EXHIBIT 2.7
================================================================================
ASSET PURCHASE AGREEMENT
by and between
Entravision Communications Corporation
and
Sunburst Media, LP
dated
May 22, 2000
================================================================================
ASSET PURCHASE AGREEMENT
------------------------
This Asset Purchase Agreement (the "Agreement") is entered into this 22nd
day of May, 2000 by and between Entravision Communications Corporation, a
Delaware corporation ("Entravision"), and Sunburst Media, LP, a Delaware limited
partnership ("Sunburst"), with respect to the following facts:
WHEREAS, Entravision is a duly formed Delaware corporation engaged in the
ownership and operation of television and radio stations and other media
properties.
WHEREAS, Sunburst is a duly formed Delaware limited partnership that owns
and operates radio stations KFRQ(FM), 94.5 MHz, Harlingen, Texas, KKPS(FM), 99.5
MHz, Brownsville, Texas, KVPA(FM), 101.1 MHz, Port ▇▇▇▇▇▇, Texas and KVLY(FM),
107.9 MHz, Edinburg, Texas (collectively, the "Stations").
WHEREAS, Sunburst desires to sell, transfer and assign to Entravision, and
Entravision desires to purchase, accept and receive, all of Sunburst's right,
title and interest in and to substantially all of the assets of the Stations,
all for the consideration and on the terms set forth in this Agreement.
WHEREAS, the Board of Directors of Entravision and the Board of Directors
of Sunburst Media Corporation, a Delaware corporation and the sole general
partner of Sunburst ("Sunburst Media"), have each approved the sale by Sunburst
and the purchase by Entravision of substantially all of the assets of the
Stations (the "Asset Acquisition").
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the Asset Acquisition and also to
prescribe certain conditions with respect thereto.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by each signatory hereto, the parties hereto
covenant and agree as follows:
ARTICLE 1.
DEFINITIONS
For purposes of this Agreement, the following terms shall have the
following meanings:
1.1 "Accounts Receivable" means all of Sunburst's accounts receivable for
cash and Sunburst's right to ▇▇▇▇ and receive cash for the sale of air time and
all other services and business of the Stations at any time prior to 11:59 p.m.
(Brownsville, Texas time) on the day immediately preceding the Closing Date (as
defined below).
1.2 "Applicable Contract" means any Contract (as defined below) relating
to the Stations (i) under which Sunburst has or may acquire any rights, (ii)
under which Sunburst has or
may become subject to any Liability or (iii) by which Sunburst or any of the
Assets are or may become bound.
1.3 "Best Efforts" means the efforts that would be used by a prudent
Person (as defined below) under similar circumstances desiring to achieve a
result as expeditiously as possible.
1.4 "Breach" means any inaccuracy in or breach of, or any failure to
perform or comply with, any representation, warranty, covenant, obligation or
other provision of this Agreement or any instrument delivered pursuant to this
Agreement.
1.5 "Cash Contracts" means those Applicable Contracts for the sale for
cash of air time and other services of the Stations that are entered into in the
Ordinary Course of Business (as defined below).
1.6 "Closing Date" means the date and time as of which the Closing (as
defined below) actually takes place.
1.7 "Consent" means any approval, consent, ratification, waiver or other
authorization required of any Person for the consummation of the Contemplated
Transactions (as defined below), including, without limitation, the FCC Consent
(as defined below), the expiration of any applicable waiting period required
under the HSR Act (as defined below) and any other necessary Governmental
Authorization (as defined below).
1.8 "Contemplated Transactions" means all of the transactions
contemplated by this Agreement, including, without limitation, the sale of the
Assets by Sunburst to Entravision pursuant to the Asset Acquisition and the
performance by Entravision and Sunburst of their respective covenants and
obligations under this Agreement.
1.9 "Contract" means any agreement, contract, obligation, promise or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
1.10 "Employee Benefit Plan(s)" means any "employee benefit plan" as
defined in Section 3(3) of ERISA (as defined below) and any other similar plan,
policy, program, practice or arrangement maintained by Sunburst for the benefit
of the employees of the Stations.
1.11 "Encumbrance" means any encumbrance, liability, charge, claim,
community property interest, condition, equitable interest, lien, option,
pledge, security interest, mortgage, right of first refusal or restriction of
any kind, including any restriction on use, voting, transfer, receipt of income
or exercise of any other attribute of ownership.
1.12 "Environmental Law(s)" means all federal, state and local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders,
-2-
directives, requests, licenses, authorizations, permits and agreements issued or
signed by any federal, state or local government authority relating to
environmental, health or safety matters, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Clean Water Act of 1977, the Clean Air Act, the Resource Conservation and
Recovery Act of 1976, the Federal Insecticide, Fungicide and Rodenticide Act,
the Toxic Substances Control Act, the Emergency Planning and Community Right-to-
Know Act of 1986, the Occupational Safety and Health Act of 1970 and the Safe
Drinking Water Act, and state and local counterparts to such acts.
1.13 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor law, and the rules and regulations issued pursuant to
that act or any successor law.
1.14 "Facilities" means the physical facilities of the Stations located at
any transmitter site and at any studio site currently owned or operated by
Sunburst.
1.15 "FCC" means the Federal Communications Commission, or any successor
agency.
1.16 "FCC Consent" means an Order (as defined below) or Orders of the FCC
granting its Consent (without conditions outside the normal course) to the
assignment to Entravision of the FCC Governmental Authorizations for all of the
Stations.
1.17 "Final FCC Consent" means that the FCC Consent has become a Final
Order (as defined below).
1.18 "Final Order" means an order, action or decision of the FCC that has
not been reversed, stayed, enjoined, annulled or suspended and as to which (i)
no timely request for stay, appeal, petition for reconsideration, application
for review or reconsideration, or action by the FCC on its own motion with
comparable effect is pending and (ii) the time for filing any such request,
appeal, petition or application, or for the taking any such action by the FCC on
its own motion, has expired.
1.19 "GAAP" means generally accepted accounting principles, applied on a
consistent basis.
1.20 "Governmental Authorization" means any Consent, license or permit
issued, granted, given or otherwise made available by or under the authority of
any Governmental Body or pursuant to any Legal Requirement.
1.21 "Governmental Body" means (i) any nation, state, county, city, town,
village, district or other jurisdiction of any nature, (ii) any federal, state,
local, municipal, foreign or other government, (iii) any governmental or quasi-
governmental authority of any nature (including any governmental agency, branch,
department, official or entity and any court or other tribunal), (iv)
-3-
any multi-national organization or body, (v) any body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power of any nature or (vi) the FCC.
1.22 "Hazardous Substance(s)" means (i) any substance, the presence of
which requires investigation or remediation under any Environmental Law or under
common law, (ii) any dangerous, toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
substance which is regulated by any Environmental Law, (iii) any substance, the
presence of which causes or threatens to cause a nuisance upon property
presently and/or previously owned, leased or otherwise used by the Stations (or
poses or threatens to pose a hazard to the health or safety of persons on or
about the property or adjacent properties) and (iv) radon, ureaformaldehyde,
polychlorinated biphenyls, asbestos or asbestos-containing materials, petroleum
and petroleum products.
1.23 "HSR Act" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
1.24 "IRC" means the Internal Revenue Code of 1986, as amended, or any
successor law, and the rules and regulations issued by the Internal Revenue
Service, or any successor agency, pursuant to the IRC or any successor law.
1.25 "Knowledge" means, as to an individual Person, (i) the actual
knowledge of a particular fact or (ii) the knowledge that a prudent individual
would be expected to discover in the course of conducting a reasonably
comprehensive investigation, but only when a prudent individual would consider
such an investigation warranted. A non-individual Person will be deemed to have
"Knowledge" of a particular fact if any individual who is serving as an officer,
director or management-level employee of such Person has Knowledge within the
meaning of the preceding sentence.
1.26 "Legal Requirement" means any FCC, federal, state, local, municipal
or other administrative order, constitution, law, ordinance, principle of common
law, regulation, statute or treaty.
1.27 "Liabilities" means, with respect to any particular Person, all
debts, adverse claims, liabilities, duties, responsibilities and obligations of
such Person of every kind or nature, whether accrued or unaccrued, known or
unknown, direct or indirect, absolute, fixed or contingent, liquidated or
unliquidated and whether arising under, pursuant to or in connection with any
Contract, Legal Requirement, tort, strict liability, rule of law or otherwise,
and regardless of whether or not reflected, or required by GAAP or any other
method of accounting to be reflected, in such Person's balance sheets or other
books and records.
1.28 "Material Adverse Change" means with respect to the Stations
(excluding for purposes of this definition KVPA(FM), taken as a whole, and not
individually, a material adverse
-4-
change in the assets, liabilities, properties, business or financial condition
of the Stations which shall mean any of the following: (i) as to the revenues of
the Stations, a decrease of ten percent (10%) or more in the combined revenues
of the Stations for the three (3) full calendar months prior to the Final FCC
Consent as compared to the same three (3) month period in 1999, excluding
political advertising in the measurement of both periods; (ii) as to the ratings
of the Stations, a decrease of twenty percent (20%) or more in the combined
Spring 2000 Arbitron ratings of the Stations, 12+ share for the Harlingen-
Weslaco-Brownsville-McAllen, Texas radio market, all persons, Monday-Sunday,
6:00 a.m. to 12:00 p.m., as compared to the Spring 1999 Arbitron ratings for the
same radio market; and (iii) as to any other matter other than revenues and
ratings, the occurrence of a Station Event (as defined below). Notwithstanding
the foregoing, a Material Adverse Change shall not include the voluntary
termination of employment by any one or more employees of the Stations from and
after May 2, 2000 and the adverse effects resulting from such voluntary
terminations.
1.29 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena or verdict entered, issued, made or rendered by any court,
administrative agency or other Governmental Body or by any arbitrator.
1.30 "Ordinary Course of Business" means an action taken by a Person in
the ordinary course of the normal day-to-day operations of such Person that is
consistent with past practices.
1.31 "Organizational Documents" means (i) the articles or certificate of
incorporation and the bylaws of a corporation, (ii) the partnership agreement
and any statement of partnership of a general partnership, (iii) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership, (iv) the certificate of formation and operating agreement of a
limited liability company, (v) any charter or similar document adopted or filed
in connection with the creation, formation or organization of a Person and (vi)
any amendment to any of the foregoing.
1.32 "Permitted Encumbrances" means any of the following: (i) liens for
current Taxes not yet due and payable; (ii) easements, oil and gas leases,
zoning and other local ordinances, deed restrictions or restrictive covenants,
all of record, which do not impair the current use of the Facilities; and (iii)
all Encumbrances set forth on Schedule 1.32 existing against the Assets prior to
-------------
the Closing, all of which shall be released at the Closing.
1.33 "Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union or other entity
or Governmental Body.
1.34 "Proceeding" means any action, arbitration, mediation, audit,
hearing, investigation, litigation or suit (whether civil, criminal,
administrative, bankruptcy, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any Governmental Body
or arbitrator.
-5-
1.35 "Real Property" means the real property owned by Sunburst set forth
on Schedule 2.1(a).
---------------
1.36 "Real Property Leases" means the real property leases set forth on
Schedule 2.1(a).
---------------
1.37 "Related Person" means an "affiliate" (as such term is defined in the
rules promulgated under the Securities Exchange Act of 1934, as amended) of a
Person.
1.38 "Representative" means with respect to a particular Person, any
director, officer, employee, agent, consultant, advisor or other representative
of such Person, including legal counsel, accountants and financial advisors.
1.39 "Schedules" means the schedules attached hereto and incorporated
herein by this reference relating to the representations and warranties of the
parties hereto.
1.40 "Station Event" means any event, circumstance or other occurrence of
any nature or description that either singularly or in the aggregate prevents
any Station from being operated in the Ordinary Course of Business, including,
without limitation, acts of nature (e.g. fires, floods, earthquakes and storms),
calamity, casualty, condemnation, loss of any rights, titles, interests,
licenses, leases and/or privileges necessary for the operation of the Stations
in the Ordinary Course of Business, the act or failure or refusal to act of any
Governmental Body having jurisdiction over the Stations or any of the Assets or
any environmental condition occurs that is not cured by Sunburst in accordance
with Section 6.15 below.
1.41 "Station Expenses" means all expenses arising out of the business and
operation of the Stations of any nature, kind and type whatsoever and however
arising, including, without limitation, tower rent, all utilities, insurance,
vehicle expense, programming costs, repairs and maintenance, travel expenses,
employee compensation, business and license fees, FCC annual regulatory fees,
employee benefits, including accrued vacation and sick leave, health, dental and
medical benefits, employee expense reimbursements, sales commissions and fees
and other commissions and fees, SESAC, ASCAP and BMI payments, expenses under
Contracts, property taxes and other Taxes, office expenses, property and
equipment rentals, applicable copyright or other fees, sales and service
charges, general and administrative expenses, accounts payable and trade
payables.
1.42 "Sunburst Financial Statements" means (i) the audited balance sheets
of Sunburst as of December 31, 1998 and December 31, 1999 for the twelve (12)
month periods then ended and the related statements of income and cash flows for
the periods then ended (including the notes thereto), as compiled by
PricewaterhouseCoopers LLP (as to 1998) and Deloitte and Touche LLP (as to 1999)
and (ii) the unaudited balance sheets of Sunburst as of April 30, 2000 for the
four (4) month period then ended.
-6-
1.43 "Tax(es)" means taxes of any kind, accrued or accruing, including any
and all federal, state or local taxes, charges, fees, levies or other
assessments of any nature whatsoever (including, without limitation, all net
income, gross income, gross receipts, sales, use, ad valorem, transfer,
franchise, profits, license, withholding, payroll, employment, excise,
estimated, severance, stamp, occupation, property or other taxes, customs,
duties, fees, assessments or charges of any kind whatsoever) together with any
interest and any penalties, additions to tax or additional amounts imposed by
any taxing authority (domestic or foreign) upon the entity to which reference is
being made or any Related Person thereof or upon any consolidated, combined or
unitary group of which any such entity is or was a member, and any and all
protest expenses (of any nature whatsoever) incurred in connection therewith.
1.44 "Tax Return" means any return (including any information return),
report, statement, schedule, notice, form or other document or information filed
with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration, implementation
or enforcement of or compliance with any Legal Requirement relating to any Tax.
1.45 "Threatened" means a claim, Proceeding, dispute or other matter will
be deemed to have been "Threatened" if any demand or statement has been made
(orally or in writing) or any notice has been given (orally or in writing), or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute or
other matter is likely to be asserted, commenced, taken or otherwise pursued in
the future.
ARTICLE 2.
ASSET ACQUISITION
2.1 Asset Acquisition. At the Closing and subject to the terms and
-----------------
conditions of this Agreement, Sunburst shall convey, transfer, assign and
deliver to Entravision, and Entravision shall purchase, acquire and accept all
right, title and interest of Sunburst in and to (i) the FCC Governmental
Authorizations (and the call letters with respect thereto) for the Stations as
set forth on Schedule 4.10(b) (collectively, the "FCC Licenses") and (ii) all of
----------------
the real and personal property, furniture, fixtures, equipment and other
tangible and intangible assets owned or leased by Sunburst on the Closing Date
that are used in the operation of the Stations (collectively, the "Assets") for
the Purchase Price (as defined below). The Assets will be sold and purchased
subject to the representations and warranties contained in this Agreement and
the Schedules. The Assets shall include, without limitation, the following:
(a) all fee simple ownership, leaseholds, easements and other
interests in real property of every kind and description and improvements
thereon owned or leased by Sunburst on the Closing Date that are used in the
operation of the Stations, as set forth in more detail on Schedule 2.1(a);
---------------
-7-
(b) all equipment, software, intellectual property, machinery,
vehicles, office furniture and fixtures, transmitting tuners, towers,
transmitters, antennae, office materials and supplies, spare parts and other
tangible personal property of every kind and description, owned or leased by
Sunburst on the Closing Date that are used in the operation of the Stations,
including any replacements thereof and those acquired by Sunburst between the
date of this Agreement and the Closing Date, including, without limitation,
those set forth on Schedule 2.1(b);
---------------
(c) all Applicable Contracts listed, described or cross-referenced on
Schedule 2.1(c) (all of the same are referred to herein as the "Assigned
---------------
Contracts"), together with all additional Applicable Contracts entered into in
the Ordinary Course of Business of the Stations between the date of this
Agreement and the Closing Date, which additional Applicable Contracts, to be
included within the Assigned Contracts, must be approved in advance in writing
by Entravision;
(d) all technical materials and guidelines, brochures, promotional
material and other selling material of the Stations; and
(e) all papers, documents, instruments, books and records, files,
agreements, books of account and other records relating or pertaining to the
Assets, including, without limitation, customer invoices, customer lists, vendor
and supplier lists, drafts and other documents and materials relating to
customer transactions, blueprints, specifications, designs, drawings, operating
and marketing plans and all other documents, tapes, discs, programs or other
embodiments of information related thereto.
2.2 Excluded Assets. Notwithstanding anything to the contrary herein,
---------------
Sunburst shall not sell, transfer, assign, convey or deliver to Entravision, and
Entravision will not purchase or accept, and the Assets shall not include, the
following assets used in, associated with or related to the business and
operations of the Stations: all of Sunburst' right, title and interest in and to
all (i) cash and cash equivalents; (ii) the utility deposits, security deposits
and cash deposits set forth on Schedule 2.2 under Assigned Contracts, which to
------------
the extent a reimbursement by the third-party holding the deposit is not
practical will be paid by Entravision to Sunburst at the Closing and Sunburst
will assign its rights to such deposit to Entravision; (iii) all Accounts
Receivable; and (iv) any Applicable Contracts that are not Assigned Contracts.
2.3 Conveyance of Assets; Non-Assumed Liabilities. The Assets shall be
---------------------------------------------
sold and conveyed to Entravision free and clear of all Liabilities (except the
Assumed Liabilities) and Encumbrances, other than Permitted Encumbrances, as of
the Closing Date. On and after the Closing Date, Entravision will assume and
discharge only those Liabilities of Sunburst under the Assigned Contracts that
arise under such Assigned Contracts on or after the Closing Date and which are
attributable solely to periods of time occurring on or after the Closing Date
(such Liabilities assumed by Entravision are referred to herein as the "Assumed
Liabilities"). Except only for the Assumed Liabilities, Entravision will not
assume or be obligated to pay or discharge any Liabilities of Sunburst.
-8-
2.4 Payment of Station Expenses. Entravision and Sunburst agree to the
---------------------------
following provisions regarding the payment of Station Expenses.
(a) Sunburst shall bear the cost of, and indemnify Entravision from,
all Station Expenses attributable to the operations of the Stations at any time
prior to the Closing Date. Entravision shall bear the cost of, and indemnify
Sunburst from, all Station Expenses attributable to the operations of the
Stations at any time on or after the Closing Date.
(b) On the Closing Date, or as soon thereafter as is practical, (i)
Sunburst shall pay all unpaid invoices for Station Expenses which are the
responsibility of Sunburst to pay and (ii) Sunburst shall pay to the employees
of the Stations all accrued wages, salaries, bonuses, commissions and all other
accrued Liabilities and payments, including accrued vacation pay and sick leave,
that are due to such employees of Sunburst. After the Closing Date, Sunburst
agrees that it will promptly pay any of its remaining unpaid Station Expenses
when same shall become due.
(c) On the Closing Date, Entravision and Sunburst will prepare a
prorations schedule allocating between themselves, in accordance with the
principle set forth in Section 2.4(a) above, the Liability for all items of
Station Expenses, or receipt by Sunburst of pre-paid sums with respect to any
Assigned Contracts, that cover any period of time beginning before the Closing
Date and ending after the Closing Date, whether or not actually paid by the
Closing Date, including, without limitation, FCC regulatory fees, property taxes
and rents. The net amount of all such prorations will be paid at Closing by
Sunburst to Entravision, or by Entravision to Sunburst, as the case may be, with
Sunburst and Entravision assuming responsibility to pay the prorated Station
Expenses in a manner consistent with such allocations. Sunburst and Entravision
shall include within this proration schedule, an allocation of the third-party
rents due Sunburst under the third-party leases of the KVLY(FM) tower facility.
(d) Sunburst and Entravision agree that within forty-five (45) days
after the Closing Date each of them will provide the other with an accounting of
any Station Expenses paid by such party (or with respect to which such party has
received an invoice) that are the responsibility of the other party to pay. At
such time Sunburst and Entravision agree to make adjusting payments between
themselves and/or promptly make appropriate third-party payments, as the case
may be, such that Sunburst and Entravision shall have each paid their own
respective Station Expenses.
2.5 Savings Clause for Non-Assignable Contracts. This Agreement shall not
-------------------------------------------
constitute an agreement to assign any Schedule 6.10 Contract (as defined below)
if the mere agreement to assign such Contract without the consent of the other
party thereto would constitute a breach thereof or in any way impair the rights
of Sunburst thereunder.
-9-
2.6 FCC Licenses. The parties hereto acknowledge and agree that at the
------------
Closing, Sunburst shall convey the FCC Licenses to Entravision Holdings, LLC, a
California limited liability company and wholly-owned subsidiary of Entravision
("Entravision Holdings").
ARTICLE 3.
CLOSING
3.1 Closing. The closing of the Assets Acquisition (the "Closing")
-------
provided for in this Agreement will take place at the offices of ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C. in Dallas, Texas on the date ten (10) days after receipt
by the parties of the Final FCC Consent, or at such other time and place as the
parties may agree. Notwithstanding the foregoing, the parties will endeavor in
good faith to effect the Closing simultaneously in different locations to avoid
the travel and additional expense of requiring all parties to be located in the
same place and in connection therewith the parties will deliver, in escrow to
opposing counsel and other appropriate parties, all agreements, instructions,
documents, releases, certificates, wire transfer instructions, pay-off
instructions, UCC-3 termination statements (if applicable) and other matters and
things necessary to effect Closing in such manner. Subject to the provisions of
Article 10 below, failure to consummate the purchase and sale provided for in
this Agreement on the date and time and at the place determined pursuant to this
section will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
3.2 Purchase Price. The aggregate consideration (the "Purchase Price") to
--------------
be paid by Entravision for the Assets shall be Fifty-Five Million Dollars
($55,000,000), payable to Sunburst in cash at the Closing by wire transfer
pursuant to instructions provided by Sunburst. The Purchase Price shall be
increased or decreased, as the case may be, by the net prorations as provided in
Section 2.4 above.
3.3 Escrow Deposit.
--------------
(a) Upon the execution and delivery of this Agreement, Entravision
shall promptly deliver to Union Bank of California, N.A. (the "Escrow Agent"),
either via cashier's check or wire transfer of immediately available funds, the
amount of Two Million Dollars ($2,000,000) (the "Escrow Deposit"), to be held by
the Escrow Agent in an interest bearing account pursuant to the terms and
conditions of that certain Escrow Agreement of even date herewith by and among
Entravision, Sunburst and the Escrow Agent (the "Escrow Agreement"). The Escrow
Deposit represents an ▇▇▇▇▇▇▇ money deposit by Entravision for the Contemplated
Transactions.
(b) The Escrow Deposit shall be held by the Escrow Agent in accordance
with the Escrow Agreement and shall be either (i) applied toward the Purchase
Price at the Closing or (ii) returned to Entravision if Entravision otherwise
pays the full Purchase Price. It is expressly acknowledged and agreed by the
parties hereto that Entravision is entitled to all interest earned on the Escrow
Deposit and that such interest shall not be part of the Purchase Price.
-10-
(c) If this Agreement is terminated by Sunburst pursuant to Section
10.1(b)(i) below and Sunburst is not in Breach of this Agreement, the Escrow
Deposit shall be disbursed in accordance with Section 10.2(b) below.
3.4 Allocation.
----------
(a) The parties agree to allocate the Purchase Price among the Assets
for all purposes (including financial accounting and tax purposes) in accordance
with the allocation schedule to be prepared by BIA Financial Network within one
hundred twenty (120) days following the Closing.
(b) Notwithstanding the foregoing, the parties agree to allocate One
Million Dollars ($1,000,000) of the Purchase Price to the Noncompetition
Agreement, substantially in the form attached hereto as Exhibit "A" and
-----------
incorporated herein by this reference (the "Noncompetition Agreement"), to be
executed by Sunburst, Sunburst Media, Sunburst Dallas, LP, Sunburst Dallas, Inc.
and Sunburst Media Management, Inc.
3.5 Closing Obligations of Sunburst. At the Closing, Sunburst will
-------------------------------
deliver or cause to be delivered to Entravision:
(a) a ▇▇▇▇ of sale and assignment of interests as to all Assets not
otherwise covered by a separate assignment or conveyance;
(b) an assignment of the FCC Licenses;
(c) a special warranty deed for each parcel of Real Property conveying
good and indefeasible title to Entravision;
(d) a separate written assignment for each Real Property Lease, and in
such case as Sunburst's leasehold interest is a matter of public record, then
the separate written assignment shall be in recordable form;
(e) the closing certificate required by Section 8.1(c) below;
(f) wire transfer instructions for the payment of the Purchase Price
(which shall be provided to Entravision in writing no later than two (2)
business days prior to the Closing);
(g) to the extent applicable, pay-off instructions for Sunburst's
secured debt, including, without limitation, Sunburst's indebtedness to FINOVA
Capital Corporation;
-11-
(h) to the extent applicable, UCC-3 termination statements and other
necessary releases signed by the appropriate parties releasing all Encumbrances
against the Assets;
(i) releases of all deeds of trust signed by the appropriate parties
releasing all deeds of trust and any other mortgages filed against any of the
Real Property or Real Property Leases;
(j) a certificate of the Secretary of Sunburst (i) attesting to the
incumbency of its officers executing the Agreement and the other agreements and
certificates delivered by Sunburst at the Closing and (ii) certifying
resolutions of the Board of Directors of Sunburst Media authorizing the
execution, delivery and performance of this Agreement by Sunburst;
(k) with respect to the KVLY(FM) main transmitter site, a written
commitment by Fidelity National Title Insurance Company, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Title Company") to
issue a Texas standard owner's title insurance policy insuring Entravision in
the amount of $300,000, subject only to the standard printed exceptions and the
Permitted Encumbrances and with survey exceptions deleted, provided that
Entravision has obtained the survey for such Real Property pursuant to Section
6.14 below;
(l) with respect to the studio site located at ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇, a written commitment by the Title Company to issue a Texas
standard owner's title insurance policy insuring Entravision in the amount of
$325,000, subject only to the standard printed exceptions and the Permitted
Encumbrances and with survey exceptions deleted, provided that Entravision has
obtained the survey for such Real Property pursuant to Section 6.14 below;
(m) the Noncompetition Agreement, executed by the Persons named in
Section 3.4(b) above;
(n) an affidavit to the effect that Sunburst is not a "foreign person"
within the meaning of Section 1445 of the IRC;
(o) a certificate of good standing for Sunburst and Sunburst Media
issued by the Delaware Secretary of State not more than ten (10) days prior to
the Closing Date;
(p) a certificate of existence/authority for each of Sunburst and
Sunburst Media issued by the Texas Secretary of State not more than ten (10)
days prior to the Closing Date; and
-12-
(q) a certificate of good standing for each of Sunburst and Sunburst
Media issued by the Texas Comptroller of Public Accounts not more than ten (10)
days prior to the Closing Date.
3.6 Closing Obligations of Entravision. At the Closing, Entravision will
----------------------------------
deliver or cause to be delivered to Sunburst:
(a) the Purchase Price, as adjusted in accordance with Section 3.2
above and Section 6.1 below;
(b) the closing certificate required by Section 8.2(c) below;
(c) a certificate of the Secretary of Entravision (i) attesting to the
incumbency of its officers executing the Agreement and the other agreements and
certificates delivered by Entravision at the Closing and (ii) certifying the
resolutions of the Board of Directors of Entravision authorizing the execution,
delivery and performance of this Agreement;
(d) the Noncompetition Agreement, executed by Entravision; and
(e) a certificate of good standing for each of Entravision and
Entravision Holdings issued by the Delaware Secretary of State and California
Secretary of State, respectively, not more than ten (10) days prior to the
Closing Date.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
OF SUNBURST
Sunburst hereby represents and warrants to Entravision as follows:
4.1 Organization and Good Standing. Sunburst is a limited partnership
------------------------------
duly organized, validly existing and in good standing under the laws of the
State of Delaware, with full power and authority to conduct its business as it
is now being conducted. Sunburst is duly qualified to do business as a foreign
limited partnership and is in existence under the laws of the State of Texas.
4.2 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid and binding obligation
of Sunburst, enforceable against Sunburst in accordance with its terms, subject
as to enforceability to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding at law or in equity. Subject to
obtaining the necessary Consents, Sunburst has the absolute and unrestricted
right, power,
-13-
authority and capacity to execute and deliver this Agreement, and to perform its
obligations hereunder.
(b) Neither the execution and delivery of this Agreement by Sunburst
nor the consummation or performance of any of the Contemplated Transactions by
Sunburst will, directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with or result in a violation of any provision of the
Organizational Documents of Sunburst or any resolution adopted by the general
partner or limited partners of Sunburst; (ii) subject to obtaining the necessary
Consents, contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the Contemplated
Transactions or to exercise any remedy or obtain any relief under, any Legal
Requirement or any Order to which Sunburst or any of the assets owned or used by
Sunburst, may be subject; (iii) subject to obtaining necessary Consents,
contravene, conflict with or result in a violation of any of the terms or
requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify any Governmental Authorization that is held
by Sunburst or that otherwise relates to the business of, or any of the assets
owned or used by, Sunburst; (iv) subject to obtaining the necessary Consents,
contravene, conflict with or result in a violation or breach of any provision
of, or give any Person the right to declare a default or exercise any remedy
under, or to accelerate the maturity or performance of, or to cancel, terminate
or modify any Assigned Contract; or (v) result in the imposition or creation of
any Encumbrance upon or with respect to any of the assets owned or used by
Sunburst. Except as set forth on Schedule 4.2 and Schedule 6.10, Sunburst
------------ -------------
neither is nor will be required to give any notice to or obtain any Consent from
any Person or Governmental Body in connection with the execution and delivery of
this Agreement or the consummation or performance of any of the Contemplated
Transactions.
4.3 Sunburst Financial Statements. Sunburst has delivered to Entravision
-----------------------------
copies of the Sunburst Financial Statements. The Sunburst Financial Statements
fairly present the financial condition and the results of operations of Sunburst
as at the respective dates of and for the periods referred to in such financial
statements, all in accordance with GAAP. The Sunburst Financial Statements
reflect the consistent application of such accounting principles throughout the
periods involved, except as disclosed in the notes to such financial statements.
4.4 Title to Assets; Encumbrances. The Assets are all of the assets
-----------------------------
owned, leased or otherwise used by Sunburst in the operation of the Stations.
Sunburst owns good and indefeasible title in and to all of the Assets that
Sunburst purports to own free and clear of all Encumbrances, except for the
Permitted Encumbrances. To the extent any of the Assets are leased, the
governing lease agreement is set forth on Schedule 2.1(c). All of the Assets
---------------
are located at the Facilities.
4.5 Condition and Sufficiency of Assets; Broadcast Equipment.
--------------------------------------------------------
(a) The improvements located on each item of Real Property are
structurally sound with an immaterial amount of deferred maintenance. All items
of tangible personal
-14-
property that are currently being used by the Stations with a replacement value
in excess of $1,000 are in good operating condition and repair, subject to
normal wear and tear, and are adequate for the uses to which they are being put.
(b) All towers, transmitters, antennas and related broadcast equipment
that are used by Sunburst in the operation of the Stations, including, without
limitation, any backup or auxiliary towers or antennas (the "Broadcast
Equipment") are in material compliance with Legal Requirements of all applicable
Governmental Bodies. The Broadcast Equipment is in sufficiently good condition
and repair and is appropriately engineered to permit the operation of the
Stations, and the broadcast of their programming to the intended audiences and
in compliance with the FCC Licenses, after the Closing Date without any
foreseeable upgrade or replacement. Within the three (3) months immediately
preceding the date of this Agreement, there has not been any material
unscheduled interruption in the broadcast of the Station caused by a failure of
the Broadcast Equipment.
4.6 No Undisclosed Liabilities. Except as set forth in the Sunburst
--------------------------
Financial Statements and for current Liabilities incurred in the Ordinary Course
of Business since April 30, 2000, Sunburst has no other Liabilities relating to
the Stations.
4.7 Tax Matters. Sunburst has timely paid (and after the Closing Date
-----------
will timely pay) all Taxes for periods prior to and including the Closing Date
that are due and payable, nonpayment of which would (i) result in an Encumbrance
on any of the Assets, (ii) have a material adverse effect on Sunburst or (iii)
result in Entravision becoming liable therefor. Sunburst has complied with (and
will comply with through and including the Closing Date) all applicable Legal
Requirements relating to the filing of Tax Returns or the payment and
withholding of Taxes relating to employee wages, salaries and other compensation
and has timely withheld and paid over (and will timely withhold and pay over
through and including the Closing Date) to the proper governmental authorities
all amounts required to be withheld and paid over for all periods under all
applicable laws with respect to the employees of Sunburst.
4.8 No Material Adverse Change. Since April 30, 2000, there has not been
--------------------------
any Material Adverse Change and no event has occurred or circumstance exists
that may result in such a Material Adverse Change.
4.9 Employee Benefits. Schedule 4.9 lists each Employee Benefit Plan
----------------- ------------
relating to the Stations to which Sunburst contributes or is a party or is bound
and under which it may have liability. Sunburst has delivered or made available
to Entravision true, correct and complete copies of all such Employee Benefit
Plans. Entravision will not incur any Liability whatsoever under any such
Employee Benefit Plans in connection with the Contemplated Transactions.
4.10 Compliance with Legal Requirements; Governmental Authorizations.
---------------------------------------------------------------
-15-
(a) The Stations are in material compliance with each Legal
Requirement that is applicable to the Stations or to the conduct or operation of
business or the ownership or use of any of the Assets. To the Knowledge of
Sunburst, no event has occurred or circumstance exists that (with or without
notice or lapse of time) may constitute or result in a violation by the Stations
of, or a failure on the part of the Stations to comply with, any Legal
Requirement or may give rise to any obligation on the part of the Stations to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature. With respect to the Stations, Sunburst has not received any notice
or other communication (whether oral or written) from any Governmental Body or
any other Person regarding any actual, alleged, possible or potential violation
of, or failure to comply with, any Legal Requirement, or any actual, alleged,
possible or potential obligation on the part of the Stations to undertake, or to
bear all or any portion of the cost of, any remedial action of any nature.
(b) Schedule 4.10(b) contains a complete and accurate list of the FCC
Licenses and antenna structure registrations for all antenna structures used by
Sunburst at the Stations and required to be so registered. The FCC Licenses are
valid and in full force and effect. The Stations are in full compliance with all
of the terms and requirements of each FCC License. To the Knowledge of Sunburst,
no event has occurred or circumstance exists that may (with or without notice or
lapse of time) constitute or result directly or indirectly in a violation of or
a failure to comply with any term or requirement of any FCC License or result in
the revocation, withdrawal, suspension, cancellation, termination of or any
modification to any FCC License. Sunburst has not received any notice or other
communication (whether oral or written) from the FCC or any other Person
regarding any actual, alleged, possible or potential violation of or failure to
comply with any term or requirement of any FCC License or any actual, proposed,
possible or potential revocation, withdrawal, suspension, cancellation,
termination of or modification to any FCC License. All filings required to have
been made with respect to the FCC Licenses have been duly made on a timely basis
with the appropriate Governmental Bodies. The FCC Licenses listed on Schedule
--------
4.10(b) collectively constitute all of the FCC Licenses necessary to permit the
-------
Stations to conduct business in the manner they currently conduct such business.
Other than the FCC Licenses, there is no other material Governmental
Authorization necessary for the operation of the Stations or that otherwise
relates to the business of the Stations, or to any of the Assets.
4.11 Legal Proceedings; Orders.
-------------------------
(a) Except only for Proceedings set forth on Schedule 4.11(a) arising
----------------
in connection with employment related claims made by past employees of Sunburst,
all of which are being responded to by Sunburst and none of which will have a
material adverse effect on the Assets or Sunburst, there is no pending
Proceeding (i) that has been commenced by or against Sunburst with respect to
the Stations or that otherwise relates to or may affect any of the Assets or
(ii) that challenges, or that may have the effect of preventing, delaying,
making illegal or otherwise interfering with, any of the Contemplated
Transactions. Entravision shall assume no Liability whatsoever relating to any
of the Proceedings set forth on Schedule 4.11(a). To the
----------------
-16-
Knowledge of Sunburst, no additional Proceedings have been Threatened and no
event has occurred or circumstance exists that may give rise to or serve as a
basis for the commencement of any such Proceeding.
(b) There is no Order relating to the Stations or any of the Assets
to which Sunburst is subject. To the Knowledge of Sunburst, no employee of
Sunburst at the Stations is subject to any Order that prohibits such employee
from engaging in or continuing any conduct, activity or practice relating to the
business of the Stations.
4.12 Absence of Certain Changes and Events. Since April 30, 2000,
-------------------------------------
Sunburst has conducted the business of the Stations only in the Ordinary Course
of Business. Since April 30, 2000 there has not been: (i) except in the Ordinary
Course of Business, any payment or increase by Sunburst of any bonuses, salaries
or other compensation to any employee of the Stations or entry into any
employment, severance or similar Contract with any employee of the Stations;
(ii) adoption of any new Employee Benefit Plan for or with any employees of the
Stations; (iii) any material damage to or destruction or loss of any of the
Assets, whether or not covered by insurance; (iv) other than matters occurring
in the Ordinary Course of Business, any sale, lease or other disposition of any
material Asset or mortgage, pledge or imposition of any Encumbrance (except for
the Permitted Encumbrances) on any material Asset; (v) material change in the
accounting methods used by Sunburst with respect to the Stations (except for the
IRC (S)481(a) adjustment); or (vi) any agreement, whether oral or written, by
Sunburst with respect to the Stations to do any of the foregoing.
4.13 Assigned Contracts; No Defaults. Schedule 2.1(c) contains a complete
------------------------------- ---------------
and accurate list of, description of or reference to each Assigned Contract.
The Assigned Contracts set forth on Schedule 2.1(c) are all of the material
---------------
Applicable Contracts. Sunburst has delivered to Entravision true and correct
copies of all Assigned Contracts (other than Cash Contracts). (i) Except for a
management agreement by and between Sunburst and Sunburst Media Management, Inc.
which is not one of the Assigned Contracts, no Related Person of Sunburst has or
may acquire any rights under, nor has or may become subject to any Liability
under any Contract that relates to the business of the Stations, or any of the
Assets; (ii) to the Knowledge of Sunburst, no employee of the Stations is bound
by any Contract that purports to limit the ability of such employee to engage in
or continue any conduct, activity or practice relating to the business of the
Stations; (iii) Sunburst is in material compliance under each of the Assigned
Contracts; (iv) to the Knowledge of Sunburst, each other Person that is a party
to any Assigned Contract is in material compliance with the Assigned Contract;
(v) to the Knowledge of Sunburst, no event has occurred or circumstance exists
that (with or without notice or lapse of time) may contravene, conflict with or
result in a violation or breach of, or give the Stations or other Person the
right to declare a default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate or modify, any Assigned
Contract; and (vi) Sunburst has not given to or received from any other Person
any notice or other communication (whether oral or written) regarding any
actual, alleged, possible or potential violation or breach of, or default under,
any Assigned Contract. Each Assigned Contract is in full force and effect and
is valid and
-17-
enforceable in accordance with its terms. Except in the Ordinary Course of
Business, there are no renegotiations of, attempts to renegotiate or outstanding
rights to renegotiate any material amounts paid or payable to Sunburst under any
of the Assigned Contracts and no Person has made written demand for such
renegotiation.
4.14 Real Property.
-------------
(a) Schedule 2.1(a) lists all of the Real Property. Sunburst has
---------------
delivered or made available to Entravision true, complete and copies of the
deeds and other instruments (as recorded) by which Sunburst acquired such Real
Property, and true, complete and copies of all title insurance policies,
opinions, abstracts and surveys in the possession of Sunburst relating to such
Real Property. Sunburst owns and has good and indefeasible title to all of the
Real Property. All improvements owned by Sunburst on each item of Real Property
lie wholly within the boundaries of the Real Property and do not encroach upon
the property of, or otherwise conflict with the property rights of, any
adjoining landowner, and are in good mechanical and structural condition and
repair. With respect to the Real Property, there are no matters pending before
any Governmental Body having jurisdiction over zoning that would prohibit or
make non-conforming the present use by Sunburst of such Real Property or any
pending or Threatened condemnation or eminent domain Proceeding or proposed sale
in lieu thereof. There are no violations of restrictive covenants affecting the
Real Property.
(b) Schedule 2.1(a) lists all of the Real Property Leases. Sunburst
---------------
has delivered to Entravision correct and complete copies of the Real Property
Leases. With respect to each Real Property Lease: (i) the lease is legal, valid,
binding, enforceable and in full force and effect; (ii) the lease will continue
to be legal, valid, binding, enforceable and in full force and effect on
identical terms immediately upon the consummation of the Contemplated
Transactions; (iii) Sunburst is not, and to the Knowledge of Sunburst, the other
parties to the lease are not, in material breach or default, and no event has
occurred which, with notice or lapse of time, would constitute a material breach
or default or permit termination, modification or acceleration thereunder; (iv)
Sunburst has not, and to the Knowledge of Sunburst, the other parties to the
lease have not, repudiated any provision thereof; (v) there are no disputes,
oral agreements or forbearance programs in effect as to the lease; (vi) except
for the Permitted Encumbrances, Sunburst has not assigned, transferred,
conveyed, mortgaged, deeded in trust or encumbered any interest in the
leasehold; (vii) to the Knowledge of Sunburst, all facilities leased thereunder
have received all approvals of all Governmental Bodies (including licenses and
permits) required in connection with the operation thereof by Sunburst and, to
the Knowledge of Sunburst, have been operated and maintained in accordance with
all Legal Requirements; (viii) all facilities leased thereunder are supplied
with utilities and other services necessary for the operation of said
facilities; and (ix) all facilities leased thereunder are in good mechanical and
structural condition and repair.
4.15 Insurance. Sunburst has delivered to Entravision true and complete
---------
copies of all current policies of insurance procured by Sunburst with respect to
the operations of the Stations
-18-
and the Assets. Sunburst shall keep each of such policies of insurance in full
force and effect through the Closing Date.
4.16 Compliance with Environmental Laws. (i) The Stations and all their
----------------------------------
operations are in compliance with all Environmental Laws as currently in effect,
(ii) Sunburst has not used, released or disposed of any Hazardous Substance in
any manner that could reasonably be expected to result in material liability,
(iii) none of the Facilities are contaminated by any Hazardous Substance, (iv)
none of the Facilities is affected by any condition that could reasonably be
expected to result in liability under any Environmental Law currently in effect
and (v) there is no condition, activity or event respecting the Stations or any
of the Facilities that could reasonably be expected to subject Entravision to
any material liability under any Environmental Law currently in effect.
4.17 Employees. Sunburst has delivered to Entravision a complete and
---------
accurate list of the following information for each employee of the Stations,
including each employee on leave of absence or layoff status: employee name,
position, current annual compensation paid, whether an employment Contract
exists and hire date. To the Knowledge of Sunburst, no employee of the Stations
is a party to, or is otherwise bound by, any agreement or arrangement, including
any confidentiality, noncompetition or proprietary rights agreement, between
such employee and any other Person that in any way adversely affects (i) the
performance of his or her duties as an employee or (ii) the ability of the
Stations to conduct their business.
4.18 Labor Relations; Compliance. Sunburst is not a party to any
---------------------------
collective bargaining or other labor Contract. There has not been while
Sunburst has owned the Stations, there is not presently pending or existing, and
to the Knowledge of Sunburst, there is not Threatened, (i) any strike, slowdown,
picketing, work stoppage or employee grievance process relating to the Stations,
(ii) except as set forth on Schedule 4.11(a), any Proceeding against or
----------------
affecting the Stations relating to the alleged violation of any Legal
Requirement pertaining to labor relations or employment matters, including any
charge or complaint filed by an employee or union with the National Labor
Relations Board, the Equal Employment Opportunity Commission or any comparable
Governmental Body, organizational activity or other labor or employment dispute
against or affecting the Stations or (iii) any application for certification of
a collective bargaining agent for the Stations. To the Knowledge of Sunburst,
no event has occurred at the Stations or circumstance exists at the Stations
that could provide the basis for any work stoppage or other labor dispute.
There is no lockout of any employees of the Stations, and no such action is
contemplated by Sunburst. Sunburst has complied in all respects with all Legal
Requirements applicable to the Stations relating to employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes, occupational
safety and health and plant closing. Sunburst is not liable for the payment of
any compensation, damages, taxes, fines, penalties or other amounts, however
designated, for failure to comply with any of the foregoing Legal Requirements.
-19-
4.19 Intellectual Property. The term "Intellectual Property Assets"
---------------------
includes the all of the following items of intellectual property owned or
licensed by Sunburst and relating to the Stations: (i) the FCC call letters
"KFRQ," "KKPS," "KVPA" and "KVLY," all fictional business names, trading names,
slogans, monikers, registered and unregistered trademarks, service marks and
applications; (ii) all know-how, trade secrets, confidential information,
customer lists, software, technical information, data, process technology,
plans, drawings and blue prints owned, used or licensed by the Stations as
licensee or licensor; and (iii) all Internet websites relating to the Stations.
Sunburst owns no patents or copyrights relating to the Stations. Sunburst has
the right to use all of the Intellectual Property Assets. Sunburst's use of the
Intellectual Property Assets does not infringe on the legally enforceable rights
of any other Person. Other than for the Stations' call letters (which are not
listed on any Schedule to this Agreement), all material items of the
Intellectual Property Assets are listed on Schedule 2.1(c).
----------------
4.20 Disclosure. No representation or warranty of Sunburst in this
----------
Agreement and no statement in the Schedules omits to state a material fact
necessary to make the statements herein or therein, in light of the
circumstances in which they were made, not misleading. No notice given pursuant
to this Agreement will contain any untrue statement or omit to state a material
fact necessary to make the statements therein or in this Agreement, in light of
the circumstances in which they were made, not misleading. There is no fact of
which Sunburst has Knowledge that has specific application to Sunburst (other
than general economic or industry conditions) and that materially adversely
affects the assets, business, financial condition or results of operations of
the Stations that has not been set forth in this Agreement or the Schedules.
4.21 Relationships With Related Persons. No Related Person of Sunburst
----------------------------------
has any interest in any property (whether real, personal or mixed and whether
tangible or intangible), used in or pertaining to the business and operation of
the Stations. Except for the management agreement by and between Sunburst and
Sunburst Media Management, Inc., no Related Person of Sunburst has owned (of
record or as a beneficial owner) an equity interest or any other financial or
profit interest in, a Person that has (i) had business dealings or a material
financial interest in any transaction with the Stations other than business
dealings or transactions conducted in the Ordinary Course of Business with the
Stations at substantially prevailing market prices and on substantially
prevailing market terms or (ii) engaged in competition with the Stations (a
"Competing Business") in any market presently served by the Stations except for
ownership of less than five percent (5%) of the outstanding capital stock of any
Competing Business that is publicly-traded on any recognized exchange or in the
over-the-counter market. No Related Person of Sunburst is a party to any
Contract with, or has any claim or right against, the Stations.
4.22 Brokers or Finders. Except for fees due to ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
------------------
which fees shall be borne solely by Sunburst, neither Sunburst nor its
Representatives has incurred any liability for brokerage or finder's fees or
agents commissions or other similar payment in connection with the Contemplated
Transactions.
-20-
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
OF ENTRAVISION
Entravision hereby represents and warrants to Sunburst as follows:
5.1 Organization and Good Standing. Entravision is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware. Entravision Holdings is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of California.
5.2 Authority; No Conflict.
----------------------
(a) This Agreement constitutes the legal, valid and binding obligation
of Entravision, enforceable against Entravision in accordance with its terms,
subject as to enforceability to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and to general principles of equity regardless of
whether enforcement is sought in a proceeding at law or in equity. Subject to
obtaining the necessary Consents, Entravision has the absolute and unrestricted
right, power, authority and capacity to execute and deliver this Agreement, and
to perform its obligations hereunder.
(b) Neither the execution and delivery of this Agreement by
Entravision nor the consummation or performance of any of the Contemplated
Transactions by Entravision will, directly or indirectly (with or without notice
or lapse of time): (i) contravene, conflict with or result in a violation of any
provision of the Organizational Documents of Entravision or any resolution
adopted by the Board of Directors or stockholders of Entravision; (ii) subject
to obtaining the necessary Consents, contravene, conflict with or result in a
violation of, or give any Governmental Body or other Person the right to
challenge any of the Contemplated Transactions or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which Entravision
or any of the assets owned or used by Entravision, may be subject; and (iii)
contravene, conflict with or result in a violation of any provision of any
Contract to which Entravision is a party. Except as set forth on Schedule 5.2,
------------
Entravision is not and will not be required to give any notice to or to obtain
any Consent from any Person or Governmental Body in connection with the
execution and delivery of this Agreement or the consummation or performance of
any of the Contemplated Transactions.
5.3 FCC and Other Qualifications. Entravision Holdings is qualified to be
----------------------------
the assignee of the FCC Licenses under the Communications Act of 1934, as
amended, and the rules, regulations and policies of the FCC.
5.4 Certain Proceedings. There is no pending Proceeding that has been
-------------------
commenced against Entravision that challenges, or may have the effect of
preventing, delaying, making illegal
-21-
or otherwise interfering with, any of the Contemplated Transactions. To the
Knowledge of Entravision, no such Proceeding has been Threatened.
5.5 Brokers or Finders. Except for fees due to Media Venture Partners,
------------------
which fees shall be borne solely by Entravision, neither Entravision nor its
Representatives have incurred any liability for brokerage or finder's fees or
agents commissions or other similar payment in connection with the Contemplated
Transactions.
ARTICLE 6.
COVENANTS OF SUNBURST
PRIOR TO CLOSING DATE
6.1 Filing Under HSR Act. Within fifteen (15) business days after full
--------------------
execution of this Agreement, Sunburst agrees to make a separate filing of the
Notification and Report Form pursuant to the HSR Act with respect to the
Contemplated Transactions as promptly as practicable and supply any additional
information or documentary material that may be required under the HSR Act and
to take all other actions as reasonably necessary to cause the expiration or
termination of the applicable waiting period under the HSR Act as soon as
possible. Sunburst will use its Best Efforts to cooperate in all respects with
Entravision in conjunction with any such filing submission or other inquiry and
to promptly notify Entravision of any communication received from or given to
the Antitrust Department of the Department of Justice (the "DOJ") or the Federal
Trade Commission (the "FTC") and to permit the other party to review such
communication. Each party shall pay one-half (1/2) of the filing fees relating
to compliance with the HSR Act, provided that Entravision shall initially pay
the filing fees and shall be reimbursed by Sunburst for one-half (1/2) of such
fee at the earlier of the Closing or a termination of this Agreement, unless
this Agreement is terminated by Sunburst pursuant to Section 10.1(b)(i) below.
6.2 Application for FCC Consent. Within ten (10) business days after the
---------------------------
execution of this Agreement, Sunburst will complete, sign and deliver to
Entravision those portions of the applications for the FCC Consent applicable to
Sunburst which portions of the applications shall be in form and substance
acceptable for filing with the FCC. Sunburst 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. Sunburst will promptly provide Entravision with a copy of any
pleading or other document served on it relating to such applications. If the
FCC Consent imposes any condition on Sunburst, Sunburst shall use its Best
Efforts to comply with such condition. If reconsideration or judicial review is
sought with respect to the FCC Consent, and such reconsideration or review
relates to Sunburst or its operations of the Stations, Sunburst shall vigorously
oppose such reconsideration or judicial review at its own expense. Entravision
and Sunburst shall each bear one-half (1/2) of the costs associated with the
filing of the application for the FCC Consent.
-22-
6.3 Access to Personnel, Books, Records and Properties. Between the date
--------------------------------------------------
of this Agreement and the Closing Date, Sunburst shall use its Best Efforts to
cause to be afforded to Entravision and its Representatives reasonable access to
the personnel (which shall be supervised access and shall be limited to, at the
Station level, the general manager only, and at the corporate offices in Dallas,
Texas, such employees who have relevant knowledge regarding the Stations, such
as regarding financial and engineering matters) books and records, tangible
assets, agreements and licenses of the Stations as may be reasonably requested
by Entravision or its Representatives. Entravision's inspections and other
access shall be conducted at such times and under such conditions as Sunburst
shall specifically determine in each instance so as to minimize any disruption
to Sunburst's operations. Entravision shall indemnify Sunburst for any and all
damages to persons or property caused by Entravision while conducting such
inspections and other physical access. Sunburst agrees that prior to
consummation of the Contemplated Transactions, Entravision will be furnished
with such accounting information and reports Entravision deems reasonably
necessary to enable Entravision to satisfy disclosure requirements to its
lenders, or state and federal regulators. Sunburst agrees to cooperate in
providing Entravision full access to its records relating to the Sunburst
Financial Statements, and to exert its Best Efforts to make its outside
independent accountants (and their available work papers) available to
Entravision and its accountants; provided, however, that Entravision will pay
any fees and expenses of Sunburst's outside independent accountants for services
rendered in connection with Entravision's activities. At the request of
Entravision, Sunburst shall provide monthly unaudited balance sheets for any
full calendar month prior to the Closing within twenty-five (25) days of the end
of any such month. No later than ten (10) days prior to the Closing Date,
Sunburst shall deliver to Entravision the revenue and rating information for the
Stations referred to in Section 1.28 above (unless the Closing Date is to occur
within the first ten (10) days of any calendar month, in which case, the time
period for the delivery of such information shall be extended for such
reasonable number of days to accommodate the availability of such information).
6.4 Operation of the Businesses of the Stations. Between the date of this
-------------------------------------------
Agreement and the Closing Date, Sunburst will: (i) conduct the business of the
Stations only in the Ordinary Course of Business; (ii) use its Best Efforts to
preserve intact the current business organization of the Stations, keep
available the services of the current employees of the Stations, and maintain
the relations and goodwill with suppliers, customers, landlords, creditors,
employees, agents and others having business relationships with the Stations;
(iii) advise Entravision concerning operational matters of a material nature;
and (iv) provide Entravision with the monthly income statements for the
operations of the Stations by no later than the twenty-fifth (25th) day of each
calendar month with respect to the prior calendar month for each month after the
date of this Agreement.
6.5 Negative Covenant. Except as otherwise expressly permitted by this
-----------------
Agreement, between the date of this Agreement and the Closing Date, Sunburst
will not, without the prior written consent of Entravision, take any affirmative
action, or fail to take any reasonable action
-23-
within its control, that causes any of the changes or events listed in Section
4.12 above occurs or become likely to occur.
6.6 Notification. Between the date of this Agreement and the Closing
------------
Date, Sunburst will promptly notify Entravision in writing if Sunburst becomes
aware of any fact or condition that causes or constitutes a Breach of any of the
representations and warranties of Sunburst in this Agreement, or if Sunburst
becomes aware of the occurrence after the date of this Agreement of any fact or
condition that would (except as expressly contemplated by this Agreement) cause
or constitute a Breach of any such representation or warranty had such
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any change
in the Schedules if the Schedules were dated the date of the occurrence or
discovery of any such fact or condition between the date of this Agreement and
the Closing Date, Sunburst will promptly (i) deliver to Entravision a supplement
to the Schedules specifying such change and (ii) notify Entravision of the
occurrence of any Breach of any covenant of Sunburst in this Article 6 or of the
occurrence of any event that may make the satisfaction of the conditions in
Article 8 impossible or unlikely; provided, however, that the parties hereto
acknowledge and agree that any such change shall not create any Liabilities of
any kind for Entravision and shall not affect the express condition to Closing
of Entravision based on Material Adverse Change as set forth in Section 8.1(h)
below.
6.7 Broadcast Transmission Interruption. Sunburst shall give prompt
-----------------------------------
written notice (a "Service Interruption Notice") to Entravision if any of the
following (a "Service Interruption") occurs: (i) the regular broadcast
transmissions of any of the Stations is interrupted or discontinued or (ii) any
of the Stations is operated from a site other than its licensed transmitter site
or with less than eighty percent (80%) of its licensed authorized power;
provided, however, that an interruption or discontinuance in broadcast
transmissions due either to (a) a disruption in power provided by a utility
provider or (b) normal and customary repair, replacement, tuning, adjusting and
maintenance of equipment will not be deemed a Service Interruption. If between
the date hereof and the Closing, any of KVLY(FM), KKPS(FM) or KFRQ(FM) has
experienced Service Interruptions aggregating seventy-two (72) consecutive hours
in any thirty (30) consecutive day period, then Entravision may, at its option,
terminate this Agreement upon written notice delivered to Sunburst no later than
ten (10) days after receipt by Entravision of a Service Interruption Notice. In
the event of termination of this Agreement by Entravision pursuant to the
preceding sentence, the Escrow Deposit shall be returned to Entravision and the
parties shall be released and discharged from any further obligation hereunder.
If Entravision does not elect to terminate this Agreement, then the parties
shall proceed as though a Service Interruption has not occurred. In addition,
if at the time of any proposed Closing, any of the Stations shall not be
broadcasting from its main licensed transmitter site with at least eighty
percent (80%) of its licensed authorized power, then Entravision shall have the
option, by written notice delivered to Sunburst, to postpone the Closing until
three (3) days after normal broadcast transmissions have resumed.
-24-
6.8 No Negotiation. Until the Closing Date, or such time, if any, as this
--------------
Agreement is terminated pursuant to Article 10 below, Sunburst and each of its
Representatives will not, directly or indirectly solicit, initiate or encourage
any inquiries or proposals from, discuss or negotiate with, provide any non-
public information to or consider the merits of any unsolicited inquiries or
proposals from, any Person (other than Entravision or its Related Persons)
relating to any transaction involving the sale of the business or any of the
assets (other than in the Ordinary Course of Business) of the Stations.
6.9 Best Efforts. Between the date of this Agreement and the Closing
------------
Date, Sunburst will use its Best Efforts to cause the conditions in Section 8.1
below to be satisfied.
6.10 Third-Party Consents and Estoppel Certificates. Attached hereto as
----------------------------------------------
Schedule 6.10 is a list of those Assignable Contracts (each a "Schedule 6.10
-------------
Contract") with respect to which Sunburst has agreed to use its Best Efforts to
seek the Consent of the other party(ies) to such Contracts to the assignment and
assumption of such Contracts from Sunburst to Entravision upon the Closing. If
Sunburst is unable to obtain third-party Consent to such assignment and
assumption of any Schedule 6.10 Contract identified under the heading "Other
Consents," then Sunburst shall continue after the Closing using its Best Efforts
after the Closing to obtain any such Consent. Until such time as such Consent
has been obtained, Sunburst will hold and administer the affected Contract for
the sole and exclusive benefit of, and at the sole cost and expense of,
Entravision. If Sunburst is unable to obtain third-party Consent to such
assignment and assumption of any Schedule 6.10 Contract identified under the
heading "Real Property Consents," then Entravision shall have the option
exercisable within ten (10) days after Sunburst notifies Entravision of such
fact to either (i) terminate this Agreement without any liability of either
party hereto and Entravision shall receive a refund of the Escrow Deposit or
(ii) waive the condition to the Closing that such Consent be obtained and
proceed with the Closing if the Contemplated Transactions and direct Sunburst to
hold and administer the affected Contract for the sole and exclusive benefit of,
and at the sole cost and expense of, Entravision. Sunburst will also request
reasonable, normal and customary estoppel certificates, in a form supplied by
Entravision, from the landlords under all Real Property Leases and will use Best
Efforts to obtain such certificates; provided that if such estoppel certificates
are not obtained, Sunburst shall have no liability to Entravision and the
failure to obtain any estoppel certificate will not excuse Entravision's
obligation to perform hereunder.
6.11 No Inconsistent Action. Sunburst shall not take any action which is
----------------------
materially inconsistent with its obligations under this Agreement, or that would
hinder or delay the consummation of the Contemplated Transactions. Sunburst
will not take any action that would disqualify or impair Sunburst as an assignor
of the Stations or as an owner and operator of the Stations.
6.12 Sales and Transfer Taxes. All costs of transferring the Assets in
------------------------
accordance with this Agreement (if any), including, without limitation,
recordation, transfer and documentary taxes and fees, and any excise, sales or
use taxes, shall be borne by Sunburst.
-25-
6.13 Risk of Loss. The risk of loss or damage to any of the fixed and
------------
tangible Assets to be conveyed to Entravision hereunder from fire or other
casualty or cause shall be upon Sunburst at all times up to the Closing Date and
it shall be the responsibility of Sunburst to repair or to cause to be repaired
and to restore the Assets to their condition prior to any such loss or damage
or, at its sole option, in lieu of performing such repair and restoration
obligations, Sunburst may tender to Entravision the insurance proceeds in the
amount sufficient to fully repair and restore such Assets. In the event of any
such loss or damage, Sunburst shall notify Entravision of the same in writing
immediately, specifying with particularity the loss or damage incurred, the
cause thereof (if know or reasonably ascertainable) and the insurance coverage
applicable to such loss and the estimated amount of the loss in excess of the
insurance proceeds plus deductible. If the loss exceeds the insurance proceeds
plus deductible by more than $500,000, Entravision shall have the option to
either (i) terminate this Agreement without being deemed in Breach of the
Agreement or (ii) proceed to the Closing and deducting the amount by which the
loss exceeds the insurance proceeds plus deductible from the Purchase Price.
6.14 Surveys. With respect to each parcel of Real Property as to which an
-------
owner's title insurance policy is to be procured, Sunburst will assist
Entravision in the procurement of a current land title survey of the Real
Property certified to Entravision prepared by a licensed surveyor and
conforming, as to Texas real estate, to current Texas Land Title Association
Minimum Detail Requirements for Land Title Surveys disclosing the location of
all improvements, easements, party walls, sidewalks, roadways, utility lines and
other matters shown customarily on such surveys, and showing access
affirmatively to public streets and roads (the "Surveys"). If any of the
Surveys shall disclose any problems with access to and from a public roadway,
the encroachment or protrusion of improvements from or onto the Real Property or
any similar defects which substantially impair the current use or occupancy the
Real Property as a tower site or studio site, as applicable, then such matter
will either be cured by Sunburst prior to the Closing or insured over by the
Closing; and if not, then Sunburst will indemnify Entravision as provided in
Section 11.2 below. Entravision shall pay the cost of the Surveys.
6.15 Environmental Assessments. Sunburst will assist Entravision in
-------------------------
obtaining with respect to each parcel of Real Property as to which an owner's
title insurance policy is to be procured, a current Phase I Environmental Site
Assessment ("ESA") and, if suggested by the Phase I ESA, a Phase II ESA, from an
environmental consultant or engineer reasonably satisfactory to Entravision. If
any of the ESAs shall conclude that there is an environmental condition that
needs remediation or if any event should occur on any property covered by the
ESAs prior to the Closing (which is not directly caused by Entravision) that
results in an environmental condition requiring remediation, then Sunburst shall
provide for such remediation at Sunburst's own cost prior to the Closing, or if
Entravision elects, credit the Purchase Price at the Closing with the estimated
amount of the remediation and final accounting once remediation is completed.
Notwithstanding the foregoing, if the estimated cost of any such remediation
shall exceed $500,000 and if Entravision does not elect to pay for the
remediation costs in excess of $500,000, then either party shall have the right
to terminate this Agreement without any
-26-
obligation to the other party, and Entravision shall be entitled to the return
of the entire Escrow Deposit, including interest. Entravision shall pay the cost
of the ESAs.
ARTICLE 7.
COVENANTS OF ENTRAVISION
PRIOR TO CLOSING DATE
7.1 Filing Under HSR Act. Within fifteen (15) business days after full
--------------------
execution of this Agreement, Entravision agrees to make a separate filing of the
Notification and Report Form pursuant to the HSR Act with respect to the
Contemplated Transactions as promptly as practicable and supply any additional
information or documentary material that may be required under the HSR Act and
to take all other actions as reasonably necessary to cause the expiration or
termination of the applicable waiting period under the HSR Act as soon as
possible. Entravision will use its Best Efforts to cooperate in all respects
with Sunburst in conjunction with any such filing submission or other inquiry
and to promptly notify Sunburst of any communication received from or given to
the Antitrust Department of the DOJ or the FTC and to permit the other party to
review such communication. Each party shall pay one-half (1/2) of the filing
fees relating to compliance with the HSR Act, provided that Entravision shall
initially pay the filing fees and shall be reimbursed by Sunburst for one-half
(1/2) of such fee at the earlier of the Closing or a termination of this
Agreement, unless this Agreement is terminated by Sunburst pursuant to Section
10.1(b)(i) below.
7.2 Application for FCC Consent. Within ten (10) business days after the
---------------------------
execution of this Agreement, Entravision will complete those portions of the
applications for the FCC Consent applicable to Entravision, which applications
shall be in form and substance acceptable for filing with the FCC, assimilate
Sunburst's portions of the applications and the file such applications with the
FCC requesting its written consent to Contemplated Transactions. Entravision
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. Entravision will promptly
provide Sunburst with a copy of any pleading or other document served on it
relating to such applications. If the FCC Consent imposes any condition on
Entravision, Entravision shall use its Best Efforts to comply with such
condition. If reconsideration or judicial review is sought with respect to the
FCC Consent, and such reconsideration or review relates to Entravision,
Entravision shall vigorously oppose such reconsideration or judicial review at
its own expense. Entravision and Sunburst shall each bear one-half (1/2) of
the costs associated with the filing of the application for the FCC Consent.
7.3 Notification. Between the date of this Agreement and the Closing
------------
Date, Entravision will promptly notify Sunburst in writing if Entravision
becomes aware of any fact or condition that causes or constitutes a Breach of
any of the representations and warranties of Entravision in this Agreement, or
if Entravision becomes aware of the occurrence after the date of this Agreement
of any fact or condition that would (except as expressly contemplated by this
Agreement) cause or constitute a Breach of any such representation or warranty
had such
-27-
representation or warranty been made as of the time of occurrence or discovery
of such fact or condition. Should any such fact or condition require any change
in the Schedules if the Schedules were dated the date of the occurrence or
discovery of any such fact or condition between the date of this Agreement and
the Closing Date, Entravision will promptly (i) deliver to Sunburst a supplement
to the Schedules specifying such change and (ii) notify Sunburst of the
occurrence of any Breach of any covenant of Entravision in this Article 7 or of
the occurrence of any event that may make the satisfaction of the conditions in
Article 8 impossible or unlikely; provided, however, that the parties hereto
acknowledge and agree that any such change shall not create any Liabilities of
any kind for Sunburst.
7.4 Best Efforts. Between the date of this Agreement and the Closing
------------
Date, Entravision will use its Best Efforts to cause the conditions in Section
8.2 below to be satisfied.
7.5 No Inconsistent Action. Entravision shall not take any action which
----------------------
is materially inconsistent with their obligations under this Agreement, or that
would hinder or delay the consummation of the Contemplated Transactions.
Entravision will not take any action that would disqualify or impair Entravision
(or any of its Related Persons) as an assignee of the Stations or as an owner
and operator of the Stations.
ARTICLE 8.
CONDITIONS PRECEDENT TO PARTIES' OBLIGATIONS TO CLOSE
8.1 Conditions Precedent to the Obligation of Entravision to Close. The
--------------------------------------------------------------
obligation of Entravision to effect the Contemplated Transactions and to take
the other actions required to be taken by Entravision at the Closing is subject
to the satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by Entravision, in whole or in part):
(a) Accuracy of Certain Representations and Warranties. All of the
--------------------------------------------------
representations and warranties of Sunburst contained in Sections 4.1, 4.2, 4.3
and 4.4 above, considered collectively, and each of such representations and
warranties, considered individually, must be accurate in all respects when made,
and as of the Closing Date as if made on the Closing Date. All of the
representations and warranties of Sunburst contained in Section 4.5 above
through Section 4.22 above shall be deemed made again at and as of the Closing;
provided, however, that it is understood that any Breach of any of the
representations and warranties of Sunburst contained in Section 4.5 above
through Section 4.22 above, whether as of the date hereof or at the time of the
Closing, shall only give rise to Entravision's claim for indemnification
pursuant to Section 11.2 below (subject to the provisions of Section 11.9
below).
(b) Performance. All of the covenants and obligations that Sunburst
-----------
is required to perform or to comply with pursuant to this Agreement at or prior
to the Closing, considered collectively, and each of these covenants and
obligations, considered individually, must have been duly performed and complied
with in all respects; provided, however, that if
-28-
Entravision believes that Sunburst has Breached any of its covenants and
obligations under this Agreement, then Entravision shall give Sunburst written
notice thereof setting forth in reasonable detail the nature of the failure and
the Closing shall be extended to permit Sunburst a reasonable opportunity (of no
less than fifteen (15) days and no more than thirty (30) days) to cure.
(c) Closing Certificate. Entravision shall have received from
-------------------
Sunburst a certificate, dated as of the Closing, certifying that the conditions
specified in Sections 8.1(a) and 8.1(b) above have been fulfilled.
(d) Delivery of Closing Items. Each item required to be delivered by
-------------------------
Sunburst pursuant to Section 3.5 above must have been tendered for delivery at
the Closing.
(e) Consents. The Final FCC Consent and the Consent identified under
--------
"Real Property Consents" on Schedule 6.10 must have been obtained and must be in
-------------
full force and effect. All parties hereto acknowledge and agree to the
requirement of the Final FCC Consent as an express condition to the Closing.
(f) Opinion of Counsel. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., counsel for
------------------
Sunburst, shall have delivered to Entravision a written legal opinion, dated as
of the Closing Date, which shall be substantially in the form attached hereto as
Exhibit "B-1" and incorporated herein by this reference.
-------------
(g) Opinion of Counsel. Pepper & ▇▇▇▇▇▇▇▇▇, L.L.P., FCC counsel for
------------------
Sunburst, shall have delivered to Entravision a written legal opinion, dated as
of the Closing Date, which shall be substantially in the form attached hereto as
Exhibit "B-2" and incorporated herein by this reference.
-------------
(h) No Material Adverse Change. There shall not have been any
--------------------------
Material Adverse Change.
(i) HSR Act. To the extent applicable, the waiting period under the
-------
HSR Act shall have expired or have been terminated with respect to the
Contemplated Transactions.
(j) Environmental Remedies. Subject to the provisions of Section 6.15
----------------------
above, any environmental problems identified by Entravision in its due diligence
of the Stations shall be remedied, to Entravision's reasonable satisfaction, by
Sunburst at its own expense.
(k) No Injunction. There must not be in effect any Legal Requirement
-------------
or any injunction or other Order that (i) prohibits the sale of the Assets by
Sunburst to Entravision and (ii) has been adopted or issued or has otherwise
become effective, since the date of this Agreement.
-29-
8.2 Conditions Precedent to the Obligation of Sunburst to Close. The
-----------------------------------------------------------
obligation of Sunburst to effect the Contemplated Transactions and to take the
other actions required to be taken by Sunburst at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions
(any of which may be waived by Sunburst, in whole or in part):
(a) Accuracy of Certain Representations and Warranties. All of the
--------------------------------------------------
representations and warranties of Entravision contained in Sections 5.1, 5.2 and
5.3 above, considered collectively, and each of such representations and
warranties, considered individually, must be accurate in all respects when made,
and as of the Closing Date as if made on the Closing Date. All of the
representations and warranties of Entravision contained in Section 5.4 above and
Section 5.5 above shall be deemed made again at and as of the Closing; provided,
however, that it is understood that any Breach of any of the representations and
warranties of Entravision contained in Section 5.4 above and Section 5.5 above,
whether as of the date hereof, or at the time of the Closing, shall only give
rise to Sunburst's claim for indemnification pursuant to Section 11.4 below
(subject to the provisions of Section 11.9 below).
(b) Performance. All of the covenants and obligations that
-----------
Entravision is required to perform or to comply with pursuant to this Agreement
at or prior to the Closing, considered collectively, and each of these covenants
and obligations, considered individually, must have been performed and complied
with in all respects; provided, however, that if Sunburst believes that
Entravision has breached any of its covenants and obligations under this
Agreement, then Sunburst shall give Entravision written notice thereof setting
forth in reasonable detail the nature of the failure and the Closing shall be
extended to permit Entravision a reasonable opportunity (of no less than fifteen
(15) days and no more than thirty (30) days) to cure.
(c) Closing Certificate. Sunburst shall have received from
-------------------
Entravision a certificate, dated as of the Closing, certifying that the
conditions specified in Sections 8.2(a) and 8.2(b) above have been fulfilled.
(d) Delivery of Closing Items. Each item required to be delivered by
-------------------------
Entravision pursuant to Section 3.6 above must have been tendered for delivery
at the Closing.
(e) Consents. The Final FCC Consent must have been obtained and must
--------
be in full force and effect. All parties hereto acknowledge and agree to the
requirement of the Final FCC Consent as an express condition to the Closing.
(f) HSR Act. To the extent applicable, the waiting period under the
-------
HSR Act shall have expired or have been terminated with respect to the
Contemplated Transactions.
(g) No Injunction. There must not be in effect any Legal Requirement
-------------
or any injunction or other Order that (i) prohibits the sale of the Assets by
Sunburst to Entravision and (ii) has been adopted or issued or has otherwise
become effective, since the date of this Agreement.
-30-
ARTICLE 9.
EMPLOYMENT MATTERS
9.1 Termination of Stations' Employees. Sunburst shall have terminated
----------------------------------
all of the employees of the Stations immediately prior to the Closing,
including, without limitation, those employees under written employment
agreements, with Sunburst to incur any and all Liabilities related to such
terminations and to the employment of such employees through the Closing Date.
Sunburst shall remain solely responsible for any termination benefits to which
any of the employees are entitled by reason of such termination whether or not
such person is subsequently employed by Entravision. Entravision shall have no
obligation to offer employment to any of the employees of the Stations.
9.2 Continued Employment with Entravision. Notwithstanding the foregoing,
-------------------------------------
on the Closing Date, Entravision may offer probational employment only to those
employees of the Stations that Entravision elects to do so in its sole and
absolute discretion, and each such employee shall be asked to execute an
acknowledgment of continued employment with Entravision, acknowledging, among
other things, that: (i) the employee has no carry over rights with respect to
any and all employee benefits relating to any former employment with Sunburst;
(ii) upon execution of the appropriate documentation, such employee will be
fully covered under the standard Entravision health insurance benefits; (iii)
such employee shall be on a ninety (90) day probationary period, and that
continued employment with Entravision is subject to the review and approval of
Entravision in its sole and absolute discretion; (iv) demotion and transfer of
such employee may occur in the sole and absolute discretion of Entravision at
any time, with or without cause and/or notice; (v) employment with Entravision
is "at-will;" and (v) such employee has received a copy of the Entravision's
Employment Policy & Procedures Manual.
ARTICLE 10.
TERMINATION
10.1 Termination Events. This Agreement may, by written notice given prior
------------------
to or at the Closing, be terminated:
(a) by Entravision: (i) if any of the conditions precedent to
Entravision's obligation to close as set forth in Section 8.1 above shall not
have been met (or waived by Entravision) by the time the Closing is to have
taken place, including any extensions of the Closing permitted or required
hereunder; (ii) if the FCC dismisses or denies the application for the FCC
Consent and such order is a Final Order; or (iii) if there shall be any Order
that would prevent or make unlawful the Closing;
(b) by Sunburst: (i) if any of the conditions precedent to Sunburst's
obligation to close as set forth in Section 8.2 above shall not have been met
(or waived by Sunburst) by the time the Closing is to have taken place,
including any extensions of the Closing permitted or required hereunder; (ii) if
the FCC dismisses or denies the application for the FCC Consent and
-31-
such order is a Final Order; or (iii) if there shall be any Order that would
prevent or make unlawful the Closing;
(c) by mutual consent of Entravision and Sunburst; or
(d) by Entravision or Sunburst if the Closing has not occurred (other
than through the failure of the party seeking to terminate this Agreement to
comply fully with its obligations under this Agreement) on or before March 31,
2001, or such later date as the parties may agree upon in writing.
10.2 Rights of Parties for Nonperformance or Upon Termination.
--------------------------------------------------------
(a) If Sunburst does not have a right to terminate under Section 10.1
above, but Sunburst refuses to close the Contemplated Transactions or prevents
the Closing due to a Breach of this Agreement, Entravision shall have the right
to waive any grounds it may have to terminate under Section 10.1 above and to
obtain specific performance of the obligations of Sunburst to consummate the
Contemplated Transactions. Sunburst acknowledges and agrees that the Assets and
the Stations are unique assets and Sunburst expressly agrees monetary damages
would be inadequate to compensate Entravision for the refusal of Sunburst to
perform the obligations for which the remedy of specific performance is granted
herein. Accordingly, Sunburst acknowledges and agrees that such refusal to
perform will cause irreparable injury to Entravision and that Entravision shall
be entitled to obtain injunctive relief for specific performance of the
obligations specifically listed in this Section 10.2.
(b) If this Agreement is terminated for any reason other than by
Sunburst under Section 10.1(b)(i) above on account of the failure of the
conditions precedent set forth in any of Sections 8.2(a), (b), (c) and/or (d)
above, the parties acknowledge and agree that Entravision shall be entitled to
the return of the entire Escrow Deposit, plus interest. If this Agreement is
terminated by Sunburst under Section 10.1(b)(i) above on account of the failure
of the conditions precedent set forth in any of Sections 8.2(a), (b), (c) and/or
(d) above, the parties acknowledge and agree that Sunburst shall be entitled to
receive the entire Escrow Deposit, less interest. In such event, Entravision
shall immediately instruct the Escrow Agent to deliver the Escrow Deposit, less
interest, to Sunburst. The parties acknowledge and agree that the remedy
provided to Sunburst in this Section 10.2(b) shall not constitute either
liquidated damages or Sunburst's sole remedy for a Breach of this Agreement by
Entravision.
(c) If this Agreement is terminated as provided in this Article 10,
the Contemplated Transactions shall be abandoned without further action, rights
or obligations by the parties hereto to one another, and all filings,
applications and other submissions made hereunder shall, to the extent
practicable, be withdrawn from the Persons to which they were made; provided,
however, that nothing herein shall relieve either party from liability for any
Breach of any representation, warranty, covenant or agreement in this Agreement
prior to such termination.
-32-
ARTICLE 11.
INDEMNIFICATION; REMEDIES
11.1 Survival; Right to Indemnification Not Affected by Knowledge. All
------------------------------------------------------------
representations, warranties, covenants and obligations in this Agreement, the
Schedules and any other certificate or document delivered pursuant to this
Agreement will survive the Closing for a period of two (2) years from the
Closing Date, unaffected by any Knowledge or either party with respect thereto;
provided, however, that the representations, warranties and covenants contained
in Sections 4.2, 4.4, 4.7 and 4.16 shall survive until the expiration of the
applicable statute of limitations; provided, further, that, with respect to
claims asserted by third-parties, all representations, warranties, covenants and
obligations shall survive until the applicable statute of limitations.
11.2 Indemnification and Payment of Damages by Sunburst. Provided that the
--------------------------------------------------
Closing shall occur, Sunburst hereby agrees to indemnify and hold harmless
Entravision, and its officers, directors, successors and assigns (collectively,
the "Indemnified Parties") for, and will pay to the Indemnified Parties the
amount of, any loss, liability, claim, damage (including incidental and
consequential damages), expense (including costs of investigation and defense
and reasonable attorney's fees) or diminution of value, whether or not involving
a third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with any or all of the following:
(a) any Breach of any representation, warranty, covenant or obligation
made by Sunburst in this Agreement, the Schedules or any other certificate or
document delivered by Sunburst pursuant to this Agreement;
(b) any and all Liabilities of Sunburst, except only for the Assumed
Liabilities;
(c) all operations of the Stations occurring at any time prior to the
Closing Date; and
(d) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by any such Person with either Sunburst (or any Person
acting on its behalf) in connection with any of the Contemplated Transactions.
11.3 Indemnification and Payment of Damages -- Environmental Matters.
---------------------------------------------------------------
(a) In addition to Section 11.2 above, Sunburst will further indemnify
and hold harmless the Indemnified Parties for, and will pay to the Indemnified
Parties the amount of, any Damages (including costs of cleanup, containment or
other remediation) arising, directly or indirectly, from or in connection with
any Environmental Laws arising out of or relating to: (i) the ownership,
operation or condition at any time prior to the Closing Date of the Facilities,
or
-33-
any Hazardous Substances or other contaminants that were present on the
Facilities prior to the Closing Date; or (ii) any Hazardous Substances or other
contaminants, wherever located, that were, or were allegedly, generated,
transported, stored, treated, released or otherwise handled by the Stations or
by any other Person for whose conduct the Stations may be held responsible at
any time prior to the Closing Date, or any hazardous activities that were, or
were allegedly, conducted by the Stations or by any other Person for whose
conduct the Stations may be held responsible.
(b) Entravision will be entitled to control any cleanup, any related
Proceeding, and, except as provided in the following sentence, any other
Proceeding with respect to which indemnity may be sought under this Section
11.3. The procedure described in Section 11.5 below will apply to any claim
solely for monetary damages relating to a matter covered by this Section 11.3.
Notwithstanding any provision to the contrary in this Section 11.3, Entravision
and Sunburst agree that any Damages arising out of any violation of any
Environmental Laws or Hazardous Substances covered by this Section 11.3 shall be
apportioned in a manner so that Sunburst is responsible for any Damages accruing
from activities occurring up through the Closing Date (other than for any
Damages caused by Entravision) and Entravision is responsible for any Damages
accruing from activities occurring from and after the Closing Date (other than
for any Damages caused by Sunburst).
11.4 Indemnification and Payment of Damages by Entravision. Provided that
-----------------------------------------------------
the Closing shall occur, Entravision will indemnify and hold harmless Sunburst,
and will pay to Sunburst the amount of any Damages arising, directly or
indirectly, from or in connection with any of the following:
(a) any Breach of any representation, warranty, covenant or obligation
made by Entravision in this Agreement or in any certificate delivered by
Entravision pursuant to this Agreement;
(b) any Breach by Entravision of any covenant or obligation of
Entravision in this Agreement;
(c) any and all of the Assumed Liabilities;
(d) all operations of the Stations occurring at any time on or after
the Closing Date;
(e) any third-party claim arising directly from information set forth
in the Public Filings (as defined below) (except for any claim arising directly
from the negligent or intentional misconduct of Sunburst or from the inaccuracy
of any information provided by Sunburst to Entravision contained in such Public
Filings); and
-34-
(f) any claim by any Person for brokerage or finder's fees or
commissions or similar payments based upon any agreement or understanding
alleged to have been made by such Person with Entravision (or any Person acting
on its behalf) in connection with any of the Contemplated Transactions.
11.5 Procedure for Indemnification -- Third-Party Claims.
---------------------------------------------------
(a) Promptly after receipt by an indemnified party in this Article 11
of notice of the commencement of any Proceeding against it, such indemnified
party will, if a claim is to be made against an indemnifying party under such
article, give notice to the indemnifying party of the commencement of such
claim, but the failure to notify the indemnifying party will not relieve the
indemnifying party of any liability that it may have to any indemnified party,
except to the extent that the indemnifying party demonstrates that the defense
of such action is prejudiced by the indemnified party's failure to give such
notice.
(b) If any Proceeding referred to in Section 11.5(a) above is brought
against an indemnified party and it gives notice to the indemnifying party of
the commencement of such Proceeding, the indemnifying party will, unless the
claim involves Taxes, be entitled to participate in such Proceeding and, to the
extent that it wishes (unless the indemnifying party is also a party to such
Proceeding and the indemnified party determines in good faith that joint
representation would be inappropriate or the indemnifying party fails to provide
reasonable assurance to the indemnified party of its financial capacity to
defend such Proceeding and provide indemnification with respect to such
Proceeding), to assume the defense of such Proceeding with counsel satisfactory
to the indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this section for any fees of other counsel
or any other expenses with respect to the defense of such Proceeding, in each
case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If
the indemnifying party assumes the defense of a Proceeding: (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party and the sole relief provided is monetary damages that are paid
in full by the indemnifying party; and (iii) the indemnified party will have no
liability with respect to any compromise or settlement of such claims effected
without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
(10) days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
-35-
(c) Notwithstanding the foregoing, if an indemnified party determines
in good faith that there is a reasonable probability that a Proceeding may
adversely affect it or its Related Persons other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the indemnified party may, by notice to the indemnifying party, assume the
exclusive right to defend, compromise or settle such Proceeding, but the
indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its written consent
(which may not be unreasonably withheld).
11.6 Procedure for Indemnification -- Other Claims. A claim for
---------------------------------------------
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
11.7 Limitation on Amount. Notwithstanding the preceding provisions of
--------------------
this Article 11 and except as provided below, the parties shall have no
liability to the other with respect to the indemnification obligations under
this Article 11 unless and until the aggregate amount of Damages equal or exceed
$25,000 (the "Threshold Amount"). At such time as the aggregate Damages equal
or exceed the Threshold Amount, the parties shall be indemnified to the full
extent of all such Damages (including Damages counted in determining whether the
aggregate Damages equal or exceed the Threshold Amount). Notwithstanding the
preceding provisions of this section, the Threshold Amount shall not apply and
each party shall be fully liable for indemnification claims for (i) payment of
Station Expenses, (ii) performance by Entravision of the Assumed Liabilities,
(iii) payment of expenses incurred in connection with the Contemplated
Transaction, (iv) intentional or fraudulent Breach by either party of any
representation, warranty, covenant or obligation contained in this Agreement or
(v) remittance to Sunburst of the collections on the Accounts Receivable.
11.8 Maximum Indemnification. The aggregate amount of all claims subject
-----------------------
to indemnification hereunder by Sunburst, on one hand, and Entravision, on the
other hand, shall not exceed Fifteen Million Dollars ($15,000,000); provided,
however, that the amount of any Damages incurred by a party pursuant to this
Article 11 shall be reduced by (i) the actual tax benefit realized with respect
to payment of all or any portion of such Damages by the indemnified party and
(ii) the amount of any insurance proceeds actually paid to such indemnified
party as reimbursement for such Damages.
11.9 Exclusivity. Each of the parties hereby acknowledges and agrees that
-----------
from and after the Closing, and except in cases of fraud or intentional
misconduct, the indemnity obligations set forth in this Article 11 shall
constitute the sole and exclusive remedy of either party with respect to the
Contemplated Transactions.
ARTICLE 12.
POST-CLOSING COVENANTS
-36-
The parties agree as follows with respect to the period following the
Closing:
12.1 Further Assurances. In case at any time after the Closing any
------------------
further action is necessary to carry out the purposes of this Agreement, each of
the parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other party reasonably may
request, all the sole cost and expense of the requesting party (unless the
requesting party is entitled to indemnification therefor under Article 11
above). After the Closing, Sunburst will execute any further documents
consistent with this Agreement, provide any further reasonably available
information and take any other actions not imposing significant financial or
operational obligations in excess of the other obligations imposed by this
Agreement, upon the request of Entravision based upon Entravision's reasonable
determination that those actions are required to enable Entravision to
effectuate this Agreement. After the Closing, Entravision will execute any
further documents consistent with this Agreement, provide any further reasonably
available information and take any other actions not imposing significant
financial or operational obligations in excess of the other obligations imposed
by this Agreement, upon the request of Sunburst based upon Sunburst's reasonable
determination that those actions are required to enable Sunburst to effectuate
this Agreement.
12.2 Access to Books and Records. At Sunburst's reasonable request,
---------------------------
Entravision shall provide Sunburst with reasonable access during business hours
to such books and records of the Stations as Sunburst may reasonably require to
comply with its tax reporting and filing obligations or to collect any unpaid
Accounts Receivable.
12.3 Confidential Information. Entravision shall continue treat as
------------------------
confidential after the Closing Date, in the same manner as required by Section
13.3 below prior to the Closing Date, all of the information regarding Sunburst
(exclusive of information relating to the Stations and the operations of the
Stations) received from Sunburst in connection with the Contemplated
Transactions.
12.4 Litigation Support. In the event and for so long as either party is
------------------
actively contesting or defending against any charge, complaint, Proceeding,
claim or demand in connection with any fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act or transaction involving the Stations, the other party will
provide reasonable access to its books and records as shall be necessary in
connection with the contest or defense, all at the sole cost and expense of the
contesting or defending party (unless the contesting or defending party is
entitled to indemnification therefor under Article 11 above); provided, however,
that such access and cooperation does not unreasonably disrupt the normal
operations of the cooperating party.
12.5 Collection of Accounts Receivable.
---------------------------------
(a) For a period commencing on the Closing Date and ending on the last
day of the fourth (4th) full calendar month following the Closing Date (such
period is referred to as
-37-
the "Collection Period"), Entravision will have the right and the obligation to
collect for the account of Sunburst the Accounts Receivable. Within three (3)
business days following the Closing Date, Sunburst will furnish Entravision with
a complete Accounts Receivable list current as of the Closing Date, detailing
customer name, amount owed, aging and invoice numbers.
(b) All receipts on the collection of an Account Receivable from a
particular account debtor shall be applied first to the oldest outstanding
invoice, unless the payment is made with reference to a specific invoice, in
which case the payment shall be allocated to the specific invoice. Any monies
or payments received by Entravision which are in payment for commercial air time
or for other services or business provided by Entravision on or after the
Closing Date shall belong to Entravision and Entravision shall not be obligated
to remit any of such sums to Sunburst. Entravision will not, without the
written consent of Sunburst, compromise or settle for less than full value any
of the Accounts Receivable.
(c) If any account debtor shall dispute its obligation to Sunburst,
if any account debtor shall pay any invoice of Entravision's before having paid
in full all outstanding invoices due to Sunburst or if any Account Receivable
shall be deemed uncollectible by Entravision, then Entravision shall notify
Sunburst of same and the rights to collect such disputed, unpaid or deemed
uncollectible account will thereupon revert to Sunburst and Entravision will
thereafter have no further responsibility with respect to the collection
thereof.
(d) On the tenth (10th) day of each month immediately following each
calendar month end during the Collection Period, Entravision will provide
Sunburst with a list of all Accounts Receivable collected during the preceding
calendar month and Entravision will at that time also remit to Sunburst all sums
collected by Entravision in connection with the Accounts Receivable (and not
theretofore remitted to Sunburst) during such preceding month, without offset or
deduction.
(e) The obligation of Entravision hereunder will be to use reasonable
efforts to collect the Accounts Receivable in the Ordinary Course of Business
and does not extend to the institution of litigation, employment of counsel or
other collection agency, or any other extraordinary means of collection,
including the sending of demand letters. If requested by Entravision, Sunburst
will provide Entravision with a power of attorney which will be sufficient for
the purposes of evidencing to the various account debtors the exclusive
authority of Entravision to collect the Accounts Receivable.
(f) At the conclusion of the Collection Period, the collection rights
to all of the remaining uncollected Accounts Receivable shall automatically
revert to Sunburst, and Entravision will thereafter have no further
responsibility with respect to the collection of the Accounts Receivable.
12.6 Cooperation Regarding Financial Information. Sunburst acknowledges
-------------------------------------------
that Entravision will use compilations, carve out audits and other derivatives
of Sunburst's financial
-38-
information regarding the Stations in connection with future public filings of
Entravision filed under the Securities Act of 1933, as amended, or under the
Securities and Exchange Act of 1934, as amended (the "Public Filings"). For a
period of three (3) years from the Closing Date, Sunburst shall cooperate in a
commercially reasonable manner with Entravision so that Entravision may obtain
any additional information concerning the Stations that Sunburst has in its
possession that Entravision may need for the preparation of its Public Filings,
in each case at Entravision's sole cost and expense. The foregoing cooperation
of Sunburst shall consist of Sunburst (i) supplying financial information
related to the Stations and (ii) granting Entravision (and its accountants)
access to (a) the books and records relating to the Stations, (b) Sunburst
personnel who are knowledgeable about such books and records and (c) subject to
their consent, Sunburst's outside accountants.
ARTICLE 13.
GENERAL PROVISIONS
13.1 Expenses. Except as otherwise expressly provided in this Agreement,
--------
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
the Contemplated Transactions, including all fees and expenses of agents,
representatives, counsel and accountants.
13.2 Public Announcements. Other than those incidental to filings
--------------------
required to comply with Legal Requirements, neither party shall make any public
announcement, press release or similar publicity with respect to this Agreement
or the Contemplated Transactions, regardless of whether the Contemplated
Transactions are consummated, without the prior written consent of the other
party. The parties will consult with each other concerning the means by which
the employees, customers and suppliers of Sunburst and others having dealings
with Sunburst will be informed of the Contemplated Transactions, and Entravision
will have the right to be present for any such communication.
13.3 Confidentiality. Between the date of this Agreement and the Closing
---------------
Date, the parties will maintain in confidence, and will cause the
Representatives of Entravision and Sunburst to maintain in confidence, any
information furnished by another party in connection with this Agreement or the
Contemplated Transactions, unless (i) such information is already known to such
party or to others not bound by a duty of confidentiality or such information
becomes publicly available through no fault of such party, (ii) the use of such
information is necessary or appropriate in making any filing or obtaining any
Consent required for the consummation of the Contemplated Transactions or (iii)
the furnishing or use of such information is required by or necessary or
appropriate in connection with legal Proceedings. If the Contemplated
Transactions are not consummated, each party will return or destroy as much of
such written information as the other party may reasonably request. Whether or
not the Closing takes place, Sunburst waives any cause of action, right or claim
arising out of the access of Entravision or its Representatives to any trade
secrets or other confidential information of
-39-
Sunburst except for the intentional competitive misuse by Entravision of such
trade secrets or confidential information.
13.4 No Solicitation of Employees. If this Agreement shall terminate
----------------------------
without the Closing having occurred, or, if the Closing has occurred, except as
otherwise provided for in Article 9 above, Entravision agrees that neither it
nor any Related Person of Entravision will employ or solicit the employment of
any employee of Sunburst at the Stations or any other employee of Sunburst or
employee of any Related Person of Sunburst for a period of two years from and
after the date hereof.
13.5 Notices. All notices, consents, waivers and other communications
-------
under this Agreement must be in writing and will be deemed to have been duly
given when (i) delivered by hand (with written confirmation of receipt), (ii)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (iii) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and facsimile
numbers set forth below (or to such other addresses and facsimile numbers as a
party may designate by notice to the other parties):
If to Entravision: Entravision Communications Corporation
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a required copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ & Fognani, L.L.P.
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sunburst: Sunburst Media, LP
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇ ▇. ▇▇▇▇▇▇
1350 One Galleria Tower
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a required copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
-40-
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a required copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Great Hill Partners
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
13.6 Further Assurances. The parties agree to furnish upon request to
------------------
each other such further information, execute and deliver to each other such
other documents and to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
13.7 Waiver. The rights and remedies of the parties to this Agreement are
------
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege. To the
maximum extent permitted by applicable law, (i) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party, (ii) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given and (iii) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
13.8 Entire Agreement and Modification. This Agreement supersedes all
---------------------------------
prior agreements between the parties with respect to its subject matter,
including, without limitation, that certain Letter of Intent dated April 10,
2000, and constitutes (along with the recitals hereto, and the exhibits,
Schedules and documents referred to in this Agreement) a complete and exclusive
statement of the terms of the agreement between the parties with respect to its
subject matter. This Agreement may not be amended except by a written agreement
executed by the party to be charged with the amendment.
13.9 Schedules. The Schedules are hereby incorporated by reference into
---------
this Agreement in their entirety. The disclosures in the Schedules must relate
only to the
-41-
representations and warranties in the section of the Agreement to
which they expressly relate and not to any other representation or warranty in
this Agreement. In the event of any inconsistency between the statements in the
body of this Agreement and those in the Schedules (other than an exception
expressly set forth as such in the Schedules with respect to a specifically
identified representation or warranty), the statements in the body of this
Agreement will control.
13.10 Assignment, Successors and No Third-Party Rights. Neither party may
------------------------------------------------
assign any of its rights under this Agreement without the prior consent of the
other parties, which will not be unreasonably withheld or delayed, except that
either party may assign any of its rights under this Agreement to any Related
Person; provided that such assignment will not delay, impede or impair the Final
FCC Consent process as compared to no such assignment having been made. Subject
to the preceding sentence, this Agreement will apply to, be binding in all
respects upon, and inure to the benefit of the successors and permitted assigns
of the parties. Nothing expressed or referred to in this Agreement will be
construed to give any Person other than the parties to this Agreement any legal
or equitable right, remedy or claim under or with respect to this Agreement or
any provision of this Agreement. This Agreement and all of its provisions and
conditions are for the sole and exclusive benefit of the parties to this
Agreement and their successors and permitted assigns.
13.11 Severability. If any provision of this Agreement is held invalid or
------------
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
13.12 Section Headings; Construction. The headings of sections in this
------------------------------
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding section or sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
13.13 Time of Essence. With regard to all dates and time periods set
---------------
forth or referred to in this Agreement, time is of the essence.
13.14 Attorney's Fees. The prevailing party in any Proceeding relating to
---------------
the enforcement or interpretation of this Agreement may recover from the
unsuccessful party all costs, expenses and actual attorney's fees (including
expert witness and other consultants fees and costs) relating to or arising out
of (i) the Proceeding (whether or not the Proceeding proceeds to judgment) and
(ii) any post-judgment or post-award proceeding including, without limitation,
one to enforce or collect any judgment or award resulting from the Proceeding.
All such judgments and awards shall contain a specific provision for the
recovery of all such subsequently incurred costs, expenses and actual attorney's
fees.
-42-
13.15 Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
-------------
UNDER THE LAWS OF THE STATE OF TEXAS WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
13.16 Jurisdiction; Service of Process. Any action or proceeding seeking
--------------------------------
to enforce any provision of, or based on any right arising out of, this
Agreement must be brought against any of the parties in the state or federal
courts located in San Antonio, Texas, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
13.17 Counterparts; Facsimile. This Agreement may be executed in one or
-----------------------
more counterparts, all of which when fully-executed and delivered by all parties
hereto and taken together shall constitute a single agreement, binding against
each of the parties. To the maximum extent permitted by law or by any
applicable governmental authority, any document may be signed and transmitted by
facsimile with the same validity as if it were an ink-signed document. Each
signatory below represents and warrants by his signature that he is duly
authorized (on behalf of the respective entity for which such signatory has
acted) to execute and deliver this instrument and any other document related to
this transaction, thereby fully binding each such respective entity.
[Remainder of Page Intentionally Left Blank]
-43-
IN WITNESS WHEREOF, the parties have executed and delivered this Asset
Purchase Agreement as of the date first written above.
Entravision ENTRAVISION COMMUNICATIONS CORPORATION,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chairman and Chief Executive Officer
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President and Chief Operating
Officer
Sunburst SUNBURST MEDIA, LP,
a Delaware limited partnership
By: Sunburst Media Corporation
Its: Sole General Partner
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
------------------
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
[Signature Page to Asset Purchase Agreement]
EXHIBITS
--------
Exhibit A Noncompetition Agreement
Exhibit B-1 Legal Opinion of Counsel for Sunburst
Exhibit B-2 Legal Opinion of FCC Counsel for Sunburst
The registrant hereby agrees to furnish a copy of any omitted schedule or
exhibit upon request.
