EXHIBIT 2.2
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AGREEMENT AND PLAN OF MERGER
by and among
Entravision Communications Company, L.L.C., LCG Acquisition Corporation,
Latin Communications Group Inc. and Certain of its Representatives
dated
December 21, 1999
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AGREEMENT AND PLAN OF MERGER
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This Agreement and Plan of Merger (the "Agreement") is entered into this
21st of December, 1999 by and among Entravision Communications Company, L.L.C.,
a Delaware limited liability company ("Entravision"), and LCG Acquisition
Corporation, a Delaware corporation ("Acquisition Co."), on the one hand, and
Latin Communications Group Inc., a Delaware corporation ("LCG"), and the LCG
Representatives (as defined below), on the other hand, with respect to the
following facts:
WHEREAS, Entravision is a duly formed Delaware limited liability company
engaged in the ownership and operation of television and radio stations.
WHEREAS, Acquisition Co. is a duly incorporated Delaware corporation formed
by Entravision for the purpose of effecting the Merger (as defined below)
contemplated by this Agreement, with authorized capital stock consisting of
1,000 shares of Common Stock, $0.001 par value per share, of which 1,000 shares
are duly and validly issued and outstanding, and all of which shares are held by
Entravision as of the date hereof.
WHEREAS, LCG is a duly incorporated Delaware corporation that owns and
operates (i) the radio stations (the "Radio Stations") listed on Schedule "A"
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attached hereto and incorporated herein by this reference and (ii) the newspaper
and other publication (the "Newspapers") listed on Schedule "A," with authorized
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capital stock consisting of fifteen million (15,000,000) shares of Common Stock,
$0.01 par value per share, of which 9,235,468 shares are duly authorized, issued
and outstanding (the "Shares"), and all of which are held of record by the
individuals and entities set forth on Schedule "B" attached hereto and
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incorporated herein by this reference (the "Stockholders"), as of the date
hereof.
WHEREAS, the managing members of Entravision, the stockholders of
Acquisition Co. and the respective Boards of Directors of Acquisition Co. and
LCG have approved and declared the advisability of the acquisition of the Shares
by Acquisition Co. via merger (the "Merger") of Acquisition Co. with and into
LCG pursuant to applicable Delaware law and the terms and conditions of this
Agreement.
WHEREAS, promptly following the execution and delivery of this Agreement
(and in no event later than January 6, 2000), LCG will notice a meeting of its
Stockholders (the "Meeting") to vote on the Merger and this Agreement and,
subject to Section 6.13 below, the Board of Directors of LCG will recommend that
such Stockholders vote in favor of the Merger and this Agreement.
WHEREAS, as of the date hereof, Stockholders holding Shares representing
over fifty percent (50%) of the issued and outstanding Shares entitled to vote
at the Meeting have entered into Voting Agreements, in the form attached hereto
as Exhibit "A" and incorporated herein by this reference (the "Voting
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Agreements"), agreeing to vote in favor of the Merger.
WHEREAS, the parties hereto desire to make certain representations,
warranties and agreements in connection with the Merger 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 "Applicable Contract" means any Contract (as defined below) under
which LCG or any of the LCG Subsidiaries (as defined below) is a party or by
which LCG or any of the LCG Subsidiaries is bound which: (i) provides for future
payments thereunder of more than $250,000 in a twelve (12) month period; (ii)
restricts the kinds of business in which LCG or any of the LCG Subsidiaries may
engage or the geographical area in which any of them may conduct their business;
(iii) is an indenture, mortgage, loan agreement or other Contract for the
borrowing of money or a line of credit; (iv) is a collective bargaining
agreement or union Contract; (v) is a material license (whether as licensor or
licensee) or similar agreement permitting the use of any Intellectual Property
Assets (as defined below); (vi) is a brokerage or finder's agreement; (vii) is a
joint venture, partnership or similar agreement; (viii) is a stock purchase
agreement, asset purchase agreement or other acquisition or divestiture
agreement which has not been fully performed; (ix) is an employment, consulting,
severance termination or management agreement (either written or, if oral,
providing for over $250,000 in payments annually); (x) is with any director,
officer, employee or stockholder of LCG or any Related Person (as defined
below); (xi) is a Real Property Lease (as defined below); or (xii) is not of the
foregoing type and is material to the business or financial condition of LCG and
the LCG Subsidiaries, taken as a whole.
1.2 "Breach" means a breach of a representation, warranty, covenant,
obligation or other provision of this Agreement or any instrument delivered
pursuant to this Agreement and will be deemed to have occurred if there is or
has been any inaccuracy in or breach of, or any failure to perform or comply
with, such representation, warranty, covenant, obligation or other provision.
1.3 "Cash on Hand" means the aggregate amount of any cash and cash
equivalents on hand at LCG or any of the LCG Subsidiaries (including the amount
of any uncashed checks payable to LCG or any of the LCG Subsidiaries) or in bank
accounts or lockboxes of LCG or any of the LCG Subsidiaries as of 11:59 p.m. New
York City time on the day immediately preceding the Closing Date (as defined
below).
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1.4 "Certificate of Merger" means the Certificate of Merger to be filed
with the Delaware Secretary of State to perfect the Merger, substantially in the
form attached hereto as Exhibit "B" and incorporated herein by this reference.
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1.5 "Closing Date" means the date and time as of which the Closing (as
defined below) actually takes place.
1.6 "Commercially Reasonable Efforts" means the efforts that a prudent
business Person (as defined below) desirous of achieving a result would use in
similar circumstances to achieve promptly such result; provided, however, that
"Commercially Reasonable Efforts" shall not require the expenditure of funds,
except for any filing fees for third-party consents or approvals to be paid by
any party as contemplated by this Agreement.
1.7 "Consent" means any approval, consent, ratification, waiver or other
authorization (including the FCC Consent, the consent required under the HSR Act
(as defined below) and any other necessary Governmental Authorization, each as
defined below).
1.8 "Contemplated Transactions" means all of the transactions contemplated
by this Agreement, including, without limitation, the Merger and the performance
by the parties hereto 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 "Delaware Code" means the Delaware General Corporation Law, as
amended.
1.11 "Escrows and Deposits" means the aggregate outstanding amount as of
the Closing Date of (i) the escrow deposit made by Portland Radio, Inc. pursuant
to that certain Purchase and Sale Agreement dated June 30, 1999 by and between
Portland Radio, Inc. and the Port of Portland (the "Portland Land Sale") and
(ii) the notes receivable in the aggregate amount of $358,500 in favor of EMI
Sacramento Radio, Inc. (the "Xxxx Notes") pursuant to that certain Asset
Purchase Agreement dated April 8, 1999 by and between EMI Sacramento, Inc. and
Xxx Xxxx d/b/a Xxxx Broadcasting, as amended (the "Xxxx Asset Purchase
Agreement").
1.12 "Employee Benefit Plan" means any material "employee benefit plan" as
defined in Section 3(3) of ERISA (as defined below) of LCG or the LCG
Subsidiaries and any other material plan, policy, program, practice or
arrangement providing compensation or other benefits to any current or former
officer or employee of LCG or the LCG Subsidiaries or any beneficiary or
dependent thereof that is maintained by LCG or the LCG Subsidiaries.
1.13 "Encumbrances" means any and all encumbrances, charges, claims,
penalties, community property interests, conditions, equitable interests, liens,
options, pledges, security interests or rights of first refusal, other than
Permitted Encumbrances (as defined below).
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1.14 "Environmental Law(s)" means all federal, state and local laws,
statutes, common law duties, rules, regulations, ordinances and codes, together
with all administrative orders, directives, 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, in each case, as amended and in effect on the date
hereof.
1.15 "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.
1.16 "FCC" means the Federal Communications Commission, or any successor
agency.
1.17 "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 by the FCC on its own motion is pending and (ii)
the time for filing any such request, appeal, petition or application or for
reconsideration by the FCC on its own motion, has expired.
1.18 "Financial Statements" means (i) the audited balance sheets of LCG as
of December 31, 1998, and the related statements of income and cash flows for
the period then ended (including notes thereto), as compiled by Ernst & Young
LLP, certified public accountants, and the unaudited balance sheets of LCG as of
October 31, 1999, and the related statements of income and cash flows for the
period then ended.
1.19 "GAAP" means generally accepted accounting principles.
1.20 "Governmental Authorization" means any approval, consent, license,
permit, waiver or other authorization issued, granted, given or otherwise made
available by or under the authority of the FCC, any Governmental Body or
pursuant to any Legal Requirement, each as defined below.
1.21 "Governmental Body" means (i) any nation or state, (ii) any federal,
state or foreign government, (iii) any federal, state or foreign governmental or
quasi-governmental authority of any nature (including any federal, state or
foreign governmental agency, branch, department or entity and any court or other
tribunal of such entity), (iv) any federal, state or foreign body exercising, or
entitled to exercise, any administrative, executive, judicial, legislative,
regulatory or taxing authority or (v) the FCC.
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1.22 "Hazardous Substance(s)" means (i) any substance, the presence of
which requires investigation or remediation under any Environmental Law, (ii)
any dangerous, toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise hazardous substance which is regulated by
any Environmental Law and (iii) radon, ureaformaldehyde, polychlorinated
biphenyls, asbestos or asbestos-containing materials, petroleum and petroleum
products.
1.23 "HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act
of 1976, as amended.
1.24 "Income Tax(es)" means any net income Tax (as defined below), any
franchise Tax based on net income or any Tax measured by or calculated with
respect to net income or net receipts, proceeds of profits or based upon or
measured by or calculated with respect to multiple bases (including, without
limitation, corporate franchise or occupation taxes) if such Tax may be based
upon, measured by, or calculated with respect to one or more of the bases
described above.
1.25 "IRC" means the Internal Revenue Code of 1986, as amended, or any
successor law, and the rules and regulations issued by the IRS (as defined
below) pursuant to the IRC or any successor law.
1.26 "IRS" means the United States Internal Revenue Service, or any
successor agency, and, to the extent relevant, the United States Department of
the Treasury.
1.27 "Knowledge" of LCG means the actual knowledge of any of Xxxxxx X.
Xxxxx, Xxxxxx Xxxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx or Xxxxxxx Xxxxxx
after a reasonable inquiry.
1.28 "LCG Material Adverse Effect" means one or more events, occurrences,
facts, conditions, changes or effects which cumulatively have a material adverse
effect on the assets, liabilities or properties of LCG and the LCG Subsidiaries
collectively, excluding matters affecting the broadcasting or print industries
generally and excluding general economic conditions.
1.29 "Legal Requirement" means any FCC, federal, state or foreign
administrative order, law, regulation or statute.
1.30 "Liabilities" means, as to any Person, all liabilities, debts and
obligations to pay money, direct, indirect, absolute, contingent or otherwise,
of such Person, whether accrued, vested or otherwise, whether in Contract, tort,
strict liability or otherwise and whether or not actually reflected, or required
by the federal income tax method of accounting to be reflected, in such Person's
balance sheets or other books and records.
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1.31 "Material Adverse Effect" means one or more events, occurrences,
facts, conditions, changes or effects which cumulatively have a material adverse
effect on the assets, liabilities or properties of any entity, its ultimate
parent and their respective Subsidiaries (as defined below) collectively,
excluding matters affecting the broadcasting or print industries generally and
excluding general economic conditions.
1.32 "Order" means any award, decision, injunction, judgment, order, ruling
or verdict entered, issued, made or rendered by any court, administrative agency
or other Governmental Body.
1.33 "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 articles of organization or certificate of formation and
the 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 or (vi) any amendment to any of the foregoing.
1.34 "Other Tax(es)" means any Tax that is not an Income Tax.
1.35 "Permitted Encumbrances" means Encumbrances (i) set forth on Schedule
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4.9, (ii) liens for Taxes, assessments and other governmental charges not yet
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due and payable or being contested in good faith by appropriate proceedings and
(iii) Encumbrances created by FCC licenses or other Governmental Authorizations.
1.36 "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.
1.37 "Proceeding" means any action, litigation, formal arbitration, formal
mediation, bankruptcy or suit (whether civil, criminal or administrative)
commenced, brought, conducted or heard by or before, or otherwise involving, any
Governmental Body or arbitrator.
1.38 "Real Property" means all of the land, buildings, plants, facilities,
installations, fixtures and other structures and improvements owned by LCG.
1.39 "Real Property Leases" shall mean, collectively, any written real
property leases to which LCG or any of the LCG Subsidiaries is a party.
1.40 "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.
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1.41 "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.
1.42 "Schedules" means the schedules attached hereto and incorporated
herein by this reference relating to the representations and warranties of the
parties hereto.
1.43 "Securities Act" means the Securities Act of 1933, as amended, or any
successor law, and the rules and regulations issued pursuant to that act or any
successor law.
1.44 "Subsidiary(ies)" means any corporation, limited liability company or
other entity with respect to which a specified Person (or a Subsidiary thereof)
owns a majority of the Common Stock or other equity ownership interest or has
the power to vote or direct the voting of sufficient securities to elect a
majority of the directors or managers.
1.45 "Surviving Corporation" means LCG as the surviving corporation
following the Merger.
1.46 "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, including any such Taxes imposed by reason of such entity being or
having been a member of a consolidated, combined or unitary group.
1.47 "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.
"Income Tax Returns" and "Other Tax Returns" shall have correlative meanings.
1.48 "Threatened" means a claim, Proceeding, dispute or other matter will
be deemed to have been "Threatened" if any demand or statement has been made in
writing or any notice has been given in writing.
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ARTICLE 2.
MERGER
2.1 Merger. Subject to the terms and conditions hereof, the Merger shall
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be consummated in accordance with the Delaware Code. Effective as of Closing,
subject to the terms and conditions of this Agreement and in accordance with the
applicable laws of the State of Delaware, Acquisition Co. shall be merged with
and into LCG, which shall be the Surviving Corporation.
2.2 Execution of Certificate of Merger. At the Closing, LCG shall execute
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the Certificate of Merger, and counsel for Entravision shall cause the
Certificate of Merger to be delivered to the Delaware Secretary of State for
filing.
2.3 Effect of the Merger. The Merger shall have the effects set forth in
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Section 259 of the Delaware Code.
2.4 Certificate of Incorporation; Bylaws. Except as otherwise provided
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herein, following the effectiveness of the Merger, the Certificate of
Incorporation of LCG, as amended by the Certificate of Merger, shall be the
Certificate of Incorporation of the Surviving Corporation and the Bylaws of
Acquisition Co. shall be the Bylaws of the Surviving Corporation.
2.5 Directors. The directors of Acquisition Co. as of the Closing Date
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shall be the directors of the Surviving Corporation and the existing directors
of LCG shall resign effective as of the Closing Date.
2.6 Officers. The officers of the Surviving Corporation as of the Closing
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Date shall be as follows, and the existing officers of LCG shall resign
effective as of the Closing Date:
Name Title
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Xxxxxx X. Xxxxx Chairman and Chief Executive Officer
Xxxxxx X. Xxxxxxxxx President and Chief Operating Officer
Xxxxxxxx X. Xxxxx Chief Financial Officer and Treasurer
Xxxx X. Xxxxxx Secretary
2.7 Conversion of Shares. On the Closing Date, by virtue of the Merger
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and without any action on the part of any party:
(a) each share of Common Stock, $0.001 par value per share, of
Acquisition Co. issued and outstanding immediately prior to the Closing Date
shall remain outstanding and shall represent one share of Common Stock, $0.0001
par value per share, of the Surviving
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Corporation, so that from and after the Closing Date, Entravision shall be the
holder of all of the issued and outstanding shares of the Common Stock of the
Surviving Corporation;
(b) each of the Shares (except for Dissenting Shares (as defined in
Section 2.10(a) below), if any) shall be converted into the right to receive
only the Adjusted Merger Consideration (as defined in Section 2.8(a) below)
divided by the total number of Shares (the "Per Share Merger Consideration"),
and the pro rata portion of any Escrow Payment (as defined in Section 2.9(e)
below), each without interest, and shall otherwise cease to be outstanding,
shall be cancelled and retired and cease to exist.
2.8 Aggregate Merger Consideration.
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(a) The aggregate consideration to be paid in the Merger for the
Outstanding Shares (the "Aggregate Merger Consideration") shall be an amount in
cash equal to Two Hundred Thirty-Five Million Dollars ($235,000,000) plus Cash
on Hand plus any amounts paid pursuant to Section 2.8(b), 2.8(c) or 2.8(d)
below, less the sum of (i) the Indebtedness Payment plus (ii) the 1997 Debenture
Payment plus (iii) the 1998 Debenture Payment plus (iv) the Option Payments plus
(v) the LCG Transaction Expenses (each of the foregoing terms as defined in
Section 2.8(e) below). The "Adjusted Merger Consideration" shall be an amount
equal to the Aggregate Merger Consideration less the Escrow Payment.
(b) Notwithstanding the foregoing, the amount of the Aggregate Merger
Consideration shall be subject to the following terms and conditions:
(i) If, prior to the Closing, LCG or the LCG Subsidiaries have
consummated the transactions contemplated by that certain Asset Purchase
Agreement - KVBC-FM and KRNV-FM dated November 21, 1999 by and among EXCL
Communications, Inc., Sunbelt Communications Company, Sierra Radio Company and
Radio News Company (the "Nevada Asset Acquisition"), the Aggregate Merger
Consideration shall be increased by Fourteen Million Two Hundred Fifty Thousand
Dollars ($14,250,000), less any amounts paid pursuant to clause (v) of this
Section 2.8(b).
(ii) If, prior to the Closing, LCG or the LCG Subsidiaries have
consummated the transactions contemplated by that certain Stock Purchase
Agreement dated November 21, 1999 by and among EXCL Communications, Inc.,
Xxxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx Cell and Xxxxx X. Xxxxxx (the "Nevada Stock
Acquisition" and collectively with the Nevada Asset Acquisition, the "Nevada
Acquisitions"), the Aggregate Merger Consideration shall be increased by Three
Million Two Hundred Fifty Thousand Dollars ($3,250,000).
(iii) If, prior to the Closing, the transactions contemplated by
the Nevada Acquisitions have not been consummated and the aggregate amount which
has been deposited by LCG or any LCG Subsidiary as an xxxxxxx money deposit
pursuant to the Nevada
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Acquisitions has not been returned to LCG or any LCG Subsidiary, the Aggregate
Merger Consideration shall be increased by such amount.
(iv) The Aggregate Merger Consideration shall be increased by
(a) the actual aggregate amount of out-of-pocket costs and expenses incurred by
LCG or any LCG Subsidiary in connection with the Nevada Acquisitions and (b) the
actual direct operating losses incurred by LCG or any LCG Subsidiary in
connection with its ownership and operation of the facilities subject to the
Nevada Acquisitions, up to a maximum of Five Hundred Thousand Dollars ($500,000)
for clauses (a) and (b) above combined.
(v) If the transactions contemplated by the Nevada Acquisitions
are being consummated prior to the Closing, Entravision shall pay to LCG or any
LCG Subsidiary, immediately prior to the closing of the Nevada Acquisitions,
Seven Million Five Hundred Thousand Dollars ($7,500,000) to be used by LCG or
any LCG Subsidiary to partially pay the consideration for the Nevada
Acquisitions, in exchange for a forty-two and eighty-six one hundredths percent
(42.86%) ownership interest in a single-purpose entity formed for purposes of
the Nevada Acquisitions. If the Closing of the Contemplated Transactions does
not occur, LCG would be obligated to repurchase Entravision's interest in such
single-purpose entity for the amount paid plus interest thereon at a rate of
LIBOR plus two and seventy-five hundredths percent (2.75%) per annum. If LCG
failed to fulfill this obligation, then Entravision will have the right to
purchase the interest of LCG and the LCG Subsidiaries in the Nevada Acquisitions
on the same basis.
(vi) If, prior to the Closing, LCG or the LCG Subsidiaries have
consummated the transactions contemplated by the Nevada Acquisitions, the
Aggregate Merger Consideration shall be increased by the aggregate amount of
interest actually incurred by LCG for borrowed money used by LCG or any LCG
Subsidiary as partial consideration for the Nevada Acquisitions.
(c) Notwithstanding the foregoing, the amount of the Aggregate Merger
Consideration shall be increased by the aggregate amount paid prior to the
Closing Date by LCG and the LCG Subsidiaries in connection with the build-out of
the property leased by EXCL Communications, Inc. at 000 Xxxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxxx, Xxxxxxxxxx (the "Campbell Build-Out Amount"), which amount
shall not exceed, in the aggregate, $1,699,773.30; provided, however, that the
parties acknowledge and agree that LCG and the LCG Subsidiaries have expended
$500,414.30 toward the Xxxxxxxx build-out as of the date hereof, and that such
sum will not be included within the Xxxxxxxx Build-Out Amount. Accordingly, the
parties acknowledge and agree that Entravision's reimbursement obligation to LCG
for the Xxxxxxxx Build-Out shall in no event exceed $1,199,359.00. LCG shall
deliver to Entravision, no later than the close of business on the business day
immediately preceding the Closing Date, a certificate setting forth the Xxxxxxxx
Build-Out Amount.
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(d) Notwithstanding the foregoing, the amount of the Aggregate Merger
Consideration shall be increased by the aggregate amounts of any Escrows and
Deposits which are returned to LCG after the Closing. Upon receipt of any such
amounts, Entravision and the Surviving Corporation shall promptly pay any
amounts so received to the LCG Representatives' respective Custodial Accounts
for distribution to each LCG Representatives' respective Stockholders and Option
Holders; provided, however, that the parties acknowledge and agree that on April
1, 2002, Entravision or the Surviving Corporation shall purchase the outstanding
balance of principal and interest owing on the Xxxx Notes for their then-present
value, to be calculated by mutual agreement of the parties. The LCG
Representatives shall distribute such amounts to the Stockholders and Option
Holders pursuant to Section 2.8(g) below.
(e) For purposes of this Agreement, the following terms shall have
the following meanings:
(i) "Indebtedness Payment" means an amount equal to, as of the
close of business on the Closing Date, the then outstanding principal of,
accrued and unpaid interest on, any prepayment penalties or premiums on, and any
other amounts payable with respect to, all indebtedness of LCG under that
certain Credit Agreement (the "Credit Agreement") dated October 22, 1999 by and
among Latin Communications Inc., a Delaware corporation and LCG Subsidiary,
Suntrust Bank, Central Florida, N.A. (the "Bank") and certain lenders, but not
including any undrawn amounts under outstanding letters of credit.
(ii) "1997 Debenture Payment" means an amount equal to, as of
the close of business on the Closing Date, the then outstanding principal of,
accrued and unpaid interest on, any penalties or premiums on, and any other
amounts payable with respect to, all indebtedness of LCG evidenced by the
debentures (the "1997 Debentures") issued pursuant to that certain Securities
Purchase Agreement dated as of February 28, 1997, as amended through the date
hereof, by and between LCG and the purchasers party thereto.
(iii) "1998 Debenture Payment" means an amount equal to, as of
the close of business on the Closing Date, the then outstanding principal of,
accrued and unpaid interest on, any penalties or premiums on, and any other
amounts payable with respect to, all indebtedness of LCG evidenced by the
debentures (the "1998 Debentures") issued pursuant to that certain Securities
Purchase Agreement dated as of February 4, 1998, as amended through the date
hereof, by and between LCG and the purchasers party thereto, as amended.
(iv) "Option Payments" means the aggregate amount equal to (1)
(i) the product of (x) the number of shares of Common Stock that would be
issuable upon exercise of Options (as defined in Section 4.5 below) outstanding
on the Closing Date if all such Options were exercisable in full on such date,
multiplied by (y) the Per Share Merger Consideration, minus (ii) the aggregate
exercise price to be paid upon exercise of all Options that would be paid if all
such Options where exercised in full on such date and (2) the product of (x) the
number of Stock Appreciation Rights (as defined in Section 4.5 below)
outstanding on the Closing Date
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multiplied by (y) the excess of the Per Share Merger Consideration over Fifteen
Dollars ($15.00). No option payments shall be made with respect to any Option
which has an exercise price equal to or greater than the Per Share Merger
Consideration ("Out of the Money Options").
(v) "LCG Transaction Expenses" means the aggregate amount of
transaction expenses and fees incurred by LCG and its agents, representatives,
counsel and accountants solely in connection with the Contemplated Transactions,
including, without limitation, the fees payable to Shamrock Capital Advisors,
Inc. ("Shamrock") pursuant to that certain Letter Agreement dated December 17,
1999 by and between LCG and Shamrock.
(f) Each holder of a Certificate (as defined in Section 2.8(g) below)
which immediately prior to the Closing Date represented Shares will be entitled
to receive, upon surrender to its appointed LCG Representative of such
Certificate for cancellation, and in accordance with the terms of this
Agreement, cash in an amount equal to the product of the number of Shares
previously represented by such Certificate multiplied by the Per Share Merger
Consideration less an amount necessary to satisfy existing and future expenses
of the LCG Representatives pursuant to Section 12.2 or Section 12.5(a) below.
All payments to holders of Certificates shall be subject to any required
withholding of taxes. No interest shall accrue or be paid on the cash payable
upon the surrender of Certificates. Neither the LCG Representatives nor any
party hereto shall be liable to a holder of Shares for any cash or interest
thereon delivered to a public official pursuant to any applicable abandoned
property, escheat or similar laws.
(g) At the Closing, Entravision shall pay to the LCG Representatives
the Adjusted Merger Consideration as follows: (i) Latin Investors (as defined
below) shall receive, by wire transfer of immediately available funds to an
account designated by Latin Investors (the "Latin Investors Custodial Account"),
cash in an amount equal to Latin Investors' allocable portion of the Adjusted
Merger Consideration (calculated pursuant to Section 2.7(b) above); (ii) the
Trefoil Designee (as defined below) shall receive, by wire transfer of
immediately available funds to an account or accounts designated by the Trefoil
Designee (collectively, the "Trefoil Custodial Accounts"), cash in an amount
equal to the Trefoil Entities' (as defined below) allocable portion of the
Adjusted Merger Consideration (calculated pursuant to Section 2.7(b) above); and
(iii) the Other Holders Designee (as defined below) shall receive, by wire
transfer of immediately available funds to an account designated by the Other
Holders Designee (the "Other Holders Custodial Account," and together with the
Latin Investors Custodial Account and the Trefoil Custodial Accounts, the
"Custodial Accounts"), cash in an amount equal to the Other Stockholders' (as
defined below) allocable portion of the Adjusted Merger Consideration
(calculated pursuant to Section 2.7(b) above). Each LCG Representative shall
pay to each of the Stockholders it has been appointed to represent, if any, such
Stockholder's allocable portion of the Adjusted Merger Consideration in
accordance with Section 2.7(b) above upon receipt by such LCG Representative of
the stock certificate(s) (a "Certificate(s)"), which immediately prior to the
Closing Date represented the number of Shares held by such Stockholder, and a
completed and duly executed Letter of Transmittal (a "Letter of Transmittal").
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(h) Within three (3) business days after the Closing Date, the
Surviving Corporation shall mail a Letter of Transmittal to all holders of
Certificates which were not previously surrendered to the LCG Representatives,
to be completed by such holder and delivered to the holder's appointed LCG
Representative together with such holder's Certificates. The LCG Representatives
shall be (i) Latin Investors Limited Partnership, a Delaware limited partnership
("Latin Investors"), (ii) Xxxxxxx X. Xxxxx (the "Trefoil Designee"), who shall
be the representative of Trefoil Latin Investors, L.P., a Delaware limited
partnership, Trefoil Latin II, L.L.C., a Delaware limited liability company, and
Shamrock Holdings of California, Inc., a California corporation (collectively,
the "Trefoil Entities"), and (iii) Xxxxxx X. Xxxxxx (the "Other Holders
Designee"), who shall be the representative of all Stockholders except for Latin
Investors and the Trefoil Entities (the "Other Stockholders") and Option Holders
(as defined below) (collectively, with the Other Stockholders, the "Other
Holders"). The LCG Representatives will, promptly upon receipt thereof, deliver
surrendered Certificates and Letters of Transmittal received by them to the
Surviving Corporation, and on the second (2nd) anniversary of the Closing Date,
return to the Surviving Corporation any portion of the Adjusted Merger
Consideration remaining to be paid to holders who have not yet surrendered their
Certificates and Letters of Transmittal and any other funds in the Custodial
Accounts which are to be distributed to Stockholders and holders of Options and
Stock Appreciation Rights on the Closing Date (each, an "Option Holder," and
collectively, the "Option Holders"). Any Stockholders and Option Holders will
thereafter be entitled to look only to the Surviving Corporation for payment of
their claim for the consideration set forth in this Section 2.8, without
interest thereon, but will have no greater rights against the Surviving
Corporation than may be accorded to general creditors thereof under applicable
law.
(i) Any distributions to be made from the Custodial Accounts of
amounts deposited therein after the Closing Date from the Escrow Account (as
defined in Section 2.9(e) below) or pursuant to the disbursement of an Escrow or
Deposit or pursuant to an indemnification claim in accordance with Article 11
below for which any amounts have been deposited in the Custodial Accounts
("Subsequent Distributions") shall be made by the LCG Representatives to the
Stockholders (other than with respect to Dissenting Shares) and the Option
Holders, after deduction of costs, expenses and holdbacks as described in
Sections 12.2 and 12.5 below, as follows: (i) Latin Investors shall disburse to
Latin Investors its allocable share of such distribution, (ii) the Trefoil
Designee shall disburse to each Trefoil Entity its allocable share of such
distribution and (iii) the Other Holders Designee shall disburse to each of the
Other Holders such Other Holder's allocable share of such distribution. The
amount to be distributed to each Stockholder and Option Holder shall be equal to
the product of (i) the number of Pro Forma Outstanding Shares (as defined below)
(other than Dissenting Shares) held by such holder and (ii) the amount equal to
(A) the applicable Subsequent Distribution divided by (B) the total number of
Pro Forma Outstanding Shares (other than Dissenting Shares). "Pro Forma
Outstanding Shares" means, as of the Closing Date, the number of Shares as of
such time plus the number of shares of Common Stock of LCG that would be
outstanding assuming all Options were exercised for cash pursuant to the terms
of the applicable option agreement (each, an "Option Agreement," and
collectively, the "Option Agreements") plus the number of Stock
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Appreciation Rights. No Option Holder shall receive a Subsequent Distribution
with respect to an Option held immediately prior to the Closing Date unless the
sum of (x) the Per Share Merger Consideration plus (y) the per Pro Forma
Outstanding Share amount of the Subsequent Distribution (calculated pursuant to
the preceding two sentences) exceeds the exercise price of such Option.
(j) LCG shall deliver to Entravision, no later than the close of
business on the business day immediately preceding the Closing Date, a
certificate setting forth (i) the Per Share Merger Consideration, (ii) the
portion of the Adjusted Merger Consideration to be delivered to each of the
Latin Investors Custodial Account, the Trefoil Custodial Accounts and the Other
Holders Custodial Account, (iii) the Cash on Hand, (iv) the Indebtedness
Payment, (v) the 1997 Debenture Payment, (vi) the 1998 Debenture Payment, (vii)
the Option Payments and (viii) the LCG Transaction Expenses.
2.9 Closing Date Indebtedness Payment and Certain Closing Deliveries.
----------------------------------------------------------------
(a) At or prior to the Closing, (i) Entravision shall contribute to
LCG, by wire transfer of immediately available funds, cash in an amount equal to
the Option Payments (excluding any payments for Out of the Money Options), (ii)
LCG shall process the Option Payments through its payroll system and (iii) LCG
shall deliver the Option Payments less the withholding tax payable in respect
thereof to the Other Holders Custodial Account, from which account the Other
Holders Designee shall deliver the amount thereof to the persons entitled to
Option Payments as a result of the Contemplated Transactions. LCG shall be
responsible for and shall pay when due any withholding taxes payable in respect
of the Option Payments.
(b) At the Closing, Entravision shall contribute to LCG, by wire
transfer of immediately available funds, cash in an amount equal to the
Indebtedness Payment, and LCG (or an LCG Subsidiary) shall pay to the Bank (for
the benefit of the lenders party to the Credit Agreement), by wire transfer of
immediately available funds, an amount in cash equal to the Indebtedness
Payment.
(c) At the Closing, Entravision shall contribute to LCG, by wire
transfer of immediately available funds, cash in an amount equal to the 1997
Debenture Payment, and LCG (or an LCG Subsidiary) shall pay to the LCG
Representatives' respective Custodial Accounts (for the benefit of the holders
of the 1997 Debentures), by wire transfer of immediately available funds, an
amount in cash equal to the 1997 Debenture Payment as follows: (i) LCG shall
deposit in the Latin Investors Custodial Account the Latin Investors' allocable
share of such payment; (ii) LCG shall deposit in the Trefoil Custodial Accounts
the Trefoil Entities' allocable share of such payment; and (iii) LCG shall
deposit in the Other Holders Custodial Account the Other Stockholders' allocable
share of such payment.
(d) At the Closing, Entravision shall contribute to LCG, by wire
transfer of immediately available funds, cash in an amount equal to the 1998
Debenture Payment, and LCG
-14-
(or an LCG Subsidiary) shall pay to the LCG Representatives' respective
Custodial Accounts (for the benefit of the holders of the 1998 Debentures), by
wire transfer of immediately available funds, an amount in cash equal to the
1998 Debenture Payment as follows: (i) LCG shall deposit in the Latin Investors
Custodial Account the Latin Investors' allocable share of such payment; (ii) LCG
shall deposit in the Trefoil Custodial Accounts the Trefoil Entities' allocable
share of such payment; and (iii) LCG shall deposit in the Other Holders
Custodial Account the Other Stockholders' allocable share of such payment.
(e) At the Closing, Entravision shall pay to Union Bank of California,
N.A., as the escrow agent (the "Escrow Agent"), the amount of Seven Million
Dollars ($7,000,000) (the "Escrow Payment") by wire transfer of immediately
available funds to an escrow account (the "Escrow Account") to be held in escrow
through April 1, 2002 (Three Million Five Hundred Thousand Dollars ($3,500,000)
of which may be released on the date that is eighteen (18) months after the
Closing Date pursuant to the terms of the Indemnity Escrow Agreement described
herein) in connection with the indemnification obligations of the Stockholders
and the Option Holders pursuant to Article 11 below and established pursuant to
the terms and conditions of that certain Indemnity Escrow Agreement,
substantially in the form attached hereto as Exhibit "C" and incorporated herein
-----------
by this reference (the "Indemnity Escrow Agreement"), to be entered into at the
Closing by and among Entravision and the LCG Representatives.
(f) At the Closing, Entravision shall pay such amounts to the obligees
of LCG Transaction Expenses as are set forth on the certificate to be delivered
by LCG to Entravision pursuant to Section 2.8(j) above.
2.10 Appraisal Rights.
----------------
(a) Notwithstanding any provision of this Agreement to the contrary,
any Shares that are held immediately prior to the Closing Date by a holder who
has neither voted in favor of the Merger nor consented thereto in writing and
who has demanded and perfected the right, if any, for appraisal of such Shares
within twenty (20) days after the date of mailing of notice to such holder of
the effective date of the Merger (the "Stockholder Notice") in accordance with
the provisions of Section 262 of the Delaware Code and has not withdrawn or lost
such right to such appraisal ("Dissenting Shares") shall not be converted into
or represent a right to receive an allocable portion of the Adjusted Merger
Consideration represented thereby, but the holder of such Shares shall only be
entitled to such appraisal rights as are granted by the Delaware Code. If a
holder of Shares who demands appraisal of such Shares under the Delaware Code
shall thereafter effectively withdraw or lose (through failure to perfect or
otherwise) the right to appraisal with respect to such Shares, then, as of the
occurrence of such event, such Shares shall be deemed to have been converted
into and represent only the right to receive such Shares' allocable portion of
the Adjusted Merger Consideration, without interest, upon the surrender of the
Certificate or Certificates representing such Shares and upon delivery of a duly
executed Letter of Transmittal. In accordance with the provisions of Sections
228(d) and 262(d)(2) of the Delaware Code, not later than the third (3rd)
business day following the Closing
-15-
Date, the Surviving Corporation shall mail the Stockholder Notice to all holders
of Certificates which were not previously surrendered to the LCG
Representatives.
(b) At their sole expense, the LCG Representatives shall direct and
control any Proceedings relating to Dissenting Shares. The LCG Representatives
shall keep Entravision and the Surviving Corporation reasonably informed of the
status of such Proceedings. Subject to the Confidentiality Agreement (as
defined below), and at the expense of the LCG Representatives (solely out of the
Escrow Account), each of Entravision and the Surviving Corporation shall provide
the LCG Representatives with such information and records and make such of their
respective officers, directors, employees and agents available as may reasonably
be requested by the LCG Representatives in connection with any Proceedings
relating to Dissenting Shares.
2.11 Closing of Transfer Books. From and after the Closing Date, the stock
-------------------------
transfer books of LCG shall be closed and no transfer of Common Stock of LCG
shall thereafter be made.
2.12 Xxxxxxx Money Escrow Deposit.
----------------------------
(a) Upon full execution of this Agreement and the Voting Agreements
(and in no event later than the end of business on December 27, 1999),
Entravision shall deliver to the Escrow Agent, either via cashier's check or
wire transfer of immediately available funds or an original, irrevocable stand-
by letter of credit from the Escrow Agent in favor of LCG, the amount of Seven
Million Dollars ($7,000,000) (the "Escrow Deposit"), to be held by the Escrow
Agent in an interest bearing account pursuant to the terms and conditions of
that certain Xxxxxxx Money Escrow Agreement of even date herewith by and among
Entravision, LCG, the LCG Representatives and the Escrow Agent, substantially in
the form attached hereto as Exhibit "D" and incorporated herein by this
-----------
reference (the "Xxxxxxx Money Escrow Agreement"). The Escrow Deposit represents
an xxxxxxx money deposit by Entravision for the Contemplated Transactions.
(b) If the Escrow Deposit is in the form of immediately available
funds, it shall be held by the Escrow Agent in accordance with the Xxxxxxx Money
Escrow Agreement and shall be applied toward the Aggregate Merger Consideration
at the Closing. Provided that this Agreement is not terminated by LCG pursuant
to Section 9.1(b)(ii) or 9.1(b)(iv) below, it is expressly acknowledged and
agreed by the parties hereto that Entravision is entitled to all interest earned
on the Escrow Deposit in this form, and that such interest shall not be part of
the Aggregate Merger Consideration.
(c) If the Escrow Deposit is in the form of an original, irrevocable
stand-by letter of credit in favor of LCG (the "Xxxxxxx Money Letter of
Credit"), the Xxxxxxx Money Letter of Credit shall be held by the Escrow Agent
in accordance with the terms of the Xxxxxxx Money Escrow Agreement. Unless this
Agreement is terminated by LCG pursuant to Section 9.1(b)(ii)
-16-
or 9.1(b)(iv) below, at the Closing, Entravision and LCG shall instruct the
Escrow Agent to release and return the Xxxxxxx Money Letter of Credit to
Entravision for cancellation.
(d) If this Agreement is terminated by LCG pursuant to Section
9.1(b)(ii) or 9.1(b)(iv) below, the Escrow Deposit, including all interest
thereon, shall be disbursed to LCG as liquidated damages in accordance with
Section 9.2(b) below.
2.13 FCC Licenses, Permits and Authorizations. The parties hereto
----------------------------------------
acknowledge and agree that, in connection with the FCC Consent, Entravision
shall assign all of its right, title and interest in and to all FCC licenses,
permits and authorizations (and the call letters with respect thereto) held by
LCG and the LCG Subsidiaries to Entravision Holdings, LLC, a California limited
liability company and wholly-owned subsidiary of Entravision and its managing
members ("Holdings"), and that the applications for the FCC Consent will reflect
Holdings as the assignee of the FCC licenses held by LCG and the LCG
Subsidiaries.
ARTICLE 3.
CLOSING
3.1 Closing. The closing of the Merger provided for in this Agreement
-------
(the "Closing") will take place at the offices of Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx
Xxxxxx & Fognani, L.L.P. in Los Angeles, California at 10:00 a.m. (pacific time)
on the fifth (5th) business day following the day on which each of the following
has occurred (i) the FCC Consent to the Merger becomes a Final Order and (ii)
the applicable waiting period under the HSR Act has expired or been terminated,
or such date as the parties may mutually agree, or at such other time and place
as the parties may mutually agree, and the parties agree to cooperate and use
their Commercially Reasonable Efforts to close the Contemplated Transactions as
soon as practicable after the FCC Consent becomes a Final Order; provided,
however, that Entravision, in its sole and absolute discretion, may waive the
condition to Closing that the FCC Consent be a Final Order and, in such case,
the Closing shall occur at such time and place as the parties may mutually
agree; provided, further, that, subject to the approval of Entravision's senior
secured lender in its sole and absolute discretion, Entravision agrees to waive
said condition and close immediately upon receipt by the parties of the
preliminary FCC Consent (which for purposes of this Section 3.1 shall be deemed
to occur when the FCC has approved the assignment of the last of the FCC
licenses of LCG or any of the LCG Subsidiaries to Holdings as evidenced by a
Public Notice released to the public by the FCC). Subject to the provisions of
Article 9 below, failure to consummate the Merger 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 Closing Obligations of LCG. At the Closing, LCG will deliver or cause
--------------------------
to be delivered to Entravision:
-17-
(a) the original Certificates representing the Shares owned by the
Stockholders, duly endorsed in blank (or accompanied by duly executed stock
powers), to the extent delivered to the LCG Representatives prior to the Closing
Date;
(b) the Indemnity Escrow Agreement, executed by LCG and each of the
LCG Representatives;
(c) any and all required third-party Consents listed on Schedule
--------
3.2(c);
------
(d) the Certificate of Merger, executed by LCG;
(e) the closing certificate required by Section 8.1(c) below;
(f) a certificate of the Secretary of LCG attesting to (i) the
incumbency of the officers executing the Agreement and the other agreements and
certificates delivered by LCG at the Closing and (ii) the authenticity of the
Organizational Documents of LCG;
(g) minutes of the Stockholders and written resolutions or minutes of
the Board of Directors of LCG authorizing the execution, delivery and
performance of this Agreement, certified by the Secretary of LCG;
(h) a certificate of good standing for LCG issued by the Delaware
Secretary of State not more than ten (10) days prior to the Closing Date; and
(i) the written legal opinions of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, corporate counsel for LCG, and Xxxxxxxxx, Xxxxxx & Xxxxxx, P.L.L.C.,
FCC counsel for LCG, substantially in the forms attached hereto as Exhibits "E-
-----------
1" and "E-2" and incorporated herein by this reference.
------------
3.3 Closing Obligations of Entravision and Acquisition Co. At the
------------------------------------------------------
Closing, Entravision and Acquisition Co. will deliver or cause to be delivered
to LCG and the LCG Representatives (or, in the case of item (g) of this Section
3.3, to the Escrow Agent):
(a) the Aggregate Merger Consideration, less the Escrow Deposit, which
shall be delivered to the LCG Representatives pursuant to this Agreement;
(b) the Indemnity Escrow Agreement, executed by Entravision;
(c) the closing certificate required by Section 8.2(c) below;
(d) a certificate of the Secretary of each of Entravision and
Acquisition Co. attesting to (i) the incumbency of the managing members and
officers, as the case may be, executing the Agreement and the other agreements
and certificates delivered by Entravision and
-18-
Acquisition Co. at the closing and (ii) the authenticity of the Organizational
Documents of each of Entravision and Acquisition Co.;
(e) written resolutions or minutes of the managing members of
Entravision and written resolutions or minutes of the sole stockholder and Board
of Directors of Acquisition Co. authorizing the execution, delivery and
performance of this Agreement, each certified by the Secretary of Entravision
and Acquisition Co., as the case may be;
(f) a certificate of good standing for each of Entravision and
Acquisition Co. issued by the Delaware Secretary of State not more than ten (10)
days prior to the Closing Date;
(g) subject to Section 2.12 above, the Escrow Deposit to the Escrow
Agent; and
(h) the written legal opinion of Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx Xxxxxx
& Fognani, L.L.P., counsel for Entravision and Acquisition Co., substantially in
the form attached hereto as Exhibit "F" and incorporated herein by this
-----------
reference.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF LCG
LCG hereby represents and warrants to Entravision and Acquisition Co. as
follows:
4.1 Organization and Good Standing. LCG is a corporation duly organized,
------------------------------
validly existing and in good standing under the laws of the State of Delaware,
and has full corporate power and authority to own, lease and operate its assets
and properties and to carry on its businesses existing as of the date hereof.
Each direct or indirect Subsidiary of LCG set forth on Schedule 4.1
------------
(collectively, the "LCG Subsidiaries") is a corporation (or limited liability
company) duly organized, validly existing and in good standing under the laws of
the state of its incorporation (or formation) as set forth on Schedule 4.1, and
------------
has full corporate or limited liability, as the case may be, power and authority
to own, lease and operate its assets and properties and to carry on its
businesses existing as of the date hereof.
4.2 Authority; No Conflict; Consents.
--------------------------------
(a) Assuming due authorization, execution and delivery of this
Agreement by Entravision and Acquisition Co., this Agreement constitutes the
legal, valid and binding obligation of LCG, enforceable against LCG in
accordance with its terms, except to the extent that such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to creditors' rights generally or is subject to general principles
of equity. LCG has the corporate right, power, authority and capacity to
execute and deliver this Agreement and to perform its obligations thereunder.
-19-
(b) Neither the execution and delivery of this Agreement by LCG nor
the consummation or performance of any of the Contemplated Transactions by LCG
will, subject to receipt of any required approval of the Stockholders to the
Merger and this Agreement, violate, Breach or conflict with: (i) any provision
of the Organizational Documents of LCG or the LCG Subsidiaries; (ii) any
resolution related to the Contemplated Transactions adopted by the stockholders
or the Board of Directors of LCG or the LCG Subsidiaries; (iii) any material
Legal Requirement or material Order to which LCG or the LCG Subsidiaries may be
subject; or (iv) any material Contract to which LCG or the LCG Subsidiaries are
a party or by which LCG or the LCG Subsidiaries may be bound.
(c) Except for the filing of the FCC Consent, the filing of the
Certificate of Merger with the Delaware Secretary of State, the filing required
by the HSR Act, obtaining any necessary third-party consents set forth on
Schedule 4.2, and the approval by the Stockholders of the Merger and this
------------
Agreement, neither LCG nor the LCG Subsidiaries will be required to give any
notice to or obtain any material third-party Consents from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions, including, without
limitation, the Merger and the transfer of the ownership and operation of the
Radio Stations to Entravision.
4.3 Broker's or Finder's Fees. Except as set forth on Schedule 4.3, none
------------------------- ------------
of LCG, the LCG Subsidiaries or their agents have incurred any Liabilities for
broker's or finder's fees or agents commissions or other similar payment in
connection with this Agreement.
4.4 Qualifications To Do Business. LCG and the LCG Subsidiaries are
-----------------------------
qualified to do business and are in good standing in each jurisdiction (listed
on Schedule 4.4 to this Agreement) where the character or location of property
------------
owned and leased, the employment of personnel or the nature of the business and
activities conducted by LCG and the LCG Subsidiaries require such qualification,
licensing or domestication, except in such jurisdictions where the failure to be
so qualified, licensed or domesticated and to be in good standing, individually
or in the aggregate, would not have an LCG Material Adverse Effect. Except as
set forth on Schedule 4.4, LCG and the LCG Subsidiaries do not file franchise,
------------
income or other tax returns in any jurisdiction based upon the ownership or use
of property therein or the derivation of income therefrom.
4.5 Capitalization.
--------------
(a) The authorized capital stock of LCG consists of fifteen million
(15,000,000) shares of Common Stock, $0.01 par value per share, of which
9,235,468 shares are duly authorized, issued and outstanding. The Stockholders
are the record holders of all of the Shares. All of the Shares have been duly
authorized and validly issued and are fully paid and nonassessable.
-20-
(b) As fully set forth on Schedule 4.5, there are outstanding options
------------
to acquire 471,668 shares of Common Stock of LCG (the "Options") and outstanding
130,000 stock appreciation rights pursuant to the Equity Appreciation Incentive
Plan of LCG described in Schedule 4.5 (the "Stock Appreciation Rights"). Except
------------
as set forth on Schedule 4.5, (i) there are no other options, warrants, stock
------------
appreciation rights, subscriptions, convertible debentures, registration rights
agreements or other rights, commitments or any other similar agreements for the
purchase of any securities of LCG to which LCG is a party, (ii) there are no
stockholders' agreements or other Contracts to which LCG is a party relating to
the issuance, sale or transfer of any equity securities or other securities of
LCG and (iii) there are no voting trust agreements or other Contracts,
agreements or arrangements restricting voting rights or transferability with
respect to LCG to which it is a party. Upon the consummation of the
Contemplated Transactions, and provided that Entravision makes the payment set
forth in Section 2.9(a) above, all of the outstanding Options and Stock
Appreciation Rights will terminate and the Surviving Corporation will have no
further obligations to the holders thereof with respect thereto.
4.6 LCG Subsidiaries.
----------------
(a) Schedule 4.6 sets forth a list of all direct or indirect
------------
Subsidiaries of LCG (the "LCG Subsidiaries"). Except as set forth on Schedule
--------
4.6, LCG owns, either directly or indirectly through one or more of the LCG
---
Subsidiaries, all of the capital stock or membership interests of each of the
LCG Subsidiaries free and clear of any Encumbrances.
(b) The authorized capital stock and number of outstanding shares or
membership interests of each of the LCG Subsidiaries is set forth on Schedule
--------
4.6 (the "Subsidiary Shares"). LCG is and will be on the Closing Date the
---
record and beneficial owner and holder of all of the Subsidiary Shares, which
will be at Closing free and clear of all Encumbrances, other than Encumbrances
created by Entravision or Acquisition Co. All of the Subsidiary Shares have
been duly authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth on Schedule 4.6, (i) there are no options,
------------
warrants, stock appreciation rights, subscriptions, convertible debentures,
registration rights agreements or other rights, commitments or any other similar
agreements for the purchase of any securities of any of the LCG Subsidiaries,
(ii) there are no stockholders' agreement or other Contracts relating to the
issuance, sale or transfer of any equity securities or other securities of any
of the LCG Subsidiaries and (iii) there are no voting trust agreements or other
Contracts, agreements or arrangements restricting voting rights or
transferability with respect to any of the LCG Subsidiaries.
4.7 Financial Statements. LCG has delivered to Entravision true, complete
--------------------
and correct copies of the Financial Statements. Except as set forth on Schedule
--------
4.7, the Financial Statements fairly present in all material respects the
---
consolidated financial condition of LCG and the LCG Subsidiaries and the assets
and liabilities of LCG and the LCG Subsidiaries as of the
-21-
respective dates thereof and the results of operations, changes in stockholders'
equity and cash flows for the periods therein specified, and have been prepared
from the books and records of LCG and the LCG Subsidiaries in accordance with
GAAP in all material respects except for the following sentence. The Financial
Statements reflect the consistent application of such accounting principles
throughout the periods involved, except as disclosed in the notes to such
financial statements, and except that the unaudited Financial Statements were
prepared on an interim basis, are subject to normal year-end adjustments and do
not contain all of the footnote disclosures required by GAAP.
4.8 Books and Records. To the Knowledge of LCG, the minute books of LCG
-----------------
and the LCG Subsidiaries contain, in all material respects, accurate and
complete records of all meetings held of, and corporate action taken by, the
stockholders and Board of Directors of LCG and the LCG Subsidiaries.
4.9 Ownership, Condition and Sufficiency of Assets. Except as set forth
----------------------------------------------
on Schedule 4.9, LCG or the LCG Subsidiaries, as the case may be, own all of
------------
their material tangible assets free and clear of all Encumbrances. The assets
of LCG and the LCG Subsidiaries are, in all material respects, in good operating
condition and repair (reasonable wear and tear in normal use excepted), and none
of such assets is in need of maintenance or repairs except for ordinary, routine
maintenance and repairs that are not material in nature or cost.
4.10 No Undisclosed Liabilities. Except as set forth on Schedule 4.10, LCG
-------------------------- -------------
and the LCG Subsidiaries have no material Liabilities of any nature which would
be required to be disclosed under GAAP as of the date hereof (whether absolute,
accrued, contingent or otherwise), except for (i) Liabilities reflected or
reserved against in the Financial Statements, (ii) current Liabilities incurred
in the ordinary course of business since October 31, 1999 which would not have
an LCG Material Adverse Effect or (iii) Liabilities that will not be Liabilities
of Entravision or Acquisition Co. after the Closing.
4.11 Taxes.
-----
(a) LCG and the LCG Subsidiaries have filed or caused to be filed on a
timely basis (taking into account all extensions) all material Tax Returns that
are or were required to be filed by them pursuant to applicable Legal
Requirements, and all such Tax Returns are true, correct and complete in all
material respects. LCG has delivered or made available to Entravision copies of
all such Tax Returns filed in the past five (5) years, and Schedule 4.11
-------------
contains a complete and accurate list of all material income Tax Returns filed
by LCG and the LCG Subsidiaries in the past five (5) years. With respect to
taxable periods ending on or before December 31, 1999, LCG has paid, or made
provision for the payment of, all income Taxes that have become due pursuant to
those Tax Returns or otherwise, or pursuant to any written assessment received
by LCG or any of the LCG Subsidiaries. Except as set forth on Schedule 4.11,
-------------
the Tax Returns of LCG and the LCG Subsidiaries have not been examined (nor are
they
-22-
currently in the process of being examined) by the IRS or any other tax
authority for any of the past five (5) years.
(b) The charges, accruals and reserves with respect to Taxes on the
Financial Statements are adequate (determined in accordance with GAAP) to cover
Taxes through the date of the Financial Statements. To the Knowledge of LCG,
there exists no proposed Tax assessment against LCG or the LCG Subsidiaries
except as disclosed in the Financial Statements or on Schedule 4.11. No consent
-------------
to the application of Section 341(f)(2) of the IRC has been filed with respect
to any property or assets held, acquired or to be acquired by LCG or the LCG
Subsidiaries. All material Taxes that LCG and the LCG Subsidiaries are or were
required by Legal Requirements to withhold or collect have been duly withheld or
collected and, to the extent required, have been paid to the proper Governmental
Body or other Person. There is no Tax sharing agreement that will require any
payment by LCG or any of the LCG Subsidiaries after the date of this Agreement.
LCG and the LCG Subsidiaries have timely paid all material Income Taxes for the
periods ending on December 31, 1999 and all Other Taxes that are due and
payable, nonpayment of which would (i) result in an Encumbrance on any of the
assets of LCG or the LCG Subsidiaries or (ii) result in Entravision becoming
liable therefor.
4.12 Employee Benefits.
-----------------
(a) Schedule 4.12 lists each Employee Benefit Plan of LCG and the LCG
-------------
Subsidiaries. Each Employee Benefit Plan is in substantial compliance with
applicable law and has been administered and operated in all material respects
in accordance with its terms. Each Employee Benefit Plan which is intended to
be "qualified" within the meaning of Section 401(a) of the IRC has received a
favorable determination letter from the IRS and no event has occurred and no
condition exists which could reasonably be expected to result in the revocation
of any such determination.
(b) No event which constitutes a "reportable event" (as defined in
Section 4043(c) of ERISA) for which the thirty (30) day notice requirement has
not been waived by the Pension Benefit Guaranty Corporation (the "PBGC") has
occurred with respect to any Employee Benefit Plan. No Employee Benefit Plan
subject to Title IV of ERISA has been terminated or is or has been the subject
of termination proceedings pursuant to Title IV of ERISA. Full payment has been
made of all amounts which LCG or the LCG Subsidiaries were required under the
terms of each Employee Benefit Plan to have paid as contributions to such
Employee Benefit Plan on or prior to the date hereof (excluding any amounts not
yet due) and no Employee Benefit Plan which is subject to Part 3 of Subtitle B
of Title 1 of ERISA has incurred any "accumulated funding deficiency" (within
the meaning of Section 302 of ERISA or Section 412 of the IRC), whether or not
waived.
(c) Neither LCG, the LCG Subsidiaries nor any other "disqualified
person" or "party in interest" (as defined in Section 4975(e)(2) of the IRC and
Section 3(14) of ERISA, respectively) has engaged in any transactions in
connection with any Employee Benefit Plan that
-23-
could reasonably be expected to result in the imposition of a material penalty
pursuant to Section 502(i) of ERISA, damages pursuant to Section 409 of ERISA or
a Tax pursuant to Section 4975(a) of the IRC. No material liability, claim,
action or litigation has been made, commenced or, to the Knowledge of LCG,
Threatened with respect to any Employee Benefit Plan (other than for benefits
payable in the ordinary course of business and PBGC insurance premiums). No
Employee Benefit Plan or related trust owns any securities in violation of
Section 407 of ERISA. With respect to any Employee Benefit Plan subject to Title
IV of ERISA, as of the most recent actuarial valuation prepared for each such
Employee Benefit Plan, the aggregate present value of the accrued liabilities
thereof did not exceed the aggregate fair market value of the assets allocable
thereto (determined on the bases set forth therein). LCG and the LCG
Subsidiaries do not presently and have not at any time in the past maintained a
"multiemployer plan" (as defined in Section 4001(a)(3) of ERISA).
(d) To the Knowledge of LCG, except as set forth on Schedule 4.12,
-------------
there are no Proceedings (other than routine claims for benefits) pending or
Threatened against any Employee Benefit Plan or its assets, or arising out of
such Employee Benefit Plan and, to the Knowledge of LCG, no facts exist which
could give rise to any such Proceedings that might have a material adverse
effect on such Employee Benefit Plan. To the Knowledge of LCG, there has been
no act or omission by LCG or the LCG Subsidiaries that has given rise or may
give rise to any fines, penalties, Taxes or late charges under Section 502(c),
(i) or (l), Section 407(1) of ERISA or Chapter 43 of the IRC.
4.13 Compliance with Legal Requirements. Except as set forth on Schedule
---------------------------------- --------
4.13 or as previously disclosed in writing to Entravision: (i) LCG and the LCG
----
Subsidiaries are in compliance in all material respects with each material Legal
Requirement that is applicable to them; (ii) to the Knowledge of LCG, no event
has occurred or circumstance exists that (with or without notice or lapse of
time) constitutes or results in a material violation by LCG or the LCG
Subsidiaries of, or a failure on the part of LCG or the LCG Subsidiaries to
comply in all material respects with, any material Legal Requirement or gives
rise to any material obligation on the part of LCG or the LCG Subsidiaries to
undertake, or to bear all or any portion of the cost of, any remedial action of
any nature; and (iii) neither LCG nor any of the LCG Subsidiaries has received
any written notice or other written communication from any Governmental Body
regarding any actual, alleged, possible or potential material violation of, or
material failure to comply with, any material Legal Requirement, any actual,
alleged, possible or potential material obligation on the part of LCG or any of
the LCG Subsidiaries to undertake, or to bear all or any portion of the cost of,
any remedial action of any nature.
4.14 Governmental Authorizations. Schedule 4.14 contains a complete and
--------------------------- -------------
accurate list of each material Governmental Authorization that is held by LCG or
the LCG Subsidiaries, except for authorizations of the FCC under Part 74 of its
rules. Each Governmental Authorization listed or required to be listed on
Schedule 4.14 is valid and in full force and effect in all material respects.
-------------
Except as set forth on Schedule 4.14 or as previously disclosed in writing to
-------------
Entravision, LCG and each of the LCG Subsidiaries is and at all times has been
in
-24-
compliance in all material respects with all of the terms and requirements of
each Governmental Authorization identified or required to be identified on
schedule 4.14, and, to the Knowledge of LCG, no event has occurred or
-------------
circumstance exists that (with or without notice or lapse of time) constitutes
or results directly or indirectly in a violation of or a failure to comply with
any material term or material requirement of any Governmental Authorization
listed or required to be listed on Schedule 4.14 or may result directly or
-------------
indirectly in a material revocation, withdrawal, suspension, cancellation,
termination of or any modification to, any Governmental Authorization listed or
required to be listed on Schedule 4.14. The Governmental Authorizations listed
-------------
on Schedule 4.14 collectively constitute all of the material Governmental
-------------
Authorizations necessary to permit LCG and the LCG Subsidiaries to lawfully
conduct and operate the Radio Stations and the Newspapers in the manner
currently conducted in all material respects.
4.15 Legal Proceedings. Except as set forth on Schedule 4.15, there is no
----------------- -------------
pending Proceeding (i) that is material and has been commenced by or against LCG
or any of the LCG Subsidiaries or (ii) that challenges, or that may have the
effect of preventing, delaying, making illegal or otherwise interfering with,
any of the Contemplated Transactions. To the Knowledge of LCG and except as set
forth on Schedule 4.15, no such Proceeding described in clauses (i) and (ii) of
-------------
this section has 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. LCG has delivered or made available to Entravision copies of
all material pleadings relating to each Proceeding listed on Schedule 4.15.
-------------
None of such Proceedings listed or required to be listed on Schedule 4.15
-------------
currently has or, to the Knowledge of LCG, is reasonably expected to have an LCG
Material Adverse Effect.
4.16 Absence of Certain Changes and Events. Except as contemplated by this
-------------------------------------
Agreement and as set forth on Schedule 4.16, since October 31, 1999, LCG and the
-------------
LCG Subsidiaries have conducted the businesses of the Radio Stations and the
Newspapers only in the ordinary course of business and there has not been any:
(i) change in the authorized or issued capital stock of LCG or any of the LCG
Subsidiaries (other than issuances pursuant to the exercise of Options), grant
of any stock option or right to purchase shares of capital stock of LCG or any
of the LCG Subsidiaries, issuance of any security convertible into such capital
stock, grant of any registration rights, purchase, redemption, retirement or
other acquisition by LCG or any of the LCG Subsidiaries of any shares of any
such capital stock or declaration or payment of any dividend or other
distribution or payment in respect of shares of capital stock; (ii) payment or
increase by LCG or any of the LCG Subsidiaries of any bonuses, salaries or other
compensation to any employee (except in the ordinary course of business) or
entry into any employment, severance or similar Contract with any employee;
(iii) adoption of, or increase in the payments to or benefits under, any
Employee Benefit Plan for or with any employees except in the ordinary course of
business; (iv) damage to or destruction or loss of any of the assets of LCG or
the LCG Subsidiaries, whether or not covered by insurance, which would have an
LCG Material Adverse Effect; (v) entry into, termination of or written receipt
of notice of termination of any material Contract, other than the expiration of
Contracts pursuant to their terms; (vi) except as set forth on Schedule 4.16,
-------------
sale (other than sales of inventory in the ordinary course of business), lease
or
-25-
other disposition of any material assets or material properties or mortgage,
pledge or imposition of any Encumbrance on any material asset or material
property; (vii) material change in the accounting methods used by LCG or the LCG
Subsidiaries, except as required by changes in GAAP; or (viii) any agreement,
whether oral or written, to do any of the foregoing.
4.17 Applicable Contracts; No Defaults.
---------------------------------
(a) Schedule 4.17 contains a complete and accurate list, and LCG has
-------------
delivered or made available to Entravision, true, complete and correct copies of
each Applicable Contract. Each Applicable Contract identified or required to be
identified on Schedule 4.17 is in full force and effect and is valid and
-------------
enforceable against LCG and to the Knowledge of LCG, against the other party or
parties thereto, in accordance with its terms, except to the extent that such
enforceability (i) may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally or (ii)
is subject to general principles of equity.
(b) Except as set forth on Schedule 4.17: (i) LCG or the LCG
-------------
Subsidiaries, as the case may be, are in material compliance with all applicable
terms and requirements of each Applicable Contract; (ii) to the Knowledge of
LCG, except for this Agreement and the Contemplated Transactions, 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 LCG
or the LCG Subsidiaries, as the case may be, or other Person the right to
declare a default under, or to accelerate the maturity or performance of, or to
cancel, terminate or modify, any material Applicable Contract; and (iii) LCG and
the LCG Subsidiaries, as the case may be, have not given to or received from any
other Person any written notice or other written communication regarding any
actual, alleged, possible or potential material violation or material Breach of,
or material default under, any Applicable Contract.
4.18 Insurance.
---------
(a) LCG has delivered or made available to Entravision true, complete
and correct copies of all material policies of insurance relating to LCG and the
LCG Subsidiaries to which LCG or the LCG Subsidiaries are a party.
(b) Except as set forth on Schedule 4.18, (i) all such material
-------------
policies of insurance are valid and outstanding, (ii) LCG and the LCG
Subsidiaries have not received any written notice of cancellation or any other
written indication that any insurance policy is no longer in full force or
effect or will not be renewed or that the issuer of any policy is not able to
perform its obligations thereunder and (iii) LCG and the LCG Subsidiaries have
paid all premiums due, and have otherwise performed all of their material
respective obligations, under each such policy.
-26-
4.19 Real Property Matters.
---------------------
(a) Schedule 4.19 contains a complete and accurate list of all Real
-------------
Property and a complete and accurate list of all material Real Property Leases
(which for purposes of this section shall be deemed to include all Real Property
Leases for tower sites and studio facilities leased by LCG or any of the LCG
Subsidiaries). LCG or the LCG Subsidiaries, as the case may be, own and have
sufficient title to all of the Real Property. The Real Property and the real
property leased pursuant to the Real Property Leases include all material land
used for the conduct of the business and operations of LCG and the LCG
Subsidiaries as they are currently conducted as of the date hereof. LCG has
delivered or made available to Entravision true, complete and copies of the
deeds and other instruments (as recorded) by which either LCG or the LCG
Subsidiaries, as the case may be, acquired such real property interests, and
true, complete and copies of all title insurance policies, opinions, abstracts
and surveys in the possession of LCG relating to such properties or interests.
(b) LCG has delivered or made available to Entravision copies of all
material Real Property Leases (which for purposes of this section shall be
deemed to include all Real Property Leases for tower sites and studio facilities
leased by LCG or any of the LCG Subsidiaries) and copies of all material reports
of any engineers, environmental consultants or other consultants in its
possession relating to any of the Real Property or any of the Real Property
leased pursuant to the Real Property Leases. To the Knowledge of LCG, none of
the Real Property is subject to any material Encumbrance, easement, right-of-
way, building or use restriction, exception, variance, reservation or
limitation.
4.20 Compliance with Environmental Laws. Except as set forth on Schedule
---------------------------------- --------
4.20 or as would not have an LCG Material Adverse Effect, (i) all of the
----
operations of LCG and the LCG Subsidiaries are in material compliance with all
Environmental Laws as currently in effect, (ii) neither LCG, the LCG
Subsidiaries nor, to the Knowledge of LCG, any of their predecessors used,
released or disposed of any Hazardous Substance in any manner that could
reasonably be expected to result in material liability to LCG or any of the LCG
Subsidiaries, (iii) to the Knowledge of LCG, none of the property owned, leased
or operated by LCG or the LCG Subsidiaries is contaminated by any Hazardous
Substance, (iv) to the Knowledge of LCG, none of the property owned, leased or
operated by LCG or the LCG Subsidiaries is affected by any condition that could
reasonably be expected to result in liability under any Environmental Law as
currently in effect and (v) to the Knowledge of LCG, there is and has been no
condition, activity or event respecting LCG or the LCG Subsidiaries that could
reasonably be expected to subject Entravision or the Surviving Corporation to
any liability under any Environmental Law as currently in effect.
4.21 Employees. LCG has delivered or made available to Entravision copies
---------
of any and all material employee handbooks and policy manuals applicable to any
of the employees of LCG or any of the LCG Subsidiaries, as well as any and all
material written or oral severance policies applicable to such employees.
-27-
4.22 Labor Relations; Compliance.
---------------------------
(a) As of the date hereof, except as set forth on Schedule 4.22,
-------------
neither LCG nor any of the LCG Subsidiaries is party to any collective
bargaining or other labor Contract. With respect to LCG and the LCG
Subsidiaries, in the past two (2) years, except as set forth on Schedule 4.22,
-------------
there has not been, there is not presently pending or existing, and to the
Knowledge of LCG, there is not Threatened, (i) any material strike, slowdown,
picketing, work stoppage or employee grievance process, (ii) any material
Proceeding against LCG or any of the LCG Subsidiaries 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 Radio Stations or (iii) any material
application for certification of a collective bargaining agent.
(b) As of the date hereof, to the Knowledge of LCG, no event has
occurred or circumstance exists that could provide the basis for any material
work stoppage or other material labor dispute for the employees of LCG or the
LCG Subsidiaries. To the Knowledge of LCG, there is no material lockout of any
employees of LCG or the LCG Subsidiaries, and no such action is contemplated.
LCG and the LCG Subsidiaries have complied in all material respects with all
material Legal Requirements 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 closings. Neither LCG nor any of the LCG
Subsidiaries are liable in any material respect for the payment of compensation,
damages, Taxes, fines, penalties or other amounts, however designated, for
failure to comply with any of the foregoing Legal Requirements.
4.23 Intellectual Property.
---------------------
(a) The term "Intellectual Property Assets" means the following
proprietary items used or licensed by LCG or the LCG Subsidiaries as licensee or
licensor in connection with their business: (i) the name and FCC call letters
listed on Schedule 4.23, all fictional business names, trade names, registered
-------------
trademarks and service marks and applications; (ii) patents and patent
applications; (iii) copyrights; (iv) rights in mask works; and (v) confidential
information.
(b) Schedule 4.23 sets forth a complete and accurate list of all
-------------
Applicable Contracts granting rights in material Intellectual Property Assets,
except for any license implied by the sale of a product and perpetual, paid-up
licenses for commonly available software programs under which LCG or the LCG
Subsidiaries are the licensees. There are no outstanding and, to the Knowledge
of LCG, no material Threatened disputes with respect to any Applicable Contract
listed on Schedule 4.23. The Intellectual Property Assets are those used in the
-------------
operation of the businesses of the Radio Stations and the Newspapers as they are
currently
-28-
conducted. LCG and the LCG Subsidiaries are the owners of or have the right to
use all of the material Intellectual Property Assets.
4.24 Relationships with Related Persons. Except as set forth on Schedule
---------------------------------- --------
4.24, each Contract to which LCG or any of the LCG Subsidiaries, on the one
----
hand, and a Related Person, on the other hand, are a party contains terms no
less favorable to LCG or the LCG Subsidiaries, as the case may be, than could
have been obtained by LCG or the LCG Subsidiaries, as the case may be, in an
arm's length transaction between independent parties.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES
OF ENTRAVISION AND ACQUISITION CO.
Entravision and Acquisition Co., jointly and severally, hereby represent
and warrant to LCG as follows:
5.1 Organization and Good Standing. Entravision is a limited liability
------------------------------
company duly organized, validly existing and in good standing under the laws of
the State of Delaware. Acquisition Co. is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
5.2 Authority; No Conflict; Consents.
--------------------------------
(a) Assuming due authorization, execution and delivery of this
Agreement by LCG, this Agreement constitutes the legal, valid and binding
obligation of Entravision and Acquisition Co., enforceable against Entravision
and Acquisition Co. in accordance with its terms, except to the extent that such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws relating to creditors' rights generally or is
subject to general principles of equity. Entravision and Acquisition Co. have
the corporate or limited liability company, as the case may be, right, power,
authority and capacity to execute and deliver this Agreement and to perform
their respective obligations thereunder.
(b) Neither the execution and delivery of this Agreement by
Entravision or Acquisition Co. nor the consummation or performance of any of the
Contemplated Transactions by Entravision or Acquisition Co. will violate, Breach
or conflict with: (i) any provision of the respective Organizational Documents
of Entravision and Acquisition Co.; (ii) any resolution related to the
Contemplated Transactions adopted by the members, stockholders or the Board of
Directors of Entravision or Acquisition Co., as the case may be; (iii) any
material Legal Requirement or material Order to which Entravision or Acquisition
Co. may be subject; or (iv) any material Contract to which Entravision or
Acquisition Co. is a party or by which Entravision or Acquisition Co. may be
bound.
-29-
(c) Except for the FCC Consent and the Filing required by the HSR Act,
Entravision and Acquisition Co. are not and will not be required to give any
notice to or obtain any material third-party Consents from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions, including, without
limitation, the Merger and the transfer of the ownership and operation of the
Radio Stations and the Newspapers to Entravision.
5.3 Broker's or Finder's Fees. Neither Entravision, Acquisition Co. nor
-------------------------
their agents have incurred any Liabilities for broker's or finder's fees or
agents commissions or other similar payment in connection with this Agreement.
5.4 Availability of Funds. As of the date hereof, Entravision has
---------------------
sufficient available funds and/or a banker's commitment for sufficient funds to
consummate the Contemplated Transactions, and on the Closing Date Entravision
will have sufficient funds to enable Entravision and Acquisition Co. to
consummate the Contemplated Transactions. Upon consummation of the Contemplated
Transactions, Entravision and the Surviving Corporation will be solvent.
5.5 No Prior Activities. Except for obligations incurred in connection
-------------------
with its incorporation or organization or the negotiation and consummation of
this Agreement and the Contemplated Transactions, Acquisition Co. has neither
incurred any obligation or liability nor engaged in any business or activity of
any type or kind whatsoever or entered into any agreement or arrangement with
any Person or entity.
5.6 FCC Matters. There are no facts which, under the Communications Act
-----------
of 1934, as amended, or the published rules, regulations or policies of the FCC,
would disqualify Entravision or Acquisition Co. as assignee of the FCC licenses
related to LCG and the LCG Subsidiaries. Entravision and Acquisition Co. are
qualified to consummate the Contemplated Transactions and to certify to their
financial qualifications on FCC Form 314, and they shall so certify in the
applications as originally filed with the FCC.
5.7 Litigation. There is no litigation pending or, to the actual
----------
knowledge, after reasonable inquiry, of Entravision, Threatened against
Entravision or Acquisition Co. or any of their respective Subsidiaries or
Affiliates (i) with respect to which there is a reasonable likelihood of a
determination which would, individually or in the aggregate, have a Material
Adverse Effect on the ability of Entravision or Acquisition Co. to perform their
obligations under this Agreement, or (ii) which seeks to enjoin or obtain
damages in respect of the consummation of the Contemplated Transactions. None
of Entravision, Acquisition Co. or any of their Subsidiaries is subject to any
outstanding Orders which, individually or in the aggregate, would have a
Material Adverse Effect on the ability of Entravision or Acquisition Co. to
perform their obligations under this Agreement.
-30-
5.8 Limitations of LCG and LCG Subsidiary Representations and Warranties.
--------------------------------------------------------------------
Entravision and Acquisition Co. acknowledge and agree that the representations
and warranties in this Agreement of LCG and the LCG Subsidiaries (and the
related Schedules) do not require disclosure of any matters related to (i) the
Nevada Acquisitions or (ii) the Xxxx Asset Purchase Agreement.
5.9 Disclaimer. ENTRAVISION AND ACQUISITION CO. EACH ACKNOWLEDGE THAT LCG
----------
HAS NOT MADE AND SHALL NOT BE DEEMED TO HAVE MADE TO ENTRAVISION OR ACQUISITION
CO. ANY REPRESENTATION OR WARRANTY OTHER THAN THOSE EXPRESSLY MADE BY LCG IN
SECTIONS 4.1 THROUGH 4.24 OF THIS AGREEMENT. ADDITIONALLY, ENTRAVISION AND
ACQUISITION CO. EACH ACKNOWLEDGE THAT LCG MAKES NO REPRESENTATION OR WARRANTY TO
ENTRAVISION OR ACQUISITION CO. (1) AS TO MERCHANTABILITY, SUITABILITY OR FITNESS
FOR A PARTICULAR PURPOSE OR QUALITY, WITH RESPECT TO ANY OF THE TANGIBLE ASSETS
BEING SO TRANSFERRED, OR AS TO THE CONDITION OR WORKMANSHIP THEREOF OR THE
ABSENCE OF ANY DEFECTS THEREIN, WHETHER LATENT OR PATENT (OR ANY OTHER
REPRESENTATION OR WARRANTY REFERRED TO IN SECTION 2-312 OF THE DELAWARE UNIFORM
COMMERCIAL CODE OR THE UNIFORM COMMERCIAL CODE OF ANY OTHER APPLICABLE
JURISDICTION OR IN ANY STATUTE APPLICABLE TO REAL PROPERTY) OR (2) WITH RESPECT
TO ANY PROJECTIONS, ESTIMATES OR BUDGETS HERETOFORE DELIVERED TO OR MADE
AVAILABLE TO ENTRAVISION OR ACQUISITION CO.
ARTICLE 6.
COVENANTS OF LCG
6.1 Access and Investigation. Between the date of this Agreement and the
------------------------
Closing Date, LCG will, and will use Commercially Reasonable Efforts to cause
its Representatives to, (i) afford Entravision and its Representatives
reasonable access during normal business hours to the personnel, properties
(including subsurface testing), Contracts, books and records and other documents
and data of LCG, (ii) furnish Entravision and its Representatives with true,
complete and correct copies of all such Contracts, books and records and other
existing documents and data as they may reasonably request and (iii) furnish
Entravision and its Representatives with such additional financial, operating
and other data and information as they may reasonably request; provided,
however, that LCG obtains any necessary landlord consents thereto, which
consents LCG shall use Commercially Reasonable Efforts to obtain. LCG agrees
that prior to consummation of the Contemplated Transactions, to the extent
available, Entravision will be furnished with such accounting information and
reports to the extent Entravision deems necessary to enable Entravision to
satisfy the disclosure or exemption requirements of any lender providing
financing for the Contemplated Transactions, or state or federal securities
regulators. Nothing in this Section 6.1 or elsewhere in this Agreement shall
require LCG to compile accounting information or prepare reports that it would
not otherwise compile or prepare. All
-31-
such information is delivered subject to that certain Confidentiality Agreement
dated September 17, 1999 (the "Confidentiality Agreement") by and between
Entravision and LCG.
6.2 Operation of Business. Without the prior written consent of
---------------------
Entravision (which shall not be unreasonably withheld), LCG will not and will
cause each of the LCG Subsidiaries not to engage in any material practice, take
any material action or enter into any material transaction outside the Ordinary
Course of Business (as defined below); provided, however, that nothing herein
shall be deemed to prohibit LCG and the LCG Subsidiaries from consummating in
the Ordinary Course of Business the transactions contemplated by (i) the Nevada
Acquisitions, (ii) the Xxxx Asset Purchase Agreement and (iii) that certain Work
Letter Agreement dated as of August 26, 1999 by and between EXCL Communications,
Inc. and WTA Xxxxxxxx Technology Park LLC. Without limiting the generality of
the foregoing, prior to the Closing, LCG will not and will cause each of the LCG
Subsidiaries not to incur trade payables other than in the Ordinary Course of
Business and not to accelerate collection of accounts receivable other than in
the Ordinary Course of Business. For purposes of this Section 6.2 only,
"Ordinary Course of Business" means an action taken by LCG or any of the LCG
Subsidiaries that is consistent with their respective past practices and is
taken in the ordinary course of their respective normal day-to-day operations.
6.3 Negative Covenant. Except as otherwise expressly permitted by this
-----------------
Agreement, between the date of this Agreement and the Closing Date, LCG will
not, without the prior written consent of Entravision, which consent shall not
be unreasonably withheld, take any affirmative action as a result of which any
of the changes or events listed in Section 4.16 above occurs; provided, however,
that nothing contained herein shall be construed to prohibit LCG from taking any
of the actions set forth on Schedule 4.16.
-------------
6.4 Notification. Between the date of this Agreement and the Closing
------------
Date, LCG will promptly notify Entravision in writing if it becomes aware of any
fact or condition that causes or constitutes a material Breach of any of its
representations and warranties in this Agreement, or if it 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
material 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 be disclosed to Entravision by LCG
as set forth above, or any fact or condition that is discovered by Entravision
independently prior to the Closing Date, 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, LCG
will promptly deliver to Entravision a supplement to the Schedules specifying
such change.
6.5 No Negotiation. Until the Closing Date, or such time, if any, as this
--------------
Agreement is terminated pursuant to Article 9 below, LCG will not, and will
cause its Representatives not to, 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
-32-
inquiries or proposals (except with respect to any unsolicited inquiry or
proposal received after the date hereof only to the extent necessary for the
Board of Directors of LCG to discharge its fiduciary duties under applicable
provisions of the Delaware Code based upon the good faith belief of the Board of
Directors of LCG that the terms of such unsolicited inquiry or proposal are
superior to the terms of this Agreement) from, any Person (other than
Entravision, Acquisition Co. or their Related Persons) relating to any
transaction involving the sale of the business or assets (other than in the
ordinary course of business or as set forth on Schedule 4.16) of LCG, or any
-------------
merger, consolidation, business combination, sale of ownership interests or
similar transaction involving LCG or the Shares.
6.6 Commercially Reasonable Efforts. Between the date of this Agreement
-------------------------------
and the Closing Date, LCG will use its Commercially Reasonable Efforts to cause
the conditions in Section 8.1 below to be satisfied.
6.7 Applications for FCC Consent. Within ten (10) days after the full
----------------------------
execution of this Agreement, LCG will file (or cooperate with Entravision to
file) such applications as are required with the FCC requesting its written
consent to the assignment of the FCC licenses held by LCG (or any of the LCG
Subsidiaries, as the case may be) from LCG (or any of the LCG Subsidiaries, as
the case may be) to Holdings (the "FCC Consent"), which applications shall be in
form and substance acceptable for filing with the FCC. LCG 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. LCG will promptly provide Entravision with a true,
complete and correct copy of any pleading or other document served on it
relating to such applications. If the FCC Consent imposes any condition on LCG,
LCG shall use its Commercially Reasonable Efforts to comply with such condition
prior to the Closing. If reconsideration or judicial review is sought with
respect to the FCC Consent, and such reconsideration or review relates to LCG or
the operations of the Radio Stations, LCG shall vigorously oppose such
reconsideration or judicial review at its own expense.
6.8 Filing Under HSR Act. Promptly after full execution of this
--------------------
Agreement, LCG 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. LCG will use its
Commercially Reasonable 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
Division of the Department of Justice or the Federal Trade Commission and to
permit the other party to review such communication.
6.9 Third-Party Consents. LCG shall use its Commercially Reasonable
--------------------
Efforts to obtain, or cause to be obtained prior to the Closing Date, any and
all required third-party Consents listed on Schedule 4.2 to the extent
------------
reasonably requested by Entravision.
-33-
6.10 No Inconsistent Action. Between the date of this Agreement and the
----------------------
Closing Date, LCG will 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. LCG will not take any action
that would disqualify or impair LCG as the assignor of the Radio Stations or as
owners and operators of the Radio Stations.
6.11 Environmental Audit/Engineering/Soils Investigation. Provided that
---------------------------------------------------
LCG has obtained any necessary landlord consents thereto, which consents LCG
shall use Commercially Reasonable Efforts to obtain, at its sole option, within
forty-five (45) days of the execution of this Agreement, Entravision may conduct
and complete a Phase I (or Phase II, if necessary) environmental audit and an
engineering and soils and geotechnical investigation of any of the Real Property
(the "Environmental Audit") to be conducted by a company selected by Entravision
(and reasonably satisfactory to LCG) and at Entravision's sole expense. If the
Environmental Audit discloses the presence of any Hazardous Substances on any
Real Property in violation of any Environmental Laws, Entravision may in its
sole and absolute discretion and at its own expense, promptly comply with the
applicable Environmental Laws to bring such property into compliance. If
Entravision does not properly and timely exercise its termination rights
pursuant to Section 9.1(e) below, the results of such Environmental Audit shall
be deemed, without further action by any of the parties hereto, to be disclosed
on the Schedules to this Agreement.
6.12 Option Notices. Prior to the Closing, LCG shall comply with the
--------------
procedural provisions (including notice provisions) of each Option Agreement
applicable to the Options in connection with the Contemplated Transactions. At
the Closing Date, each outstanding Option shall be cancelled and the holder
thereof shall only be entitled to receive at the Closing Date from LCG in
consideration for such cancellation a cash payment of an amount equal to (i) the
excess, if any, of the Per Share Merger Consideration minus (ii) the exercise
price to be paid upon exercise of such Option pursuant to such Option Agreement
(the "Option Amount") (subject to withholding required under all applicable
laws). Prior to the Closing Date, the Board of Directors of LCG will take any
corporate action necessary to effectuate the provisions of this Section 6.12.
6.13 Board Recommendation. LCG shall take all action necessary in
--------------------
accordance with the Delaware Code and its Certificate of Incorporation and
Bylaws to convene the Meeting on the date set forth in the notice of such
Meeting (and in no event later than twenty-five (25) days after the date of the
notice of the Meeting) in order to consider and vote upon the Merger, and the
Board of Directors of LCG shall not adjourn, postpone or in any way prevent the
Meeting from occurring on the date set forth in such notice. At the Meeting,
the Board of Directors of LCG shall recommend that the Stockholders vote to
approve the Merger and this Agreement; provided, however, that if, after the
date hereof, LCG has received an unsolicited inquiry or proposal, then such
recommendation may be withdrawn, modified or amended, after the Board of
Directors has considered such unsolicited inquiry or proposal, solely to the
extent that the Board of Directors of LCG concludes, in good faith after
consultation with its outside financial advisor,
-34-
and upon advice of outside legal counsel, that it is inconsistent with such
Board's fiduciary duties under applicable law not to do so; provided, further,
that if the events set forth in the preceding clause do occur, the Board of
Directors of LCG shall nonetheless put the approval of the Merger and this
Agreement to a vote of the Stockholders.
ARTICLE 7.
COVENANTS OF ENTRAVISION AND ACQUISITION CO.
7.1 Notification. Between the date of this Agreement and the Closing
------------
Date, Entravision will promptly notify LCG in writing if Entravision become
aware of any fact or condition that causes or constitutes a Breach of any of the
representations and warranties of Entravision or Acquisition Co. 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 representation or warranty been made as of
the time of occurrence or discovery of such fact or condition.
7.2 Commercially Reasonable Efforts. Between the date of this Agreement
-------------------------------
and the Closing Date, Entravision and Acquisition Co. will use their
Commercially Reasonable Efforts to cause the conditions in Section 8.2 below to
be satisfied.
7.3 Applications for FCC Consent. Within ten (10) days after the full
----------------------------
execution of this Agreement, Entravision will file (or cooperate with LCG to
file) such applications as are required in connection with the FCC Consent.
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 LCG with a true, complete and correct copy of any pleading or
other document served on it relating to such applications. If the FCC Consent
imposes any condition on Entravision, Acquisition Co. or Holdings, Entravision,
Acquisition Co. or Holdings shall use their Commercially Reasonable Efforts to
comply with such condition prior to the Closing. If reconsideration or judicial
review is sought with respect to the FCC Consent, and such reconsideration or
review relates to Entravision or Acquisition Co. or Holdings, Entravision or
Acquisition Co. or Holdings, as the case may be, shall vigorously oppose such
reconsideration or judicial review at their own expense.
7.4 Filing Under HSR Act. Promptly 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 Commercially Reasonable Efforts to cooperate in all
respects with LCG in conjunction with any such filing submission or other
inquiry and to promptly notify LCG of any communication
-35-
received from or given to the Antitrust Division of the Department of Justice or
the Federal Trade Commission and to permit the other party to review such
communication.
7.5 No Inconsistent Action. Entravision and Acquisition Co. will 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 and Acquisition Co. will not take any action that
would disqualify or impair Entravision or Holdings as the assignees of the Radio
Stations or as the owner and operator of the Radio Stations.
7.6 Certificate of Incorporation.
----------------------------
(a) At the Closing, the Certificate of Incorporation and Bylaws of the
Surviving Corporation shall contain provisions providing for exculpation of
director and officer liability and indemnification to the fullest extent
permitted by the Delaware Code. Such provisions in the Certificate of
Incorporation of the Surviving Corporation shall not be amended, repealed or
otherwise modified until April 1, 2002 in any manner that would in any material
respect adversely affect the rights thereunder of individuals who at or prior to
the Closing Date were directors, officers, employees or agents of LCG, unless
such modification is required by law.
(b) This Section 7.6 shall survive the Closing Date, is intended to
benefit LCG, the Surviving Corporation and each of the persons referred to in
paragraph (a) of this Section and shall be binding on all successors and assigns
of the Surviving Corporation.
7.7 Escrows and Deposits. Entravision and the Surviving Corporation agree
--------------------
to keep the LCG Representatives reasonably informed as to the status of any
outstanding portion of the Escrows and Deposits and to promptly provide the LCG
Representatives with any disbursements, notices or other materials Entravision
or the Surviving Corporation receive with respect thereto. Entravision and the
Surviving Corporation acknowledge and agree that the LCG Representatives shall
direct and control any Proceedings relating to the Escrows and Deposits.
Subject to the Confidentiality Agreement, and at the expense of the LCG
Representatives (solely from the Escrow Account), each of Entravision and the
Surviving Corporation shall provide the LCG Representatives with such
information and records and make such of its respective officers, directors,
employees and agents available as may reasonably be requested by the LCG
Representatives in connection with any Proceedings relating to the Escrows and
Deposits.
ARTICLE 8.
CONDITIONS PRECEDENT TO PARTIES' OBLIGATIONS TO CLOSE
8.1 Conditions Precedent to the Obligation of Entravision and Acquisition
---------------------------------------------------------------------
Co. to Close. The obligation of Entravision and Acquisition Co. to effect the
------------
Contemplated Transactions and to take the other actions required to be taken by
Entravision and Acquisition
-36-
Co. 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, where permissible):
(a) Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of LCG in this Agreement must be accurate in all
respects as of the date of this Agreement, except for such inaccuracies as would
not have an LCG Material Adverse Effect. Each of the following representations
and warranties of LCG in this Agreement must be accurate when made, and as of
the Closing Date as if made on the Closing Date, except for such inaccuracies as
would not have an LCG Material Adverse Effect: Sections 4.1, 4.2(a), the first
sentence through clause (i) of 4.2(b), 4.3, 4.4 (except for the last sentence),
4.5 (except that if any Options are exercised between the date of execution of
this Agreement and the Closing Date, the number of outstanding Options and the
number of outstanding Shares set forth in this Agreement and the Schedules
hereto shall be deemed to be adjusted accordingly), 4.8, 4.11, 4.14, 4.16 and
4.24.
(b) Performance. All of the material covenants and obligations that
-----------
LCG is required to perform or to comply with pursuant to this Agreement at or
prior to the Closing must have been duly performed and complied with in all
material respects, including, without limitation, the obligations of LCG
pursuant to Section 3.2 above.
(c) Closing Certificate. Entravision shall have received from a duly-
-------------------
authorized officer of LCG 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) No Order. There shall not be in effect any Order of a
--------
Governmental Body which prevents, makes illegal or otherwise prohibits any of
the Contemplated Transactions.
(e) No Prohibition. There shall not be in effect any Legal
--------------
Requirement that prevents, makes illegal or otherwise prohibits any of the
Contemplated Transactions.
(f) Consents. Subject to Section 3.1 above, the FCC Consent shall
--------
have become a Final Order. The applicable waiting period under the HSR Act
shall have expired or been terminated.
(g) Stockholder Approval. The Stockholders shall have approved the
--------------------
Merger and this Agreement at the Meeting in accordance with the Delaware Code
and the Certificate of Incorporation and Bylaws of LCG.
(h) Other Documents. Entravision shall have received such other
---------------
agreements, receipts, pay-off letters and other instruments as it may reasonably
require to evidence payment and satisfaction in full of, or release from, all
obligations of LCG and the LCG Subsidiaries in respect of indebtedness for
borrowed money set forth on Schedule 4.10, including, without limitation, the
-------------
obligations of LCG with respect to the Credit Agreement, the 1997 Debentures
-37-
and the 1998 Debentures, and LCG shall have delivered or caused to be delivered
to Entravision the original promissory note(s) or other instruments evidencing
such indebtedness marked "cancelled," the release and termination of any and all
security interests and liens on the assets of LCG or any of the LCG Subsidiaries
issued in connection with such indebtedness and such other documentation
reasonably requested by Entravision's counsel as necessary to evidence full
repayment of such indebtedness and release of all legal rights and remedies in
connection therewith.
8.2 Conditions Precedent to the Obligation of LCG to Close. The
------------------------------------------------------
obligation of LCG to effect the Contemplated Transactions and to take the other
actions required to be taken by LCG 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 LCG, in whole or in part, where permissible):
(a) Accuracy of Representations and Warranties. All of the
------------------------------------------
representations and warranties of Entravision and Acquisition Co. in this
Agreement must be accurate in all respects when made, and as of the Closing Date
as if made on the Closing Date, except for such inaccuracies as would not have a
Material Adverse Effect on Entravision or Acquisition Co.
(b) Performance. All of the material covenants and obligations that
-----------
Entravision and Acquisition Co. are required to perform or to comply with
pursuant to this Agreement at or prior to the Closing must have been performed
and complied with in all material respects, including, without limitation, the
obligations of Entravision and Acquisition Co. pursuant to Section 3.3 above.
(c) Closing Certificate. LCG shall have received from a duly-
-------------------
authorized officer of 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) No Order. There shall not be in effect any Order of a
--------
Governmental Body which prevents, makes illegal or otherwise prohibits any of
the Contemplated Transactions.
(e) No Prohibition. There shall not be in effect any Legal
--------------
Requirement that prevents, makes illegal or otherwise prohibits any of the
Contemplated Transactions.
(f) Consents. Subject to Section 3.1 above, the FCC Consent shall
--------
have become a Final Order. The applicable waiting period under the HSR Act
shall have expired or been terminated.
(g) Stockholder Approval. The Stockholders shall have approved the
--------------------
Merger and this Agreement at the Meeting in accordance with the Delaware Code
and the Certificate of Incorporation and Bylaws of LCG.
-38-
ARTICLE 9.
TERMINATION
9.1 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 material conditions set forth in
this Agreement, including, without limitation, the material conditions set forth
in Section 8.1 above, have not been materially satisfied as of the Closing Date
or if satisfaction of such material conditions is or becomes impossible (other
than through the failure of Entravision or Acquisition Co. to comply with their
obligations under this Agreement) and Entravision has not waived such condition
in writing on or before the Closing Date; (ii) if LCG remains in default in any
material respect in the observance or in the due and timely performance of any
of its material covenants, agreements, representations or warranties contained
herein after fifteen (15) days written notice and opportunity to cure; or (iii)
if the FCC dismisses or denies the application for the FCC Consent and such
order is a Final Order or if the FCC designates the applications for FCC Consent
for an evidentiary hearing;
(b) by LCG: (i) if any of the material conditions set forth in this
Agreement, including, without limitation, the material conditions set forth in
Section 8.2 above, have not been materially satisfied as of the Closing Date or
if satisfaction of such material conditions is or becomes impossible (other than
through the failure of LCG to comply with its obligations under this Agreement)
and LCG has not waived such condition in writing on or before the Closing Date;
(ii) if Entravision and/or Acquisition Co. remains in default in any material
respect in the observance or in the due and timely performance of any of their
material covenants, agreements, representations or warranties contained herein
after fifteen (15) days written notice and opportunity to cure; (iii) if the FCC
dismisses or denies the application for the FCC Consent and such order is a
Final Order or if the FCC designates the applications for FCC Consent for an
evidentiary hearing; or (iv) if, upon satisfaction or waiver of all of
Entravision and Acquisition Co.'s conditions to close set forth in this
Agreement, Entravision does not have adequate available funds to pay the
Aggregate Merger Consideration;
(c) by mutual consent of Entravision and LCG;
(d) by either Entravision or LCG if the Closing has not occurred
(other than through the failure of any party seeking to terminate this Agreement
to materially comply with its obligations under this Agreement) on or before the
date which is six (6) months from the date of this Agreement; provided, however,
that the Closing Date shall be extended for four (4) additional months if the
only condition to the Closing which has not been satisfied or waived is the
receipt of the FCC Consent as a Final Order, or such later date as the parties
may agree upon; provided, however, that this section may not be utilized by any
party at such time as such party is in Breach of or default under this Agreement
in any material respect; or
-39-
(e) by Entravision within forty-five (45) days from the date of this
Agreement if the Environmental Audit discloses any matters which would have an
LCG Material Adverse Effect unless LCG agrees to fully indemnify Entravision and
the Surviving Corporation for any Liability arising from such matter.
(f) Notwithstanding anything in the foregoing to the contrary, no
party that is in material Breach of this Agreement shall be entitled to
terminate this Agreement except with the consent of the other parties hereto.
9.2 Rights of Parties for Nonperformance or Upon Termination.
--------------------------------------------------------
(a) If LCG does not have a right to terminate under Section 9.1 above
and all conditions precedent to LCG's obligation to close under Section 8.2
above have been satisfied, but LCG refuses to close the Contemplated
Transactions, Entravision shall have the right to waive any grounds it may have
to terminate under Section 9.1 above and to seek specific performance of the
obligation of LCG to consummate the Contemplated Transactions. LCG acknowledges
and agrees that the Radio Stations and the Newspapers are unique assets and LCG
expressly agrees that monetary damages may be inadequate to compensate
Entravision for the refusal of LCG to perform the obligations for which the
remedy of specific performance is made available herein. Accordingly, LCG
acknowledges and agrees that such refusals to perform may cause irreparable
injury to Entravision and that Entravision shall be entitled to seek injunctive
relief for specific performance of the obligations specifically listed in this
Section 9.2. Notwithstanding anything herein to the contrary, LCG's monetary
liability to Entravision and Acquisition Co. in the event of a termination of
this Agreement pursuant to Section 9.1(a) above shall in no event exceed Seven
Million Dollars ($7,000,000).
(b) If this Agreement is terminated for any reason other than by LCG
under Section 9.1(b)(ii) or 9.1(b)(iv) 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 LCG under Section 9.1(b)(ii)
or 9.1(b)(iv) above, the parties acknowledge and agree that LCG will suffer
damages that are not practicable to ascertain. Accordingly, in such event, LCG
shall be entitled to the entire Escrow Deposit as liquidated damages, payable
(i) if the Escrow Deposit is in the form of immediately available funds, by
release of the entire Escrow Deposit (plus interest) to LCG, and (ii) if the
Escrow Deposit is in the form of the Xxxxxxx Money Letter of Credit, by LCG
drawing upon the Xxxxxxx Money Letter of Credit. In the event of a dispute
concerning the right of LCG to receive the liquidated damages provided for
herein, the prevailing party shall be entitled to receive (in addition to the
right to draw upon the Xxxxxxx Money Letter of Credit or the release of the
entire Seven Million Dollars ($7,000,000) plus interest in funds) interest from
Entravision and Acquisition Co., on the one hand, or from LCG, on the other
hand, at the rate of eight percent (8%) per annum from the date of purported
termination of this Agreement until the date on which such accrued and unpaid
interest is paid in full. The parties agree that the foregoing liquidated
damages are reasonable considering all the circumstances existing as of the date
hereof and constitute the parties' good faith estimate of the actual damages
-40-
reasonably expected to result from the termination of this Agreement by LCG
pursuant to Section 9.1(b)(ii) or 9.1(b)(iv) above. In such event, Entravision
shall immediately instruct the Escrow Agent to deliver the Xxxxxxx Money Letter
of Credit to LCG to permit it to draw upon the Xxxxxxx Money Letter of Credit or
to release the funds. LCG AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY LAW,
THE RIGHT TO DRAW UPON THE XXXXXXX MONEY LETTER OF CREDIT OR THE RELEASE OF THE
SEVEN MILLION DOLLARS ($7,000,000), AND THE RIGHT TO RECEIVE INTEREST, PROVIDED
IN THIS SECTION 9.2(b) SHALL BE ITS SOLE AND EXCLUSIVE REMEDY IF THE CLOSING
DOES NOT OCCUR WITH RESPECT TO ANY DAMAGES WHATSOEVER THAT LCG MAY SUFFER OR
ALLEGE TO SUFFER AS A RESULT OF ANY CLAIM OR CAUSE OF ACTION ASSERTED BY LCG
RELATING TO OR ARISING FROM BREACHES OF THE REPRESENTATIONS, WARRANTIES OR
COVENANTS OF ENTRAVISION OR ACQUISITION CO. CONTAINED IN THIS AGREEMENT AND TO
BE MADE OR PERFORMED AT OR PRIOR TO THE CLOSING. In the event of any dispute
between the parties with respect to the right of LCG to receive the liquidated
damages provided for herein, the prevailing party shall be entitled to receive
from the other, on demand, its reasonable attorney's fees in connection with the
final resolution of such dispute.
(c) If this Agreement is terminated as provided in this Article 9,
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, except that
the last sentence of Section 6.1, Sections 13.1, 13.3, 13.4, 13.13, 13.14 and
13.17, and this Section 9.2 and the Confidentiality Agreement shall remain in
effect, and provided that nothing herein shall relieve any party from liability
for any breach of any covenant or agreement in this Agreement prior to such
termination.
ARTICLE 10.
TAX RETURNS AND PAYMENTS
10.1 Returns.
-------
(a) Income Tax Returns.
------------------
(i) Pre-Cut-Off Date Returns. The LCG Representatives shall
------------------------
cause to be prepared and Entravision shall cause to be timely filed all required
federal, state, local and foreign Income Tax Returns of LCG and the LCG
Subsidiaries for any period which ends on or before December 31, 1999 (the "Cut-
Off Date"), for which returns have not been filed as of the Closing Date. Such
Tax Returns shall, to the extent not otherwise required by law, be prepared in a
manner consistent with LCG's past practice (including any Tax elections and
methods of accounting). Entravision and its Related Persons, including the
Surviving Corporation after the Closing Date, shall reasonably cooperate with
the LCG Representatives and their Related Persons in the preparation of such
returns. The LCG Representatives shall submit such returns to
-41-
Entravision not less than three (3) days before the due date (including
extensions) for filing such returns.
(ii) Straddle Returns. Entravision shall cause to be prepared
----------------
and timely filed all required federal, state, local and foreign Income Tax
Returns of, or which include, LCG and the LCG Subsidiaries for taxable periods
beginning before and ending after the Cut-Off Date ("Straddle Returns") which
have not been filed as of the Closing Date. Such Tax Returns shall, to the
extent not otherwise required by law, be prepared in a manner consistent with
LCG's past practice (including any Tax elections and methods of accounting). At
least fifteen (15) days prior to the filing of any Straddle Returns required to
be caused to be filed by Entravision pursuant to the preceding sentence,
Entravision shall submit for their approval copies of such returns to the LCG
Representatives which approval shall not be unreasonably withheld. Entravision
shall take no position on such returns that would adversely affect the
Stockholders after the Closing Date unless such position would be reasonable in
the case of a Person that owned LCG and the LCG Subsidiaries both before and
after the Closing Date.
(b) Other Tax Returns.
-----------------
(i) Pre-Closing Date Returns. The LCG Representatives shall
------------------------
cause to be prepared and Entravision shall cause to be timely filed all required
Other Tax Returns of LCG and the LCG Subsidiaries for any period which ends on
or before the Closing Date for which returns have not been filed as of the
Closing Date. Such Tax Returns shall, to the extent not otherwise required by
law, be prepared in a manner consistent with LCG's past practice (including any
Tax elections and methods of accounting). Entravision and its Related Persons,
including the Surviving Corporation after the Closing Date, shall reasonably
cooperate with the LCG Representatives and their Related Persons in the
preparation of such returns. The LCG Representatives shall submit such returns
to Entravision not less than three (3) days before the due date (including
extensions) for filing such returns.
(ii) Straddle Returns. Entravision shall cause to be prepared
----------------
and timely filed all required Other Tax Returns of, or which include, LCG and
the LCG Subsidiaries for taxable periods beginning before and ending after the
Closing Date ("Other Tax Straddle Returns") which have not been filed as of the
Closing Date. Such Tax Returns shall, to the extent not otherwise required by
law, be prepared in a manner consistent with LCG's past practice (including any
Tax elections and methods of accounting). At least fifteen (15) days prior to
the filing of any Other Tax Straddle Returns required to be caused to be filed
by Entravision pursuant to the preceding sentence, Entravision shall submit for
their approval copies of such returns to the LCG Representatives which approval
shall not be unreasonably withheld. Entravision shall take no position on such
returns that would adversely affect the Stockholders after the Closing Date
unless such position would be reasonable in the case of a Person that owned LCG
and the LCG Subsidiaries both before and after the Closing Date.
10.2 Payments.
--------
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(a) Income Tax Payments. Entravision shall timely cause to be paid
-------------------
all federal, state, local and foreign Income Taxes with respect to the Income
Tax Returns to be caused to be filed by Entravision pursuant to Section 10.1(a)
above. Such Income Taxes to be caused to be paid by Entravision, to the extent
attributable to any period or portion of any period ending on or before the Cut-
Off Date, shall be referred to herein as "Pre-Cut-Off Date Taxes." Prior to the
Closing, LCG shall pay to Entravision an amount equal to the Pre-Cut-Off Date
Taxes due and not yet paid or reserved for on the Financial Statements with
respect to any such returns caused to be filed by Entravision. Where the Pre-
Cut-Off Date Taxes involve a period which begins before and ends after the Cut-
Off Date (a "Straddle Period"), such Pre-Cut-Off Date Taxes shall be calculated
as through the taxable year of LCG terminated at the close of business on the
Cut-Off Date.
(b) Other Tax Payments. Entravision shall timely cause to be paid
------------------
all Other Taxes with respect to the returns to be caused to be filed by
Entravision pursuant to Section 10.1(b) above. Such Other Taxes to be caused to
be paid by Entravision, to the extent attributable to any period or portion of a
period ending on or before the Closing Date, shall be referred to herein as
"Pre-Closing Date Taxes." LCG shall pay to Entravision an amount equal to the
Pre-Closing Date Taxes due and not yet paid or reserved for on the Financial
Statements with respect to any such returns caused to be filed by Entravision.
Where a Pre-Closing Date Tax involves a period which begins before and ends
after the Closing Date (an "Other Tax Straddle Period"), such Pre-Closing Date
Tax shall be equal to the amount of such Other Tax for the taxable year,
multiplied by a fraction, the numerator of which shall be the number of days
from the beginning of the taxable year through the Closing Date and the
denominator of which shall be the number of days in the taxable year.
Any amounts owed by LCG with respect to Tax Returns filed pursuant to
Section 10.1(a)(i) or 10.1(b)(i) above shall be paid to Entravision by LCG ten
(10) days prior to the due date of each such Tax Return. Prior to the Closing,
any amounts owed by LCG to Entravision pursuant to this Section 10.2
attributable to Straddle Returns or Other Tax Straddle Returns shall be paid by
LCG within the later of ten (10) days of Entravision's request therefor or ten
(10) days prior to the date on which Entravision is required to cause to be paid
the related Tax liability. All amounts due from LCG for periods prior to the
Closing and not paid in a timely fashion shall bear interest until paid at the
lesser of ten percent (10%) per annum or the highest rate allowed by law.
10.3 Refunds.
-------
(a) Income Taxes. Any refunds or credits of federal, state, local
------------
or foreign Income Taxes (including any interest thereon) received by or credited
to LCG or any of the LCG Subsidiaries attributable to periods ending on or prior
to the Cut-Off Date or to Straddle Periods (in the case of Straddle Periods,
which were not borne by Entravision) (collectively, the "Stockholders' Refunds")
shall be for the benefit of the Stockholders, and Entravision shall use its
Commercially Reasonable Efforts at the Stockholders' expense to obtain any of
the
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Stockholders' Refunds and shall cause the Surviving Corporation to pay over to
the LCG Representatives any of the Stockholders' Refunds, net of any Tax costs
to Entravision or any of its Related Persons, including the Surviving
Corporation, immediately upon receipt thereof. In addition, if the Cut-Off Date
Taxes with respect to a Straddle Period are conclusively determined to be less
than the payments previously made by or credited to LCG or any of the LCG
Subsidiaries with respect to such Straddle Period, Entravision shall cause the
Surviving Corporation to pay to the LCG Representatives, on behalf of the
Stockholders, the excess of such previous payments over such Pre-Cut-Off Date
Taxes within ten (10) days of the Surviving Corporation receiving the benefit of
such excess payments through a reduction in any Tax payment required to be made
by the Surviving Corporation with respect to any period beginning after the Cut-
Off Date.
(b) Other Taxes. Any refunds or credits of Other Taxes (including
-----------
any interest thereon) received or credited to LCG or any of the LCG Subsidiaries
attributable to periods ending on or prior to the Closing Date or to Other Tax
Straddle Periods (in the case of Other Tax Straddle Periods, which were not
borne by Entravision) (collectively, the "Stockholders' Other Tax Refunds")
shall be for the benefit of the Stockholders, Entravision shall use its
Commercially Reasonable Efforts at the Stockholders' expense to obtain any of
the Stockholders' Other Tax Refunds and shall cause the Surviving Corporation to
pay over to the LCG Representatives any of the Stockholders' Other Tax Refunds,
net of any Tax costs to Entravision or any of its Related Persons, including the
Surviving Corporation, immediately upon receipt thereof. In addition, if the
Pre-Closing Date Taxes with respect to an Other Tax Straddle Period are
conclusively determined to be less than the payments previously made by or
credited to LCG or any of the LCG Subsidiaries with respect to such Other Tax
Straddle Period, Entravision shall cause the Surviving Corporation to pay to the
LCG Representatives, on behalf of the Stockholders, the excess of such previous
payments over such Pre-Closing Date Taxes within ten (10) days of the Surviving
Corporation receiving the benefit of such excess payments through a reduction in
any Tax payment required to be made by the Surviving Corporation after the
Closing Date.
10.4 Tax Cooperation. Subject to the Confidentiality Agreement,
---------------
Entravision and the LCG Representatives shall provide the other party with such
information and records and make such of its officers, directors, employees and
agents available as may reasonably be requested by such other party in
connection with the preparation of any Tax Return or any audit or other
proceeding that relates to LCG or any LCG Subsidiary. Entravision shall prepare
and provide to the LCG Representatives such federal, state, local and foreign
tax information packages as the LCG Representatives shall reasonably request for
use in preparing any Tax Return that relates to LCG or any LCG Subsidiary. Such
information packages shall be completed by Entravision and provided to the LCG
Representatives within sixty (60) days after a request therefor. Notwithstanding
any other provisions hereof, each party shall bear its own expenses in complying
with the foregoing provisions.
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10.5 Entravision's Taxes. Notwithstanding anything in this Agreement to
-------------------
the contrary, Entravision shall pay, or cause to be paid, and Entravision and
the Surviving Corporation shall jointly and severally indemnify the LCG
Representatives, the Stockholders, the Option Holders and their affiliates
against and hold them harmless from any liability for Taxes arising from any
action or failure to act by Entravision or any of their Related Persons
(including the Surviving Corporation) from and after the Closing.
10.6 Taxes of Other Persons. Solely out of the funds in the Escrow
----------------------
Account, the Stockholders and the Option Holders agree to indemnify Entravision
and the Surviving Corporation for any Liability to the Surviving Corporation for
Taxes attributable to LCG or any of the LCG Subsidiaries as a transferee or
successor or by Contract, for the periods ending on or before the Cut-Off Date
with respect to Income Taxes (and in the case of Other Taxes, for the periods
ending on or before the Closing Date).
10.7 Amended Returns. Entravision shall not amend or cause to be amended
---------------
any Tax Return relating to any taxable period or portion of any taxable period
ending on or before the Closing Date without first obtaining the written consent
of the LCG Representatives, which shall not be unreasonably withheld.
ARTICLE 11.
INDEMNIFICATION; REMEDIES
11.1 Survival. 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 until April 1, 2002.
11.2 Indemnification by Stockholders and Option Holders. Each of the
--------------------------------------------------
Stockholders and the Option Holders hereby agrees to indemnify, defend and hold
harmless (solely and exclusively out of funds on deposit in the Escrow Account
and subject to the limitations contained herein) Entravision, Acquisition Co.
and the Surviving Corporation, and their respective Representatives, successors,
assigns, stockholders, members, officers, directors, agents, employees,
controlling Persons and affiliates (collectively, the "Entravision Indemnified
Parties") from and against, and will pay to the Entravision Indemnified Parties
the amount of any loss, liability, claim, damage (including incidental and
consequential damages), cost or expense (including costs of investigation and
defense and reasonable out-of-pocket attorney's fees and expenses), whether or
not involving a third-party claim (collectively, "Damages") (provided, however,
that Damages shall be calculated net of the amount of insurance proceeds or
third-party contribution or indemnification payments actually paid to such
indemnified party as reimbursement for such Damages), arising, directly or
indirectly, from or in connection with (i) any Breach of any representation,
warranty, covenant, obligation or agreement made by LCG in this Agreement, the
Schedules or any other certificate or document delivered by LCG pursuant to this
Agreement, (ii) any payments by Entravision or the Surviving Corporation to
holders of Dissenting Shares (a) arising from a final non-appealable court award
that has been entered
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against the Surviving Corporation with respect to Dissenting Shares or (b)
arising from a final, written, binding settlement agreement with respect to
Dissenting Shares, (iii) any claim by a party for broker's or finder's fees or
commissions, or similar payment or remuneration in respect of the Contemplated
Transactions, (iv) the sale or divestiture of Station KMYC(AM), Marysville,
California pursuant to the Xxxx Asset Purchase Agreement and (v) the Portland
Land Sale.
11.3 Indemnification by Entravision. Entravision hereby agrees to
------------------------------
indemnify, defend and hold harmless each of the LCG Representatives,
Stockholders, the Option Holders and their respective Representatives,
successors, assigns, stockholders, members, officers, directors, agents,
employees, controlling Persons and affiliates (collectively, the "Stockholder
Indemnified Parties") from and against, and will pay to the Stockholder
Indemnified Parties the amount of, any Damages arising, directly or indirectly,
from or in connection with (i) any Breach of any representation, warranty,
covenant, obligation or agreement made by Entravision or Acquisition Co. in this
Agreement or any other certificate or document delivered by Entravision or
Acquisition Co. pursuant to this Agreement and (ii) any claim by a party for
broker's or finder's fees or commissions, or similar payment or remuneration in
respect of the Contemplated Transactions.
11.4 Procedure for Indemnification.
-----------------------------
(a) Promptly (and in all cases within thirty (30) days) after
receipt by an indemnified party in this Article 11 of notice of the commencement
of any Proceeding against it or the existence of any written third-party claim
against it relating to a matter covered by this Article 11, such indemnified
party will, if a claim is to be made against an indemnifying party under such
section, 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 is prejudiced by the
indemnified party's failure to give such notice.
(b) If any Proceeding referred to in Section 11.4(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 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), to assume the defense of such Proceeding with counsel reasonably
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) no compromise or settlement of such claims may be effected by the
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indemnifying party without the indemnified party's consent (which shall not be
unreasonably withheld) 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 (ii) the indemnified party will have no liability with respect to any
compromise or settlement of such claims effected without its consent, unless the
indemnified party unreasonably withholds its consent. If the indemnified party
unreasonably withholds its consent to a proposed compromise or settlement of a
claim, the indemnifying party shall have no obligations whatsoever to the
indemnified party with respect to Damages related to such claim in an amount in
excess of the proposed compromise or settlement. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within thirty (30) 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 may assume the defense of
such Proceeding, the indemnified party may assume the defense of such
Proceeding. If the indemnified party assumes the defense of a Proceeding, no
compromise or settlement of such claims may be effected by the indemnified party
without the indemnifying party's consent (which consent shall not be
unreasonably withheld).
(c) 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.
11.5 Tax Claims. Notwithstanding the procedure set forth in Section 11.4
----------
above, if a written claim shall be made to Entravision or the Surviving
Corporation by any taxing authority with respect to Taxes which, if successful,
might result in an indemnity payment to Entravision or the Surviving Corporation
or any of their Related Persons, Entravision shall promptly notify the LCG
Representatives of such claim (a "Tax Claim") and the LCG Representatives shall
have sole control over the Proceedings and the filing of any amended Tax Returns
and may make all decisions in connection with such Tax Claim. The LCG
Representatives shall keep Entravision informed in respect of all material
aspects of such Tax Claim. Entravision and the Surviving Corporation shall
reasonably cooperate with the LCG Representatives in defending or contesting any
such Tax Claim, which cooperation shall include the retention and (upon request)
the provision of records and information which are reasonably relevant to such
Tax Claim, and making employees available on a mutually convenient basis to
provide additional information or explanation of any material provided hereunder
or to testify at proceedings relating to such Tax Claim. Notwithstanding
anything in this Agreement to the contrary, any Tax Claim shall not be subject
to the Threshold Amount set forth in Section 11.6 below.
11.6 Threshold Indemnification Obligations. Subject to the last sentence
-------------------------------------
of Section 11.5 above, the parties hereto shall have no liability for
indemnification under this Article 11 unless and until the total of the alleged
Damages with respect to any such individual matter equals or exceeds Five
Hundred Thousand Dollars ($500,000) (the "Threshold Amount"). At such time as
the aggregate Damages equal or exceed the Threshold Amount, the indemnified
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party(ies) shall be indemnified to the full extent of all such Damages (in
excess of the Threshold Amount).
11.7 Maximum Indemnification Obligations. The aggregate amount of all
-----------------------------------
claims subject to indemnification (including claims and payments under Article
10) hereunder by the LCG Representatives, on behalf of the Stockholders and the
Option Holders (solely from the funds in the Escrow Account), on one hand, and
Entravision, on the other hand, shall not exceed Seven Million Dollars
($7,000,000).
11.8 Certificate of Incorporation and Bylaws. No Stockholder or Option
---------------------------------------
Holder shall be entitled to indemnification directly or indirectly under the
Certificates of Incorporation or Bylaws of LCG or any of the LCG Subsidiaries
for any matter upon which such Stockholder or Option Holder has an
indemnification obligation hereunder and such Certificates of Incorporation and
Bylaws shall be deemed amended accordingly. However, the provisions of this
Section 11.8 are intended only for the regulation of relations between the
Entravision Indemnified Parties and the Stockholders and the Option Holders, and
this Section 11.8 is not intended for the benefit of creditors or other third
parties and does not grant any rights to creditors or other third parties.
11.9 Unaffected by Knowledge. The rights of the parties to
-----------------------
indemnification, payment of Damages or other remedy under this Article 11 will
not be affected by any knowledge with respect to the accuracy or inaccuracy of
or compliance with, any representation, warranty, covenant or obligation of any
party under this Agreement.
11.10 Exclusivity. Each of the parties hereby acknowledges and agrees that
-----------
the indemnity obligations set forth above shall be the exclusive remedy of any
party with respect to the Contemplated Transactions (including, without
limitation, any matters or claims arising under the Environmental Laws) other
than with respect to fraud or willful misconduct of any party.
11.11 Tax Benefit. Notwithstanding anything to the contrary in this
-----------
Agreement, any indemnification obligation hereunder shall be reduced by the
amount of any Tax benefit actually realized by an indemnified party as a result
of the incurrence of the liability or event giving rise to such indemnification
obligation.
11.12 Purchase Price Adjustment. Except as otherwise required by law, the
-------------------------
parties agree to treat all payments made under this Article 11 as adjustments to
the purchase price.
ARTICLE 12.
REPRESENTATIVES
By virtue of the approval of this Agreement and the Merger by the Board of
Directors of LCG and the approval of this Agreement and the Merger by the
Stockholders pursuant to the
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Certificate of Incorporation and Bylaws of LCG and the applicable provisions of
the Delaware Code, each Stockholder and each Option Holder (whether or not he,
she or it executes and delivers a Letter of Transmittal) will be agreeing as
follows:
12.1 Authorization of the LCG Representatives. Upon adoption of this
----------------------------------------
Agreement and the Merger by the Board of Directors of LCG and approval of this
Agreement and the Merger by the Stockholders pursuant to the Certificate of
Incorporation and Bylaws of LCG and the applicable provisions of the Delaware
Code, the LCG Representatives (and each successor appointed in accordance with
Section 12.6 below) hereby are appointed, authorized and empowered to act, by
unanimous decision of the LCG Representatives, as the LCG Representatives, on
behalf of the Stockholders and the Option Holders, in connection with and to
facilitate the consummation of the Contemplated Transactions, and in connection
with the activities to be performed on behalf of the Stockholders and the Option
Holders under the Indemnity Escrow Agreement and the Escrow Account for the
purposes and with the powers and authority hereinafter set forth in this Article
12 and in the Indemnity Escrow Agreement, which shall include the power and
authority:
(a) to execute and deliver the Xxxxxxx Money Escrow Agreement and
the Indemnity Escrow Agreement (collectively, the "Escrow Agreements") (with
such modifications or changes therein as to which the LCG Representatives, in
their sole unanimous discretion, shall have consented) and to agree to such
amendments or modifications thereto as the LCG Representatives, in their sole
unanimous discretion, may deem necessary or desirable;
(b) to execute and deliver such waivers and consents in connection
with this Agreement, the Escrow Agreements and the consummation of the
Contemplated Transactions as the LCG Representatives, in their sole unanimous
discretion, may deem necessary or desirable;
(c) to deliver any Letters of Transmittal and all Certificates
representing the Shares tendered therewith to Entravision and to collect and
receive all moneys and other proceeds and property payable to the Stockholders
and Option Holders pursuant to Section 2.8 above (including moneys and other
proceeds and property payable to Stockholders who do not tender counterpart
signature pages and/or Letters of Transmittals to the LCG Representatives for
delivery to Entravision at the Closing) and, subject to the withholding and
retention provisions hereinafter set forth in this Article 12 and the payment of
expenses payable by the LCG Representatives, to disburse and pay the same to
each of the Stockholders and Option Holders pursuant to Section 2.8 above (other
than Stockholders who shall at such time be Dissenting Holders);
(d) as the LCG Representatives of the Stockholders and Option
Holders, to enforce and protect the rights and interests of the Stockholders and
Option Holders and to enforce and protect the rights and interests of the LCG
Representatives arising out of or under or in any manner relating to this
Agreement, the Escrow Agreements and each other agreement, document, instrument
or certificate referred to herein or therein or the transactions provided for
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herein or therein (including, without limitation, in connection with any and all
claims for indemnification brought by any Entravision Indemnified Party under
Article 11 above) and, in connection therewith, to (i) assert by claim or
institute any action, proceeding or investigation; (ii) investigate, defend,
contest or litigate any claim, action, proceeding or investigation initiated by
any Entravision Indemnified Party, or any other Person, against the LCG
Representatives and/or the Escrow Account, and receive process on behalf of any
or all Stockholders and Option Holders in any such claim, action, proceeding or
investigation and compromise or settle on such terms as the LCG Representatives
shall determine to be appropriate, and give receipts, releases and discharges on
behalf of all of the Stockholders and Option Holders with respect to, any such
claim, action, proceeding or investigation; (iii) file any proofs of debts,
claims and petitions as the LCG Representatives may deem advisable or necessary;
(iv) settle or compromise any claims asserted under Article 11 above; (v)
assume, on behalf of all of the Stockholders and Option Holders, the defense of
any Claim that is the basis of any claim asserted under Article 11 above; and
(vi) file and prosecute appeals from any decision, judgment or award rendered in
any of the foregoing actions, proceedings or investigations, it being understood
that the LCG Representatives shall not have any obligation to take any such
actions, and shall not have any liability to the Stockholders or the Option
Holders for any failure to take any such actions;
(e) to enforce payment from the Escrow Account and any other amounts
payable to the Stockholders and Option Holders, in each case on behalf of the
Stockholders and Option Holders, in the names of the LCG Representatives or, if
the LCG Representatives so elect, in the names of one or more of the
Stockholders or Option Holders;
(f) to cause to be paid out of the Escrow Account the full amount of
any judgment or judgments and legal interest and costs awarded in favor of any
indemnified party arising out of the indemnification provisions set forth in
Article 11 above;
(g) to refrain from enforcing any right of the Stockholders, Option
Holders or any of them and/or of the LCG Representatives arising out of or under
or in any manner relating to this Agreement, the Escrow Agreements or any other
agreement, instrument or document in connection with the foregoing; and
(h) to make, execute, acknowledge and deliver all such other
agreements, guarantees, orders, receipts, endorsements, notices, requests,
instructions, certificates, stock powers, letters and other writings, and, in
general, to do any and all things and to take any and all action that the LCG
Representatives, in their sole and absolute discretion, may consider necessary
or proper or convenient in connection with or to carry out the activities
described in paragraphs (a) through (g) above and the Contemplated Transactions.
The grant of authority provided for in this Section 12.1: (i) is coupled
with an interest and is being granted, in part, as an inducement to Entravision
and Acquisition Co. to enter into this Agreement and the Indemnity Escrow
Agreement and shall be irrevocable and survive the death, incompetency,
bankruptcy or liquidation of any Stockholder or Option Holder and shall be
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binding on any successor thereto; (ii) subject to the provisions of Section 12.6
below, may only be exercised by all of the LCG Representatives, each acting by
signing as an LCG Representative of each of the Stockholders and Option Holders;
and (iii) shall survive the delivery of an assignment by a Stockholder or Option
Holder of the whole or any fraction of his, her of its interest in the Escrow
Accounts or distributions from the Custodial Account.
12.2 Payments of Expenses; Holdbacks.
-------------------------------
(a) The LCG Representatives shall withhold and retain from any
distributions to the LCG Representatives on behalf of the Stockholders and the
Option Holders or withdrawals by the LCG Representatives on behalf of the
Stockholders and the Option Holders out of the Custodial Accounts such amount or
amounts as shall be sufficient to pay all known, or reasonably anticipated,
expenses which are required to be paid or borne by the Stockholders and the
Option Holders pursuant to this Agreement (including, without limitation, all
transaction costs, fees and expenses), the Indemnity Escrow Agreement or are
otherwise incurred by the LCG Representatives in performance of their duties
hereunder, including, without limitation, their own out-of-pocket expenses and
the payment of any fees and expenses under the Indemnity Escrow Agreement to the
Escrow Agent, and shall pay all such expenses out of the amount or amounts so
withheld. In the event that the amounts so withheld (if any) are insufficient
to pay all such expenses, each Stockholder and Option Holder, upon written
notification from the LCG Representatives of any such deficiency, shall promptly
deliver to the LCG Representatives full payment of its ratable share of the
amount of such deficiency in accordance with such Stockholder's or Option
Holder's Pro Forma Outstanding Shares.
(b) If a Stockholder or an Option Holder fails to make a payment
referred to above or referred to in Section 12.5 below, or any portion thereof
(a "Defaulting Stockholder"), all other Stockholders and Option Holders shall
make such payment, or portion thereof, on behalf of each Defaulting Stockholder
in proportion to their respective Pro Forma Outstanding Shares (computed without
reference to the Pro Forma Outstanding Shares of any Defaulting Stockholder).
In no event shall a Defaulting Stockholder be released from liability for
failing to make such payment hereunder. A Defaulting Stockholder shall be
liable to each other Stockholder, Option Holder and to the LCG Representatives
for all payments, costs and expenses incurred as a result of the failure of the
Defaulting Stockholder to comply with the terms hereof, including, without
limitation, any costs and expenses incurred in enforcing the provisions of this
Agreement.
(c) In connection with the performance of their obligations
hereunder and under the Indemnity Escrow Agreement, the LCG Representatives
shall have the right at any time and from time to time to select and engage, at
the cost and expense of the Stockholders and the Option Holders, attorneys,
accountants, investment bankers, advisors, consultants and clerical personnel
and obtain such other professional and expert assistance, and maintain such
records, as the LCG Representatives may deem necessary or desirable and incur
other out-of-pocket expenses.
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12.3 Disbursements.
-------------
(a) All payments to the Stockholders and the Option Holders by the
LCG Representatives hereunder, and all sums, proceeds and other property held by
the LCG Representatives, shall be allocated among the Stockholders and the
Option Holders (other than Stockholders who shall at such time be Dissenting
Holders) in accordance with Section 2.8 above.
(b) All money or other proceeds received by the LCG Representatives
shall be distributed by the LCG Representatives as promptly as practicable to
each Stockholders and Option Holder as set forth on Section 12.3(a) above,
subject, however, to the right of the LCG Representatives to deduct and withhold
amounts as contemplated by the provisions of Section 12.2 above.
12.4 Bank Accounts; Investments.
--------------------------
(a) The LCG Representatives shall have the right to open such
account or accounts in their own names as LCG Representatives of the
Stockholders and the Option Holders in any bank or trust company as they may
select in order to deposit all sums which they may receive and hold hereunder
(including amounts under Section 12.2(a) above) and to issue checks or draw
money upon the signature of any of the then-acting LCG Representatives (or the
signature of one or more Persons the LCG Representatives may designate) on each
such account.
(b) The LCG Representatives shall have the right, in their sole and
absolute unanimous discretion, to invest and reinvest any of the proceeds held
by them under the terms of this Agreement in investments only of a type which
the Escrow Agent is permitted to make pursuant to the Indemnity Escrow
Agreement. Any securities or other property at any time held by the LCG
Representatives may be held by them in bearer or registered form or in the name
of any other Person or Persons they may designate, and the LCG Representatives
may deal with such securities or other property to the same extent and with the
same powers as an individual owner thereof might do. The LCG Representatives
shall have no responsibility or obligation whatsoever to any Stockholder or
Option Holder for the performance of any investments made in accordance with the
provisions of this Agreement or for any losses realized by any thereof.
12.5 Compensation; Exculpation; Indemnity.
------------------------------------
(a) The LCG Representatives shall not be entitled to any fee,
commission or other compensation for the performance of their services
hereunder, but shall be entitled to the payment out of the Custodial Accounts of
all of their out-of-pocket expenses incurred as LCG Representatives, and in
furtherance of the foregoing, may pay or cause to be paid or reimburse
themselves for the payment of any and all such expenses.
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(b) In dealing with this Agreement, the Escrow Agreements and any
instruments, agreements or documents relating thereto, and in exercising or
failing to exercise all or any of the powers conferred upon the LCG
Representatives hereunder or thereunder, (i) the LCG Representatives shall not
assume any, and shall incur no, responsibility whatsoever to any Stockholder or
Option Holder by reason of any error in judgment or other act or omission
performed or omitted hereunder or in connection with this Agreement, the Escrow
Agreements or any such other agreement, instrument or document and (ii) the LCG
Representatives shall be entitled to rely on the advice of counsel, public
accountants or other independent experts experienced in the matter at issue, and
any error in judgment or other act or omission of the LCG Representatives
pursuant to such advice shall in no event subject the LCG Representatives to
liability to any Stockholder, Option Holder, the Company, Entravision,
Acquisition Co., the Surviving Corporation or any other Person.
(c) Each Stockholder and each Option Holder, severally, shall
indemnify the LCG Representatives up to, but not exceeding, an amount equal to
the aggregate Per Share Merger Consideration received by such Person hereunder
against all damages, liabilities, claims, obligations, costs and expenses,
including reasonable attorney's, accountants' and other experts' fees and the
amount of any judgment against them, of any nature whatsoever, arising out of or
in connection with any claim, investigation, challenge, action or proceeding or
in connection with any appeal thereof, relating to the acts or omissions of the
LCG Representatives hereunder, or under the Escrow Agreements or otherwise. The
foregoing indemnification shall not be deemed exclusive of any other right to
which the LCG Representatives may be entitled apart from the provisions hereof.
In the event of any indemnification under this Section 12.5(c), the LCG
Representatives shall first proceed against any distributions to the LCG
Representatives on behalf of the Stockholders and the Option Holders.
Thereafter, upon written notice from the LCG Representatives to the Stockholders
and the Option Holders as to the existence of a deficiency toward the payment of
any such indemnification amount, each Stockholder and Option Holder shall
promptly deliver to the LCG Representatives full payment of his, her or its
ratable share of the amount of such deficiency, in accordance with such
Stockholder's and Option Holder's Pro Forma Outstanding Shares.
(d) All of the indemnities, immunities and powers granted to the LCG
Representatives under this Agreement shall survive the Closing and/or any
termination of this Agreement and the Escrow Agreements.
(e) Entravision and the Surviving Corporation shall have the right
to rely upon all actions taken or omitted to be taken by the LCG Representatives
pursuant to this Agreement or any applicable ancillary document; provided,
however, that Entravision and the Surviving Corporation shall not have the right
to rely upon any such written action taken by the LCG Representatives unless
such written action is evidenced by a writing executed by all three LCG
Representatives. Notwithstanding anything herein to the contrary, none of
Entravision, Acquisition Co., LCG or the Surviving Corporation shall have any
responsibility or obligation
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whatsoever to any Stockholder, Option Holder or to any other party with respect
to or arising out of any actions taken or any inaction by the LCG
Representatives.
12.6 Removal and Replacement of a LCG Representatives; Successor LCG
---------------------------------------------------------------
Representatives; Action by LCG Representatives.
----------------------------------------------
(a) If one or more of the LCG Representatives is unable or
unavailable to perform his, her or its duties hereunder, a successor for such
LCG Representative or Representatives shall be appointed as follows: (i) in the
case of Latin Investors, by Latin Investors, with written notice delivered to
the LCG Representatives, Entravision and the Surviving Corporation; (ii) in the
case of the Trefoil Designee, by the Trefoil Entities, with written notice
delivered to the LCG Representatives, Entravision and the Surviving Corporation;
and (iii) in the case of the Other Holders Designee, by the written vote of the
holders of a majority of the Pro Forma Outstanding Shares with written notice
delivered to the LCG Representatives, the Stockholders and Option Holders,
Entravision and the Surviving Corporation.
(b) Any LCG Representative or all of them may be removed at any time
as follows: (i) in the case of Latin Investors, by written notice delivered by
Latin Investors to the LCG Representatives, Entravision and the Surviving
Corporation; (ii) in the case of the Trefoil Designee, by written notice
delivered by the Trefoil Entities to the LCG Representatives, Entravision and
the Surviving Corporation; and (iii) in the case of the Other Holders Designee,
by written notice delivered by the holders of a majority of the Pro Forma
Outstanding Shares to the LCG Representatives, the other Stockholders and Option
Holders, Entravision and the Surviving Corporation. Any of Latin Investors, any
Trefoil Designee or any Other Holders Designee so removed shall be replaced in
the manner set forth in Section 12.6(a) above.
(c) Any successor LCG Representative shall have all of the authority
and responsibilities conferred upon or delegated to a LCG Representative
pursuant to this Article 12.
ARTICLE 13.
GENERAL PROVISIONS
13.1 Expenses. Except as otherwise expressly provided in this Agreement,
--------
each party to this Agreement shall separately bear its own 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, regardless of whether the Contemplated
Transactions are consummated.
13.2 Public Announcements. Other than as required by law or those
--------------------
incidental to filings required to comply with Legal Requirements, any public
announcement or similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time and in such
manner as the parties mutually determine. Unless consented to by
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the other parties in advance or required by Legal Requirements, prior to the
Closing, the parties hereto shall keep this Agreement strictly confidential and
may not make any disclosure of this Agreement to any Person.
13.3 Confidentiality. Between the date of this Agreement and the Closing
---------------
Date, the parties will abide by the terms and conditions of the Confidentiality
Agreement and will maintain in confidence, and will cause the directors,
officers, employees, agents and advisors of each of them to maintain in
confidence, any information disclosed pursuant to the Confidentiality Agreement.
13.4 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 certified 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 or Acquisition Co: Entravision Communications Company, L.L.C.
Attention: Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxxxx
00000 Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a required copy to: Xxxxxx Xxxxxx Xxxxxxx XxXxxxxx
Xxxxxx & Fognani, L.L.P.
Attention: Xxxxxxx X. Xxxxx, Esq.
000 Xxxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to LCG: Latin Communications Group Inc.
Attention: Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a required copy to: Shamrock Capital Advisors, Inc.
Attention: Xxxxxx X. Xxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and with a required copy to: Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Attention: Xxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Latin Investors: Latin Investors Limited Partnership
Attention: Xxxxx Xxxxxxxx
c/o LI Management Inc.
000 Xxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a required copy to: Xxxxx Xxxxxxxxxx LLP
Attention: E. Xxx Xxxx, Esq.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trefoil Designee: Shamrock Capital Advisors, Inc.
Attention: Xxxxxxx X. Xxxxx
000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a required copy to: Sigma Hedge Partners, G.P.
c/o General Electric Pension Trust
Attention: Xxxxxxx Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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with a required copy to: Fried, Xxxxx Xxxxxx, Xxxxxxx & Xxxxxxxx
Attention: Xxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Other Holders Designee: Xxxxxx X. Xxxxxx
000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a required copy to: Fried, Xxxxx Xxxxxx, Xxxxxxx & Xxxxxxxx
Attention: Xxxxx X. Xxxxxxx, Esq.
000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
13.5 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.
13.6 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.
13.7 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 November 3,
1999, as amended, except for the Confidentiality Agreement, and constitutes
(along with the Confidentiality Agreement and recitals hereto, and
-57-
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.
13.8 Schedules. The Schedules are hereby incorporated by reference into
---------
this Agreement in their entirety. Entravision and Acquisition Co. hereby
acknowledge and agree that any matter disclosed on any particular Schedule shall
be deemed to be disclosed on all Schedules and shall modify all representations
and warranties of LCG herein.
13.9 Assignment, Successors and No Third-Party Rights. No 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
Entravision and Acquisition Co. may assign any of their rights under this
Agreement to one another or to any Related Person of Entravision and Acquisition
Co., including, without limitation, to a newly-formed corporation created for
purposes of a contemplated roll-up of the equity ownership of Entravision into
such new entity; provided, however, that no such assignment shall be permitted
if such assignment would impair or delay the consummation of the Contemplated
Transactions. 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. Except as set forth in Section 7.6 above,
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 assigns.
13.10 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.
13.11 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.
13.12 Time of Essence. With regard to all dates and time periods set forth
---------------
or referred to in this Agreement, time is of the essence.
13.13 Attorney's Fees. The prevailing party(ies) in any Proceeding
---------------
relating to the enforcement or interpretation of this Agreement may recover from
the unsuccessful party(ies) all
-58-
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 results in a 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.
13.14 Governing Law. This Agreement will be governed by the laws of the
-------------
State of Delaware without regard to conflicts of laws principles.
13.15 Jurisdiction; Service of Process. Any 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 United States District Court for the
Central District of California, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such Proceeding and waives any objection to venue laid therein. Process in any
Proceeding referred to in the preceding sentence may be served on any party
anywhere in the world. In the event that the dispute fails to meet the
jurisdictional threshold requirements of the federal courts, venue shall lie in
the appropriate state courts sitting in Los Angeles County, California.
13.16 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, this Agreement 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 or her signature that he or she
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.
13.17 Transfer Taxes. Notwithstanding anything in this Agreement to the
--------------
contrary, Entravision, on the one hand, and the LCG Representatives on behalf of
the Stockholders and the Option Holders, on the other hand, shall each pay one-
half ( 1/2) of all sales, use, transfer, real property transfer, documentary,
recording, gains, stock transfer and similar taxes and fees, and any deficiency,
interest or penalty asserted with respect thereto (collectively, "Transfer
Taxes") arising out of or in connection with the Merger, and Entravision, on the
one hand, and the Stockholders and the Option Holders, on the other hand, shall
indemnify, defend and hold harmless the other parties and their respective
Representatives with respect to such party's proportionate share of such
Transfer Taxes. Entravision shall timely file the necessary documentation and
Tax Returns with respect to such Transfer Taxes.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Acquisition Agreement and Plan of Merger as of the date first written above.
Entravision ENTRAVISION COMMUNICATIONS COMPANY, L.L.C.,
a Delaware limited liability company
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------------------
Xxxxxx X. Xxxxx, Chairman, Chief Executive Officer
and Managing Member
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------------------------
Xxxxxx X. Xxxxxxxxx, President, Chief Operating
Officer and Managing Member
Acquisition Co. LCG ACQUISITION CORPORATION,
a Delaware corporation
By: /s/ Xxxxxx X. Xxxxx
------------------------------------------------------
Xxxxxx X. Xxxxx, Chairman and Chief Executive
Officer
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------------------------
Xxxxxx X. Xxxxxxxxx, President and Chief Operating
Officer
LCG LATIN COMMUNICATIONS GROUP INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------------------
Name: Xxxxxxx X. Xxxxx
-----------------------------------------------------
Title: Vice President
----------------------------------------------------
[Signature Page No. 1 to Agreement and Plan of Merger]
LCG Representatives
/s/ Xxxxx Xxxxxxxx
----------------------------------------------------------
Xxxxx Xxxxxxxx, as the Latin Investors Designee
/s/ Xxxxxxx X. Xxxxx
----------------------------------------------------------
Xxxxxxx X. Xxxxx, as the Trefoil Designee
/s/ Xxxxxx X. Xxxxxx
----------------------------------------------------------
Xxxxxx X. Xxxxxx, as the Other Holders Designee
[Signature Page No. 2 to Agreement and Plan of Merger]
Schedule 3.2 Required Consents
Schedule 4.1 LCG Subsidiaries
Schedule 4.2 Third Party Consents
Schedule 4.3 Broker's or Finder's Fee
Schedule 4.4 Qualifications to Do Business
Schedule 4.5 Capitalization
Schedule 4.6 Subsidiaries
Schedule 4.7 Financial Statements
Schedule 4.9 Assets
Schedule 4.10 Liabilities
Schedule 4.11 Taxes
Schedule 4.12 Employee Benefits
Schedule 4.13 Non-Compliance with Legal Requirements
Schedule 4.14 Governmental Authorizations
Schedule 4.15 Legal Proceedings
Schedule 4.16 Certain Changes and Events
Schedule 4.17 Applicable Contracts; No Defaults
Schedule 4.19 Real Property
Schedule 4.20 Environmental Matters
Schedule 4.22 Labor Relations
Schedule 4.23 Intellectual Property
Schedule 4.24 Relationships with Related Persons
Schedule A Radio Stations and Newspapers
Schedule B Stockholders
Exhibit A Voting Agreement
Exhibit B Certificate of Merger
Exhibit C Indemnity Escrow Agreement
Exhibit D Earnest Money Escrow Agreement
Exhibit E-1 Legal Opinion of Corporate Counsel for LCG
Exhibit E-2 Legal Opinion of FCC Counsel for LCG
Exhibit F Legal Opinion of Counsel for Entravision and Acquisition Co.
The registrant hereby agrees to furnish a copy of any omitted schedule or
exhibit upon request.
