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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OCC ACQUISITION COMPANY, INC.,
XXXXXX COMMUNICATIONS CORPORATION,
AND
OCC HOLDING CORPORATION
(FOR CERTAIN LIMITED PURPOSES SET FORTH HEREIN)
DATED AS OF
JULY 23, 1996
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TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
1.1. The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3. Effect of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4. Certificate of Incorporation; Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5. Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6. Merger Consideration; Conversion and Cancellation of Securities . . . . . . . . . . . . . . . . . . . 2
1.7. Employee Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.8. Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.9. Dissenting Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.10. Payment; Surrender of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.11. Stock Transfer Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.12. Stockholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.13. Proxy Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.14. Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties Regarding Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2. Representations and Warranties of Mergeco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1. Covenants of Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.2. Negative Trade Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
3.3. Environmental Site Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
ADDITIONAL AGREEMENTS OF XXXXXX
4.1. No Solicitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.2. Access and Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.3. Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4.4. Compliance With Station Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(i)
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PAGE
4.5. Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.6. Third Party Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4.7. Xxxxx X. Xxxxxx Employment Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE V
COVENANTS OF MERGECO
5.1. Notification of Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
5.2. Commitment Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VI
MUTUAL COVENANTS
6.1. Application for Commission Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.2. Control of Stations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.3. Other Governmental Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.4. Brokers or Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.5. Additional Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.6. Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.2. Conditions to Obligation of Mergeco . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
7.3. Conditions to Obligations of Xxxxxx . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE VIII
CLOSING
8.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.2. Actions to Occur at Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
9.2. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.3. Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
(ii)
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ARTICLE X
GENERAL PROVISIONS
PAGE
10.1. Non-Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . . 40
10.2. Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.3. Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.4. Waiver of Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.5. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.6. Expenses and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.7. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.8. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.9. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.10. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.11. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.13. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.14. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.15. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.16. Director, Officer and Stockholder Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
10.17. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
(iii)
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EXHIBITS:
Exhibit A -- Form of Certificate of Incorporation of the Surviving Corporation
Exhibit B -- Form of Employment Agreement
Exhibit C -- Form of Subscription Agreement
Exhibit D -- Form of Opinion of Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
Exhibit E -- Form of Opinion of Haley, Bader & Xxxxx
Exhibit F -- Form of Opinion of Xxxxxx & Xxxxxx L.L.P.
Exhibit G -- Form of Opinion of Xxxxxx, Xxxxxxx, Xxxxxx & Leader
Exhibit H -- Form of Voting Agreement
Exhibit I -- Form of Escrow Agreement
Exhibit J -- Form of Letter of Credit
Exhibit K -- Form of Commitment Letter
Exhibit L -- Form of Release
SCHEDULES:
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Schedule 2.1(b) -- Subsidiaries
Schedule 2.1(c) -- Options, Warrants and Capitalization of Subsidiaries
Schedule 2.1(f) -- Unrecorded Liabilities and Conduct of Business
Schedule 2.1(g) -- Licenses and Permits
Schedule 2.1(h) -- Litigation
Schedule 2.1(i) -- Insurance
Schedule 2.1(j) -- Real Estate
Schedule 2.1(l) -- Liens and Encumbrances
Schedule 2.1(m) -- Environmental Matters
Schedule 2.1(o) -- Certain Agreements
Schedule 2.1(p) -- Collective Bargaining Agreements
Schedule 2.1(q) -- Patents, Trademarks; Etc.
Schedule 2.1(r) -- Affiliate Relationships
Schedule 3.1(k) -- Permitted Acquisitions and Dispositions
(iv)
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated as of July
23, 1996, is entered into by and among OCC Acquisition Company, Inc., a
Delaware corporation ("Mergeco"), Xxxxxx Communications Corporation, a Delaware
corporation ("Xxxxxx"), and for purposes of Sections 1.12 and 10.14 only, OCC
Holding Corporation, a Delaware corporation which holds all of the outstanding
capital stock of Mergeco ("Parent").
RECITALS:
WHEREAS, Mergeco, upon the terms and subject to the conditions of this
Agreement and in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law"), will merge with and into Xxxxxx (the "Merger");
WHEREAS, the Board of Directors (the "Xxxxxx Board") of Xxxxxx has
determined that the Merger is fair to, and in the best interests of, Xxxxxx and
its stockholders and has approved and adopted this Agreement and the
transactions contemplated hereby, and recommended approval and adoption of this
Agreement and the transactions contemplated hereby by the stockholders of
Xxxxxx;
WHEREAS, the Board of Directors (the "Mergeco Board") of Mergeco, a
wholly-owned subsidiary of Parent, has determined that the Merger is fair to,
and in the best interests of, Mergeco and the Parent and has approved and
adopted this Agreement and the transactions contemplated hereby, and
recommended approval and adoption of this Agreement and the transactions
contemplated hereby by the Parent; and
WHEREAS, the Parent, by its execution of this Agreement, has consented
to, and has authorized, approved and adopted, this Agreement and the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants, representations, warranties and agreements herein contained, the
parties hereto covenant and agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Delaware Law, at the Effective
Time (as defined in Section 1.2), Mergeco shall be merged with and into Xxxxxx.
As a result of the Merger, the separate corporate existence of Mergeco shall
cease and Xxxxxx shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"). The name of the Surviving Corporation shall be
"Xxxxxx Communications Corporation."
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1.2. Effective Time. The Merger shall be consummated, as and when
provided in Section 8.1 hereof, by filing a Certificate of Merger with the
Secretary of State of the State of Delaware, in such form as is required by,
and executed in accordance with the relevant provisions of, Delaware Law (the
date and time of the completion of such filing being the "Effective Time").
1.3. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject to the applicable
provisions of Delaware Law, at the Effective Time, all the property, rights,
privileges, powers and franchises of Mergeco and Xxxxxx shall vest in the
Surviving Corporation, and all debts, liabilities and duties of Mergeco and
Xxxxxx shall become the debts, liabilities and duties of the Surviving
Corporation.
1.4. Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of
Incorporation of Xxxxxx, as in effect immediately prior to the
Effective Time, shall be amended and restated as of the Effective Time
by operation of this Agreement and by virtue of the Merger without any
further action by the stockholders or directors of the Surviving
Corporation to read in its entirety as set forth on Exhibit A hereto.
(b) At the Effective Time, the Bylaws of Xxxxxx, as in
effect immediately prior to the Effective Time, shall be the Bylaws of
the Surviving Corporation.
1.5. Directors and Officers. The directors of Mergeco immediately
prior to the Effective Time shall be the directors of the Surviving Corporation
at the Effective Time, each to hold office in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation, and the officers of
Mergeco immediately prior to the Effective Time shall be the officers of the
Surviving Corporation at the Effective Time, except that the president and
chief executive officer of Xxxxxx immediately prior to the Effective Time shall
be the president and chief executive officer of the Surviving Corporation at
the Effective Time, in each case until their respective successors are duly
elected or appointed and qualified.
1.6. Merger Consideration; Conversion and Cancellation of
Securities. At the Effective Time, by virtue of the Merger and without any
action on the part of Mergeco, Xxxxxx or the holders of Xxxxxx'x securities:
(a) Subject to the other provisions of this Section 1.6,
each share of common stock, par value $0.01 per share, of Xxxxxx ("Common
Stock") issued and outstanding immediately prior to the Effective Time (other
than any share of Common Stock to be canceled pursuant to Section 1.6(b), any
Dissenting Shares (as defined in Section 1.9) and any share of Common Stock
described in Section 1.6(c)) shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into the right to
receive $15.375 in cash (the "Merger Consideration"), without any interest
thereon, payable to the holder thereof upon surrender of the certificate
formerly
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representing such share. As a result of its conversion each converted share of
Common Stock (collectively, the "Converted Shares") shall cease to be
outstanding and shall automatically be canceled and retired. Until surrendered
to the Surviving Corporation, each certificate previously evidencing the
Converted Shares outstanding immediately prior to the Effective Time shall be
deemed for all purposes to evidence solely the right to receive the
consideration described in this Section 1.6(a). Notwithstanding the foregoing,
if between the date of this Agreement and the Effective Time the outstanding
shares of Common Stock shall have been changed into a different number of
shares or a different class, by reason of any stock dividend, subdivision,
reclassification, recapitalization, split, combination or exchange of shares,
the Merger Consideration shall be correspondingly adjusted to reflect such
stock dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares. The aggregate Merger Consideration payable
to each stockholder shall be rounded to the nearest xxxxx.
(b) Notwithstanding any provision of this Agreement to
the contrary, each share of Common Stock held in the treasury of Xxxxxx
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof and no payment shall be made with respect
thereto.
(c) Notwithstanding any provision of this Agreement to
the contrary, each share of Common Stock held by the Parent or Mergeco
immediately prior to the Effective Time shall be canceled and extinguished
without any conversion thereof and no payment shall be made with respect
thereto.
(d) Each share of common stock, par value $0.01 per share
("Mergeco Common Stock"), of Mergeco issued and outstanding immediately prior
to the Effective Time shall be converted into one share of common stock, par
value $0.01 per share, of the Surviving Corporation ("Surviving Corporation
Common Stock").
1.7. Employee Stock Options. At the Effective Time, each holder of
then outstanding options ("Options") to purchase shares (the "Option Shares")
of Common Stock granted by Xxxxxx pursuant to the Xxxxxx Communications
Corporation Incentive Stock Plan, as amended (the "Option Plan"), (whether or
not then presently exercisable) shall be entitled to receive, and shall
receive, in settlement of each Option, a cash payment (the "Option
Consideration") from the Surviving Corporation in an amount equal to the
product of (a) $15.375 minus the exercise price per Option Share and (b) the
number of Option Shares (including any fractional Option Shares) covered by
such Option, less any applicable withholding taxes. Each agreement previously
evidencing the Options immediately prior to the Effective Time that are settled
pursuant to this Section 1.7 (the "Settled Options") shall be deemed for all
purposes to evidence solely the right to receive the Option Consideration. The
Committee (the "Committee") administering the Option Plan shall have the right
at any time or from time to time following the execution hereof to accelerate
and vest, in full or in part, any and all Settled Options not currently
exercisable in full. Xxxxxx, acting through the Xxxxxx Board or the Committee,
shall take all necessary actions to make the Option Plan consistent with this
treatment of the Options and shall cause each holder of an Option to consent to
the settlement of its
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Options pursuant to the terms of this Section 1.7. The Option Consideration
payable to each Option holder shall be rounded to the nearest xxxxx.
1.8. Warrants. Immediately prior to the Effective Time, each
holder of then outstanding warrants (the "Warrants") to purchase shares of
Common Stock granted by Xxxxxx (whether or not then presently exercisable)
shall be entitled to receive, and shall receive, in settlement of each Warrant,
where the amount set forth in clause (i) below is positive, a cash payment (the
"Warrant Consideration") from Xxxxxx in an amount equal to the product of (i)
$15.375 minus the exercise price per share of the Warrant and (ii) the number
of shares of Common Stock (including any fractional shares) covered by such
Warrant, less any applicable withholding taxes. Each agreement or certificate
previously evidencing such Warrants (the "Settled Warrants") immediately prior
to the Effective Time shall be deemed for all purposes to evidence solely the
right to receive the Warrant Consideration. Xxxxxx, acting through the Xxxxxx
Board or any committee thereof, shall have the right at any time or from time
to time following the execution hereof to accelerate and vest, in full or in
part, any and all Settled Warrants not currently exercisable in full. Xxxxxx,
acting through the Xxxxxx Board or any committee thereof, shall take all
necessary actions to make the terms of the Warrants consistent with this
treatment of the Warrants and shall cause each holder of a Warrant to consent
to the settlement of its Warrants pursuant to the terms of this Section 1.8.
The Warrant Consideration payable to each Warrant holder shall be rounded to
the nearest xxxxx.
1.9. Dissenting Shares. Notwithstanding anything in this Agreement
to the contrary, shares of Common Stock that are issued and outstanding
immediately prior to the Effective Time and that are held by stockholders who
have properly exercised appraisal rights with respect thereto under Section 262
of the Delaware Law (the "Dissenting Shares") shall not be converted into the
right to receive the Merger Consideration as provided in Section 1.6(a), but
the holders of Dissenting Shares shall be entitled to receive such payment as
shall be determined pursuant to Section 262 of the Delaware Law; provided,
however, that if any such holder shall have failed to perfect or shall withdraw
or lose the right to appraisal and payment under the Delaware Law, each such
holder's shares of Common Stock shall thereupon be deemed to have been
converted as of the Effective Time into the right to receive the Merger
Consideration, without any interest thereon, as provided in Section 1.6(a), and
such shares shall no longer be Dissenting Shares.
1.10. Payment; Surrender of Certificates.
(a) Exchange Fund. At or prior to the Effective Time,
Mergeco shall deposit, or cause to be deposited, with a bank or trust company
designated by Mergeco or, at Mergeco's election, with the Surviving Corporation
(such bank or trust company or the Surviving Corporation being referred to as
the "Exchange Agent"), for the benefit of the former holders of Converted
Shares, Settled Options or Settled Warrants, for exchange in accordance with
this Section 1.10(a) through the Exchange Agent, cash in an amount equal to
the sum of (i) the sum of the Merger Consideration applicable to all Converted
Shares, (ii) the sum of the Option Consideration applicable to all Settled
Options, and (iii) the sum of the Warrant Consideration applicable to all
Settled Warrants. The cash deposited with the Exchange Agent in accordance
with this Subsection 1.10(a) is hereinafter referred
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to as the "Exchange Fund." The Exchange Agent shall, pursuant to irrevocable
instructions, deliver cash, as described above, in exchange for surrendered
certificates or agreements pursuant to the terms of this Agreement out of the
Exchange Fund.
(b) Exchange Procedures. As soon as practicable after
the Effective Time, the Surviving Corporation shall cause the Exchange Agent to
send to each record holder of Common Stock, Settled Options or Settled Warrants
at the Effective Time (i) a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to certificates
theretofore representing Common Stock and certificates or agreements
representing Settled Options or Settled Warrants (collectively,
the"Certificates") shall pass, only upon delivery of the Certificates to the
Exchange Agent and shall be in such form and contain such other provisions as
the Surviving Corporation shall determine) and (ii) instructions for use in
effecting the surrender of the Certificates in exchange for cash. Upon
surrender of a Certificate for cancellation to the Exchange Agent, together
with such letter of transmittal, duly executed, the holder of such Certificate
shall be entitled to receive in exchange therefor cash in the amount such
holder has the right to receive pursuant to the provisions of this Article I,
and the Certificate so surrendered shall forthwith be canceled. Until
surrendered for exchange in accordance with the provisions of this Section 1.9,
each Certificate theretofore representing Converted Shares, Settled Options or
Settled Warrants shall from and after the Effective Time represent for all
purposes only the right to receive the Merger Consideration, Option
Consideration or Warrant Consideration, as applicable, as set forth in this
Agreement. If any holder of Converted Shares, Settled Options or Settled
Warrants shall be unable to surrender such holder's Certificates because such
Certificates have been lost or destroyed, such holder may deliver in lieu
thereof an affidavit and indemnity bond in form and substance and with surety
reasonably satisfactory to the Surviving Corporation. If payment 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 otherwise in proper form for transfer
and that the person requesting such payment shall pay transfer or other taxes
required by reason of the payment to a person other than the registered holder
of the surrendered Certificate or shall establish to the satisfaction of the
Surviving Corporation that such tax has been paid or is not applicable. No
interest shall be paid on any Merger Consideration, Option Consideration or
Warrant Consideration payable to former holders of Converted Shares, Settled
Options or Settled Warrants.
(c) Termination of Exchange Fund. Any portion of the
Exchange Fund that remains unclaimed by the former holders of Converted Shares,
Settled Options or Settled Warrants on the six-month anniversary of the Closing
Date shall be delivered to the Surviving Corporation, upon demand, and any
former holders of Converted Shares, Settled Options or Settled Warrants who
have not theretofore complied with this Section 1.10 shall thereafter look only
to the Surviving Corporation for the Merger Consideration, Option Consideration
or Warrant Consideration to which they are entitled, without any interest
thereon.
1.11. Stock Transfer Books. At the Effective Time, the stock
transfer books of Xxxxxx shall be closed and there shall be no further
registration of transfers of shares of Common Stock on the records of Xxxxxx.
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1.12. Stockholder Approval.
(a) Xxxxxx, acting through the Xxxxxx Board, shall, in
accordance with applicable law and Xxxxxx'x Certificate of Incorporation and
Bylaws, (i) duly call, give notice of, convene and hold an annual or special
meeting of its stockholders as soon as practicable for the purpose of
considering and taking action on this Agreement and the transactions
contemplated hereby (the "Xxxxxx Stockholders Meeting") and (ii) subject to the
fiduciary obligations of the Xxxxxx Board as advised by independent legal
counsel, include in the proxy statement (the "Proxy Statement") the
recommendation of the Xxxxxx Board that the stockholders of Xxxxxx approve and
adopt this Agreement and the transactions contemplated hereby, including,
without limitation, the Merger, and use its commercially reasonable efforts to
obtain such approval and adoption. To the extent permitted by law, Mergeco and
Parent agree to vote all shares of Common Stock then beneficially owned by the
Parent or Mergeco in favor of approval and adoption of this Agreement and the
transactions contemplated hereby.
(b) Parent, in its capacity as the sole stockholder of
Mergeco, by its execution hereof, approves and adopts this Agreement and the
transactions contemplated hereby.
1.13. Proxy Statement.
(a) As promptly as practicable after the execution of
this Agreement, Xxxxxx shall prepare and file with the Securities and Exchange
Commission (the "SEC") the preliminary Proxy Statement with respect to the
actions to be taken at the Xxxxxx Stockholders Meeting, which shall be in form
and substance reasonably satisfactory to Mergeco based on Mergeco's review of
the preliminary Proxy Statement prior to it being filed with the SEC. Mergeco
and Xxxxxx shall cooperate with each other in the preparation of the Proxy
Statement, and Xxxxxx shall notify Mergeco of the receipt of any comments of
the SEC with respect to the Proxy Statement and of any requests by the SEC for
any amendment or supplement thereto or for additional information and shall
provide to Mergeco promptly copies of all correspondence between Xxxxxx or any
representative of Xxxxxx and the SEC. As promptly as practicable after
comments are received from the SEC with respect to the preliminary Proxy
Statement, Xxxxxx shall use its commercially reasonable efforts to respond to
the comments of the SEC, which responses shall be in form and substance
reasonably satisfactory to Mergeco based on Mergeco's review of Xxxxxx'x
proposed responses to the SEC. Xxxxxx shall give Mergeco and its counsel the
opportunity to review all amendments and supplements to the Proxy Statement and
all responses to requests for additional information and replies to comments of
the SEC prior to their being filed with or sent to the SEC. Mergeco shall
provide Xxxxxx with such information as may be required to be included in the
Proxy Statement or as may be reasonably required to respond to any comment of
the SEC. After all the comments received from the SEC have been cleared by the
SEC staff and all information required to be contained in the Proxy Statement,
to the reasonable satisfaction of Mergeco, has been included therein by Xxxxxx,
Xxxxxx shall file with the SEC the Proxy Statement and Xxxxxx shall use its
commercially reasonable efforts to have the Proxy Statement cleared by the SEC
as soon thereafter as practicable. Xxxxxx shall cause the Proxy Statement to
be mailed to its stockholders of record as
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promptly as practicable after clearance by the SEC. Unless Xxxxxx is advised
in writing by independent legal counsel that such a recommendation is no longer
consistent with the discharge of applicable fiduciary duties of the directors
of Xxxxxx, Xxxxxx shall cause the Proxy Statement to include, and continue to
include until the vote is taken at the Xxxxxx Stockholders Meeting, the
recommendation of the Xxxxxx Board in favor of the Merger.
(b) None of the information supplied or to be supplied by
Xxxxxx for inclusion or incorporation by reference in the Proxy Statement will,
at the mailing date of the Proxy Statement and at the time of the Xxxxxx
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances in which they were
made, not misleading. If at any time prior to the Xxxxxx Stockholders' Meeting
any event or circumstance relating to Xxxxxx or any of its affiliates, or its
or their respective officers or directors, should be discovered by Xxxxxx that
should be set forth in a supplement to the Proxy Statement, Xxxxxx shall
promptly inform Mergeco. All documents that Xxxxxx is responsible for filing
with any Governmental Entity (as defined in Section 2.1(e)) in connection with
the transactions contemplated hereby, including the Proxy Statement to the
extent that the information contained therein relates to Xxxxxx and its
subsidiaries or the transactions contemplated hereby, will comply as to form in
all material respects with the provisions of applicable law, including
applicable provisions of the Securities Act of 1933 (the "Securities Act"), the
Securities Exchange Act of 1934 (the "Exchange Act"), and the rules and
regulations thereunder, and each such document required to be filed with any
Governmental Entity other than the SEC will comply with the provisions of
applicable law as to the information required to be contained therein.
(c) None of the information supplied or to be supplied by
Mergeco for inclusion or incorporation by reference in the Proxy Statement
will, at the mailing date of the Proxy Statement and at the time of the Xxxxxx
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements contained therein, in light of the circumstances in which they
were made, not misleading. If at any time prior to the Xxxxxx Stockholders'
Meeting any event or circumstance relating to Mergeco or any of its affiliates,
or its or their respective officers or directors, should be discovered by
Mergeco that should be set forth in a supplement to the Proxy Statement,
Mergeco shall promptly inform Xxxxxx. All documents that Mergeco is
responsible for filing with any Governmental Entity in connection with the
transactions contemplated hereby, to the extent that the information contained
therein relates to Mergeco and its subsidiaries or the transactions
contemplated hereby, will comply as to form in all material respects with the
provisions of applicable law, including applicable provisions of the Securities
Act, the Exchange Act and the rules and regulations thereunder, and each such
document required to be filed with any Governmental Entity other than the SEC
will comply with the provisions of applicable law as to the information
required to be contained therein.
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1.14. Letter of Credit.
(a) Concurrently with the execution of this Agreement and
as security for liquidated damages that may be payable by Mergeco to Xxxxxx
pursuant to Section 9.3, Mergeco shall deposit, or cause to be deposited, an
original, irrevocable letter of credit issued by Bankers Trust Company
("Bankers Trust") in favor of Xxxxxx (the "Letter of Credit") for the sum of
$5,000,000 in an escrow account with Citibank, N.A., a national banking
association (the "Escrow Agent"), to be held in escrow and released therefrom
in accordance with the terms of the Escrow Agreement (herein so called) in
substantially the form of Exhibit I attached hereto to be entered into on or
before such date of deposit.
(b) If this Agreement is terminated and Xxxxxx seeks
liquidated damages pursuant to Section 9.3, then (i) if (A) Xxxxxx is otherwise
paid liquidated damages due under Section 9.3, or (B) Xxxxxx and Mergeco agree
that Xxxxxx is not entitled to the $5,000,000 as liquidated damages, Xxxxxx and
Mergeco shall deliver joint written instructions to the Escrow Agent
authorizing the release of the Letter of Credit to Mergeco, or as directed by
Mergeco, for cancellation; (ii) if Xxxxxx and Mergeco agree that Xxxxxx is
entitled to the $5,000,000 as liquidated damages, Xxxxxx and Mergeco shall
deliver joint written instructions to the Escrow Agent authorizing the Escrow
Agent to release the Letter of Credit to Xxxxxx; (iii) if a final
non-appealable judgment of a court of competent jurisdiction (a "Final
Determination") establishes Xxxxxx'x right to liquidated damages pursuant to
Section 9.3, Xxxxxx shall deliver a copy of the Final Determination to the
Escrow Agent authorizing the Escrow Agent to release the Letter of Credit to
Xxxxxx; or (iv) if a Final Determination establishes Mergeco's right to the
Letter of Credit, Mergeco shall deliver a copy of the Final Determination to
the Escrow Agent authorizing the release of the Letter of Credit to Mergeco, or
as directed by Mergeco, for cancellation. Immediately prior to the Effective
Time and upon satisfaction of the conditions to Xxxxxx'x obligation to
consummate the Merger set forth in Article VII, Xxxxxx and Mergeco shall
jointly instruct the Escrow Agent to release and return the Letter of Credit to
Mergeco, or as directed by Mergeco, for cancellation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties Regarding Xxxxxx. Xxxxxx
represents and warrants to Mergeco as follows (with the understanding that
Mergeco is relying on such representations and warranties in entering into and
performing this Agreement).
(a) Organization, Good Standing, Etc. Each of Xxxxxx and
its subsidiaries (as defined in Section 10.17) is a corporation or other entity
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation (or organization), has all requisite corporate
power and authority to own, lease and operate its properties and to carry on
its business
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as now being conducted and is duly qualified and in good standing to do
business in each state in which the nature of its business or the ownership or
leasing of its properties makes such qualification necessary, except where the
failure to so qualify or be in good standing could not have a material adverse
effect on the business, operations, properties, condition (financial or
otherwise), results of operations, assets or liabilities of Xxxxxx and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). Xxxxxx has
delivered to Mergeco true and complete copies of the Certificates or Articles
of Incorporation and Bylaws (or equivalent organizational documents) of Xxxxxx
and each of its subsidiaries, as in effect at the date of this Agreement.
Neither Xxxxxx nor any subsidiary is in violation of any provisions of its
Certificate or Articles of Incorporation, Bylaws or equivalent organizational
documents.
(b) Subsidiaries of Xxxxxx. Schedule 2.1(b) sets forth a
true and complete list of all of Xxxxxx'x directly or indirectly owned
subsidiaries, together with the jurisdiction of incorporation or organization
of each subsidiary and the percentage of each subsidiary's outstanding capital
stock or other equity interests owned by Xxxxxx or another subsidiary of
Xxxxxx. Except as disclosed on Schedule 2.1(b), Xxxxxx does not own, directly
or indirectly, any subsidiaries or have the right, pursuant to a contract or
otherwise, to acquire any capital stock, equity interest or other similar
investment in any corporation, partnership, joint venture association, limited
liability company, trust or other entity.
(c) Capital Structure. The authorized capital stock of
Xxxxxx consists of 7,425,000 shares of Common Stock, 75,000 shares of
non-voting common stock, par value $0.01 per share ("Non-Voting Common Stock"),
and 5,000,000 shares of preferred stock, par value $0.01 per share ("Preferred
Stock"), none of which are designated. At the close of business on the date
hereof, 5,423,014 shares of Common Stock were issued and outstanding, no shares
of Common Stock were held by Xxxxxx in its treasury, and 860,205 shares of
Common Stock were reserved for issuance as follows: (x) 338,031 shares were
reserved for issuance upon exercise of all of the issued and outstanding
warrants, (y) 486,875 shares were reserved for issuance upon exercise of all of
the stock options outstanding under the Option Plan, and (z) 35,299 shares were
reserved for issuance and available for grant pursuant to the Option Plan. At
the close of business on the date hereof, no shares of Non-Voting Common Stock
and no shares of Preferred Stock were issued and outstanding. Except as
described in this Section 2.1(c) and Schedule 2.1(c), no shares of capital
stock of Xxxxxx are reserved for issuance for any other purpose. As of the
date hereof, there are no bonds, debentures, notes or other indebtedness issued
or outstanding having the right to vote ("Voting Debt") on any matters on which
holders of Common Stock may vote. All the issued and outstanding shares of
capital stock of Xxxxxx are duly authorized, validly issued, fully paid and
nonassessable and have not been, and as to shares issued in the future, will
not be, issued in violation of any preemptive or similar rights. The shares of
Surviving Corporation Common Stock will, when issued, be duly authorized,
validly issued, fully paid and nonassessable and will not be issued in
violation of any preemptive or similar rights. Except as described in this
Section 2.1(c), as of the date hereof, there are no options, warrants, calls,
rights, commitments or agreements of any character to which Xxxxxx or any of
its subsidiaries is a party or by which any of them is bound obligating Xxxxxx
or any of its subsidiaries to issue, deliver or sell, or cause to be, delivered
or sold, additional shares of
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capital stock or any Voting Debt of Xxxxxx or any of its subsidiaries, or
obligating Xxxxxx or any of its subsidiaries to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. All shares of
Common Stock which may be issued upon exercise of stock options granted
pursuant to the Option Plan will, when issued in accordance with the terms of
such options and the Option Plan, be validly issued, fully paid and
nonassessable and not subject to any preemptive or similar rights. All shares
of Common Stock which may be issued upon exercise of issued warrants will, when
issued in accordance with the terms of such warrants and the respective warrant
agreement, be validly issued, fully paid and nonassessable and not subject to
any preemptive or similar rights. There are no outstanding contractual
obligations of Xxxxxx or any subsidiary to repurchase, redeem or otherwise
acquire any shares of Common Stock or other capital stock of Xxxxxx or any
capital stock of, or any equity interest in, any subsidiary listed on Schedule
2.1(b). Except for the Voting Agreement (as defined in Section 10.17), there
are no voting trusts, proxies or other agreements or understandings to which
Xxxxxx or any of its subsidiaries is a party or by which Xxxxxx or any of its
subsidiaries is bound with respect to the voting of any shares of capital stock
or other equity interests of Xxxxxx or any of its subsidiaries. Schedule
2.1(c) sets forth a complete and correct list as of the date hereof, of (i) (A)
the number of stock options outstanding, (B) the exercise price of each
outstanding stock option and (C) the number of stock options then exercisable
and (ii) (A) the number of warrants outstanding, (B) the exercise price of each
outstanding warrant, (C) the number of shares of Common Stock attributable to
each warrant and (D) the number of warrants then exercisable. Schedule 2.1(c)
also sets forth the capitalization of each subsidiary of Xxxxxx listed on
Schedule 2.1(b), including the number of authorized shares of each class of
capital stock and the par value (if any) thereof, the number of shares of each
class of capital stock held in the treasury of the subsidiary, and the number
of issued and outstanding shares of each class of capital stock and the names
of ( and number of shares held by) the record owners thereof. All the issued
and outstanding shares of capital stock of each subsidiary of Xxxxxx are duly
authorized, validly issued, fully paid and nonassessable and have not been
issued in violation of any preemptive or similar rights.
(d) Authority. Xxxxxx has all requisite corporate power
and authority to enter into this Agreement, the Voting Agreement and any other
agreement executed by Xxxxxx in connection with the transactions contemplated
by this Agreement (collectively, the "Transaction Documents") and to consummate
the transactions contemplated hereby or thereby. The execution and delivery of
the Transaction Documents by Xxxxxx and the consummation by it of the
transactions contemplated hereby or thereby have been duly authorized by all
necessary corporate action on the part of Xxxxxx (subject to the approval and
adoption of this Agreement and the transactions contemplated hereby by the
stockholders of Xxxxxx as set forth in Section 1.12 of this Agreement). The
Transaction Documents have been duly executed and delivered and constitute the
valid and binding obligations of Xxxxxx, enforceable against it in accordance
with their terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
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(e) No Conflict; Required Filings and Consents. The
execution and delivery of the Transaction Documents by Xxxxxx do not and the
performance by Xxxxxx of the transactions contemplated hereby or thereby will
not , subject to (i) with respect to the Merger, the approval and adoption of
this Agreement and the transactions contemplated hereby by the stockholders of
Xxxxxx as set forth in Section 1.12 of this Agreement, and (ii) obtaining the
consents, approvals, authorizations and permits and making the filings
described in this Section 2.1(e), (A) violate, conflict with or result in any
breach of any provision of the Certificates or Articles of Incorporation or
Bylaws or equivalent organizational documents, in each case as amended or
restated, of Xxxxxx or any of its subsidiaries, (B) violate, conflict with or
result in a violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under, or permit the termination of, or
result in the acceleration of, or entitle any party to accelerate (whether as a
result of a change of control of Xxxxxx or otherwise) any obligation, or result
in the loss of any benefit, or give any person the right to require any
security to be repurchased, or give rise to the creation of any lien, charge,
security interest or encumbrance upon any of the properties or assets of Xxxxxx
or any of its subsidiaries under any of the terms, conditions or provisions of
any loan or credit agreement, note, bond, mortgage, indenture or deed of trust,
or any license, lease, agreement or other instrument or obligation to which any
of them is a party or by which they or any of their properties or assets may be
bound or subjected, or (C) violate any order, writ, judgment, injunction,
decree, statute, rule or regulation, of any court or any federal, state or
local administrative agency or commission or other governmental authority or
instrumentality (a "Governmental Entity") applicable to Xxxxxx or any of its
subsidiaries or by which or to which any of their respective properties or
assets is bound or subject. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Entity is
required by or with respect to Xxxxxx or any of its subsidiaries in connection
with the execution and delivery of the Transaction Documents by Xxxxxx or the
consummation of the transactions contemplated hereby or thereby, except for (1)
the filing of a premerger notification report under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (2) the
consents of the Federal Communications Commission (the "FCC") to the transfers
of control of the Station Licenses (as defined in Section 2.l(g)(ii) below) as
contemplated by Section 6.1 hereof, (3) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware, and (4) applicable
requirements, if any, of the Securities Act and the Exchange Act and state
securities or blue sky laws. The Xxxxxx Board has taken all actions necessary
under Delaware Law, including approving the transactions contemplated by the
Transaction Documents, to ensure that the prohibitions on business combinations
set forth in Section 203 of Delaware Law do not, and will not, apply to the
transactions contemplated by the Transaction Documents.
(f) Reports; Financial Statements; Absence of Certain
Changes or Events.
(i) Xxxxxx and its subsidiaries have filed (A)
all forms, reports, statements and other documents required to be
filed with (1) the SEC, including without limitation (v) all Annual
Reports on Form 10-K, (w) all Quarterly Reports on Form 10-Q, (x) all
proxy statements relating to meetings of stockholders (whether annual
or special), (y) all Current Reports on Form 8-K and (z) all other
reports, schedules, registration
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statements or other documents (collectively referred to as the
"Company SEC Reports"), and (2) any applicable state securities
authorities and (B) all material forms, reports, statements and other
documents required to be filed with any other Governmental Entities,
including the FCC (all such forms, reports, statements and other
documents in clauses (A) and (B) of this Subsection 3.1(e)(i) being
referred to herein, collectively, as the "Company Reports"). The
Company Reports were prepared in all material respects in accordance
with the requirements of applicable law (including, with respect to
the Company SEC Reports, the Securities Act or the Exchange Act, as
the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Reports) and the Company SEC
Reports did not at the time they were filed contain any untrue
statement of a material fact or omit to state a 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.
(ii) Xxxxxx has delivered to Mergeco copies of the
audited consolidated balance sheets as of December 31, 1995 and
December 31, 1994, together with the related audited consolidated
statements of income, cash flows and changes in stockholders' equity
of Xxxxxx for the years ended December 31, 1995, 1994 and 1993, and
the notes thereto, accompanied by the reports thereon of Ernst & Young
LLP, independent public accountants (such audited financial statements
collectively being referred to as the "Financial Statements"). The
Financial Statements, including the notes thereto, were prepared in
accordance with generally accepted accounting principles in the United
States ("GAAP") applied on a consistent basis throughout the periods
covered thereby (except to the extent disclosed therein or required by
changes in GAAP) and present fairly in all material respects the
consolidated financial position, results of operations and changes in
stockholders' equity and cash flows of Xxxxxx as of such dates and for
the periods then ended. The consolidated financial statements
(including, in each case, any related notes thereto) contained in the
Company SEC Reports filed subsequent to January 1, 1993 (A) have been
prepared in accordance with the published rules and regulations of the
SEC and GAAP applied on a consistent basis throughout the periods
involved (except (1) to the extent disclosed therein or required by
changes in GAAP, (2) with respect to Company SEC Reports filed prior
to the date of this Agreement, as may be indicated in the notes
thereto, and (3) in the case of the unaudited financial statements, as
permitted by the rules and regulations of the SEC) and (B) fairly
present in all material respects the consolidated financial position
of Xxxxxx and its subsidiaries as of the respective dates thereof and
the consolidated results of operations and changes in stockholders'
equity and cash flows for the periods indicated (subject, in the case
of unaudited consolidated financial statements for interim periods, to
adjustments, consisting only of normal, recurring accruals, necessary
to present fairly such results of operations and cash flows), except
that any pro forma financial statements contained in such consolidated
financial statements are not necessarily indicative of the
consolidated financial position of Xxxxxx and its subsidiaries as of
the respective dates thereof and the consolidated results of
operations and cash flows for the periods indicated.
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(iii) Except as disclosed in Schedule 2.1(f), there
is no liability or obligation of any kind, whether accrued, absolute,
fixed, contingent or otherwise, of Xxxxxx or its subsidiaries which
would have a Material Adverse Effect and that is not reflected or
reserved against in the balance sheet contained in the Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996 (the "Balance
Sheet"), other than (A) liabilities incurred in the ordinary course of
business in a manner consistent with past practice since March 31,
1996 (the "Balance Sheet Date"), or (B) any such liability or
obligation which would not be required to be presented in financial
statements or the notes thereto prepared in conformity with GAAP
applied, in a manner consistent with past practice, in the preparation
of the Financial Statements and the consolidated financial statements
contained in Company SEC Reports.
(iv) Except as disclosed in Schedule 2.1(f), since
the Balance Sheet Date, Xxxxxx and its subsidiaries have conducted
their respective businesses only in the ordinary course consistent
with past practice and nothing has occurred that would have been
prevented by Section 3.1 if the terms of such section had been in
effect as of and after the Balance Sheet Date. Except as disclosed in
Schedule 2.1(f), since the Balance Sheet Date, there has not occurred,
and Xxxxxx and its subsidiaries have not incurred or suffered, any
Material Adverse Effect.
(g) Compliance with Applicable Laws: FCC Matters.
(i) Except as permitted or contemplated hereby,
the businesses of Xxxxxx and its subsidiaries have been conducted in
compliance with each applicable law, ordinance, regulation, judgment,
decree, injunction, rule or order of the FCC or any other Governmental
Entity binding on Xxxxxx or any of its subsidiaries or their
respective properties or assets, except for such instances of
noncompliance as would not have a Material Adverse Effect. No
investigation or review by any Governmental Entity with respect to
Xxxxxx or any of its subsidiaries is pending or, to Xxxxxx'x
knowledge, threatened, except for such investigations or reviews as
would not have a Material Adverse Effect. Without limiting the
generality of the foregoing, Xxxxxx and its subsidiaries have complied
with the Communications Act of 1934, as amended (the "Communications
Act") in all material respects, all material rules, regulations and
written policies of the FCC thereunder, all material obligations with
respect to equal opportunity under applicable law, and all material
rules and regulations of the Federal Aviation Administration
applicable to the towers used by the radio broadcast stations operated
by Xxxxxx and its subsidiaries (the "Stations"). In addition, Xxxxxx
and its subsidiaries have duly and timely filed, or caused to be so
filed, with the FCC all material reports, statements, documents,
registrations, filings or submissions with respect to the operation of
the Stations and the ownership thereof, including, without limitation,
applications for renewal of authority required by applicable law to be
filed. All such FCC filings complied with all material applicable
laws when made and no material deficiencies have been asserted with
respect to any such filings. The material required by 47 C.F.R.
Section 73.3526 to be kept in the public inspection files of the
Stations is in such files.
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(ii) Schedule 2.1(g) lists (A) all licenses,
permits and other authorizations, including the expiration dates
thereof, issued to Xxxxxx or any of its subsidiaries by the FCC
relating to the Stations and held by them as of the date of this
Agreement and (B) all licenses, permits or authorizations issued to
Xxxxxx or any of its subsidiaries by any other Governmental Entities
which are material to the operations of the Stations and held by them
as of the date of this Agreement, the loss of which could have a
Material Adverse Effect. Such licenses, permits and authorizations,
and all applications for modification, extension or renewal thereof or
for new licenses, permits, permissions or authorizations, are
collectively referred to herein as the "Station Licenses." Schedule
2.1(g) lists the legally authorized holder(s) of the Station Licenses,
each of which is in full force and effect. The Stations have been
operated in all material respects in accordance with the terms of the
Station Licenses. There are no material proceedings pending or, to
Xxxxxx'x knowledge, threatened with respect to Xxxxxx'x or any of its
subsidiaries ownership or operation of the Stations which reasonably
may be expected to result in the revocation, material adverse
modification, non-renewal or suspension of any of the Station
Licenses, the denial of any pending applications for Station Licenses,
the issuance against Xxxxxx or any of its subsidiaries of any cease
and desist order, or the imposition of any administrative actions by
the FCC or any other Governmental Entity with respect to the Station
Licenses, or which reasonably may be expected to adversely affect the
Stations' ability to operate as currently operated or the Surviving
Corporation's ability to obtain control of the Station Licenses. To
Xxxxxx'x knowledge, no other broadcast station or radio communications
facility is causing interference to the Stations' transmissions beyond
that which is allowed by FCC rules and regulations. Xxxxxx has no
reason to believe that the FCC will not renew the Station Licenses
issued by the FCC in the ordinary course of business. Xxxxxx knows of
no facts relating to Xxxxxx under the Communications Act or the rules,
regulations or written policies of the FCC in effect on the date of
this Agreement that reasonably may be expected to disqualify Xxxxxx
from transferring control of the Station Licenses pursuant to the
terms of this Agreement or that would prevent the consummation by them
of the transactions contemplated by this Agreement.
(h) Absence of Litigation. Except as set forth on
Schedule 2.1(h), there is no claim, action, suit, inquiry, judicial or
administrative proceeding, grievance or arbitration pending or, to the
knowledge of Xxxxxx, threatened against Xxxxxx or any of its subsidiaries or
any of their respective properties or assets by or before any arbitrator or
Governmental Entity, nor to Xxxxxx'x knowledge are there any investigations
relating to Xxxxxx or any of its subsidiaries or any of their respective
properties or assets pending or threatened by or before any arbitrator or
Governmental Entity which would have a Material Adverse Effect. Except as set
forth in Schedule 2.1(h), there is no judgment, decree, injunction, order,
determination, award, finding, or letter of deficiency of any Governmental
Entity or arbitrator outstanding against Xxxxxx or any of its subsidiaries or
any of their respective properties or assets which would have a Material
Adverse Effect. As of the date of this Agreement, there is no action, suit,
inquiry, judicial or administrative proceeding pending or, to the knowledge of
Xxxxxx, threatened against Xxxxxx or any of its subsidiaries relating to the
transactions contemplated by this Agreement.
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(i) Insurance. Schedule 2.1(i) sets forth a summary of
all fire, general liability, malpractice liability, theft and other forms of
insurance and all fidelity bonds held by or applicable to Xxxxxx or any of its
subsidiaries. No event has occurred, including, without limitation, the
failure by Xxxxxx or any of its subsidiaries to give any notice or information
or the delivery of any inaccurate or erroneous notice or information, which
limits or impairs the rights of Xxxxxx or any of its subsidiaries under any
such insurance policies in such a manner as could have a Material Adverse
Effect. Excluding insurance policies that have expired and been replaced in
the ordinary course of business, no insurance policy has been canceled within
the last two years prior to the date hereof.
(j) Real Estate. Each of Xxxxxx and its subsidiaries has
good and marketable title in fee simple to all real properties owned by it and
valid leaseholds in the Leased Real Property (as defined herein), except to the
extent marketability may be affected by the existence of Permitted Liens (as
defined in Section 2.1(l)). Each lease is valid without default thereunder by
the lessee or, as of the date hereof and to Xxxxxx'x knowledge, the lessor.
Schedule 2.1(j) lists as of the date hereof (i) the street address and use of
each parcel of real property owned by Xxxxxx or any of its subsidiaries (the
"Owned Real Property"), (ii) the street address and use of each parcel of real
property leased by Xxxxxx or any of its subsidiaries (the "Leased Real
Property") and (iii) two grants of easements pursuant to which a subsidiary of
Xxxxxx is a grantee.
(k) Personal Property. Except for property held under
capital leases, Xxxxxx has good title to all the items of machinery, equipment,
furniture, fixtures, inventory, receivables and other tangible or intangible
personal property reflected on the Balance Sheet and all such property acquired
since the Balance Sheet Date, except for any such property or assets sold or
otherwise disposed of in the ordinary course of business and consistent with
past practices since such date or which would not have a Material Adverse
Effect. The tangible personal property and fixtures owned or used by Xxxxxx or
any of its subsidiaries that are necessary for the operation of the Stations,
including all broadcasting equipment and broadcast towers, are in good
operating condition and repair (subject to normal wear and tear) and permit the
conduct of the business of the Stations in compliance with all material FCC
rules and regulations. Xxxxxx or any of its subsidiaries owns or holds under
valid leases all of the tangible personal property and fixtures necessary to
conduct the business of the Stations as presently conducted except where the
failure to own or hold under valid lease any tangible property or fixtures
would not have a Material Adverse Effect.
(l) Liens and Encumbrances. All properties and assets,
including leases, owned by Xxxxxx and its subsidiaries are free and clear of
all liens, pledges, claims, security interests, restrictions, mortgages,
tenancies and other possessory interests, conditional sale or other title
retention agreements, assessments, easements, rights of way, covenants,
restrictions, rights of first refusal, defects in title, encroachments and
other burdens, options or encumbrances of any kind (collectively, "Liens")
except (i) statutory Liens securing payments not yet delinquent or the validity
of which are being contested in good faith by appropriate actions, (ii)
purchase money Liens arising in the ordinary course, (iii) Liens for taxes not
yet delinquent, (iv) Liens reflected in the Balance Sheet (which have not been
discharged), (v) Liens which in the aggregate do not materially detract
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from the value for use for broadcasting purposes or materially impair the
present and continued use of the properties or assets subject thereto in the
usual and normal conduct of the business of the Stations, and (vi) Liens on
leases arising from the provisions of such leases, (vii) any liens set forth on
the title reports for the Owned Real Property, copies of which reports have
been provided to Mergeco, (viii) any leases of Leased Real Property listed on
Schedule 2.1(l) and (ix) any other liens set forth on Schedule 2.1(l) (the
Liens referred to in clauses (i) through (ix) being "Permitted Liens").
(m) Environmental Matters. Except as set forth on
Schedule 2.1(m):
(i) The real property and facilities owned,
operated and leased by Xxxxxx or its subsidiaries and the operations
of Xxxxxx or its subsidiaries thereon comply in all material respects
and have at all times complied in all material respects with all
applicable federal, state and local laws, statutes, codes, rules,
regulations, ordinances, orders, determinations or rules of common law
pertaining to the environment, natural resources and public or
employee health and safety including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
of 1980, as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986, as amended, the Resource Conservation and
Recovery Act of 1976, as amended, the Clean Air Act, as amended, the
Federal Water Pollution Control Act, as amended, The Oil Pollution Act
of 1990, as amended, the Safe Drinking Water Act, as amended, the
Hazardous Materials Transportation Act, as amended, the Toxic
Substances Control Act, as amended, and other environmental
conservation or protection laws ("Environmental Laws");
(ii) No judicial proceedings are pending or, to
Xxxxxx'x knowledge, threatened against Xxxxxx or its subsidiaries
alleging the violation of any Environmental Laws, and there are no
administrative proceedings pending or, to Xxxxxx'x knowledge,
threatened against Xxxxxx or its subsidiaries, alleging the violation
of any Environmental Laws and no notice (in the case of clause
(ii)(B), directed to Xxxxxx or any of its subsidiaries) from any
Governmental Entity or any private or public person has been received
by Xxxxxx or its subsidiaries (A) claiming any violation of any
Environmental Laws in connection with any real property or facility
owned, operated or leased by Xxxxxx or its subsidiaries that has not
been complied with or otherwise resolved to the satisfaction of the
party giving notice, or (B) requiring any remediation, clean-up,
modification, repairs, work, construction, alterations or
installations on or in connection with any real property or facility
owned, operated or leased by Xxxxxx or its subsidiaries that are
necessary to comply with any Environmental Laws and that have not been
complied with or otherwise resolved to the satisfaction of the party
giving notice;
(iii) All material permits, registrations,
licenses, authorizations, and the like ("Permits") required to be
obtained or filed by each of Xxxxxx and its subsidiaries under any
Environmental Laws in connection with Xxxxxx'x and its subsidiaries'
operations, including, without limitation, those activities relating
to the generation, use, storage,
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treatment, disposal, release, or remediation of Hazardous Substances
(as such term is defined in Section 2.1(m)(iv) hereof), have been duly
obtained or filed, and each of Xxxxxx and its subsidiaries are and
have at all times been in compliance in all material respects with the
terms and conditions of all such Permits;
(iv) All Hazardous Substances used or generated by
Xxxxxx or its subsidiaries or, to Xxxxxx'x knowledge, any of their
predecessors, on, in, or under any of the owned, operated, or leased
real property or facilities are and have at all times been generated,
stored, used, treated, disposed of, and released by such persons or on
their behalf in such manner as not to result in any material
Environmental Costs or Liabilities. "Hazardous Substances" means (A)
any hazardous materials, hazardous wastes, hazardous substances, toxic
wastes, and toxic substances as those or similar terms are defined
under any Environmental Laws; (B) any asbestos or any material which
contains any hydrated mineral silicate, including chrysolite, amosite,
crocidolite, tremolite, anthophylite and/or actinolite, whether
friable or non-friable; (C) PCBs, or PCB-containing materials, or
fluids; (D) radon; (E) any other hazardous, radioactive, toxic or
noxious substance, material, pollutant, contaminant, constituent, or
solid, liquid or gaseous waste; (F) any petroleum, petroleum
hydrocarbons, petroleum products, crude oil and any fractions or
derivatives thereof, any oil or gas exploration or production waste,
and any natural gas, synthetic gas and any mixtures thereof; (G) any
substance that, whether by its nature or its use, is subject to
regulation under any Environmental Laws or with respect to which any
Environmental Laws or Governmental Entity requires environmental
investigation, monitoring or remediation; and (H) any underground
storage tanks, dikes, or impoundments as defined under any
Environmental Laws. "Environmental Costs or Liabilities" means any
losses, liabilities, obligations, damages, fines, penalties,
judgments, settlements, actions, claims, costs and expenses
(including, without limitation, reasonable fees, disbursements and
expenses of legal counsel, experts, engineers and consultants, and the
costs of investigation or feasibility studies and performance of
remedial or removal actions and cleanup activities) arising from or
under any Environmental Laws, order of, or contract of Xxxxxx or its
subsidiaries with, any Governmental Entity or any private or public
persons;
(v) There are not now, nor have there been in the
past, on, in or under any property or facilities when owned, leased or
operated by Xxxxxx or its subsidiaries or, to Xxxxxx'x knowledge, when
owned, leased or operated by any of their predecessors, any Hazardous
Substances that are in a condition that violates any Environmental Law
in any material respect or that reasonably could be expected to
require remediation under any Environmental Law;
(vi) Xxxxxx and its Subsidiaries have not
received, and to the knowledge of Xxxxxx do not expect to receive, any
notification from any source advising Xxxxxx or such subsidiaries
that: (A) it is a potentially responsible party under CERCLA or any
other Environmental Laws; (B) any real property or facility currently
or previously owned, operated, or leased by it is identified or
proposed for listing as a federal National Priorities
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List ("NPL") (or state-equivalent) site or a Comprehensive
Environmental Response, Compensation and Liability Information System
("CERCLIS") list (or state-equivalent) site; and (C) any facility to
which it has ever transported or otherwise arranged for the disposal
of Hazardous Substances is identified or proposed for listing as an
NPL (or state-equivalent) site or CERCLIS (or state-equivalent) site;
and
(vii) The Stations' operations do not have a
significant environmental impact, as defined by 47 C.F.R. Section
1.1307.
(n) Taxes. Each of Xxxxxx and its subsidiaries has
filed, or has timely applied for extensions of time to file, all tax returns,
reports, statements and other documents ("Tax Returns"') required to be filed,
and all such Tax Returns which have been filed are accurate and complete in all
material respects. Each of Xxxxxx and its subsidiaries has paid (or there has
been paid on its behalf), or has set up an adequate reserve for the payment of,
all taxes required to be paid, withheld, or deducted, or for which any of
Xxxxxx or its subsidiaries are liable, in respect of the periods covered by
such Tax Returns, and with respect to each tax, from the end of the period
covered by the most recently filed Tax Return to the date hereof, and the
Balance Sheet reflects an adequate reserve for all taxes payable, or required
to be withheld and remitted, by Xxxxxx or any of its subsidiaries, or for which
Xxxxxx or any of its subsidiaries are liable, accrued through the Balance Sheet
Date. No material deficiencies for any taxes have been proposed, asserted or
assessed against Xxxxxx or any of its subsidiaries and are pending, and no
requests for waivers of the time to assess any such taxes are pending. The
federal income tax returns of Xxxxxx and its subsidiaries have not been
examined by the Internal Revenue Service. None of Xxxxxx or its subsidiaries
(i) has filed a consent under section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code"), (ii) has made, or is obligated or may become
obligated to make, any payments that will not be deductible by reason of
section 280G of the Code, or (iii) has been a member of an affiliated group of
corporations which has filed a consolidated federal income tax return (other
than the group of which Xxxxxx is the common parent) or otherwise has any
liability for the taxes of any person (other than Xxxxxx and its subsidiaries)
under Treas. Reg. Section 1.1502-6, any similar provision of state, local or
foreign law, or by reason of its status as a transferee, successor, indemnitor
or otherwise. For the purposes of this Agreement, the term "taxes" shall
include all federal, state, local and foreign income, property, sales, excise,
withholding, unemployment compensation, social security, and other taxes and
charges of any nature whatsoever (including interest, penalties and additions
to tax relating to any of the specified items).
(o) Certain Agreements. Except as set forth in Schedule
2.1(o) and for oral or written agreements, plans or arrangements, the benefits
of which do not in the aggregate exceed $75,000, neither Xxxxxx nor any of its
subsidiaries is a party to any oral or written agreement, plan or arrangement
with any officer, director, employee or other station or broadcast personnel
(whether an employee or an independent contractor) of Xxxxxx or its
subsidiaries (i) the benefits of which are contingent, or the terms of which
are materially altered, upon, or result from, the occurrence of a transaction
involving Xxxxxx of the nature of any of the transactions contemplated by this
Agreement, (ii) providing severance benefits or other benefits after the
termination of employment
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or other contractual relationship regardless of the reason for such termination
and regardless of whether such termination is before or after a change of
control, (iii) under which any person may receive payments subject to the tax
imposed by Section 4999 of the Code or (iv) any of the benefits of which will
be increased, or the vesting of benefits of which will be accelerated, by the
occurrence of any of the transactions contemplated by this Agreement or the
value of any of the benefits of which will be calculated on the basis of any of
the transactions contemplated by this Agreement. Schedule 2.1(o) hereto lists
(and, in the case of clause (iv), describes) each oral or written (i)
agreement, contract, indenture or other instrument relating to the borrowing of
money or the guarantee of any obligation for the borrowing of money, (ii)
Employee Benefit Plan, as defined in Section 2.1(p), (iii) employment or
consulting contract which is not terminable without liability or penalty to
Xxxxxx or any of its subsidiaries on 30 days or less notice, other than such
employment or consulting contracts the payments under which do not in the
aggregate exceed $75,000, (iv) covenant, agreement, or arrangement under which
Xxxxxx'x or any of its subsidiary's ability or right to compete with another
Person is restricted or impaired, or (v) contract, agreement or commitment
(except for trade or barter agreements) under which any party thereto remains
obligated to provide goods or services having a value, or to make payments
aggregating, in excess of $75,000 per year, in any such case to which Xxxxxx or
any of its subsidiaries is a party or bound. Each such agreement, contract or
obligation described in Schedule 2.1(o) or required to be so described is a
valid and binding obligation of Xxxxxx or one of its subsidiaries, as the case
may be, and is in full force and effect without amendment, except where not
being a valid and binding obligation or in full force and effect without
amendment could not have a Material Adverse Effect. Xxxxxx or one of its
subsidiaries, as the case may be, has performed in all material respects the
obligations required to be performed by it under the agreements so described
and is not (with or without lapse of time or the giving of notice, or both) in
material breach or default thereunder. As of the date hereof and to the
knowledge of Xxxxxx, each other party to such contracts has performed in all
material respects the obligations required to be performed by it under the
agreements so described and is not (with or without lapse of time or the giving
of notice, or both) in material breach or default thereunder. Schedule 2.1(o)
identifies, as to each agreement, contract or obligation listed thereon,
whether the consent of the other party thereto is required in order for such
agreement, contract or obligation to continue in full force and effect upon the
consummation of the transactions contemplated hereby or whether such agreement,
contract or obligation can be canceled by the other party without liability to
such other party due to the consummation of the transactions contemplated
hereby. A copy of each written agreement, contract, obligation, plan or
arrangement and a description of each oral agreement, contract, obligation,
plan or arrangement set forth in Schedule 2.1(o) has been provided to Mergeco.
(p) ERISA Compliance; Labor.
(i) The present value of all accrued benefits
(vested and unvested) under each "employee pension benefit plan" as
such term is defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which Xxxxxx or any other
trades or businesses under common control within the meaning of
Section 4001(b)(1) of ERISA with Xxxxxx (collectively, the "ERISA
Group") maintains, or to which
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Xxxxxx or any member of the ERISA Group is obligated to contribute
(the "Pension Plans"), did not, as of the respective last annual
valuation dates for such Pension Plans, exceed the value of the assets
of such Pension Plan allocable to such benefits. None of the Pension
Plans subject to Section 302 of ERISA has incurred any "accumulated
funding deficiency," as such term is defined in Section 302 of ERISA
(whether or not waived), since the effective date of such Section 302.
Neither Xxxxxx or any member of the ERISA Group, nor any officer of
Xxxxxx or any member of the ERISA Group or any of the employee benefit
plans of Xxxxxx or any member of the ERISA Group which are subject to
ERISA, including the Pension Plans, or any trusts created thereunder,
or any trustee or administrator thereof, has engaged in a "prohibited
transaction," as such term is described in Section 4975 of the Code,
which has subjected or which could subject Xxxxxx or any member of the
ERISA Group, any officer of Xxxxxx or any of its subsidiaries or any
of such plans or any trust to any material tax or penalty on
prohibited transactions imposed by such Section 4975. None of such
Pension Plans subject to Title IV of ERISA or any of their related
trusts has been terminated or partially terminated, nor has there been
any "reportable event," as that term is defined in Section 4043 of
ERISA, with respect thereto since the effective date of such Section
4043. Neither Xxxxxx or any member of the ERISA Group has contributed
or been obligated to contribute to any "multiemployer plan" as such
term is defined in Section 3(37) or Section 4001(a)(3) of ERISA.
Except as set forth on Schedule 2.1(p), there are no "employee benefit
plans" within the meaning of Section 3(3) of ERISA or any bonus,
pension, profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option, phantom
stock, retirement, vacation, severance, disability, death benefit,
hospitalization, insurance or other plan or arrangement or
understanding providing benefits to any present or former employee or
contractor of Xxxxxx or any member of the ERISA Group maintained by
Xxxxxx or any member of the ERISA Group or as to which Xxxxxx or any
member of the ERISA Group has any material liability or obligation
(collectively, "Employee Benefit Plans").
(ii) True, correct and complete copies of each of
the Employee Benefit Plans, and related trusts, if applicable, have
been furnished to Mergeco, along with the most recent report filed on
Form 5500 and summary plan description with respect to each Employee
Benefit Plan required to file Form 5500. All reports and disclosures
relating to the Employee Benefit Plans required to be filed with or
furnished to governmental agencies or plan participants or
beneficiaries have been furnished in accordance with applicable law in
a timely manner. Each Employee Benefit Plan has been maintained in
compliance in all material respects with ERISA and the Code, and each
Employee Benefit Plan intended to be qualified under Section 401 of
the Code satisfies the requirements of such Section and has received a
favorable determination letter from the Internal Revenue Service
regarding the qualified status and has not, since receipt of the most
recent favorable determination letter, been amended or, to the
knowledge of Xxxxxx, operated in a manner which would adversely affect
such qualified status. There are no actions, suits or claims pending
(other than routine claims for benefits) or, to the knowledge of
Xxxxxx, threatened against, or with respect to any of the Employee
Benefit Plans. All contributions required to be made to the Employee
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26
Benefit Plans pursuant to their terms have been timely made. To the
knowledge of Xxxxxx, there is no matter pending with respect to any of
the Employee Benefit Plans before the Internal Revenue Service,
Department of Labor or the Pension Benefit Guaranty Corporation.
Except as required by applicable law, none of the Employee Benefit
Plans provides medical insurance coverage following retirement. Each
Employee Benefit Plan which is an "employee welfare benefit plan," as
defined in Section 3(1) of ERISA, may be unilaterally amended or
terminated in its entirety without liability except as to benefits
accrued prior to such amendment or termination.
(iii) Schedule 2.1(p) lists each collective
bargaining agreement to which Xxxxxx or any of its subsidiaries is a
party. Except for those unions which are parties to one or more of
the listed collective bargaining agreements or as otherwise listed on
Schedule 2.1(p) neither Xxxxxx nor any of its subsidiaries has agreed
to recognize any union or other collective bargaining representative,
nor has any union or other collective bargaining representative been
certified as the exclusive bargaining representative of any of their
employees. Each of Xxxxxx and its subsidiaries (A) is, and has been
since January 1, 1993, in substantial compliance with all applicable
laws regarding labor, employment and employment practices, terms and
conditions of employment, affirmative action, wages and hours, plant
closing and mass layoff, occupational safety and health, immigration,
and workers' compensation, (B) is not engaged, nor has it since
January 1, 1993, engaged, in any unfair labor practices, and has no,
and has not had since January 1, 1993, any, unfair labor practice
charges or complaints before the National Labor Relations Board
pending or, to Xxxxxx'x knowledge, threatened against it, (C) has no,
and has not had since January 1, 1993, any, grievances, arbitrations
or other proceedings arising or asserted to arise under any collective
bargaining agreement, pending or, to Xxxxxx'x knowledge, threatened
against it and (D) has no, and has not had since January 1, 1993, any,
charges, complaints or proceedings before the Equal Employment
Opportunity Commission, Department of Labor or any other federal,
state or local agency responsible for regulating employment practices,
pending, or, to Xxxxxx'x knowledge, threatened against it. There is no
labor strike, slowdown, work stoppage or lockout pending or, to the
knowledge of Xxxxxx, threatened against or affecting Xxxxxx or its
subsidiaries, and Xxxxxx or its subsidiaries has not experienced any
labor strike, slowdown, work stoppage or lockout since January 1,
1993. Except as set forth on Schedule 2.1(p), to Xxxxxx'x knowledge,
no union organizational campaign or representation petition is
currently pending with respect to the employees of Xxxxxx or its
subsidiaries.
(q) Patents, Trademarks, Etc. Schedule 2.1(q) sets forth
each material patent, patent application, trademark, trade name, trade name and
trademark registration, service xxxx, trade secret, copyright, copyright
registration and any other proprietary intellectual property rights
(collectively, "Intellectual Rights") owned by or registered in the name of
Xxxxxx or any of its subsidiaries, or in which Xxxxxx or any of its
subsidiaries has any right, license or interest. Xxxxxx or its subsidiaries
owns or has the unencumbered right to use pursuant to a valid, binding and
enforceable license agreement or other contract or arrangement all such
Intellectual Rights. To the
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27
knowledge of Xxxxxx, neither Xxxxxx nor any of its subsidiaries is infringing
any such Intellectual Rights, and Xxxxxx is not aware of any infringement by
others of any such rights owned by Xxxxxx or any of its subsidiaries.
(r) Affiliate Relationships. Schedule 2.1(r) sets forth
a complete list and summary description of all contracts or other arrangements
involving Xxxxxx or any of its subsidiaries in which any officer, director,
stockholder or any of their affiliates has a financial interest, including
indebtedness to Xxxxxx or its subsidiaries, other than such contracts or
arrangements which in the aggregate do not exceed $75,000.
(s) Vote Required. The only votes of the holders of any
class or series of capital stock of Xxxxxx necessary to approve the Merger and
adopt this Agreement are the affirmative votes of the holders of a majority of
the outstanding shares of the Common Stock.
(t) Opinion of Financial Advisor. Xxxxxx has received
the opinion of Alex. Xxxxx & Sons Incorporated ("Alex. Xxxxx") to the effect
that, as of the date of this Agreement, the Merger is fair, from a financial
point of view to the holders of Common Stock. The fees of Alex. Xxxxx in
connection with the transactions contemplated by this Agreement shall not
exceed $825,000.
2.2. Representations and Warranties of Mergeco. Mergeco represents
and warrants to Xxxxxx as follows (with the understanding that Xxxxxx is
relying on such representations and warranties in entering into and performing
this Agreement):
(a) Organization Standing and Power. Mergeco is a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite corporate power
and authority to own, lease and operate its properties and to carry on its
business as now being conducted.
(b) Authority. Mergeco has all requisite corporate power
and authority to enter into this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by Mergeco
and the consummation by it of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Mergeco
(including the approval and adoption of this Agreement and the transactions
contemplated hereby by the Parent). This Agreement has been duly executed and
delivered and constitutes the valid and binding obligation of Mergeco,
enforceable against it in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws affecting creditors' rights and remedies generally and subject, as
to enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity). The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby and compliance 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,
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cancellation or acceleration of any material obligation or to a loss of a
material benefit under, any provision of the Certificate of Incorporation or
Bylaws of Mergeco or any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Mergeco or its properties or assets, except for any such
conflicts, violations or defaults or terminations, cancellations or
accelerations which individually or in the aggregate do not have a material
adverse effect on Mergeco's ability to consummate its obligations hereunder.
No consent, approval, order or authorization of, or registration, declaration
or filing with, any Governmental Entity is required by or with respect to
Mergeco in connection with the execution and delivery of this Agreement by
Mergeco or the consummation by it of the transactions contemplated hereby,
except for (i) the filing of a premerger notification report under the HSR Act,
(ii) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware, (iii) the filing with the FCC and the grant of the consent
of the FCC to the transfer of control of the Station Licenses pursuant to the
terms of this Agreement (as contemplated by Section 6.1), and (iv) applicable
requirements, if any, of the Securities Act and the Exchange Act and the rules
and regulations thereunder and state securities or blue sky laws. Mergeco is
acquiring the shares of Surviving Corporation Common Stock for investment
purposes and without a view to the distribution thereof in violation of the
Securities Act.
(c) Litigation. As of the date hereof, there is no
action, suit, inquiry, judicial or administrative proceeding pending or, to the
knowledge of Mergeco, threatened against it relating to the transactions
contemplated by this Agreement.
(d) FCC Matters. Mergeco knows of no facts relating to
it under the Communications Act or the rules, regulations or written policies
of the FCC in effect on the date of this Agreement that reasonably may be
expected to disqualify it from obtaining control of the Station Licenses or
that would prevent it from consummating the transactions contemplated by this
Agreement. Mergeco is able to certify on an FCC Form 315 that it is
financially qualified.
(e) Real Estate. As of the date hereof, Mergeco does not
own or lease any real property.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1. Covenants of Xxxxxx. Except as contemplated by this Agreement
or to the extent that Mergeco shall otherwise consent in writing, from the date
of this Agreement until the Effective Time, Xxxxxx covenants and agrees that it
shall not, and shall not permit any of its subsidiaries to:
(a) conduct its business in any material respect except
in the ordinary course consistent with past practice; or
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(b) if it would cause a Material Adverse Effect, fail to
use its commercially reasonable efforts to preserve intact Xxxxxx'x present
business organization and to keep available the services of its present
officers, station managerial personnel (including the General Manager, Station
Manager, General Sales Manager, Local Sales Manager, National Sales Manager,
Programming Director and Business Manager, or persons performing comparable
duties, of each Station (collectively, the "Station Management")) and
over-the-air employees or independent contractors and preserve its
relationships with customers, suppliers and others having business dealings
with it to the end that its goodwill and ongoing business shall not be
materially impaired at the Closing Date. The (i) failure to renew an
employment agreement pursuant to Section 3.1(g) due to a failure by Mergeco to
consent to an increase in compensation or (ii) renewal of an employment
agreement pursuant to Section 3.1(g) with an increase in compensation
thereunder which has been consented to by Mergeco, shall not be deemed to be a
violation of this Section 3.1(b); or
(c) other than as previously disclosed in writing, fail
to use its commercially reasonable efforts to maintain the present format of
the Stations and with programming consistent with past practices; or
(d) split, combine, divide, distribute or reclassify any
shares of its capital stock, declare, pay or set aside for payment any dividend
or other distribution in respect of its capital stock, or directly or
indirectly, redeem, purchase or otherwise acquire any shares of its capital
stock or other securities; provided that nothing herein shall prevent any of
its subsidiaries from paying dividends or making other distributions to Xxxxxx;
or
(e) issue, sell, pledge, dispose of, encumber or deliver
(whether through the issuance or granting of any options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any stock of any
class or any securities convertible into or exercisable or exchangeable for
shares of stock of any class (other than the issuance of certificates in
replacement of lost certificates); or
(f) change or amend its charter documents or bylaws; or
(g) except for amendments, terminations (without payment
of penalty or damages), renewals or failures to renew (without payment of
penalty or damages) of employment agreements with over-the-air personnel in the
ordinary course of business and consistent with past practice (subject to prior
consultation with Mergeco reasonably in advance thereof), enter into,
materially amend, terminate, or fail to use its commercially reasonable efforts
to renew any material contract (i.e., a contract or agreement of the type
required to be described in Schedule 2.1(o) (provided that neither Xxxxxx nor
its subsidiaries shall be required to renew any material contract on terms that
are less favorable to Xxxxxx or its subsidiaries) or default in any material
respect (or take or omit to take any action that, with or without the giving
notice or passage of time, would constitute a material default) under any
material contract or enter into any new material contract; or
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(h) merge or consolidate with or into any other legal
entity, dissolve or liquidate; or
(i) incur or assume any long-term debt (including
obligations in respect of capital leases and for interest), assume, guarantee,
endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other person (other than
endorsements of checks in the ordinary course) or make any loans, advances or
capital contributions to, or investments in, any person (other than advances to
employees in the ordinary course of business); or
(j) adopt or amend any Employee Benefit Plan or
collective bargaining agreement, or increase in any manner the compensation or
fringe benefits of any director, officer or employee or other station and
broadcast personnel (whether employees or independent contractors) or pay any
benefit not by any existing agreement, except in the ordinary course of
business and consistent with past practices and as required by law, provided
that, before entering into any employment agreement or increasing or agreeing
to increase the compensation, bonuses or other benefits of any Station
Management or over-the-air talent in the ordinary course of business and as
required by law, Xxxxxx shall first have consulted in good faith with Mergeco
with respect to the terms of any such employment agreement or increase or
change in compensation, bonuses or other benefits; or
(k) except as set forth on Schedule 3.1(k), acquire
(including, without limitation, by merger, consolidation or the acquisition of
any equity interest or assets) or sell (whether by merger, consolidation or the
sale of an equity interest or assets), lease or dispose of any assets except in
the ordinary course of business and consistent with past practice or, even if
in the ordinary course of business and consistent with past practices (other
than sales of surplus or obsolete equipment), whether in one or more
transactions, in no event having a fair market value in excess of $75,000; or
(l) mortgage, pledge or subject to any material Lien any
of its properties or assets, tangible or intangible, other than in the ordinary
course of business consistent with past practice; or
(m) except as required by GAAP, applicable law or
circumstances which did not exist as of the Balance Sheet Date, change any of
the material accounting principles or practices used by it; or
(n) make any settlement of or compromise any tax
liability, change any tax election or tax method of accounting or make any new
tax election or adopt any new tax method of accounting which settlement,
compromise, method or election is material to Xxxxxx and its subsidiaries,
taken as a whole; or
(o) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of business
consistent with past practice, or fail to pay or otherwise satisfy (except if
being contested
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in good faith) any material accounts payable, claims, liabilities or
obligations on a basis, and within the time, consistent with past practice; or
(p) change in any material respect its existing practices
and procedures with respect to the collection of accounts receivable of the
Stations and, except with respect to good faith attempts consistent with past
practice to obtain payment of a past due receivable, or except in accordance
with existing practices, a contested receivable, offer to discount the amount
of any outstanding receivable or extend any other incentive (whether to the
account debtor or any employee or third party responsible for the collection of
receivables) to accelerate the collection thereof, or change any Station's
advertising rates or policies, procedures or methods in connection with the
sale of advertising time in a manner primarily intended to accelerate the
receipt of cash payments or fail to incur annual advertising and promotional
department expenses in cash and trade below 90% of that budgeted for 1996 (as
such budget previously has been delivered to Mergeco); or
(q) except as contemplated by that certain Option
Agreement dated as of July 8, 1996, by and between Wheeling Radio Company and
Mountain Radio Corporation, enter into, or enter into negotiations or
discussions with any person other than Mergeco with respect to, any local
marketing agreement, time brokerage agreement, joint sales agreement or any
other similar agreement; or
(r) agree to or make any commitment, orally or in
writing, to take any actions prohibited by this Agreement.
3.2. Negative Trade Balance. Xxxxxx shall use commercially
reasonable efforts to ensure that the Xxxxxx Negative Trade Balance, as defined
below, of the Stations, taken as a whole, does not exceed $75,000 (excluding
the Station in Fresno, California) in the aggregate at the Closing Date.
"Xxxxxx Negative Trade Balance" means the difference, if negative, between the
value of time owed under barter agreements to which any of the Stations is a
party or by which any of them is bound and the value of the goods and services
to be received under such agreements.
3.3. Environmental Site Assessments. If Mergeco or its lenders or
other financing sources require Phase I or Phase II environmental site
assessments ("ESAs"), Xxxxxx covenants and agrees that, upon written notice
from Mergeco to Xxxxxx identifying the locations at which such ESAs are
required, Xxxxxx shall at its sole cost and expense cause to be performed by a
nationally recognized and duly qualified environmental consultant reasonably
acceptable to Mergeco and Xxxxxx an ESA at each identified transmission site
owned, operated or leased by Xxxxxx or its subsidiaries and at such other
identified real properties and facilities owned, operated or leased by Xxxxxx
or its subsidiaries. The ESAs which are to be conducted for the benefit of
Mergeco shall be performed in a manner that at a minimum satisfies the
requirements of ASTM Practice E 1527-94. Xxxxxx covenants and agrees that,
upon receipt of the notice referred to above, it shall diligently pursue the
performance of the requisite ESAs to their completion, with final copies of the
Phase I environmental site assessment reports (and, if applicable, Phase II
Environmental Site Assessment
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reports) made available to Mergeco by no later than 45 days following the date
on which Xxxxxx receives the notice referred to above.
ARTICLE IV
ADDITIONAL AGREEMENTS OF XXXXXX
4.1. No Solicitation of Transactions. Xxxxxx shall not, nor shall
it permit its subsidiaries to, directly or indirectly, through any officer,
director, agent or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person relating to any acquisition or purchase
of all or any material portion of the assets of, or any equity interest in,
Xxxxxx or any of its subsidiaries or any merger, consolidation, share exchange,
business combination or other similar transaction with Xxxxxx or any of its
subsidiaries or participate in any negotiations regarding, or furnish to any
other person any information with respect to, or otherwise cooperate in any way
with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person to do or seek any of the foregoing; provided,
however, that prior to the receipt of the requisite vote or consent for
approval and adoption by the holders of Common Stock of this Agreement and the
transactions contemplated hereby, nothing contained in this Section 4.1 shall
prohibit Xxxxxx from furnishing information to, or entering into discussions or
negotiations with, any person in connection with an unsolicited proposal by
such person to acquire Xxxxxx pursuant to a merger, consolidation, share
exchange, business combination or other similar transaction or to acquire all
or substantially all of the assets of Xxxxxx received by Xxxxxx after the date
of the Agreement, if, and only to the extent that, (a) the Xxxxxx Board
determines in good faith that such action is required in order for the Xxxxxx
Board not to breach its fiduciary duties to stockholders imposed by applicable
law, such determination being based on consultations with Alex. Xxxxx and the
opinion of its independent legal counsel that such action is required in order
for the Xxxxxx Board not to breach its fiduciary duties to stockholders imposed
by applicable law, and (b) prior to furnishing such information to, or entering
into discussions or negotiations with, such person, Xxxxxx (i) gives Mergeco as
promptly as practicable prior written notice of Xxxxxx'x intention to furnish
such information or begin such discussions and (ii) receives from such person
an executed confidentiality agreement on terms no less favorable to Xxxxxx than
those contained in the Confidentiality Agreement (as defined in Section 4.2).
Xxxxxx shall promptly communicate to Mergeco the material terms of any such
proposal (and the identity of the party making such proposal) which it may
receive. Xxxxxx agrees not to release any third party from, or waive any
provision of, any confidentiality or standstill agreement to which Xxxxxx is a
party. Xxxxxx immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. From and after the receipt of the requisite vote or
consent for approval and adoption by the holders of Common Stock of this
Agreement and the transactions contemplated hereby, Xxxxxx shall not, nor shall
it permit its subsidiaries to, directly or indirectly, through any officer,
director, agent or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person relating to any acquisition or purchase
of all or any material portion of the assets of, or any equity interest in,
Xxxxxx or any of its subsidiaries or any merger, consolidation, share
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exchange, business combination or other similar transaction with Xxxxxx or any
of its subsidiaries or participate in any negotiations regarding, or furnish to
any other person any information with respect to, or otherwise cooperate in any
way with, or assist or participate in, facilitate or encourage, any effort or
attempt by any other person to do or seek any of the foregoing.
4.2. Access and Information. (a) Until the Closing, subject only
to applicable rules and regulations of the FCC, Xxxxxx shall afford to Mergeco
and its representatives (including accountants and counsel) full access, during
normal business hours, upon reasonable notice and in such manner as will not
unreasonably interfere with the conduct of the business of Xxxxxx or its
subsidiaries, to all properties, books, records and returns of Xxxxxx and its
subsidiaries and all other information with respect to its business, together
with the opportunity to make copies of such books, records and other documents
and to discuss the business of Xxxxxx and its subsidiaries with such corporate
officers, station managerial personnel (including the General Manager, Station
Manager, General Sales Manager, Programming Director, Business Manager and
Traffic Manager, or persons performing comparable duties, of each Station),
accountants, consultants and counsel for Xxxxxx as Mergeco deems reasonably
necessary or appropriate for the purposes of familiarizing itself with Xxxxxx
and the Stations, including, without limitation, the right to visit each
Station at least monthly; provided that such Station visits shall be scheduled
at least five business days in advance and shall be conducted in a manner
intended to minimize the disruption to the operations of the Stations. In
furtherance of the foregoing, Xxxxxx shall authorize and instruct Ernst & Young
LLP to meet with Mergeco and its representatives, including its independent
public accountants, to discuss the business and accounts of Xxxxxx and to make
available (with the opportunity to make copies) to Mergeco and its
representatives, including its independent public accountants, all the work
papers of Ernst & Young LLP related to their audit of the consolidated
financial statements and tax returns of Xxxxxx. All information provided
pursuant to this Agreement shall remain subject in all respects to the
Confidentiality Agreement (herein so called) dated May 30, 1996 between Hicks,
Muse, Xxxx & Xxxxx Incorporated and Xxxxxx until such time as the transactions
contemplated by this Agreement have been consummated. Xxxxxx waives any
provisions in the Confidentiality Agreement that would otherwise prohibit the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
(b) Within 30 days after the end of each calendar month
(other than in the case of December 1996, and then within 90 days after the end
of such month), Xxxxxx shall deliver to Mergeco, for each of the Stations, and
for Xxxxxx as a whole, monthly operating statements (in a form consistent with
the monthly operating statements previously supplied to Mergeco) prepared in
the ordinary course of business for internal purposes, including comparisons to
comparable prior year periods and current year budget. Further, within 45 days
after the end of each calendar quarter, Xxxxxx shall deliver to Mergeco, for
each of the Stations, quarterly statements prepared in the ordinary course for
internal purposes containing the dollar amount of all trade and barter
agreements of each Station. Xxxxxx shall deliver to Mergeco the rating books
and such other ratings information subscribed to by Xxxxxx including, without
limitation, Arbitrends, Accuratings or any other written information reflective
of the quantitative or qualitative nature of the audiences of the Stations for
each of the Stations upon receipt of the same by the corporate officers of
Xxxxxx. Xxxxxx shall
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instruct the Station Management of each Station to provide such information and
reports to Xxxxxx'x corporate officers promptly upon receipt by such Station
Management. In addition, as soon as the same are distributed to Xxxxxx'x
corporate officers by each Station, Xxxxxx will provide Mergeco with copies of
each Station's weekly sales pacing reports, with comparisons to sales pacing in
the corresponding period of the prior year.
(c) Without duplication of Sections 4.2(b), at such time
as Xxxxxx provides the same to its lenders, Xxxxxx shall provide Mergeco with
copies of the financial statements and other information delivered by Xxxxxx to
such lenders.
(d) Xxxxxx shall promptly deliver to Mergeco true and
correct copies of any report, statement or schedule filed with the SEC
subsequent to the date of this Agreement.
4.3. Assistance. If Mergeco requests, Xxxxxx will cooperate, and
will cause Ernst & Young LLP to cooperate, in all reasonable respects with the
efforts of Mergeco to finance the transactions contemplated by this Agreement,
including without limitation, providing assistance in the preparation of one or
more registration statements or other offering documents relating to debt
and/or equity financing and any other filings that may be made by Mergeco with
the SEC, all at the sole expense of Mergeco. Xxxxxx (a) shall furnish to Ernst
& Young LLP, as independent accountants to Xxxxxx, such customary management
representation letters as Ernst & Young LLP may require of Xxxxxx as a
condition to its execution of any required accountants' consents necessary in
connection with any filing by Mergeco with the SEC or in connection with the
delivery of any "comfort" letters requested by Mergeco's financing sources and
(b) shall furnish to Mergeco all financial statements (audited and unaudited)
and other information in the possession of Xxxxxx or its representatives or
agents as Mergeco shall reasonably determine is necessary or appropriate for
the preparation of such offering documents, registration statements or filings.
Mergeco will indemnify and hold harmless Xxxxxx 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 Mergeco to finance the
transactions contemplated hereby, including, without limitation, any
registration statement, prospectus, offering documents and other filings
related thereto; provided, however, that subject to the limitations and
provisions of this Agreement, nothing herein shall prevent Mergeco from
asserting any claim for breach of representation or warranty under this
Agreement.
4.4. Compliance With Station Licenses. Xxxxxx shall cause the
Stations to be operated in all material respects in accordance with the Station
Licenses and all applicable rules and regulations of the FCC and in compliance
in all material respects with all other applicable laws, regulations, rules and
orders. Xxxxxx shall use its commercially reasonable efforts not to cause or
permit any of the Station Licenses to expire or be surrendered, adversely
modified or terminated. Xxxxxx shall file or cause to be filed with the FCC
all applications (including license renewals) or other documents required to be
filed in connection with the operation of the Stations. In addition, if
requested by Mergeco and at Mergeco's expense, Xxxxxx shall file or cause to be
filed with the FCC applications for new, specifically identified frequencies
that may be useful in connection with
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the operation of the Stations. Should the FCC institute any proceedings for
the suspension, revocation or adverse modification of any of the Station
Licenses, Xxxxxx will use its commercially reasonable efforts to promptly
contest such proceedings and to seek to have such proceedings terminated in a
manner that is favorable to the Stations. Xxxxxx will use its commercially
reasonable efforts to maintain the FCC construction permits (if any) listed in
Schedule 2.1(g) in effect until the applicable construction projects are
complete and to diligently prosecute all pending FCC applications listed in
Schedule 2.1(g). If Xxxxxx (or its FCC counsel) 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 other Governmental Entity, that
could affect Xxxxxx'x ability to consummate the transactions contemplated
hereby, or should Xxxxxx (or its FCC counsel) become aware of any fact relating
to the qualifications of Xxxxxx that reasonably could be expected to cause the
FCC to withhold its consent to the transfer of control of the Station Licenses,
Xxxxxx shall promptly notify Mergeco in writing and use its commercially
reasonable efforts to take such steps as may be necessary to remove any such
impediment to the transactions contemplated by this Agreement.
4.5. Notification of Certain Matters. Xxxxxx shall give prompt
written notice to Mergeco 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 Xxxxxx contained in this Agreement to
be untrue or inaccurate (in any material respect for any representation or
warranty not already qualified for materiality) at any time from the date
hereof to the Closing Date, (b) the failure of Xxxxxx to comply with or satisfy
in any material respect any covenant, condition or agreement to be complied
with or satisfied by it hereunder, (c) the occurrence of a Station Event (as
defined in Section 8.1) and (d) the occurrence of any threat by any officer of
Xxxxxx or any of its subsidiaries or any General Manager, Station Manager,
General Sales Manager or Programming Director of a Station to resign or
otherwise terminate their employment or independent contractor relationship
with Xxxxxx or its subsidiaries. No such notification shall affect the
representations or warranties of the parties or the conditions to their
respective obligations hereunder.
4.6. Third Party Consents. After the date hereof and prior to the
Closing, Xxxxxx shall use its commercially reasonable efforts to obtain the
written consent from any party to an agreement or instrument identified in
Schedule 2.1(o) which is required to permit the consummation of the
transactions contemplated hereby.
4.7. Xxxxx X. Xxxxxx Employment Agreement. Immediately prior to
the Effective Time, Xxxxxx hereby agrees to execute and deliver an employment
agreement to Xxxxx X. Xxxxxx in substantially the form of Exhibit B attached
hereto.
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ARTICLE V
COVENANTS OF MERGECO
5.1. Notification of Certain Matters. If Mergeco (or its FCC
counsel) 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 Mergeco's ability to consummate
the transactions contemplated hereby, or should Mergeco (or its FCC counsel)
become aware of any fact relating to the qualifications of Mergeco that
reasonably could be expected to cause the FCC to withhold its consent to the
transfer of control of the Station Licenses, Mergeco shall promptly notify
Xxxxxx thereof and shall use its commercially reasonable efforts to take such
steps as may be necessary to remove any such impediment to the transactions
contemplated by this Agreement. In addition, Mergeco shall give to Xxxxxx
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 Mergeco 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 Mergeco, 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.
5.2. Commitment Letter. On or before September 3, 1996, Mergeco
shall deliver to Xxxxxx a binding commitment letter from Hicks, Muse, Xxxx &
Xxxxx Equity Fund III, L.P., a Delaware limited partnership ("Fund III"), to
provide financing in an amount of $27.2 million to provide Mergeco a portion of
the funds necessary to enable Mergeco to consummate the transactions
contemplated hereby. Fund III shall at such time have subscription commitments
for unallocated capital equal to at least its committed amount and there shall
be no restrictions on Fund III's ability to call such capital.
ARTICLE VI
MUTUAL COVENANTS
6.1. Application for Commission Consent. By the tenth business day
after the date hereof, Xxxxxx and Mergeco will join in one or more applications
filed with the FCC requesting the FCC's written consent to the transfer of
control of the Station Licenses pursuant to this Agreement (the
"Applications"). The parties will take all proper steps reasonably necessary
(a) to diligently prosecute the Applications and (b) to obtain the Commission's
determination that the grant of each Application will serve the public
interest, convenience and necessity (the "Commission Consent"). The failure by
either party to timely file or diligently prosecute its portion of any
Application shall be a material breach of this Agreement.
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6.2. Control of Stations. This Agreement will not be consummated
until after the Commission Consents with respect to the Applications referred
to in Section 6.1 are granted without any material adverse conditions not
customarily imposed on the grant of such applications and have become Final
Orders. "Final Order" means an order, action or decision of the FCC (without
the inclusion of any material adverse conditions not customarily imposed with
respect to such consents) that has not been reversed, stayed, enjoined,
annulled or suspended and as to which (a) no timely request for stay, appeal,
petition for reconsideration, application for review, or reconsideration by the
FCC on its own motion is pending and (b) the time for filing any such request,
appeal, petition or application, or for reconsideration by the FCC on its own
motion, has expired. Between the date of this Agreement and the Closing Date,
Mergeco will not directly or indirectly control, supervise or direct the
operation of the Stations. Further, between the date of this Agreement and the
Closing Date, Xxxxxx shall, directly or indirectly, supervise or control the
operation of the Stations. Such operation shall be the sole responsibility of
Xxxxxx.
6.3. Other Governmental Consents. Promptly following the execution
of this Agreement, the parties shall proceed to prepare and file with the
appropriate governmental authorities (other than the FCC) such requests,
reports or notifications as may be required in connection with this Agreement,
and shall diligently and expeditiously prosecute, and shall cooperate fully
with each other in the prosecution of, such matters. Without limiting the
foregoing, the parties shall (a) file promptly with the Federal Trade
Commission and the Antitrust Division of the Department of Justice the
notifications and other information (if any) required to be filed under the HSR
Act with respect to the transactions contemplated hereby and shall use their
commercially reasonable efforts to cause all applicable waiting periods under
the HSR Act to expire or be terminated as of the earliest possible date and (b)
make all necessary filings, and thereafter make any other required submissions
with respect to the transactions contemplated hereby under the Securities Act
and the Exchange Act and the rules and regulations thereunder, including filing
the Proxy Statement, and any other applicable federal or state securities laws.
6.4. Brokers or Finders. Mergeco represents and warrants to
Xxxxxx, and other than Bankers Trust and Xxxxxx Xxxxxxxx, Xxxxxx represents and
warrants to Mergeco, that no agent, broker, investment banker or other or
person is or will be entitled to any broker's or finder's fee or any other
commission or similar fee in connection with any of the transactions
contemplated by this Agreement. Xxxxxx also represents and warrants that the
aggregate fees payable to Bankers Trust and Xxxxxx Xxxxxxxx in connection with
any of the transactions contemplated by this Agreement shall not exceed
$1,250,000.
6.5. Additional Agreement. Subject to the terms and conditions of
this Agreement, each of the parties hereto will use its commercially reasonable
efforts to do, or cause to be taken all action and to do, or cause to be done,
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement, including, entering into the Release (as defined in Section 9.3) as
contemplated by Section 9.3 and, if Mergeco has preferred stock issued and
outstanding prior to the Closing, at the request of Mergeco, amending Sections
1.4 and 1.6 to provide that such preferred stock shall be converted into
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preferred stock of the Surviving Corporation and amending the Certificate of
Incorporation of Xxxxxx to the extent necessary to allow such preferred stock
to become preferred stock of the Surviving Corporation.
6.6. Escrow Agreement. The parties hereto who are to be parties to
the Escrow Agreement hereby covenant and agree to execute and deliver the
Escrow Agreement on the date of this Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation. The respective
obligations of each party to effect the transactions contemplated hereby are
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
(a) Stockholder Approval. The Merger and this Agreement
and the other transactions contemplated hereby shall have been approved and
adopted by the requisite vote or consent of the stockholders of Xxxxxx.
(b) Other Approvals. All authorizations, consents,
orders or approvals of, or declarations or filings with, or expirations of
waiting periods imposed by, any Governmental Entity necessary for the
consummation of the transactions contemplated by this Agreement shall have been
filed, occurred or been obtained. The Commission Consents shall have become
Final Orders.
(c) No Injunctions or Restraints. 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 transactions contemplated hereby shall be in
effect.
(d) No Action. No action shall have been taken nor any
statute, rule or regulation shall have been enacted by any Governmental Entity
that makes the consummation of the transactions contemplated hereby illegal.
7.2. Conditions to Obligation of Mergeco. The obligation of
Mergeco to effect the Merger and the transactions contemplated hereby is
subject to the satisfaction of the following conditions unless waived, in whole
or in part, by Mergeco:
(a) Representations and Warranties. The representations
and warranties of Xxxxxx set forth in this Agreement shall be true and correct
(in all material respects for any representation or warranty not already
qualified for materiality) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date (unless otherwise
limited to
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the date of this Agreement), and Mergeco shall have received a certificate
signed on behalf of Xxxxxx by the chief executive officer or by the chief
financial officer to such effect with respect to Xxxxxx.
(b) Performance of Obligations. Xxxxxx shall have
performed in all material respects all obligations required to be performed by
it under this Agreement prior to the Closing Date, and Mergeco shall have
received a certificate signed on behalf of Xxxxxx by the chief executive
officer or by the chief financial officer to such effect.
(c) Consents Under Agreements. Mergeco shall have been
furnished with evidence reasonably satisfactory to it of the consent or
approval of each person that is a party to a contract or agreement identified
in Schedule 2.1(o) whose consent or approval shall be required in order to
permit the consummation of the transactions contemplated hereby.
(d) Legal Opinions. Mergeco shall have received from (i)
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, counsel to Xxxxxx, and (ii) Haley,
Bader & Xxxxx, special FCC counsel to Xxxxxx, one or more opinions dated the
Closing Date, in substantially the forms attached as Exhibits D and E hereto,
which opinions shall expressly provide that they may be relied upon by
Mergeco's lenders, underwriters or other sources of financing with respect to
the transactions contemplated hereby.
(e) Subscription. Concurrently with the execution of
this Agreement, Xxxxx X. Xxxxxx shall have entered into a Subscription
Agreement in substantially the form of Exhibit C attached hereto and thereby
subscribed for one share of the common stock, par value $0.01 per share, of the
Parent in exchange for each share of Common Stock held of record by him. The
closing contemplated by the Subscription Agreement shall have occurred
immediately prior to the Effective Time.
(f) Options and Warrants. Xxxxxx shall have obtained the
consent of each holder of Options or Warrants, as applicable, to the settlement
of such holder's Options or Warrants pursuant to the terms of Sections 1.7 and
1.8, respectively.
(g) Closing Deliveries. All documents, instruments,
certificates or other items required to be delivered by Xxxxxx pursuant to
Section 8.2 shall have been delivered.
(h) Xxxxx X. Xxxxxx Employment Agreement. Xxxxxx shall
have executed and delivered the employment agreement to Xxxxx X. Xxxxxx as
required by Section 4.7.
(i) Fees and Expenses. The aggregate fees and expenses
payable to Alex. Xxxxx, Bankers Trust and Xxxxxx Xxxxxxxx which have been
incurred in connection with any of the Transactions contemplated by this
Agreement, shall not have exceeded $2,075,000.
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7.3. Conditions to Obligations of Xxxxxx. The obligation of Xxxxxx
to effect the Merger and the transactions contemplated hereby is subject to the
satisfaction of the following conditions unless waived, in whole or in part, by
Xxxxxx:
(a) Representations and Warranties. The representations
and warranties of Mergeco set forth in this Agreement shall be true and correct
(in all material respects for any representation or warranty not already
qualified for materiality) as of the date of this Agreement and as of the
Closing Date as though made on and as of the Closing Date, and Xxxxxx shall
have received a certificate signed on behalf of Mergeco by the chief executive
officer or by the chief financial officer of Mergeco to such effect.
(b) Performance of Obligations of Mergeco. Mergeco shall
have performed in all material respects the obligations required to be
performed by it under this Agreement prior to the Closing Date, and Xxxxxx
shall have received a certificate signed on behalf of Mergeco by the chief
executive officer or by the chief financial officer of Mergeco to such effect.
(c) Legal Opinions. Xxxxxx shall have received from (i)
Xxxxxx & Xxxxxx L.L.P., counsel to Mergeco, and (ii) Xxxxxx, Xxxxxxx, Xxxxxx &
Leader, special FCC counsel to Mergeco, opinions dated the Closing Date, in
substantially the forms attached hereto as Exhibits F and G.
(d) Closing, Deliveries. All documents and instruments
required to be delivered by Mergeco pursuant to Section 8.2 shall have been
delivered.
ARTICLE VIII
CLOSING
8.1. Closing. The closing of the Merger (the "Closing") will take
place at the offices of Xxxxxx & Xxxxxx L.L.P., Dallas, Texas, at 10:00 a.m.,
local time, or at such other place and time as Mergeco and Xxxxxx may agree,
subject to the satisfaction or waiver of the conditions set forth in Article
VII, on or before the 10th business day after the Commission Consent has become
a Final Order, upon five business days' prior written notice, given within the
first 5 business days after the Commission Consent has become a Final Order,
from Mergeco to Xxxxxx of the date on which the Closing shall occur (the
"Closing Date"); provided, however, that in no event shall the Closing occur
prior to February 20, 1997. Notwithstanding the foregoing, (a) in the case of
a Trading Event, a Banking Event or a Station Event (in each case as defined
below), (i) if the Cessation Date (as defined below) is less than 60 days after
the Event Date (as defined below), Mergeco, in its discretion, may extend the
Closing Date to a date not later than the 30th day after the Cessation Date,
(ii) if the Cessation Date is more than 60, but less than 90, days after the
Event Date, Mergeco, in its discretion, shall elect on the first to occur of
the 10th business day after the Cessation Date or the 90th day (or, if not a
business day, the next business day) after the Event Date (the "Election Date")
to either (A) close the Merger on the later to occur of the 5th business day
after the Election Date or the 90th day (or, if not a business day, the next
business day) after the Event Date or (B) terminate
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this Agreement, or (iii) if the Cessation Date has not occurred by the 90th day
after the Event Date, then on the 90th day (or, if not a business day, the next
business day) after the Event Date Mergeco, in its discretion, shall elect to
close the Merger on the 5th business day thereafter or terminate this
Agreement, (b) in the case of a Conflict Event, Mergeco, in its discretion, may
only extend the Closing Date to a date not to exceed the 90th day after the
Event Date, (c) if a Cure Period (as defined in Section 9.1(b)(i)) has not
ended on or before the Closing Date, the Closing Date shall be extended to the
end of the Cure Period, and (d) if the Closing does not occur within 20 days
after the date of the Final Order, the parties hereby agree to request approval
from the FCC to extend the Closing so that the Closing contemplated hereunder
will not violate any FCC rules or regulations. For purposes of this Agreement,
a "Trading Event" shall mean that trading generally in securities on the New
York Stock Exchange shall have been suspended or materially limited; a "Banking
Event" shall mean that a general moratorium on commercial banking activities in
New York, New York shall have been declared by any federal or state authority;
a "Conflict Event" shall mean the occurrence of any major armed conflict
involving a substantial participation by the armed forces of the United States
of America; a "Station Event" shall mean any act of nature, calamity or
casualty (including but not limited to fires, floods, earthquakes and storms)
that has caused one or more Stations representing an aggregate of 3% of the
consolidated gross revenues of Xxxxxx for the last full 12 calendar months not
to be operating in compliance with its or their respective Station License(s);
an "Event Date" shall mean the date on which a Trading Event, Banking Event,
Conflict Event or a Station Event occurs; and a "Cessation Date" shall mean the
date on which a Trading Event, Banking Event, Conflict Event or a Station Event
ends. Pro forma adjustments shall be made for purposes of calculating gross
revenues for the 12-month period specified in the definition of "Station Event"
to (i) eliminate the gross revenues of any Station sold during such 12-month
period and (ii) with respect to any radio broadcast station acquired during
such 12-month period, to assume that such station was acquired at the beginning
of such 12-month period and include the gross revenues of such station for the
full 12-month period.
8.2. Actions to Occur at Closing.
(a) At the Closing, Mergeco shall deliver to Xxxxxx the
following:
(i) the certificates in Section 7.3(a) and (b);
and
(ii) the opinions of counsel in Section 7.3(c).
(b) At the Closing, Xxxxxx shall deliver to Mergeco the
following:
(i) the certificates described in Section 7.2(a)
and (b); and
(ii) the opinions of counsel in Section 7.2(d).
(c) At the Closing, Mergeco shall receive from Xxxxxx an
affidavit described in Section 1445(b)(3) of the Code.
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(d) At the Closing, the Certificate of Merger shall be
signed by the parties and filed with the Secretary of State of the State of
Delaware.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination. This Agreement may be terminated prior to the
Closing:
(a) by mutual consent of Mergeco and Xxxxxx;
(b) by either Mergeco or Xxxxxx:
(i) if there shall have been any breach of any
representation or warranty, or any material breach of any covenant or
agreement, on the part of Mergeco, on the one hand, or Xxxxxx, on the other
hand, set forth in this Agreement which breach shall not have been cured within
twenty (20) days (the "Cure Period") following receipt by the breaching party
of written notice of such breach;
(ii) if a court of competent jurisdiction or other
Governmental Entity shall have issued an order, decree or ruling or taken any
other action (which order, decree or ruling the parties hereto shall use their
best efforts to lift), in each case permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this Agreement, and such
order, decree, ruling or other action shall have become final and
nonappealable;
(iii) if, for any reason, the FCC denies or
dismisses any of the Applications and the time for reconsideration or court
review under the Communications Act with respect to such denial or dismissal
has expired and there is not pending with respect thereto a timely filed
petition for reconsideration or request for review;
(iv) if, for any reason, any of the Applications
is designated for an evidentiary hearing by the FCC;
(v) if this Agreement and the transactions
contemplated hereby, when presented to the holders of Common Stock for their
consideration, whether by vote or by consent, shall fail to receive the
requisite vote or consent for approval and adoption by the holders of Common
Stock; or
(vi) if the Closing shall not have occurred by the
later of the first anniversary date of this Agreement, or the date to which the
Closing Date is extended pursuant to the second sentence of Section 8.1;
provided, however, that the right to terminate this Agreement
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under this clause (vi) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date; or
(c) by Mergeco:
(i) with respect to a Trading Event, Banking
Event, or a Station Event, at its option, as provided in the second sentence of
Section 8.1;
(ii) if the FCC grants any of the Applications
with any material adverse conditions not generally imposed on grants of such
applications and the time for reconsideration or court review under the
Communications Act with respect to such material adverse conditions has expired
and there is not pending with respect thereto a timely filed petition for
reconsideration or request for review;
(iii) if (A) the Xxxxxx Board (1) withdraws its
recommendation of this Agreement or the Merger (whether or not under the
circumstances permitted by this Agreement) or shall have resolved to do so or
(2) shall have recommended to the stockholders of Xxxxxx any Business
Combination Transaction (as defined in Section 9.2), whether or not in the
circumstances under which Xxxxxx has a right to terminate this Agreement
pursuant to Section 9.1(d)(i) of this Agreement, or resolved to do so or (B) a
tender offer or exchange offer for 50% or more of the outstanding shares of
capital stock of Xxxxxx is commenced (other than by Xxxxxx or its affiliates)
and the Xxxxxx Board fails to recommend against the stockholders of Xxxxxx
tendering their shares into such tender offer or exchange offer; or
(iv) if Xxxxxx shall fail to perform its
obligations under Section 8.2; or
(d) by Xxxxxx:
(i) by Xxxxxx if, prior to the receipt of the
requisite vote or consent for approval and adoption by the holders of Common
Stock of this Agreement and the transactions contemplated hereby, in the
exercise of its good faith judgment (subject to Section 4.1) as to its
fiduciary duties to its stockholders under applicable law, the Xxxxxx Board
determines that such termination is required by such fiduciary duties by reason
of a proposal that either constitutes a Business Combination Transaction or may
reasonably be expected to lead to a Business Combination Transaction on terms
more favorable to the stockholders of Xxxxxx than the Merger and which has a
reasonable prospect of being consummated in accordance with its terms (such
determination being based on consultations with Alex. Xxxxx and the opinion of
its independent legal counsel that such termination is required in order for
the Xxxxxx Board not to breach its fiduciary duties to stockholders imposed by
applicable law) (a "Business Combination Transaction Proposal"); provided that
Xxxxxx has provided Mergeco with at least 48 hours prior written notice of its
intent to so terminate this Agreement (together with a summary of the material
terms of such Business Combination Transaction Proposal); and provided further
that any termination of this Agreement by Xxxxxx pursuant to this Section
9.1(d)(i) shall not be effective until Xxxxxx has made payment of
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the Alternative Proposal Fee (as hereinafter defined) and the Acquiror Expenses
(as hereinafter defined) as required by Section 9.2 hereof; or
(ii) if Mergeco shall fail to perform any of its
obligations under Section 8.2.
The right of any party hereto to terminate this Agreement pursuant to this
Section 9.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any person
controlling any such party or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents or other
representatives whether prior to or after the execution of this Agreement.
Notwithstanding anything in the foregoing to the contrary, no party that is in
material breach of this Agreement shall be entitled to terminate this Agreement
except with the consent of the other parties hereto.
9.2. Fees and Expenses. Xxxxxx shall pay Mergeco a fee (an
"Alternative Proposal Fee") of $3,750,000 if this Agreement is terminated
pursuant to Section 9.1(c)(iii) or simultaneously with any termination of this
Agreement pursuant to Section 9.1(d)(i). As used herein, the term "Business
Combination Transaction" shall mean any of the following involving Xxxxxx: (a)
any merger, consolidation, share exchange, business combination or other
similar transaction (other than the Merger); (b) any sale, lease, exchange,
transfer or other disposition (other than a pledge or mortgage) of 50% or more
of the assets of Xxxxxx and its subsidiaries in a single transaction or series
of related transactions; or (c) the acquisition by a person or entity or any
"group" (as such term is defined under Section 13(d) of the Exchange Act and
the rules and regulations thereunder) of beneficial ownership of 35% or more of
the shares of Common Stock, whether by tender offer, exchange offer or
otherwise.
9.3. Effect of Termination. In the event of termination of this
Agreement by either Xxxxxx or Mergeco as provided in Section 9.1, this
Agreement shall forthwith become void, the Merger shall be abandoned and there
shall be no liability on the part of Xxxxxx or Mergeco of any kind whatsoever,
except (i) with respect to Section 9.2 which shall continue to apply in
accordance with its terms and (ii) each party shall remain liable for a breach
of this Agreement. Termination of this Agreement shall have no effect on the
rights and obligations of the parties under the Confidentiality Agreement. In
the event that Xxxxxx terminates this Agreement under Section 9.1(b)(i), the
parties agree and acknowledge that Xxxxxx will suffer damages that are not
practicable to ascertain at the time of execution of this Agreement.
Accordingly, Xxxxxx and Mergeco agree that, in such event, Xxxxxx shall be
entitled to the sum of $5,000,000 as liquidated damages. The parties agree
that the foregoing liquidated damages are reasonable considering all the
circumstances existing as of the date hereof and constitute the parties' good
faith estimate of the actual damages reasonably expected to result from the
termination of this Agreement by Xxxxxx pursuant to Section 9.1(b)(i). Xxxxxx
agrees that, to the fullest extent permitted by law, the right to payment of
the $5,000,000 as liquidated damages under this Section 9.3 shall be its sole
and exclusive remedy if the Closing does not occur with respect to any damages
whatsoever that Xxxxxx may suffer or allege to suffer as a result of any claim
or cause of action asserted by Xxxxxx relating to or arising from breaches of
the
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representations, warranties or covenants of Mergeco contained in this Agreement
and to be made or performed at or prior to the Closing; provided that as a
condition to payment, and upon receipt, of liquidated damages under this
Section 9.3, Xxxxxx hereby (a) irrevocably and unconditionally releases,
acquits, and forever discharges Mergeco, Parent and their respective
successors, assigns, employees, agents, stockholders, partners, subsidiaries,
parent companies and other affiliates (corporate or otherwise) (the "Released
Parties") of and from any and all claims, demands, causes of action, or
liabilities of any kind whatsoever, whether known or unknown, matured or
unmatured, suspected or unsuspected, liquidated or unliquidated, absolute or
contingent, direct or derivative, against the Released Parties, including,
without limitation, any claim, demand, cause of action, or liability arising
out of, based upon, resulting from or relating to the negotiation, execution,
performance, breach or otherwise related to or arising out of this Agreement or
any agreement entered into in connection herewith or related hereto, and (b)
agrees to deliver a Release (herein so called) in the form of Exhibit L
attached hereto, to Mergeco and Parent.
ARTICLE X
GENERAL PROVISIONS
10.1. Non-Survival of Representations, Warranties and Covenants.
The representations and warranties in this Agreement shall terminate at the
Effective Time. Except for those covenants and agreements which are fully
performed on or prior to the Effective Time, all covenants and agreements in
this Agreement shall survive the Effective Time indefinitely.
10.2. Knowledge. Wherever reference is made in this Agreement to a
particular statement being "to the knowledge of Xxxxxx" (or any correlative
phrase), such phrase shall be deemed to include the actual knowledge of any
officer of Xxxxxx or its subsidiaries, and the General Managers and/or Station
Managers and Chief Engineers of each of the Stations.
10.3. Amendment and Modification. This Agreement may be amended by
the parties hereto by action taken by or on behalf of their respective Boards
of Directors at any time prior to the Effective Time; provided, however, that,
after the approval and adoption of this Agreement and the transactions
contemplated hereby by the stockholders of Xxxxxx, no amendment may be made
that would reduce the amount or change the type of consideration into which
each share of Common Stock shall be converted pursuant to this Agreement upon
consummation of the Merger. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
10.4. Waiver of Compliance. Any failure of Mergeco on the one hand,
or Xxxxxx, on the other hand, to comply with any obligation, covenant,
agreement or condition contained herein may be waived only if set forth in an
instrument in writing signed by the party or parties to be bound thereby, but
such waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any other failure.
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10.5. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
applicable 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 Merger is not affected in any manner
materially 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 a mutually
acceptable manner in order that the Merger be consummated as originally
contemplated to the fullest extent possible.
10.6. Expenses and Obligations. Except as otherwise expressly
provided in this Agreement or as provided by law, all costs and expenses
incurred by the parties hereto in connection with the consummation of the
transactions contemplated hereby shall be borne solely and entirely by the
party which has incurred such expenses. In the event of a dispute between the
parties in connection with this Agreement and the transactions contemplated
hereby, each of the parties hereto hereby agrees that the prevailing party
shall be entitled to reimbursement by the other party of reasonable legal fees
and expenses incurred in connection with any action or proceeding.
10.7. Parties in Interest. This Agreement shall be binding upon
and, except as provided below, inure solely to the benefit of each party hereto
and their successors and assigns, and nothing in this Agreement, except as set
forth below, express or implied, is intended to confer upon any other person
any rights or remedies of any nature whatsoever under or by reason of this
Agreement.
10.8. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed given if delivered personally or mailed by
registered or certified mail (return receipt requested) to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
(a) If to Mergeco or Parent, to
OCC Acquisition Company, Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxx X. Xxxxxx
Facsimile: (000) 000-0000
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with a copy to
Xxxxxx & Xxxxxx L.L.P.
3700 Xxxxxxxx Xxxx Center
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(b) If to Xxxxxx,
Xxxxxx Communications Corporation
000 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
with a copy to
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1385 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
Facsimile: (000) 000-0000
10.9. Interpretation. When a reference is made in this Agreement to
Sections or Exhibits, such reference shall be to a Section or Exhibit to this
Agreement unless otherwise indicated. The table of contents, if any, and
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
Whenever the words "include," "includes," or "including" are used in this
Agreement, they shall be deemed to be followed by the words "without
limitation."
10.10. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
10.11. Entire Agreement. This Agreement (which term shall be deemed
to include the Confidentiality Agreement referred to in Section 4.2(a), the
exhibits and schedules hereto and the other certificates, documents and
instruments delivered hereunder) constitutes the entire agreement of the
parties hereto and supersedes all prior agreements and understandings, both
written and oral,
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among the parties with respect to the subject matter hereof. There are no
representations or warranties, agreements or covenants other than those
expressly set forth in this Agreement (as so defined).
10.12. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE. ANY SUIT OR
PROCEEDING BROUGHT HEREUNDER SHALL BE SUBJECT TO THE EXCLUSIVE JURISDICTION OF
THE COURTS LOCATED IN DELAWARE.
10.13. Public Announcements. (a) Mergeco and Xxxxxx shall consult
with each other before issuing any press release or otherwise making any public
statements with respect to this Agreement or the transactions contemplated
hereby and shall not issue any such press release or make any such public
statement prior to such consultation and (b) prior to the Effective Time,
Xxxxxx will not issue any other press release or otherwise make any public
statements regarding its business, except as may be required by applicable law
or any listing agreement with the National Association of Securities Dealers,
Inc. to which Xxxxxx is a party.
10.14. Assignment. 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; provided, however, that (a)
upon notice to Xxxxxx and without releasing Mergeco from any of its obligations
or liabilities hereunder, Mergeco may assign or delegate any or all of its
rights or obligations under this Agreement to any affiliate thereof, and (b)
nothing in this Agreement shall limit Mergeco's ability to make a collateral
assignment of its rights under this Agreement to any institutional lender that
provides funds to Mergeco without the consent of Xxxxxx. Xxxxxx shall execute
an acknowledgment of such assignment(s) and collateral assignments in such
forms as Mergeco or its institutional lenders may from time to time reasonably
request; provided, however, that unless written notice is given to Xxxxxx that
any such collateral assignment has been foreclosed upon, Xxxxxx shall be
entitled to deal exclusively with Mergeco as to any matters arising under this
Agreement or any of the other agreements delivered pursuant hereto. In the
event of such an assignment, the provisions of this Agreement shall inure to
the benefit of and be binding on Mergeco's assigns. Nothing in this Agreement
shall prevent the Parent from assigning its interest in Mergeco to an affiliate
of the Parent.
10.15. Further Assurances. At the Closing or from time to time
thereafter, the Surviving Corporation shall execute and deliver such other
instruments of assignment, transfer and delivery and shall take such other
actions as the other reasonably may request in order to consummate, complete
and carry out the transactions contemplated by this Agreement.
10.16. Director, Officer and Stockholder Liability. The directors,
officers and stockholders of Mergeco and the directors, officers and
stockholders of the Parent shall not have any personal liability for any
liabilities arising under this Agreement. The directors, officers and
stockholders of Xxxxxx and its subsidiaries shall not have any personal
liability for any liabilities arising under this Agreement.
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10.17. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" of a specified person means a person who,
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified person;
(b) "beneficial owner" with respect to any shares means a
person who shall be deemed to be the beneficial owner of such shares (i) which
such person or any of its affiliates or associates (as such term is defined in
Rule 12b-2 promulgated under the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or associates 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 rights,
exchange rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates or any 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
such shares, or (iv) pursuant to Section 13(d) of the Exchange Act and any
rules or regulations promulgated thereunder;
(c) "business day" means any day on which the principal
offices of the SEC in Washington, D.C. are open to accept filings, or, in the
case of determining a date when any payment is due, any day on which banks are
not required or authorized to close in New York, New York.
(d) "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 and policies of a person, whether through the ownership of voting
securities, as trustee or executor, by contract or credit arrangement or
otherwise;
(e) "person" means an individual, corporation, limited
liability company, partnership, limited partnership, syndicate, person
(including, without limitation, a "person" as defined in Section 13(d)(3) of
the Exchange Act), trust, association or other legal entity or government,
political subdivision, agency or instrumentality of a government; and
(f) "subsidiary" or "subsidiaries" of any person means
any corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns or
has rights to acquire, directly or indirectly, 50% or more of the capital stock
or other equity interests the holders of which are generally entitled to vote
for the election of the board of directors or other governing body of such
corporation or other legal entity.
(g) "Voting Agreement" shall mean the Voting Agreement in
substantially the form of Exhibit H hereto dated as of even date herewith, by
and among Mergeco and the stockholders of Xxxxxx named therein.
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IN WITNESS WHEREOF, Mergeco, Xxxxxx, and the Parent have caused this
Agreement to be signed, all as of the date first written above.
MERGECO:
OCC ACQUISITION COMPANY, INC.
By: Xxxx X. Xxxxxx
Its: President
XXXXXX:
XXXXXX COMMUNICATIONS CORPORATION
------------------------------------
By:
---------------------------------
Its:
---------------------------------
PARENT:
OCC HOLDING CORPORATION
------------------------------------
By:
---------------------------------
Its:
---------------------------------
