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AGREEMENT AND PLAN OF MERGER
Among
BHC COMMUNICATIONS, INC.,
THE NEWS CORPORATION LIMITED,
NEWS PUBLISHING AUSTRALIA LIMITED
and
FOX TELEVISION HOLDINGS, INC.
Dated as of August 13, 2000
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TABLE OF CONTENTS
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ARTICLE I
THE MERGER
SECTION 1.1 The Merger ............................................. 2
SECTION 1.2 Effect on Securities ................................... 3
SECTION 1.3 Share Election ......................................... 7
SECTION 1.4 Allocation and Proration ............................... 9
SECTION 1.5 Exchange of Certificates ............................... 11
SECTION 1.6 Transfer Taxes; Withholding; Certain Stock ............. 14
SECTION 1.7 Lost Certificates ...................................... 14
SECTION 1.8 Dissenting Shares ...................................... 15
SECTION 1.9 Merger Closing ......................................... 15
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 Certificate of Incorporation ........................... 15
SECTION 2.2 By-laws ................................................ 15
SECTION 2.3 Officers and Board of Directors ........................ 16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 3.1 Organization and Qualification; Subsidiaries ........... 16
SECTION 3.2 Restated Certificate of Incorporation and By-Laws ...... 17
SECTION 3.3 Capitalization ......................................... 17
SECTION 3.4 Authority Relative to Agreement ........................ 18
SECTION 3.5 No Conflict; Required Filings and Consents ............. 19
SECTION 3.6 Permits and Licenses; Contracts; Compliance with Laws .. 20
SECTION 3.7 SEC Reports ............................................ 22
SECTION 3.8 Absence of Certain Changes or Events ................... 22
SECTION 3.9 Absence of Litigation .................................. 23
SECTION 3.10 Employee Benefit Plans ................................ 23
SECTION 3.11 Labor Matters ......................................... 26
SECTION 3.12 Environmental Matters ................................. 26
SECTION 3.13 Trademarks, Patents and Copyrights .................... 27
SECTION 3.14 Taxes ................................................. 28
SECTION 3.15 Tax Matters ........................................... 30
SECTION 3.16 Title to Properties; Assets ........................... 30
SECTION 3.17 Year 2000 Compliance .................................. 31
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SECTION 3.18 Opinion of Financial Advisors ......................... 31
SECTION 3.19 Vote Required ......................................... 31
SECTION 3.20 Brokers ............................................... 31
SECTION 3.21 State Takeover Statutes ............................... 31
SECTION 3.22 UTV ................................................... 32
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
SECTION 4.1 Organization and Qualification; Subsidiaries ........... 33
SECTION 4.2 Charter Documents ...................................... 33
SECTION 4.3 Capitalization ......................................... 33
SECTION 4.4 Authority Relative to Agreement ........................ 34
SECTION 4.5 No Conflict; Required Filings and Consents ............. 35
SECTION 4.6 Permits and Licenses ................................... 36
SECTION 4.7 Buyer SEC/ASX Reports ................................. 36
SECTION 4.8 Absence of Certain Changes or Events ................... 36
SECTION 4.9 Tax Matters ............................................ 37
SECTION 4.10 Brokers ............................................... 37
SECTION 4.11 Interim Operations of Acquisition Sub. ................ 37
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the
Merger ............................................... 37
SECTION 5.2 FCC Matters ............................................ 41
SECTION 5.3 Certain Tax Matters .................................... 41
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Registration Statement; Proxy Statement ................ 42
SECTION 6.2 Stockholders' Meetings ................................. 44
SECTION 6.3 Appropriate Action; Consents; Filings .................. 44
SECTION 6.4 Access to Information; Confidentiality ................. 46
SECTION 6.5 No Solicitation of Competing Transactions .............. 47
SECTION 6.6 Directors' and Officers' Indemnification and
Insurance ............................................ 48
SECTION 6.7 Notification of Certain Matters ........................ 50
SECTION 6.8 Tax Matters ............................................ 51
SECTION 6.9 Stock Exchange Listing ................................. 51
SECTION 6.10 Public Announcements .................................. 52
SECTION 6.11 Affiliates of the Company ............................. 52
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SECTION 6.12 Employee Matters ...................................... 52
SECTION 6.13 Letters of the Company's Accountants .................. 54
SECTION 6.14 Letters of Buyer's Accountants ........................ 54
SECTION 6.15 [INTENTIONALLY OMITTED] ............................... 54
SECTION 6.16 Other Merger Agreements ............................... 54
SECTION 6.17 Employee Solicitation ................................. 54
SECTION 6.18 Post-Closing Covenant of Buyer ........................ 54
SECTION 6.19 Form of Merger ........................................ 55
SECTION 6.20 Advance of Funds ...................................... 56
SECTION 6.21 Obligations of FTH .................................... 56
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to the Obligations of Each Party ............ 56
SECTION 7.2 Conditions to the Obligations of Buyer ................. 58
SECTION 7.3 Conditions to the Obligations of the Company ........... 59
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination ............................................ 60
SECTION 8.2 Effect of Termination .................................. 61
SECTION 8.3 Amendment .............................................. 61
SECTION 8.4 Waiver ................................................. 61
SECTION 8.5 Expenses ............................................... 62
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements ........................................... 62
SECTION 9.2 Notices ................................................ 62
SECTION 9.3 Interpretation, Certain Definitions .................... 64
SECTION 9.4 Severability ........................................... 65
SECTION 9.5 Entire Agreement; Assignment ........................... 65
SECTION 9.6 Parties in Interest .................................... 65
SECTION 9.7 Governing Law .......................................... 65
SECTION 9.8 Consent to Jurisdiction ................................ 66
SECTION 9.9 Counterparts ........................................... 66
SECTION 9.10 WAIVER OF JURY TRIAL .................................. 66
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EXHIBITS
Exhibit A Voting Agreement
Exhibit B Form of Written Agreement with Company Affiliate
Exhibit C Terms of Newco-FTH Agreement
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TABLE OF DEFINED TERMS
1999 Balance Sheet .................................................... 29
Acquisition Sub ....................................................... 1
Actions ............................................................... 41
Adverse Condition ..................................................... 45
Agreement ............................................................. 1
All Cash Election ..................................................... 7
All Cash Election Shares .............................................. 9
Blue Sky Laws ......................................................... 19
Buyer ................................................................. 1
Buyer Disclosure Schedule ............................................. 32
Buyer FCC Licenses .................................................... 36
Buyer Licensed Facilities ............................................. 36
Buyer Preferred Stock ................................................. 3
Buyer SEC Reports ..................................................... 36
Buyer Shares .......................................................... 3
Buyer Shares Trust .................................................... 13
Cash Amount ........................................................... 10
Cash Election Shares .................................................. 3
Cash Fraction ......................................................... 9
Certificate of Merger ................................................. 2
Certificates .......................................................... 11
Xxxxx-Craft ........................................................... 1
Xxxxx-Craft Merger .................................................... 1
Xxxxx-Craft Merger Agreement .......................................... 1
Class A Common Stock .................................................. 2
Class B Common Stock .................................................. 2
Closing ............................................................... 15
Closing Date .......................................................... 15
Closing Price ......................................................... 10
Code .................................................................. 1
Communications Act .................................................... 19
Company ............................................................... 1
Company Benefit Plans ................................................. 23
Company Common Stock .................................................. 2
Company Disclosure Schedule ........................................... 16
Company Employees ..................................................... 23
Company FCC Licenses .................................................. 20
Company Financial Advisor ............................................. 31
Company Intellectual Property Rights .................................. 28
Company Permits ....................................................... 20
Company SEC Reports ................................................... 22
Company Stations ...................................................... 20
Company Year 2000 Plan ................................................ 31
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Confidentiality Agreement ............................................. 46
Costs ................................................................. 49
Covered Affiliates .................................................... 49
Delaware Law .......................................................... 1
Deposit Agreement ..................................................... 11
Dissenting Shares ..................................................... 15
DTV ................................................................... 21
Effective Time ........................................................ 2
Election Deadline ..................................................... 8
Elections ............................................................. 7
ERISA ................................................................. 23
ERISA Affiliate ....................................................... 23
Excess Buyer Shares ................................................... 13
Exchange Act .......................................................... 14
Exchange Agent ........................................................ 7
Exchange Fund ......................................................... 13
FCC ................................................................... 19
FCC Multiple Ownership Rules .......................................... 44
FEG ................................................................... 54
Form of Election ...................................................... 7
Forward Merger ........................................................ 1
FTH ................................................................... 54
GAAP .................................................................. 22
Holders ............................................................... 7
HSR Act ............................................................... 19
Indemnifiable Claim ................................................... 49
Indemnifying Party .................................................... 48
Indemnitees ........................................................... 49
Intellectual Property Rights .......................................... 28
IRS ................................................................... 24,59
IRS Ruling ............................................................ 59
Laws .................................................................. 19
Merger ................................................................ 1
Merger Consideration .................................................. 3
Multiemployer Plans ................................................... 23
Newco ................................................................. 54
Non-Election .......................................................... 7
Non-Election Fraction ................................................. 10
Non-Election Shares ................................................... 9
NYSE .................................................................. 6
Order ................................................................. 45
Partial Cash Election ................................................. 3
Partial Cash Election Shares .......................................... 3
Partial Exchange Ratio ................................................ 3
Post-Signing Returns .................................................. 41
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Preferred Stock ....................................................... 17
Pro-Rata Bonus ........................................................ 52
Program Agreement ..................................................... 40
Proxy Statement ....................................................... 42
Registration Statement ................................................ 42
Representatives ....................................................... 46
Restructuring Trigger ................................................. 55
Reverse Merger ........................................................ 1
Reverse Merger Exchange Ratio ......................................... 4
Secretary of State .................................................... 2
Securities Act ........................................................ 19
Special Committee ..................................................... 1
Stock Election ........................................................ 7
Stock Election Shares ................................................. 9
Stock Fraction ........................................................ 10
Stockholders' Meeting ................................................. 44
Surviving Corporation ................................................. 2
Terminating Buyer Breach .............................................. 60
Terminating Company Breach ............................................ 60
Termination Date ...................................................... 60
Total Consideration ................................................... 10
UTV ................................................................... 1
UTV Common Stock ...................................................... 18
UTV Merger ............................................................ 1
UTV Merger Agreement .................................................. 1
UTV Preferred Stock ................................................... 32
Valuation Period ...................................................... 6
VEBA .................................................................. 24
Voting Agreement ...................................................... 2
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AGREEMENT AND PLAN OF MERGER dated as of August 13, 2000 (this
"Agreement") by and among BHC COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), THE NEWS CORPORATION LIMITED, a South Australian corporation
("Buyer"), NEWS PUBLISHING AUSTRALIA LIMITED, a Delaware corporation and a
subsidiary of Buyer ("Acquisition Sub") and FOX TELEVISION HOLDINGS, INC., a
Delaware corporation (but solely as to Section 6.3 and Section 6.21 of this
Agreement).
WHEREAS, in furtherance of the acquisition of the Company by
Buyer, the respective Boards of Directors of the Company, Buyer and Acquisition
Sub, and Buyer, as the sole stockholder of Acquisition Sub, have each approved
this Agreement and the merger of (A) the Company with and into Acquisition Sub
(the "Forward Merger") and (B) in the event a Restructuring Trigger (as defined
herein) has occurred, the merger of Acquisition Sub with and into the Company
(the "Reverse Merger" and, together with the Forward Merger, as applicable, the
"Merger"), in each case upon the terms and subject to the conditions and
limitations set forth herein and in accordance with the General Corporation Law
of the State of Delaware ("Delaware Law");
WHEREAS, each of the Board of Directors of the Company and the
special committee of the Board of Directors of the Company (the "Special
Committee") (i) has determined that the Merger is fair to, advisable and in the
best interests of, the Company and its stockholders and has approved and adopted
this Agreement, the Merger and the other transactions contemplated by this
Agreement and (ii) has recommended the approval of this Agreement by the
stockholders of the Company;
WHEREAS, for Federal income tax purposes, it is intended that
the Forward Merger shall qualify as a reorganization under the provisions of
Section 368(a) of the United States Internal Revenue Code of 1986, as amended
(the "Code");
WHEREAS, simultaneously with the execution and delivery of
this Agreement, Buyer, Acquisition Sub and Xxxxx-Craft Industries, Inc.
("Xxxxx-Craft"), a Delaware corporation and the parent corporation of the
Company, are entering into an agreement and plan of merger (the "Xxxxx-Craft
Merger Agreement"), providing for the merger of Xxxxx-Craft with and into
Acquisition Sub, or, if a Restructuring Trigger (as defined for purposes of such
agreement) has occurred, the merger of a direct or indirect owned subsidiary of
Buyer with and into Xxxxx-Craft, in each case upon the terms and subject to the
conditions set forth in the Xxxxx-Craft Merger Agreement (the "Xxxxx-Craft
Merger");
WHEREAS, simultaneously with the execution and delivery of
this Agreement, Buyer, Acquisition Sub and United Television, Inc. ("UTV"), a
Delaware corporation and a direct, majority-owned subsidiary of the Company, are
entering into an agreement and plan of merger (the "UTV Merger Agreement"),
providing for the merger of UTV with and into Acquisition Sub, or, if a
Restructuring Trigger (as defined for purposes of such agreement) has occurred,
the merger of a direct or indirect owned subsidiary of Buyer (or of BHC) with
and into UTV, in each case upon the terms and subject to the conditions set
forth in the UTV Merger Agreement (the "UTV Merger");
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WHEREAS, it is intended that the mergers heretofore referred
to shall be completed in the following order: first, the Xxxxx-Craft Merger;
second, the Merger; and third, the UTV Merger; and
WHEREAS, as a condition and inducement to Buyer to enter into
this Agreement and incur the obligations set forth herein, concurrently with the
execution and delivery of this Agreement, Buyer is entering into a Voting
Agreement, substantially in the form of Exhibit A attached hereto (the "Voting
Agreement"), with Xxxxx-Craft pursuant to which, among other things, Xxxxx-Craft
has agreed, subject to the terms and conditions contained therein, to vote all
shares of Class A Common Stock of the Company, par value $.01 per share (the
"Class A Common Stock"), and all shares of Class B Common Stock of the Company,
par value $.01 per share (the "Class B Common Stock" and together with the Class
A Common Stock, the "Company Common Stock"), owned by it in favor of this
Agreement and the Merger and, to the extent provided for therein, against any
conflicting transaction.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained and contained in the Voting
Agreement and intending to be legally bound hereby, the parties hereto hereby
agree as follows:
ARTICLE I
THE MERGER
SECTION 1.1 The Merger.
(a) Upon the terms and subject to the conditions
of this Agreement, and in accordance with Delaware Law, at the Effective Time
(as defined below), in the case of the Forward Merger, the Company shall be
merged with and into Acquisition Sub, whereupon the separate existence of the
Company shall cease, and Acquisition Sub shall continue as the surviving
corporation and, in the case of the Reverse Merger, Acquisition Sub shall be
merged with and into the Company, whereupon the separate corporate existence of
Acquisition Sub shall cease, and the Company shall continue as the surviving
corporation (the surviving corporation in the Merger is sometimes referred to
herein as the "Surviving Corporation") and shall continue to be governed by the
laws of the State of Delaware and shall continue under the name "News Publishing
Australia Limited." Whether the Forward Merger or the Reverse Merger is to be
effected shall be determined in accordance with Section 6.19 hereof.
(b) Concurrently with the Closing (as defined in
Section 1.9 hereof), the Company, Buyer and Acquisition Sub shall cause a
certificate of merger (the "Certificate of Merger") with respect to the Merger
to be executed and filed with the Secretary of State of the State of Delaware
(the "Secretary of State") as provided under Delaware Law. The Merger shall
become effective on the date and time at which the Certificate of Merger has
been duly filed with the Secretary of State or at such other date and time as
are agreed between the parties and specified in the Certificate of Merger, and
such date and time is hereinafter referred to as the "Effective Time."
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(c) From and after the Effective Time, the
Surviving Corporation shall possess all rights, privileges, immunities, powers
and franchises and be subject to all of the obligations, restrictions,
disabilities, liabilities, debts and duties of the Company and Acquisition Sub.
SECTION 1.2 Effect on Securities. At the Effective Time:
(a) Cancellation of Securities. In the case of the
Forward Merger, each share of Company Common Stock held by the Company as
treasury stock or held by Buyer or its subsidiaries or by Xxxxx-Craft (unless
the Xxxxx-Craft Merger shall not have occurred prior to the Effective Time)
immediately prior to the Effective Time shall automatically be cancelled and
revert to the status of authorized but unissued shares, and no consideration or
payment shall be delivered therefor or in respect thereto. In the case of the
Reverse Merger, each share of Company Common Stock held by Xxxxx-Craft (unless
the Xxxxx-Craft Merger shall not have occurred prior to the Effective Time)
immediately prior to the Effective Time shall remain outstanding and continue to
represent one share of common stock of the Company.
(b) Conversion of Securities. Except as otherwise
provided in this Agreement and subject to Section 1.4 hereof, each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares cancelled pursuant to Section 1.2(a) hereof and
Dissenting Shares (as defined in Section 1.8 hereof)) shall be converted into
the following (the "Merger Consideration"):
Either (X) in the case of the Forward Merger:
(i) for each share of Company Common Stock
with respect to which an election to receive only cash (to the extent available)
has been effectively made and not revoked or lost, pursuant to Section 1.3
hereof, the right to receive in cash from Buyer the Per Share Amount (as defined
below), subject to Sections 1.2(f) and 1.4(f) and to the allocation and
proration procedures set forth in Section 1.4 hereof; and
(ii) for each share of Company Common Stock
with respect to which an election to receive forty percent (40%) of the Cash
Merger Price in cash and the remainder of the Merger Consideration in American
Depositary Shares of Buyer ("Buyer Shares"), each of which represents four (4)
fully paid and nonassessable Preferred Limited Voting Ordinary Shares of Buyer
("Buyer Preferred Stock"), has been effectively made and not revoked or lost,
pursuant to Section 1.3 hereof (a "Partial Cash Election"), (A) the right to
receive from Buyer an amount in cash equal to $66 and (B) 2.2278 (the "Partial
Exchange Ratio") Buyer Shares (such shares of Company Common Stock being,
collectively, "Partial Cash Election Shares" and, together with the All Cash
Election Shares (as defined herein), "Cash Election Shares"); provided, however,
that the foregoing shall be subject to Sections 1.2(f) and 1.4(f) hereof. The
Buyer Preferred Stock allotted and issued in accordance with this Agreement
shall on and from its date of allotment rank pari passu with all existing Buyer
Preferred Stock on issue at that date,
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including as to all dividend entitlements (in respect of which they
shall receive the same entitlement as any previously issued Buyer
Preferred Stock); and
(iii) for each other share of Company Common
Stock, the right to receive from Buyer, the number of Buyer Shares
equal to the Exchange Ratio (as defined below), subject to Sections
1.2(f) and 1.4(f) and to the allocation and proration procedures set
forth in Section 1.4 hereof; or,
(Y) in the case of the Reverse Merger, subject to Section
1.2(f), for each share of Company Common Stock, (A) the right to
receive from Buyer an amount in cash equal to $69.30 and (B) 2.3392
Buyer Shares (the "Reverse Merger Exchange Ratio").
(c) Cancellation of Company Common Stock. All
shares of Company Common Stock to be converted into the Merger Consideration
pursuant to this Section 1.2 shall, by virtue of the Merger and without any
action on the part of the holders thereof, cease to be outstanding, be cancelled
and retired and cease to exist; and each holder of a certificate representing
prior to the Effective Time any such shares of Company Common Stock shall
thereafter cease to have any rights with respect to such securities, except the
right to receive (i) the Merger Consideration, (ii) any dividends and other
distributions in accordance with Section 1.5(c) hereof and (iii) any cash to be
paid in lieu of any fractional Buyer Share in accordance with Section 1.5(d)
hereof.
(d) [INTENTIONALLY OMITTED]
(e) Capital Stock of Acquisition Sub. In the
Forward Merger, no shares of Acquisition Sub stock will be issued directly or
indirectly and each share of common stock of Acquisition Sub issued and
outstanding immediately prior to the Effective Time shall remain outstanding
following the Effective Time. In the case of the Reverse Merger, each share of
common stock of Acquisition Sub shall be converted into one fully paid and
nonassessable share of the Surviving Corporation.
(f) Adjustments to Exchange Ratio.
(i) Subject to clause (ii) below, in the
event that Buyer declares or effects a stock split, stock or cash
dividend (other than ordinary course cash dividends declared and paid
consistent with past practice) or other reclassification, acquisition,
exchange or distribution with respect to the Buyer Shares or Buyer
Preferred Stock, in each case with a record or ex-dividend date or
effective date occurring after the date hereof and on or prior to the
date of the Effective Time, there will be an appropriate adjustment
made to the Merger Consideration so as to provide for the inclusion
therein of the cash, property, securities or combination thereof that
each holder of Company Common Stock who has the right to receive the
Merger Consideration pursuant to Section 1.2 hereof would have received
had such Company Common Stock been converted into Buyer Shares or Buyer
Preferred Stock as of the date hereof.
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(ii) If either (A) in the case of the
Forward Merger, the tax opinion to the Company referred to in Section
7.3(c) hereof as to the Merger qualifying as a reorganization cannot be
rendered (as reasonably determined by Xxxx, Scholer, Fierman, Xxxx &
Handler, LLP), (B) in the case of the Forward Merger, the tax opinion
to Buyer referred to in Section 7.2(f) as to the Merger qualifying as a
reorganization cannot be rendered (as reasonably determined by
Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP), (C) in the case of the
Forward Merger, in the reasonable judgment of the Company or Buyer,
based on the advice of their respective counsel, there is a meaningful
risk that the receipt of the cash, property, securities or combination
thereof referred to in clause (i) above would be taxable or have an
adverse tax consequence to the holders of Company Common Stock or (D)
in the case of either the Forward Merger or the Reverse Merger, the
adjustment referred to in clause (i) above is not possible or not
possible without materially changing the tax treatment of the
transaction referred to in clause (i) in question, then, in each case,
Buyer (but only if requested by the Company in the case of clause (C)
above) shall make an appropriate adjustment to the Merger Consideration
that (x) conveys an equivalent value (taking into account, among other
things, the impact of the transaction referred to in clause (i) above
on the trading price of Company Common Stock, Buyer Shares, Buyer
Preferred Stock and any newly issued securities) to the holders of
Company Common Stock as the adjustments contemplated in paragraph (i)
above, (y) in the case of the Forward Merger, allows such tax opinions
to be delivered and (z) in the case of the Forward Merger, avoids the
consequences referred to in clause (C) above; it being understood that,
by way of illustration and not limitation, the Company's written
agreement that clause (x) is satisfied shall constitute conclusive
evidence as to such fact.
(g) Certain Definitions. For purposes of this
Agreement, or, in the case of clause (xii) below, solely for purposes of
Sections 1.2, 1.3 and 1.4 hereof, the following terms shall have the following
meanings:
(i) "Aggregate Buyer Share Amount" means (A)
60% of the product of (x) the number of shares of Company
Common Stock issued and outstanding immediately prior to the
Effective Time, less the number of outstanding shares of
Company Common Stock cancelled pursuant to Section 1.2(a)
hereof, and (y) 3.7131, less (B) the number of Buyer Shares to
be paid in respect of Partial Cash Election Shares, in each
case subject to adjustment as described in Section 1.4(f)
hereof.
(ii) "Aggregate Cash Amount" means (A) 40%
of the product of (x) the number of shares of Company Common
Stock issued and outstanding immediately prior to the
Effective Time, less the number of outstanding shares of
Company Common Stock cancelled pursuant to Section 1.2(a)
hereof and (y) the Cash Merger Price, less (B) the amount of
cash to be paid in respect of Partial Cash Election Shares, in
each case subject to adjustment as described in Section 1.4(f)
hereof.
(iii) "All Cash Election Number" means (A)
that number of shares of Company Common Stock as shall be
equal to the quotient obtained by dividing
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the Aggregate Cash Amount by the Per Share Amount, less (B) the number
of Dissenting Shares, subject to adjustment as described in Section
1.4(f) hereof.
(iv) "Cash Merger Price" means $165.
(v) "Closing Buyer Share Value" means the
volume weighted average sales price for all trades of Buyer Shares
reported on the New York Stock Exchange (the "NYSE") for each of the
five trading days immediately preceding but not including the Closing
Date (the "Valuation Period"); provided, however, if necessary to
comply with any requirements of the Securities and Exchange Commission
(the "SEC"), the term Closing Date in this clause (iv) shall be deemed
to mean the date which is the closest in time but prior to the Closing
Date which complies with such rules and regulations. Buyer agrees that
during the Valuation Period neither Buyer nor its affiliates shall (x)
purchase or acquire, or offer to purchase or acquire, or announce any
intention to purchase or acquire, any Buyer Shares or Buyer Preferred
Stock or other outstanding securities of Buyer or its affiliates
convertible into Buyer Shares or Buyer Preferred Stock (other than
purchases at market value of Buyer Shares (in accordance with all
applicable laws) by a broker who has full discretion as to the amount
and timing of such purchases pursuant to a pre-existing stock buyback
program) or (y) announce or effect any material corporate transaction.
(vi) "Closing Transaction Value" means the
sum of (A) the Aggregate Cash Amount and (B) the product obtained by
multiplying the Aggregate Buyer Share Amount by the Closing Buyer Share
Value.
(vii) "Exchange Ratio" means that number of
Buyer Shares as shall be obtained by dividing the Per Share Amount by
the Closing Buyer Share Value.
(viii) "Exchangeable Shares" means the
aggregate number of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time less the number of
such shares cancelled pursuant to Section 1.2(a) hereof and less the
aggregate number of Partial Cash Election Shares.
(ix) "Exchanged Shares" means the aggregate
number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time less the number of such shares
(A) cancelled pursuant to Section 1.2(a) hereof and (B) that are
Dissenting Shares.
(x) "Per Share Amount" means the amount
obtained by dividing the Closing Transaction Value by the number of
Exchangeable Shares.
(xi) "Stock Election Number" means that
number of shares of Company Common Stock as shall be equal to (A) the
number of Exchanged Shares less (B) the sum of (i) the All Cash
Election Number and (ii) the aggregate number of Partial Cash Election
Shares, subject to adjustment as described in Section 1.4(f) hereof.
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(xii) "Dissenting Shares" means shares of
Company Common Stock that are Dissenting Shares within the meaning of
Section 1.9 hereof in respect of which the holder thereof shall have
taken all steps necessary to exercise and perfect properly his or her
demand for appraisal under Section 262 of the Delaware Law to the
extent that such steps are required to have been taken by the
applicable date of determination.
SECTION 1.3 Share Election. In the case of the Forward Merger
(and, with respect to clauses (b) and, unless a Restructuring Trigger has
theretofore occurred, (c) and (e) below, in the case of the Reverse Merger to
the extent applicable):
(a) Each Person (as defined in Section 1.3(b)
hereof) who, on or prior to the Election Deadline referred to in subsection (c)
below is a record holder of shares of Company Common Stock (collectively,
"Holders") shall have the right, with respect to the Merger Consideration, (i)
to elect to receive only cash for such shares pursuant to Section 1.2(b)(X)(i)
hereof (an "All Cash Election"), (ii) to make a Partial Cash Election, (iii) to
elect to receive Buyer Shares for such shares pursuant to Section 1.2(b)(X)(iii)
hereof (a "Stock Election"), (iv) to indicate that such record holder has no
preference as to the receipt of cash or Buyer Shares for such shares (a
"Non-Election") or (v) to make a mixed election, specifying the number of shares
of Company Common Stock corresponding with each such Election (the All Cash
Election, the Partial Cash Election, the Stock Election, and the Non-Election
are collectively referred to as the "Elections"). Holders who hold such shares
as nominees, trustees or in other representative capacities may submit multiple
Forms of Election (as defined below).
(b) Prior to the mailing of the Proxy Statement (as
defined in Section 6.1 hereof), The Bank of New York or such other bank, trust
company, Person or Persons shall be designated by Buyer and reasonably
acceptable to the Company to act as exchange agent (the "Exchange Agent") for
payment of the Merger Consideration. The Exchange Agent shall act as the agent
for the Company's stockholders for the purpose of receiving and holding their
Forms of Election and Certificates (as defined below) and shall obtain no rights
or interests (beneficial or otherwise) in such shares. For purposes of this
Agreement, "Person" means any natural person, firm, individual, corporation,
limited liability company, partnership, association, joint venture, company,
business trust, trust or any other entity or organization, whether incorporated
or unincorporated, including a government or political subdivision or any agency
or instrumentality thereof.
(c) All Elections shall be made on a form designed
for that purpose, which shall include a letter of transmittal and election form
(together, a "Form of Election"). Elections shall be made by Holders by mailing
to the Exchange Agent a Form of Election, which shall specify that delivery
shall be effected, and risk of loss and title to any Certificates) shall pass,
only upon proper delivery of the Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Buyer, in consultation with the
Company, may reasonably specify. Buyer and the Company will announce the
Exchange Ratio and the Per Share Amount when known and will announce the
anticipated Closing Date at least three
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business days, but not more than five business days, prior thereto; provided,
however, that the Closing Date (A) shall occur immediately following the
Xxxxx-Craft Merger or (B) in the event that the Xxxxx-Craft Merger Agreement is
terminated and this Agreement is not also terminated, shall not be earlier than
the second business day after the satisfaction or waiver of all conditions set
forth in Article VII hereof (other than the conditions set forth in Sections
7.1(h), 7.2(a), 7.2(b) 7.2(f), 7.3(a), 7.3(b), 7.3(c) and, in so far as it
relates to the accuracy of representations and warranties and the performance of
covenants, Section 7.1(i), so long as the foregoing enumerated conditions are
anticipated by the parties hereto to be satisfied on the Closing Date);
provided, further that the Closing Date shall not be earlier than the
satisfaction of the condition set forth in Section 7.1(h) . All Certificates so
surrendered shall be subject to the exchange procedures set forth in Section 1.5
hereof. To be effective, a Form of Election must be properly completed, signed
and submitted to the Exchange Agent and accompanied by the Certificates as to
which the election is being made (or by an appropriate guarantee of delivery of
such Certificates as set forth in such Form of Election from a firm which is a
member of the NYSE or another registered national securities exchange or a
commercial bank or trust company having an office or correspondent in the United
States, provided such Certificates are in fact delivered to the Exchange Agent
within five NYSE trading days after the Election Deadline (as defined below)).
Buyer will have the discretion, which it may delegate in whole or in part to the
Exchange Agent, to determine whether Forms of Election have been properly
completed, signed and submitted or revoked and to disregard immaterial defects
in Forms of Election. The decision of Buyer (or the Exchange Agent) in such
matters, absent manifest error, shall be conclusive and binding. Neither Buyer
nor the Exchange Agent will be under any obligation to notify any person of any
defect in a Form of Election submitted to the Exchange Agent. The Exchange Agent
and Buyer shall also make all computations contemplated by this Section 1.3 and
by Section 1.4 hereof and all such computations shall be conclusive and binding
on the Holders absent manifest error. The Form of Election and the accompanying
Certificates (or appropriate guarantee of delivery in respect thereof) must be
received by the Exchange Agent prior to 10:00 a.m New York City time on the day
on which the Closing occurs (the "Election Deadline") in order to be effective.
If the Closing is delayed to a subsequent date, the Election Deadline shall be
similarly delayed and Buyer will promptly announce such rescheduled Election
Deadline and Closing. An election may be revoked, but only by written notice
received by the Exchange Agent prior to the Election Deadline. Upon any such
revocation, unless a duly completed Election Form, accompanied by a Certificate,
is thereafter submitted in accordance with this paragraph (c), such shares shall
be deemed to be Non-Election Shares (as defined in Section 1.4 hereof). If a
Form of Election is revoked, or in the event that this Agreement is terminated
pursuant to the provisions hereof, and any Certificates (or guarantee(s) of
delivery, as appropriate), have been transmitted to the Exchange Agent pursuant
to the provisions hereof, such Certificates (and, in the case of a revoked Form
of Election, guarantee(s) of delivery, as appropriate), shall promptly be
returned without charge to the Person submitting the same.
(d) For the purposes hereof, Company Common Stock
as to which the Holder has not made a valid Election prior to the Election
Deadline, including as a result of revocation, shall be deemed to be
Non-Election Shares. If Buyer or the Exchange Agent shall determine that any
purported All Cash Election, Partial Cash Election or Stock Election was not
properly made, such purported All Cash Election, Partial Cash Election or Stock
Election shall
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be deemed to be of no force and effect and the Holder making such purported All
Cash Election, Partial Cash Election or Stock Election shall for purposes hereof
be deemed to have made a Non-Election. Shares in respect of which a Non-Election
shall have been made or deemed made shall be treated as Non-Election Shares.
(e) Concurrently with the mailing of the Proxy
Statement, Buyer and the Company shall mail the Form of Election to each person
who is a Holder on the record date for the Stockholders' Meeting (as defined in
Section 6.2 hereof) and shall each use its reasonable best efforts to mail the
Form of Election to all persons who become Holders during the period between (i)
such record date and (ii) the date seven calendar days prior to the anticipated
Effective Time, and to make the Form of Election available to all persons who
become Holders subsequent to the date described in clause (ii) but not later
than 5:00 p.m. New York City time on the last business day prior to the
Effective Time. The Exchange Agent may, with the mutual agreement of Buyer and
the Company, make such rules as are consistent with this Section 1.3 for the
implementation of the Elections provided for herein as shall be necessary or
desirable to effect such Elections fully.
SECTION 1.4 Allocation and Proration.
(a) Notwithstanding anything in this Agreement to
the contrary, the maximum number of shares of Company Common Stock which shall
be converted into the right to receive cash in the Merger (other than pursuant
to Partial Cash Elections and other than Dissenting Shares) shall be equal to
the All Cash Election Number. The maximum number of shares of Company Common
Stock to be converted into the right to receive Buyer Shares in the Merger
(other than pursuant to Partial Cash Elections) shall be equal to the Stock
Election Number.
(b) If the aggregate number of shares of Company
Common Stock covered by All Cash Elections (the "All Cash Election Shares")
exceeds the All Cash Election Number, all shares of Company Common Stock covered
by Stock Elections (the "Stock Election Shares") and all shares of Company
Common Stock covered by Non-Elections (the "Non-Election Shares") shall be
converted into the right to receive Buyer Shares, and the All Cash Election
Shares shall be converted into the right to receive Buyer Shares and cash in the
following manner:
each All Cash Election Share shall be converted into the right
to receive (i) an amount in cash, without interest, equal to
the product of (x) the Per Share Amount and (y) a fraction
(the "Cash Fraction"), the numerator of which shall be the All
Cash Election Number and the denominator of which shall be the
total number of All Cash Election Shares, and (ii) a number of
shares of Buyer Shares equal to the product of (x) the
Exchange Ratio and (y) a fraction equal to one minus the Cash
Fraction.
(c) If the aggregate number of Stock Election
Shares exceeds the Stock Election Number, all All Cash Election Shares and all
Non-Election Shares shall be
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converted into the right to receive cash, and the Stock Election Shares shall be
converted into the right to receive Buyer Shares and cash in the following
manner:
each Stock Election Share shall be converted into the right to
receive (i) a number of Buyer Shares equal to the product of
(x) the Exchange Ratio and (y) a fraction (the "Stock
Fraction"), the numerator of which shall be the Stock Election
Number and the denominator of which shall be the total number
of Stock Election Shares, and (ii) an amount in cash, without
interest, equal to the product of (x) the Per Share Amount and
(y) a fraction equal to one minus the Stock Fraction.
(d) In the event that neither Section 1.4(b)
nor 1.4(c) above is applicable, all All Cash Election Shares shall be converted
into the right to receive cash, all Stock Election Shares shall be converted
into the right to receive Buyer Shares and the Non-Election Shares shall be
converted into the right to receive Buyer Shares and cash in the following
manner:
each Non-Election Share shall be converted into the right to
receive (i) an amount in cash, without interest, equal to the
product of (x) the Per Share Amount and (y) a fraction (the
"Non-Election Fraction"), the numerator of which shall be the
excess of the All Cash Election Number over the total number
of All Cash Election Shares and the denominator of which shall
be the excess of (A) the number of Exchangeable Shares over
(B) the sum of the total number of All Cash Election Shares
and the total number of Stock Election Shares and (ii) a
number of Buyer Shares equal to the product of (x) the
Exchange Ratio and (y) a fraction equal to one minus the Non-
Election Fraction.
(e) Partial Election Shares shall not be subject to
proration and shall be converted into the right to receive the Merger
Consideration pursuant to Section 1.2(b)(X)(ii) hereof, subject to Section
1.4(f) hereof.
(f) If the sum of (i) the Aggregate Cash Amount
(without giving effect to the reference therein to this subsection (f)) and (ii)
40% of the Cash Merger Price multiplied by the number of Partial Cash Election
Shares (such sum being the "Cash Amount") exceeds 55% of the sum of (x) the Cash
Amount and (y) the product of (A) the closing price of Buyer Shares reported on
the NYSE Composite Tape on the trading day immediately preceding the Closing
Date (the "Closing Price") multiplied by (B) 3.7131 multiplied by (C) 60% of the
excess of the number of shares of Company Common Stock outstanding immediately
prior to the Effective Time over the number of outstanding shares of Company
Common Stock cancelled pursuant to Section 1.2(a) hereof (such sum of (x) and
(y) being the "Total Consideration"), then the components of the Merger
Consideration shall be modified (1) first, in the case of shares of Company
Common Stock (other than Dissenting Shares) as to which All Cash Elections shall
have been made, by reducing the cash portion of the Merger Consideration to the
minimum extent necessary, and in no event below 40% of the Cash Merger Price,
and issuing in lieu
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thereof additional Buyer Shares in an amount equal to the result obtained by
dividing (x) the amount of such per share cash reduction by (y) the Closing
Price and (2) second, in the event that the foregoing reduction is not
sufficient to result in the Cash Amount not exceeding 55% of the Total
Consideration, in the case of shares of Company Common Stock as to which an All
Cash Election or a Partial Cash Election shall have been made, by further
reducing the amount of the cash portion of the Merger Consideration to the
minimum extent necessary to satisfy the 55% limitation referred to above and to
issue in lieu thereof additional Buyer Shares, in amount equal to the result
obtained by dividing (u) the amount of such per share reduction by (v) the
Closing Price. In the case of the Forward Merger, if either (i) the tax opinion
referred to in Section 7.3(c) hereof cannot be rendered (as reasonably
determined by Xxxx, Scholer, Fierman, Xxxx & Handler, LLP), or (ii) the tax
opinion to Buyer referred to in Section 7.2(f) cannot be rendered (as reasonably
determined by Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP), then the foregoing
adjustments shall be similarly made, in each case to the minimum extent
necessary to enable the relevant tax opinion or opinions, as the case may be, to
be rendered. For purposes of this Section 1.4(f), holders of Dissenting Shares
shall be deemed to be Persons making All Cash Elections notwithstanding, and in
lieu of, any election they have or have not made.
SECTION 1.5 Exchange of Certificates.
(a) As of the Effective Time, Buyer shall (i)
deposit, or cause to be deposited with (A) the Exchange Agent for the benefit of
holders of shares of Company Common Stock, cash to the extent it constitutes
Merger Consideration and (B) pursuant to the terms of the Deposit Agreement (as
defined below) the Custodian (as defined in the Deposit Agreement) certificates
representing the Buyer Preferred Stock underlying the Buyer Shares to the extent
they constitute Merger Consideration and (ii) pursuant to the terms of the
Deposit Agreement, instruct the Depositary to deposit the Buyer Shares to be
issued in the Merger with the Exchange Agent for the benefit of holders of
shares of Company Common Stock for exchange in the Merger. For purposes of this
Agreement, "Depositary" shall mean Citibank, N.A., as Depositary, pursuant to
the Amended and Restated Deposit Agreement, dated as of December 3, 1996, among
Buyer, the Depositary and the holders from time to time of Buyer Shares (the
"Deposit Agreement"). In addition, Buyer shall make available to the Exchange
Agent on a daily basis sufficient cash to permit prompt payment to all Holders
entitled to receive the Merger Consideration in the form of cash. The Buyer
shall pay, or cause one of its affiliates to pay, any transfer taxes and all
other charges and fees (including all fees for the depositary, registry or
custodian for the ADRs).
(b) As of or promptly following the Effective Time,
the Surviving Corporation shall cause the Exchange Agent to mail (and to make
available for collection by hand) to each holder of record of a certificate or
certificates, which immediately prior to the Effective Time represented
outstanding shares of Company Common Stock (the "Certificates") (other than in
the case of the Forward Merger those who had not previously properly delivered
their Certificates to the Exchange Agent along with a Form of Election), (i) a
letter of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Exchange Agent and which shall be in the form and
have such other provisions as Buyer and the Company may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for
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(A) a certificate or certificates representing that number of whole Buyer
Shares, if any, into which the number of shares of Company Common Stock
previously represented by such Certificate shall have been converted pursuant to
this Agreement and (B) the amount of cash, if any, into which all or a portion
of the number of shares of Company Common Stock previously represented by such
Certificate shall have been converted pursuant to this Agreement (which
instructions shall provide that at the election of the surrendering holder,
Certificates may be surrendered, and the Merger Consideration in exchange
therefor collected, by hand delivery). Upon surrender of a Certificate for
cancellation to the Exchange Agent, together with a letter of transmittal duly
completed and validly executed in accordance with the instructions thereto, and
such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Merger Consideration for each share of Company Common Stock formerly represented
by such Certificate, to be mailed (or made available for collection by hand if
so elected by the surrendering holder) within five business days following the
later to occur of (i) the Effective Time or (ii) the Exchange Agent's receipt of
such Certificates, and the Certificate so surrendered shall be forthwith
cancelled. The Exchange Agent shall accept such Certificates upon compliance
with such reasonable terms and conditions as the Exchange Agent may impose to
effect an orderly exchange thereof in accordance with normal exchange practices.
No interest shall be paid or accrued for the benefit of holders of the
Certificates on the Merger Consideration (or the cash pursuant to subsections
(c) and (d) below) payable upon the surrender of the Certificates.
(c) Buyer may retain any dividends or other
distributions with respect to Buyer Shares with a record date on or after the
Effective Time in respect of the holder of any unsurrendered Certificate with
respect to the Buyer Shares represented thereby by reason of the conversion of
shares of Company Common Stock pursuant to Sections 1.2(b), 1.3 and 1.4 hereof
and no cash payment in lieu of fractional Buyer Shares shall be paid to any such
holder pursuant to Section 1.5(d) hereof until such Certificate is surrendered
in accordance with this Article 1. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be released and paid,
without interest, to the Person in whose name the Buyer Shares representing such
securities are registered (i) at the time of such surrender or as promptly as
practicable after the sale of the Excess Buyer Shares (as defined in Section
1.5(d) hereof), the amount of any cash payable in lieu of fractional Buyer
Shares to which such holder is entitled pursuant to Section 1.5(d) hereof and
the proportionate amount of dividends or other distributions with a record date
after the Effective Time theretofore paid with respect to the Buyer Shares
issued upon conversion of Company Common Stock, and (ii) at the appropriate
payment date or as promptly as practicable thereafter, the proportionate amount
of dividends or other distributions with a record date after the Effective Time
but prior to such surrender and a payment date subsequent to such surrender
payable with respect to such Buyer Shares.
(d) Notwithstanding any other provision of this
Agreement, no fraction of a Buyer Share will be issued and no dividend or other
distribution, stock split or interest with respect to Buyer Shares shall relate
to any fractional Buyer Share, and such fractional interest shall not entitle
the owner thereof to vote or to any rights as a security holder of the Buyer
Shares. In lieu of any such fractional security, each holder of shares of
Company Common Stock otherwise entitled to a fraction of a Buyer Share will be
entitled to receive in accordance with the
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provisions of this Section 1.5 from the Exchange Agent a cash payment
representing such holder's proportionate interest in the net proceeds from the
sale by the Exchange Agent on behalf of all such holders of the aggregate of the
fractions of Buyer Shares which would otherwise be issued (the "Excess Buyer
Shares"). The sale of the Excess Buyer Shares by the Exchange Agent shall be
executed on the NYSE through one or more member firms of the NYSE and shall be
executed in round lots to the extent practicable. Until the net proceeds of such
sale or sales have been distributed to the holders of shares of Company Common
Stock, the Exchange Agent will, subject to Section 1.5(e) hereof, hold such
proceeds in trust for the holders of such shares (the "Buyer Shares Trust").
Subject to its right to withhold for taxes as described in Section 1.6 hereof,
the Surviving Corporation shall pay all commissions, transfer taxes (other than
those transfer taxes for which the Company's former stockholders are solely
liable) and other out-of-pocket transaction costs, including the expenses and
compensation of the Exchange Agent incurred in connection with such sale of the
Excess Buyer Shares. As soon as practicable after the determination of the
amount of cash, if any, to be paid to holders of shares of Company Common Stock
in lieu of any fractional Buyer Share interests, the Exchange Agent shall make
available such amounts to such holders of shares of Company Common Stock without
interest.
(e) Any portion of the Merger Consideration
deposited with the Exchange Agent pursuant to this Section 1.5 (the "Exchange
Fund") which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to Buyer, upon demand, and
any holders of shares of Company Common Stock prior to the Merger who have not
theretofore complied with this Article I shall thereafter look for payment of
their claim, as general creditors thereof, only to Buyer for their claim for (1)
cash, if any, without interest, (2) Buyer Shares, if any, (3) any cash without
interest, to be paid, in lieu of any fractional Buyer Shares and (4) any
dividends or other distributions with respect to Buyer Shares to which such
holders may be entitled. None of Buyer, Acquisition Sub, the Company, the
Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Buyer Shares or cash held in the Exchange Fund (and any cash,
dividends and other distributions payable in respect thereof) delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law.
(f) None of Buyer, Acquisition Sub, the Company,
the Surviving Corporation or the Exchange Agent shall be liable to any Person in
respect of any Buyer Shares or cash held in the Exchange Fund (and any cash,
dividends and other distributions payable in respect thereof) delivered to a
public official pursuant to any applicable abandoned property, escheat or
similar law. If any Certificates shall not have been surrendered prior to one
year after the Effective Time (or immediately prior to such earlier date on
which (i) any cash, (ii) any Buyer Shares, (iii) any cash in lieu of fractional
Buyer Shares or (iv) any dividends or distributions with respect to Buyer Shares
in respect of such Certificate would otherwise escheat to or become the property
of any Governmental Authority (as defined in Section 9.3 hereof)), any such
Buyer Shares, cash, dividends or distributions in respect of such Certificate
shall, to the extent permitted by applicable law, become the property of Buyer,
free and clear of all claims or interest of any Person previously entitled
thereto.
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(g) The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by Buyer on a daily basis. Any
interest and any other income resulting from such investments shall be paid to
Buyer. Nothing contained in this Section 1.5(g) shall relieve Buyer or the
Exchange Agent from making the payments required by this Article I to be made to
the holders of shares of Company Common Stock.
SECTION 1.6 Transfer Taxes; Withholding; Certain Stock.
(a) If any certificate for a Buyer Share is to
be issued to, or cash is to be remitted to, a Person who holds shares of Company
Common Stock (other than the Person in whose name the Certificate surrendered in
exchange therefor is registered), it shall be a condition of such exchange that
the Company Certificate so surrendered shall be properly endorsed and otherwise
in proper form for transfer and that the Person requesting such exchange shall
(i) pay to the Exchange Agent any transfer or other Taxes (as defined in Section
3.14 hereof) required by reason of the payment of the Merger Consideration to a
Person other than the registered holder of the Certificate so surrendered, or
(ii) establish to the satisfaction of the Exchange Agent that such Tax either
has been paid or is not applicable. Buyer or the Exchange Agent shall be
entitled to deduct and withhold from the Buyer Shares (or cash in lieu of
fractional Buyer Shares) otherwise payable pursuant to this Agreement to any
holder of shares of Company Common Stock such amounts as Buyer or the Exchange
Agent are required to deduct and withhold under the Code, or any provision of
state, local or foreign Tax law, with respect to the making of such payment. To
the extent that amounts are so withheld by Buyer or the Exchange Agent, such
withheld amounts shall be treated for all purposes of this Agreement as having
been paid to the holder of shares of Company Common Stock in respect of whom
such deduction and withholding was made by Buyer or the Exchange Agent.
(b) Prior to the Effective Time, Buyer and the
Company shall take all steps reasonably necessary to cause the transactions
contemplated hereby and any other dispositions of equity securities of the
Company (including derivative securities) or acquisitions of Buyer equity
securities (including derivative securities) in connection with this Agreement
by each individual who (a) is a director or officer of the Company or (b) at the
Effective Time, will become a director or officer of Buyer, to be exempt under
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act") to the extent Section 16 of the Exchange Act is applicable
to such person.
SECTION 1.7 Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the Person claiming such Certificate to be lost, stolen or destroyed and, if
required by the Surviving Corporation, the posting by such Person of a bond, in
such reasonable amount as the Surviving Corporation may direct, as indemnity
against any claim that may be made against it with respect to such Certificate,
the Exchange Agent will issue in exchange for such lost, stolen or destroyed
Certificate the Merger Consideration to which the holder thereof is entitled
pursuant to this Article I.
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SECTION 1.8 Dissenting Shares. Notwithstanding Section 1.2
hereof, to the extent that holders thereof are entitled to appraisal rights
under Section 262 of Delaware Law, shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time and held by a holder who has
properly exercised and perfected his or her demand for appraisal rights under
Section 262 of Delaware Law (the "Dissenting Shares"), shall not be converted
into the right to receive the Merger Consideration, but the holders of
Dissenting Shares shall be entitled to receive such consideration as shall be
determined pursuant to Section 262 of Delaware Law; provided, however, that if
any such holder shall have failed to perfect or shall have effectively withdrawn
or lost his or her right to appraisal and payment under Delaware Law, such
holder's shares of Company 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, and such shares shall not be deemed
to be Dissenting Shares. Any payments required to be made with respect to the
Dissenting Shares shall be made by Buyer (and not the Company or Acquisition
Sub).
SECTION 1.9 Merger Closing. Subject to the satisfaction or, if
permissible, waiver of the conditions set forth in Article VII hereof, the
closing of the Merger (the "Closing") will take place at 9:00 a.m., New York
City time, on a date determined in accordance with, in the case of the Forward
Merger, the third sentence of Section 1.3(c) hereof and, in the case of the
Reverse Merger, the proviso of the third sentence of Section 1.3(c) hereof, and
in each case at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 4 Times
Square, New York, New York, unless another time, date or place is agreed to in
writing by the parties hereto (such date being the "Closing Date").
ARTICLE II
THE SURVIVING CORPORATION
SECTION 2.1 Certificate of Incorporation. The certificate of
incorporation of Acquisition Sub in the case of the Forward Merger, as in effect
immediately prior to the Effective Time, shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended in
accordance with applicable law. The certificate of incorporation of the Company
in the case of the Reverse Merger shall be the certificate of incorporation of
the Surviving Corporation, amended at the Effective Time to read in its entirety
as the certificate of incorporation of Acquisition Sub as in effect immediately
prior to the Effective Time, until thereafter amended in accordance with
applicable law.
SECTION 2.2 By-laws. The By-laws of Acquisition Sub in effect
at the Effective Time shall be the By-laws of the Surviving Corporation until
thereafter amended in accordance with applicable law, the articles of formation
of such entity and the By-laws of such entity.
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SECTION 2.3 Officers and Board of Directors.
(a) From and after the Effective Time, the officers
of Acquisition Sub at the Effective Time shall be the officers of the Surviving
Corporation, until their respective successors are duly elected or appointed and
qualified in accordance with applicable law.
(b) The Board of Directors of the Surviving
Corporation effective as of, and immediately following, the Effective Time shall
consist of the members of the Board of Directors of Acquisition Sub immediately
prior to the Effective Time.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except (i) as disclosed in the report on Form 10-K dated March
30, 2000 for the year ended December 31, 1999, the reports on Form 10-Q and Form
8-K filed by the Company since December 31, 1999 or the proxy statement dated
April 5, 2000, in each case in the form filed by the Company with the SEC prior
to the date of this Agreement or in such similar forms filed by the Company's
subsidiaries for such periods or, to the extent it is readily apparent that such
disclosure would be applicable hereto, in the disclosure schedules to the
Xxxxx-Craft Merger Agreement or the UTV Merger Agreement, and (ii) as disclosed
in a separate disclosure schedule which has been delivered by the Company to
Buyer prior to the execution of this Agreement (the "Company Disclosure
Schedule") (each section of which qualifies the correspondingly numbered
representation and warranty or covenant to the extent specified therein and such
other representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the information
called for by such other representation and warranty or covenant readily
apparent), the Company hereby represents and warrants to Buyer:
SECTION 3.1 Organization and Qualification; Subsidiaries.
(a) Each of the Company and its subsidiaries is a
corporation or entity duly incorporated or formed, validly existing and in good
standing under the laws of its jurisdiction of incorporation or formation and
has the requisite corporate power and authority and all necessary governmental
approvals to own, lease and operate its properties and to carry on its business
as it is now being conducted, except where the failure to have such power,
authority and governmental approvals would not, individually or in the
aggregate, have a Company Material Adverse Effect (as defined below). Each of
the Company and its subsidiaries is duly qualified or licensed as a foreign
corporation to do business, and is in good standing, in each jurisdiction in
which the character of the properties owned, leased or operated by it or the
nature of its business makes such qualification or licensing necessary, except
for such failures to be so qualified or licensed and in good standing as would
not, individually or in the aggregate, have a Company Material Adverse Effect.
The term "Company Material Adverse Effect" means any change, effect or
circumstance that is or is reasonably likely to be materially adverse to the
business,
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operations, results of operations or financial condition of Xxxxx-Craft and its
subsidiaries taken as a whole, other than any change, effect or circumstance
relating to or resulting from (i) general changes in the television broadcasting
industry, (ii) changes in general economic conditions or securities markets in
general, or (iii) this Agreement or the transactions contemplated hereby or the
announcement thereof.
(b) Other than with respect to UTV (the
capitalization of which is described in Section 3.22 hereof) and its
subsidiaries, all the outstanding shares of capital stock or other equity or
voting interests of each subsidiary of the Company are owned by the Company, by
another wholly owned subsidiary of the Company or by the Company and another
wholly owned subsidiary of the Company, free and clear of all pledges, claims,
liens, charges, encumbrances and security interests of any kind or nature
whatsoever (collectively, "Liens"), and are duly authorized, validly issued,
fully paid and nonassessable. Except as set forth above or in Section 3.1(b) of
the Company Disclosure Schedule and except for the capital stock of, or other
equity or voting interests in, its subsidiaries, the Company does not own,
directly or indirectly, any capital stock of, or other equity or voting
interests in, any corporation, partnership, joint venture, association or other
entity.
SECTION 3.2 Restated Certificate of Incorporation and By-Laws.
The Company has made available to Buyer a complete and correct copy of the
Restated Certificate of Incorporation and the By-laws, each as amended to date,
of the Company. The Restated Certificate of Incorporation and By-laws (or
equivalent organizational documents) of the Company and its subsidiaries are in
full force and effect. None of the Company or its subsidiaries is in material
violation of any provision of its Restated Certificate of Incorporation or
By-laws (or equivalent organizational documents).
SECTION 3.3 Capitalization.
(a) As of the date of this Agreement, the
authorized capital stock of the Company consists of 200,000,000 shares of Class
A Common Stock, 200,000,000 shares of Class B Common Stock, and 50,000,000
shares of Preferred Stock, par value $0.01 per share ("Preferred Stock"). At the
close of business on June 30, 2000, (i) 4,510,823 shares of Class A Common Stock
were issued and outstanding, 18,000,000 shares of Class B Common Stock were
issued and outstanding, and no shares of Preferred Stock were issued and
outstanding; (ii) no shares of Class A Common Stock, Class B Common Stock or
Preferred Stock were held by the Company in its treasury; and (iii) no shares of
Class A Common Stock or Class B Common Stock were reserved for issuance upon the
exercise of outstanding options to purchase such shares. Since January 31, 2000,
no shares of capital stock of the Company have been issued. As of the date of
this Agreement, except as set forth above, no shares of capital stock or other
voting securities of the Company are issued, reserved for issuance or
outstanding. As of the date of this Agreement, there are no securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings
of any kind to which the Company or any of its subsidiaries is a party or by
which any of them is bound obligating the Company or any of its subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or any of its
subsidiaries or obligating the Company or
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any of its subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
All outstanding shares of capital stock of the Company are duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of the
Company or any of its subsidiaries, and no securities or other instruments or
obligations of the Company or any of its subsidiaries the value of which is in
any way based upon or derived from any capital or voting stock of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. Except as set forth in Section 3.3(a) of the Company Disclosure
Schedule, to the knowledge of the Company, as of the date of this Agreement,
there are no outstanding contractual obligations of the Company or any of its
subsidiaries (i) to repurchase, redeem or otherwise acquire any shares of
capital stock of the Company or (ii) to vote or to dispose of any shares of the
capital stock of any of the Company.
(b) As of the date of this Agreement the Company,
directly or indirectly, owns 5,509,027 shares of Common Stock of UTV, par value
$.10 per share (the "UTV Common Stock").
SECTION 3.4 Authority Relative to Agreement.
(a) The Company has all necessary power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the Merger and the other transactions contemplated
hereby. The execution and delivery of this Agreement by the Company and the
consummation by the Company of the Merger and the other transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement or to
consummate the Merger and the other transactions contemplated hereby (other
than, with respect to the Merger, the adoption of this Agreement and the
approval of the Merger by the affirmative vote of a majority of the votes cast
by all stockholders entitled to vote at the Stockholders' Meeting (as defined in
Section 6.2 hereof) voting together as a single class. This Agreement has been
duly and validly executed and delivered by the Company and, assuming the due
authorization, execution and delivery by Buyer, this Agreement constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms.
(b) The Special Committee has been duly authorized
and constituted. The Special Committee, at a meeting thereof duly called and
held on August 13, 2000, (A) determined that this Agreement and the Merger are
fair to and in the best interests of the Company and its stockholders (other
than Buyer and its affiliates), (B) determined that this Agreement and the
Merger should be approved and declared advisable and (C) resolved to recommend
that the stockholders of the Company approve the Merger and adopt this
Agreement. The Board of Directors of the Company, at a meeting thereof duly
called and held on August 13, 2000, in reliance upon the advice of the Special
Committee (X) determined that this Agreement and the Merger are fair to and in
the best interests of the Company and its stockholders (other than Buyer and its
affiliates), (Y) approved and declared the advisability of
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this Agreement and the Merger and (Z) resolved to recommend that the
stockholders of the Company approve the Merger and adopt this Agreement.
SECTION 3.5 No Conflict; Required Filings and Consents.
(a) Except as set forth in Section 3.5 of the
Company Disclosure Schedule, the execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement and the consummation of
the Merger and the other transactions contemplated hereby by the Company and its
subsidiaries will not, (i) conflict with or violate the Restated Certificate of
Incorporation or By-Laws (or equivalent organizational documents) of (A) the
Company or (B) any of its subsidiaries, (ii) assuming the consents, approvals
and authorizations specified in Section 3.5(b) have been received and the
waiting periods referred to therein have expired, and any condition precedent to
such consent, approval, authorization, or waiver has been satisfied, conflict
with or violate any domestic (Federal, state or local) or foreign law, rule,
regulation, order, judgment or decree (collectively, "Laws") applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected or (iii) result in any
breach of or constitute a default (or an event which with notice or lapse of
time or both would become a default) under, or give to others any right of
termination, amendment, acceleration, or cancellation of, or result in the
creation of a lien or other encumbrance on any property or asset of the Company
or any of its subsidiaries pursuant to, any note, bond, mortgage, indenture or
credit agreement, or any other contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any property or asset of the Company or any of its subsidiaries is bound or
affected, except, in the case of clauses (ii) and (iii) above, for any such
conflicts, violations, breaches, defaults or other occurrences of the type
referred to above which would not, individually or in the aggregate, have a
Company Material Adverse Effect and would not prevent or materially delay the
consummation of the Merger or the UTV Merger; provided, however, that for
purposes of this Section 3.5(a), the definition of "Company Material Adverse
Effect" shall be read so as not to include clause (iii) thereof.
(b) Except as set forth in Section 3.5 of the
Company Disclosure Schedule, the execution and delivery of this Agreement by the
Company do not, and the performance of this Agreement by the Company and the
consummation of the Merger and the other transactions contemplated hereby by the
Company and its subsidiaries will not, require any consent, approval,
authorization, waiver or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic, foreign or supranational, except
for applicable requirements of the Exchange Act, the Securities Act of 1933, as
amended (the "Securities Act"), state securities or "blue sky" laws ("Blue Sky
Laws"), the pre-merger notification arrangements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended, and the rules and regulations
thereunder (the "HSR Act"), any filings and approvals and waivers of the Federal
Communications Commission or any successor entity (the "FCC") as may be required
under the Communications Act of 1934, as amended, and the rules, regulations and
published orders of the FCC thereunder (collectively, the "Communications Act"),
filing and recordation of appropriate merger documents as required by Delaware
Law and the rules of the NYSE and except where
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failure to obtain such consents, approvals, authorizations or permits, or to
make such filings or notifications, would not, individually or in the aggregate,
have a Company Material Adverse Effect and would not prevent or materially delay
the consummation of the Merger or the UTV Merger; provided, however, that for
purposes of this Section 3.5(b), the definition of "Company Material Adverse
Effect" shall be read so as not to include clause (iii) thereof.
SECTION 3.6 Permits and Licenses; Contracts; Compliance with
Laws.
(a) Each of the Company and its subsidiaries is
in possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
necessary for the Company or any of its subsidiaries to own, lease and operate
the properties of the Company and its subsidiaries or to carry on its business
as it is now being conducted and contemplated to be conducted (the "Company
Permits"), and no suspension or cancellation of any of the Company Permits is
pending or, to the knowledge of the Company, threatened, except where the
failure to have, or the suspension or cancellation of, any of the Company
Permits would not, individually or in the aggregate, have a Company Material
Adverse Effect. Except as set forth in Section 3.6(a) of the Company Disclosure
Schedule, none of the Company or any of its subsidiaries is in conflict with, or
in default or violation of, (i) any Laws applicable to the Company or any of its
subsidiaries or by which any property or asset of the Company or any of its
subsidiaries is bound or affected, (ii) any of the Company Permits or (iii) any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any property or asset of the Company or any of its subsidiaries is bound or
affected, except for any such conflicts, defaults or violations that would not,
individually or in the aggregate, have a Company Material Adverse Effect.
(b) Except as set forth in Section 3.6(b) of the
Company Disclosure Schedule, none of the Company or any of its subsidiaries is a
party to, or to the knowledge of the Company is bound by, any contract or
agreement that contains a covenant restricting the ability of the Company or any
of its subsidiaries or, after the Effective Time, could restrict the ability of
Buyer or any of its subsidiaries or affiliates, to compete in any line of
business or with any person or engage in any business in any geographic area.
(c) The Company and its subsidiaries have operated
their respective television stations and associated facilities (the "Company
Stations"), in compliance with the terms of the Company Permits issued by the
FCC to the Company and its subsidiaries ("Company FCC Licenses"), and in
compliance with the Communications Act, and the Company and its subsidiaries
have timely filed or made all applications, reports and other disclosures
required by the FCC to be filed or made with respect to the Company Stations and
have timely paid all FCC regulatory fees with respect thereto, in each case
except as, individually or in the aggregate, (i) as of the date of this
Agreement, would not materially adversely affect the operation of any of the
broadcasting facilities of the Company's subsidiaries' New York or Los Angeles
television stations and would not have a Company Material Adverse Effect and
(ii) would not result in the loss of the Company's subsidiaries' main station
license issued by the FCC with respect to any of the Company's subsidiaries' New
York or Los Angeles television
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stations and would not have a Company Material Adverse Effect. (i) There is not,
as of the date of this Agreement, pending or, to the Company's knowledge,
threatened before the FCC any material proceeding, notice of violation, order of
forfeiture or complaint or, to the knowledge of the Company, investigation
against the Company or any of its subsidiaries, relating to any of the Company
Stations or FCC regulated services conducted by the Company or any of its
subsidiaries and (ii) there is not pending or, to the Company's knowledge,
threatened before the FCC any proceeding, notice of violation, order of
forfeiture or complaint or, to the knowledge of the Company, investigation
against the Company or any of its subsidiaries, relating to any of the Company
Stations or FCC regulated services conducted by the Company or any of its
subsidiaries, except for any such proceedings, notices, orders, complaints or
investigations that would not, individually or in the aggregate, have a Company
Material Adverse Effect.
(d) Except as disclosed in Section 3.6(d) of the
Company Disclosure Schedule, as of the date of this Agreement, there are no
contracts or agreements that are material to the business, properties, assets,
condition (financial or otherwise) or results of operations of the Company and
its subsidiaries taken as a whole. Neither the Company nor any of its
subsidiaries is in violation or default of, nor has the Company or, to the
knowledge of the Company, any subsidiary or affiliate thereof received written
notice from any third party alleging that the Company or any of its subsidiaries
is in violation of or in default under, nor, to the knowledge of the Company,
does there exist any condition which upon the passage of time or the giving of
notice would cause such a violation of or default under any loan or credit
agreement, note, bond, mortgage, indenture, lease, permit, concession,
franchise, license or any other contract, agreement, arrangement or
understanding, to which it is a party or by which it or any of its properties or
assets is bound, except for any such violations or defaults which would not,
individually or in the aggregate, have a Company Material Adverse Effect and
would not prevent or materially delay the consummation of the Merger or the UTV
Merger.
(e) Set forth in Section 3.6(e) of the Company
Disclosure Schedule is a list, as of the date of this Agreement, of all (i)
network affiliation agreements, (ii) employment agreements involving payments in
excess of $100,000 per annum or $300,000 in the aggregate, (iii) talent
agreements involving payments in excess of $250,000 per annum or $500,000 in the
aggregate, (iv) program or film syndication or license agreements requiring
remaining payments after the date hereof of more than $500,000 per annum or
$2,500,000 in the aggregate or, in the case of barter agreements, having a term
ending more than one year from the date hereof, (v) retransmission consent
agreements entered into with any direct satellite providers and each of the top
10 (ranked by number of subscribers) multiple system operators, and (vi)
agreements licensing or creating any obligations with respect to the current or
future use of the digital data stream of any digital television ("DTV") station
owned or to be constructed by the Company or any of its subsidiaries that would
be in effect following the Effective Time, to which, in each case, the Company
or any of its subsidiaries is a party, and the Company has made available to
Buyer true and complete copies of the agreements described in this Section
3.6(e). Also set forth in Section 3.6(e) of the Company Disclosure Schedule are
the most recent syndicated program and feature film inventory reports for each
of the Company Stations.
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(f) Section 3.6(f) of the Company Disclosure
Schedules sets forth a list, as of the date of this Agreement, of all material
licenses and construction permits held by the Company with respect to the
construction and operation of DTV stations in each of the markets in which the
Company and its subsidiaries operate broadcast television stations (the "DTV
Stations"). Except as set forth in Section 3.6(f) of the Company Disclosure
Schedule, to the knowledge of the Company, there are no facts or circumstances
existing as of the date of this Agreement that would prevent the construction
and operation of the DTV Stations by the relevant deadline established by the
FCC.
(g) Set forth in Section 3.6(g) of the Company
Disclosure Schedule is a list of all attributable interests, as defined at Note
2 to 47 C.F.R. Section 73.3555, of the Company and its subsidiaries in any
broadcast radio or television station, daily English language newspaper or cable
television system.
SECTION 3.7 SEC Reports. The Company and UTV have filed with
the SEC, and have heretofore made available to Buyer true and complete copies
of, all forms, reports, schedules, statements and other documents required to be
filed with the SEC by the Company and UTV since January 1, 1997 (together with
all information incorporated therein by reference, the "Company SEC Reports").
Except for UTV, no subsidiary of the Company is required to file any form,
report, schedule, statement or other document with the SEC. As of their
respective dates, the Company SEC Reports complied in all material respects with
the requirements of 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 none of the Company SEC Reports at the time they
were filed contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The financial statements (including the related notes) included
in the Company SEC Reports comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with U.S.
generally accepted accounting principles ("GAAP") (except, in the case of
unaudited statements, as permitted by forms or rules of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of the Company and UTV and their respective consolidated
subsidiaries as of the dates thereof and their respective consolidated results
of operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal and recurring year-end audit adjustments).
Except as and to the extent set forth in Section 3.7 of the Company Disclosure
Schedule, the Company and its subsidiaries do not have any liability or
obligation of any nature (whether accrued, absolute, contingent or otherwise)
other than liabilities and obligations which would not, individually or in the
aggregate, have a Company Material Adverse Effect.
SECTION 3.8 Absence of Certain Changes or Events.
(a) Since December 31, 1999, except as contemplated
by this Agreement, there has not been any change, event or circumstance which,
when taken individually
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or together with all other changes, events or circumstances, has had or would
have a Company Material Adverse Effect, including, to the extent covered by the
definition of such term set forth in Section 3.1 hereof, any adverse effect on
the Company's investment in UTV, and (b) since December 31, 1999 to the date of
this Agreement, (i) each of the Company and its subsidiaries has conducted its
businesses only in the ordinary course and in a manner consistent with past
practice and (ii) there has not been (A) any material change by the Company or
any of its subsidiaries in its material accounting policies, practices and
procedures, (B) any entry by the Company or any of its subsidiaries into any
commitment or transaction material to the Company and its subsidiaries taken as
a whole other than in the ordinary course of business consistent with past
practice, (C) any declaration, setting aside or payment of any dividend or
distribution in respect of any capital stock of the Company or any of its
subsidiaries (other than cash dividends payable by any wholly owned subsidiary
to another subsidiary or the Company, the Company's special dividend which was
paid in February 2000 and the UTV regular annual cash dividend paid in April
2000), (D) any increase in the compensation payable or to become payable to any
corporate officers or heads of divisions of the Company or any of its
subsidiaries, except in the ordinary course of business consistent with past
practice, or (E) any action, event, occurrence or transaction that would have
been prohibited by Section 5.1 hereof if this Agreement had been in effect since
December 31, 1999.
SECTION 3.9 Absence of Litigation. Except as disclosed in
Section 3.9 of the Company Disclosure Schedule, there is no claim, action,
proceeding or investigation pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any property or
asset of the Company or any of its subsidiaries, before any court, arbitrator or
Governmental Authority, in each case except as would not, individually or in the
aggregate, have a Company Material Adverse Effect. None of the Company, any of
its subsidiaries nor any property or asset of the Company or any of its
subsidiaries is subject to any order, writ, judgment, injunction, decree,
determination or award imposed by any court, arbitration or Governmental
Authority, in each case except as would not, individually or in the aggregate,
have a Company Material Adverse Effect.
SECTION 3.10 Employee Benefit Plans.
(a) Section 3.10(a) of the Company Disclosure
Schedule lists each employee benefit plan, program, arrangement and contract
(including, without limitation, any "employee benefit plan," as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") and any "multiemployer plans" within the meaning of Section 3(37) of
ERISA ("Multiemployer Plans")), maintained, contributed or required to be
contributed to by the Company, any of its subsidiaries or any trade or business
(whether or not incorporated) under common control with the Company within the
meaning of Section 414(b), (c), (m) or (o) of the Code ("ERISA Affiliate"), or
with respect to which the Company, any of its subsidiaries or any ERISA
Affiliate could incur liability under Section 4069 of ERISA (the "Company
Benefit Plans"), each, with respect to which current and former employees of the
Company and any of its subsidiaries (the "Company Employees") participate. No
Company Benefit Plan has ever been or is currently subject to or governed by the
Laws of any jurisdiction other than the United States or any State or
Commonwealth of the United States. The Company
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has provided to Buyer a true and correct copy of each of the following
documents, including any amendments thereto, with respect to each Company
Benefit Plan, other than Multiemployer Plans: (i) the most recent annual report
(Form 5500) filed with the Internal Revenue Service (the "IRS"), (ii) all plan
documents for such Company Benefit Plan, (iii) each trust agreement, insurance
contract or other funding vehicle relating to such Company Benefit Plan, (iv)
the most recent summary plan description for each Company Benefit Plan for which
a summary plan description is required, (v) the most recent actuarial report or
valuation relating to a Company Benefit Plan subject to Title IV of ERISA, if
any, and (vi) the most recent determination letter, if any, issued by the IRS
with respect to any Company Benefit Plan qualified under Section 401(a) of the
Code or voluntary employees' benefit association ("VEBA") qualified under
Section 501(c)(9) of the Code. Except as specifically provided in the foregoing
documents delivered to Buyer or except as otherwise contemplated by this
Agreement or except as disclosed in Section 3.10(a) of the Company Disclosure
Schedule, there are no amendments to any Company Benefit Plan that have been
adopted or approved nor has the Company or any of its subsidiaries undertaken to
make any such amendments or to adopt or approve any new Plan. The Company will,
promptly following the date of this Agreement, request a copy of each Company
Benefit Plan that is a multiemployer plan within the meaning of Section 3(37) of
ERISA from the trustees of such multiemployer plan and the Company shall deliver
such copy of the plan to Buyer promptly upon its receipt thereof.
(b) Each Company Benefit Plan has been administered
in accordance with its terms and the terms of any applicable collective
bargaining or other labor union contract or agreement, and in compliance with
applicable laws. The Company, its subsidiaries and each ERISA Affiliate have
performed all obligations required to be performed by them under, are not in any
respect in default under or in violation of, and have no knowledge of any
default or violation by any party to, any Company Benefit Plans, except for any
defaults or violations which would not, individually or in the aggregate, have a
Company Material Adverse Effect. With respect to the Company Benefit Plans, no
event has occurred and no condition or set of circumstances exists, in
connection with which the Company, any of its subsidiaries or any ERISA
Affiliate is subject to any liability under the terms of such Company Benefit
Plans, ERISA, the Code or any other applicable Law except as would not,
individually or in the aggregate, have a Company Material Adverse Effect. No
Company Benefit Plan (other than a Multiemployer Plan) is under audit or
investigation by any Governmental Authority nor has the Company, any subsidiary
or any ERISA Affiliate been notified of any audit or investigation. Neither the
Company nor any ERISA Affiliate has any actual or contingent liability under
Title IV of ERISA (other than the payment of premiums to the Pension Benefit
Guaranty Corporation), including, without limitation, any liability in
connection with (i) the termination or reorganization of any employee benefit
plan subject to Title IV of ERISA or (ii) the withdrawal from any Multiemployer
Plan or Multiple Employer Plan (within the meaning of Section 400l(a)(3) and
4063, respectively, of the Code), and no fact or event exists which is
reasonably likely to give rise to any such liability, in each case except as
would not, individually or in the aggregate, have a Company Material Adverse
Effect.
(c) The Company has made available to Buyer: (i)
copies of all employment agreements with executive officers of the Company and
its subsidiaries; (ii) copies
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of all severance agreements, programs and policies of the Company, any of its
subsidiaries or any ERISA Affiliate with or relating to the Company Employees;
and (iii) copies of all plans, programs, agreements and other arrangements of
the Company, any of its subsidiaries or any ERISA Affiliate with or relating to
the Company Employees which contain change in control provisions. Except as
disclosed in Section 3.10(c) of the Company Disclosure Schedule, or except as
otherwise contemplated by this Agreement neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(i) result in any payment (including, without limitation, severance,
unemployment compensation, "golden parachute" or otherwise) becoming due to any
director, officer or employee of the Company or any of its subsidiaries from the
Company or any of its affiliates under any Company Benefit Plan or otherwise,
(ii) materially increase any benefits otherwise payable under any Company
Benefit Plan, (iii) result in any acceleration of the time of payment or vesting
of any material benefits, (iv) result in a restriction on Buyer's ability to
amend, modify or terminate any plan, (v) trigger a requirement for funding or
the acceleration of funding of any material benefits, (vi) commence a period
during which a subsequent termination of employment by a Company Employee will
entitle such Company Employee to benefits in excess of what would otherwise have
been required in the absence of the transactions contemplated hereby or (vii)
result in a reportable event within the meaning of Section 4043(c) of ERISA for
which a notice requirement has not been waived. There are no outstanding options
to purchase Company Common Stock or any other equity security of the Company and
there are no other awards or grants outstanding that relate to the Company
Common Stock or other equity securities of the Company. Without limiting the
generality of the foregoing, except as set forth in Section 3.10(c) of the
Company Disclosure Schedule, no amount paid or payable by the Company to any
employee of the Company or any of its subsidiaries in connection with the
transactions contemplated hereby (either solely as a result thereof or as a
result of such transactions in conjunction with any other event) will be an
"excess parachute payment" within the meaning of Section 280G of the Code.
(d) Each Company Benefit Plan that is intended to
be qualified under Section 401(a) of the Code or Section 401(k) of the Code has
timely received a favorable determination letter from the IRS covering all of
the provisions applicable to the Plan for which determination letters are
currently available that the Company Benefit Plan is so qualified and each trust
established in connection with any Company Benefit Plan which is intended to be
exempt from Federal income taxation under Section 501(a) of the Code has
received a determination letter from the IRS that it is so exempt, and no fact
or event has occurred since the date of such determination letter or letters
from the IRS which is reasonably likely to adversely affect the qualified status
of any such Company Benefit Plan or the exempt status of any such trust. Each
Company Benefit Plan that is a VEBA meets the requirements of Section 501(c)(9)
of the Code.
(e) The Company and its subsidiaries have no
liability for life, health, medical or other welfare benefits to former
officers, directors or employees or beneficiaries or dependents thereof, except
for health continuation coverage as required by Section 4980B of the Code or
Part 6 of Title I of ERISA.
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(f) There are no pending or threatened claims
(other than claims for benefits in the ordinary course), lawsuits or
arbitrations which have been asserted or instituted, or to Company's knowledge,
no set of circumstances exists which may reasonably give rise to a claim or
lawsuit, against the Company Benefit Plans, any fiduciaries thereof with respect
to their duties to the Plans or the assets of any of the trusts under any of the
Company Benefit Plans which could reasonably be expected to result in any
liability of the Company or any of the ERISA Affiliates to the Pension Benefit
Guaranty Corporation, the Department of Treasury, the Department of Labor, any
Multiemployer Plan, any Company Benefit Plan or any participant in a Company
Benefit Plan.
(g) The Company has taken reasonable steps to
ensure that each individual classified by the Company or any subsidiary as an
independent contractor has been properly classified as such.
SECTION 3.11 Labor Matters. There is no labor dispute, strike,
work stoppage or lockout, or, to the knowledge of the Company, threat thereof,
by or with respect to any employee of the Company or any of its subsidiaries,
except where such dispute, strike, work stoppage or lockout individually or in
the aggregate would not have a Company Material Adverse Effect. None of the
Company or any of its subsidiaries has breached or otherwise failed to comply
with any provision of any collective bargaining or other labor union contract
applicable to any employees of the Company or any of its subsidiaries and there
are no grievances or complaints outstanding or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries under any such
contract except for any breaches or failures to comply that, individually or in
the aggregate, would not have a Company Material Adverse Effect.
SECTION 3.12 Environmental Matters. Except as would not,
individually or in the aggregate, have a Company Material Adverse Effect:
(a) the Company and its subsidiaries (i) are
in compliance with all, and, to the Company's knowledge, are not subject to any
asserted liability or liability (including liability with respect to current or
former subsidiaries or operations), in each case with respect to any
Environmental Laws (as defined below), (ii) hold or have applied for all
Environmental Permits (as defined below) and (iii) are in compliance with their
respective Environmental Permits;
(b) neither the Company nor any Company subsidiary
has received any written notice, demand, letter, claim or request for
information alleging that the Company or any of its subsidiaries or, to the
Company's knowledge as of the date of this Agreement, any of their predecessors
in interest, is or may be in violation of, or liable under, any Environmental
Law;
(c) (i) neither the Company nor any of its
subsidiaries has entered into or agreed to any consent decree or order or is
subject to any judgment, decree or judicial order relating to compliance with
Environmental Laws, Environmental Permits or the investigation, sampling,
monitoring, treatment, remediation, removal or cleanup of Hazardous Materials
(as
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defined below) and, to the knowledge of the Company, no investigation,
litigation or other proceeding is pending or threatened in writing with respect
thereto, and (ii) neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company as of the date of this Agreement, any of their
predecessors in interest, is an indemnitor in connection with any threatened or
asserted claim by any third-party indemnitee or is the subject of a claim for
personal injury or property damage for any liability under any Environmental Law
or relating to any Hazardous Materials; and
(d) none of the real property owned or leased by
the Company or any of its subsidiaries or, to the knowledge of the Company as of
the date of this Agreement, any of their predecessors in interest, is listed or,
to the knowledge of the Company, proposed for listing on the "National
Priorities List" under CERCLA, as updated through the date hereof, or any
similar state or foreign list of sites requiring investigation or cleanup.
For purposes of this Agreement:
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended as of the date hereof.
"Environmental Laws" means any applicable federal, state,
local or foreign statute, law, ordinance, regulation, rule, code, treaty, writ
or order and any enforceable judicial or administrative interpretation thereof,
including any judicial or administrative order, consent decree, judgment,
stipulation, injunction, permit, authorization, policy, opinion, or agency
requirement, in each case having the force and effect of law, relating to the
pollution, protection, investigation or restoration of the environment, health
and safety or natural resources, including those relating to the use, handling,
presence, transportation, treatment, storage, disposal, release, threatened
release or discharge of Hazardous Materials or noise, odor, wetlands, pollution,
contamination or any injury or threat of injury to persons or property or to the
siting, construction, operation, closure and post-closure care of waste
disposal, handling and transfer facilities.
"Environmental Permits" means any permit, approval,
identification number, license and other authorization required under any
Environmental Law.
"Hazardous Materials" means (i) any petroleum, petroleum
products, by-products or breakdown products, radioactive materials,
asbestos-containing materials or polychlorinated biphenyls and (ii) any
chemical, material or other substance defined or regulated as toxic or hazardous
or as a pollutant or contaminant or waste under any Environmental Law.
SECTION 3.13 Trademarks, Patents and Copyrights.
(a) Except as would not have a Company Material
Adverse Effect, (i) the Company and its subsidiaries own, or possess necessary
or required licenses, to be used in each case in the manner currently used, or
other necessary or required rights to use, all patents, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights, domain
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names, service marks, service xxxx rights, trade secrets, applications to
register, and registrations for, the foregoing trademarks, know-how and other
proprietary rights and information (the "Intellectual Property Rights") used in
connection with the business of the Company and its subsidiaries as currently
conducted (the "Company Intellectual Property Rights"), and (ii) neither the
Company nor any of its subsidiaries has received any written charge, complaint,
claim, demand or notice challenging the validity of any of the Company
Intellectual Property Rights.
(b) To the Company's knowledge, none of the Company
or any of its subsidiaries has interfered with, infringed upon, misappropriated
or otherwise come into conflict with any Intellectual Property Rights or other
proprietary information of any other Person, except for any such interference,
infringement, misappropriation or other conflict that, individually or in the
aggregate, would not have a Company Material Adverse Effect. None of the Company
or any of its subsidiaries has received any written charge, complaint, claim,
demand or notice alleging any such interference, infringement, misappropriation
or other conflict (including any claim that the Company or any of its
subsidiaries must license or refrain from using any Company Intellectual
Property Rights or other proprietary information of any other person) that has
not been settled or otherwise fully resolved, except for any such interference,
infringement, misappropriation or other conflict that, individually or in the
aggregate, would not have a Company Material Adverse Effect. To the Company's
knowledge, no other person has interfered with, infringed upon, misappropriated
or otherwise come into conflict with any Company Intellectual Property Rights,
except for any such interference, infringement, misappropriation or other
conflict that, individually or in the aggregate, would not have a Company
Material Adverse Effect.
SECTION 3.14 Taxes.
(a) For purposes of this Agreement, (i) "Tax" or
"Taxes" means any and all taxes, fees, levies, duties, tariffs, imposts, and
other charges of any kind (together with any and all interest, penalties,
additions to tax and additional amounts imposed with respect thereto) imposed by
any governmental or taxing authority including, without limitation: taxes or
other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, payroll,
employment, social security, workers' compensation, unemployment compensation,
or net worth; taxes or other charges in the nature of excise, withholding, ad
valorem, stamp, transfer, value added, or gains taxes; license, registration and
documentation fees; and customs' duties, tariffs, and similar charges; and
liability for the payment of any of the foregoing as a result of (x) being a
member of an affiliated, consolidated, combined or unitary group, (y) being
party to any tax sharing agreement and (z) any express or implied obligation to
indemnify any other person with respect to the payment of any of the foregoing;
and (ii) "Tax Returns" means returns, reports and information statements,
including any schedule or attachment thereto, with respect to Taxes required to
be filed with the IRS or any other governmental or taxing authority or agency,
domestic or foreign, including consolidated, combined and unitary tax returns.
(b) Except as set forth in Section 3.14(b) of the
Company Disclosure Schedule and except as would not, individually or in the
aggregate, have a Company Material
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Adverse Effect (unless stated otherwise below): (i) each of the Company and each
of its subsidiaries has timely filed all U.S. Federal, state, local and non-U.S.
Tax Returns required to be filed by it, and all such Tax Returns are true,
correct and complete, and has paid and discharged all Taxes shown as due thereon
and has paid all of such other Taxes as are due, other than such payments as are
being contested in good faith by appropriate proceedings; (ii) neither the IRS
nor any other taxing authority or agency, domestic or foreign, is now asserting
in writing or, to the knowledge of the Company or its subsidiaries after due
inquiry, threatening in writing to assert against the Company or any of its
subsidiaries any deficiency or claim with respect to Taxes of the Company or any
of its subsidiaries; (iii) no waiver of any statute of limitations with respect
to, or any extension of a period for the assessment of, any Tax has been granted
by the Company or any of its subsidiaries without regard to whether such waiver
or extension could have a Company Material Adverse Effect in connection with
Federal, New York State and California Taxes; (iv) the accruals and reserves for
Taxes reflected in the Company's audited consolidated balance sheet as of
December 31, 1999 (and the notes thereto) (the "1999 Balance Sheet") and the
most recent quarterly financial statements (and the notes thereto) are adequate
to cover all Taxes accruable through the date thereof in accordance with
generally accepted accounting principles; (v) no election under Section 341(f)
of the Code has been made by the Company or any of its subsidiaries; (vi) the
Company and each of its subsidiaries has withheld or collected and paid over to
the appropriate governmental authorities or is properly holding for such payment
all Taxes required by law to be withheld or collected; (vii) there are no liens
for Taxes upon the assets of the Company or any of its subsidiaries, other than
liens for Taxes that are being contested in good faith by appropriate
proceedings or are not yet due, (viii) neither the Company nor any of its
subsidiaries have constituted either a "distributing corporation" or a
"controlled corporation" (within the meaning of Section 355(a)(1)(A) of the
Code) in a distribution of stock qualifying for tax-free treatment under Section
355 of the Code in the two years prior to the date of this Agreement; (ix) the
Federal income Tax Returns for the Company and each of its subsidiaries have
been examined and settled with the IRS (or the applicable statutes of limitation
for the assessment of Federal income Taxes for such periods have expired) for
all years through 1995; (x) the Company and its subsidiaries have given or
otherwise made available to Buyer correct and complete copies of (A) all Federal
income Tax Returns of the Company and UTV filed for periods ending after
December 31, 1993 and (B) income Tax returns filed on behalf of KCOP Television,
Inc. and affiliates for California and WWOR-TV, Inc. for New Jersey and New York
State for tax years 1997 and 1998; (xi) neither the Company nor any of its
subsidiaries are a party to any agreement relating to the sharing, allocation,
or indemnification of Taxes or any similar contract or arrangement without
regard to whether any such agreement could have a Company Material Adverse
Effect other than agreements between members of the affiliated group of which
the Company is the common parent under Section 1504 of the Code; (xii) neither
the Company nor any of its subsidiaries have agreed, or is required to make, any
adjustment under Section 481 of the Code; (xiii) the Company and each of its
subsidiaries were not, at any time during the period specified in Section
897(c)(1)(A)(ii) of the Code, a United States real property holding corporation
within the meaning of Section 897(c)(2) of the Code without regard to whether
such status could give rise to a Company Material Adverse Effect; and (xiv)
there have been no redemptions by the Company or any of its subsidiaries since
March 31, 1998 without regard to whether such redemptions could give rise to a
Company Material Adverse Effect.
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SECTION 3.15 Tax Matters. None of the Company or any of its
affiliates has taken or agreed to take any action, has failed to take any action
or knows of any fact, agreement, plan or other circumstance that is reasonably
likely to prevent the Merger from qualifying as a reorganization within the
meaning of Section 368(a) of the Code; provided, however, that the foregoing
representation is made only as of the date hereof in the case of the Reverse
Merger. The preceding sentence excludes all transactions contemplated by this
Agreement.
SECTION 3.16 Title to Properties; Assets. Neither the Company
nor any of its subsidiaries owns, or has any material interest in, (i) any
material assets in Australia or (ii) any television, media or other broadcasting
assets in Australia. Except in each case as, individually or in the aggregate,
(i) as of the date of this Agreement, would not materially adversely affect the
operation of the broadcasting facilities of the Company's subsidiaries' New York
or Los Angeles television stations and (ii) would not have a Company Material
Adverse Effect:
(a) Each of the Company and its subsidiaries has
good, marketable fee simple title to its owned properties and assets or good and
valid leasehold interests in all of its leasehold properties and assets together
with full legal and practical access to all of its properties except for such as
are no longer used or useful in the conduct of its businesses or as have been
disposed of in the ordinary course of business. All such properties and assets,
other than properties and assets in which the Company or any of its subsidiaries
has a leasehold interest, are free and clear of all Liens.
(b) Each of the Company and its subsidiaries has
complied with the terms of all leases to which it is a party and under which it
is in occupancy, and all deeds in respect of property which it owns, and all
such leases and deeds are in full force and effect. Section 3.16(b) of the
Company Disclosure Schedule sets forth a description of (i) each lease to which
it is a party relating to its television broadcasting, (ii) all other leases to
which it is a party in which the annual rental payments exceed $250,000 or which
contemplate aggregate payments in excess of $500,000 and (iii) each deed under
which it is the owner; and a copy of each such lease or deed, as applicable, has
previously been provided to Buyer. The Company and its subsidiaries enjoy
peaceful and undisturbed possession under all such leases. There are no facts
that would prevent Buyer or any of its subsidiaries from using or occupying all
of the leased and owned property referred to in clauses (i), (ii) and (iii)
above, after the Effective Time, in the same manner such leased and owned
property is used or occupied by the Company or its subsidiaries immediately
prior to the Effective Time.
(c) The assets of the Company and each of its
subsidiaries constitute all of the properties, assets and rights forming a part
of, used, held or intended to be used in, and all such properties, assets and
rights as are necessary in, the conduct of the business as it is now being
conducted and contemplated to be conducted by the Company and its subsidiaries.
At all times since December 31, 1999, each of the Company and its subsidiaries
has caused such assets to be maintained in accordance with good business
practice, and all of such assets are in good operating condition and repair and
are suitable for the purposes for which they are used and intended.
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SECTION 3.17 Year 2000 Compliance.
(a) The Company has adopted a plan that it believes
will cause Company Systems (as defined below) to be Company Year 2000 Compliant
(as defined below) (such plan, as it may be amended, modified or supplemented
from time to time being, the "Company Year 2000 Plan") in all material respects.
The Company has taken, and between the date of this Agreement and the Effective
Time will continue to take, all reasonable steps to implement the Company Year
2000 Plan with respect to the Company Systems.
(b) For purposes of this Section 3.17, (i) "Company
Systems" shall mean all computer, hardware, software, systems, and equipment
(including embedded microcontrollers in non-computer equipment) embedded within
or required to operate the current products of the Company and its subsidiaries,
and/or material to or necessary for the Company and its subsidiaries to carry on
their respective businesses as currently conducted; and (ii) "Company Year 2000
Compliant" means that Company Systems will (A) manage, accept, process, store
and output data involving dates reasonably expected to be encountered in the
foreseeable future and (B) accurately process date data from, into and between
the 20th and 21st centuries and each date during the year 2000.
SECTION 3.18 Opinion of Financial Advisors. The Special
Committee has received the written opinion of Xxxxxxxxxxx Xxxxxxx & Co. (the
"Company Financial Advisor") on or prior to the date of this Agreement, to the
effect that, as of the date of such opinion, the Merger Consideration is fair to
the stockholders of the Company (other than Xxxxx-Craft) from a financial point
of view, and the Company will deliver a copy of such opinion to Buyer promptly
after the date of this Agreement.
SECTION 3.19 Vote Required. At the Stockholders' Meeting, the
affirmative vote of the holders of a majority of the voting power of the
outstanding Common Stock voting together as a single class are the only votes of
the holders of any class or series of capital stock of the Company necessary to
adopt this Agreement.
SECTION 3.20 Brokers. The Company Financial Advisor has
entered into a letter of engagement with the Special Committee in connection
with the Merger, a copy of which has previously been provided to Buyer. Except
as disclosed in Section 3.20 of the Company Disclosure Schedule, no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the Merger based upon arrangements made by or
on behalf of the Company other than as provided in a letter of engagement
previously provided to Buyer.
SECTION 3.21 State Takeover Statutes. The Board of Directors
of the Company has taken all action necessary to render inapplicable to the
Merger and the Voting Agreement and the transactions contemplated hereby and
thereby the provisions of Section 203 of Delaware Law. To the knowledge of the
Company, no other state takeover statute or similar statute or regulation
applies or purports to apply to the Merger.
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SECTION 3.22 UTV.
(a) As of the date of this Agreement, the authorized capital stock of
UTV consists of 25,000,000 shares of UTV Common Stock and 1,000,000 shares of
Preferred Stock, par value $1.00 per share ("UTV Preferred Stock"). At the close
of business on June 30, 2000, (i) 9,486,173 shares of UTV Common Stock were
issued and outstanding and no shares of UTV Preferred Stock were issued and
outstanding; (ii) no shares were held by UTV in its treasury; and (iii) 234,570
shares of UTV Common Stock were reserved for issuance upon the exercise of
outstanding options to purchase such shares. Since January 31, 2000, no shares
of capital stock of UTV have been issued except pursuant to exercise of options
of UTV outstanding as of September 30, 1999 in accordance with the terms
thereof. As of the date of this Agreement, except as set forth above, no shares
of capital stock or other voting securities of UTV are issued, reserved for
issuance or outstanding. As of the date of this Agreement, except as set forth
above or in Section 3.22(a) of the Company Disclosure Schedule, there are no
securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which UTV or any of its subsidiaries
is a party or by which any of them is bound obligating UTV or any of its
subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or other voting securities of UTV or of
any of its subsidiaries or obligating UTV or any of its subsidiaries to issue,
grant, extend or enter into any such security, option, warrant, call, right,
commitment, agreement, arrangement or undertaking. All outstanding shares of
capital stock of UTV are duly authorized, validly issued, fully paid and
nonassessable and not subject to preemptive rights. There are no bonds,
debentures, notes or other indebtedness of UTV or any of its subsidiaries, and
no securities or other instruments or obligations of UTV or any of its
subsidiaries the value of which is in any way based upon or derived from any
capital or voting stock of UTV having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of UTV may vote. Except as set forth in Section 3.22(a) of the
Company Disclosure Schedule, to the knowledge of the Company, as of the date of
this Agreement, there are no outstanding contractual obligations of UTV or any
of its subsidiaries (i) to repurchase, redeem or otherwise acquire any shares of
capital stock of UTV or (ii) to vote or to dispose of any shares of the capital
stock of any of UTV's subsidiaries.
(b) As of the date of this Agreement, the Company, directly or
indirectly, owns 5,509,027 shares of UTV Common Stock.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Except as disclosed in its Annual Report on Form 20-F filed with the
SEC on October 27, 1999 and the reports on Form 6-K filed with the SEC on
November 3, 1999, February 15, 2000 and May 12, 2000, or in a separate
disclosure schedule which has been delivered by Buyer to the Company prior to
the execution of this Agreement (the "Buyer Disclosure Schedule") (each section
of which qualifies the correspondingly numbered
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representation and warranty or covenant to the extent specified therein and such
other representations and warranties or covenants to the extent a matter in such
section is disclosed in such a way as to make its relevance to the information
called for by such other representation and warranty or covenant readily
apparent), Buyer hereby represents and warrants to the Company that:
SECTION 4.1 Organization and Qualification; Subsidiaries. Each of Buyer
and its subsidiaries is a corporation or entity duly incorporated or formed,
validly existing and in good standing, under the laws of its jurisdiction of
incorporation or formation, and has the requisite corporate power and authority
and all necessary governmental approvals to own, lease and operate its
properties and to carry on its business as it is now being conducted, except
where the failure to have such power, authority and governmental approvals would
not, individually or in the aggregate, have a Buyer Material Adverse Effect (as
defined below). Each of Buyer and its subsidiaries is duly qualified or licensed
as a foreign corporation to do business, and is in good standing, in each
jurisdiction where the character of the properties owned, leased or operated by
it or the nature of its business makes such qualification or licensing
necessary, except for such failures to be so qualified or licensed and in good
standing that would not, individually or in the aggregate, have a Buyer Material
Adverse Effect. The term "Buyer Material Adverse Effect" means any change,
effect or circumstance that is or is reasonably likely to be materially adverse
to the business, operations, results of operations or financial condition of
Buyer and its subsidiaries taken as a whole, other than any change, effect or
circumstance relating to or resulting from (i) general changes in the industry
in which Buyer conducts business, (ii) changes in general economic conditions or
securities markets in general or (iii) this Agreement or the transactions
contemplated hereby or the announcement thereof
SECTION 4.2 Charter Documents. Buyer has made available to the Company
a complete and correct copy of the constitution, as amended to date, of Buyer.
The constitution (or equivalent organizational documents) of Buyer and its
subsidiaries are in full force and effect. Except as would not have a Buyer
Material Adverse Effect, none of Buyer or its subsidiaries is in violation of
any provision of its corporate charter documents (or equivalent organizational
documents).
SECTION 4.3 Capitalization. (a) No shares of capital stock of Buyer are
owned by any subsidiary of Buyer. All outstanding shares of capital stock of
Buyer are, when issued in accordance with the terms thereof, duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. There are no bonds, debentures, notes or other indebtedness of Buyer or
any of its subsidiaries, and no securities or other instruments or obligations
of Buyer or any of its subsidiaries the value of which is in any way based upon
or derived from any capital or voting stock of Buyer, having the right to vote
(or convertible into, or exchangeable for, securities having the right to vote)
on any matters on which stockholders of Buyer may vote. Except as set forth
above, there are no contracts of any kind to which Buyer or any of its
subsidiaries is a party or by which Buyer or any of its subsidiaries is bound
obligating Buyer or any of its subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock of, or other
equity or voting interests in, or securities convertible into, or exchangeable
or exercisable for, shares of capital stock of, or other equity or voting
interests in,
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Buyer or any of its subsidiaries or obligating Buyer or any of its subsidiaries
to issue, grant, extend or enter into any such security, option, warrant, call,
right or contract. There are not any outstanding contractual obligations of
Buyer or any of its subsidiaries to (i) repurchase, redeem or otherwise acquire
any shares of capital stock of, or other equity or voting interests in, Buyer or
any of its subsidiaries or (ii) vote or dispose of any shares of the capital
stock of, or other equity or voting interests in, any of its subsidiaries. To
the knowledge of Buyer as of the date of this Agreement, there are no
irrevocable proxies and no voting agreements with respect to any shares of the
capital stock or other voting securities of Buyer or any of its subsidiaries.
(b) All shares of Buyer Preferred Stock underlying the Buyer Shares to
be issued in the Merger, when deposited with the Custodian in accordance with
Section 1.5(a) hereof and the terms of the Deposit Agreement, will be duly
authorized, validly issued, fully paid and nonassessable and free and clear of
all Liens. Upon the due issuance by the Depositary of Buyer Shares evidencing
Preferred Stock against the deposit of Buyer Preferred Stock in accordance with
the terms of the Deposit Agreement, the Buyer Shares to be issued in the Merger
will be duly authorized, validly issued, fully paid and non-assessable and free
and clear of all Liens, and the persons in whose names the Buyer Shares are
registered will be entitled to the rights of registered holders of Buyer Shares
specified in the Deposit Agreement, and the Buyer Shares will conform in all
material respects to the description of the Buyer Shares set forth on the proxy
statement dated July 10, 1997 of Heritage Media Corporation, which proxy
statement was incorporated by reference into the Registration Statement on Form
F-4 of Buyer. The Deposit Agreement has been duly and validly authorized by all
necessary corporate action of Buyer, has been duly and validly executed and
delivered by Buyer, and, constitutes the legal, valid and binding obligation of
Buyer, enforceable against Buyer in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to creditors' rights generally and by equitable principles
to which the remedies of specific performance and injunctive and similar forms
of relief are subject.
SECTION 4.4 Authority Relative to Agreement. Buyer and its subsidiaries
have all necessary power and authority to execute and deliver this Agreement, to
perform their obligations hereunder and to consummate the Merger and the other
transactions contemplated hereby. The execution and delivery of this Agreement
by Buyer and the consummation by Buyer and certain of its subsidiaries of the
Merger and the other transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of Buyer or any of its subsidiaries are necessary to authorize the
execution and delivery of this Agreement or to consummate the Merger and the
other transactions contemplated hereby (other than any necessary stockholder
approval of Buyer (as provided in Section 4.5(b) hereof) or of any publicly
owned subsidiaries of Buyer in connection with Section 6.18 hereof, which shall
be obtained in accordance with Section 6.2(b) hereof). This Agreement has been
duly and validly executed and delivered by Buyer and, assuming the due
authorization, execution and delivery by the Company, this Agreement constitutes
a legal, valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms. The Newco-FTH Agreement (as hereinafter defined),
when executed and delivered by the parties thereto, will have been duly and
validly executed and delivered by such parties and will
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constitute a legal, valid and binding obligation of such parties, enforceable
against such parties in accordance with its terms.
SECTION 4.5 No Conflict; Required Filings and Consents.
(a) The execution and delivery of this Agreement by Buyer does not, and
the performance of this Agreement and the consummation of the Merger and the
other transactions contemplated hereby by Buyer and its subsidiaries will not,
(i) conflict with or violate the corporate charter documents (or equivalent
organizational documents) of (A) Buyer or (B) any of its subsidiaries, (ii)
assuming the consents, approvals and authorizations specified in Section 4.5(b)
have been received and the waiting periods referred to therein have expired, and
any condition precedent to such consent, approval, authorization, or waiver has
been satisfied, conflict with or violate any Law or the Listing Rules (the "ASX
Listing Rules") of the Australian Stock Exchange Limited ("ASX") applicable to
Buyer or any of its subsidiaries or by which any property or asset of Buyer or
any of its subsidiaries is bound or affected or (iii) result in any breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any right of termination,
amendment, acceleration or cancellation of, or result in the creation of a lien
or other encumbrance on any property or asset of Buyer or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture or credit
agreement, or, to Buyer's knowledge as of the date of this Agreement, any other,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which Buyer or any of its subsidiaries is a party or by which
Buyer or any of its subsidiaries or any property or asset of Buyer or any of its
subsidiaries is bound or affected, except, in the case of clauses (i)(B), (ii)
and (iii), for any such conflicts, violations, breaches, defaults or other
occurrences of the type referred to above which would not have a Buyer Material
Adverse Effect and would not prevent or materially delay the consummation of the
Merger; provided, however, that for purposes of this Section 4.5(a), the
definition of Buyer Material Adverse Effect shall be read so as not to include
clause (iii) of the definition thereof.
(b) The execution and delivery of this Agreement by Buyer do not, and
the performance of this Agreement by Buyer and the consummation of the Merger
and the other transactions contemplated hereby by Buyer and its subsidiaries
will not, require any consent, approval, authorization, waiver or permit of, or
filing with or notification to, any Governmental Authority, except for
applicable requirements of the Exchange Act, the Securities Act, Blue Sky Laws,
the HSR Act, such filings and approvals as may be required under the
Communications Act, filing and recordation of appropriate merger documents as
required by Delaware Law and the rules of the NYSE filings and recordings of
appropriate documents with, and announcements to, the Australian Securities and
Investment Commission and the ASX, and a waiver from the ASX (or, if not
obtained, the approval of Buyer's shareholders at a special meeting of Buyer
shareholders (the "Buyer Shareholder Approval") with respect to the Listing Rule
10.1 of the ASX Listing Rules (the "ASX Waiver") and except where failure to
obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not have a Buyer Material Adverse Effect and
would not prevent or materially delay the consummation of the Merger; provided,
however, that for purposes of this Section 4.5(b), the definition of Buyer
Material Adverse Effect shall be read so as not to include clause (iii) of the
definition thereof.
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SECTION 4.6 Permits and Licenses. Buyer or its subsidiaries have (i)
operated the television stations and associated facilities for which Buyer or
any of its subsidiaries holds licenses from the FCC, in each case which are
owned or operated by Buyer or its subsidiaries (the "Buyer Licensed
Facilities"), in compliance with the terms of the permits issued by the FCC to
Buyer or its subsidiaries ("Buyer FCC Licenses"), and in compliance with the
Communications Act, and (ii) timely filed or made all applications, reports and
other disclosures required by the FCC to be filed or made with respect to the
Buyer Licensed Facilities and have timely paid all FCC regulatory fees with
respect thereto, in each case except as would not have a Buyer Material Adverse
Effect. As of the date hereof, to Buyer's knowledge, there is not pending or
threatened before the FCC any material investigation, proceeding, notice of
violation, order of forfeiture or complaint against Buyer or any of its
subsidiaries, relating to any of the Buyer Licensed Facilities or FCC regulated
services conducted by Buyer or its subsidiaries that, if adversely decided,
would have a Buyer Material Adverse Effect.
SECTION 4.7 Buyer SEC/ASX Reports. Buyer has filed with the SEC and ASX
all forms, reports, schedules, statements and other documents required to be
filed with the SEC and ASX by Buyer since January 1, 1997 (together with all
information incorporated therein by reference, the "Buyer Reports"). As of their
respective dates, the Buyer Reports complied in all material respects with the
requirements of the Securities Act or the Exchange Act or the ASX Listing Rules,
as the case may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Buyer Reports, and none of the Buyer Reports at
the time they were filed contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements (including the related
notes) of Buyer included in the Buyer Reports comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC or the ASX with respect thereto, have been prepared in
accordance with Australian generally accepted accounting principles with
appropriate reconciliation to GAAP as required by SEC rules (except, in the case
of unaudited statements, as permitted by forms or rules of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly present in all material respects the consolidated
financial position of Buyer and its consolidated subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal and
recurring year-end audit adjustments). Buyer and its subsidiaries do not have
any liability or obligation of any nature (whether accrued, absolute, contingent
or otherwise) other than liabilities and obligations which, individually or in
the aggregate, would not have a Buyer Material Adverse Effect.
SECTION 4.8 Absence of Certain Changes or Events.
(a) Since December 31, 1999, except as contemplated by this Agreement,
there has not been any change, event or circumstance which, when taken
individually or together with all other changes, events or circumstances, has
had or would have a Buyer Material Adverse Effect, and (b) since December 31,
1999 to the date of this Agreement, each of
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Buyer and its subsidiaries has conducted its businesses only in the ordinary
course and in a manner consistent with past practice.
SECTION 4.9 Tax Matters. None of Buyer or any of its affiliates has
taken or agreed to take any action, has failed to take any action or knows of
any fact, agreement, plan or other circumstance that is reasonably likely to
prevent the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code; provided, however, that the foregoing representation
is made only as of the date hereof in the case of the Reverse Merger. The
preceding sentence excludes all transactions contemplated by this Agreement.
SECTION 4.10 Brokers. No broker, finder or investment banker (other
than Xxxxxxxxx, Xxxxxx & Xxxxxxxx, Inc.) is entitled to any brokerage, finder's
or other fee or commission in connection with the Merger based upon arrangements
made by or on behalf of Buyer.
SECTION 4.11 Interim Operations of Acquisition Sub. In the case of the
Reverse Merger, Acquisition Sub will be a newly formed indirect subsidiary of
Buyer or a newly formed subsidiary of Xxxxx-Craft (unless the Xxxxx-Craft Merger
has not occurred prior to the Effective Time), will be a Delaware corporation
and, when formed, will have been formed solely for the purpose of engaging in
the transactions contemplated hereby, the Xxxxx-Craft Merger and the UTV Merger,
as applicable, and will have engaged in no business other than in connection
with such transactions and the transactions contemplated by this Agreement. In
the case of the Forward Merger, Acquisition Sub will be News Publishing
Australia Limited, a Delaware corporation, of which Buyer directly owns and will
continue to own at least 80% of the total combined voting power of all classes
of stock entitled to vote and 80% of the total number of shares of each other
class of stock of such corporation.
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 5.1 Conduct of Business by the Company Pending the Merger. The
Company covenants and agrees that, between the date of this Agreement and the
Effective Time, except (x) as expressly contemplated by this Agreement
(including, without limitation, as set forth in Section 5.1 of the Company
Disclosure Schedule or as set forth as an exception or qualification to
paragraphs (a) through (n) of this Section 5.1), (y) as expressly authorized
pursuant to the Xxxxx-Craft Merger Agreement, and (z) as Buyer shall otherwise
agree in advance in writing, the business of the Company and its subsidiaries
shall be conducted only in, and the Company shall not take any action except in,
the ordinary course of business and in a manner consistent with past practice;
and the Company and its subsidiaries shall use their reasonable best efforts to
preserve substantially intact the Company's business organization, to keep
available the services of the current officers, employees and consultants of the
Company and its subsidiaries (provided that the foregoing covenant to use
reasonable best efforts shall not require or permit the Company to offer
retention bonuses or other non-ordinary course compensation to such
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individuals without Buyer's written consent) and to preserve the current
relationships of the Company and its subsidiaries with customers, distributors,
dealers, suppliers and other persons with which the Company and its subsidiaries
have significant business relations. By way of amplification and not limitation,
between the date of this Agreement and the Effective Time, the Company will not
do, and, subject to the fiduciary duties of the Company to UTV and the members
of the Board of Directors of UTV, shall not permit any of its subsidiaries to
do, directly or indirectly, any of the following except in compliance with the
exceptions listed above:
(a) amend or otherwise change the Restated Certificate of Incorporation
or By-laws of the Company or, in any material respect, that of any of its
subsidiaries;
(b) issue, sell, pledge, dispose of, grant, encumber, or authorize the
issuance, sale, pledge, disposition, grant or encumbrance of, (i) any shares of
its or its subsidiaries' capital stock, or any options, warrants, convertible
securities or other rights of any kind to acquire any shares of its or its
subsidiaries' capital stock or any other ownership interest (including any
phantom interest), of the Company or any of its subsidiaries, (ii) any assets
except for sales of marketable securities and investment assets for their fair
value and except for sales of other assets in the ordinary course of business
consistent with past practice not in excess of $500,000 in the aggregate
(including, for purposes of calculating such $500,000 aggregate limitation, any
action taken by or on behalf of Xxxxx-Craft, the Company or UTV pursuant to
Section 5.1(b) of the Xxxxx-Craft Merger Agreement or by or on behalf of UTV
pursuant to Section 5.1(b) of the UTV Merger Agreement);
(c) declare, set aside, make or pay any dividend or other distribution,
payable in cash, stock, property or otherwise, with respect to the Company's or
any of its subsidiaries' capital stock (other than cash dividends payable by any
wholly owned subsidiary (or by UTV if permitted under the UTV Merger Agreement))
with respect to ordinary course dividends, including dividends designated as
special dividends, in a manner consistent with past practice);
(d) in the case of the Company, reclassify, combine, split, subdivide
or redeem, purchase or otherwise acquire, directly or indirectly, any of its
capital stock;
(e) (i) except in connection with acquisitions or investments which are
made in the ordinary cause of business consistent with past practice not in
excess of $10,000,000 individually or $25,000,000 in the aggregate (including,
for purposes of calculating such $25,000,000 aggregate limitation, any action
taken by or on behalf of Xxxxx-Craft, the Company or UTV pursuant to Section
5.1(e) of the Xxxxx-Craft Merger Agreement or by or on behalf of UTV pursuant to
Section 5.1(e) of the UTV Merger Agreement) and which the Buyer has not
reasonably objected to as presenting any meaningful risk of resulting in the FCC
Consent (with no Adverse Condition) not being obtained or delayed for more than
an immaterial period of time and except with respect to the reinvestment of
marketable securities or investment assets, and the investment of cash generated
by the operations of the Company and its subsidiaries in marketable securities,
in each case in the ordinary course of business consistent with past practice
(A)
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acquire (including by merger, consolidation, or acquisition of stock or assets),
or otherwise make any investment in, any corporation, partnership, limited
liability company, other business organization or any division thereof, or any
material amount of assets, or acquire any interest in any broadcast radio or
television station, daily English-language newspaper or cable television system,
as defined at Note 2 to 47 C.F.R. Section 73.3555; or (B) incur any indebtedness
for borrowed money, issue any debt securities, assume, guarantee or endorse, or
otherwise as an accommodation become responsible for, the obligations of any
person, agree to amend or otherwise modify in any manner any agreement or
instrument pursuant to which the Company has incurred indebtedness, or make any
loans or advances, except in the ordinary course of business and consistent with
past practice, except the refinancing of existing indebtedness, borrowings under
commercial paper programs in the ordinary course of business or borrowings under
existing bank lines of credit in the ordinary course of business, (ii) enter
into any material contract, agreement or transaction, other than (X) in the
ordinary course of business, and (Y) which would not be reasonably likely to
prevent or materially delay the consummation of the Merger, (iii) authorize any
capital expenditures which are, in the aggregate, in excess of 110% of the
amounts currently budgeted for fiscal year 2000, and with respect to fiscal year
2001, in excess of 120% of the amount budgeted for fiscal year 2000, in each
case for the Company and its subsidiaries taken as a whole; provided that any
amounts budgeted in respect of DTV may be reallocated between the two years or
(iv) enter into or amend any contract, agreement, commitment or arrangement
which would require the Company to take any action prohibited by this subsection
(e);
(f) except as set forth in Section 6.12 hereof or as required by Law or
by the terms of any collective bargaining agreement or other labor union
contract or other agreement currently in effect between the Company or any
subsidiary of the Company and any executive officer or employee thereof,
(provided, however, that except as contemplated hereby no actions shall be taken
with respect to the acceleration of vesting or cashing-out of Company Options in
connection with the execution and delivery of this Agreement or the consummation
of any transactions contemplated hereby or otherwise), increase the compensation
payable or to become payable to its executive officers or employees, or grant
any severance or termination pay to, or enter into any employment or severance
agreement with, any director or executive officer or employee of it or any of
its subsidiaries, or establish, adopt, enter into or amend in any respect or
take action to accelerate any rights or benefits under any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any director, executive officer or employee,
provided that this clause shall not prevent the Company or any of its
subsidiaries from (i) making severance payments to the extent contractually
obligated under contractual arrangements currently existing at the Company or
such subsidiary and previously disclosed to Buyer, (ii) increasing compensation
in accordance with the provisions of agreements with executive officers or
employees in accordance with the terms of such agreements in effect on the date
of this Agreement, provided that if any such agreement does not specify the
amount of such increase, no such increase shall (A) fail to be in the ordinary
course of business and in accordance with the past practices of the Company and
(B) exceed 10 percent of the compensation of such executive officer or employee
in effect on the date of this Agreement, or (iii) increasing compensation for
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employees who are not parties to agreements relating to compensation, provided
that each such increase (A) is in the ordinary course of business, and in
accordance with the past practices of the Company and (B) does not exceed, with
respect to any employee, 10 percent of the compensation of such employee on the
date of this Agreement;
(g) change (except as required by the SEC or changes in GAAP which
become effective after the date of this Agreement) any accounting methods,
policies, practices or procedures;
(h) enter into any contract, agreement, lease, license, permit,
franchise or other instrument or obligation which if in existence and known to
the Company prior to the date of this Agreement would have resulted in a breach
of Section 3.4 hereof;
(i) settle or compromise any material arbitration, action, suit,
investigation or proceeding (other than those related to Tax matters, which
shall be governed exclusively by the provisions of Section 5.3 hereof), other
than in the ordinary course of business consistent with past practice not in
excess of $2,500,000 in the aggregate (including for purposes of calculating
such $2,500,000 aggregate limitation, any action taken by or on behalf of Xxxxx-
Craft (other than in respect of Excluded Matters) (as defined in the Xxxxx-Craft
Merger Agreement), UTV or the Company pursuant to Section 5.1(i) of the
Xxxxx-Craft Merger Agreement or by or on behalf of UTV pursuant to Section
5.1(i) of the UTV Merger Agreement); provided, however that the Company shall
not in any event settle any arbitration action, suit, investigation or
proceeding arising out of this Agreement, the Voting Agreement or the matters
contemplated hereby or thereby without Buyer's consent (other than those related
to Tax matters, which shall be governed exclusively by the provisions of Section
5.3 hereof);
(j) settle or discharge any material liability of a type not covered in
subsection (i) above, other than in accordance with its terms or on terms no
less favorable to the Company and its subsidiaries;
(k) amend or waive any right under or enter into any agreement with any
affiliate of the Company (other than its wholly owned subsidiaries or UTV in the
ordinary course of business consistent with past practice) or with any
stockholder of the Company or any of its subsidiaries or any affiliate of any
such stockholder;
(l) enter into, amend in any material respect or terminate any network
affiliation agreement, retransmission consent agreement or, except in the case
of agreements terminable without cost or penalty by the Company prior to the
Closing or by Buyer within 30 days thereafter, any agreement licensing or
creating any obligations with respect to the use of the digital data stream of
any DTV Station;
(m) enter into, amend or terminate any film or program license or
syndication agreement (each a "Program Agreement") involving aggregate payments
of more than (i) $2,500,000 in the aggregate on a per Program Agreement, per
station basis (including, for purposes of calculating such $2,500,000 aggregate
limitation, any action taken by or on
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behalf of Xxxxx-Craft, the Company or UTV pursuant to Section 5.1(m) of the
Xxxxx-Craft Merger Agreement or by or on behalf of UTV pursuant to Section
5.1(m) of the UTV Merger Agreement), (ii) $5,000,000 in the aggregate
(including, for purposes of calculating such $500,000 aggregate limitation, any
action taken by or on behalf of Xxxxx-Craft, the Company or UTV pursuant to
Section 5.1(m) of the Xxxxx-Craft Merger Agreement or by or on behalf of UTV
pursuant to Section 5.1(m) of the UTV Merger Agreement) on a per station basis,
(iii) $500,000 per annum on a per Program Agreement, per station basis and (iv)
barter agreements that expire after December 31, 2001; or
(n) enter into or publicly announce an intention to enter into any
contract, agreement, commitment or arrangement to, do any of the foregoing
actions set forth in this Section 5.1.
SECTION 5.2 FCC Matters. During the period from the date of this
Agreement to the Effective Time, the Company shall, and shall cause each of its
subsidiaries: (i) to use its reasonable best efforts to comply with all material
requirements of the FCC applicable to the operation of the Company Stations;
(ii) promptly to deliver to Buyer copies of any material reports, applications
or responses filed with the FCC; (iii) promptly to notify Buyer of any inquiry,
investigation or proceeding initiated by the FCC; (iv) not to make or revoke any
material election with the FCC; and (v) use its reasonable best efforts to take
all actions necessary to complete construction and initiate operation of the DTV
Stations by the relevant deadline established by the FCC, as it may be extended,
and to consult with Buyer about, and keep Buyer reasonably informed of, the
progress of construction of the DTV Stations.
SECTION 5.3 Certain Tax Matters. During the period from the date of
this Agreement to the Effective Time, the Company shall, and shall cause each of
its subsidiaries to: (i) timely file all Tax Returns ("Post-Signing Returns")
required to be filed by it and such Post-Signing Returns shall be prepared in a
manner consistent with past practice; (ii) timely pay all Taxes due and payable
in respect of such Post-Signing Returns that are so filed; (iii) accrue a
reserve in its books and records and financial statements in accordance with
past practice for all Taxes payable by it for which no Post-Signing Return is
due prior to the Effective Time; (iv) promptly notify Buyer of any Federal,
California, New Jersey or New York income or franchise tax and any other
material suit, claim, action, investigation, proceeding or audit (collectively,
"Actions") pending against or with respect to the Company or any of its
subsidiaries in respect of any Tax matter, including (without limitation) Tax
liabilities and refund claims, and not settle or compromise any such Tax matter
or Action without Buyer's consent, which consent shall not be unreasonably
withheld; and (v) not make or revoke any material Tax election or adopt or
change a material tax accounting method without Buyer's consent.
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ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.1 Registration Statement; Proxy Statement.
(a) As promptly as practicable after the execution of this Agreement,
(i) the Company shall prepare and shall cause to be filed with the SEC a proxy
statement (together with any amendments thereof or supplements thereto, the
"Proxy Statement") relating to the meeting of the Company's stockholders to be
held to consider the adoption of this Agreement and the approval of the Merger
and (ii) Buyer shall prepare and file with the SEC a registration statement on
the appropriate form (together with all amendments thereto, the "Registration
Statement") in which the Proxy Statement shall be included as a prospectus, in
connection with the registration under the Securities Act of the Buyer Shares to
be issued to the stockholders of the Company pursuant to the Merger. In addition
to the foregoing, Buyer shall make such other appropriate filings and deliveries
as may be required by applicable law (including any applicable prospectus
delivery requirements thereof). Each of Buyer and the Company shall use its
reasonable best efforts to cause the Registration Statement to become effective
at such time as they shall agree, and, prior to the effective date of the
Registration Statement, Buyer shall use reasonable best efforts to take all or
any action required under any applicable Federal or state securities Laws in
connection with the issuance of Buyer Shares pursuant to the Merger. If
requested by the SEC, each of the Forward Merger and the Reverse Merger shall be
submitted to the Company's stockholders at the Stockholders' Meeting (as defined
in Section 6.2) as separate proposals. Each of Buyer and the Company shall
furnish all information concerning it as may reasonably be requested by the
other party in connection with such actions and the preparation of the Proxy
Statement and Registration Statement. As promptly as practicable after the
Registration Statement shall have become effective, the Company shall mail the
Proxy Statement to its stockholders. Each of Buyer and the Company shall also
promptly file, use reasonable best efforts to cause to become effective as
promptly as practicable and, if required, mail to the Company's stockholders,
any amendment to the Registration Statement or Proxy Statement which may become
necessary after the date the Registration Statement is declared effective.
(b) The Proxy Statement shall include the recommendations of the
Special Committee and the Board of Directors of the Company to the stockholders
of the Company in favor of the adoption of this Agreement and the approval of
the Merger; provided, however, that the Special Committee and the Board of
Directors of the Company may take or disclose to the stockholders of the Company
a position contemplated by Rule 14e-2(a) promulgated under the Exchange Act or
make any disclosure required under applicable Law and may, prior to the date of
its Stockholders' Meeting (as defined in Section 6.2 hereof), withdraw, modify,
or change any such recommendation to the extent that the Special Committee or
the Board of Directors of the Company determines in good faith that such
withdrawal, modification or change is required in order to comply with its
fiduciary duties under applicable Law after receiving advice to such effect from
independent legal counsel (who may be the Company's regularly engaged outside
legal counsel). Unless this Agreement is previously terminated in
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accordance with Article VIII, the Company shall submit this Agreement to its
stockholders at its Stockholders' Meeting even if the Special Committee or the
Board of Directors of the Company determines at any time after the date hereof
that is no longer advisable or recommends that the Company's stockholders reject
it.
(c) No amendment or supplement to the Proxy Statement or the
Registration Statement will be made by Buyer or the Company without the approval
of the other party, which shall not be unreasonably withheld or delayed. Each of
Buyer and the Company will advise the other, promptly after it receives notice
thereof, of the time when the Registration Statement has become effective or any
supplement or amendment has been filed, the issuance of any stop order, the
suspension of the qualification of the Buyer Shares issuable in connection with
the Merger for offering or sale in any jurisdiction, or any request by the SEC
for amendment of the Proxy Statement or the Registration Statement or comments
thereon and responses thereto or requests by the SEC for additional information.
(d) The information supplied by the Company for inclusion in the
Registration Statement and the Proxy Statement (including by incorporation by
reference) shall not, at (i) the time the Registration Statement is declared
effective, (ii) the time the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to the stockholders of the Company, (iii)
the time of the Stockholders' Meeting, and (iv) the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to the Company or any of its subsidiaries, or their respective officers
or directors, should be discovered by the Company which, pursuant to the
Securities Act or Exchange Act, should be set forth in an amendment or a
supplement to the Registration Statement or Proxy Statement, the Company shall
promptly inform Buyer. All documents that the Company is responsible for filing
with the SEC in connection with the Merger will comply as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act.
(e) The information supplied by Buyer for inclusion in the Registration
Statement and the Proxy Statement (including by incorporation by reference)
shall not, at (i) the time the Registration Statement is declared effective,
(ii) the time the Proxy Statement (or any amendment thereof or supplement
thereto) is first mailed to the stockholders of the Company, (iii) the time of
the Stockholders' Meeting, and (iv) the Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading. If at any time prior to the Effective Time any event or circumstance
relating to Buyer or any of its subsidiaries, or their respective officers or
directors, should be discovered by Buyer which, pursuant to the Securities Act
or Exchange Act, should be set forth in an amendment or a supplement to the
Registration Statement or Proxy Statement, Buyer shall promptly inform the
Company. All documents that Buyer is responsible for filing with the SEC in
connection with the Merger will comply as to form in all material respects with
the applicable requirements of the Securities Act and the Exchange Act.
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SECTION 6.2 Stockholders' Meetings.
(a) The Company shall, as promptly as practicable following the date of
this Agreement establish a record date (which will be as promptly as reasonably
practicable following the date of this Agreement) for, duly call, give notice
of, convene and hold a meeting of its stockholders (the "Stockholders'
Meeting"), for the purpose of voting upon the adoption of this Agreement and
approval of the Merger, and the Company shall hold the Stockholders' Meeting as
soon as practicable after the date on which the Registration Statement becomes
effective. The Company shall use its reasonable best efforts to cause the
Stockholders' Meeting to occur on the same day as the meetings of stockholders
are held to consider the Xxxxx-Craft Merger and the UTV Merger. The Company
shall use its reasonable best efforts to solicit from its stockholders proxies
in favor of the adoption of this Agreement and approval of the Merger, and shall
take all other action necessary or advisable to secure the vote of its
stockholders, required by the NYSE or Delaware Law, as applicable, to obtain
such approvals; provided, however, that the Company shall not be obligated to
solicit proxies in favor of the adoption of this Agreement at its Stockholders'
Meeting (but shall nonetheless remain obligated to submit this Agreement to a
vote of its stockholders) to the extent that the Board of Directors of the
Company determines in good faith that such failure to solicit proxies is
required in order to comply with its fiduciary duties under applicable Law after
receiving advice to such effect from independent legal counsel (who may be such
party's regularly engaged outside legal counsel).
(b) Without limiting the provisions of Section 4.4 hereof, Buyer shall,
as promptly as practicable following the date of this Agreement, obtain, and
cause its subsidiaries to obtain, all stockholder and other approvals, including
the Buyer Shareholder Approval if required, necessary to consummate the Merger
and the other transactions contemplated hereby, including, without limitation,
entering into and performing the agreements and transactions contemplated by
Section 6.18 hereof.
SECTION 6.3 Appropriate Action; Consents; Filings.
(a) Each of the parties hereto shall (i) make promptly its respective
filings, and thereafter make any other required submissions under the HSR Act
with respect to the transactions contemplated herein and (ii) make promptly
filings with or applications to the FCC with respect to the transactions
contemplated herein (the "FCC Application"). The parties hereto will use their
respective reasonable best efforts to consummate and make effective the
transactions contemplated herein and to cause the conditions to the Forward
Merger and, if a Restructuring Trigger has occurred, the Reverse Merger, in each
case as set forth in Article VII to be satisfied (including using reasonable
best efforts to obtain all licenses, permits, consents, approvals,
authorizations, waivers, qualifications and orders of Governmental Authorities
as are necessary for the consummation of the transactions contemplated herein),
and will do so in a manner designed to obtain such regulatory clearance and the
satisfaction of such conditions as expeditiously as reasonably possible;
provided, however, that Buyer and FTH shall have the right to make all decisions
concerning any divestiture commitments necessary to comply with the FCC's
multiple ownership rules set forth at 47 C.F.R. Section 73.3555) as in effect on
the date of this Agreement (the "FCC Multiple Ownership Rules"); provided, that
Buyer and FTH shall
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regularly consult with the Company during the processes referred to in this
Section 6.3 and consider in good faith the views of the Company with respect
thereto; and provided, further, that, in connection with the Merger, Buyer and
FTH shall not seek a waiver of Section 73.3555 of the FCC's rules except for a
temporary waiver of subsections (b), and (e) thereof for a period not to exceed
twelve months from the Closing Date for television divestitures required in
order to obtain the FCC Consent (as defined in Section 7.1(e) hereof) and, with
respect to subsection (d) thereof, in the FCC Application when it is filed,
Buyer will (1) maintain that no waiver is required to permit it to own a
newspaper and two television stations in the New York market, and (2) request in
the alternative, if that position is rejected or a permanent waiver is not
issued by the FCC, a temporary waiver to hold the two television stations and
newspaper for a period not to extend beyond the date which is the later of (A)
twelve months from the Closing Date and (B) the conclusion of any then pending
FCC rule making proceeding regarding 47 C.F.R. Section 73.3555(d); provided,
that the foregoing sentence shall be subject to the provisions of subsection (b)
below. Failure to obtain any of the waivers set forth above shall not limit
Buyer's obligations pursuant to subsection (b) below.
(b) Notwithstanding anything to the contrary in this Agreement other
than the following sentence, the Company and Buyer and FTH each agree to take
promptly any and all steps necessary to avoid or eliminate each and every
impediment and obtain all consents or waivers under any antitrust, competition
or communications or broadcast Law that may be validly required by any U.S.
federal, state or local antitrust or competition Governmental Authority, or by
the FCC or similar Governmental Authority, or by any Australian Law, in each
case with competent jurisdiction, so as to enable the parties to close the
transactions contemplated by this Agreement as expeditiously as reasonably
possible, including committing to or effecting, by consent decree, hold separate
orders, trust, or otherwise, the sale or disposition of such of its assets or
businesses as are required to be divested in order to obtain the FCC Consent (as
defined below), or to avoid the entry of, or to effect the dissolution of or
vacate or lift, any decree, order, judgment, injunction, temporary restraining
order or other order in any suit or proceeding by or with any Governmental
Authority (each, an "Order"), that would otherwise have the effect of preventing
or materially delaying the consummation of the Merger and the other transactions
contemplated by this Agreement. Notwithstanding the foregoing, (i) neither Buyer
nor FTH shall be required to divest any of its material assets or accept any
material limitation on any of its material businesses other than (x) the
divestiture of such broadcast assets (i.e., newspaper and television stations)
as it is required to divest or (y) the material limitation on such broadcast
assets or Buyer's and FTH's operation thereof as it is required to be subject
to, in the case of each of clauses (x) and (y) in order to comply with the FCC
Multiple Ownership Rules or a final Order in an action brought by an antitrust
or competition or FCC or similar Governmental Authority, (ii) notwithstanding
clause (i), neither the Company, Buyer nor FTH shall be required to divest or to
hold separate, or to accept any substantial limitation on the operation of, or
to waive any rights material to, the Los Angeles television station of Buyer or
the Company (each of the actions described in clause (i) and (ii) above being an
"Adverse Condition"), (iii) neither party shall be required to take any of the
foregoing actions if such action is not conditioned on the consummation of the
Merger and (iv) without limiting Buyer's obligations set forth herein, the
Company shall not agree to any of the foregoing without Buyer's
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consent and, at Buyer's request, the Company shall agree to any of the foregoing
so long as such agreement is conditioned upon consummation of the Merger.
(c) Each of Buyer, FTH and the Company shall give (or shall cause its
respective subsidiaries to give) any notices to third parties, and Buyer, FTH
and the Company shall use, and cause each of its subsidiaries to use, its
reasonable best efforts to obtain any third party consents not covered by
paragraphs (a) and (b) above, necessary, proper or advisable to consummate the
Forward Merger or, if a Restructuring Trigger has occurred, the Reverse Merger;
provided that neither Buyer nor FTH shall be required to pay, and the Company
shall not pay, without Buyer's prior written consent, any material consideration
to obtain any such third party consent. Each of the parties hereto will furnish
to the other such necessary information and reasonable assistance as the other
may request in connection with the preparation of any required governmental
filings or submissions and will cooperate in responding to any inquiry from a
Governmental Authority, including immediately informing the other party of such
inquiry, consulting in advance before making any presentations or submissions to
a Governmental Authority, and supplying each other with copies of all material
correspondence, filings or communications between either party and any
Governmental Authority with respect to this Agreement.
SECTION 6.4 Access to Information; Confidentiality.
(a) From the date hereof to the Effective Time, Buyer will comply with
the reasonable requests of the Company to make officers available to respond to
the reasonable inquiries of the Company in connection with the transactions
contemplated by this Agreement and to make available information regarding Buyer
and its subsidiaries as the Company may reasonably request.
(b) From the date hereof to the Effective Time, to the extent permitted
by applicable Law and contracts, the Company will provide to Buyer (and its
officers, directors, employees, accountants, consultants, legal counsel, agents
and other representatives, collectively, "Representatives") access to all
employees, sites, properties, information and documents which Buyer may
reasonably request regarding the business, assets, liabilities, employees and
other aspects of the Company; provided, however, that the Company shall not be
required to provide access to any employees, sites, properties, information or
documents which would breach any agreement with any third-party or which would
constitute a waiver of the attorney-client or other privilege by the Company.
(c) Except with respect to matters related to the hiring of employees
and the solicitation for hiring of employees, which matters shall be governed by
the provisions of Section 6.17 hereof, the parties hereto shall comply with, and
shall cause their respective Representatives to comply with all of their
respective obligations under the Confidentiality Agreement dated September 16,
1999 between Buyer and Xxxxx-Craft, as supplemented by the Addendum to the
Confidentiality Agreement, dated August 7, 2000 (as so supplemented, the
"Confidentiality Agreement"); provided that, following any termination of this
Agreement, Section 6.17 hereof shall be of no further force or effect.
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(d) No investigation pursuant to this Section 6.4 shall affect any
representation or warranty in this Agreement of any party hereto or any
condition to the obligations of the parties hereto.
SECTION 6.5 No Solicitation of Competing Transactions.
(a) The Company shall not, directly or indirectly, through any officer,
director, agent or otherwise, initiate, solicit or knowingly encourage
(including by way of furnishing non-public information), or take any other
action knowingly to facilitate, any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Competing Transaction
(as defined below), or enter into or maintain or continue discussions or
negotiate with any person or entity in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize any of the officers, directors or employees of the
Company or any investment banker, financial advisor, attorney, accountant or
other agent or representative of the Company to take any such action, and the
Company shall notify Buyer as promptly as practicable of all of the relevant
material details relating to all inquiries and proposals which the Company or
any such officer, director, employee, investment banker, financial advisor,
attorney, accountant or other agent or representative may receive relating to
any of such matters, provided, however, that prior to the adoption of this
Agreement and the approval of the Merger by the stockholders of the Company,
nothing contained in this Section 6.5 shall prohibit the Board of Directors of
the Company from (i) furnishing information to, or entering into and engaging in
discussions or negotiations with, any person that makes an unsolicited proposal
that the Board of Directors of the Company determines in good faith, after
consultation with the Company's financial advisors and independent legal
counsel, can be reasonably expected to result in a Superior Proposal; provided
that prior to furnishing such information to, or entering into discussions or
negotiations with, such person, the Company (1) provides notice to Buyer to the
effect that it is furnishing information to, or entering into discussions or
negotiations with, such Person and provides, in any such notice to Buyer in
reasonable detail the identity of the Person making such proposal and the
material terms and conditions of such proposal, and (2) has received from such
person or entity an executed confidentiality agreement or (ii) complying with
Rule 14e-2 promulgated under the Exchange Act with regard to a tender or
exchange offer or making any disclosure required under applicable Law.
(b) For purposes of this Agreement, "Competing Transaction" shall mean
any of the following involving the Company: (i) any merger, consolidation, share
exchange, business combination, issuance or purchase of securities or other
similar transaction other than transactions specifically permitted pursuant to
Section 5.1 of this Agreement; (ii) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition of the assets of the Company in a single
transaction or series of related transactions; (iii) any tender offer or
exchange offer for the Company's securities or the filing of a registration
statement under the Securities Act in connection with any such exchange offer;
in the case of clauses (i), (ii) or (iii) above, which transaction would result
in a third party (or its stockholders) acquiring more than 25% of the voting
power of the capital stock then outstanding or more than 25% of the assets of
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the Company and its subsidiaries, taken as a whole; or (iv) any public
announcement of an agreement, proposal, plan or intention to do any of the
foregoing, either during the effectiveness of this Agreement or at any time
thereafter.
For purposes of this Agreement, a "Superior Proposal" means any
proposal made by a third party which would result in such party (or in the case
of a parent-to-parent merger, its stockholders) acquiring, directly or
indirectly, including pursuant to a tender offer, exchange offer, merger,
consolidation, share exchange, business combination, share purchase, asset
purchase, recapitalization, liquidation, dissolution, joint venture or similar
transaction, more than 50% of the voting power of the capital stock then
outstanding or all or substantially all of the assets of the Company and its
subsidiaries, taken as a whole, for consideration which the Board of Directors
of the Company determines in its good faith judgment, after consultation with
independent legal counsel and its financial advisors, to be more favorable to
the Company's stockholders than the Merger.
SECTION 6.6 Directors' and Officers' Indemnification and Insurance.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Restated Certificate of Incorporation and By-laws of the Company on
the date of this Agreement, which provisions shall not be amended, repealed or
otherwise modified after the Effective Time in any manner that would adversely
affect the rights thereunder of individuals who at any time prior to the
Effective Time were officers, directors or employees of the Company in respect
of actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), unless
such modification is required by law.
(b) The Surviving Corporation shall maintain (or cause to be
maintained) in effect for six years from the Effective Time directors' and
officers' liability insurance covering those persons who are currently covered
by the Company's directors' and officers' liability insurance policy on terms
comparable to such existing insurance coverage; provided, however, that in no
event shall the Surviving Corporation be required to expend pursuant to this
Section 6.6 more than an amount per year equal to 300% of current annual
premiums paid by the Company for such insurance; and provided further that if
the annual premiums exceed such amount, Buyer shall be obligated to obtain a
policy with the greatest coverage available for an annual cost not exceeding
such amount.
(c) In addition to the other rights provided for in this Section 6.6
and not in limitation thereof (but without in any way limiting or modifying the
obligations of any insurance carrier contemplated by Section 6.6(b)), from and
after the Effective Time, Buyer shall, and shall cause the Surviving Corporation
to, to the fullest extent permitted by applicable Law (the "Indemnifying
Party"), (i) indemnify and hold harmless (and release from any liability to
Buyer or the Surviving Corporation or any of their respective subsidiaries), the
individuals who, on or prior to the Effective Time, were officers, directors or
employees of the Company or served on behalf of the Company as an officer,
director or employee of any of the Company's current or former subsidiaries or
affiliates (including, without limitation, those affiliates listed in Section
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6.6(c) of the Company Disclosure Schedule (collectively, "Covered Affiliates")
or any of their predecessors in all of their capacities (including as
stockholder, controlling or otherwise) and the heirs, executors, trustees,
fiduciaries and administrators of such officers, directors or employees (the
"Indemnitees") against all Expenses (as defined hereinafter), losses, claims,
damages, judgments or amounts paid in settlement ("Costs") in respect of any
threatened, pending or completed claim, action, suit or proceeding, whether
criminal, civil, administrative or investigative, based on, or arising out of or
relating to the fact that such person is or was a director, officer, employee or
stockholder (controlling or otherwise) of the Company or any of its current or
former subsidiaries or Covered Affiliates or any of their predecessors arising
out of acts or omissions occurring on or prior to the Effective Time (including,
without limitation, in respect of acts or omissions in connection with this
Agreement and the transactions contemplated hereby (an "Indemnifiable Claim";
except for acts or omissions which involve conduct known to such Person at the
time to constitute a material violation of Law); provided that the Surviving
Corporation and Buyer shall not be responsible for any amounts paid in
settlement of any Indemnifiable Claim without the consent of Buyer and the
Surviving Corporation; and (ii) advance to such Indemnitees all Expenses
incurred in connection with any Indemnifiable Claim (including in circumstances
where the Indemnifying Party has assumed the defense of such claim) promptly
after receipt of reasonably detailed statements therefor; provided that, the
person to whom Expenses are to be advanced provides an undertaking to repay such
advances if it is ultimately determined that such person is not entitled to
indemnification from Buyer or the Surviving Corporation. Any Indemnifiable Claim
shall continue until such Indemnifiable Claim is disposed of or all judgments,
orders, decrees or other rulings in connection with such Indemnifiable Claim are
fully satisfied. Except as otherwise may be provided pursuant to any Indemnity
Agreement, the Indemnitees as a group may retain only one law firm with respect
to each related matter except to the extent there is, in the opinion of counsel
to an Indemnitee, under applicable standards of professional conduct, a conflict
on any significant issue between positions of any two or more Indemnitees;
provided that any law firm or firms so retained shall be reasonably acceptable
to Buyer. The Indemnifying Party shall be entitled to assume and control the
defense of any potential Indemnifiable Claim at its expense and through counsel
of its choice if it gives notice of its intention to do so to the Indemnified
Party within 30 days of its receipt of notice from the Indemnified Party that a
potential Indemnifiable Claim has been made and so long as it unconditionally
agrees in writing (x) to indemnify fully and indefinitely, subject only to
limitations required by applicable Law, and (y) not to seek repayment of any
Expenses advanced (unless such repayment would otherwise be available pursuant
to clause (ii) of the first sentence of this Section 6.6(c) solely because such
matter was excluded from the definition of Indemnifiable Claim pursuant to the
exception contained in the definition thereof appearing immediately prior to the
initial proviso in this subsection) from, the Indemnitees in respect of such
potential Indemnifiable Claim, and acknowledges in writing its obligation to do
so under this Section; provided, however, that, if there exists or is reasonably
likely to exist a conflict of interest that would make it inappropriate in the
judgment of the Indemnified Party, in its reasonable discretion, for the same
counsel to represent both the Indemnified Party and the Indemnifying Party, then
the Indemnified Party shall be entitled to retain its own counsel at the expense
of the Indemnifying Party. In the event that the Indemnifying Party exercises
the right to undertake any such defense against any such Indemnifiable Claim as
provided above, the Indemnified Party shall cooperate with the Indemnifying
Party in such defense and make
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available to the Indemnifying Party, at the Indemnifying Party's expense, all
witnesses, pertinent records, materials and information in the Indemnified
Party's possession or under the Indemnified Party's control relating thereto as
is reasonably required by the Indemnifying Party. Similarly, in the event the
Indemnified Party is, directly or indirectly, conducting the defense against any
such Indemnifiable Claim, the Indemnifying Party shall cooperate with the
Indemnified Party in such defense and make available to the Indemnified Party,
at the Indemnifying Party's expense, all such witnesses, records, materials and
information in the Indemnifying Party's possession or under the Indemnifying
Party's control relating thereto as is reasonably required by the Indemnified
Party. No such Indemnifiable Claim may be settled by any Indemnified Party
without the prior written consent of the Indemnifying Party, which consent will
not be unreasonably withheld or delayed. For the purposes of this Section 6.6,
"Expenses" shall include reasonable attorneys' fees and all other reasonable
costs, charges and expenses paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in any Indemnifiable Claim,
but shall exclude damages, losses, claims, judgments and amounts paid in
settlement. The term "Indemnitees" shall exclude persons who both (x) were
serving as officers or directors or employees of the Covered Affiliates listed
on Section 6.6(c) of the Company Disclosure Schedule at the request of an entity
other than the Company or one of its current or former subsidiaries, or any
predecessor thereto, and (y) are not otherwise an Indemnitee.
(d) Notwithstanding anything contained in Section 9.1 hereof to the
contrary, this Section 6.6 shall survive the consummation of the Merger
indefinitely, is intended to benefit each Indemnitee, shall be binding, jointly
and severally, on all successors and assigns of Buyer, the Surviving Corporation
and its subsidiaries, and shall be enforceable by the Indemnitees and their
successors. In the event that Buyer or the Surviving Corporation or any of its
subsidiaries or any of their respective successors or assigns (i) consolidates
with or merges into any other Person or (ii) transfers all or substantially all
of its properties or assets to any Person, then, and in each case, the
successors and assigns of Buyer or the Surviving Corporation or its subsidiary,
as the case may be, shall expressly assume and be bound by the indemnification
obligations set forth in this Section 6.6.
(e) The obligations of the Surviving Corporation, its subsidiaries and
Buyer under this Section 6.6 shall not be terminated or modified in such a
manner as to adversely affect any Indemnitee to whom this Section 6.6 applies
without the consent of such affected Indemnitee (it being expressly agreed that
the Indemnitees to whom this Section 6.6 applies shall be third party
beneficiaries of this Section 6.6).
SECTION 6.7 Notification of Certain Matters. The Company shall give
prompt notice to Buyer, and Buyer shall give prompt notice to the Company, of
(i) the occurrence, or nonoccurrence, of any event the occurrence, or
nonoccurrence, of which would be likely to cause (x) any representation or
warranty contained in this Agreement to be untrue or inaccurate or (y) any
covenant, condition or agreement contained in this Agreement not to be complied
with or satisfied or (z) the Forward Merger not to be consummated and (ii) any
failure of the Company or Buyer, as the case may be, to comply with or satisfy
any covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice
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pursuant to this Section 6.7 shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
SECTION 6.8 Tax Matters. Buyer and Xxxxx-Craft shall submit any filings
or documents necessary to obtain the IRS Ruling and shall engage, through their
representatives in any communications with the IRS and Buyer and, on behalf of
the Company, Xxxxx-Craft shall control the process of obtaining the IRS Ruling.
Buyer and the Company shall make reasonable best efforts to obtain the IRS
Ruling, the tax opinions set forth in Sections 7.2(f) and 7.3(c) hereof, and the
FCC Consent, including taking any reasonable actions requested by the IRS or the
FCC in connection with obtaining the IRS Ruling and the FCC Consent and
cooperating in preparing and submitting any filings and documents to the IRS and
the FCC in a prompt manner. In the case of the Forward Merger (a) the Agreement
is intended to constitute a "plan of reorganization" within the meaning of
Section 1.368-2(g) of the income tax regulations promulgated under the Code; (b)
neither the Company nor Buyer nor their affiliates shall directly or indirectly
(without the consent of the other) take any action, that would reasonably be
expected to adversely affect the intended tax treatment of the transactions
contemplated by this Agreement; (c) officers of Buyer, Acquisition Sub and the
Company shall execute and deliver to (i) Squadron, Ellenoff, Plesent & Xxxxxxxxx
LLP, tax counsel to Buyer, and Xxxx, Scholer, Fierman, Xxxx & Handler, LLP,
counsel to the Company, certificates substantially in the form agreed to by the
parties as of the date hereof and other appropriate representations at such time
or times as may be reasonably requested by such law firms, including
contemporaneously with the execution of this Agreement and at the Effective
Time, in connection with their respective deliveries of opinions, pursuant to
Sections 7.2(f) and 7.3(c) hereof, with respect to the tax treatment of the
Merger and (ii) Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP, counsel to Buyer
and Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, counsel to Xxxxx-Craft, such
representations as are required by the IRS in order to issue the IRS Ruling; and
(d) none of the Buyer, Acquisition Sub or the Company shall take or cause to be
taken any action which would cause to be untrue (or fail to take or cause not to
be taken any action which would cause to be untrue) any of such certificates and
representations.
SECTION 6.9 Stock Exchange Listing. Buyer and the Company shall (a) as
promptly as reasonably practicable prepare and submit to the NYSE an application
covering the Buyer Shares to be issued in the Merger, and shall use their
reasonable best efforts to cause such securities to be approved for listing on
the NYSE prior to the Effective Time, (b) within two business days after the
Effective Time, prepare and submit to ASX, pursuant to the applicable listing
rules of the ASX, applications covering the Buyer Preferred Stock underlying the
Buyer Shares issued pursuant to the Merger and cause such securities to be
approved for quotation by the ASX, and (c) promptly seek the ASX Waiver or, if
the ASX Waiver is not granted, as soon as possible thereafter call a special
meeting of shareholders to obtain the Buyer Shareholder Approval) and take all
actions and prepare all documents and shareholder materials required in
connection therewith.
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SECTION 6.10 Public Announcements. Buyer and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to this Agreement and shall not issue any such
press release or make any such public statement without the prior consent of the
other (which consent shall not be unreasonably withheld or delayed), except as
may be required by Law or any listing rules of, or listing agreement or
arrangement with, a national securities exchange or the ASX to which Buyer or
the Company is a party. The parties have agreed on the text of a joint press
release by which Buyer and the Company will announce the execution of this
Agreement.
SECTION 6.11 Affiliates of the Company. The Company represents
and warrants to Buyer that prior to the date of the Stockholders' Meeting the
Company will deliver to Buyer a letter identifying all persons who may be deemed
affiliates of the Company under Rule 145 of the Securities Act, including,
without limitation, all directors and executive officers of the Company, and the
Company represents and warrants to Buyer that the Company has advised the
persons identified in such letter of the resale restrictions imposed by
applicable securities laws. The Company shall use its reasonable best efforts to
obtain from each person identified in such letter a written agreement,
substantially in the form of Exhibit A. The Company shall use its reasonable
best efforts to obtain as soon as practicable from any person who may be deemed
to have become an affiliate of the Company after the Company's delivery of the
letter referred to above and prior to the Effective Time, a written agreement
substantially in the form of Exhibit A.
SECTION 6.12 Employee Matters.
(a) During the one-year period commencing on the
Effective Date, Buyer shall provide or shall cause the Surviving Corporation to
provide to each Company Employee employee benefits (including incentive
opportunities but excluding benefits under equity-based plans) that are either
(i) in the aggregate, substantially comparable to the benefits being provided to
Company Employees as of the date of this Agreement under the Company Benefit
Plans or (ii) substantially similar to those being provided to similarly
situated employees of the Buyer (other than for former employees of the
Company).
(b) Without limiting the generality of paragraph (a)
of this Section 6.12, if the Effective Time occurs prior to December 31, 2000,
(1) each Company Employee who received an annual bonus in respect of 1999 and is
eligible to receive an annual bonus for the year 2000 and who, is employed by
the Company immediately prior to the Effective Time, shall be entitled to
receive, in lieu of any other bonus to which the participant may otherwise be
entitled under such plan, or for the period from January 1, 2000 through the
Effective Time, as the case may be, a prorated bonus (the "Pro-Rata Bonus"),
determined by multiplying (i) the participant's annual bonus in respect of 1999
by (ii) a fraction, the numerator of which is equal to the number of days in
calendar year 2000 through and including the Effective Time and the denominator
of which is 366 and (2) each such Company Employee who remains employed with the
Company (or its successor) or any affiliate thereof through December 31, 2000,
shall be entitled to receive an additional bonus such that, when added to such
employee's Pro-Rata Bonus, such employee's aggregate annual bonus in respect of
2000 is not less than such employee's annual bonus in respect of 1999. Such
annual bonus with respect of 2000 shall be payable at
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such time that annual bonuses are normally paid to similarly situated employees
of the Company. If the Effective Time occurs during the calendar year 2001, then
the process described in (i) of the preceding sentence shall apply in an
analogous manner to the Company's 2001 Bonus Plan and to other employees who
receive an annual bonus in respect of the year 2000, with the references to the
year 2000 therein being deemed to be references to the year 2001 and with
references to the year 1999 therein being deemed to be references to the year
2000 and subject to Section 6.12(a), the process for determining the bonus for
those who remain employed on and after the Effective Time through December 31,
2001 shall be determined in the discretion of the Buyer.
(c) Without limiting the generality of paragraph (a)
of this Section 6.12, with respect to each Surviving Corporation plan and such
other employee benefit plans as may be maintained for Company Employees from
time to time following the Effective Time by Buyer, the Surviving Corporation or
any subsidiary of the Surviving Corporation (including, without limitation,
plans or policies providing severance benefits and vacation entitlement), and
service with the Company and any of its subsidiaries (or a predecessor to the
Company's or any of its subsidiaries' business or assets) shall be treated as
service with the Buyer, the Surviving Corporation or any of its subsidiaries, as
the case may be, to the extent recognized in the comparable plans of the Company
for purposes of determining eligibility to participate and vesting but not for
purposes of benefit accrual. Such service also shall apply for purposes of
satisfying any waiting periods, evidence of insurability requirements, or the
application of any preexisting condition limitations. In the event Company
Employees are transferred to a new health plan maintained by the Surviving
Corporation effective as of a date within the annual plan year for purposes of
accumulating annual deductibles, copayments and out-of-pocket maximums, Company
Employees shall be given credit for amounts they have paid under a corresponding
benefit plan during the new health plan's year in which the Company Employees
are transferred for purposes of applying deductibles, copayments and
out-of-pocket maximums as though such amounts had been paid in accordance with
the terms and conditions of the benefit plan maintained by Surviving Corporation
or any of its subsidiaries. Buyer shall also honor, or cause the Surviving
Corporation to honor, all vacation, personal and sick days accrued by the
Company Employees under the plans, policies, programs and arrangements of the
Company or any of its subsidiaries immediately prior to the Effective Time to
the extent reserved against the Company's financial statements.
(d) Without limiting the generality of paragraph (a)
of this Section 6.12, the Surviving Corporation shall, or shall cause its
subsidiaries to, honor, in accordance with their terms, and shall, or shall
cause its subsidiaries to, make required payments when due under, all Company
Benefit Plans maintained or contributed to by the Company or any of its
subsidiaries or to which the Company or any of its subsidiaries is a party
(including, but not limited to, employment, incentive and severance agreements
and arrangements), that are applicable with respect to any Company Employee or
any director of the Company or any of its subsidiaries (whether current, former
or retired) or their beneficiaries; provided, however, that, subject to the
provisions of Section 6.12(e) of the Xxxxx-Craft Disclosure Schedule, the
foregoing shall not preclude the Surviving Corporation or any of its
subsidiaries from amending or terminating any Company Benefit Plan in accordance
with its terms.
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SECTION 6.13 Letters of the Company's Accountants. The Company
shall use reasonable best efforts to cause to be delivered to Buyer two
"comfort" letters in customary form from PricewaterhouseCoopers LLP, the
Company's independent public accountants, one dated a date within five business
days before the date on which the Registration Statement shall become effective
and one dated a date within five business days before the Closing Date, each
addressed to Buyer.
SECTION 6.14 Letters of Buyer's Accountants. Buyer shall use
reasonable best efforts to cause to be delivered to the Company two "comfort"
letters in customary form from Xxxxxx Xxxxxxxx LLP, Buyer's independent public
accountants, one dated a date within five business days before the date on which
the Registration Statement shall become effective and one dated a date within
five business days before the Closing Date, each addressed to the Company.
SECTION 6.15 [INTENTIONALLY OMITTED].
SECTION 6.16 Other Merger Agreements. Buyer shall comply with
its obligations under the Xxxxx-Craft Merger Agreement and the UTV Merger
Agreement. The Company shall comply with its obligations under the Voting
Agreement related to the UTV Merger.
SECTION 6.17 Employee Solicitation. In addition to, and not in
limitation of any restrictions on the parties hereto contained in other
documents, the parties hereto agree that during the period from the date hereof
to the earlier of the termination of this Agreement or the consummation of the
Merger, neither they nor any of their controlled affiliates shall solicit for
employment any current senior management level employees or any of the three (3)
highest compensated on air talent employees at each station of the other party
hereto. This Section 6.17 shall govern in the event of any inconsistency between
this Section 6.17 and Section 6.4 hereof.
SECTION 6.18 Post-Closing Covenant of Buyer. As of or promptly
following the Effective Time, in the event of the Forward Merger (as defined in
the Xxxxx-Craft Merger Agreement) under the Xxxxx-Craft Merger Agreement Buyer
shall cause such assets as Buyer shall determine, but at a minimum shall include
the broadcast assets and related liabilities held or previously held by the
Company and its subsidiaries, to be transferred to and assumed by one or more
direct or indirect subsidiaries of Buyer, and shall cause such assets and
liabilities to be ultimately held by a newly formed subsidiary which is
controlled by Buyer within the meaning of Section 368(c) of the Code ("Newco")
of Fox Entertainment Group, Inc. ("FEG"). As of or promptly following the
Effective Time, Newco and either FTH or a wholly owned subsidiary will enter
into the Newco-FTH Agreement (as hereinafter defined). The Newco-FTH Agreement
shall be an agreement prepared by Buyer and FTH as soon as practicable after the
date hereof and in any event no later than August 31, 2000 which (i) reflects
and is consistent with the terms set forth on Exhibit C hereto and (ii)
otherwise is as Buyer and FTH shall determine, but which is consistent with the
objective of obtaining the FCC Consent (without an Adverse Condition) with
respect to the Forward Merger and, if the Xxxxx-Craft Merger is to be effected
as a Forward Merger (as defined in the Xxxxx-Craft Merger Agreement), with
respect to the Xxxxx-Craft Merger,
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and the IRS Ruling; provided that it shall not contain any provisions as to
which Xxxxx-Craft or, if the Merger is to be effected as a Forward Merger, the
Company reasonably objects by reason of concerns as to the Federal income tax
treatment of the Xxxxx-Craft Merger or, if the Merger is a Forward Merger, the
Forward Merger, or the ability to obtain the FCC Consent (without any Adverse
Condition) or the IRS Ruling for the Forward Merger or, if the Xxxxx-Craft
Merger is to be effected as a Forward Merger (as defined in the Xxxxx-Craft
Merger Agreement), for the Xxxxx-Craft Merger. Buyer and FTH shall comply with
this Section 6.18 in a manner deemed appropriate by Buyer and FTH; provided,
that Buyer and FTH shall act in a manner that preserves (i) the qualification of
the Merger or the Xxxxx-Craft Merger, as the case may be, as a reorganization
under Section 368(a) of the Code and (ii) the effectiveness and validity of the
FCC Consent (as defined below). In the event (and only in the event) that the
Merger is a Reverse Merger and the Xxxxx-Craft Merger is a Reverse Merger (as
defined in the Xxxxx-Craft Merger Agreement), as of or promptly following the
Effective Time, the broadcast assets and related liabilities held by the Company
and its subsidiaries (or the Company and its subsidiaries themselves by way of
merger) will be transferred to and assumed by FTH or one or more direct or
indirect subsidiaries thereof. The foregoing processes contained in this Section
6.18 and the actions contemplated hereby shall be deemed to constitute
"transactions contemplated by this Agreement" for purposes of Buyer's
representations and warranties herein.
SECTION 6.19 Form of Merger. In the event that there is a
Ruling Failure or an FCC Failure (each, a "Restructuring Trigger"), then the
Merger shall be effected as the Reverse Merger and not as the Forward Merger
and, in lieu of News Publishing Australia Limited, a newly formed indirect
subsidiary of Buyer (which could, at the election of Buyer, be a subsidiary of
Xxxxx-Craft unless the Xxxxx-Craft Merger has not occurred prior to the
Effective Time) shall be Acquisition Sub and Buyer shall cause such Acquisition
Sub to execute a counterpart signature page to this Agreement and become a party
hereto; provided, that, notwithstanding the foregoing, if the Xxxxx-Craft Merger
is to be effected as a Forward Merger (as defined in the Xxxxx-Craft Merger
Agreement), then such Acquisition Sub shall be a first-tier subsidiary of Buyer
that is controlled by Buyer within the meaning of Section 368(c) of the Code. In
the event that, following the occurrence of a Restructuring Trigger and prior to
the Effective Time, subsequent events occur such that the conditions to
effecting the Forward Merger are all satisfied, then the Merger shall occur as
if such Triggering Event had never occurred. For purposes of this Agreement, a
"Ruling Failure" shall be deemed to have occurred (i) if the IRS Ruling (as
defined herein) is not obtained on or prior to the seven-month anniversary of
the submission of the ruling request to the IRS (unless a responsible officer of
the IRS has indicated to representatives of both the Company and Buyer that the
IRS Ruling is likely to be issued within the next succeeding three months and
such IRS Ruling is so issued within such three-month period) in form and
substance reasonably satisfactory to each of the parties hereto or (ii) a
responsible officer of the IRS has indicated to representatives of both
Xxxxx-Craft and Buyer prior to the three-month anniversary of this Agreement
that the IRS Ruling, in form and substance reasonably satisfactory to each of
the parties hereto, is not likely to be issued, and such indication shall not
have been reversed or withdrawn prior to the five-month anniversary of the date
of this Agreement or (iii) either Xxxx, Scholer, Fierman, Xxxx & Handler, LLP or
Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP indicates in writing to Xxxxx-Craft
and Buyer that it will not be able to deliver its respective opinion pursuant to
Section 7.3 or Section 7.2, as the case may be. For purposes of this Agreement,
an
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"FCC Failure" shall be deemed to have occurred (i) if the FCC Consent (without
an Adverse Condition) is not obtained on or prior to the ten-month anniversary
of this Agreement (unless a responsible officer of the FCC has indicated to
representatives of both the Company and Buyer that the FCC Consent (without an
Adverse Condition) will be issued within the next succeeding two months and such
FCC Consent is so issued within such two-month period) in form and substance
reasonably satisfactory to each of the parties hereto or (ii) a responsible
officer of the FCC has indicated to representatives of both the Company and
Buyer that the FCC Consent, in form and substance reasonably satisfactory to
each of the parties hereto, will not be issued and, prior to the three-month
anniversary of this Agreement, such indication shall not have been reversed or
withdrawn; provided that no FCC Failure shall have occurred if a responsible
officer of the FCC has indicated (and subsequently not withdrawn or changed such
indication) to representatives of both the Company and Buyer that the sole
reason or reasons for the FCC Consent (without an Adverse Condition) not having
been obtained does not relate in any manner to whether the Merger is the Forward
Merger or the Reverse Merger and that there is no material greater likelihood of
obtaining the FCC Consent (without an Adverse Condition) with respect to the
Reverse Merger than the Forward Merger.
SECTION 6.20 Advance of Funds. Notwithstanding anything to the
contrary contained in this Agreement, the Company shall (and shall be permitted
to) advance funds to Xxxxx-Craft on an as needed basis, including, without
limitation, to pay any and all fees and expenses payable by Xxxxx-Craft in
connection with the Xxxxx-Craft Merger; provided, however, that any such
advances shall be made pursuant to short term loans on arms-length terms and
must be repaid no later than 30 days after consummation of the Merger, unless
the Xxxxx-Craft Merger has also been consummated.
SECTION 6.21 Obligations of FTH. In view of the fact that one
or more subsidiaries of FTH would become the licensees of the Company Stations
under either the Forward Merger or the Reverse Merger and would otherwise
benefit from either merger, FTH agrees that it shall take such actions, and
shall cause its subsidiaries to take such actions, as may be necessary to
accomplish the requirements of FTH under Sections 6.3, 6.18 and 6.19 hereof and
any other requirements of this Agreement relating to the effectuation of, or
transactions to be accomplished immediately following, the Forward Merger and
the Reverse Merger, as the case may be.
ARTICLE VII
CONDITIONS TO THE MERGER
SECTION 7.1 Conditions to the Obligations of Each Party. The
obligations of the Company and Buyer to consummate the Merger are subject to the
satisfaction or waiver by the Company and Buyer of the following conditions:
(a) this Agreement shall have been adopted by the
affirmative vote of a majority of the votes cast by all stockholders entitled to
vote at the Stockholders' Meeting voting together as a single class;
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(b) any applicable waiting period under the HSR Act
relating to the Merger shall have expired or been terminated;
(c) no Governmental Authority or court of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law, rule, regulation, executive order or Order which is then in effect and has
the effect of making the Merger illegal or otherwise prohibiting the
consummation of the Merger;
(d) the Registration Statement shall have been
declared effective, and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such purpose
shall be pending before or threatened by the SEC;
(e) the FCC Consent (as defined below) shall have
been obtained. "FCC Consent," as used herein, means action by the FCC granting
its consent to the assignment or to the transfer of control of the FCC licenses
of the Company and UTV to FTH (or a wholly owned subsidiary of FTH), including
transfer of those authorizations, licenses, permits, and other approvals, issued
by the FCC, and used in the operation of the Company Stations, pursuant to
appropriate applications filed by the parties with the FCC, as contemplated by
this Agreement;
(f) all other authorizations, consents, waivers,
orders or approvals for the Merger required to be obtained, and all other
filings, notices or declarations required to be made, by Buyer and the Company
prior to the consummation of the Merger and the transactions contemplated
hereunder, shall have been obtained from, and made with, all required
Governmental Authorities, including the ASX Waiver or, if the ASX Waiver is not
granted, the Buyer Shareholder Approval, and except for such authorizations,
consents, waivers, orders, approvals, filings, notices or declarations the
failure to obtain or make which would not, individually or in the aggregate,
have a Company Material Adverse Effect or Buyer Material Adverse Effect;
provided, however, that a party who has failed to fulfill its obligations under
Section 6.3 hereof shall not be entitled to deem this Section 7.1(e) unsatisfied
by reason of such non-fulfillment;
(g) the Buyer Shares issuable to the Company's
stockholders in the Merger shall have been authorized for listing on the NYSE,
subject to official notice of issuance;
(h) the Xxxxx-Craft Merger shall have occurred or the
stockholders of Xxxxx-Craft shall have failed to approve the Xxxxx-Craft Merger
at a duly held stockholders' meeting called for such purpose or at any
adjournment or postponement thereof; and
(i) all conditions to all parties' obligations to
consummate the UTV Merger, except completion of the UTV Merger, shall have been
satisfied or waived; provided, however, that this condition may not be enforced
by a party if such party's actions or failure to act has prevented the
conditions to the consummation of the UTV Merger from being satisfied; and
provided further that this condition may not be enforced by the Company by
reason of the failure
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to obtain the requisite stockholder vote by the stockholders of UTV at a duly
held stockholders' meeting called for such purpose or at any adjournment or
postponement thereof.
SECTION 7.2 Conditions to the Obligations of Buyer. The
obligations of Buyer to consummate the Merger are subject to the satisfaction or
waiver by Buyer of the following further conditions:
(a) each of the representations and warranties of the
Company contained in this Agreement that is qualified as to materiality shall be
true and correct, and each of the representations and warranties of the Company
contained in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of this Agreement and as
of the Effective Time with the same effect as though made as of the Effective
Time (except to the extent expressly made as of an earlier date, in which case
as of such date), and the Buyer shall have received a certificate signed on
behalf of the Company by the chief executive officer or chief financial officer
of the Company to such effect;
(b) the Company shall have performed or complied in
all material respects with all material agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Effective Time, and Buyer shall have received a certificate signed on behalf of
the Company by the chief executive officer or chief financial officer of the
Company to such effect;
(c) Buyer shall have received from each person named
in the letter referred to in Section 6.11 an executed copy of an agreement
substantially in the form of Exhibit B hereto;
(d) Buyer shall have received evidence, in form and
substance reasonably satisfactory to it, that Buyer or the Company shall have
obtained (i) all material consents, approvals, authorizations, qualifications
and orders of all Governmental Authorities legally required for the consummation
of the Merger and (ii) all other consents, approvals, authorizations,
qualifications and orders of Governmental Authorities or third parties required
(other than those set forth in Section 7.2(d) of the Company Disclosure
Schedule) for the consummation of the Merger, except, in the case of this clause
(ii), for those the failure of which to be obtained individually or in the
aggregate could not reasonably be expected to have a Company Material Adverse
Effect or a Buyer Material Adverse Effect; provided, however, that if Buyer has
failed to fulfill its obligations under Section 6.3 hereof it shall not be
entitled to deem this Section 7.2(d) unsatisfied by reason of such
non-fulfillment;
(e) [INTENTIONALLY OMITTED]
(f) In the case of the Forward Merger, Buyer shall
have received (i) the opinion of Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP, in
form and substance reasonably satisfactory to Buyer, dated as of the Closing
Date, on the basis of facts, representations and assumptions set forth in such
opinion, the IRS Ruling, and certificates obtained from officers of Buyer,
Acquisition Sub and the Company, all of which are consistent with the state of
facts
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existing as of the Effective Time, to the effect that (A) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code,
(B) for U.S. federal income tax purposes, no income, gain or loss will be
recognized by Buyer, Acquisition Sub and the Company as a result of the Merger,
and (C) for U.S. federal income tax purposes, no income, gain or loss will be
recognized by the holders of Company Common Stock as a result of the Merger
except to the extent such holders receive cash as Merger Consideration and (ii)
a private letter ruling (the "IRS Ruling") from the IRS, to the effect that the
Merger will satisfy the continuity of business enterprise requirement described
in Treasury Regulations Section 1.368-1(d). In rendering the opinion described
in clause (i) hereof, Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP shall have
received and may rely upon the certificates and representations referred to in
Section 6.8 hereof; and
(g) the FCC Consent shall not contain any Adverse
Condition.
SECTION 7.3 Conditions to the Obligations of the Company. The
obligations of the Company to consummate the Merger are subject to the
satisfaction or waiver by the Company of the following further conditions:
(a) each of the representations and warranties of Buyer
contained in this Agreement that is qualified as to materiality shall be true
and correct, and each of the representations and warranties of Buyer contained
in this Agreement that are not qualified shall be true and correct in all
material respects, in each case as of the date of this Agreement and as of the
Effective Time with the same effect as though made on and as of the Effective
Time (except to the extent expressly made as of an earlier date, in which case
as of such date), and the Company shall have received a certificate signed on
behalf of Buyer by the chief executive officer or chief financial officer of
Buyer to such effect;
(b) Buyer and FTH shall have performed or complied in all
material respects with all material agreements and covenants required by this
Agreement to be performed or complied with by it on or prior to the Effective
Time, and the Company shall have received a certificate signed on behalf of
Buyer by the chief executive officer or chief financial officer of Buyer to such
effect; and
(c) in the case of the Forward Merger, the Company shall have
received (i) the opinion of Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, in form
and substance reasonably satisfactory to the Company, dated as of the Closing
Date, on the basis of facts, representations and assumptions set forth in such
opinion, the IRS Ruling, and certificates obtained from officers of Buyer,
Acquisition Sub and the Company, all of which are consistent with the state of
facts existing as of the Effective Time, to the effect that (A) the Merger will
qualify as a reorganization within the meaning of Section 368(a) of the Code,
(B) for U.S. federal income tax purposes, no income, gain or loss will be
recognized by Buyer, Acquisition Sub and the Company as a result of the Merger,
and (C) for U.S. federal income tax purposes, no income, gain or loss will be
recognized by the holders of Company Common Stock as a result of the Merger
except to the extent such holders receive cash as Merger Consideration and (ii)
the IRS Ruling. In rendering the opinion described in clause (i) hereof, Xxxx,
Scholer, Fierman, Xxxx &
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Handler, LLP shall have received and may rely upon the certificates and
representations referred to in Section 6.8 hereof.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.1 Termination. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time,
notwithstanding any requisite adoption of this Agreement and approval of the
Merger, as follows:
(a) by mutual written consent duly authorized by the
Boards of Directors of each of Buyer and the Company;
(b) by either Buyer or the Company, if the Effective
Time shall not have occurred on or before 15 months from the execution of this
Agreement (the "Termination Date");
(c) by the Company, upon a breach of any
representation, warranty, covenant or agreement on the part of Buyer or FTH set
forth in this Agreement, or if any representation or warranty of Buyer shall
have become untrue, in either case such that the conditions set forth in Section
7.3(a) or (b) cannot be satisfied on or before the Termination Date (a
"Terminating Buyer Breach");
(d) by Buyer, upon breach of any representation,
warranty, covenant or agreement on the part of the Company set forth in this
Agreement, or if any representation or warranty of the Company shall have become
untrue, in either case such that the conditions set forth in Sections 7.2(a) or
(b) cannot be satisfied on or before the Termination Date ("Terminating Company
Breach");
(e) by either Buyer or the Company, if any
Governmental Authority of competent jurisdiction shall have issued an Order or
taken any other action permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such Order or
other action shall have become final and nonappealable;
(f) by Buyer or the Company if the approval of the
Merger by the stockholders of the Company required for the consummation of the
Merger as set forth in Section 7.1(a) shall not have been obtained by reason of
the failure to obtain such required vote at a duly held Stockholders' Meeting or
at any adjournment or postponement thereof provided, however, the Company shall
not have the right to terminate this Agreement pursuant to this Section 8.1(f)
if the breach by Xxxxx-Craft of the Voting Agreement is the reason for such
failure;
(g) by Buyer or the Company if the Xxxxx-Craft Merger
Agreement shall have been terminated; provided, however, that a party shall not
have the right to terminate the Agreement pursuant to this Section 8.1(g) if its
actions or failure to act shall have prevented
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the consummation of the Xxxxx-Craft Merger; provided, further, that the Company
shall not have the right to terminate the Agreement pursuant to this Section
8.1(g) if the Xxxxx-Craft Merger shall have been terminated as a result of the
failure of the Xxxxx-Craft stockholders to approve the Xxxxx-Craft Merger at a
duly held stockholders meeting called for such purpose or at any adjournment or
postponement thereof; or
(h) by Buyer or the Company if the UTV Merger
Agreement shall have been terminated; provided, however, that a party shall not
have the right to terminate this Agreement pursuant to this Section 8.1(h) if
its actions or failure to act shall have prevented the consummation of UTV
Merger; and provided further that the right to terminate this Agreement pursuant
to this Section 8.1(h) may not be enforced by the Company by reason of the
failure to obtain the requisite stockholder vote by the stockholders of UTV at a
duly held stockholders' meeting called for such purpose or at any adjournment or
postponement thereof.
SECTION 8.2 Effect of Termination. Subject to Sections 8.5 and
9.1 hereof, in the event of termination of this Agreement pursuant to Section
8.1, this Agreement shall forthwith become void, there shall be no liability
under this Agreement on the part of Buyer, FTH or the Company or any of their
respective officers or directors and all rights and obligations of each party
hereto shall cease; provided, however, that nothing herein shall relieve any
party from liability for the willful breach of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
SECTION 8.3 Amendment. This Agreement may be amended by mutual
agreement of 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 adoption of this Agreement and the approval
of the Merger by stockholders of the Company, there shall not be any amendment
that by Law requires further approval by the stockholders of the Company without
the further approval of such stockholders and provided further that any such
amendment must also be approved by the Special Committee. This Agreement may not
be amended except by an instrument in writing signed by the parties hereto.
SECTION 8.4 Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any obligation
or other act of any other party hereto, (b) waive any inaccuracy in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) subject to the proviso of Section 8.3, waive compliance
with any agreement or condition contained herein. Any such extension or waiver
shall only be valid if set forth in an instrument in writing signed by the party
or parties to be bound thereby.
SECTION 8.5 Expenses. Except as set forth in this Section 8.5,
all Expenses (as defined below) incurred in connection with this Agreement and
the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses, whether or not the Merger or any other transaction is
consummated, except that the Company and Buyer each shall pay one-half of all
Expenses relating to (i) printing, filing and mailing the Registration Statement
and the Proxy Statement and all SEC and other regulatory filing fees incurred in
connection with the
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Registration Statement and the Proxy Statement, (ii) any filing with the FCC or
similar authority and (iii) any filing with antitrust authorities; provided,
however, that Buyer shall pay all Expenses relating to the Exchange Agent and,
provided further, that the Company, Xxxxx-Craft and UTV shall not, in the
aggregate, pay more than one-half of the Expenses. "Expenses" as used in this
Agreement (other than Section 6.6 hereof) shall include all reasonable
out-of-pocket expenses (including all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to a party hereto and its
affiliates) incurred by a party or on its behalf in connection with or related
to the authorization, preparation, negotiation, execution and performance of
this Agreement, the preparation, printing, filing and mailing of the
Registration Statement and the Proxy Statement, the solicitation of stockholder
and stockholder approvals, the filing of any required notices under the HSR Act
or other similar regulations, any filings with the SEC or the FCC and all other
matters related to the closing of the Merger and the other transactions
contemplated by this Agreement.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.1 Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement and
any certificate delivered pursuant hereto by any person shall terminate at the
Effective Time or upon the termination of this Agreement pursuant to Section
8.1, as the case may be, except that this Section 9.1 shall not limit any
covenant or agreement of the parties which by its terms contemplates performance
after the Effective Time or after termination of this Agreement, including,
without limitation, those contained in Sections 6.4, 6.6, 6.8, 6.10, 6.11, 6.12,
6.18 and 6.21.
SECTION 9.2 Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by facsimile, by courier service or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 9.2):
if to Buyer or FTH:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Senior Executive Vice President and Group
General Counsel
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with copies to:
Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
if to the Company:
BHC Communications, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with copies to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
with copies to:
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: Xxxx Xxxx Xxxxxx, Esq.
SECTION 9.3 Interpretation, Certain Definitions. When a
reference is made in this Agreement to an Article, Section or Exhibit, such
reference shall be to an Article or Section of, or an Exhibit to, this
Agreement, unless otherwise indicated. The table of contents and headings for
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." The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement. All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in this Agreement
are applicable to the singular as well as the plural forms of such terms and to
the masculine as well as to the
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feminine and neuter genders of such term. Any statute defined or referred to
herein or in any agreement or instrument that is referred to herein means such
statute as from time to time amended, modified or supplemented, including (in
the case of statutes) by succession of comparable successor statutes. References
to a person are also references to its permitted successors and assigns.
References of "$" or "dollars" herein shall be deemed to be references to U.S.
$.
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) "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 the City of New York;
(c) "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;
(d) "Governmental Authority" means any United States
(Federal, state or local) or foreign government, or governmental, regulatory,
judicial or administrative authority, agency or commission;
(e) "knowledge" means the actual knowledge of the
following officers and employees of the Company (or Xxxxx-Craft) and Buyer,
without benefit of an independent investigation of any matter, as to (i) the
Company: Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxxx,
Xxxx X. Xxxxxxxx and Xxxxxx X. Xxxxxx and (ii) Buyer: X.X. Xxxxxxx, X.X. XxXxx,
X. Xxxxxxx, Xxxxx Xxxxxxx and Xxxxx Xxxxx; and
(f) "subsidiary" or "subsidiaries," of any Person,
means any corporation, partnership, joint venture or other legal entity of which
such Person (either above or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the 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. For purposes of this Agreement, FTH and its subsidiaries shall
each be deemed to be a subsidiary of Buyer, of FEG and of all of the entities of
which FEG is itself a subsidiary.
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SECTION 9.4 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
Law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the 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.
SECTION 9.5 Entire Agreement; Assignment. This Agreement
(including the Exhibits, the Company Disclosure Schedule and the Buyer
Disclosure Schedule which are hereby incorporated herein and made a part hereof
for all purposes as if fully set forth herein), the Voting Agreement, and the
Confidentiality Agreement constitutes the entire agreement among the parties
with respect to the subject matter hereof and supersede all prior agreements and
undertakings, both written and oral, among the parties, or any of them, with
respect to the subject matter hereof. The parties agree to comply with all
covenants and agreements set forth on the Company Disclosure Schedule and the
Buyer Disclosure Schedule as if such covenants and agreements were fully set
forth in this Agreement. This Agreement shall not be assigned by the Company.
Buyer shall not assign this Agreement, other than to an affiliate of Buyer;
provided that no such assignment shall relieve Buyer of any of its obligations
hereunder.
SECTION 9.6 Parties in Interest. Except as otherwise provided
in this Section 9.6, this Agreement shall be binding upon and inure solely to
the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement other
than Sections 6.6, 6.8, 6.12, 6.18 and 6.21 (which are intended to be for the
benefit of the Persons covered thereby and may be enforced by such Persons
(including Xxxxx-Craft in respect of Sections 6.8, 6.9, 6.18 and 6.21)). In the
event that the Forward Merger is consummated, Sections 6.8, 6.18 and 6.21 are
intended for the benefit of the persons who were the stockholders of the Company
immediately preceding the Effective Time.
SECTION 9.7 Governing Law. This Agreement shall be governed
by, and construed in accordance with the laws of the State of Delaware.
SECTION 9.8 Consent to Jurisdiction.
(a) Each of Buyer and the Company hereby irrevocably
submits to the exclusive jurisdiction of the courts of the State of Delaware and
to the jurisdiction of the United States District Court for the State of
Delaware, for the purpose of any action or proceeding arising out of or relating
to this Agreement and each of Buyer and the Company hereby irrevocably agrees
that all claims in respect to such action or proceeding may be heard and
determined exclusively in any Delaware state or federal court. Each of Buyer and
the Company agrees that a final judgment in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.
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(b) Each of Buyer and the Company irrevocably
consents to the service of the summons and complaint and any other process in
any other action or proceeding relating to the transactions contemplated by this
Agreement, on behalf of itself or its property, by personal delivery of copies
of such process to such party in accordance with Section 9.2. Nothing in this
Section 9.8 shall affect the right of any party to serve legal process in any
other manner permitted by law.
SECTION 9.9 Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed and delivered shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH OF BUYER AND THE
COMPANY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF BUYER OR THE
COMPANY IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, Buyer, Acquisition Sub and the Company
have caused this Agreement to be executed as of the date first written above by
their respective officers thereunto duly authorized.
THE NEWS CORPORATION LIMITED
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
NEWS PUBLISHING AUSTRALIA
LIMITED
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
BHC COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
FOX TELEVISION HOLDINGS, INC.
(solely as to Section 6.3 and Section 6.21 of
this Agreement)
By: /s/ Xxxxx Xxxxxxxxx
--------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
