Exhibit 2.34
ASSET PURCHASE AGREEMENT
FOR CHICAGO RADIO
BETWEEN
EVERGREEN MEDIA CORPORATION OF LOS ANGELES
AND
PACIFIC AND SOUTHERN COMPANY, INC.
Dated April 4, 1997
TABLE OF CONTENTS
Page No.
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ARTICLE IA. Conditions Precedent....................................... 2
1A.1 Conditions Precedent......................................... 2
ARTICLE I. Transfer of Station Assets.................................. 3
1.1 Transfer of Station Assets.................................... 3
1.2 Excluded Station Assets....................................... 4
1.3 Liabilities................................................... 6
ARTICLE II. Consideration.............................................. 6
2.1 Consideration................................................. 6
2.2 Prorations.................................................... 7
ARTICLE III. The Closing............................................... 9
3.1 Time and Place of Closing..................................... 9
3.2 Deliveries by Pacific and Southern............................ 10
3.3 Deliveries by Evergreen....................................... 10
ARTICLE IV. Representations and Warranties of Pacific and
Southern........................................................... 11
4.1 Organization; Qualification................................... 11
4.2 Authority Relative to this Agreement.......................... 12
4.3 Financial Schedules........................................... 12
4.4 Business Since the Pacific and Southern Balance Sheet
Date.......................................................... 13
4.5 No Defaults................................................... 13
4.6 Undisclosed Liabilities....................................... 14
4.7 Licenses and Authorizations................................... 14
4.8 Condition of the Station Assets............................... 15
4.9 Contracts and Arrangements.................................... 15
4.10 Title........................................................ 17
4.11 Call Letters; Trademarks..................................... 18
4.12 Litigation and Compliance with Laws.......................... 19
4.13 Employees.................................................... 20
4.14 Taxes........................................................ 21
4.15 Instruments of Conveyance; Good Title........................ 21
4.16 Changes...................................................... 21
4.17 Brokers...................................................... 22
4.18 Environmental................................................ 22
4.19 No Untrue Statement.......................................... 23
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ARTICLE V. Representations and Warranties of Evergreen . . 23
5.1 Organization; Qualification . . . . . . . . . . . 23
5.2 Authority Relative to this Agreement. . . . . . . 24
5.3 No Defaults . . . . . . . . . . . . . . . . . . . 24
5.4 Qualification as Buyer. . . . . . . . . . . . . . 24
5.5 [Intentionally deleted.]. . . . . . . . . . . . . 25
5.6 Brokers . . . . . . . . . . . . . . . . . . . . . 25
5.7 No Untrue Statement . . . . . . . . . . . . . . . 25
ARTICLE VI. Covenants of Pacific and Southern Pending the
Closing Date . . . . . . . . . . . . . . . . . . . . . 25
6.1 Maintenance of Business . . . . . . . . . . . . . 26
6.2 Organization; Goodwill . . . . . . . . . . . . . 28
6.3 Access to Facilities, Files and Records . . . . . 28
6.4 Representations and Warranties. . . . . . . . . . 29
6.5 Corporate Action. . . . . . . . . . . . . . . . . 29
6.6 Applications for FCC Consent. . . . . . . . . . . 29
6.7 Consents . . . . . . . . . . . . . . . . . . . . 30
6.8 Consummation of Agreement . . . . . . . . . . . . 30
6.9 Notice of Proceedings . . . . . . . . . . . . . . 31
6.10 Xxxx-Xxxxx-Xxxxxx Act. . . . . . . . . . . . . . 31
6.11 Interim Financial Statements . . . . . . . . . . 32
ARTICLE VII. Covenants of Evergreen Pending the Closing Date
. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.1 Representations and Warranties . . . . . . . . . 32
7.2 Corporate Action. . . . . . . . . . . . . . . . . 32
7.3 Applications for FCC Consent. . . . . . . . . . . 33
7.4 Consummation of Agreement . . . . . . . . . . . . 33
7.5 Notice of Proceedings . . . . . . . . . . . . . . 34
7.6 Xxxx-Xxxxx-Xxxxxx Act . . . . . . . . . . . . . . 34
7.7 Confidential Information. . . . . . . . . . . . . 34
7.8 Disqualifying Matters . . . . . . . . . . . . . . 35
ARTICLE VIII. Conditions to the Obligations of Evergreen . 36
8.1 Representations, Warranties, Covenants. . . . . . 36
8.2 Proceedings . . . . . . . . . . . . . . . . . . . 37
8.3 FCC Authorizations. . . . . . . . . . . . . . . . 38
8.4 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . 39
8.5 Opinion of Counsel. . . . . . . . . . . . . . . . 39
8.6 Damage to the Station Assets. . . . . . . . . . . 40
8.7 Third-Party Consents. . . . . . . . . . . . . . . 41
ARTICLE IX. Conditions to the Obligations of Pacific and
Southern . . . . . . . . . . . . . . . . . . . . . . . 41
9.1 Representations, Warranties, Covenants. . . . . . 41
9.2 Proceedings . . . . . . . . . . . . . . . . . . . 42
9.3 FCC Authorizations. . . . . . . . . . . . . . . . 43
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9.4 Xxxx-Xxxxx-Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . 43
9.5 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . 44
9.6 Additional Stations . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE X. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 44
10.1 Survival; Limitations. . . . . . . . . . . . . . . . . . . . . . 44
10.2 Indemnification of Evergreen . . . . . . . . . . . . . . . . . . 45
10.3 Indemnification of Pacific and Southern. . . . . . . . . . . . . 46
10.4 Notice of Claims . . . . . . . . . . . . . . . . . . . . . . . . 47
10.5 Defense of Third Party Claims. . . . . . . . . . . . . . . . . . 47
10.6 Known Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE XI. Termination Rights . . . . . . . . . . . . . . . . . . . . . . 49
11.1 Abandonment of Agreement . . . . . . . . . . . . . . . . . . . . 49
11.2 Liabilities Upon Abandonment . . . . . . . . . . . . . . . . . . 50
ARTICLE XII. Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . 51
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
12.2 Environmental Studies. . . . . . . . . . . . . . . . . . . . . . 51
12.3 Employees and Employee Benefits. . . . . . . . . . . . . . . . . 53
12.4 Accounts Receivable. . . . . . . . . . . . . . . . . . . . . . . 56
12.5 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . 57
12.6 Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
12.7 Allocation of Purchase Price . . . . . . . . . . . . . . . . . . 59
12.8 Right to Audit . . . . . . . . . . . . . . . . . . . . . . . . . 60
12.9 Waiver of Compliance . . . . . . . . . . . . . . . . . . . . . . 60
12.10 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
12.11 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 62
12.12 Qualified Intermediary. . . . . . . . . . . . . . . . . . . . . 62
12.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 64
12.14 Bulk Sales Law. . . . . . . . . . . . . . . . . . . . . . . . . 64
12.15 Control of the Stations . . . . . . . . . . . . . . . . . . . . 64
12.16 Public Announcements. . . . . . . . . . . . . . . . . . . . . . 65
12.17 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 65
12.18 Other Parties . . . . . . . . . . . . . . . . . . . . . . . . . 65
12.19 Entire Agreement; Amendments. . . . . . . . . . . . . . . . . . 65
Schedules
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Schedule 1.1 Tangible Personal Property
Schedule 4.7 Licenses and Authorizations
Schedule 4.9 Material Station Contracts
Schedule 4.10 Stations' Owned Real Estate
Schedule 4.11 Intellectual Property
Schedule 4.12 Litigation and Compliance with Laws
Schedule 4.13 Employees; Salaries
Schedule 4.16 Changes Since Balance Sheet Date
Schedule 5.4 Buyer's Disqualifications
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Exhibits
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Exhibit 3.2 (a) Xxxx of Sale and Assignment
Exhibit 3.2 (b) Warranty Deed
Exhibit 3.2 (c) Opinion of Pacific and Southern's Counsel
Exhibit 3.2 (d) Certificate of Secretary of Pacific and
Southern
Exhibit 3.2 (e) Bring Down Certificate of Officer of Pacific
and Southern
Exhibit 3.3 (a) Opinion of Evergreen's Counsel
Exhibit 3.3 (b) Assumption Agreement
Exhibit 3.3 (c) Certificate of Secretary of Evergreen
Exhibit 3.3 (d) Bring Down Certificate of Officer of
Evergreen
Exhibit 3.2 (g) License Agreement
Exhibit 12.3 Change in Control Plan
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT ("Agreement") is dated as of April 4, 1997,
and is between Pacific and Southern Company, Inc., a Delaware corporation having
its principal place of business in Arlington, Virginia ("Pacific and Southern"),
and Evergreen Media Corporation of Los Angeles, a Delaware corporation having
its principal place of business in Irving, Texas ("Evergreen").
Pacific and Southern is the licensee of and owns and operates radio
broadcast stations WGCI-AM/FM in Chicago, Illinois (the "Stations") pursuant to
licenses, permits and other authorizations ("FCC Authorizations") issued by the
Federal Communications Commission (the "FCC"). Pacific and Southern also is the
licensee of and owns and operates radio broadcast stations KHKS-FM in Dallas,
Texas and KKBQ-AM/FM in Houston, Texas (the "Additional Stations") which Pacific
and Southern desires to sell to Evergreen pursuant to Asset Purchase Agreements
of even date herewith.
Pacific and Southern desires to sell and Evergreen desires to purchase the
Stations under the terms and conditions set forth below.
Based upon the representations and warranties made by each party to the
other in this Agreement, the parties agree to consummate the transfer of the
Station Assets (as defined in Section 1.1 below) on the terms contained herein.
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ARTICLE IA. Conditions Precedent
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1A.1 Conditions Precedent. Notwithstanding any other provisions of this
--------------------
Agreement, the following conditions precedent shall apply to the effectiveness
of this Agreement. By not later than April 4, 1997, Evergreen shall have
delivered to Pacific and Southern documentation satisfactory to Pacific and
Southern in its sole discretion evidencing the form and availability of the
Letter of Credit for the Deposit and the availability of funding for the payment
of the Purchase Price in cash. Pacific and Southern shall notify Evergreen by
close of business on April 8, 1997 whether the financing and Letter of Credit
meet with its approval. The final executed Letter of Credit for the deposit and
the executed documentation evidencing the availability of funding for the
payment of the Purchase Price shall be delivered to Pacific and Southern on
April 9, 1997. The absence of written approval by Pacific and Southern by April
8, 1997 or Evergreen's failure to deliver the executed Letter of Credit and
documentation evidencing availability of funding by April 9, 1997 shall result
in termination of this Agreement, and neither party shall have any claim against
the other as a result of the failure of the transaction. Upon approval of the
Letter of Credit and the Purchase Price funding by Pacific and Southern,
Evergreen will take no subsequent action that
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would cause the Purchase Price funding described in such documentation to be
reduced or impaired, or to become unavailable or delayed, unless it again
delivers to Pacific and Southern prior to taking such action substitute
documentation satisfactory to Pacific and Southern in its sole discretion
evidencing the availability of funding for the payment of the Purchase Price in
cash.
ARTICLE I. Transfer of Station Assets
--------- --------------------------
1.1 Transfer of Station Assets. Upon the terms and subject to the
--------------------------
conditions of this Agreement, on the Closing Date (as defined in Section 3.1
hereof) Pacific and Southern will sell, assign, transfer, convey or cause to be
conveyed, and deliver to Evergreen, and Evergreen will acquire and accept from
Pacific and Southern, the assets and properties, tangible or in tangible, of
every kind and description used or held for use by Pacific and Southern in
connection with the business and operation of the Stations (all such assets
being referred to herein as the "Station Assets"), but excluding the Excluded
Station Assets described in Section 1.2 below. The Station Assets include, but
are not limited to, the following:
(a) All of Pacific and Southern's tangible personal property, assets
and equipment used in connection with the business and operation
of the Stations, including those listed in Schedule 1.1 hereto,
------------
including any replacements and less any retirements or
dispositions thereof made between the date hereof and the Closing
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Date in the ordinary course of Pacific and Southern's business;
(b) All real property owned by Pacific and Southern and used
primarily in connection with the business and operations of the
Stations (together with all appurtenant easements thereto and all
structures, fixtures, and improvements located thereon, which
need not be listed) as listed in Schedule 4.10, together with any
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additions thereto between the date hereof and the Closing Date;
(c) All contracts, leases, agreements and similar documents that
relate to the operation of the Stations, including, but not
limited to, trade agreements, barter programming agreements,
programming and talent agreements, together with all orders and
agreements for the sale of advertising relating to the Stations,
including those described in Schedule 4.9 hereto;
------------
(d) All of Pacific and Southern's right, title and interest in and to
all licenses, permits and other governmental authorizations
related to the Stations, including, without limitation, the FCC
Authorizations, and all applications therefor, together with any
renewals, extensions or modifications thereof including, without
limitation, those listed in Schedule 4.7;
------------
(e) All intangible rights and interests to or owned by Pacific and
Southern and used in connection with the operation of the
Stations as described in Sections 4.7 and 4.11 below, including,
without limitation the Stations' call letters and those rights
listed on Schedule 4.7 and Schedule 4.11 hereto; and
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(f) All files and other records (including FCC records) of Pacific
and Southern relating to the operation of the Stations (other
than duplicate copies of such files and records that are
maintained in the offices of Pacific and Southern's affiliates).
1.2 Excluded Station Assets. The following assets relating to the
-----------------------
business and operation of the Stations shall
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be retained by Pacific and Southern and shall not be exchanged, assigned or
transferred to Evergreen (the "Excluded Station Assets"):
(a) All assets of Pacific and Southern not used primarily in connection
with the Stations;
(b) Claims by Pacific and Southern with respect to the Excluded Station
Assets and liabilities not assumed by Evergreen, including without
limitation claims for tax refunds and counterclaims with respect to
obligations and liabilities not being assumed by Evergreen
hereunder;
(c) All contracts of insurance and all insurance proceeds or claims
made by Pacific and Southern, except as otherwise provided for in
Section 8.6 below;
(d) All of Pacific and Southern's accounts receivable arising out of
Pacific and Southern's operation of the Stations;
(e) All employee benefit plans of any nature and their assets;
(f) Cash on hand and in banks, other cash items and cash equivalents;
(g) the use of the name "Gannett" or "Pacific and Southern" or any
variations;
(h) All tangible personal property of Pacific and Southern disposed of
or consumed in the ordinary course of the operation of the Stations
as permitted under Section 6.1 below or with the consent of
Evergreen between the date of this Agreement and the Closing Date;
and
(i) Pacific and Southern's corporate seal, minute books, charter
documents, corporate stock record books and such other books and
records as pertain to the organization, existence or share
capitalization of Pacific and Southern and duplicate copies of such
records as are necessary to enable Pacific and Southern to file its
tax returns and reports as well as any other
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records or materials relating to Pacific and Southern generally and
not involving or relating to the Station Assets or the operation of
the Stations.
1.3 Liabilities. The Station Assets shall be exchanged, transferred
-----------
and conveyed to Evergreen free and clear of all liabilities, liens, security
interests and encumbrances of any kind, except for liens for property taxes not
yet due and payable and except for those liens listed on Schedules 1.1 and 4.10
----------------------
hereto. Evergreen shall assume and undertake to perform the obligations of
Pacific and Southern arising and to be performed on or after the Closing Date
under the contracts, leases, agreements and similar documents referred to in
Section 1.1(c) above, but Evergreen does not assume and will not be liable for
any other liability, obligation, claim, lien, security interest or encumbrance
of Pacific and Southern or the Stations.
ARTICLE II. Consideration
--------------------------
2.1 Consideration. In consideration of Pacific and Southern's
-------------
performance of this Agreement and the transfer and delivery of the Station
Assets to Evergreen on the Closing Date, Evergreen shall pay Pacific and
Southern by wire transfer, to a bank account designated by Pacific and Southern,
$140,000,000 in immediately available funds, plus or minus the amount of any
adjustments as may be pursuant to Section 2.2 below, plus if the Closing Date is
prior to
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December 29, 1997, Seven Hundred Thousand Dollars ($700,000) for every month or
portion thereof after the Closing Date between August 1, 1997 and December 26,
1997 (the "Purchase Price"). One day after delivery of the notice from Pacific
and Southern specified in Section 1A.1, Evergreen shall (a) pay Pacific and
Southern a non-refundable (except as set forth in Sections 11.2(b), 12.2 or 12.6
below) deposit in the amount of $14,000,000, payable by delivery of the letter
of credit provided pursuant to Section 1A.1 (the "Deposit") and (b) deliver to
Pacific and Southern the executed documentation pursuant to Section 1A.1
evidencing the availability of funding for payment of the Purchase Price in
cash.
2.2 Prorations
----------
(a) Prior to the Closing Date. Evergreen shall be entitled to
-------------------------
all income earned and be responsible for all expenses incurred in connection
with the business and operation of the Stations on or subsequent to the Closing
Date. Pacific and Southern shall be entitled to all income earned and be
responsible for all expenses incurred in connection with the business and
operation of the Stations prior to the Closing Date. Items to be prorated
hereunder shall be prorated as of 11:59 p.m., local time per Station market, on
the date immediately preceding the Closing Date and shall include, without
limitation, power and utility charges,
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personal property taxes and real property taxes, sick and vacation pay, wages,
license fees, and lease payments.
(b) Trade, Barter. A proration or adjustment shall be made in favor
-------------
of Evergreen for the amount, if any, by which the advertising time remaining to
be run by a Station as of the Closing Date is greater than the sum of (a)
$100,000 and (b) the value of goods and services to be received by the Station
under their trade and barter agreements as of the Closing Date.
(c) Time for Payment. The prorations and adjustments provided for in
----------------
this Section 2.2, to the extent practicable, shall be made on the Closing Date,
and the party owing any net amount shall pay that amount on the Closing Date. As
to those prorations and adjustments not capable of being ascertained on the
Closing Date, an adjustment and proration shall be made within 90 days of the
Closing Date, and payment shall be made at that time.
(d) Dispute Resolution. In the event of any disputes between the
------------------
parties as to such prorations, the amounts not in dispute shall nonetheless be
paid at the time provided in subsection (c) above, and such disputes shall be
determined by an independent certified public accountant mutually acceptable to
the parties whose determination shall be final, and the fees and expenses of
such accountant shall be borne equally by Evergreen and Pacific and Southern.
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ARTICLE III. The Closing
----------- -----------
3.1 Time and Place of Closing.
-------------------------
(a) Subject to the satisfaction or waiver of the provisions of
Articles VIII and IX below and upon prior written notice from Pacific and
Southern (the "Closing Date Notice"), the closing (the "Closing") of the
transfer of the Station Assets shall be held in the offices of Pacific and
Southern at 0000 Xxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 at 10:00 a.m. (i)
on the tenth day after the Closing Date Notice (and if such day is not a
business day, then on the next following business day after the tenth day) or
(ii) such other time and place as shall be mutually agreed upon by the parties
(the "Closing Date").
(b) If all the conditions to closing in Article IX have been
fulfilled by December 10, 1997, then the Closing Date shall be no later than
December 26, 1997. If the conditions to closing in Sections 9.3 and 9.4 have
not been fulfilled by December 10, 1997, then Pacific and Southern may, at its
election (but subject to the provisions of Section 11.1(h)), extend the Closing
Date beyond December 26, 1997 to a date not later than thirty (30) days
following (i) satisfaction of the condition in Section 9.4 and (ii) receipt of
FCC consent to the assignment of the FCC Authorizations in a final order not
subject to further review or delay.
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3.2 Deliveries by Pacific and Southern. At the Closing, Pacific and
----------------------------------
Southern will deliver to Evergreen the following:
(a) Bills of sale, deeds, assignments and other instruments of
transfer and conveyance transferring and assigning the Station
Assets to Evergreen, in form and substance satisfactory to the
parties, including a xxxx of sale and assignment in the form to
be attached hereto as Exhibit 3.2(a) and a warranty deed in the
--------------
form to be agreed upon by the parties prior to Closing and
attached hereto as Exhibit 3.2(b):
--------------
(b) Consents to assignment from third parties relating to the
Material Station Contracts to be listed on Schedule 4.9 hereto,
------------
as well as any other consents obtained by Evergreen;
(c) Opinion of Pacific and Southern's corporate legal counsel, and
an opinion of Pacific and Southern's FCC legal counsel, in the
form to be attached hereto as Exhibit 3.2(c);
--------------
(d) Certificate dated the Closing Date, of the Secretary of Pacific
and Southern as to resolutions of the Board of Directors of
Pacific and Southern relating to this Agreement and the
transactions contemplated hereby in the form to be attached
hereto as Exhibit 3.2(d); and
--------------
(e) Certificate of an officer of Pacific and Southern certifying
the fulfillment of the conditions set forth in Sections 8.1(a)
and 8.1(b) below in the form to be attached hereto as Exhibit
-------
3.2(e).
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3.3 Deliveries by Evergreen. At the closing, Evergreen will deliver to
-----------------------
Pacific and Southern the following:
(a) Opinion of Evergreen's corporate legal counsel and an opinion
of Evergreen's FCC legal counsel in the form to be attached
hereto as Exhibit 3.3(a);
--------------
(b) An assumption agreement pursuant to which Evergreen shall
assume Pacific and Southern's
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liabilities and obligations as provided in Section 1.1 hereof in
the form to be attached hereto as Exhibit 3.3(b);
--------------
(c) Certificate, dated the Closing Date, of the Secretary of
Evergreen as to resolutions of the Board of Directors of
Evergreen relating to this Agreement and the transactions
contemplated hereby in the form to be attached hereto as
Exhibit 3.3 (c);
---------------
(d) Certificate of an officer of Evergreen certifying the fulfillment
of the conditions set forth in Sections 9.1(a) and 9.1(b) below
in the form to be attached hereto as Exhibit 3.3(d);
--------------
(e) An assumption agreement pursuant to which Evergreen shall assume
Gannett Co., Inc.'s April 9, 1997 Radio Division Change in
Control Plan for the six senior Station employees listed in
Exhibit 12.3;
------------
(f) Funds equal to the Purchase Price (and upon payment of the
Purchase Price in full the Letter of Credit will be returned to
Evergreen); and
(g) A license agreement pursuant to which Evergreen grants to Pacific
and Southern a perpetual royalty-free license to use the call
letters "WGCI" for a television station in any DMA other than
Chicago, in the form to be attached hereto as Exhibit 3.3(g).
--------------
ARTICLE IV. Representations and Warranties of Pacific and Southern
---------- ------------------------------------------------------
Pacific and Southern represents and warrants to Evergreen as follows:
4.1 Organization; Qualification. Pacific and Southern is a corporation
---------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Pacific and Southern has the full power and authority to
own and operate
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the Station Assets and to carry on the business operations of the Stations as
such operations are now being conducted.
4.2 Authority Relative to this Agreement. Pacific and Southern has the
-----------------------------------
full corporate power, authority and legal right to execute and deliver this
Agreement and to consummate the transactions and perform its obligations as
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been or will be duly
and validly authorized by all necessary corporate and shareholder action, and
this Agreement has been duly and validly executed and delivered by Pacific and
Southern and constitutes a legal, valid and binding obligation of Pacific and
Southern enforceable against Pacific and Southern in accordance with its terms.
4.3 Financial Schedules. Pacific and Southern has furnished to Evergreen
-------------------
the unaudited financial statements of Pacific and Southern with respect to the
Stations for the fiscal years ended December 24, 1994, December 31, 1995 and
December 29, 1996 (the "Financial Schedules"). December 29, 1996 is the "Balance
Sheet Date". The Financial Schedules have been prepared from and are in
accordance with the books and records regularly maintained by Pacific and
Southern with respect to the Stations. In all material respects, the Financial
Schedules present fairly the financial condition of the Stations for the periods
indicated. No material
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adjustments of the Financial Schedules are required for a fair presentation of
the financial condition and the results of the Stations' operations for the
periods indicated. The Financial Schedules are true and correct in all material
respects. Pacific and Southern makes no representations, however, about the
future business or financial prospects of the Stations.
4.4 Business Since the Pacific and Southern Balance Sheet Date. Since
----------------------------------------------------------
the Balance Sheet Date the business of the Stations has been conducted in the
ordinary course of business and in substantially the same manner as it was
before the Balance Sheet Date, and there have been no material adverse changes
in the business, condition (financial or otherwise) or results of the Stations'
operations and the operations of the Additional Stations considered in the
aggregate.
4.5 No Defaults. The execution, delivery and performance of this
-----------
Agreement by Pacific and Southern will not (a) conflict with any provision of
the Articles of Incorporation or bylaws of Pacific and Southern, (b) result in a
default (or give rise to any right of termination, cancellation or acceleration)
under or conflict with any of the terms, conditions or provisions of any
Material Station Contracts (as defined in Section 4.9 below), (c) violate any
law, statute, rule, regulation, order, injunction or decree of any federal,
state or local governmental authority or agency applicable to Pacific and
Southern or any of the Station
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Assets, or (d) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on any of the Station Assets.
4.6 Undisclosed Liabilities. Pacific and Southern has no material
-----------------------
obligation or liability to be reflected or reserved against in any of the
Financial Schedules which is not fully reflected or reserved against in such
Financial Schedules or otherwise disclosed hereunder.
4.7 Licenses and Authorizations. As of the date of this Agreement,
---------------------------
Pacific and Southern is the holder of the FCC Authorizations listed in Schedule
--------
4.7 to this Agreement. Pacific and Southern will deliver to Evergreen true and
---
complete copies of the FCC Authorizations. Such FCC Authorizations constitute
all of the licenses and authorizations required under the Communications Act,
and the current rules, regulations, and policies of the FCC for and/or used in
the operation of the Stations as now operated. The FCC Authorizations are in
full force and effect. There is not now pending, or to the knowledge of Pacific
and Southern threatened, any action by or before the FCC to revoke, cancel,
rescind, modify or refuse to renew any of such FCC Authorizations arising out of
actions not caused by Evergreen, and there is not now pending, or to the
knowledge of Pacific and Southern threatened, issued or outstanding by or before
the FCC, any investigation, Order to Show Cause, Notice of
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Violation, Notice of Apparent Liability or Notice of Forfeiture or complaint
against Pacific and Southern or any of its affiliates with respect to the
Stations, and arising out of actions not caused by Evergreen. In the event of
any such action, or the filing or issuance of any such order, notice or
complaint against Pacific and Southern, or Pacific and Southern's learning of
the threat thereof, Pacific and Southern shall promptly notify Evergreen of same
in writing and shall take all reasonable measures, at its expense, to contest in
good faith or seek removal or rescission of such action, order, notice or
complaint. The Stations are operating in all material respects in compliance
with the FCC Authorizations, the Communications Act and the current rules,
regulations and policies of the FCC.
4.8 Condition of the Station Assets. The tangible assets included in the
--------------------------------
Station Assets are in good operating condition and repair, ordinary wear and
tear excepted, and are adequate and suitable in accordance with general industry
practices for the purposes for which they currently are used.
4.9 Contracts and Arrangement.
-------------------------
(a) Schedule 4.9 hereto contains true and complete lists all of the
-----------
contracts (written or oral) included in the Station Assets. except for those
contracts involving annual consideration of less than $25,000 or which are
terminable by Pacific and Southern without penalty or other financial
- 16 -
obligation upon notice of thirty (30) days or less (the "Station Contracts"),
including but not limited to the following Station Contracts:
(i) Any radio network affiliation agreements;
(ii) Contracts evidencing time sales to advertisers or advertising
agencies;
(iii) Any trade or barter agreements;
(iv) Sales agency or advertising representation contracts;
(v) Contracts for the future construction or purchase of capital
improvements, purchase of materials, supplies or equipment, or for
the sale of assets (other than broadcast time);
(vi) Employment contracts or consulting contracts;
(vii) Licenses or agreements under which Pacific and Southern is
authorized to broadcast on the Stations programming supplied by
others;
(viii) Leases of real property;
(ix) Leases of personal property; and
(x) Any other contract or lease not made in the usual and ordinary
course of business.
(b) Schedule 4.9 specifies those Station Contracts the assignment of
------------
which requires the consent of a third party and which Evergreen and Pacific and
Southern have agreed are material to the operation of each Station ("Material
Station Contracts"). Evergreen and Pacific and Southern agree that the
Stations' transmitter leases are Material Station Contracts. Provided that any
requisite consent to the assignment of Station Contracts to Evergreen is
obtained, and
- 17 -
the contract or lease has not expired by its terms, each of the contracts and
leases which is assigned to and assumed by Evergreen on the Closing Date shall
be valid and in full force and effect.
(c) Subject to Pacific and Southern's obtaining necessary third-
party consents, Pacific and Southern has full legal power and authority to
assign its rights under the Station Contracts to Evergreen in accordance with
this Agreement, and such assignment shall not affect the validity,
enforceability and continuity of any of the Material Station Contracts. Neither
Pacific and Southern, nor to its knowledge any other party, has defaulted or
caused an event of default or other event which with notice or lapse of time or
both, would, in reasonable likelihood, constitute a default or an event of
default, under any such Station Contract, or under any contacts being assumed
by Evergreen hereunder, which defaults or events of default in the aggregate
would exceed $50,000.
4.10 Title.
-----
(a) Schedule 4.10 lists all real property included in the Station
-------------
Assets (the "Stations' Owned Real Estate"). Pacific and Southern owns and has
good and valid marketable title to such properties, free and clear of all
security interests, mortgages, conditional sales agreements, charges, liens and
encumbrances, except for liens for taxes not yet due
- 18 -
and payable, and except for those liens, if any, set forth on Schedule 4.10,
-------------
which will be removed at or prior to Closing.
(b) Schedule 4.9 lists all real property leased by Pacific and
------------
Southern and used in the Stations' operation (the ``Stations' Leased Real
Estate''). Schedule 1.1 lists all material tangible personal property included
------------
in the Station Assets.
(c) Except as set forth in Schedule 1.1 or Schedule 4.10, Pacific and
-----------------------------
Southern owns and has good and valid title to such properties, free and clear of
all security interests, mortgages, pledges, charges, liens and encumbrances,
except for liens for taxes not yet due and payable.
(d) Pacific and Southern's use and occupancy of the Stations' Owned
Real Estate complies in all material respects with all regulations, codes,
ordinances, and statutes of all applicable governmental authorities.
4.11 Call Letters; Trademarks. Schedule 4.11 to this Agreement sets forth a
------------------------ -------------
correct and complete list of all call letters, copyrights, trademarks, trade
names and service marks which are owned or held for use by Pacific and Southern
solely in connection with the business and operation of the Stations and which
are material to the financial condition of the Station Assets (the ``Station
Rights''). The registrations (if any) for the Station Rights are valid, in good
standing and
- 19 -
uncontested. Pacific and Southern possesses adequate rights, licenses or other
authority to use all Station Rights necessary to conduct the business of the
Stations as presently conducted. Except as set forth Schedule 4.11, Pacific
-------------
and Southern has not received any notice with respect to any alleged
infringement or unlawful or improper use of any Station Rights owned or alleged
to be owned by others. No director, officer or employee of Pacific and Southern
or of any of its affiliates has any interest in any Station Rights listed on
Schedule 4.11, all of which are free and clear of any lien, security interest,
-------------
claim or encumbrance of any kind. Pacific and Southern has not granted any
outstanding licenses or other rights to any Station Rights listed on Schedule
--------
4.11, and Pacific and Southern has no knowledge of any infringement of any of
----
the Station Rights.
4.12 Litigation and Compliance with Laws. Except as set forth on Schedule
----------------------------------- --------
4.12: (a) Pacific and Southern, with respect to the Stations, has not been
----
operating under or subject to. or in default with respect to, any order, writ,
injunction, judgment or decree of any court or federal, state, or local
governmental authority or agency which arises out of actions not caused by
Evergreen and which has or could reasonably be expected to have a material
adverse effect on the business, operations or financial condition of the
Stations;
- 20 -
(b) neither Pacific and Southern nor any of its officers or agents
has received any inquiry, written or oral, from any such authority or agency
concerning any of the operations or business of the Stations during the 12-month
period prior to the date of this Agreement which could be expected to have a
material adverse effect on the business, operations or financial condition of
the Stations; and
(c) there is no litigation pending by or against, or to Pacific and
Southern's knowledge threatened against, Pacific and Southern or the Stations
related to or affecting any of the Stations Assets. Except as disclosed in
Schedule 4.12, and except for environmental matters (which are governed
-------------
exclusively by Section 4.18 below), Pacific and Southern has complied in all
material respects with all laws, regulations, orders or decrees applicable to
the Stations, and the present uses by Pacific and Southern of the Station Assets
do not violate any such laws, regulations, orders or decrees, in any material
respect.
4.13 Employees. Schedule 4.13 lists the names and salaries or rates of
--------- -------------
commission of all the full and part-time employees of the Stations. Except as
shown on Schedule 4.9, Pacific and Southern is not a party to any collective
------------
bargaining agreement or any other labor agreement covering or relating to any of
the employees of the Stations, and has not
-21-
recognized and has not received a demand for recognition of any collective
bargaining representative.
4.14 Taxes. Pacific and Southern has paid in full all taxes, estimated
-----
taxes, interest, assessments, and penalties due and payable by it. Pacific and
Southern does not and will not prior to the Closing Date have any liability,
fixed or contingent, for any unpaid federal, state or local taxes or other
governmental or regulatory charges whatsoever which could result in a lien on
the Station Assets after the Closing Date.
4.15 Instruments of Conveyance; Good Title. The instruments to be executed
-------------------------------------
by Pacific and Southern and delivered to Evergreen at the Closing conveying the
Station Assets to Evergreen will transfer good and marketable title to the
Station Assets free and clear of all liabilities, obligations and encumbrances,
except as provided elsewhere in this Agreement.
4.16 Changes. Except as shown on Schedule 4.16 to this Agreement, since the
------- -------------
Balance Sheet Date, Pacific and Southern has not, with respect to the business
of the Stations: (a) mortgaged, pledged or subjected to a lien or any other
encumbrance, any of the Station Assets; (b) sold or transferred any material
assets used or useful in the business of the Stations; or (c) increased the
compensation payable or
- 22 -
to become payable to any employee or agent, except increases in accordance with
historical practices.
4.17 Brokers. There is no broker or finder or other person who would have
-------
any valid claim against Evergreen for a commission or brokerage fee in
connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Pacific and Southern.
4.18 Environmental.
-------------
(a) In connection with the operation of the Stations, no release,
emission or discharge into the environment of hazardous substances including,
without limitation, PCBs, hazardous waste or air pollutants or toxic pollutants,
as defined under any Environmental Laws, by Pacific and Southern, and to the
best of Pacific and Southern's knowledge, by any other person, has occurred, is
presently occurring, or is anticipated to occur in excess of permitted levels or
reportable quantities, under any Environmental Law. No hazardous waste has been
disposed of by Pacific and Southern or, and to the best of Pacific and
Southern's knowledge, by any other person on the real property occupied by the
Stations or their transmitters. As used herein, the term "hazardous waste" shall
have the same meaning as it has in RCRA, as amended, and in the equivalent state
statutes, if any, of Texas, as applicable.
- 23 -
(b) The Stations' present use of the Station Assets does not violate
any Environmental Law, occupational safety and health or other applicable law,
the effect of which violation could materially adversely affect the Station
Assets or Evergreen's use thereof, or which could impose a material liability on
Evergreen. Pacific and Southern has complied in all material respects with all
Environmental Laws applicable to the Stations and their operations, including
but not limited to, the FCC's guidelines regarding RF radiation.
4.19 No Untrue Statement. No representation or warranty made by Pacific
-------------------
and Southern in this Agreement, and no statement made in any certificate,
document, exhibit or schedule furnished or to be furnished in connection with
the transactions herein contemplated, contains or will contain any untrue
statement of a material fact or omits or will omit to state any material fact
necessary to make such representation or warranty or any such statement not
misleading to Evergreen.
ARTICLE V. Representations and Warranties of Evergreen
------------------------------------------------------
Evergreen represents and warrants to Pacific and Southern as follows:
5.1 Organization; Qualification. Evergreen is a corporation duly
---------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Evergreen has the full power and authority to own and operate the
- 24 -
Station Assets and to carry on the business operations of the Stations as such
operations are now being conducted.
5.2 Authority Relative to this Agreement. Evergreen has the full
------------------------------------
corporate power, authority and legal right to execute and deliver this Agreement
and to consummate the transactions and perform its obligations as contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been or will be duly and validly
authorized by all necessary corporate and shareholder action, and this Agreement
has been duly and validly executed and delivered by Evergreen and constitutes a
legal, valid and binding obligation of Evergreen enforceable against Evergreen
in accordance with its terms.
5.3 No Defaults. The execution, delivery and performance of this
-----------
Agreement by Evergreen will not (a) conflict with or result in any breach of any
provision of the Articles of Incorporation or bylaws of Evergreen, or (b) except
and only to the extent shown on Schedule 5.4, violate any law, statute, rule,
------------
regulation, order, injunction or decree of any federal, state or local
governmental authority or agency applicable to Evergreen.
5.4 Qualification as Buyer. Except and only to the extent shown on
----------------------
Schedule 5.4, Evergreen knows of no fact which would, under antitrust law or the
------------
existing laws, rules, regulations and practices of the FCC, disqualify Evergreen
as
- 25 -
(a) assignee of the FCC Authorizations listed in Schedule 4.7 to this Agreement,
------------
or (b) owner and operator of either of the Stations. Evergreen will take no
action prior to the Closing Date which it knows or has reason to know would
cause such disqualification, or which would require any waiver of any of the
FCC's rules, regulations or practices or any delay with respect to the FCC or
antitrust reviews of this transaction.
5.5 [Intentionally deleted.]
5.6 Brokers. There is no broker or finder or other person who would have
-------
any valid claim against Pacific and Southern for a commission or brokerage fee
in connection with this Agreement or the transactions contemplated hereby as a
result of any agreement, understanding or action by Evergreen.
5.7 No Untrue Statement. No representation or warranty made by Evergreen in
-------------------
this Agreement, and no statement made in any certificate, document, exhibit or
schedule furnished or to be furnished in connection with the transactions herein
contemplated, contains or will contain any untrue statement of a material fact
or omits or will omit to state any material fact necessary to make such
representation or warranty or any such statement not misleading to Pacific and
Southern.
- 26 -
ARTICLE VI. Covenants of Pacific and Southern Pending the Closing Date
----------- ----------------------------------------------------------
Except with the prior consent of Evergreen, Pacific and Southern covenants
and agrees with respect to the Stations that from the date hereof to and
including the Closing Date:
6.1 Maintenance of Business.
-----------------------
(a) Pacific and Southern shall continue to carry on the business and
operation of the Stations, including promotional expenses, in substantially the
same manner as heretofore in the ordinary course of business.
(b) Pacific and Southern shall continue to operate the Stations in
accordance with the terms of the FCC Authorizations and in compliance with all
applicable laws and FCC rules and regulations. Pacific and Southern will
promptly execute and will prosecute diligently any necessary applications for
renewal of the FCC Authorizations for the Stations, without conditions adverse
to Evergreen. Pacific and Southern will take reasonable steps to protect the
integrity of its service contours from claims, actions and applications by third
parties. Pacific and Southern will deliver to Evergreen, copies of any reports,
applications or communications with the FCC related to the Stations which are
filed between the date of this Agreement and the Closing Date;
(c) Pacific and Southern shall, at its expense, maintain all
machinery and equipment (including spare parts)
- 27 -
used in the business and operation of the Stations in a normal state of repair
and efficiency and at normal levels, will replace items with a value in excess
of $5,000 that are disposed of with replacement items of substantially
equivalent nature and value consistent with past practices and the ordinary
operation of the Stations, and will fully perform its obligations under all
contracts to be assigned to an assumed by Evergreen. Pacific and Southern will
maintain in full force and effect through the Closing Date its existing property
damage, liability and other insurance with respect to the Station Assets.
(d) Prior to the Closing Date, Pacific and Southern will not, without
Evergreen's prior written consent, which consent shall not be unreasonably
withheld or delayed:
(i) Sell, lease, transfer or agree to sell, lease or transfer any of the
Station Assets without replacement thereof with an asset of substantially
equivalent kind, condition and value;
(ii) Enter into any contract of employment or collective bargaining
agreement, or permit any increases or changes in the compensation
(including bonus) of any of the Stations' employees, except for increases
in accordance with historical practices;
(iii) Except for the time sales contracts in (iv) below and for the
renewal of Stations' tower lease
- 28 -
scheduled to expire in 1997, enter into or amend any contract or commitment
with respect to the Stations (A) involving total consideration of more than
$25,000 individually or $500,000 in the aggregate and/or (B) for a term
exceeding one year, or waive any right, other than as permitted by other
provisions of this Agreement;
(iv) Renew, renegotiate, modify, amend or terminate any existing time
sales contracts with respect to the Stations except in the ordinary and
usual course of business;
(v) Apply to the FCC for any construction permit with respect to the
Stations or make any material change in the Stations' buildings, leasehold
improvements or fixtures; or
(vi) Enter into any barter or trade contract valued in excess of
$25,000 individually or $500,000 in the aggregate.
6.2 Organization; Goodwill. Pacific and Southern shall use reasonable
----------------------
efforts to preserve the business organization of the Stations intact and
preserve good relations with its suppliers, customers, employees and others
having business relations with it.
6.3 Access to Facilities, Files and Records. At the reasonable request of
---------------------------------------
Evergreen, Pacific and Southern shall from time to time give or cause to be
given to the officers,
- 29 -
employees, accountants, counsel and accredited representatives of Evergreen (a)
full access during normal business hours to all facilities, property, accounts,
books, minute books, deeds, title papers, licenses, agreements, contracts, tax
returns, records and files of every character, equipment, machinery, fixtures,
furniture, vehicles, notes and accounts payable and receivable and inventories
related to the Stations, and (b) all such other information concerning the
affairs of the Stations as is reasonable requested.
6.4 Representations and Warranties. Pacific and Southern shall give
------------------------------
detailed written notice to Evergreen promptly upon the occurrence of or becoming
aware of the impending or threatened occurrence of any event which would cause
or constitute a breach, or would have caused a breach had such event occurred or
been known prior to the date hereof, of any of its representations or warranties
contained in this Agreement or in any Schedule hereto.
6.5 Corporate Action. Subject to the provisions of this Agreement, Pacific
----------------
and Southern will take all necessary corporate and other action required of it
to carry out the transactions contemplated by this Agreement.
6.6 Applications for FCC Consent. As promptly as practicable after April
----------------------------
9, 1997, and in no event later than five (5) business days thereafter, Pacific
and Southern will file applications with the FCC requesting its written consent
- 30 -
to the assignment of the FCC Authorizations for the Stations (and any extension
or renewals thereof) to Evergreen. Pacific and Southern will diligently take, or
cooperate in the taking of, all steps that are necessary, proper or desirable to
expedite the preparation of such applications and their prosecution to a
favorable conclusion.
6.7 Consents. Pacific and Southern will use its reasonable efforts to
--------
obtain or cause to be obtained prior to the Closing Date consents to the
assignment to or assumption by Evergreen of all of Station Contracts included in
the Station Assets which require the consent of any third party by reason of the
transactions provided for in this Agreement; provided, however, that Pacific and
Southern shall not be required to make any payments or to incur any obligations
to third parties in connection with the obtaining of any such consent. Pacific
and Southern will be deemed to have fulfilled its obligations under this Section
6.7 with respect to non-Material Station Contracts by sending a written request
for consent to assignment to the other contracting party(ies) thereto.
6.8 Consummation of Agreement. Subject to the provisions of Section 11.1
-------------------------
below, Pacific and Southern shall use its best efforts to fulfill and perform
all conditions and obligations on its part to be fulfilled and performed under
this Agreement
- 31 -
and to cause the transactions contemplated by this Agreement to be fully carried
out.
6.9 Notice of Proceedings. Pacific and Southern will promptly notify
---------------------
Evergreen in writing upon becoming aware of any order or decree or any complaint
praying for an order or decree restraining or enjoining the consummation of this
Agreement or the transactions contemplated hereunder, or seeking damages as a
result of the consummation of this Agreement, or upon receiving any notice from
any governmental department, court, agency or commission of its intention to
institute an investigation into, or institute any action or proceeding to
restrain or enjoin consummation of this Agreement or such transactions, or to
nullify or render ineffective this Agreement or such transactions if
consummated.
6.10 Xxxx-Xxxxx-Xxxxxx Act. As soon as possible after April 9, 1997, but
---------------------
in no event later than ten (10) business days thereafter, Pacific and Southern
shall prepare and file all documents with the Federal Trade Commission and the
United States Department of Justice as are required to comply with the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended, if such filing
is required, and shall promptly furnish all materials and information thereafter
requested by any of the regulatory agencies having jurisdiction over such
filings.
- 32 -
6.11 Interim Financial Statements. Pacific and Southern shall deliver to
----------------------------
Evergreen unaudited interim financial statements for the Stations promptly after
the close of each of Pacific and Southern's standard fiscal accounting periods
that occur between the Balance Sheet Date and the Closing Date.
ARTICLE VII. Covenants of Evergreen Pending the Closing Date
----------- -----------------------------------------------
Except with the prior consent of Pacific and Southern, Evergreen covenants
and agrees with respect to the Stations that from the date hereof to and
including the Closing Date:
7.1 Representations and Warranties. Evergreen shall render accurate as of
------------------------------
the Closing Date the representations and warranties made by it in this
Agreement. Evergreen shall give detailed written notice to Pacific and Southern
promptly upon the occurrence of, or becoming aware of, the impending or
threatened occurrence of any event which would cause or constitute a breach, or
would have caused a breach had such event occurred or been known prior to the
date hereof, of any of its representations and warranties contained in this
Agreement.
7.2 Corporate Action. Subject to the provisions of the Agreement, Evergreen
----------------
will take all necessary corporate and
- 33 -
other action required of it to carry out the transactions contemplated by this
Agreement.
7.3 Applications for FCC Consent. (a) As promptly as practicable after
----------------------------
April 9, 1997, and in no event later than five (5) business days thereafter,
Evergreen will file applications with the FCC requesting its written consent to
the assignment of the FCC Authorizations for the Stations (and any extension or
renewals thereof) to Pacific and Southern. (b) In addition, as promptly as
practicable after April 9, 1997 and in no event later than June 15, 1997,
Evergreen will file applications with the FCC requesting its written consent to
the assignment or placement in trust of those station licenses that are
necessary or desirable to remove the disqualifying station ownerships reflected
in Schedule 5.4 to this Agreement. Evergreen will diligently take, or cooperate
------------
in the taking of, all steps that are necessary, proper or desirable to expedite
the preparation of all such applications in (a) and (b) above and their
prosecution to favorable conclusions.
7.4 Consummation of Agreement. Subject to the provisions of Section 11.1
-------------------------
below, Evergreen shall use its best efforts to fulfill and perform all
conditions and obligations on its part to be fulfilled and performed under this
Agreement and to cause the transactions contemplated by this Agreement to be
fully carried out.
- 34 -
7.5 Notice of Proceedings. Evergreen will promptly notify Pacific and
---------------------
Southern in writing upon becoming aware of any order or decree or any complaint
praying for an order or decree restraining or enjoining the consummation of this
Agreement or the transactions contemplated hereunder, or seeking damages as a
result of the consummation of this Agreement, or upon receiving any notice from
any governmental department, court, agency or commission of its intention to
institute an investigation into, or institute any action or proceeding to
restrain or enjoin consummation of this Agreement or such transactions, or to
nullify or render ineffective this Agreement or such transactions if
consummated.
7.6 Xxxx-Xxxxx-Xxxxxx Act. As soon as possible after April 9, 1997, but in
---------------------
no event later than ten (10) business days thereafter, Evergreen shall prepare
and file all documents with the Federal Trade Commission and the United States
Department of Justice as are required to comply with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, if such filing is required, and
shall promptly furnish all materials and information thereafter requested by any
of the regulatory agencies having jurisdiction over such filings.
7.7 Confidential Information. If for any reason the transactions
------------------------
contemplated in this Agreement are not
- 35 -
consummated, Evergreen shall not disclose to any third parties any information
designated as confidential and received from Pacific and Southern or its agents
in the course of investigating, negotiating and completing the transactions
contemplated by this Agreement. Nothing shall be deemed to be confidential
information which: (a) is known to Evergreen at the time of its disclosure to
it; (b) becomes publicly known or available other than through disclosure by
Evergreen; (c) is rightfully received by Evergreen from a third party; or (d) is
independently developed by Evergreen.
Evergreen also shall not disclose to any third parties the terms of this
Agreement; provided, however, that Evergreen may disclose such terms to any
prospective lender or investor who has demonstrated to the reasonable
satisfaction of Evergreen (a) the financial capability to be a lender or
investor of Evergreen and (b) a good faith interest in becoming a lender to or
investor in Evergreen. Evergreen shall cause any third party to whom the terms
of this Agreement are disclosed to agree to abide by the provisions of this
Section 7.7, and shall be responsible for any breaches of this Section 7.7 by
any such party.
7.8 Disqualifying Matters. With respect to the matters disclosed in
---------------------
Schedule 5.4 that may disqualify Evergreen as (a) assignee of the FCC
------------
Authorizations listed in Schedule 4.7 to this Agreement or (b) owner and
------------
operator of either of the
- 36 -
Stations, Evergreen will, beginning as promptly as practicable after the date of
this Agreement, transfer, convey or place in trust all Station licenses or other
interests necessary to remove all such disqualifications.
ARTICLE VIII. Conditions to the Obligations of Evergreen
------------ ------------------------------------------
The obligations of Evergreen under this Agreement are, at its option,
subject to the fulfillment of the following conditions prior to or at the
Closing Date:
8.1 Representations, Warranties, Covenants.
--------------------------------------
(a) Each of the representations and warranties of Pacific and
Southern contained in this Agreement and in any schedule or exhibit to this
Agreement delivered by Pacific and Southern pursuant hereto or in connection
with the transactions contemplated hereby, shall have been true and accurate in
all material respects as of the date when made and shall be deemed to be made
again on and as of the Closing Date and shall then be true and accurate;
(b) Pacific and Southern shall have performed and complied in all
material respects with each and every covenant and agreement required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date, other than delivery to Evergreen of the instruments conveying the Station
Assets to Evergreen; and
- 37 -
(c) Pacific and Southern shall have delivered to Evergreen a
certificate of an officer of Pacific and Southern, dated the Closing Date,
certifying to the fulfillment of the conditions set forth in Sections 8.1(a) and
8.1(b) above.
8.2 Proceedings.
-----------
(a) No action or proceeding shall have been instituted before any
court or governmental body to restrain or prohibit, or to obtain substantial
damages in respect of, the consummation of this Agreement which, in the
reasonable opinion of Evergreen, may reasonably be expected to result in a
preliminary or permanent injunction against such consummation or an award of
such substantial damages; and
(b) Neither of the parties to this Agreement shall have received
written notice from any governmental body of (i) its intent to institute any
action or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry, including a routine Civil Investigative Demand) into
the consummation of this Agreement, or (ii) the actual commencement of such an
investigation.
(c) In the event such a notice of intent as specified in Section
8.2(b)(i) above is received or such an action, proceeding or investigation as
specified in 8.2(b)(ii) above is commenced, this Agreement may not be abandoned
by
- 38 -
Evergreen for a period of one hundred eighty (180) days from the date of such
notice of intent or notice of commencement, but Closing shall be delayed during
such period; provided, however, that in no event will any such delay extend
beyond the date specified in Section 11.1(g) unless the parties mutually agree.
This Agreement may be abandoned by Evergreen after the one hundred eighty
(180)-day period if, in the reasonable opinion of Evergreen, there is a likely
probability that an investigation will result in an action or proceeding of the
type described in clause (a) of this Section 8.2.
8.3 FCC Authorizations. The FCC shall have given its written consents to
------------------
the assignment of the FCC Authorizations, without any conditions materially
adverse to Evergreen, (provided that Evergreen, may, if there shall be a
challenge made to the FCC consent to any assignment of the FCC Authorizations
prior to such consent becoming a final order not subject to further review or
appeal, delay (but subject in any event to the terms of Sections 3.1 and 11.1)
the Closing of the transactions contemplated by this Agreement if and for so
long as its outside FCC counsel shall provide it with a written opinion (with a
copy to Pacific and Southern) to the effect that the challenge has raised
material non-frivolous issues which could require substantive review of the
merits of the challenge by the FCC and/or any reviewing court and which would
more probably than not result in reversal or rescission
- 39 -
of the FCC consent to the assignment of the FCC Authorizations); provided,
however, it shall not be a condition to Closing that renewal of any FCC
Authorizations has been issued by the FCC, provided that Evergreen may, if there
shall be a challenge made to the FCC consent to any renewal of the FCC
Authorizations prior to such renewal becoming effective, delay (but subject in
any event to the terms of Sections 3.1 and 11.1) the Closing of the transactions
contemplated by this Agreement if and for so long as its outside FCC counsel
shall provide it with a written opinion (with a copy to Pacific and Southern) to
the effect that the challenge has raised material non-frivolous issues which
could require substantive review of the merits of the challenge by the FCC
and/or any reviewing court and which more probably than not result in a
non-grant of the renewal, or a reversal or rescission of the renewal. In the
event renewal is denied and such denial is a final order, Evergreen may
terminate this Agreement.
8.4 Xxxx-Xxxxx-Xxxxxx. The waiting period under the Xxxx-Xxxxx-Xxxxxx
-----------------
Act shall have expired, and no order of a court restraining the transactions
contemplated by this Agreement shall be outstanding.
8.5 Opinion of Counsel. Evergreen shall have received an opinion of
------------------
corporate legal counsel for Pacific and Southern, and an opinion from FCC legal
counsel for Pacific and
- 40 -
Southern, dated the Closing Date, in accordance with Section 3.2(c) above.
8.6 Damage to the Station Assets. (a) If on the Closing Date the Station
----------------------------
Assets shall have suffered damage or loss sufficient to prevent operation of any
of the Stations consistent with Pacific and Southern's past operation of such
Station, and such Station operations cannot be restored within thirty (30) days
after such loss, then Evergreen shall have the right at its election to complete
the purchase hereunder and to collect and receive on behalf of Pacific and
Southern the proceeds of any insurance payable to Pacific and Southern on
account of such damage or loss, including the amount of any deductible payable
by Pacific and Southern related to such insurance proceeds. If Evergreen does
not so elect, it shall have the right to terminate this Agreement, and upon such
termination Evergreen and Pacific and Southern shall be released from any
liability under this Agreement.
(b) With respect to any other such damage or loss to the Station Assets as
of the Closing Date that does not prevent the operation of any of the Stations
to the extent specified above, Pacific and Southern shall assign to Evergreen
the proceeds of any insurance payable to Pacific and Southern on account of such
damage or loss, including the amount of any deductible payable by Pacific and
Southern related to such insurance proceeds.
- 41 -
8.7 Third-Party Consents. Pacific and Southern shall have obtained and
--------------------
shall have delivered to Evergreen all third-party consents to the assignment
of the Material Station Contracts, or, as applicable, to the assignment of any
contracts replacing any Material Station Contracts that have expired or are
terminated between the date of this Agreement and the Closing Date.
ARTICLE IX. Conditions to the Obligations of Pacific and Southern
---------- -----------------------------------------------------
The obligations of Pacific and Southern under this Agreement are, at its
option, subject to the fulfillment of the following conditions prior to or at
the Closing Date.
9.1 Representations, Warranties, Covenants.
--------------------------------------
(a) each of the representations and warranties of Evergreen
contained in this Agreement and in any schedule or exhibit to this Agreement
delivered by Evergreen pursuant hereto or in connection with the transactions
contemplated hereby, shall have been true and accurate in all material respects
as of the date when made and shall be deemed to be made again on and as of the
Closing Date and shall then be true and accurate;
(b) Evergreen shall have performed and complied with each and every
covenant and agreement required by this Agreement to be performed or complied
with by it prior to or
- 42 -
at the Closing Date, other than delivery to Pacific and Southern of the
instruments conveying the Television Station Assets to Pacific and Southern;
and
(c) Evergreen shall have delivered to Pacific and Southern a
certificate of an officer of Evergreen, dated the Closing Date, certifying to
the fulfillment of the conditions set forth in Sections 9.1(a) and 9.1(b) above.
9.2 Proceedings.
-----------
(a) No action or proceeding shall have been instituted before any
court or governmental body to restrain or prohibit, or to obtain substantial
damages in respect of, the consummation of this Agreement which, in the
reasonable opinion of Pacific and Southern, may reasonably be expected to
result in a preliminary or permanent injunction against such consummation or an
award of such substantial damages; and
(b) Neither of the parties to this Agreement shall have received
written notice from any governmental body of (i) its intent to institute any
action or proceeding to restrain or enjoin or nullify this Agreement or the
transactions contemplated hereby, or to commence any investigation (other than a
routine letter of inquiry including a routine Civil Investigative Demand) into
the consummation of this agreement or (ii) the actual commencement of such an
investigation.
- 43 -
(c) In the event such a notice of intent as specified in Section
9.2(b)(i) above is received or such an action, proceeding or investigation as
specified in 9.2(b)(ii) above is commenced, this Agreement may not be abandoned
by Pacific and Southern for a period of one hundred eighty (180) days from the
date of such notice of intent or notice of commencement, but Closing shall be
delayed during such period; provided, however, that in no event will any such
delay extend beyond the date specified in Section 11.1(g) unless the parties
mutually agree. This Agreement may be abandoned by Pacific and Southern after
the one hundred eighty (180)-day period if, in the reasonable opinion of Pacific
and Southern, there is a likely probability that an investigation will result in
an action or proceeding of the type described in clause (a) of this Section 9.2.
9.3 FCC Authorizations. The FCC, by not later than December 10,
------------------
1997, shall have given its written consents to the assignment of the FCC
Authorizations, without any conditions materially adverse to Pacific and
Southern or to its affiliated companies.
9.4 Xxxx-Xxxxx-Xxxxxx. The waiting period under the
-----------------
Xxxx-Xxxxx-Xxxxxx Act shall have expired by December 10, 1997, and no order of a
court restraining the transactions contemplated by this Agreement shall be
outstanding.
- 44 -
9.5 Opinion of Counsel. Pacific and Southern shall have received an
------------------
opinion of corporate legal counsel for Evergreen, and an opinion of FCC legal
counsel for Evergreen, dated the Closing Date, in accordance with Section 3.3(a)
above.
9.6 Additional Stations. The Closings under the Asset Purchase
-------------------
Agreements for the Additional Stations shall have occurred or shall occur
simultaneously with the Closing hereunder, or Pacific and Southern shall have
waived the obligation under this Section 9.6.
ARTICLE X. Indemnification
--------- ---------------
10.1 Survival; Limitations.
---------------------
(a) The several representations, warranties, covenants and
agreements of Evergreen and Pacific and Southern contained in or made pursuant
to his Agreement shall be deemed to have been made on the Closing Date, shall
survive the Closing Date and shall remain operative and in full force and effect
for a period of one year after the Closing Date, except that the
representations, warranties, covenants and agreements continued in Sections 4.1,
4.2, 5.1 and 5.2 shall survive without time limit.
(b) Except as otherwise provided for in Section 12.2 below,
neither party shall be entitled to indemnification under this Agreement for any
indemnification claim until the aggregate Loss and Expense (defined in Section
10.2 below)
- 45 -
suffered by such party equals $250,000 (the "Threshold"). Once the Threshold has
been met, an indemnified party shall be entitled to indemnification pursuant to
this Article X only for its Loss and Expense in excess of the Threshold.
(c) Each party's maximum aggregate liability to the other for
indemnification claims under this Agreement shall be an amount equal to the
Purchase Price.
10.2 Indemnification of Evergreen. Subject to the provisions of
----------------------------
Section 10.1(b), Pacific and Southern agrees that it shall indemnify and hold
Evergreen, its affiliated companies and subsidiaries, and their respective
employees, directors, officers, agents, successors and assigns harmless from and
against any and all damages, claims, losses, expenses, costs, obligations and
liabilities, including without limitation, (i) liabilities for reasonable
attorneys' fees and disbursements and (ii) any taxes imposed on the receipt of
any payments under this Article X (reduced by any taxes saved as a result of
the damage, claim, loss, expense, use, obligation or liability being
indemnified) ("Loss and Expense"), suffered directly or indirectly by such
persons by reason of, or arising out of:
(a) any material breach of representation or warranty made by
Pacific and Southern pursuant to this Agreement;
- 46 -
(b) any material failure by Pacific and Southern to perform or
fulfill any of its covenants or agreements set forth in this Agreement;
(c) any failure by Pacific and Southern to pay or perform when due
any of its liabilities or obligations (including without limitation any
liability for taxes) arising out of or related to the business of the
Stations which have not been assumed by Evergreen hereunder or to pay any
amounts due under Article II above; or
(d) any litigation, proceeding or claim by any third party (including
governmental agencies) relating to the business or operation of the
Stations prior to the Closing Date.
10.3 Indemnification of Pacific and Southern. Subject to the provisions of
---------------------------------------
Section 10.1(b), Evergreen agrees that it shall indemnify and hold Pacific and
Southern, its affiliated companies and subsidiaries and their respective
employees, directors, officers, agents, successors and assigns harmless from and
against any and all Loss and Expense suffered directly or indirectly by such
persons by reason of, or arising out of:
(a) any breach of representation or warranty made by Evergreen
pursuant to this Agreement;
- 47 -
(b) any failure by Evergreen to perform or fulfill any of its
covenants or agreements set forth in this Agreement; or
(c) any failure by Evergreen to pay or discharge on or subsequent to
the Closing Date any liabilities or obligations (including without
limitation any liability for taxes) assumed by Evergreen hereunder or
incurred or first required to be performed by Evergreen with respect to
the Stations on or after the Closing Date.
10.4 Notice of Claims. If Evergreen or Pacific and Southern believes that
----------------
it is entitled to indemnification hereunder, it shall notify the other party
promptly in writing and within the applicable time period specified in Section
10.1, describing such Loss and Expense, the amount thereof, if known, and the
method of computation of the Loss and Expense, all with reasonable particularity
and containing a reference to the provisions of this Agreement in respect of
which such Loss and Expense shall have occurred. The amount of the Loss and
Expense set forth in the notice shall not be a limitation on any claim for the
actual amount of such Loss and Expense, however.
10.5 Defense of Third Party Claims. If any action at law or suit in equity
-----------------------------
is instituted by a third party (a "Claim") with respect to which any of the
parties intends to claim a Loss and Expense under this Article X, such party
shall
- 48 -
promptly notify the indemnifying party of such action or suit. The indemnifying
party shall have the right to conduct and control any Claim through counsel of
its own choosing, but the indemnified party may, at its election, participate in
the defense of any such Claim at its sole cost and expense. If the indemnifying
party does not notify the indemnified party within 10 days after receipt of the
notice specified in this Section 10.5 that it is defending any such Claim, then
the indemnified party may defend such Claim and settle such Claim, through
counsel of its own choosing, and recover from the indemnifying party the amount
of such Loss or Expense.
Notwithstanding the foregoing, the failure by a party to abide by these
terms and conditions shall not affect the other party's obligations to indemnify
such party against Loss and Expense under this Article X, provided that the
indemnifying party is not prejudiced by such failure.
10.6 Known Matters. Notwithstanding anything to the contrary in this
-------------
Article X, as of the Closing Date, (a) no claim for indemnification may be
asserted under Section 10.2 with respect to any matters discovered by or known
to Evergreen on or before the Closing Date and (b) no claim for indemnification
may be asserted under Section 10.3 with respect to any matter discovered by or
known to Pacific and Southern on or before the Closing Date.
- 49 -
ARTICLE XI. Termination Rights.
---------- ------------------
11.1 Abandonment of Agreement. This Agreement may be terminated by
------------------------
Evergreen or Pacific and Southern at any time prior to the Closing Date:
(a) by the mutual consent of both parties hereto;
(b) by Evergreen if any of the conditions in Article VIII hereof have
not been met by the time required and have not been waived;
(c) by Pacific and Southern if any of the conditions in Article IX
hereof have not been met by the time required and have not been waived;
(d) by Evergreen pursuant to Section 12.6 or Section 12.2(b) below;
(e) by any non-defaulting party hereto if the other party, within
five (5) business days after April 9, 1997 (provided that the parties shall have
used their best efforts to cooperate in their preparation), has not placed on
file with the FCC its portions of substantially complete applications for FCC
consent to the transfer or assignment of its Stations;
(f) by any party hereto if the FCC has denied or designated for a
trial-type hearing any of the assignments of the FCC Authorizations contemplated
by this Agreement;
(g) by either party if the conditions to close specified in Section
9.3 and/or 9.4 have been fulfilled by
- 50 -
December 10, 1997 but the Closing has not been fully completed by December 26,
1997;
(h) by Pacific and Southern if the conditions to close specified in
Section 9.3 and/or 9.4 have not been fulfilled by December 10, 1997, if the
Closing has not been fully completed by the earlier of (i) the 30th day
following the Closing Date after December 26, 1997 specified by Pacific and
Southern pursuant to Section 3.1(b) above, or (ii) July 1, 1998; or
(i) by Evergreen if the Closing has not been fully completed by July
1, 1998.
No termination pursuant to this Section 11.1 shall relieve any party of
liability it would otherwise have for breach of this Agreement.
11.2 Liabilities Upon Abandonment.
----------------------------
(a) In the event this Agreement is terminated pursuant to Section
11.1 above, no party hereto shall have any liability to the other party for
costs, expenses, damages, loss of anticipated profits or otherwise, unless the
termination occurs because of any misrepresentation or breach of warranty by
such party or the failure by such party in the performance of, or compliance
with, any covenant or agreement contained in this Agreement. In the event that
this Agreement is terminated by Pacific and Southern as a result of
misrepresentation or breach of warranty or covenant by
- 51 -
Evergreen, the Deposit shall continue to be held until Pacific and Southern's
damages therefrom have been agreed to by the parties or established by a court
of competent jurisdiction (the "Damages"). Following such determination, the
Deposit shall be drawn down and applied toward the Damages. The amount not
needed to satisfy the Damages, if any, shall be returned to Evergreen. The
Deposit shall not be a limit on the amount of damages to which Pacific and
Southern may be entitled in the event of a breach by Evergreen.
(b) In the event Evergreen terminates this Agreement as a result of
a breach by Pacific and Southern, then the Deposit shall be returned to
Evergreen.
ARTICLE XII. Miscellaneous Provisions
----------- ------------------------
12.1 Expenses. Except as otherwise provided herein, all costs and
--------
expenses incurred in connection with this Agreement and the transactions
contemplated hereby will be paid by the party incurring such costs and expenses.
All costs associated with transferring the Station Assets, including without
limitation any sales or use taxes or recording or transfer taxes or fees, shall
be paid by Evergreen.
12.2 Environmental Studies. (a) Evergreen may, at its election and cost,
---------------------
conduct an environmental study of the Station's Owned or Leased Real Estate. If
a study hereunder indicates that any representation or warranty made by Pacific
- 52 -
and Southern in Section 4.18 is untrue, Evergreen shall disclose the results of
its study by not later than May 6, 1997 to Pacific and Southern, and the terms
of this Section 12.2 will govern. Evergreen and Pacific and Southern agree
that, unless and to the extent disclosure is required by law, the results of any
environmental study obtained pursuant to this Agreement shall not be disclosed
to any third parties, other than each party's employees, agents, representatives
or lenders (but to lenders only to the extent that such disclosure is required
by a credit agreement between a party and its lender).
(b) If the parties learn between the date of this Agreement and the
Closing Date that Pacific and Southern is not in compliance with the provisions
of Section 4.18, then Pacific and Southern may, at Evergreen's election, be
required to contribute up to $250,000 toward the cure of such non-complying
conditions as required by applicable law, and to use reasonable efforts to
complete such cure prior to the Closing Date. If the cost to cure such
conditions would exceed $250,000 in the aggregate, Evergreen may elect to
terminate this Agreement. Evergreen agrees to give Pacific and Southern twenty
(20) days prior written notification of its intention to terminate this
Agreement pursuant to this Section 12.2, during which twenty (20) -day period
Pacific and Southern shall notify Evergreen as to whether it intends to cure the
- 53 -
identified conditions. If Pacific and Southern elects to cure such conditions,
Evergreen shall not be entitled to terminate this Agreement. If Evergreen elects
not to terminate the Agreement hereunder, then Evergreen shall assume all
obligations to cure any such environmental conditions in excess of the $250,000
payable by Pacific and Southern pursuant to this Section 12.2.
12.3 Employees and Employee Benefits.
-------------------------------
(a) Evergreen shall hire all of the employees of the Stations as of
the Closing Date in each case for the same position and with the same
compensation as enjoyed by an employee prior to the Closing Date. Pacific and
Southern shall be responsible for payment of all compensation (including accrued
vacation, commissions and sick pay) payable to all employees of the Stations up
through the day preceding the Closing Date. Pacific and Southern shall pay all
non-qualified, out-of-pocket pension liabilities and, except as provided in (b),
(c), (d), (e), (f) and (g) below, other employee liabilities to employees or
former employees of the Stations related to any period prior to the Closing
Date. Except as provided in (g) below, Pacific and Southern will retain all of
the Stations' employee benefit plans and pension plans, and Evergreen will not
assume any obligations under such plans related to any period of time. Pacific
and Southern shall be fully and solely responsible for any costs,
- 54 -
expenses, obligations and liabilities, vested or non-vested, arising out of the
pension or retirement obligations attributable to the Stations' current or
former employees related to the period prior to the Closing Date. Pacific and
Southern agrees to indemnify, defend and hold Evergreen harmless from and
against all direct and indirect costs, expenses or liabilities arising from or
relating to claims made by the Stations' employees in respect of any employee
benefit plans of Pacific and Southern.
(b) Any employee terminated by Evergreen as of or during the ninety (90)
day period after the Closing Date shall be paid severance by Evergreen using the
following formula, with credit for service at the Stations prior to the Closing
Date: two (2) weeks' compensation for an employee's initial year of employment
or portion thereof at the Stations and one (1) week's compensation for each
additional year of employment or portion thereof.
Evergreen agrees to indemnify and defend and hold Pacific and Southern
harmless from and against all direct and indirect costs, expenses or liabilities
arising from or relating to claims made by the Stations' employees in respect of
termination of employment by reason of the transactions contemplated by this
Agreement, including, but not limited to, any claims of improper termination or
for severance payments.
- 55 -
Evergreen agrees to waive any waiting periods and any exclusion under
any welfare plan of Evergreen for pre-existing conditions as of the Closing Date
to the extent any pre-existing condition was or would have been covered by a
plan of Pacific and Southern. If Evergreen maintains a general severance policy
which provides for service credit, any employee who is terminated by Evergreen
following such ninety-day period will be credited with all years of service as
an employee of Pacific and Southern and/or any of its affiliated companies for
purposes of calculating the amount of severance Evergreen will pay to such
employee pursuant to Evergreen's severance arrangements.
(c) Evergreen will be responsible for all medical insurance costs
relating to COBRA coverage for those Station Employees who are terminated by
Evergreen on or after the Closing Date. If Pacific and Southern is obligated to
provide such coverage, Evergreen shall reimburse Pacific and Southern for all
costs incurred by it in providing the coverage.
(d) Evergreen in its sole discretion shall determine what employee
benefits will be made available to the employees of the Stations on and after
the Closing; provided, however, that Evergreen will (i) waive any health plan
coverage waiting period or pre-existing condition rules for all employees it
hires hereunder, and (ii) offer medical coverage to all of such employees on and
after the Closing Date.
- 56 -
(e) Evergreen will be responsible for all payments and
obligations to Station employees under federal or state plant closing statutes,
including the WARN Act.
(f) Evergreen will be responsible for all payments and
obligations to those senior Station employees listed on and covered by the
Change in Control Plan attached as Exhibit 12.3 to this Agreement.
------------
(g) As soon as practicable after the Closing Date, Pacific and
Southern shall cause the trustee of the Gannett Co., Inc. 401(k) Plan to
transfer the assets and liabilities related to the benefits of the employees of
the Stations to a qualified 401(k) Plan and Trust sponsored by Evergreen and
Evergreen shall cause its Plan and Trust to assume the liabilities to the
employees of the Station. Pacific and Southern and Evergreen shall cooperate to
effect the transfer of the assets and liabilities as expeditiously as possible.
12.4 Accounts Receivable.
-------------------
(a) For a period of six (6) months following the Closing Date,
Evergreen shall continue to collect and receive payment in the ordinary course
of business with respect to the Stations' accounts receivable for the period
prior to the Closing Date (the "Station Receivables") and shall pursue
collection thereof in accordance with Evergreen's normal practices; provided,
however, that in no event shall this obligation extend to the institution of
litigation, employment
- 57 -
of any collection agency, legal counsel, or other third party or any other
extraordinary means of collection by Evergreen. All payments from each obligor
of a Station Receivable not identified to a specific invoice shall be applied on
a "first-in, first-out" basis during the Collection Period so that each payment
from an obligor is applied first to the oldest outstanding account receivable of
such obligor. Evergreen shall remit to Pacific and Southern no later than ten
(10) days after the end of each calendar month during the Collection Period
those amounts required to be paid to Evergreen hereunder during such month,
together with a list of all uncollected Accounts Receivable as of the end of the
preceding month.
Following the end of the Collection Period, Evergreen shall cease to
have any further responsibilities with respect to the uncollected Station
Receivables (except that Evergreen shall promptly remit to Pacific and Southern
any amount subsequently received by Evergreen expressly on account of the
Station Receivables), and Pacific and Southern may collect any uncollected
Station Receivables in any manner Pacific and Southern chooses.
12.5 Further Assurances.
------------------
(a) From time to time after the Closing Date, without
further consideration, each party will, at its expense, (i) execute and deliver,
or cause to be executed and
- 58 -
delivered, such documents to the other party as such party may reasonably
request in order to effectively vest in the other party good title to the
Station Assets, and (ii) use all reasonable efforts to obtain any necessary
third party consents to the assignment of the Station Contracts, subject to the
terms of Section 6.7 above.
(b) From time to time after the Closing Date, Evergreen will provide
Pacific and Southern with access, with reasonable prior notice and during normal
business hours, to the financial records of the Stations related to the period
prior to the Closing Date for use by Pacific and Southern in connection with tax
and/or legal proceedings related to its operation of the Stations prior to the
Closing Date. Evergreen agrees to maintain all tax records related to the
Stations for all tax years that remain open as of the Closing Date unless and
until (i) Pacific and Southern notifies it that any such tax year(s) are closed
or (ii) Evergreen has given Pacific and Southern reasonable prior notice of its
intent to destroy such records and Pacific and Southern has not reasonably and
promptly requested that such records not be destroyed.
12.6 Schedules. Pacific and Southern will deliver to Evergreen, within
---------
fifteen (15) days following April 9, 1997, all schedules and related documents
required to be delivered under this Agreement by Pacific and Southern.
Evergreen shall
- 59 -
be permitted, for a period of twenty (20) days immediately following its receipt
of such schedules and documents, to terminate this Agreement if (i) such
schedules reveal any conditions of which Evergreen is not aware as of the date
of this Agreement and/or any breaches of Pacific and Southern's
representations, warranties and/or covenants hereunder, which unknown
conditions and/or breaches in the aggregate would have a material adverse effect
on the aggregate value of the Stations and the Additional Stations considered in
the aggregate or on Evergreen's ability to operate the Stations and the
Additional Stations considered in the aggregate as they are currently being
operated by Pacific and Southern, or (ii) the parties are unable to agree upon
which Station Contracts are Material Station Contracts. Following any such
termination, the parties shall have no further obligation to one another in
respect of this Agreement.
12.7 Allocation of Purchase Price. Within 60 days after the Closing Date,
----------------------------
Pacific and Southern and Evergreen shall obtain an appraisal by a mutually
agreeable third-party appraiser for the purpose of allocating the Purchase
Price. Pacific and Southern and Evergreen agree (i) that any such allocation
shall be arrived at by arm's length negotiation, based upon the findings of
appraisal, and shall be consistent with the requirements of Section 1060 of the
Internal Revenue Code of 1986, as amended, and the regulations thereunder, (ii)
- 60 -
to jointly complete and separately file Forms 8594 with its federal income
return for the tax year in which the Closing Date occurs, and (iii) that neither
Pacific and Southern nor Evergreen will take a position on any income, transfer
or gains tax return before any governmental agency charged with the collection
of any such tax or in any judicial proceeding that is in any manner inconsistent
with the terms of any such allocation without the written consent of the other.
If either Pacific and Southern or Evergreen elects to use a Qualified
Intermediary pursuant to Section 12.12, the foregoing provisions of this Section
12.7 shall not apply.
12.8 Right to Audit. Commencing on the date of this Agreement, Evergreen,
---------------
at its expense, may examine the Stations' books and records for the purpose of
conducting an audit to meet Evergreen's public reporting obligations. Such
examination shall be performed by an independent certified public accountant
satisfactory to both parties. Any such examination shall be made during normal
business hours and with reasonably prior notice to Pacific and Southern.
12.9 Waiver of Compliance. Except as otherwise provided in this
---------------------
Agreement, any failure of any of the parties to comply with any obligation,
representation, warranty, covenant, agreement or condition herein may be waived
by the other party only by a written instrument signed by the party granting the
waiver. Any such waiver or failure to insist upon strict
- 61 -
compliance with a term of this Agreement shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure to comply.
12.10 Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed given when delivered by hand or by facsimile
transmission or mailed by registered or certified mail (return receipt
requested), at such other address for a party as shall be specified by like
notice):
(a) If to Evergreen, to:
x/x Xxxxxxxxx Xxxxx Xxxxxxxxxxx xx Xxx Xxxxxxx
000 X. Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Fax No.: (000)000-0000
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxx., X.X.
Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxxx
Fax No.: (000)000-0000
(b) If to Pacific and Southern to:
Gannett Broadcasting
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax No. (000)000-0000
- 62 -
with a copy to:
Gannett Co., Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Fax No. (000)000-0000
12.11 Assignment. This Agreement and all of its terms shall be binding and
----------
inure to the benefit of the parties and their respective successors and
permitted assigns. This Agreement shall not be assigned by any party hereto,
except that (a) Pacific and Southern may assign or transfer its rights under
this Agreement to any of its affiliates or subsidiaries, (b) either party may
assign or transfer its rights under this Agreement to a Qualified Intermediary
or Qualified Escrow Account pursuant to the procedures set forth in Section
12.12 below, and a Qualified Intermediary or Qualified Escrow Account that has
been assigned rights under this Agreement may assign those rights to the
assignor of those rights, and (c) Evergreen may assign or transfer its rights
under this Agreement to one of its affiliated companies; provided, however that
any such assignment shall not relieve Evergreen of any of its obligations
pursuant to this Agreement.
12.12 Qualified Intermediary.
----------------------
(a) In order to facilitate a tax-free exchange by Pacific and
Southern, Pacific and Southern may use Qualified Intermediary for this
transaction as that term is used in IRC
- 63 -
Regulation (S)1.10-31(k)-1(g)(4) under the Internal Revenue Code and/or a
Qualified Escrow Account as that term is used in Regulation
(S)1.1031(k)-1(g)(3) under the Internal Revenue Code. The Qualified
Intermediary shall be nominated, or the Qualified Escrow Account shall be
selected, by Pacific and Southern, and Pacific and Southern shall notify
Evergreen of the nomination. Such nomination or selection shall become effective
five (5) days after notice to Evergreen. All fees and expenses charged by the
Qualified Intermediary shall be paid by Pacific and Southern. Evergreen agrees
to take all steps necessary or desirable to accommodate Pacific and Southern's
use of a Qualified Intermediary or a Qualified Escrow Account, provided that
there is no adverse effect upon Evergreen.
(b) In order to facilitate a tax-free exchange by Evergreen,
Evergreen may use a Qualified Intermediary for this transaction as that term is
used in IRC Regulation (S)1.1031(k)-1(g)(4) under the Internal Revenue Code
and/or a Qualified Escrow Account as that term is used in Regulation
(S) 1.1031(k)-1(g)(3) under the Internal Revenue Code. The Qualified
Intermediary shall be nominated, or the Qualified Escrow Account shall be
selected, by Evergreen, and Evergreen shall notify Pacific and Southern of the
nomination. Such nomination or selection shall become effective five (5) days
after notice to Pacific and Southern. All fees and expenses
- 64 -
charged by the Qualified Intermediary shall be paid by Evergreen. Pacific and
Southern agrees to take all steps necessary or desirable to accommodate
Evergreen's use of a Qualified Intermediary or a Qualified Escrow Account,
provided that there is no adverse effect upon Pacific and Southern and the use
of a Qualified Intermediary under this Section 12.12(b) does not result in any
delay or otherwise affect the ability of Pacific and Southern to give a Closing
Date Notice on a date selected by it.
12.13 Governing Law. This Agreement shall be governed by, construed and
-------------
enforced in accordance with the laws of the State of New York.
12.14 Bulk Sales Law. As an inducement to the other party to waive
--------------
compliance with the provisions of any applicable bulk transfer laws, each party
covenants that it will promptly pay and discharge all debts, obligations and
liabilities relating to its Stations which are not expressly assumed by the
other party under this Agreement as and when they become due and payable. Each
party further agrees to indemnify and hold the other party harmless pursuant to
Article X above from all Loss and Expense suffered by the other party by reason
of or arising out of claims made by creditors with respect to non-compliance
with any bulk transfer law.
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12.15 Control of the Stations. Prior to the Closing Date, Evergreen
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shall not directly or indirectly control, or attempt to control, the
operations of the Stations.
12.16 Public Announcements. Unless required by law, rule or regulation,
--------------------
no public announcement (including an announcement to employees) or press release
concerning the transactions provided for herein shall be made by either party
without the prior written approval of the other. With respect to any disclosures
required by applicable law, rule or regulation, including disclosure
requirements under applicable securities acts, each party will consult with the
other party prior to making any such disclosures.
12.17 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall constitute one agreement, and all of which when taken
together shall constitute one agreement. This Agreement shall become effective
when counterparts of this Agreement have been executed and delivered to each
party.
12.18 Other Parties. Pacific and Southern and Evergreen agree that
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nothing in this Agreement shall be deemed to create any right with respect to
any person or entity not a party to this Agreement, including without limitation
any employee, shareholder or lender of either party.
12.19 Entire Agreement; Amendments. This Agreement, including the
----------------------------
Exhibits and Schedules hereto and the documents
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delivered hereunder, embodies the entire agreement and understanding of the
parties in respect of the subject matter hereof, and supersedes all prior
agreements and understandings between the parties. This Agreement may not be
amended except in a writing signed by both parties.
Evergreen and Pacific and Southern have caused this Agreement to be signed
by their respective duly authorized officers as of the date first above written.
EVERGREEN MEDIA CORPORATION
OF LOS ANGELES
By: /s/ Xxxxx X. Xxxxxxxx
---------------------------
Title: President/CEO
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PACIFIC AND SOUTHERN
COMPANY, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Title: President
------------------------
