letter of Credit upon such bank's receipt
of a certificate from the Secretary or Treasurer of Seller certifying the
Agreement has been terminated pursuant to Section 12.1 or otherwise on account
of a material breach by Buyer and that Seller is not in material default
thereunder. The Letter of Credit shall be held and disbursed in accordance with
the terms of the Escrow Agreement and the following provisions:
(a) Upon Closing, Seller shall return the Letter of Credit to
Buyer.
(b) If this Agreement is terminated pursuant to Section 8.5,
12.2 or Article XIII and Section 12.3(c) does not apply and Buyer is not in
material breach of this Agreement, Seller shall return the Letter of Credit to
Buyer.
29
(c) If this Agreement is terminated pursuant to Section 12.1 or
otherwise on account of a material breach by Buyer, and Seller is not in
material breach of this Agreement, then Seller shall be entitled to draw upon
the Letter of Credit as liquidated damages.
12.4 Seller's Remedies. If this Agreement is terminated by Seller
-----------------
and Section 12.3(c) applies, then the payment to Seller pursuant to Section
12.3(c) shall be liquidated damages and shall constitute full payment and the
exclusive remedy for any damages suffered by Seller. Seller and Buyer agree in
advance that actual damages would be difficult to ascertain and that the amount
of the payment to be made to Seller pursuant to Section 12.3(c) is a fair and
equitable amount to reimburse Seller for damages sustained due to Buyer's breach
of this Agreement. Seller hereby waives all claims to damages arising from any
termination of this Agreement except for liquidated damages under the
circumstances set forth in Section 12.3(c).
12.5 Buyer's Remedies. The parties recognize that if, prior to
----------------
Closing, Seller breaches this Agreement and refuses to perform under the
provisions of this Agreement, monetary damages alone would not be adequate to
compensate Buyer for its injury. Buyer shall therefore be entitled, in addition
to any other remedies that may be available, to obtain specific performance of
the terms of this Agreement prior to Closing. If any action is brought by Buyer
to enforce this Agreement prior to Closing, Seller shall waive the defense that
there is an adequate remedy at law. In the event Buyer elects to terminate this
Agreement as a result of Seller's default instead of seeking specific
performance, Buyer shall be entitled to recover Buyer's damages. Following the
Closing, Buyer shall be entitled, in addition to any other remedies that may be
available, to seek specific performance of the terms of this Agreement if such
remedy is available at equity.
ARTICLE XIII.
TERMINATION
13.1 Absence of Grant of Assignment Applications; Designation for
------------------------------------------------------------
Hearing. Either party may terminate this Agreement if such party is not then in
-------
default upon written notice to the other, if, (x) for any reason, the Assignment
Applications are not granted by Final Order earlier than fifteen (15) days prior
to the Upset Date or (y) the Assignment Applications are designated for hearing
by the Commission; provided, however, that with respect to termination under
clause (x) hereof, written notice must be given on or prior to the Upset Date,
and with respect to termination under clause (y) hereof, notice of termination
must be given within twenty (20) days after release of the hearing designation
order. Upon termination pursuant to this Section 13.1, the parties shall be
released and discharged from any further obligation hereunder.
13.2 Damage.
-------
13.2.1 Risk of Loss. The risk of loss or damage to the Assets
------------
shall be upon Seller at all times prior to the Closing. In the event of loss or
damage, Seller shall promptly notify Buyer thereof and shall repair, replace and
restore the lost or damaged property to its
30
former condition as soon as possible. If such repair, replacement and
restoration has not been completed prior to the Closing Date, Buyer may, at its
option:
(a) elect to terminate this Agreement, but only if the failure
to repair, replace and restore the lost or damaged property continues for a
period in excess of sixty (60) days from the date that would be the Closing Date
without consideration of this Section 13.2;
(b) elect to consummate the Transaction on the Closing Date in
which event Seller shall pay to Buyer the amount necessary to restore the lost
or damaged property to its former condition and against such obligation shall
assign to Buyer all of Seller's rights under any applicable insurance policies;
or
(c) elect to postpone the Closing Date, with prior consent of
the Commission if necessary, which consent both parties will use their
reasonable best efforts to obtain, until a date within fifteen (15) business
days after Seller gives written notice to Buyer of completion of the repair,
replacement and restoration of such lost or damaged property. If, after the
expiration of that extension period, the lost or damaged property has not been
adequately repaired, replaced or a restored, Buyer may terminate this Agreement,
and the parties shall be released and discharged from any further obligation
hereunder.
13.2.2 Failure of Broadcast Transmission. Seller shall give
---------------------------------
prompt written notice to Buyer if either of the following (a "Specified Event")
shall occur: (i) the regular broadcast transmissions of any of the Stations in
the normal and usual manner are interrupted or discontinued; or (ii) any of the
Stations are operated at less than their respective licensed antenna height
above average terrain or at less than ninety percent (90%) of their respective
licensed effective radiated power. If any Specified Event persists for more than
ninety-six (96) hours (or, in the event of force majeure or utility failure
affecting generally the markets served by the Stations, one hundred and twenty
(120) hours), whether or not consecutive, during any period of thirty (30)
consecutive days, then Buyer may, at its option: (i) terminate this Agreement by
written notice given to Seller not more than ten (10) days after the expiration
of such thirty (30) day period, or (ii) proceed in the manner set forth in
Section 13.2.1. In the event of termination of this Agreement by Buyer pursuant
to this Section, the parties shall be released and discharged from any further
obligation hereunder.
13.2.3 Resolution of Disagreements. If the parties are unable
---------------------------
to agree upon the extent of any loss or damage, the cost to repair, replace or
restore any lost or damaged property, the adequacy of any repair, replacement,
or restoration of any lost or damaged property, or any other matter arising
under this Section 13.2, the disagreement shall be referred to a qualified
consulting communications engineer mutually acceptable to Seller and Buyer who
is a member of the Association of Federal Communications Consulting Engineers,
whose decision shall be final, binding upon and non-appealable by the parties,
and whose fees and expenses shall be paid one-half by Seller and one-half by
Buyer.
31
13.3 Legal Actions. If, prior to the Closing Date, any action, suit,
-------------
or proceeding shall have been instituted by or before any court or other
governmental authority (other than the Commission) to enjoin, restrain, or
prohibit the consummation of the Transaction, the Closing may be adjourned at
the option of either party, with prior consent of the Commission if necessary,
which consent both parties will use their reasonable best efforts to obtain, for
a period of up to thirty (30) days, and if, at the end of such period, the
action, suit, or proceeding shall not have been favorably resolved, either party
may, by written notice to the other, terminate this Agreement; provided,
however, that if such action, suit, or proceeding shall have been solicited or
encouraged by, or instituted as a result of any act or omission of, Seller or
Buyer, then such party shall not have any right of adjournment or termination
pursuant to this Section. In the event of termination pursuant to this Section,
the parties shall be released and discharged from any further obligation
hereunder.
ARTICLE XIV.
POST-CLOSING OBLIGATIONS OF SELLER
14.1 Future Financings. Seller acknowledges that Buyer or one of its
-----------------
Affiliates (such party, "Public Buyer") may use the financial statements of
Seller and other information regarding Seller in connection with future
financings by Public Buyer, including in a registration statement filed under
the Securities Act of 1933, as amended (the "Public Filings"). For a period of
three (3) years from the Closing Date, Seller shall cooperate in a commercially
reasonable manner with Public Buyer so that Public Buyer can obtain information
sufficient for Public Buyer to prepare any Public Filings, in each case at
Public Buyer's sole expense. The foregoing cooperation of Seller shall include
(i) compiling the requisite financial information, including supplying financial
information for purposes of comfort letters to be issued in connection with
Public Filings, and (ii) granting Buyer and its accountants full and complete
access to the books and records of Seller and to any personnel knowledgeable
about such books and records (including the Seller's accountants), in each case,
to the extent reasonably requested by Public Buyer and (iii) signing customary
management representation letters related to the financial statements and any
comfort letters.
14.2 Removal of Liens. Seller shall cause its obligations which are
----------------
not yet due and payable as of the Closing Date and which could result in a Lien
on the Assets, to be timely paid in full. Notwithstanding any other provision in
this Agreement, this Section 14.2 shall survive Closing for a period of three
(3) years, at which time the same shall expire (except for claims asserted
during such three (3) year period).
ARTICLE XV.
GENERAL PROVISIONS
15.1 Brokerage. Each party represents and warrants to the other that
---------
no agent, broker, investment banker, or other person or firm acting on behalf of
such party or any of its affiliates or under the authority of any of them, other
than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, is or will be entitled to any broker's or finder's fee or
any other commission or similar fee (a "Brokerage Fee") in connection with the
Transaction. Seller shall be solely responsible to pay ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ all
Brokerage Fees due and owing in connection with the Transaction. Each party
hereby
32
agrees to indemnify, save harmless and defend the other from and against all
claims, losses, liabilities and expenses, including reasonable attorney's fees,
arising out of any claim made by any broker, finder or other intermediary who
claims to have dealt with such party in connection with the transaction which is
the subject of this Agreement. The provisions of this Section 15.1 shall survive
Closing hereunder.
15.2 Expenses. Except as otherwise provided herein, all expenses
--------
involved in the preparation and consummation of this Agreement shall be borne by
the party incurring the same whether or not the Transaction is consummated. All
Commission filing fees for the Assignment Applications shall be shared equally
by Buyer and Seller. All recording costs for instruments of transfer, and all
stamp, sales, use and transfer taxes shall be paid by Seller.
15.3 Notices. All notices, requests, demands, and other communications
-------
pertaining to this Agreement shall be in writing and shall be deemed duly given
when delivered personally (which shall include delivery by Federal Express or
other nationally recognized, reputable overnight courier service that issues a
receipt or other confirmation of delivery) to the party for whom such
communication is intended, or three (3) business days after the date mailed by
certified or registered U.S. mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to Seller:
GHB Broadcasting Corp.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Reddy ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(Counsel to Seller)
(b) If to Buyer:
▇▇▇▇▇▇▇ Broadcasting of Augusta, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
33
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(Counsel to ▇▇▇▇▇▇▇ Broadcasting of Augusta, Inc.)
Any party may change its address for notices by notice to the others given
pursuant to this Section.
15.4 Attorneys' Fees. If either party initiates any litigation against
---------------
the other party involving this Agreement, the prevailing party in such action
shall be entitled to receive reimbursement from the other party for all
reasonable attorneys' fees and other costs and expenses incurred by the
prevailing party in respect of that litigation, including any appeal, and such
reimbursement may be included in the judgment or final order issued in that
proceeding.
15.5 Survival of Representations, Warranties and Indemnification
-----------------------------------------------------------
Rights. The several representations and warranties of the parties contained
------
herein, and the parties respective indemnification rights pursuant to Section
11.1, shall survive the Closing for a period of one year, at which time the same
shall expire (except for claims asserted during such one-year period); provided,
however, that representations and warranties with respect to taxes, ERISA and
environmental matters shall survive for the period of the applicable statute of
limitations plus ninety (90) days and the representations and warranties with
respect to title and authorization shall survive in perpetuity.
15.6 Exclusive Dealings. For so long as this Agreement remains in
------------------
effect, neither Seller, its officers, directors, employees, nor any person
acting on Seller's behalf, shall, directly or indirectly, solicit or initiate
any offer from, or conduct any negotiations with, any person other than Buyer or
Buyer's assignee(s) concerning the acquisition of the Stations.
15.7 Waiver. Unless otherwise specifically agreed in writing to the
------
contrary: (i) the failure of any party at any time to require performance by any
other of any provision of this Agreement shall not affect such party's right
thereafter to enforce the same; (ii) no waiver by any party of any default by
any other shall be valid unless in writing and acknowledged by an authorized
representative of the non-defaulting party, and no such waiver shall be taken or
held to be a waiver by such party of any other preceding or subsequent default;
and (iii) no extension of time granted by any party for the performance of any
obligation or act by any other party shall be deemed to be an extension of time
for the performance of any other obligation or act hereunder.
34
15.8 Assignment. No party may assign its rights or obligations
----------
hereunder without the prior written consent of the other parties except: (i)
Buyer may assign all or a portion of its rights and obligations to a
corporation, partnership or other business entity that controls, is controlled
by, or is under common control with Buyer, provided that any such assignment
shall not release Buyer from any of its obligations under this Agreement and
(ii) Buyer may make a collateral assignment of its rights under this Agreement
to any lender that provides funds to Buyer for the acquisition or operation of
the Stations. Seller agrees to execute acknowledgments of any assignment(s) and
collateral assignment(s) pursuant to this Section 15.8 in such forms as Buyer or
Buyer's lender(s) may from time to time reasonably request. Subject to the
foregoing, this Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties hereto and their respective successors and assignees.
15.9 Entire Agreement. This Agreement and the Exhibits and Schedules
----------------
hereto (which are incorporated by reference herein) constitute the entire
agreement between the parties with respect to the subject matter hereof and
referenced herein, supersede and terminate any prior agreements between the
parties (written or oral). This Agreement may not be altered or amended except
by an instrument in writing signed by the party against whom enforcement of any
such change is sought.
15.10 Counterparts. This Agreement may be signed in any number of
------------
counterparts with the same effect as if the signatures on each such counterpart
were on the same instrument.
15.11 Construction. The Section headings of this Agreement are for
------------
convenience only and in no way modify, interpret or construe the meaning of
specific provisions of the Agreement. As used herein, the neuter gender shall
also denote the masculine and feminine, and the masculine gender shall also
denote the neuter and feminine, where the context so permits.
15.12 Schedules and Exhibits. The Schedules and Exhibits to this
----------------------
Agreement are a material part of this Agreement.
15.13 Severability. If any one or more of the provisions contained in
------------
this Agreement should be found invalid, illegal or unenforceable in any respect,
the validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. Any illegal or
unenforceable term shall be deemed to be void and of no force and effect only to
the minimum extent necessary to bring such term within the provisions of
applicable law and such term, as so modified, and the balance of this Agreement
shall then be fully enforceable.
15.14 Choice of Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of South Carolina, without regard to
the choice of law rules utilized in that jurisdiction.
15.15 Counsel. Each party has been represented by its own counsel in
-------
connection with the negotiation and preparation of this Agreement and,
consequently, each party
35
hereby waives the application of any rule of law that would otherwise be
applicable in connection with the interpretation of this Agreement, including
but not limited to any rule of law to the effect that any provision of this
Agreement shall be interpreted or construed against the party whose counsel
drafted that provision.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK. SIGNATURES FOLLOW
ON NEXT PAGE.]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed by a respective duly authorized officer as of the date first written
above.
SELLER:
------
GHB OF AUGUSTA, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary - Treasurer
GHB OF CLEARWATER* INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary - Treasurer
▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------
BUYER:
-----
▇▇▇▇▇▇▇ BROADCASTING OF AUGUSTA, INC.
By: /s/ B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
WGAC LICENSE, LLC
By: ▇▇▇▇▇▇▇ BROADCASTING OF AUGUSTA, INC..
By: /s/ B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------
Name: B. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Secretary
37