Asset Purchase Agreement (2006)Full Document 

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ASSET PURCHASE AGREEMENT

 

Among

 

ENTRAVISION COMMUNICATIONS CORPORATION

 

ENTRAVISION HOLDINGS, LLC

 

ENTRAVISION-TEXAS LIMITED PARTNERSHIP

 

LIBERMAN BROADCASTING OF DALLAS, INC.

 

AND

 

LIBERMAN BROADCASTING OF DALLAS LICENSE CORP.

 

RELATING TO THE ACQUISITION OF

 

KTCY (FM) (101.7 FM, LICENSED TO AZLE, TX)

 

KZZA (FM) (106.7 FM, LICENSED TO MUENSTER, TX)

 

KZMP (FM) (104.9 FM, LICENSED TO PILOT POINT, TX)

 

KZMP (AM) (1540 AM, LICENSED TO UNIVERSITY PARK, TX)

 

and

 

KBOC (FM) (98.3 FM, LICENSED TO BRIDGEPORT, TX)

 

Dated as of August 2, 2006


TABLE OF CONTENTS

 

         Page

ARTICLE I          DEFINITIONS

   1
        1.1   Definitions    1
        1.2   Knowledge    10
        1.3   Construction    10

ARTICLE II         PURCHASE AND SALE OF ASSETS

   10
        2.1   Assets to Be Conveyed    10
        2.2   Excluded Assets    12

ARTICLE III       PURCHASE PRICE; METHOD OF PAYMENT; ESCROW DEPOSIT

   13
        3.1   Purchase Price    13
        3.2   Liabilities Assumed    14
        3.3   Escrow Deposit    14
        3.4   Remedies    15
        3.5   Allocation    16
        3.6   Post-Closing Prorations and Adjustments    16

ARTICLE IV       REPRESENTATIONS AND WARRANTIES BY SELLER

   18
        4.1   Organization and Standing    18
        4.2   Authorization    18
        4.3   FCC Licenses    18
        4.4   Purchased Assets    21
        4.5   Insurance    22
        4.6   Litigation    22
        4.7   Contracts    22
        4.8   Insolvency    23
        4.9   Reports    23
        4.10   No Defaults    23
        4.11   Reserved    24
        4.12   Environmental Compliance    24
        4.13   Intellectual Property    24
        4.14   Brokers    25

 

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TABLE OF CONTENTS

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          Page

        4.15    Reserved    26
        4.16    Employees and Employee Benefits.    26
        4.17    Taxes.    26
        4.18    No Interference with Signal.    26
        4.19    Financial Statements.    26
        4.20    Affiliate Transactions    27
        4.21    Principal Advertisers    27

ARTICLE V         REPRESENTATIONS AND WARRANTIES BY BUYER

   27
        5.1    Organization and Standing    27
        5.2    No Defaults    27
        5.3    Authorization    28
        5.4    Brokers    28
        5.5    Qualification as a Broadcast Licensee    28
        5.6    Litigation    28
        5.7    Approvals and Consents    29
        5.8    Financing    29

ARTICLE VI       COVENANTS

   29
        6.1    Affirmative Covenants of Seller    29
        6.2    Negative Covenants of Seller    32
        6.3    Consents and Filings; Matters Related to Title Policies    33
        6.4    KBOC Upgrade    35
        6.5    COBRA Continuation Coverage.    35
        6.6    Confidentiality    35
        6.7    Corporate Name    36
        6.8    Seller Access    36
        6.9    LMA    36

ARTICLE VII     ADDITIONAL AGREEMENTS

   37
        7.1    Application for Commission Consent    37
        7.2    Mutual Right to Terminate    37
        7.3    Buyer’s Right to Terminate    38

 

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TABLE OF CONTENTS

(continued)

 

          Page

        7.4    Seller’s Right to Terminate    38
        7.5    Effect of Termination    38
        7.6    Risk of Loss    39
        7.7    Transfer Taxes; FCC Filing Fees; HSRA Filing Fees; Expenses.    40
        7.8    Invoices    41
        7.9    Non-Compete; Non-Solicitation; Confidentiality    41
        7.10    Environmental Assessment    42
        7.11    Potential Additional Post-Closing Transactions    43

ARTICLE VIII    CLOSING CONDITIONS

   44
        8.1    Conditions Precedent to Buyer’s Obligations    44
        8.2    Conditions Precedent to Seller’s Obligations    46

ARTICLE IX       ITEMS TO BE DELIVERED AT THE CLOSING

   47
        9.1    Seller’s Performance at Closing    47
        9.2    Buyer’s Performance at Closing    49

ARTICLE X         INDEMNIFICATION

   50
        10.1    Indemnification by Seller    50
        10.2    Indemnification by Buyer    51
        10.3    Third-Party Claims    52
        10.4    Survival of Representations and Warranties    53
        10.5    Limitations    53
        10.6    Exclusivity    54
        10.7    Subrogation    54

ARTICLE XI       MISCELLANEOUS PROVISIONS

   55
        11.1    Notices    55
        11.2    Benefit and Assignment    56
        11.3    Public Announcements    56
        11.4    Other Documents    56
        11.5    Appendices    57
        11.6    Attorneys’ Fees    57
        11.7    Governing Law    57

 

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TABLE OF CONTENTS

(continued)

 

          Page

        11.8    Arbitration    57
        11.9    Counterparts    59
        11.10    Headings    59
        11.11    Entire Agreement    59
        11.12    Personal Liability    59
        11.13    Post-Closing Cooperation With Respect to Financial Statements    59

 

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TABLE OF CONTENTS

(continued)

 

APPENDIXES, SCHEDULES AND EXHIBITS

 

APPENDIX 1   Matters Related to Section 7.11.2
SCHEDULE I   Identification of Contracts to be Assumed
SCHEDULE II   Owned Real Property/Leasehold Interests
SCHEDULE III   List of all Permits and FCC Licenses
SCHEDULE IV   List of Required Consents
SCHEDULE V   Identification of Principal Items of Tangible Personal Property
SCHEDULE VI   Insurance Coverage Maintained by Seller on the Purchased Assets
SCHEDULE VII   Environmental Compliance
SCHEDULE VIII   Estimated Prorations and Adjustments
SCHEDULE IX   Identification of Intellectual Property
SCHEDULE X   Principal Advertisers
SCHEDULE XI   Information to be Provided to Buyer
SCHEDULE XII   Maximum Permissible Outage Periods
EXHIBIT A   Legal Opinion of Seller’s Counsel
EXHIBIT B   Legal Opinion of Seller’s FCC Counsel
EXHIBIT C   Legal Opinion of Buyer’s Counsel
EXHIBIT D   Form of Estoppels and Consents
EXHIBIT E   Form of Escrow Agreement

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT is made and entered into this 2nd day of August, 2006 (the “Execution Date”), by and among Entravision Communications Corporation, a Delaware corporation (“ECC”), Entravision-Texas Limited Partnership, a Texas limited partnership (“ECC LP”) and Entravision Holdings, LLC, a California limited liability company (“Holdings”), on the one hand, and Liberman Broadcasting of Dallas, Inc., a California corporation (“LBI”); and Liberman Broadcasting of Dallas License Corp., a California corporation (“LBI Sub”), on the other. ECC, ECC LP and Holdings are referred to collectively as “Seller” and LBI and LBI Sub are referred to collectively as “Buyer.”

W I T N E S S E T H:

WHEREAS, Seller owns certain assets used or held for use principally in connection with the operation of the following radio broadcast stations and their related auxiliary facilities, if any (each a “Station” and, collectively, the “Stations”):

KTCY (FM) (101.7 FM, licensed to Azle, TX)

KZZA (FM) (106.7 FM, licensed to Muenster, TX)

KZMP (FM) (104.9 FM, licensed to Pilot Point, TX)

KZMP (AM) (1540 AM, licensed to University Park, TX)

KBOC (FM) (98.3 FM, licensed to Bridgeport, TX)

WHEREAS, Seller desires to sell and assign to Buyer the Stations, the businesses of the Stations, and their respective related assets, and the licenses, permits and other authorizations issued by the Federal Communications Commission (the “FCC” or “Commission”) for or in connection with the operation of the Stations, including any and all pending applications therefor (together with any renewals, extensions, additions or modifications thereof, the “FCC Licenses”);

WHEREAS, LBI Sub desires to acquire the FCC Licenses, and LBI desires to acquire from Seller all the other assets owned by the Seller used or held for use principally for the Stations and the businesses related thereto; and

WHEREAS, the FCC Licenses may not be assigned to LBI Sub without the prior written consent of the Commission.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein contained, the Parties, intending to be legally bound, agree as follows:

ARTICLE I

DEFINITIONS

1.1 Definitions. Unless otherwise stated in this Agreement, the following terms shall have the following meanings:

ABC Tower Lease” means that certain Tower Lease Agreement dated as of November 6, 1998, by and between Entravision Broadcasting Corporation (as successor in interest to First Broadcasting Towers, L.P.) and ABC, Inc., which lease has not been amended or modified.


Affiliate” means a Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, a specified Person.

Agreement” means this Multiple Station Asset Purchase Agreement, and references to “Articles,” “Sections,” “Schedules” and “Exhibits” are to the Articles and Sections of this Agreement and to the Schedules and Exhibits attached hereto.

Assignment Application” means the application which Seller and Buyer will join in and file with the Commission requesting its written consent to the assignment of the FCC Licenses from Seller to LBI Sub.

Assumed Contracts” means only (i) those Contracts listed on Schedule I and (ii) any other Contract, including any such Contracts existing as of the Execution Date or entered into by Seller between the Execution Date and the Closing Date, in each case, which LBI specifically agrees in writing to assume in connection with this Agreement in its sole discretion.

Assumed Liabilities” has the meaning set forth in Section 3.2.

Auxiliary Studio Lease” means that certain Lease Agreement, dated as of December 1, 2001, by and between Terry J. Hilliard (d/b/a T&R Rent Properties) and Seller (as successor-in-interest under the agreement to KTCY Licensing, Inc.), which lease has not been amended or modified.

Basket Amount” has the meaning set forth in Section 10.5.1.

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