Exhibit 2
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of August 12, 1997 (this
"Agreement"), among RANGER HOLDINGS CORP., a Delaware corporation ("Parent"),
RANGER ACQUISITION COMPANY, a Delaware corporation and a wholly owned
subsidiary of Parent ("Sub"), and LIN TELEVISION CORPORATION, a Delaware
corporation (the "Company").
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved, and deem it advisable and in the best interests of
Parent, Sub and the Company and of their respective shareholders to
consummate, the business combination transaction provided for herein in which
Sub will merge with and into the Company (the "Merger");
WHEREAS, pursuant to the Merger, each outstanding share of the
Company's common stock, par value $.01 per share (the "Company Common
Stock"), shall be converted into the right to receive the Merger
Consideration (as defined in Section 2.1(c)), upon the terms and subject to
the conditions set forth herein;
WHEREAS, Parent and Sub are unwilling to enter into this Agreement
(and effect the transactions contemplated hereby) unless, contemporaneously
with the execution and delivery hereof, the Principal Company Shareholder (as
defined in Section 2.4) and Xxxx Inlet Communications Corp. ("CI") each enters
into an agreement (collectively, the "Shareholders Agreements") providing for
certain matters with respect to its shares of Company Common Stock and the
Principal Company Shareholder and CI have each agreed to execute and deliver
such agreements;
WHEREAS, Parent, by its execution of this Agreement, has
authorized, approved, adopted and consented to this Agreement and the
transactions contemplated hereby; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, mutual covenants and agreements
herein contained, and intending to be legally bound hereby, Parent, Sub and
the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), at the Effective Time
(as defined in Section 1.3), Sub shall be merged with and into the Company.
As a result of the Merger, the separate corporate existence of Sub shall
cease, and the Company shall continue as the surviving corporation of the
Merger (the "Surviving Corporation") and shall continue under the name LIN
Television Corporation.
SECTION 1.2 Closing. Unless this Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to Section 7.1 and subject to the satisfaction or waiver of the
conditions set forth in Article VI, the closing of the Merger (the "Closing")
will take place as promptly as practicable (and in any event within two
business days) following satisfaction or waiver of the conditions set forth
in Article VI (the "Closing Date"), at the offices of Weil, Gotshal & Xxxxxx
LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, unless another date,
time or place is agreed to in writing by the parties hereto.
SECTION 1.3 Effective Time of the Merger. As soon as practicable
on or after the Closing Date, the parties hereto shall cause the Merger to be
consummated by filing this Agreement or a certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the date and time of the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
(or such later time as is specified in the Certificate of Merger) being the
"Effective Time").
SECTION 1.4 Effects of the Merger. The Merger shall have the
effects set forth in the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the properties,
rights, privileges, immunities, powers and franchises of the Company and Sub
shall vest in the Surviving Corporation, and all debts, liabilities and
duties of the Company and Sub shall become the debts, liabilities and duties
of the Surviving Corporation.
SECTION 1.5 Certificate of Incorporation; By-Laws. (a) At the
Effective Time, the certificate of incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation following the Merger.
(b) The by-laws of Sub, as in effect immediately prior to the
Effective Time, shall be the by-laws of the Surviving Corporation and
thereafter may be amended or repealed in accordance with their terms or the
certificate of incorporation of the Surviving Corporation or as provided by
applicable law.
SECTION 1.6 Directors and Officers. The directors of Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the certificate
of incorporation and by-laws of the Surviving Corporation, and the officers
of the Company immediately prior to the Effective Time shall be the initial
officers of the Surviving Corporation, in each case until their respective
successors are duly elected or appointed, as the case may be, and qualified.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES
SECTION 2.1 Effect on Capital Stock. At the Effective Time, by
virtue of the Merger and without any action on the part of the holders of any
shares of Company Common Stock, or any shares of capital stock of Sub:
(a) Common Stock of Sub. Each share of common stock, par value
$0.01 per share, of Sub issued and outstanding immediately prior to the
Effective Time shall be converted into one validly issued, fully paid and
nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation, which shall be all of the issued and outstanding
capital stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Parent Owned Company Common
Stock. Each share of Company Common Stock and all other shares of capital
stock of the Company that are owned by the Company or by any subsidiary of
the Company, and each share of Company Common Stock and all other shares of
capital stock of the Company that are owned by Parent, Sub or any other
subsidiary of Parent, shall automatically be cancelled and retired and shall
cease to exist and no consideration shall be delivered or deliverable in
exchange therefor.
(c) Conversion of Company Common Stock. Except as otherwise
provided herein and subject to Section 2.1(d), each issued and outstanding
share of Company Common Stock (other than shares to be cancelled in
accordance with Section 2.1(b)) shall be converted into the right to receive
$47.50 plus the additional amounts, if any, payable with respect thereto
pursuant to Section 2.1(e) (collectively, the "Merger Consideration"),
payable to the holder thereof upon surrender of the certificate formerly
representing such share of Company Common Stock in the manner provided in
Section 2.2. All such shares of Company Common Stock, when so converted,
shall no longer be outstanding and shall automatically be cancelled and
retired and shall cease to exist, and each certificate previously
representing any such shares shall cease to have any rights with respect
thereto, except the right to receive the Merger Consideration therefor upon
the surrender of such certificates in accordance with Section 2.2.
(d) Shares of Dissenting Holders. Notwithstanding anything in
this Agreement to the contrary, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time held by holders who have
not voted in favor of the Merger or consented thereto in writing and who have
demanded appraisal rights with respect thereto in accordance with Section 262
of the DGCL (the "Dissenting Shares") shall not be converted into the right
to receive the Merger Consideration as described in Section 2.1(c), but
holders of such shares shall be entitled to receive payment of the appraised
value of such shares in accordance with the provisions of such Section 262;
provided, however, that any Dissenting Shares held by a holder who shall
thereafter have failed to perfect or shall have effectively withdrawn such
demand for appraisal of such shares or shall have lost the right to appraisal
as provided in Section 262 of the DGCL shall thereupon be deemed to have been
converted, at the Effective Time, into the right to receive the Merger
Consideration as described in Section 2.1(c) upon surrender (in the manner
provided in Section 2.2) of the Certificate or Certificates that, immediately
prior to the Effective Time, evidenced such shares of Company Common Stock.
The Company shall give Parent (i) prompt notice of any written demands for
appraisal of any shares, attempted withdrawals of such demands, and any other
instruments served pursuant to the DGCL that are received by the Company
relating to shareholders' rights of appraisal and (ii) the opportunity to
direct all negotiations and proceedings with respect to demands for appraisal
under the DGCL. The Company shall not, except with the prior written consent
of Parent, voluntarily make any payment with respect to any demands for
appraisals of capital stock of the Company, offer to settle or settle any
such demands or approve any withdrawal of any such demands.
(e) Additional Amounts. (i) The amount of cash to which holders
of issued and outstanding shares of Company Common Stock shall be entitled
pursuant to Section 2.1(c) shall be increased by an additional amount per
share equal to $47.50 multiplied by a fraction (A) the numerator of which
shall be equal to the Applicable Rate (as defined below) multiplied by the
number of days from and including the earlier of (x) the date on which the
Required Vote shall have been obtained and (y) January 1, 1998 (the earlier
of such dates being the "Accretion Start Date"), to but excluding the date on
which the Effective Time occurs and (B) the denominator of which shall be
365.
(ii) For purposes of this Section 2.1(e), the term "Applicable
Rate" shall mean 8% per annum.
SECTION 2.2 Payment; Exchange of Certificates.
(a) Paying Agent; Payment Fund. Prior to the Effective Time,
Parent shall designate a bank or trust company who shall be reasonably
satisfactory to the Company to act as paying agent in the Merger (the "Paying
Agent"), and on or prior to the Closing Date, Parent shall deposit or cause
to be deposited with the Paying Agent for the benefit of the holders of the
Company Common Stock (other than the Company and holders of Dissenting
Shares) cash in an amount necessary for the payment of the Merger
Consideration as provided in Section 2.1 upon surrender of certificates
representing shares of Company Common Stock as part of the Merger. Funds
deposited with the Paying Agent shall be invested by the Paying Agent as
directed by Parent or, after the Effective Time, the Surviving Corporation,
provided that such investments shall only be in obligations of or guaranteed
by the United States of America, in commercial paper obligations rated A-1 or
P-1 or better by Xxxxx'x Investors Service, Inc. or Standard & Poor's
Corporation, respectively, or in certificates of deposit, bank repurchase
agreements or banker's acceptances of commercial banks with capital exceeding
$1 billion. Any interest earned on such funds shall be for the Surviving
Corporation. The Paying Agent shall, pursuant to irrevocable instructions
from Parent and the Surviving Corporation, use the funds deposited with the
Paying Agent to pay the holders of the Company Common Stock in accordance
with this Article II, and such funds shall not be used for any other purpose.
If for any reason (including losses) the funds on deposit with the Paying
Agent are inadequate to pay the amounts to which the holders of shares of
Company Common Stock shall be entitled under Article II, Parent shall cause
the Surviving Corporation to promptly deposit in trust additional cash with
the Paying Agent sufficient to make all payments required under this
Agreement, and the Surviving Corporation shall in any event be liable for
payment thereof.
(b) Exchange Procedures. As soon as reasonably practicable after
the Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding shares of Company Common Stock (the "Certificates"),
whose shares were converted pursuant to Section 2.1 into the right to receive
the Merger Consideration, (i) a letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the Certificates to the
Paying Agent and shall be in such form and have such other provisions as
Parent and the Company may reasonably specify) and (ii) instructions to
effect the surrender of the Certificates in exchange for payment of the
Merger Consideration. Upon surrender of one or more Certificates for
cancellation to the Paying Agent or to such other agent or agents as may be
appointed by Parent, which agents shall be reasonably satisfactory to the
Company, together with such letter of transmittal, duly executed, the holder
of such Certificates shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly
represented by such Certificate, and the Certificates so surrendered shall
forthwith be cancelled. Except as required by law, no interest shall be paid
on the Merger Consideration payable upon surrender of any Certificate. If
payment of the Merger Consideration is to be made to a person other than the
person in whose name the surrendered Certificate is registered, it shall be a
condition of payment that the Certificate so surrendered shall be properly
endorsed or shall be otherwise in proper form for transfer and that the
person requesting such payment shall have paid any transfer and other taxes
required by reason of the payment of the Merger Consideration to a person
other than the registered holder of the Certificate surrendered or shall have
established to the satisfaction of the Surviving Corporation that such tax
either has been paid or is not applicable. Until surrendered as contemplated
by this Section 2.2, each Certificate (other than Certificates representing
Dissenting Shares) shall be deemed at any time after the Effective Time to
represent only the right to receive the Merger Consideration in cash as
contemplated by this Section 2.2.
(c) No Further Ownership Rights in Company Common Stock. All cash
paid upon the surrender of Certificates in accordance with the terms of this
Article II shall be deemed to have been paid in full satisfaction of the
rights pertaining to the shares of Company Common Stock theretofore
represented by such Certificates. At the Effective Time, the stock transfer
books of the Company shall be closed, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the shares of Company Common Stock which were outstanding
immediately prior to the Effective Time. If, after the Effective Time,
Certificates are presented to the Paying Agent or the Surviving Corporation,
they shall be cancelled and exchanged for the Merger Consideration as
provided in this Article II.
(d) Termination of Payment Fund. Any portion of the funds held by
the Paying Agent pursuant to this Section 2.2 which remain undistributed to
the holders of Company Common Stock for six months after the Effective Time
shall be delivered to the Surviving Corporation, upon demand, and any holders
of Company Common Stock who have not theretofore complied with this Article
II shall thereafter look only to the Surviving Corporation (subject to
abandoned property, escheat or other similar laws) for payment of the Merger
Consideration to which they are entitled.
(e) No Liability. None of Parent, the Company, the Surviving
Corporation or the Paying Agent shall be liable to any holder of shares of
Company Common Stock for any cash delivered to a public official pursuant to
any applicable abandoned property, escheat or similar law. If any
Certificates shall not have been surrendered prior to five years after the
Effective Time (or immediately prior to such earlier date on which any
payment in respect thereof would otherwise escheat to or become the property
of any Governmental Entity (as defined in Section 3.1(e)), the payment in
respect of such Certificates shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free and clear of all
claims or interest of any person previously entitled thereto.
(f) Withholding Rights. The Paying Agent or the Surviving
Corporation shall be entitled to deduct and withhold from the consideration
otherwise payable pursuant to this Agreement to any holder of shares of
Company Common Stock such amounts as the Paying Agent or the Surviving
Corporation is required to deduct and withhold with respect to the making of
such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law, or any court
order, provided, however, there shall be no withholding pursuant to section
1445 of the Code if the Company or its shareholders deliver appropriate
certification pursuant to section 1445 of the Code. To the extent that
amounts are so withheld by the Paying Agent or the Surviving Corporation,
such withheld amounts shall be treated for all purposes of this Agreement as
having been paid to the holder of the shares of Company Common Stock in
respect of which such deduction and withholding was made by the Paying Agent
or the Surviving Corporation.
SECTION 2.3 Treatment of Employee Options. (a) Prior to the
Effective Time, the Board of Directors of the Company (or, if appropriate,
any committee thereof) shall adopt appropriate resolutions and take all other
actions reasonably necessary to (i) provide for the cancellation, effective
at the Effective Time, of all the outstanding stock options, stock
appreciation rights, limited stock appreciation rights and performance units
(the "Options") heretofore granted under any stock option, performance unit
or similar plan of the Company (the "Stock Plans"), (ii) provide that
immediately prior to the Effective Time, each Option, whether or not then
vested or exercisable, shall no longer be exercisable but shall entitle each
holder thereof (subject to applicable withholding taxes), in cancellation and
settlement therefor, to a cash payment at the Effective Time equal to (x) the
excess, if any, of the Merger Consideration over the exercise price of each
Option held by the holder, whether or not then vested or exercisable,
multiplied by (y) the number of shares of Company Common Stock subject to
such Option and (iii) provide that all Stock Plans will terminate as of or
prior to the Effective Time.
(b) As provided herein, the Stock Plans and any other plan,
program or arrangement providing for the issuance or grant of any other
interest in respect of the capital stock of the Company or any subsidiary
(collectively with the Stock Plans, referred to as the "Stock Incentive
Plans") shall terminate as of the Effective Time. The Company will take all
action reasonably necessary to ensure that, as of the Effective Time, none of
Parent, the Company, the Surviving Corporation or any of their respective
subsidiaries is or will be bound by any Options, other options, warrants,
rights or agreements which would entitle any person, other than Parent or its
affiliates, to own any capital stock of the Company or the Surviving
Corporation or any of their respective subsidiaries or to receive any payment
in respect thereof after the Effective Time.
SECTION 2.4 Termination of Private Market Value Guarantee. At the
Effective Time, without further action on the part of any of the parties
hereto or any shareholders of the Company (including the Public Stockholders
(as defined in Section 8.3)), the Television Private Market Value Guarantee
dated December 28, 1994 between the Company and AT&T Wireless Services, Inc.
(as successor) (the "Principal Company Shareholder"), as the same may be
further amended or supplemented (the "PMVG"), shall terminate and be of no
further force or effect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Company. The
Company hereby represents and warrants to Parent and Sub as follows:
(a) Organization and Qualification; Subsidiaries. Each of the
Company and each of its Significant Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite corporate power and
authority to own, lease and operate its properties and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power and authority
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (as defined below) or to prevent or materially delay
the ability of the Company to consummate the transactions contemplated
hereby. Each of the Company and each of its Significant Subsidiaries is duly
qualified or licensed as a foreign corporation to do business, and is in good
standing, in each jurisdiction where the character of the properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary, except for such failures to be so duly
qualified or licensed and in good standing which would not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
When used in connection with the Company or any of its
subsidiaries, the term "Material Adverse Effect" means any event, change or
effect that, individually or together with all other events, changes or
effects, is materially adverse to the properties, business, financial
condition or results of operations of the Company and its subsidiaries taken
as a whole (other than changes in general economic conditions or in economic
conditions generally affecting the television broadcasting industry).
Notwithstanding the preceding sentence, the parties hereto agree that for
purposes of this Agreement (i) (provided that the Company has complied with
its obligations under Section 5.6(a)(ii)) any modification of, or any payments
made or other arrangements entered into, in connection with obtaining any
consent to the transactions contemplated hereby under any Material Contract
(as defined in Section 3.1(t)) and (ii) (subject to Section 6.2(e)) any
modification or termination of any LMA Agreement (as defined in Section
3.1(t)) to comply with any FCC rule making proceeding or other action, in
each case shall not be taken into account in determining whether there
has been or may be a Material Adverse Effect.
(b) Certificates of Incorporation and By-Laws. The Company has
heretofore furnished to Parent a complete and correct copy of the certificate
of incorporation and the by-laws of the Company and each Significant
Subsidiary of the Company as currently in effect. The certificate of
incorporation and by-laws of the Company and each Significant Subsidiary are
in full force and effect and no other organizational documents are applicable
to or binding upon the Company or any Significant Subsidiary. Neither the
Company nor any Significant Subsidiary is in violation of any of the
provisions of its certificate of incorporation or by-laws.
(c) Capitalization. The authorized capital stock of the Company
consists of 90,000,000 shares of Company Common Stock and 15,000,000 shares
of Preferred Stock, $.01 par value per share ("Company Preferred Stock"). As
of August 1, 1997, (i) 29,782,664 shares of Company Common Stock were issued
and outstanding, all of which were validly issued, fully paid and
nonassessable and were issued free of preemptive (or similar) rights, (ii)
3,956 shares of Company Common Stock were owned by the Company or by
subsidiaries of the Company and (iii) an aggregate of 2,455,231 shares of
Company Common Stock were reserved for issuance and issuable upon or
otherwise deliverable in connection with the exercise of outstanding employee
Options issued pursuant to the Plans (as defined in Section 3.1(m)). Since
June 30, 1997, no options to purchase shares of Company Common Stock have
been granted and no shares of Company Common Stock have been issued except
for shares issued pursuant to the exercise of employee Options outstanding as
of June 30, 1997. Section 3.1(c) of the Disclosure Schedule sets forth a
true and complete list of the subsidiaries and associated entities of the
Company which evidences, among other things, the capitalization of, and the
amount of capital stock or other equity interests owned by the Company,
directly or indirectly, in, such subsidiaries or associated entities. As of
the date hereof, no shares of Company Preferred Stock are issued and
outstanding. Except as set forth above and except as a result of the
exercise of employee Options outstanding as of June 30, 1997, there are
outstanding (i) no shares of capital stock or other voting securities of the
Company or any subsidiary, (ii) no securities of the Company or any
subsidiary convertible into or exchangeable or exercisable for shares of
capital stock or voting securities of the Company or any subsidiary, (iii) no
options or other rights to acquire from the Company or any subsidiary, and no
obligation of the Company or any subsidiary to issue, any capital stock,
voting securities or securities convertible into or exchangeable or
exercisable for capital stock or voting securities of the Company or any
subsidiary and (iv) no equity equivalents, interests in the ownership or
earnings of the Company or any subsidiary, stock appreciation rights or other
similar rights (collectively, "Company Securities"). Except as set forth in
Section 3.1(c) of the Disclosure Schedule of the Company dated the date
hereof and delivered to Parent (the "Disclosure Schedule"), there are no
outstanding obligations of the Company or any of its subsidiaries to
repurchase, redeem or otherwise acquire any Company Securities, and there are
no other options, calls, warrants or other rights, agreements, arrangements
or commitments of any character relating to the issued or unissued capital
stock of the Company or any of its subsidiaries to which the Company or any
of its subsidiaries is a party. Except as set forth in Section 3.1(c) of the
Disclosure Schedule, there are no stockholder agreements (other than the
Shareholders Agreements), voting trusts or other agreements or understandings
to which the Company or any of its subsidiaries is a party or by which any of
them is bound relating to the voting of any shares of capital stock of the
Company or any such subsidiary. All shares of Company Common Stock subject
to issuance as aforesaid, upon issuance on the terms and conditions specified
in the instruments pursuant to which they are issuable, will be duly
authorized, validly issued, fully paid and nonassessable and free of
preemptive (or similar) rights. There are no outstanding contractual
obligations of the Company or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of Company Common Stock or the capital stock
of any subsidiary or, except as described in Section 3.1(c) of the Disclosure
Schedule, to provide funds to or make any investment (in the form of a loan,
capital contribution, guarantee or otherwise) in any such subsidiary or any
other entity. Except as set forth in Section 3.1(c) of the Disclosure
Schedule, each of the outstanding shares of capital stock of each of the
Company's subsidiaries is duly authorized, validly issued, fully paid and
nonassessable and is owned directly or indirectly by the Company free and
clear of any Liens (as defined in Section 8.3).
(d) Authority Relative to Agreements. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and, subject to approval of the Merger and this Agreement by (i) the holders
of a majority of the issued and outstanding Company Common Stock and (ii) a
Majority Vote of the Public Stockholders (as defined in Section 8.3), in each
case as set forth herein (collectively, the "Required Vote"), to consummate
the transactions contemplated hereby. The execution, delivery and
performance of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of the Company
(subject to the approval and adoption of the Merger and this Agreement by the
Required Vote, and, with respect to the Merger, the filing of appropriate
merger documents as required by the DGCL). The Board of Directors of the
Company has [unanimously] resolved to recommend that the shareholders of the
Company approve and adopt this Agreement, provided, that such approval and
recommendation may be withdrawn or modified if permitted pursuant to Section
5.3. This Agreement has been duly executed and delivered by the Company and,
assuming the valid authorization, execution and delivery hereof by each of
Parent and Sub, constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws affecting or relating to the enforcement of
creditors' rights generally and by general principles of equity. The action
of the Board of Directors of the Company in approving the Merger and this
Agreement and the transactions contemplated by this Agreement is sufficient
to render inapplicable to the Merger and this Agreement the provisions of
Section 203 of the DGCL and to the knowledge of the Company no other state
takeover statute or similar statute or regulation applies to the Merger, this
Agreement or any of the transactions contemplated hereby.
(e) Consents and Approvals; No Violations. Except as set forth in
Section 3.1(e) of the Disclosure Schedule, the execution and delivery by the
Company of this Agreement do not, and the consummation by the Company of the
transactions contemplated hereby and compliance by the Company with the
provisions hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
obligation or the loss of a benefit under, or result in the creation of any
Lien upon or right of first refusal with respect to any of the properties or
assets of the Company or any of its subsidiaries under, (i) any provision of
the certificate of incorporation, by-laws or comparable organization
documents of the Company or any of its Significant Subsidiaries, (ii) any
loan or credit agreement, note, bond, mortgage, indenture, lease or other
agreement (other than, with respect to termination, agreements terminable
without material penalty either at will or upon 90 days' or less notice by
the terminating party), obligation, instrument, permit, concession, franchise
or license applicable to the Company or any of its Significant Subsidiaries
or (iii) assuming all the consents, filings and registrations referred to in
the next sentence are obtained and made, any judgment, order, decree,
statute, law, ordinance, rule or regulation applicable to the Company or any
of its Significant Subsidiaries or any of their respective properties or
assets, other than, in the case of clause (ii) or (iii), any such violations,
defaults, rights, losses or liens, that, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect. No
filing or registration with, or authorization, consent or approval of, any
domestic (federal and state) or foreign court, commission, governmental body,
regulatory agency, authority or tribunal (a "Governmental Entity") is
required by or with respect to the Company or any of its subsidiaries in
connection with the execution and delivery of this Agreement by the Company
or is necessary for the consummation of the Merger and the other transactions
contemplated by this Agreement, except (i) the filing with the Securities and
Exchange Commission (the "SEC") of (1) a proxy statement in definitive form
relating to the Shareholders' Meeting (such proxy statement, as amended or
supplemented from time to time, the "Proxy Statement") and (2) such other
filings under the Securities Exchange Act of 1934, as amended, and the rules
and regulations promulgated thereunder (the "Exchange Act"), as may be
required in connection with this Agreement and the transactions contemplated
hereby and the obtaining from the SEC of such orders as may be required in
connection therewith, (ii) applicable filings, if any, pursuant to the
provisions of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (iii) such filings with, and orders of, the Federal
Communications Commission (the "FCC") as may be required under the
Communications Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Communications Act") (iv) the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware
and appropriate documents with the relevant authorities of other states in
which the Company or any of its subsidiaries is qualified to do business, (v)
such filings and consents as may be required under any environmental, health
or safety law or regulation pertaining to any notification, disclosure or
required approval triggered by the Merger or the other transactions
contemplated by this Agreement, (vi) such filings as may be required in
connection with statutory provisions and regulations relating to real
property transfer gains taxes and real property transfer taxes, and (vii)
such other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would
not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or prevent or materially delay the ability of the
Company to consummate the transactions contemplated by this Agreement.
(f) Licenses. (i) Each of the Company and its Significant
Subsidiaries has all permits, licenses, waivers and authorizations (other
than FCC Licenses (as defined in Section 8.3), but including licenses,
authorizations and certificates of public convenience and necessity from
applicable state and local authorities), which are necessary for it to
conduct its business, including its television broadcast operations, in the
manner in which they are presently being conducted (collectively,
"Licenses"), other than any Licenses the failure of which to have would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each of the Company and its Significant Subsidiaries is in
compliance with the terms of all Licenses (other than FCC Licenses), except
for such failures so to comply which would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The
Company and its Significant Subsidiaries have duly performed their respective
obligations under and are in compliance with the terms of such Licenses,
except for such non-performance or non-compliance as would not, individually
or in the aggregate, reasonably be expected to have a Material Adverse
Effect. There is no pending or, to the knowledge of the Company, threatened
application, petition, objection or other pleading with any Governmental
Entity other than the FCC which challenges or questions the validity of, or
any rights of the holder under, any License (other than an FCC License),
except for such applications, petitions, objections or other pleadings, that
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect or that are applicable to the broadcast industry
generally. No representation or warranty is made in this Section 3.1(f) with
respect to Licenses required by Environmental Laws (as defined in Section
3.1(p)).
(ii) Section 3.1(f)(ii) of the Disclosure Schedule sets forth all
material FCC Licenses held by or in respect of each Company Station and to
the knowledge of the Company (without investigation) all material FCC
Licenses held by or in respect of each LMA Station. Except as set forth in
Section 3.1(f)(ii) of the Disclosure Schedule and except as does not
materially adversely affect the operation by the Company or any subsidiary of
the Company of any of the Company Stations or the operation of the LMA
Stations (as defined in Section 8.3) to which the FCC Licenses listed in
Section 3.1(f)(ii) of the Disclosure Schedule apply: (A) the Company and
those of its subsidiaries that are required to hold FCC Licenses with respect
to Company Stations, or that control FCC Licenses with respect to Company
Stations, are financially qualified and, to the knowledge of the Company, are
otherwise qualified to hold such FCC Licenses or to control such FCC
Licenses, as the case may be; (B) the Company and those of its subsidiaries
that are required to hold FCC Licenses with respect to Company Stations hold
such FCC Licenses; (C) the Company is not aware of any facts or circumstances
relating to the FCC qualifications of the Company or any of its subsidiaries
that would prevent the FCC's granting the FCC Form 315 Transfer of Control
Application to be filed with respect to the Merger (the "FCC Application");
(D) each Company Station and to the knowledge of the Company (without
investigation) each LMA Station is in material compliance with all FCC
Licenses held by it and with the Communications Act; and (E) there is not
pending or, to the knowledge of the Company (without investigation in respect
of LMA Stations), threatened any application, petition, objection or other
pleading with the FCC or other Governmental Entity which challenges the
validity of, or any rights of the holder under, any FCC License held by the
Company Stations, the LMA Stations, the Company or any of its subsidiaries,
except for rule making or similar proceedings of general applicability to
persons engaged in substantially the same business conducted by the Company
Stations.
(g) SEC Documents and Other Reports. The Company has filed all
required documents with the SEC since January 1, 1995 (the "SEC Reports").
Except as set forth in Section 3.1(g) of the Disclosure Schedule, as of their
respective filing dates, the SEC Reports complied in all material respects
with the requirements of the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "Securities Act"), or the Exchange Act,
as the case may be, each as in effect on the date so filed, and at the time
filed with SEC none of the SEC Reports contained any untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. Except as set
forth in Section 3.1(g) of the Disclosure Schedule, the financial statements
of the Company included in the SEC Reports comply as of their respective
dates as to form in all material respects with the then applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles (except, in the case of the unaudited statements, as permitted by
Form 10-Q of the SEC) applied on a consistent basis during the periods
involved (except as may be indicated therein or in the notes thereto) and
fairly present the consolidated financial position of the Company and its
consolidated subsidiaries as at the dates thereof and the consolidated
results of their operations and their consolidated cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal year-end
audit adjustments and to any other adjustments described therein).
(h) Information Supplied. The Proxy Statement (or any amendment
thereof or supplement thereto) will, at the date of mailing to shareholders
of the Company and at the time of the Shareholders' Meeting to be held in
connection with the Merger, not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that no
representation is made by the Company with respect to statements made based
on information supplied by Parent or Sub in writing specifically for
inclusion in the Proxy Statement. The Proxy Statement will comply as to form
in all material respects with the provisions of the Exchange Act and the
rules and regulations thereunder.
(i) Absence of Certain Changes or Events. Since June 30, 1997,
except as contemplated by this Agreement, as set forth in Section 3.1(i) of
the Disclosure Schedule or disclosed in the SEC Reports filed since that date
and up to the date of this Agreement, the Company and its subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since such date, there has not been (i)
any condition, event or occurrence which, individually or in the aggregate,
has had, or would reasonably be expected to have, a Material Adverse Effect,
(ii) any termination or cancellation of, or any modification to, any
agreement, arrangement or understanding which has had or would reasonably be
expected to have a Material Adverse Effect, (iii) any material change by the
Company in its accounting methods, principles or practices, (iv) any
revaluation by the Company of any of its material assets other than in the
ordinary course of business, consistent with past practice, (v) any entry by
the Company or any of its subsidiaries into any commitment or transactions
material to the Company, (vi) any declaration, setting aside or payment of
any dividends or distributions in respect of the shares of Company Common
Stock or any redemption, purchase or other acquisition of any of its
securities, (vii) any increase in or establishment of any bonus, insurance,
severance, deferred compensation, pension, retirement, profit sharing, stock
option (including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan or agreement or arrangement, or any
other increase in the compensation payable or to become payable to any
officers or key employees of the Company or any of its subsidiaries other
than in the ordinary course of business consistent with past practice or as
was required under employment, severance or termination agreements in effect
as of June 30, 1997, (viii) any bonus paid to the employees of the Company or
its subsidiaries other than in the ordinary course of business and consistent
with past practice, (ix) any sale or transfer of any material assets of the
Company or its subsidiaries other than in the ordinary course of business and
consistent with past practice or (x) any loan, advance or capital
contribution to or investment in any person in an aggregate amount in excess
of $100,000 by the Company or any subsidiary (excluding any loan, advance or
capital contribution to, or investment in, the Company or any wholly owned
subsidiary and except for drawdowns by the Company under its credit
facility).
(j) Liabilities. Except (a) for liabilities incurred in the
ordinary course of business consistent with past practice, (b) for
transaction expenses incurred in connection with this Agreement, (c) for
liabilities which individually or in the aggregate would not reasonably be
expected to have a Material Adverse Effect, (d) for liabilities set forth on
any balance sheet (including the notes thereto) included in the Company's
financial statements included in the SEC Reports filed prior to the date
hereof, or (e) as set forth in Section 3.1(j) of the Disclosure Schedule,
since December 31, 1996 neither the Company nor any of its subsidiaries has
incurred any liabilities or obligations of any nature, whether or not
accrued, contingent or otherwise, and whether due or to become due, that
would be required to be reflected or reserved against in a consolidated
balance sheet of the Company and its subsidiaries (including the notes
thereto) prepared in accordance with generally accepted accounting principles
as applied in preparing the consolidated balance sheet of the Company and its
subsidiaries as of December 31, 1996 contained in the Company's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996.
(k) Absence of Litigation. Except as disclosed in the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 or in
Section 3.1(k) of the Disclosure Schedule, there are no suits, claims,
actions, proceedings or investigations pending or, to the knowledge of the
Company, threatened against the Company or any of its subsidiaries, or any
properties or rights of the Company or any of its subsidiaries, before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that (i) individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, (ii) as of the
date of this Agreement question the validity of this Agreement or any action
to be taken by the Company in connection with the consummation of the
transactions contemplated hereby or (iii) as of the date of this Agreement
would prevent or result in a material delay of the consummation of the
transactions contemplated hereby. As of the date hereof, neither the Company
nor any of its subsidiaries nor any of their respective properties is or are
subject to any order, writ, judgment, injunction, decree, determination or
award having, or which would reasonably be expected to have, a Material
Adverse Effect or which would prevent or result in a material delay of the
consummation of the transactions contemplated hereby.
(l) Labor Matters. Except as set forth in Section 3.1(l) of the
Disclosure Schedule or in the SEC Reports filed prior to the date hereof, (i)
neither the Company nor any of its subsidiaries is a party to any labor or
collective bargaining agreement, and no employees of the Company or any of
its subsidiaries are represented by any labor organization, (ii) to the
knowledge of the Company there are no material representation or
certification proceedings, or petitions seeking a representation proceeding
pending or threatened to be brought or filed with the National Labor
Relations Board or any other labor relations tribunal or authority and (iii)
to the knowledge of the Company there are no material organizing activities
involving the Company or any of its subsidiaries with respect to any group of
employees of the Company or its subsidiaries.
(m) Employee Arrangements and Benefit Plans. (i) Section 3.1(m)
of the Disclosure Schedule sets forth a complete and correct list of (i) all
employee benefit plans within the meaning of Section 3(3) of ERISA and all
bonus or other incentive compensation, deferred compensation, salary
continuation, severance, disability, stock award, stock option, stock
purchase, tuition assistance, or vacation pay plans or programs (collectively
the "Plans") and (ii) all written employment, severance, termination, change-
in-control, or indemnification agreements (collectively, the "Employment
Arrangements"), in each case (i) or (ii) under which the Company or any of
its subsidiaries has any obligation or liability (contingent or otherwise),
except for any Employment Arrangement which provides for annual compensation
(excluding benefits) of $150,000 or less or has an unexpired term of and can
be terminated (before, on or after a change in control) in less than one year
from the date hereof without additional cost or penalty. Except as set forth
in the SEC Reports filed prior to the date of this Agreement or in Section
3.1(m) of the Disclosure Schedule and except as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect: (A)
each Plan has been administered and is in compliance with the terms of such
Plan and all applicable laws, rules and regulations, (B) no "reportable
event" (as such term is used in section 4043 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) (other than those events
for which the 30 day notice has been waived pursuant to the regulations),
"prohibited transaction" (as such term is used in section 406 of ERISA or
section 4975 of the Code) or "accumulated funding deficiency" (as such term
is used in section 412 or 4971 of the Code) has heretofore occurred with
respect to any Plan and (C) each Plan intended to qualify under Section
401(a) of the Code has received a favorable determination from the IRS
regarding its qualified status and no notice has been received from the IRS
with respect to the revocation of such qualification.
(ii) There is no litigation or administrative or other proceeding
involving any Plan or Employment Arrangement nor has the Company received
written notice that any such proceeding is threatened, in each case where an
adverse determination would reasonably be expected to have a Material Adverse
Effect. Except as set forth in Section 3.1(m) of the Disclosure Schedule,
the Company has not contributed to any "multiemployer plan" (within the
meaning of section 3(37) of ERISA) and neither the Company nor any of its
subsidiaries has incurred, nor, to the best of the Company's knowledge, is
reasonably likely to incur any withdrawal liability which remains unsatisfied
in an amount which would reasonably be expected to have a Material Adverse
Effect. The termination of, or withdrawal from, any Plan or multiemployer
plan to which the Company contributes, on or prior to the Closing Date, will
not subject the Company to any liability under Title IV of ERISA that would
reasonably be expected to have a Material Adverse Effect.
(iii) With respect to each Plan and Employment Arrangement (other
than any Employment Arrangement which provides for annual compensation
(excluding benefits) of $150,000 or less or has an unexpired term of and can
be terminated (before, on or after a change in control) in less than one year
from the date hereof without additional cost or penalty), a complete and
correct copy of each of the following documents (if applicable) have been
provided by the Company: (i) the most recent Plan or Employment Arrangement,
and all amendments thereto and related trust documents; (ii) the most recent
summary plan description, and all related summaries of material
modifications; (iii) the most recent Form 5500 (including schedules); (iv)
the most recent IRS determination letter; (v) the most recent actuarial
reports (including for purposes of Financial Accounting Standards Board
report no. 87, 106 and 112) and (vi) the most recent estimate of withdrawal
liability from any Plan constituting a multiemployer plan if any.
(iv) Except as disclosed in Section 3.1(m) of the Disclosure
Schedule, in the SEC Reports or in connection with equity compensation,
neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) result in any payment becoming
due to any employee (current, former or retired) or consultant of Company or
any or its subsidiaries, (ii) increase any benefits under any Plan or
Employment Arrangement or (iii) result in the acceleration of the time of
payment or vesting of any rights under any Plan or Employment Arrangement.
(n) Tax Matters. (i) Except as set forth in Section 3.1(n) of
the Disclosure Schedule, (A) the Company and each of its subsidiaries have
timely filed with the appropriate taxing authorities all material Tax Returns
(as defined below) required to be filed through the date hereof and will
timely file any such material Tax Returns required to be filed on or prior to
the Closing Date (except those under valid extension) and all such Tax
Returns are and will be true and correct in all material respects, (B) all
Taxes (as defined below) of the Company and each of its subsidiaries shown to
be due on the Tax Returns described in (A) above have been timely paid or
adequately reserved for in accordance with GAAP (except to the extent that
such Taxes are being contested in good faith, which contested Taxes are set
forth in Section 3.1(n) of the Disclosure Schedule, (C) no material
deficiencies for any Taxes have been proposed, asserted or assessed against
the Company or any of its subsidiaries that have not been fully paid or
adequately provided for in the appropriate financial statements of the
Company and its subsidiaries, and no power of attorney with respect to any
Taxes has been executed or filed with any taxing authority and no material
issues relating to Taxes have been raised in writing by any governmental
authority during any presently pending audit or examination, (D) the Company
and its subsidiaries are not now subject to audit by any taxing authority and
no waivers of statutes of limitation with respect to the Tax Returns have
been given by or requested in writing from the Company, (E) there are no
material liens for Taxes (other than for Taxes not yet due and payable) on
any assets of the Company or any of its subsidiaries, (F) neither the Company
nor any of its subsidiaries is a party to or bound by (nor will any of them
become a party to or bound by) any tax indemnity, tax sharing, tax allocation
agreement, or similar agreement, arrangement or practice with respect to
taxes, (G) neither the Company nor any of its Subsidiaries has ever been a
member of an affiliated group of corporations within the meaning of Section
1504 of the Code, other than the affiliated group of which the Company is the
common parent, (H) neither the Company nor any of its subsidiaries has filed
a consent pursuant to the collapsible corporation provisions of Section
341(f) of the Code (or any corresponding provision of state or local law) or
agreed to have Section 341(f)(2) of the Code (or any corresponding provisions
of state or local law) apply to any disposition of any asset owned by the
Company or any of its subsidiaries, as the case may be, (I) neither the
Company nor any of its subsidiaries has agreed to make, nor is any required
to make any adjustment under Section 481(a) of Code by reason of a change in
accounting method or otherwise, (J) the Company and its subsidiaries have
complied in all material respects with all applicable laws, rules and
regulations relating to withholding of Taxes and (K) no property owned by the
Company or any of its subsidiaries (i) is property required to be treated as
being owned by another person pursuant to the provisions of Section 168(f)(8)
of the Internal Revenue Code of 1954, as amended and in effect immediately
prior to the enactment of the Tax Reform Act of 1986; (ii) constitutes "tax
exempt use property" within the meaning of Section 168(h)(1) of the Code; or
(iii) is tax exempt bond financed property within the meaning of Section
168(g) of the Code.
(ii) As used in this Agreement, "Tax Return" shall mean any
return, report or statement required to be filed with any governmental
authority with respect to Taxes. As used in this Agreement, "Taxes" shall
mean taxes of any kind, including but not limited to those measured by or
referred to as income, gross receipts, sales, use, ad valorem, franchise,
profits, license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, value added, property or windfall profits taxes,
customs, duties or similar fees, assessments or charges of any kind
whatsoever, together with any interest and any penalties, additions to tax or
additional amounts imposed by any governmental authority, domestic or
foreign.
(o) Intellectual Property. Except as set forth in Section 3.1(o)
of the Disclosure Schedule and except to the extent that the inaccuracy of
any of the following (or the circumstances giving rise to such inaccuracy),
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect: (a) the Company and each of its subsidiaries owns,
or is licensed to use (in each case, clear of any Liens), all Intellectual
Property (as defined below) used in or necessary for the conduct of its
business as currently conducted; (b) the use of any Intellectual Property by
the Company and its subsidiaries does not infringe on or otherwise violate
the rights of any person and is in accordance with any applicable license
pursuant to which the Company or any subsidiary acquired the right to use any
Intellectual Property; and (c) to the knowledge of the Company, no person is
challenging, infringing on or otherwise violating any right of the Company or
any of its subsidiaries with respect to any Intellectual Property owned by
and/or licensed to the Company or its subsidiaries and (d) neither the
Company nor any of its subsidiaries has received any written notice of any
pending claim with respect to any Intellectual Property used by the Company
and its subsidiaries and to its knowledge no Intellectual Property owned
and/or licensed by the Company or its subsidiaries is being used or enforced
in a manner that would result in the abandonment, cancellation or
unenforceability of such Intellectual Property. For purposes of this
Agreement, "Intellectual Property" shall mean trademarks, service marks,
brand names and other indications of origin, the goodwill associated with the
foregoing and registrations in any jurisdiction of, and applications in any
jurisdiction to register, the foregoing, including any extension,
modification or renewal of any such registration or application; inventions,
discoveries and ideas, whether patentable or not, in any jurisdiction;
patents, applications for patents (including, without limitation, divisions,
continuations, continuations in part and renewal applications), and any
renewals, extensions or reissues thereof, in any jurisdiction; nonpublic
information, trade secrets and confidential information and rights in any
jurisdiction to limit the use or disclosure thereof by any person; writings
and other works, whether copyrightable or not, in any jurisdiction;
registrations or applications for registration of copyrights in any
jurisdiction, and any renewals or extensions thereof; any similar
intellectual property or proprietary rights; and any claims or causes of
action arising out of or relating to any infringement or misappropriation of
any of the foregoing.
(p) Environmental Matters. Except as disclosed in the SEC Reports
filed prior to the date of this Agreement or in Section 3.1(p) of the
Disclosure Schedule and except as would not reasonably be expected to have a
Material Adverse Effect (i) the operations of the Company and its
subsidiaries have been and are in compliance with all Environmental Laws and
with all Licenses required by Environmental Laws, (ii) there are no pending
or, to the knowledge of the Company, threatened, actions, suits, claims,
investigations or other proceedings (collectively, "Actions") under or
pursuant to Environmental Laws against the Company or its subsidiaries or
involving any real property currently or, to the knowledge of the Company,
formerly owned, operated or leased by the Company or its subsidiaries, (iii)
the Company and its subsidiaries are not subject to any Environmental
Liabilities, and, to the knowledge of the Company, no facts, circumstances or
conditions relating to, arising from, associated with or attributable to any
real property currently or, to the knowledge of the Company, formerly owned,
operated or leased by the Company or its subsidiaries or operations thereon
that could reasonably be expected to result in Environmental Liabilities,
(iv) all real property owned and to the knowledge of the Company all real
property operated or leased by the Company or its subsidiaries is free of
contamination from Hazardous Material and (v) there is not now, nor, to the
knowledge of the Company, has there been in the past, on, in or under any
real property owned, leased or operated by the Company or any of its
predecessors (a) any underground storage tanks, above-ground storage tanks,
dikes or impoundments containing Hazardous Materials, (b) any asbestos-
containing materials, (c) any polychlorinated biphenyls, or (d) any
radioactive substances.
As used in this Agreement, "Environmental Laws" means any and all
federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decisions, injunctions, orders, decrees,
requirements of any Governmental Entity, any and all common law requirements,
rules and bases of liability regulating, relating to or imposing liability or
standards of conduct concerning pollution, Hazardous Materials or protection
of human health or the environment, as currently in effect and includes, but
is not limited to, the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), 42 U.S.C. Section 9601 et seq., the Hazardous
Materials Transportation Act 49 U.S.C. Section 1801 et seq., the Resource
Conservation and Recovery Act ("RCRA"), 42 U.S.C. Section 6901 et seq., the
Clean Water Act. 33 U.S.C. Section 1251 et seq., the Clean Air Act, 33 U.S.C.
Section 2601 et seq., the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.,
Section 136 et seq., and the Oil Pollution Act of 1990, 33 U.S.C. Section 2701
et seq., as such laws have been amended or supplemented, and the regulations
promulgated pursuant thereto, and all analogous state or local statutes. As
used in this Agreement, "Environmental Liabilities" with respect to any person
means any and all liabilities of or relating to such person or any of its
subsidiaries (including any entity which is, in whole or in part, a
predecessor of such person or any of such subsidiaries), whether vested
or unvested, contingent or fixed, actual or potential, known or unknown,
which (i) arise under or relate to matters covered by Environmental Laws
and (ii) relate to actions occurring or conditions existing on or prior
to the Closing Date. As used in this Agreement, "Hazardous Materials" means
any hazardous or toxic substances, materials or wastes, defined, listed,
classified or regulated as such in or under any Environmental Laws which
includes, but is not limited to, petroleum, petroleum products, friable
asbestos, urea formaldehyde and polychlorinated biphenyls.
(q) Transactions with Affiliates. Except as set forth in the SEC
Reports filed prior to the date of this Agreement or in Section 3.1(q) of the
Disclosure Schedule, there are no contracts, agreements, arrangements or
understandings of any kind between any affiliate of the Company, on the one
hand, and the Company or any subsidiary of the Company, on the other hand.
(r) Opinion of Financial Advisor. On the date hereof, the Company
has received the opinions of Xxxxxxxxxxx Xxxxxxx & Co., Inc. ("Xxxxxxxxxxx")
and Xxxxxx Xxxxxxx, Xxxx Xxxxxx, Discover & Co. ("Xxxxxx Xxxxxxx") to the
effect that the Merger Consideration is fair to the holders of the Company
Common Stock from a financial point of view and the Independent Directors (as
defined in Section 8.3) have received the opinions of Xxxxxxxxxxx to the
effect that (i) the amendment to the PMVG dated as of the date hereof is not
materially adverse to the holders of the Public Shares (as defined in Section
8.3) from a financial point of view (ii) the provisions of this Agreement
relating to the Termination Fee (as defined in Section 7.3) and the fees and
expenses of the transactions contemplated hereby are not likely to depress
the value of the Company on the Initiation Date (as defined in the amendment
to the PMVG described in the preceding clause (i)) and (iii) the Asset
Purchase Agreement dated as of the date hereof among Parent, the Company, LIN
Broadcasting Corporation and LCH Communications, Inc. (the "WOOD Agreement")
and the transactions contemplated thereby are not likely to depress the value
of the Company on the Initiation Date. Copies of each such opinion have been
made available to Parent.
(s) Brokers. No broker, finder, financial advisor or investment
banker (other than each of Xxxxxxxxxxx and Xxxxxx Xxxxxxx) is entitled to any
brokerage, finder's or other fee, commission or expense reimbursement in
connection with the transactions contemplated by this Agreement based upon
arrangements made by and on behalf of the Company. The Company has
heretofore furnished to Parent a complete and correct copy of all agreements
between the Company and each of Xxxxxxxxxxx and Xxxxxx Xxxxxxx pursuant to
which each such firm would be entitled to any payment or reimbursement
relating to the transactions contemplated by this Agreement. The Company
shall be responsible for the payment of all such payments or reimbursements.
(t) Material Agreements. (i) From and after December 31, 1996,
neither the Company nor any of its subsidiaries has entered into any
contract, agreement or other document or instrument (other than this
Agreement and the WOOD Agreement) that is required to be filed with the SEC
that has not been so filed on or before the date of this Agreement or any
material amendment, modification or waiver under any contract, agreement or
other document or instrument (other than the WOOD Agreement and any
amendments to agreements related thereto, any amendment relating to the PMVG
entered into in connection with this Agreement, any amendment to the LIN
Television Stockholders Agreement dated as of December 28, 1994 among the
Company, the Principal Company Shareholder and CI or any amendments to any
Stock Incentive Plan) that was previously so filed.
(ii) Except as filed as an exhibit to the SEC Reports filed prior
to the date hereof or as set forth in Section 3.1(t) of the Disclosure
Schedule, neither the Company nor any of its subsidiaries is a party to or
has entered into or as of the date hereof made any material amendment or
modification to or granted any material waiver under the following
(collectively, "Material Contracts"): (A) any network affiliation agreement
for any Company Station (a "Network Agreement"), (B) any material sports
broadcasting agreement (a "Sports Agreement"), (C) any main transmitter site
or main studio lease for any Company Station or LMA Station (a "Necessary
Lease"), (D) any agreement pursuant to which the Company agrees to provide
programming to an LMA Station, or pursuant to which the Company has either a
contingent obligation or the right to purchase the assets of an LMA Station
or any shares of capital stock of any corporation holding any assets relating
to an LMA Station (an "LMA Agreement"), or (E) any partnership or joint
venture agreement obligating the Company to contribute cash in excess of
$200,000 per year.
(iii) Each of the Material Contracts is valid and enforceable
against the Company in accordance with its terms, and there is no default
under any Material Contract either by the Company or any of its subsidiaries
which is a party to such Material Contract or, to the knowledge of the
Company, by any other party thereto, and no event has occurred that with the
lapse of time or the giving of notice or both would constitute a default
hereunder by the Company or, to the knowledge of the Company, any other
party thereto, in any such case in which such default or event would
reasonably be expected to have a Material Adverse Effect. In addition,
neither the Company nor any subsidiary is in material breach of any Network
Agreement, Sports Agreement or LMA Agreement (including any breach which
would give rise to a right to terminate any such agreement). Neither the
Company nor any subsidiary has received any written notice (or to the
knowledge of the Company any other notice) of default or termination under
any Material Contract, and to the knowledge of the Company, there exists no
basis for any assertion of a right of default or termination under such
agreements, except as set forth in Section 3.1(t) of the Disclosure Schedule.
Neither the Company nor any subsidiary has received any written notice (or to
the knowledge of the Company any other notice) of the exercise of a put
option or other right pursuant to which the Company would be obligated to
purchase capital stock or assets relating to any LMA Station.
(iv) Neither the Company nor any of its subsidiaries is in breach
of any material agreement other than any Material Contract, except for
breaches which would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(u) Compliance with Applicable Law. Except as set forth in
Section 3.1(u) of the Disclosure Schedule or as disclosed by the Company in
the SEC Reports filed prior to the date hereof, the Company and its
subsidiaries are not in violation of any law, ordinance or regulation of any
Governmental Entity, except that no representation or warranty is made in
this Section 3.1 (u) with respect to Environmental Laws, the Communications
Act and FCC rules, regulations and policies and except for violations or
possible violations which would not reasonably be expected to have a Material
Adverse Effect. Except as set forth in Section 3.1(u) of the Disclosure
Schedule or as disclosed by the Company in the SEC Reports filed prior to the
date hereof, to the knowledge of the Company no investigation or review by
any Governmental Entity with respect to the Company or its subsidiaries is
pending or threatened, nor, to the knowledge of the Company, has any
Governmental Entity indicated an intention to conduct the same, other than,
in each case, any such action or intention of the FCC and those which would
not reasonably be expected to have a Material Adverse Effect.
(v) Tangible Property. All of the assets of the Company and its
subsidiaries are in good operating condition, reasonable wear and tear
excepted, and usable in the ordinary course of business, except where the
failure to be in such condition or so usable would not individually or in the
aggregate reasonably be expected to have a Material Adverse Effect.
SECTION 3.2 Representations and Warranties of Parent and Sub.
Each of Parent and Sub hereby represents and warrants to the Company as
follows:
(a) Corporate Organization. Each of Parent and Sub is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has the requisite corporate power and
authority and any necessary governmental authority to own, operate or lease
its properties and to carry on its business as it is now being conducted,
except where the failure to be so organized, existing and in good standing or
to have such power, authority and governmental approvals would not,
individually or in the aggregate, reasonably be expected to prevent or
materially delay the ability of Parent or Sub to consummate the transactions
contemplated hereby. All of the issued and outstanding capital stock of Sub
is owned directly by Parent free and clear of any Lien. Parent has provided
the Company with complete and correct copies of the certificate of
incorporation and by-laws of Parent and Sub as currently in effect.
(b) Authority Relative to Agreements. Each of Parent and Sub has
all necessary corporate power and authority to enter into this Agreement to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this
Agreement by each of Parent and Sub and the consummation by Parent and Sub of
the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Parent and Sub and no other
corporate proceedings on the part of Parent or Sub are necessary to authorize
this Agreement or to consummate such transactions, other than filing and
recordation of appropriate merger documents as required by the DGCL. This
Agreement has been duly executed and delivered by each of Parent and Sub and,
assuming due authorization, execution and delivery by the Company,
constitutes a legal, valid and binding obligation of each of Parent and Sub
enforceable against Parent and Sub in accordance with its terms, except as
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting or relating to the
enforcement of creditors' rights generally and by general principles of
equity.
(c) Consents and Approvals; No Violations. The execution and
delivery by each of Parent and Sub of this Agreement do not, and the
consummation by Parent and Sub of the transactions contemplated hereby and
compliance by Parent and Sub with the provisions hereof will not, conflict
with, or result in any violation of, or default (with or without notice or
lapse of time, or both) under, or give rise to a right of termination,
cancellation or acceleration of any obligation or the loss of a benefit
under, or result in the creation of any Lien upon or right of first refusal
with respect to any of the properties or assets of either Parent or Sub
under, (i) any provision of the certificate of incorporation or by-laws of
Parent or Sub, (ii) any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, obligation, instrument, permit,
concession, franchise or license applicable to Parent or Sub or (iii)
assuming all the consents, filings and registrations referred to in the next
sentence are obtained and made, any judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to Parent or Sub (or any of their
affiliates) or any of its properties or assets, other than, in the case of
clause (ii) or (iii), any such violations, defaults, rights, losses or liens,
that, individually or in the aggregate, would not reasonably be expected to
prevent or result in a material delay of the consummation of the transactions
contemplated hereby. No filing or registration with, or authorization,
consent or approval of, any Governmental Entity is required by or with
respect to Parent or Sub (or any of their affiliates) in connection with the
execution and delivery of this Agreement by Parent or Sub or is necessary for
the consummation of the Merger and the other transactions contemplated by
this Agreement, except (i) applicable filings, if any, pursuant to the HSR
Act, (ii) such filings with, and orders of, the FCC as may be required under
the Communications Act, (iii) the filing of the Certificate of Merger with
the Secretary of State of the State of Delaware, (iv) such filings as may be
required with Governmental Entities to satisfy the applicable requirements of
state securities or "blue sky" laws, (v) such filings as may be required in
connection with statutory provisions and regulations relating to real
property transfer gains taxes and real property transfer taxes, and (vi) such
other consents, approvals, orders, authorizations, registrations,
declarations and filings the failure of which to be obtained or made would
not, individually or in the aggregate, reasonably be expected to prevent or
result in a material delay of the consummation of the transactions
contemplated hereby.
(d) Information Supplied. None of the information supplied or to
be supplied by Parent or Sub for inclusion or incorporation by reference in
the Proxy Statement will, at the date of mailing to shareholders and at the
time of the Shareholders' Meeting, contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(e) Financing. Prior to the date hereof, Parent and Sub have
delivered to the Company true and complete copies of: (i) a binding
commitment letter from Hicks, Muse, Xxxx & Xxxxx Equity Fund III, L.P., a
Delaware limited partnership ("Fund III"), to provide equity financing in
an amount not less than $630 million to provide Parent and Sub a portion
of the funds necessary to consummate the transactions contemplated hereby
and (ii) a binding commitment letter or letters from The Chase Manhattan
Bank, N.A. and/or Chase Securities, Inc. to provide debt financing in an
amount not less than $1.215 billion in the aggregate to provide Parent
and Sub all remaining funds necessary to consummate the transactions
contemplated hereby (collectively, the "Commitment Letters"). Fund III
shall on the date hereof and immediately prior to the Effective Time have
subscription commitments for unallocated capital equal to at least the
amount set forth in clause (i) above and, immediately prior to the
Effective Time, there shall be no restrictions on Fund III's ability to
call such capital. Parent is not aware of any facts or circumstances
that would cause Parent to be unable to obtain financing in accordance
with the terms of the Commitment Letters. Parent agrees to promptly
notify the Company if at any time prior to the Closing Date it no longer
believes in good faith that it will be able to obtain any of the financing
substantially on the terms described in the Commitment Letters.
(f) Brokers. No broker, finder, financial advisor or investment
banker is entitled to any brokerage, finder's or other fee, commission or
expense reimbursement in connection with the transactions contemplated by
this Agreement based upon arrangements made by and on behalf of Parent or Sub
except for The Chase Manhattan Bank and Chase Securities, Inc., whose fees
and expenses will be paid by Parent in accordance with Parent's agreements
with such firms.
(g) FCC Licenses of Parent and Affiliates. To the knowledge of
Parent (without investigation) as of the date of this Agreement but subject
to the disclosure provisions of Section 4.4 hereof: (i) Parent and its
affiliates hold or control all FCC Licenses necessary to the lawful operation
of their business and have the requisite FCC qualifications to hold or
control such FCC Licenses, (ii) each broadcast station owned, controlled or
operated by Parent or any of its affiliates is in material compliance with
its FCC Licenses and with the Communications Act, (iii) there are no facts or
circumstances relating to the FCC qualifications of Parent or any of its
affiliates that would prevent the FCC's granting the FCC Application under
Current FCC Policy (as defined in Section 8.3) and (iv) there is not pending
or threatened any application, petition, objection or other pleading with the
FCC or other Governmental Entity challenging the FCC qualifications of Parent
or any of its affiliates to hold any of their FCC Licenses, except for rule
making or similar proceedings of general applicability to persons engaged in
substantially the same business conducted by the broadcast stations owned,
controlled or operated by Parent or any of its affiliates.
(h) FCC Application. To Parent's knowledge and except as set
forth in the Disclosure Schedule of Parent dated the date hereof and
delivered to the Company (the "Parent Disclosure Schedule"), Parent and its
affiliates are qualified under Current FCC Policy to hold, or control the
entities which hold or will hold, the FCC Licenses currently held or
controlled by the Company and to be held by Parent or any person under common
control with Parent after the Effective Time. Except as set forth in the
Parent Disclosure Schedule, Parent is not aware of any facts or circumstances
relating to Parent or any of its affiliates that would, under Current FCC
Policy, prevent or materially delay the FCC's granting of the FCC
Application.
(i) Ownership and Operations of Parent and Sub. Each of Parent
and Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement. As of the date hereof and as of the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by
this Agreement and except for this Agreement and any other agreements or
arrangements contemplated by this Agreement, each of Parent and Sub has no
and will not have incurred, directly or indirectly, through any subsidiary or
affiliate, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person or own or lease any real property.
(j) Attributable Interests and Meaningful Relationships. Parent
has provided to the Company in writing a list of all media properties in
which Parent or any of its affiliates have any "attributable interest" or any
"meaningful relationship" under Current FCC Policy.
ARTICLE IV
CONDUCT OF BUSINESSES PENDING THE MERGER
SECTION 4.1 Conduct of Business of the Company. The Company
covenants and agrees that, during the period from the date hereof to the
Effective Time, except as set forth in Section 4.1 of the Disclosure Schedule
or unless Parent shall otherwise agree in writing, the businesses of the
Company and its subsidiaries shall be conducted only in, and the Company
shall not take any action and its subsidiaries shall not take any action
except in, the ordinary course of business; and the Company and each of its
subsidiaries shall use its reasonable best efforts to preserve intact the
business organization of the Company and its subsidiaries, to keep available
the services of the present officers, employees and consultants of the
Company and its subsidiaries and to preserve the present relationships of the
Company and its subsidiaries with customers, suppliers and other persons with
which the Company or any of its subsidiaries has significant business
relationships. Without limiting the generality of the foregoing, except as
expressly provided in this Agreement (including Section 4.3), neither the
Company nor any of its subsidiaries shall, between the date of this Agreement
and the Effective Time, directly or indirectly do, or propose or commit to
do, any of the following without the prior written consent of Parent (which
may not be unreasonably delayed or withheld):
(a) (i) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock (except
dividends and distributions by a wholly owned subsidiary of the Company
to its parent), (ii) split, combine or reclassify any of its capital
stock or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock or (iii) purchase, redeem or otherwise acquire any shares of
capital stock of the Company or any of its subsidiaries or any other
securities thereof or any rights, warrants or options to acquire any
such shares or other securities (other than in connection with its
employee stock purchase plan consistent with past practice);
(b) except as set forth in Schedule 3.1(m) of the Disclosure
Schedule and except as permitted under existing Plans or Employment
Arrangements in effect on the date of this Agreement (including, without
limitation, any Stock Incentive Plans) and consistent with past
practice, authorize for issuance, issue, deliver, sell or agree or
commit to issue, sell or deliver (whether through the issuance or
granting of options, warrants, commitments, subscriptions, rights to
purchase or otherwise), pledge or otherwise encumber any shares of its
capital stock or the capital stock of any of its subsidiaries, any other
voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities or any other securities or equity equivalents
(including without limitation stock appreciation rights) (other than
sales of capital stock of any wholly owned subsidiary of the Company to
the Company or another wholly owned subsidiary of the Company);
(c) except as set forth in Section 3.1(m) of the Disclosure
Schedule and except to the extent required under existing Plans or
Employment Arrangements as in effect on the date of this Agreement, (i)
increase the compensation or fringe benefits of any of its directors,
officers or employees, except for periodic increases in salary or wages
of officers or employees of the Company or its subsidiaries in the
ordinary course of business consistent with past practice, or (ii) grant
any severance or termination pay not currently required to be paid under
existing Plans other than in the ordinary course of business consistent
with past practice, or (iii) enter into any Employment Arrangement or
similar agreement or arrangement with any present or former director
level or other equivalent or more senior officer or employee, or, other
than in the ordinary course of business, any other employee of the
Company or any of its subsidiaries, or (iv) establish, adopt, enter into
or amend in any material respect or terminate any Plan or Employment
Arrangement or other plan, agreement, trust, fund, policy or arrangement
for the benefit of any directors, officers or employees; provided that
this Section 4.1(c) shall not apply to (A) any employment or consulting
arrangement providing for annual compensation (excluding benefits) of
$200,000 or less which is entered into in the ordinary course of
business or (B) any renewal of any existing employment or consulting
arrangement that provides for an increase in annual compensation
(excluding benefits) of 10% or less than the immediately preceding
year or (C) any amendment or termination of the Stock Incentive Plans
necessary or desirable to effectuate the purposes of Section 2.3;
(d) amend its certificate of incorporation, by-laws or other
comparable charter or organizational documents or alter through merger,
liquidation, reorganization, restructuring or in any other fashion the
corporate structure or ownership of any Significant Subsidiary of the
Company;
(e) acquire or agree to acquire (i) by merging or consolidating
with, or by purchasing a substantial portion of the stock or assets of,
or by any other manner, any business or any corporation, partnership,
joint venture, association or other business organization or division
thereof or (ii) any assets that are material, individually or in the
aggregate, to the Company and its subsidiaries taken as a whole;
(f) sell, lease, dispose of, license, mortgage or otherwise
encumber or subject to any lien or otherwise dispose of any of its
properties or assets, except (i) in the ordinary course of business, and
(ii) in connection with capital expenditures permitted to be expended by
the Company pursuant to Section 4.1(h);
(g) (i) incur or assume any indebtedness for borrowed money or
guarantee any such indebtedness of another person (other than guarantees
by the Company in favor of any of its wholly owned subsidiaries or by
any of its subsidiaries in favor of the Company), issue or sell any debt
securities or warrants or other rights to acquire any debt securities of
the Company or any of its subsidiaries, guarantee any debt securities of
another person, enter into any "keep well" or other agreement to
maintain any financial statement condition of another person or enter
into any arrangement having the economic effect of any of the foregoing,
except for borrowings incurred in the ordinary course of business under
existing lines of credit, or (ii) make any loans, advances or capital
contributions to, or investments in, any other person, other than to the
Company or any direct or indirect wholly owned subsidiary of the
Company;
(h) authorize or expend funds for capital expenditures other than
in accordance with the Company's current capital expenditure plans and
budgets (which plans and budgets shall have been disclosed in writing to
Parent on or prior to the date hereof);
(i) enter into, amend in any material respect, terminate, rescind,
waive in any material respect or release any of the terms or provisions
of any (i) Material Contract or (ii) any other agreement which is
material to the business of the Company and its subsidiaries taken as a
whole other than in the ordinary course of business, in each case other
than (A) any modification in compliance with the terms of Section
5.6(a)(ii), (B) any modification or termination of an LMA Agreement to
comply with any FCC rule making proceeding or other action, (C) any
programming agreement entered into after the date hereof in the ordinary
course of business and which provides for annual payments by a Company
Station of $400,000 or less and has a term of 2 years or less and (D)
any modification of the PMVG approved by the Independent Directors;
(j) knowingly violate or fail to perform any material obligation
or duty imposed upon it by any applicable material federal, state or
local law, rule, regulation, guideline or ordinance;
(k) adopt a plan of complete or partial liquidation or resolutions
providing for or authorizing such a liquidation or a dissolution,
merger, consolidation, restructuring, recapitalization or
reorganization;
(l) recognize any labor union (unless legally required to do so)
or enter into or materially amend any collective bargaining agreement;
(m) except as may be required as a result of a change in law or in
generally accepted accounting principles, make any material change in
its method of accounting;
(n) revalue in any material respect any of its material assets,
including, without limitation, writing down the value of inventory or
writing-off notes or accounts receivable other than in the ordinary
course of business or as required by generally accepted accounting
principles;
(o) except to the extent required by law, make or revoke any Tax
election or settle or compromise any Tax liability that is, in the case
of any of the foregoing, material to the business, financial condition
or results of operations of the Company and its subsidiaries taken as a
whole or change (or make a request to any taxing authority to change)
any material aspect of its method of accounting for tax purposes;
(p) except for claims covered by insurance, settle or compromise
any litigation in which the Company or any subsidiary is a defendant
(whether or not commenced prior to the date of this Agreement) or
settle, pay or compromise any claims not required to be paid, which
payments are individually in an amount in excess of $500,000 and in the
aggregate in an amount in excess of $1,000,000, or settle or compromise
any pending or threatened suit, action or claim which would prevent or
materially delay the ability of the Company to consummate the
transactions contemplated hereby;
(q) pay any liabilities or obligations (absolute, accrued,
asserted, contingent or otherwise), other than any payment, discharge or
satisfaction in the ordinary course of business consistent with past
practice, any payment for the prepaid insurance and indemnification
policy referred to in the second proviso of Section 5.5 and any payment
of expenses arising in connection with the transactions contemplated
hereby;
(r) knowingly violate or fail to perform any material obligation
under the consulting agreement with WOOD-TV, Grand Rapids, Michigan; and
(s) take, propose to take, or agree in writing or otherwise to
take, any of the foregoing actions.
SECTION 4.2 Control of Company Operations. Notwithstanding
Section 4.1, prior to the Effective Time, control of the Company's television
broadcast operations, along with all of the Company's other operations, shall
remain with the Company. The Company, Parent and Sub acknowledge and agree
that neither Parent nor Sub nor any of their employees, affiliates, agents or
representatives, directly or indirectly, shall, or have any right to,
control, direct or otherwise supervise, or attempt to control, direct or
otherwise supervise, such broadcast and other operations, it being understood
that supervision of all programs, equipment, operations and other activities
of such broadcast and other operations shall be the sole responsibility, and
at all times prior to the Effective Time remain within the complete control
and discretion, of the Company, subject to the terms of Section 4.1.
SECTION 4.3 Conduct of Business of Parent and Sub. During the
period from the date of this Agreement to the Effective Time, neither Parent
nor Sub shall engage in any activities of any nature except as provided in,
or in connection with the transactions contemplated by, this Agreement.
SECTION 4.4 Notification of Certain Matters. If Parent (or its
affiliates) or the Company receives an administrative or other order or
notification relating to any violation or claimed violation of the rules and
regulations of the FCC, or of any Governmental Entity, that could affect
Parent's, Sub's or the Company's ability to consummate the transactions
contemplated hereby, or should Parent (or its affiliates) or the Company
become aware of any fact (including any change in law or regulations (or any
interpretation thereof by the FCC)) relating to the qualifications of Parent
(and its controlling persons) that reasonably could be expected to cause the
FCC to withhold its consent to the transfer of control of the FCC Licenses,
Parent or the Company, as the case may be, shall promptly notify the other
party thereof and shall use all reasonable efforts to take such steps as may
be necessary to remove any such impediment to the transactions contemplated
by this Agreement. In addition, Parent or the Company, as the case may be,
shall give to the other party prompt written notice of (a) the occurrence, or
failure to occur, of any event of which it becomes aware that has caused or
that would be likely to cause any representation or warranty of Parent and
Sub or the Company, as the case may be, contained in this Agreement to be
untrue or inaccurate at any time from the date hereof to the Closing Date,
and (b) the failure of Parent and Sub or the Company, as the case may be, or
any officer, director, employee or agent thereof, to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied
with or satisfied by it hereunder. No such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
SECTION 4.5 Assistance. If Parent requests, the Company will
cooperate, and will cause Ernst & Young LLP to cooperate, in all reasonable
respects with the efforts of Parent to finance the transactions contemplated
by this Agreement, including without limitation, providing assistance in the
preparation of one or more offering documents relating to debt financing to
be obtained by Parent, all at the sole expense of Parent. The Company (a)
shall furnish to Ernst & Young LLP, as independent accountants to the
Company, such customary management representation letters as Ernst & Young
LLP may require of the Company in connection with the delivery of any
customary "comfort" letters requested by Parent's financing sources and (b)
shall furnish to Parent all financial statements (audited and unaudited) and
other information in the possession of the Company or its representatives or
agents as Parent shall reasonably determine is necessary or appropriate for
the preparation of such offering documents. Notwithstanding the foregoing,
prior to the Closing, the Company shall not be required to file or assist
Parent in filing any registration statement with the SEC in connection with
Parent's efforts to finance the transactions contemplated hereby. Parent and
Sub will indemnify and hold harmless the Company and its officers, directors
and controlling persons against any and all claims, losses, liabilities,
damages, costs or expenses (including reasonable attorneys' fees and
expenses) that may arise out of or with respect to the efforts by Parent to
finance the transactions contemplated hereby, including, without limitation,
any offering documents and other documents related thereto.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 Shareholder Approval; Preparation of Proxy Statement.
(a) On or prior to December 31, 1997, the Company shall duly call, give
notice of, convene and hold a meeting of holders of the Company Common Stock
(the "Shareholders Meeting") for the purpose of obtaining the Required Vote.
Without limiting the generality of the foregoing but subject to Section
5.3(b), the Company agrees that its obligations pursuant to the first
sentence of this Section 5.1(a) shall not be affected by (i) the
commencement, public proposal, public disclosure or communication to the
Company of any Transaction Proposal or (ii) the withdrawal or modification by
the Board of Directors of the Company of its approval or recommendation of
this Agreement or the Merger. The Company shall, through its Board of
Directors (but subject to the right of the Board of Directors to withdraw or
modify its approval or recommendation of the Merger and this Agreement as set
forth in Section 5.3(b)), recommend to its shareholders that the Required
Vote be given.
(b) The Company shall prepare and file a preliminary Proxy
Statement with the SEC and shall use its reasonable best efforts to respond
to any comments of the SEC or its staff, and, to the extent permitted by law,
to cause the Proxy Statement to be mailed to the Company's shareholders as
promptly as practicable after responding to all such comments to the
satisfaction of the staff and in any event at least 20 days prior to the
Shareholders Meeting. The Company shall notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the
SEC or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent with copies of all
correspondence between the Company or any of its representatives, on the one
hand, and the SEC or its staff, on the other hand, with respect to the Proxy
Statement or the Merger. If at any time prior to the Shareholders Meeting
there shall occur any event that should be set forth in an amendment or
supplement to the Proxy Statement, the Company shall promptly prepare and
mail to its shareholders such an amendment or supplement. The Company shall
not mail any Proxy Statement, or any amendment or supplement thereto, to
which Parent reasonably objects. Parent shall cooperate with and provide
such information as is reasonably requested by the Company in the preparation
of the Proxy Statement or any amendment or supplement thereto.
(c) Parent, in its capacity as the sole shareholder of Sub, by its
execution hereof, approves and adopts this Agreement and the transactions
contemplated hereby.
SECTION 5.2 Access to Information; Confidentiality. The Company
shall, and shall cause each of its subsidiaries to, upon reasonable notice,
afford to Parent and to the officers, employees, accountants, counsel,
actuaries, financial advisors and other representatives of Parent and
Parent's financing sources with respect to the transactions contemplated by
this Agreement, reasonable access to, and permit them to make such
inspections as they may reasonably require of, during normal business hours
during the period from the date of this Agreement through the Effective Time,
all their respective properties, books, contracts, commitments, documents and
records and, during such period, the Company shall, and shall cause each of
its subsidiaries to, furnish promptly to Parent (i) a copy of each report,
schedule, registration statement and other document filed by it during such
period pursuant to the requirements of federal or state securities laws and
(ii) all other information concerning its business, properties and personnel
as Parent may reasonably request. All information obtained by or on behalf
of Parent pursuant to this Section 5.2 shall be kept confidential in
accordance with the Confidentiality Agreement (as defined in Section 8.3).
The Company shall use reasonable best efforts to cause its senior management
to cooperate with any reasonable request by Parent relating to Parent
obtaining the financing described in the Financing Documents (as defined in
Section 5.11), including the attendance and participation by such senior
management in meetings with prospective members of and participants in any
syndicate of financial institutions being assembled to provide such
financing.
SECTION 5.3 No Solicitation. (a) The Company and its subsidiaries
shall, and the Company shall direct and use its best efforts to cause the
officers, directors, employees, representatives, agents and affiliates of the
Company and its subsidiaries to, immediately cease any discussions or
negotiations with any parties that may be ongoing with respect to any
Transaction Proposal (as hereinafter defined). The Company shall not, nor
shall it permit any of its subsidiaries to, nor shall it authorize or permit
any of its officers, directors or employees or any investment banker,
financial advisor, attorney, accountant or other representative retained by
it or any of its subsidiaries to, directly or indirectly, (i) solicit,
initiate or knowingly encourage (including by way of furnishing information
or assistance) any inquiries or the making of any proposal which constitutes,
or may reasonably be expected to lead to, any Transaction Proposal or (ii)
enter into or participate in any discussions or negotiations regarding any
Transaction Proposal; provided, however, that at any time prior to the
receipt of the Required Vote the Company may, in response to a Transaction
Proposal which was not solicited subsequent to the date hereof, (x) furnish
information with respect to the Company to any person pursuant to a
confidentiality agreement on terms no less favorable to the Company than the
Confidentiality Agreement (unless the Company also agrees to amend the
Confidentiality Agreement in the same manner); provided that provisions
similar to Section 4 thereof need not be included and (y) enter into or
participate in discussions, investigations and/or negotiations regarding such
Transaction Proposal. The Company shall promptly give notice to Parent of
the names of the person or persons with respect to which it takes any action
pursuant to subclauses (x) or (y) of the preceding sentence and a general
description of the actions taken.
(b) Except as set forth in this Section 5.3, the Board of
Directors of the Company shall not (i) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to Parent, the approval
or recommendation by such Board of Directors of the Merger or this Agreement,
(ii) approve or recommend, or propose publicly to approve or recommend, any
Transaction Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar
agreement related to any Transaction Proposal. Notwithstanding the
foregoing, if the Board of Directors of the Company determines in good faith
that it has received a Superior Proposal, the Board of Directors of the
Company may, prior to the receipt of the Required Vote, withdraw or modify
its approval or recommendation of the Merger and this Agreement, approve or
recommend a Superior Proposal (as defined below) or terminate this Agreement,
but in each case, only at a time that is at least five business days after
Parent's receipt of written notice advising Parent that the Board of
Directors of the Company has received a Transaction Proposal that may
constitute a Superior Proposal, specifying the material terms and conditions
of such Superior Proposal and the names of the person or persons making such
Superior Proposal.
(c) Nothing contained in this Section 5.3 shall prohibit the
Company from taking and disclosing to its shareholders a position
contemplated by Rules 14d-9 and 14e-2 promulgated under the Exchange Act or
from making any disclosure to the Company's shareholders if, in the good
faith judgment of the Board of Directors of the Company, after consultation
with outside counsel, such disclosure is necessary in order to comply with
its fiduciary duties to the Company's shareholders under applicable law or is
otherwise required under applicable law.
(d) (i) For purposes of this Agreement, "Transaction Proposal"
means any bona fide inquiry, proposal or offer from any person relating to
any direct or indirect acquisition or purchase of more than 50% of the
aggregate assets of the Company and its subsidiaries, taken as a whole, or
more than 50% of the voting power of the shares of Company Common Stock
then outstanding or any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction
involving the Company, other than the transactions contemplated by this
Agreement.
(ii) For purposes of this Agreement, a "Superior Proposal" means
any proposal determined by the Board of Directors of the Company in good
faith, after consultation with outside counsel, to be a bona fide proposal
and made by a third party (other than the Principal Company Shareholder) to
acquire, directly or indirectly, for consideration consisting of cash,
property and/or securities, more than 50% of the voting power of the shares
of Company Common Stock then outstanding or all or substantially all the
assets of the Company and otherwise on terms which the Board of Directors of
the Company determines in its good faith judgment, after consultation with
outside counsel and with a financial advisor of nationally recognized
reputation (such as the financial advisor(s) identified in Section 3.1(r)),
to be more favorable to the Company's shareholders (taking into account all
factors relating to such proposal deemed relevant by the Board of Directors
of the Company, including, without limitation, the financing of such
proposal, any regulatory issues related thereto and all other conditions to
closing) than the Merger.
SECTION 5.4 Employee Benefits Matters. (a) During the period
from the Effective Time until January 1, 2000, the Surviving Corporation
shall maintain wages, compensation levels, employee pension and welfare plans
for the benefit of employees and former employees of the Company and its
subsidiaries, which in the aggregate are equal or greater than those wages,
compensation levels and other benefits provided under the Plans and
Employment Arrangements that are in effect on the date hereof.
(b) (i) With respect to any officer or employee who is covered by
a severance compensation agreement, employment agreement or other severance
policy or plan separate from the standard severance policy for the employees
of the Company or any of its subsidiaries, the Surviving Corporation shall
maintain or cause to be maintained such severance compensation agreement,
employment agreement or other separate policy or plan as in effect as of the
date hereof (except as may be otherwise agreed by such officer or employee),
and as to all other officers and employees, the Surviving Corporation shall
maintain or cause to be maintained the standard severance policy of the
Company and its subsidiaries as in effect as of the date hereof until January
1, 2000.
(ii) The Surviving Corporation shall honor or cause to be honored
all severance agreements and employment agreements with the directors,
officers and employees of the Company and its subsidiaries.
(c) The Surviving Corporation will maintain the bonus practices of
the Company and its subsidiaries, as in effect on the date hereof, through
the end of the 1998 fiscal year, with bonuses to be paid to the employee
participating thereunder at levels consistent with past practice.
(d) The Surviving Corporation will (i) waive all limitations as to
preexisting conditions, exclusions and waiting periods with respect to
participation and coverage requirements applicable to the employees of the
Company or any of its subsidiaries under any welfare plan that such employees
may be eligible to participate in after the Effective Time, and (ii) provide
each employee of the Company and its subsidiaries with credit for any co-
payments and deductibles paid prior to the Effective Time in satisfying any
applicable deductible or out-of-pocket requirements under any welfare plans
that such employees are eligible to participate in after the Effective Time.
SECTION 5.5 Directors' and Officers' Indemnification and
Insurance. From and after the Effective Time, the Surviving Corporation will
exculpate, indemnify and hold harmless all past and present employees,
officers, agents and directors of the Company and its subsidiaries (the
"Indemnified Parties") to the same extent such persons are currently
exculpated and indemnified by the Company pursuant to the Company's
certificate of incorporation and by-laws for any acts or omissions occurring
at or prior to the Effective Time and the Surviving Corporation's certificate
of incorporation and by-laws will continue to include provisions to such
effect. The Surviving Corporation will provide, for an aggregate period of
not less than six years from the Effective Time, the directors and officers
of the Company or any of its subsidiaries who are currently covered by the
Company's existing insurance and indemnification policy an insurance and
indemnification policy that provides coverage for events occurring prior to
the Effective Time (the "D&O Insurance") that is no less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage
is unavailable, the best available coverage; provided that the Surviving
Corporation shall not be required to pay an annual premium for the D&O
Insurance in excess of 200 percent of the last annual premium paid prior to
the date hereof (which the Company represents and warrants to be
approximately $218,000), but in such case shall purchase as much coverage as
possible for such amount; provided further, that the Surviving Corporation
shall not be obligated to provide such insurance if the Company or the
Surviving Corporation shall have obtained for the benefit of the directors
and officers of the Company and its subsidiaries who are covered by the
Company's existing insurance and indemnification policy a prepaid policy that
provides coverage for the six year period for events occurring prior to the
Effective Time that is no less favorable than the Company's existing policy.
SECTION 5.6 Reasonable Best Efforts. (a) Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties in doing, all things reasonably necessary, proper or advisable
to consummate and make effective, in the most expeditious manner practicable,
the Merger and the other transactions contemplated by this Agreement,
including (i) the obtaining of all necessary actions, waivers, consents,
licenses and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all reasonable steps as may be necessary to
obtain an approval, waiver or license from, or to avoid an action or
proceeding by, any Governmental Entity, (ii) the obtaining of all necessary
consents, approvals or waivers from third parties (and in furtherance thereof
the Company, with the consent of Parent (which consent may not be
unreasonably withheld), may make and commit to make payments to third parties
and enter into or modify agreements), (iii) the defending of any lawsuits or
other legal proceedings, whether judicial or administrative, challenging this
Agreement, or the consummation of the transactions contemplated by this
Agreement, including seeking to have any stay or temporary restraining order
entered by any court or other Governmental Entity vacated or reversed and
(iv) the execution and delivery of any additional instruments necessary to
consummate the transactions contemplated by, and to carry out fully the
purposes of, this Agreement. Without limiting the foregoing, each of the
parties hereto shall use its reasonable best efforts and cooperate in
promptly preparing and filing as soon as practicable, and in any event within
20 business days after executing this Agreement, (i) notifications under the
HSR Act and (ii) the FCC Application and related filings in connection with
the Merger and the other transactions contemplated hereby, and to respond as
promptly as practicable to any inquiries or requests received from the
Federal Trade Commission (the "FTC"), the Antitrust Division of the United
States Department of Justice (the "Antitrust Division"), the FCC and any
other Governmental Entities for additional information or documentation and
to respond as promptly as practicable to all inquiries and requests received
from any State Attorney General or other Governmental Entity in connection
with antitrust matters or matters relating to the FCC Application. Each of
the parties hereto, to the extent applicable, further agrees (i) to file
(and, in the case of Parent to cause its affiliates to file)
contemporaneously with the filing of the FCC Application any requests for
temporary or permanent waivers of applicable FCC rules and regulations or
rules and regulations of other Governmental Entities and in furtherance of
those waiver requests to pledge to hold separate, to place in trust and/or to
divest any of the businesses, product lines or assets of (A) the Company or
any of its subsidiaries at any time after the Effective Time or (B) Parent or
any of its affiliates at any time prior to, on or after the Effective Time,
in each case as may be required under Current FCC Policy to obtain approval
of the FCC Application (collectively, "Divestitures") in order to permit
consummation of the Merger and the other transactions contemplated by this
Agreement prior to the Termination Date (as defined in Section 7.1(e)) and
(ii) to expeditiously prosecute such waiver requests and to diligently submit
any additional information or amendments for which the FCC or any other
relevant Governmental Entity may ask with respect to such waiver requests.
Parent further covenants that, prior to the Effective Time, neither it nor
any of its affiliates shall acquire any new or increased "attributable
interest" or "meaningful relationship", each as defined in the FCC rules, in
any media property ("Further Media Interest"), which Further Media Interest
could not be held in common control with any Company Station by the Surviving
Corporation following the Effective Time (including by virtue of the FCC's
multiple ownership limits), without the prior written consent of the Company.
(b) In connection with, but without limiting, the foregoing, the
Company and its Board of Directors shall (i) use reasonable best efforts to
ensure that no state takeover statute or similar statute or regulation is or
becomes applicable to this Agreement, the Merger or any of the other
transactions contemplated by this Agreement and (ii) if any state takeover
statute or similar statute or regulation becomes applicable to this
Agreement, the Merger or any of the transactions contemplated by this
Agreement, use reasonable best efforts to ensure that the Merger and the
other transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated by this Agreement and
otherwise to minimize the effect of such statute or regulation on the Merger
and the other transactions contemplated by this Agreement.
(c) In connection with, but without limiting, the foregoing,
Parent shall use its reasonable best efforts to resolve such objections, if
any, as may be asserted with respect to the transactions contemplated by this
Agreement under any antitrust, competition or trade regulatory laws, rules or
regulations of any Governmental Entity ("Antitrust Laws") or any laws, rules
or regulations of the FCC or other Governmental Entities relating to the
broadcast, newspaper, mass media or communications industries (collectively,
"Communications Laws") and will take all necessary and proper steps
(including, without limitation, any Divestitures) as may be required (i) for
securing the termination of any applicable waiting period or for the approval
of the FCC Application under the Antitrust Laws or Communications Laws, in
each case in order to permit the consummation of the Merger and the other
transactions contemplated hereby prior to the Termination Date or (ii) by any
domestic or foreign court or similar tribunal, in any suit brought by a
private party or Governmental Entity challenging the transactions
contemplated by this Agreement as violative of any Antitrust Law or
Communications Law, in order to avoid the entry of, or to effect the
dissolution of, any injunction, temporary restraining order or other order
that has the effect of preventing the consummation of any of such
transactions.
(d) Each of the parties hereto shall promptly provide the others
with a copy of any inquiry or request for information (including any oral
request for information), pleading, order or other document either party
receives from any Governmental Entities with respect to the matters referred
to in Section 5.6.
(e) The Company shall give prompt notice to Parent and Sub, and
Parent and Sub shall give prompt notice to the Company, of (i) any notice of,
or other communication relating to, a default or event which, with notice or
lapse of time or both, would become a default, if received by it or any of
its subsidiaries subsequent to the date of this Agreement and prior to the
Effective Time, under any Material Contract or (ii) any written notice or
other communication from any third party alleging that the consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement; provided, however, that the delivery of any
notice pursuant to this Section 5.6 shall not cure such breach or non-
compliance or limit or otherwise affect the remedies available hereunder to
the party receiving such notice.
(f) Parent agrees to assume and become bound by the terms of any
of the Network Agreements if and to the extent required thereby in connection
with the transactions contemplated by this Agreement.
SECTION 5.7 Public Announcements. Each of the parties hereto
shall consult with each other before issuing any press release or otherwise
making any public statements with respect to the Merger and shall not issue
any such press release or make any such public statement prior to such
consultation, except as may be required by law, fiduciary duties or any
listing agreement with any national securities exchange or quotation system.
SECTION 5.8 Taxes. Any liability with respect to taxes specified
in Section 5.9 hereof that are incurred in connection with the Merger shall
be borne by the Surviving Corporation and expressly shall not be a liability
of the shareholders of the Company.
SECTION 5.9 Conveyance Taxes. Each of the parties hereto shall
cooperate in the preparation, execution and filing of all returns,
questionnaires, applications, or other documents regarding any real property
transfer gains, sales, use, transfer, value added, stock transfer and stamp
taxes, any transfer, recording, registration and other fees, and any similar
taxes that become payable in connection with the transactions contemplated
hereby that are required or permitted to be filed on or before the Effective
Time.
SECTION 5.10 Solvency Letter. (a) Parent shall use all
reasonable efforts to deliver to the Board of Directors of the Company
a letter (the "Solvency Letter") from an independent third party selected
by the Board of Directors and reasonably satisfactory to Parent (the
"Appraiser") attesting that, immediately after the Effective Time, the
Surviving Corporation: (i) will be solvent (in that both the fair value
of its assets will not be less than the sum of its debts and that the
present fair saleable value of its assets will not be less than the amount
required to pay its probable liability on its debts as they become absolute
and matured), (ii) will have adequate capital with which to engage in its
business; and (iii) will not have incurred and does not plan to incur debts
beyond its ability to pay as they become absolute and matured, based upon the
proposed financing structure for the Merger and certain other financial
information to be provided to the Appraiser by Parent and the Company and
after giving effect to any changes in the Surviving Corporation's assets and
liabilities as a result of the Merger and the financing relating thereto.
Subject to the foregoing, the Solvency Letter shall be in form and substance
reasonably satisfactory to the Board of Directors of the Company. Except
with the prior written consent of the Company's Board of Directors, Parent
will not consummate the Merger unless and until such Board of Directors shall
have received the Solvency Letter.
(b) Parent will request the Appraiser to promptly deliver the
Solvency Letter and in any event, Parent will cause the Solvency Letter to
be delivered prior to the Shareholders Meeting. The parties agree to
cooperate with the Appraiser in connection with the preparation of the
Solvency Letter, including, without limitation, providing the Appraiser
with any information reasonably available to them necessary for the
Appraiser's preparation of such letter.
SECTION 5.11 Definitive Financing Documents. Not later than 10
business days prior to the Shareholders Meeting, Parent and Sub shall provide
the Company with the then agreed upon forms of the documentation, which must
be in form and substance reasonably satisfactory to the Company, relating to
the financing commitments described in the Commitment Letters (the "Financing
Documents"); provided that Parent and Sub shall not be required to provide
forms of documentation relating to the "bridge" financing described therein
unless and until such documentation is prepared. Parent will promptly
provide to the Company any amendments, modifications, supplements or other
changes ("Financing Changes") to the Financing Documents. Parent agrees to
confirm in writing to the Company from time to time upon request that Parent
believes in good faith that it will be able to obtain financing substantially
on the terms described in the Financing Documents.
ARTICLE VI
CONDITIONS OF MERGER
SECTION 6.1 Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall
be subject to the satisfaction at or prior to the Effective Time of the
following conditions:
(a) Shareholder Approval. The Merger and this Agreement shall
have been approved by the Required Vote.
(b) HSR Approval. The waiting period (and any extension thereof)
applicable to the Merger under the HSR Act shall have been terminated or
shall have expired, and no restrictive order or other requirements pursuant
to the HSR Act shall have been placed on the Company, Parent, Sub or the
Surviving Corporation in connection therewith.
(c) FCC Approval. The FCC shall have approved the FCC Application
and such approval shall have become final; provided, that such approval may
be subject to Parent (or its affiliates) or the Surviving Corporation making
Divestitures as set forth in Section 5.6 or to changes being made in the
terms and conditions of any contracts to which the Company is a party. For
purposes of this Agreement, FCC approval of the FCC Application shall be
deemed to be final if the FCC has taken action approving the transfer of the
FCC Licenses for the operation of the Company Stations pursuant to the Merger
which, except in each case as may be waived in writing by Parent, has not
been reversed, stayed, enjoined, set aside, annulled or suspended, with
respect to which no timely request for stay, petition for reconsideration or
appeal or sua sponte action of the FCC with comparable effect is pending and
as to which the time for filing any such request, petition or appeal or for
the taking of any such sua sponte action by the FCC has expired.
(d) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued
by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect, nor
shall any proceeding by any Governmental Entity seeking any of the foregoing
be pending. There shall not be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Merger, which makes the consummation of the Merger illegal.
SECTION 6.2 Conditions to Obligations of Parent and Sub. The
obligations of Parent and Sub to effect the Merger are subject to the
satisfaction of the following additional conditions unless waived by Parent:
(a) Representations and Warranties of the Company. The
representations and warranties of the Company set forth in this Agreement
shall be true and correct in all respects (provided that any representation
or warranty of the Company contained herein that is subject to a materiality,
Material Adverse Effect or similar qualification shall not be so qualified
for purposes of determining the existence of any breach thereof on the part
of the Company) as of the date of this Agreement and (except to the extent
such representations and warranties speak as of an earlier date) as of the
Closing Date as though made on and as of the Closing Date, except for such
breaches that would not, individually or in the aggregate with any other
breaches on the part of the Company, reasonably be expected to have a
Material Adverse Effect on the Company, and Parent shall have received a
certificate signed on behalf of the Company by the Chief Executive Officer of
the Company to such effect.
(b) Performance of Obligations of the Company. The Company shall
have performed in all material respects all obligations required to be
performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by
the Chief Executive Officer of the Company to such effect.
(c) Financing. Parent shall have received the debt and equity
financing for the transactions contemplated hereby on terms substantially as
outlined in the Financing Documents.
(d) Consents. The Company shall have obtained the consent or
approval of each person (other than any Governmental Entity) whose consent or
approval shall be required in connection with the transactions contemplated
hereby under any Material Contract.
(e) LMA Agreements; Waiver Requests. There shall not have been
any material modification or termination of any LMA Agreement which
individually or in the aggregate would reasonably be expected to have a
materially adverse economic effect on the business, financial condition
or results of operations of the Company and its subsidiaries taken as a
whole or a denial by the FCC of any of the waiver requests referred to in
the Parent Disclosure Schedule (provided that Parent has made and/or agreed
to make any necessary Divestitures pursuant to Section 5.6), in each case
other than as directed by the FCC under Current FCC Policy. For purposes
of this Agreement, the FCC shall be deemed to have acted under Current FCC
Policy except to the extent that its action is the result of (i) legislative
change enacted after the date of this Agreement, (ii) FCC action taken
after the date of this Agreement in a rule making proceeding or (iii)
application by the FCC Staff of interim decisions, policies or
processing guidelines adopted by the FCC Staff with respect to requests
for waivers of the duopoly rule, 47 C.F.R. Section 73.3555(b) or the
one-to-a-market rule, 47 C.F.R. Section 73.3555(c), or to local
marketing agreements, not heretofore applied to transfer applications
for stations similarly situated to the stations whose licenses are to
be transferred pursuant to the FCC Application.
(f) Dissenting Shares. No more than five percent (5%) of the
shares of Company Common Stock outstanding immediately prior to the Effective
Time shall be Dissenting Shares.
(g) Options and Convertible Securities. All Stock Incentive Plans
shall have been or will be as of the Effective Time duly cancelled by the
Company and each Option and all securities convertible into or exchangeable
or exercisable for shares of capital stock or voting securities of the
Company shall be or will be as of the Effective Time cancelled, exercised or
expired, with the effect that, upon consummation of the Merger, Parent will
own 100% of the capital stock and voting securities of the Surviving
Corporation on a fully diluted basis.
SECTION 6.3 Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is subject to the satisfaction
of the following additional conditions unless waived by the Company:
(a) Representations and Warranties of Parent and Sub. The
representations and warranties of each of Parent and Sub set forth in this
Agreement shall be true and correct in all respects (provided that any
representation or warranty of Parent and Sub contained herein that is subject
to a materiality, Material Adverse Effect or similar qualification shall not
be so qualified for purposes of determining the existence of any breach
thereof on the part of Parent and/or Sub) as of the date of this Agreement
and (except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date as though made on and as of the Closing
Date, except for such breaches that would not, individually or in the
aggregate with other breaches on the part of Parent and/or Sub, materially
adversely affect the ability of Parent or Sub to consummate the transactions
contemplated hereby, and the Company shall have received a certificate signed
on behalf of each of Parent and Sub by the Chief Executive Officer of each of
Parent and Sub to such effect.
(b) Performance of Obligations of Parent and Sub. Each of Parent
and Sub shall have performed in all material respects all obligations
required to be performed by it under this Agreement at or prior to the
Closing Date, and the Company shall have received a certificate signed on
behalf of each of Parent and Sub by the Chief Executive Officer of each of
Parent and Sub to such effect.
(c) Solvency Letter. The Board of Directors of the Company shall
have received the Solvency Letter referred to in Section 5.10.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
SECTION 7.1 Termination. This Agreement may be terminated and the
Merger contemplated hereby may be abandoned at any time prior to the
Effective Time, notwithstanding approval thereof by the shareholders of the
Company:
(a) by mutual written consent of Parent, Sub and the Company; or
(b) by Parent, so long as neither Parent nor Sub is then in
material breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement on the part of the Company
set forth in this Agreement, or if any such representation or warranty of the
Company shall have been or become untrue, in each case such that the
conditions set forth in Section 6.2(a) or Section 6.2(b), as the case may be,
would not be satisfied and such breach or untruth (i) cannot be cured by the
Closing Date or (ii) has not been cured within 30 days of the date on which
the Company receives written notice thereof from Parent;
(c) by the Company, so long as the Company is not then in material
breach of its obligations hereunder, upon a breach of any material
representation, warranty, covenant or agreement on the part of Parent or Sub
set forth in this Agreement, or if any such representation or warranty of
Parent or Sub shall have been or become untrue, in each case such that the
conditions set forth in Section 6.3(a) or Section 6.3(b), as the case may be,
would not be satisfied and such breach or untruth (i) cannot be cured by the
Closing Date or (ii) has not been cured within 30 days of the date on which
Parent or Sub receives written notice thereof from the Company;
(d) by either Parent or the Company if any permanent injunction
or other order, decree, ruling or action by any Governmental Entity
preventing the consummation of the Merger shall have become final and
nonappealable; provided that such right of termination shall not be available
to any party if such party shall have failed to make reasonable efforts to
prevent or contest the imposition of such injunction or other order, decree,
ruling or action and such failure materially contributed to such imposition;
(e) by either Parent or the Company if (other than due to the
willful failure of the party seeking to terminate this Agreement to perform
its obligations hereunder required to be performed at or prior to the
Effective Time) the Merger shall not have been consummated on or prior to May
12, 1998 (the "Termination Date"); provided that such right of termination
shall not be available to Parent if Parent (or its affiliates) have not taken
necessary action pursuant to Section 5.6 in order for the FCC Application to
be approved;
(f) by either Parent or the Company, if the approval of the
shareholders of the Company of this Agreement and the Merger required for the
consummation of the Merger shall not have been obtained by reason of the
failure to obtain the Required Vote at a duly held meeting of shareholders or
at any adjournment thereof;
(g) by Parent, if (i) the Board of Directors of the Company
(A) shall have withdrawn, modified or changed its approval or recommendation
of this Agreement or the Merger in any manner which is adverse to Parent,
(B) shall have approved or have recommended to the shareholders of the
Company a Transaction Proposal or (C) shall have resolved to do the
foregoing; or (ii) the Company shall have wilfully failed to hold the
Shareholders Meeting on or prior to January 15, 1998 (the "Delayed Date");
provided that the Delayed Date shall be automatically extended for each day
with respect to which the failure to hold the Shareholders Meeting (x) is
attributable to a lack of cooperation and assistance by Parent, Sub or their
affiliates or (y) is the result of any injunction or similar action or any
action of the SEC, in each case preventing or delaying the holding of such
meeting; or
(h) by the Company prior to the receipt of the Required Vote in
accordance with Section 5.3; provided, that Parent receives at least the five
business days' prior written notice specified in Section 5.3(b) and, during
such five business day period, the Company shall, and shall cause its
financial and legal advisors to, consider any adjustment in the terms and
conditions of this Agreement that Parent may propose; provided, further, that
the Company may not effect such termination pursuant to this Section 7.1(h)
unless the Company has contemporaneously with such termination tendered
payment to Parent or Parent's designee of the amounts, if any, that are due
to Parent under Section 7.3(b)(ii).
(i) by the Company if there is no reasonable possibility that (A)
the FCC Application will receive final approval on or prior to the
Termination Date or (B) the funding of any of the financing commitments
described in the Financing Documents will be available to Parent or Sub
substantially on the terms set forth therein; or
(j) by the Company (i) if a Solvency Letter reasonably
satisfactory to the Company has not been delivered to the Company within the
period described in Section 5.10(b) or (ii) if (A) Parent has not provided the
Company with reasonably satisfactory Financing Documents within the period
described in Section 5.11, (B) the Company objects in writing to Parent to
any material Financing Change provided to the Company pursuant to Section
5.11, and in each case (A) and (B) Parent has not taken action which
reasonably satisfies such objection within ten business days of notice
thereof or (iii) if Parent does not confirm in writing to the Company that
Parent believes in good faith that it will be able to obtain financing
substantially on the terms set forth in the Financing Documents within five
business days of being requested to do so by the Company pursuant to
Section 5.11.
SECTION 7.2 Effect of Termination. In the event of the
termination of this Agreement pursuant to Section 7.1, this Agreement shall
forthwith become void and there shall be no liability on the part of any
party hereto except as set forth in Section 7.3, Section 5.2 and Section 8.1;
provided, however, that nothing herein shall relieve any party from liability
for any breach hereof.
SECTION 7.3 Fees and Expenses. (a) Except as provided below in
this Section 7.3, all fees and expenses incurred in connection with the
Merger, this Agreement and the transactions contemplated hereby shall be paid
by the party incurring such fees or expenses, whether or not the Merger is
consummated.
(b) The Company shall pay, or cause to be paid, in same day funds
to Parent the amounts set forth below (which amounts shall constitute full
satisfaction of all of the Company's obligations and liabilities to Parent
and Sub under this Agreement) under the circumstances and at the times
specified:
(i) if Parent terminates this Agreement under Section 7.1(g), the
Company shall pay Parent $32 million as an alternative transaction fee
and as reimbursement of the expenses of Parent and Sub (the "Termination
Fee") upon demand;
(ii) if the Company terminates this Agreement under Section 7.1(h),
the Company shall pay the Termination Fee upon such termination;
(iii) if Parent or the Company terminates this Agreement under
Section 7.1(f), the Company shall reimburse Parent for its documented
out-of-pocket expenses incurred in connection with the transactions
contemplated hereby, up to a maximum reimbursement of $4 million,
promptly upon presentment of statements documenting such expenses;
(iv) if (1) Parent or the Company terminates this Agreement under
Section 7.1(f) or (2) Parent terminates this Agreement under Section
7.1(b) as a result of a willful breach of a material representation,
warranty or covenant by the Company, and within 320 days thereafter, (A)
the Company enters into a merger agreement, acquisition agreement or
similar agreement (including, without limitation, a letter of intent)
with respect to a Transaction Proposal, or a Transaction Proposal is
consummated, or (B) the Company enters into a merger agreement,
acquisition agreement or similar agreement (including, without
limitation, a letter of intent) with respect to a Superior Proposal, or
a Superior Proposal is consummated, which in the case of either (A) or
(B) above will result in shareholders of the Company becoming entitled
to receive upon consummation of such Transaction Proposal or Superior
Proposal consideration with a value (determined in good faith by the
Board of Directors of the Company) per share of Company Common Stock
greater than (i) the cash price specified in Section 2.1(c) plus (ii)
the Additional Amounts described in Section 2.1(e) accruing from the
Accretion Start Date through the date of the consummation of such
Transaction Proposal or Superior Proposal, then, in the case of either
(A) or (B) above, the Company shall pay to Parent upon the consummation
of such Transaction Proposal or Superior Proposal the difference between
the Termination Fee and the amounts previously paid to Parent pursuant
to Section 7.3(b)(iii).
SECTION 7.4 Brokers. Except as otherwise provided in Section 7.3,
the Company agrees to indemnify and hold harmless Parent and Sub, and Parent
and Sub agree to indemnify and hold harmless the Company, from and against
any and all liability to which Parent and Sub, on the one hand, or the
Company, on the other hand, may be subjected by reason of any brokers,
finders or similar fees or expenses with respect to the transactions
contemplated by this Agreement to the extent such similar fees and expenses
are attributable to any action undertaken by or on behalf of the Company,
Parent or Sub, as the case may be.
SECTION 7.5 Amendment. This Agreement may be amended by the
parties hereto by action taken by the respective Boards of Directors of
Parent, Sub and the Company at any time prior to the Effective Time;
provided, however, that, after approval of the Merger by the shareholders of
the Company, no amendment may be made which would reduce the amount or change
the type of consideration into which each share of Company Stock shall be
converted upon consummation of the Merger. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
SECTION 7.6 Waiver. At any time prior to the Effective Time, any
party hereto, to the extent lawful, may (a) extend the time for the
performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Section 7.1, except that (i) those agreements set forth
in Section 2.1, Section 2.2, Section 5.2, Section 5.4, Section 5.5, Section
7.2, Section 7.3, Section 7.4 and Article VIII shall survive the Effective
Time and those agreements set forth in Section 5.2, Section 7.2, Section 7.3,
Section 7.4 and Article VIII shall survive termination (in each of (i) and
(ii) in accordance with the terms of such provisions).
SECTION 8.2 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person,
by cable, telecopy, telegram or telex or by registered or certified mail
(postage prepaid, return receipt requested) to the respective parties at the
following addresses (or at such other address for a party as shall be
specified by like notice):
if to Parent or Sub:
Ranger Holdings Corp.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxx
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Xxxxxx Xxxxxxxxxx, Esq.
if to the Company:
LIN Television Corporation
#1 Richmond Square, Suite 230E
Providence, Rhode Island 02906
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx Xxxxxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
SECTION 8.3 Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with, the first mentioned person;
(b) "beneficial owner" with respect to any shares of Company
Common Stock means a person who shall be deemed to be the beneficial
owner of such shares of Company Common Stock (i) which such person or
any of its affiliates or associates beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or
associates (as such term is defined in Rule 12b-2 of the Exchange Act)
has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or subject only to the passage of
time), pursuant to any agreement, arrangement or understanding or upon
the exercise of consideration rights, exchange rights, warrants or
options, or otherwise, or (B) the right to vote pursuant to any
agreement, arrangement or understanding or (iii) which are beneficially
owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or person with whom such person or any
of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing
of any shares;
(c) "Company Station" means each broadcast television station
owned by the Company or a subsidiary of the Company and shall not
include any broadcast television station operated by the Company or a
subsidiary of the Company pursuant to a local marketing agreement;
(d) "Confidentiality Agreement" means the confidentiality
agreement dated June 13, 1997 between the Company and Hicks, Muse,
Xxxx & Xxxxx Incorporated, as amended, modified or supplemented
from time to time;
(e) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of
the management policies of a person, whether through the ownership of
stock, as trustee or executor, by contract or credit arrangement or
otherwise;
(f) "Current FCC Policy" means the Communications Act and FCC
rules, regulations and policies in effect on the date of this Agreement;
(g) "FCC License" means any permit, license, waiver or
authorization that a person is required by the FCC to hold in connection
with the operation of its business;
(h) "generally accepted accounting principles" shall mean the
generate accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such
other statements by such other entity as may be approved by a significant
segment of the accounting profession in the United States, in each case
applied on a basis consistent with the manner in which the audited
financial statements for the fiscal year of the Company ended
December 31, 1996 were prepared;
(i) "Independent Directors" means the three members of the
Company's Board of Directors designated as such pursuant to the PMVG;
(j) "knowledge" means, with respect to any entity, knowledge of
any officer of an entity after reasonable inquiry (except as otherwise
set forth herein);
(k) "Lien" means, with respect to any asset (including, without
limitation, any security) any mortgage, lien, pledge, collateral
assignment, hypothecation, charge, security interest or encumbrance of
any kind in respect of such asset;
(l) "LMA Station" means each broadcast television station for
which the Company or a subsidiary of the Company provides programming
and advertising services pursuant to a local marketing agreement;
(m) "Majority Vote of the Public Stockholders" means (i) the
affirmative vote of the holders of at least a majority of the Public
Shares present and entitled to vote at any meeting at which the holders
of a majority of the Public Shares are present or (ii) the action by
written consent (in accordance with applicable provisions of Delaware
law and the Company's certificate of incorporation and by-laws) of the
holders of a majority of the Public Shares;
(n) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group
(as defined in Section 13(d)(3) of the Exchange Act);
(o) "Public Shares" means shares of Company Common Stock not owned
by the Principal Company Shareholder or any of its affiliates;
(p) "Significant Subsidiary" means, with respect to the Company,
each of the Company's subsidiaries through which the Company operates,
or holds an FCC License with respect to the operation of, a Company
Station and any other subsidiary which is a party to a Material
Contract; and
(q) "subsidiary" or "subsidiaries" of the Company, the Surviving
Corporation, Parent, Sub or any other person means any corporation,
partnership, joint venture or other legal entity of which the Company,
the Surviving Corporation, Parent, Sub or such other person, as the case
may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, 50% or more of the stock or other equity
interests the holder of which is generally entitled to vote for the
election of the board of directors or other governing body of such
corporation or other legal entity.
SECTION 8.4 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in
any manner adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the fullest extent possible.
SECTION 8.5 Entire Agreement; Assignment. Except for the
Confidentiality Agreement and the WOOD Agreement, this Agreement constitutes
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements and undertakings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof; provided however that it is expressly agreed that the transactions
contemplated by this Agreement do not violate Section 4 of the
Confidentiality Agreement. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interest and obligations hereunder to
any newly-formed direct wholly owned Subsidiary of Parent or Sub. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors
and assigns.
SECTION 8.6 Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto, and (other than
Sections 2.2(a), 5.4 and 5.5) nothing in this Agreement, express or implied,
is intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
SECTION 8.7 Director and Officer Liability. The directors,
officers, stockholders and other controlling persons of each of the parties
and their affiliates acting in such capacity shall not in such capacity have
any personal liability or obligation arising under this Agreement (including
any claims that the other parties may assert) other than as an assignee of
this Agreement.
SECTION 8.8 Enforcement of Agreement. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions
of this Agreement were not performed in accordance with their specific terms
or were otherwise breached. It is accordingly agreed that the parties shall
be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
court of the United States or any state having jurisdiction, such remedy
being in addition to any other remedy to which any party is entitled at law
or in equity.
SECTION 8.9 Governing Law. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws thereof.
SECTION 8.10 Headings. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
SECTION 8.11 Counterparts. This Agreement may be executed in one
or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this
Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
RANGER HOLDINGS CORP.
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
RANGER ACQUISITION COMPANY
By:/s/ Xxxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
LIN TELEVISION CORPORATION
By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President and
General Counsel
----------------------------------
AGREEMENT AND PLAN OF MERGER
AMONG
RANGER HOLDINGS CORP.,
RANGER ACQUISITION COMPANY
and
LIN TELEVISION CORPORATION
Dated as of August 12, 1997
----------------------------
TABLE OF CONTENTS
Page
ARTICLE I
THE MERGER . . . . . . . . . . . . . . 1
SECTION 1.1 The Merger . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2 Closing . . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.3 Effective Time of the Merger . . . . . . . . . . 2
SECTION 1.4 Effects of the Merger . . . . . . . . . . . . . . 2
SECTION 1.5 Certificate of Incorporation; By-Laws . . . . . . 2
SECTION 1.6 Directors and Officers . . . . . . . . . . . . . 2
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE
CONSTITUENT CORPORATIONS; EXCHANGE OF CERTIFICATES . . . . 2
SECTION 2.1 Effect on Capital Stock . . . . . . . . . . . . . 2
(a) Common Stock of Sub . . . . . . . . . . . . . . . 3
(b) Cancellation of Treasury Stock and Parent
Owned Company Common Stock . . . . . . . . . . . 3
(c) Conversion of Company Common Stock . . . . . . . 3
(d) Shares of Dissenting Holders . . . . . . . . . . 3
(e) Additional Amounts . . . . . . . . . . . . . . . 4
SECTION 2.2 Payment; Exchange of Certificates . . . . . . . . 4
(a) Paying Agent; Payment Fund . . . . . . . . . . . 4
(b) Exchange Procedures . . . . . . . . . . . . . . . 4
(c) No Further Ownership Rights in Company Common
Stock . . . . . . . . . . . . . . . . . . . . . . 5
(d) Termination of Payment Fund . . . . . . . . . . . 5
(e) No Liability . . . . . . . . . . . . . . . . . . 5
(f) Withholding Rights . . . . . . . . . . . . . . . 6
SECTION 2.3 Treatment of Employee Options . . . . . . . . . . 6
SECTION 2.4 Termination of Private Market Value Guarantee . . 6
ARTICLE III
REPRESENTATIONS AND WARRANTIES . . . . . . . . . 7
SECTION 3.1 Representations and Warranties of the Company . . 7
(a) Organization and Qualification; Subsidiaries . . 7
(b) Certificates of Incorporation and By-Laws . . . . 7
(c) Capitalization . . . . . . . . . . . . . . . . . 7
(d) Authority Relative to Agreements . . . . . . . . 8
(e) Consents and Approvals; No Violations . . . . . . 9
(f) Licenses . . . . . . . . . . . . . . . . . . . . 10
(g) SEC Documents and Other Reports . . . . . . . . . 11
(h) Information Supplied . . . . . . . . . . . . . . 12
(i) Absence of Certain Changes or Events . . . . . . 12
(j) Liabilities . . . . . . . . . . . . . . . . . . . 13
(k) Absence of Litigation . . . . . . . . . . . . . . 13
(l) Labor Matters . . . . . . . . . . . . . . . . . . 13
(m) Employee Arrangements and Benefit Plans . . . . . 14
(n) Tax Matters . . . . . . . . . . . . . . . . . . . 15
(o) Intellectual Property . . . . . . . . . . . . . . 16
(p) Environmental Matters . . . . . . . . . . . . . . 17
(q) Transactions with Affiliates . . . . . . . . . . 18
(r) Opinion of Financial Advisor . . . . . . . . . . 18
(s) Brokers . . . . . . . . . . . . . . . . . . . . . 18
(t) Material Agreements . . . . . . . . . . . . . . . 18
(u) Compliance with Applicable Law . . . . . . . . . 19
(v) Tangible Property . . . . . . . . . . . . . . . . 20
SECTION 3.2 Representations and Warranties of Parent and
Sub . . . . . . . . . . . . . . . . . . . . . . . 20
(a) Corporate Organization . . . . . . . . . . . . . 20
(b) Authority Relative to Agreements . . . . . . . . 20
(c) Consents and Approvals; No Violations . . . . . . 20
(d) Information Supplied . . . . . . . . . . . . . . 21
(e) Financing . . . . . . . . . . . . . . . . . . . . 21
(f) Brokers . . . . . . . . . . . . . . . . . . . . . 22
(g) FCC Licenses of Parent and Affiliates . . . . . . 22
(h) FCC Application . . . . . . . . . . . . . . . . . 22
(i) Ownership and Operations of Parent and Sub . . . 22
(j) Attributable Interests and Meaningful
Relationships . . . . . . . . . . . . . . . . . . 23
ARTICLE IV
CONDUCT OF BUSINESSES PENDING THE MERGER . . . . . . 23
SECTION 4.1 Conduct of Business of the Company . . . . . . . 23
SECTION 4.2 Control of Company Operations . . . . . . . . . . 26
SECTION 4.3 Conduct of Business of Parent and Sub . . . . . . 26
SECTION 4.4 Notification of Certain Matters . . . . . . . . . 26
SECTION 4.5 Assistance . . . . . . . . . . . . . . . . . . . 27
ARTICLE V
ADDITIONAL AGREEMENTS . . . . . . . . . . . 27
SECTION 5.1 Shareholder Approval; Preparation of Proxy
Statement . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.2 Access to Information; Confidentiality . . . . . 28
SECTION 5.3 No Solicitation . . . . . . . . . . . . . . . . . 29
SECTION 5.4 Employee Benefits Matters . . . . . . . . . . . . 30
SECTION 5.5 Directors' and Officers' Indemnification and
Insurance . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.6 Reasonable Best Efforts . . . . . . . . . . . . . 31
SECTION 5.7 Public Announcements . . . . . . . . . . . . . . 34
SECTION 5.8 Taxes . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 5.9 Conveyance Taxes . . . . . . . . . . . . . . . . 34
SECTION 5.10 Solvency Letter . . . . . . . . . . . . . . . . . 34
SECTION 5.11 Definitive Financing Documents . . . . . . . . . 34
ARTICLE VI
CONDITIONS OF MERGER . . . . . . . . . . . 35
SECTION 6.1 Conditions to Obligation of Each Party to
Effect the Merger . . . . . . . . . . . . . . . . 35
SECTION 6.2 Conditions to Obligations of Parent and Sub . . . 36
SECTION 6.3 Conditions to Obligations of the Company . . . . 37
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER . . . . . . . . 37
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . 37
SECTION 7.2 Effect of Termination . . . . . . . . . . . . . . 39
SECTION 7.3 Fees and Expenses . . . . . . . . . . . . . . . . 39
SECTION 7.4 Brokers . . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.5 Amendment . . . . . . . . . . . . . . . . . . . . 40
SECTION 7.6 Waiver . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VIII
GENERAL PROVISIONS . . . . . . . . . . . . 41
SECTION 8.1 Non-Survival of Representations, Warranties
and Agreements . . . . . . . . . . . . . . . . . 41
SECTION 8.2 Notices . . . . . . . . . . . . . . . . . . . . . 41
SECTION 8.3 Certain Definitions . . . . . . . . . . . . . . . 42
SECTION 8.4 Severability . . . . . . . . . . . . . . . . . . 44
SECTION 8.5 Entire Agreement; Assignment . . . . . . . . . . 44
SECTION 8.6 Parties in Interest . . . . . . . . . . . . . . . 44
SECTION 8.7 Director and Officer Liability . . . . . . . . . 44
SECTION 8.8 Enforcement of Agreement . . . . . . . . . . . . 44
SECTION 8.9 Governing Law . . . . . . . . . . . . . . . . . . 44
SECTION 8.10 Headings . . . . . . . . . . . . . . . . . . . . 45
SECTION 8.11 Counterparts . . . . . . . . . . . . . . . . . . 45
