Exhibit 2.1
------------------------------------------------
AGREEMENT AND PLAN OF MERGER
Among
XXXXX-CRAFT INDUSTRIES, 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
Page
ARTICLE I
THE MERGER
Section 1.1 The Merger....................................................2
Section 1.2 Effect on Securities..........................................3
Section 1.3 Share Election................................................8
Section 1.4 Allocation and Proration.....................................11
Section 1.5 Exchange of Certificates.....................................14
Section 1.6 Transfer Taxes; Withholding..................................17
Section 1.7 Stock Options and Other Stock................................18
Section 1.8 Lost Certificates............................................20
Section 1.9 Dissenting Shares............................................20
Section 1.10 Merger Closing...............................................20
ARTICLE II
THE SURVIVING CORPORATION
Section 2.1 Certificate of Incorporation.................................21
Section 2.2 By-laws......................................................21
Section 2.3 Officers and Board of Directors..............................21
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1 Organization and Qualification; Subsidiaries.................22
Section 3.2 Restated Certificate of Incorporation and By-Laws............23
Section 3.3 Capitalization...............................................23
Section 3.4 Authority Relative to Agreement..............................25
Section 3.5 No Conflict; Required Filings and Consents...................26
Section 3.6 Permits and Licenses; Contracts; Compliance with Laws........27
Section 3.7 SEC Reports..................................................30
Section 3.8 Absence of Certain Changes or Events.........................31
Section 3.9 Absence of Litigation........................................31
Section 3.10 Employee Benefit Plans.......................................32
Section 3.11 Labor Matters................................................35
Section 3.12 Environmental Matters........................................35
Section 3.13 Trademarks, Patents and Copyrights...........................37
Section 3.14 Taxes........................................................38
Section 3.15 Tax Matters..................................................40
Section 3.16 Title to Properties; Assets..................................40
Section 3.17 Year 2000 Compliance.........................................41
Section 3.18 Opinion of Financial Advisors................................42
Section 3.19 Vote Required................................................42
Section 3.20 Brokers......................................................42
Section 3.21 State Takeover Statutes......................................42
Section 3.22 BHC and UTV..................................................42
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Section 4.1 Organization and Qualification; Subsidiaries.................44
Section 4.2 Charter Documents............................................45
Section 4.3 Capitalization...............................................45
Section 4.4 Authority Relative to Agreement..............................46
Section 4.5 No Conflict; Required Filings and Consents...................47
Section 4.6 Permits and Licenses.........................................48
Section 4.7 Buyer SEC/ASX Reports........................................48
Section 4.8 Absence of Certain Changes or Events.........................49
Section 4.9 Tax Matters..................................................49
Section 4.10 Brokers......................................................49
Section 4.11 Interim Operations of Acquisition Sub........................49
ARTICLE V
CONDUCT OF BUSINESS PENDING THE MERGER
Section 5.1 Conduct of Business by the Company Pending the Merger........50
Section 5.2 Prior Preferred Stock........................................54
Section 5.3 FCC Matters..................................................54
Section 5.4 Certain Tax Matters..........................................55
ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 Registration Statement; Proxy Statement......................55
Section 6.2 Stockholders' Meetings; Approvals............................58
Section 6.3 Appropriate Action; Consents; Filings........................58
Section 6.4 Access to Information; Confidentiality.......................61
Section 6.5 No Solicitation of Competing Transactions....................62
Section 6.6 Directors' and Officers' Indemnification and Insurance.......63
Section 6.7 Notification of Certain Matters..............................66
Section 6.8 Tax Matters..................................................66
Section 6.9 Stock Exchange Listing.......................................67
Section 6.10 Public Announcements.........................................67
Section 6.11 Affiliates of the Company....................................68
Section 6.12 Employee Matters.............................................68
Section 6.13 Letters of the Company's Accountants.........................70
Section 6.14 Letters of Buyer's Accountants...............................70
Section 6.15 [INTENTIONALLY OMITTED]......................................71
Section 6.16 Other Merger Agreements......................................71
Section 6.17 Employee Solicitation........................................71
Section 6.18 Post-Closing Covenant of Buyer...............................71
Section 6.19 Form of Merger...............................................72
Section 6.20 Obligations of FTH...........................................73
ARTICLE VII
CONDITIONS TO THE MERGER
Section 7.1 Conditions to the Obligations of Each Party..................73
Section 7.2 Conditions to the Obligations of Buyer.......................75
Section 7.3 Conditions to the Obligations of the Company.................76
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
Section 8.1 Termination..................................................77
Section 8.2 Effect of Termination........................................78
Section 8.3 Amendment....................................................79
Section 8.4 Waiver.......................................................79
Section 8.5 Expenses.....................................................79
ARTICLE IX
GENERAL PROVISIONS
Section 9.1 Non-Survival of Representations, Warranties and
Agreements.................................................80
Section 9.2 Notices......................................................80
Section 9.3 Interpretation, Certain Definitions..........................81
Section 9.4 Severability.................................................82
Section 9.5 Entire Agreement; Assignment.................................83
Section 9.6 Parties in Interest..........................................83
Section 9.7 Governing Law................................................83
Section 9.8 Consent to Jurisdiction......................................84
Section 9.9 Counterparts.................................................84
Section 9.10 WAIVER OF JURY TRIAL.........................................84
EXHIBITS
Exhibit A Form of Written Agreement with Company Affiliates
Exhibit B Newco - FTH Agreement Term Sheet
TABLE OF DEFINED TERMS
Term Page
---- ----
$...........................................................................81
1999 Balance Sheet..........................................................39
Acquisition Sub..............................................................1
Actions.....................................................................55
Adverse Condition...........................................................60
affiliate...................................................................82
Aggregate Buyer Share Amount.................................................6
Aggregate Cash Amount........................................................7
Agreement....................................................................1
All Cash Election............................................................9
All Cash Election Number.....................................................7
All Cash Election Shares....................................................11
ASX.....................................................................18, 47
ASX Listing Rules...........................................................47
ASX Waiver..................................................................48
BHC..........................................................................2
BHC Class A Shares..........................................................43
BHC Class B Shares..........................................................43
BHC Merger...................................................................2
BHC Merger Agreement.........................................................2
BHC Preferred Stock.........................................................43
Blue Sky Laws...............................................................27
business day................................................................82
Buyer........................................................................1
Buyer Disclosure Schedule...................................................44
Buyer FCC Licenses..........................................................48
Buyer Licensed Facilities...................................................48
Buyer Material Adverse Effect...............................................44
Buyer Preferred Stock........................................................4
Buyer SEC Reports...........................................................48
Buyer Shareholder Approval..................................................48
Buyer Shares.................................................................4
Buyer Shares Trust..........................................................16
Cash Amount.................................................................13
Cash Election Shares.........................................................4
Cash Fraction...............................................................12
Cash Merger Price............................................................7
CERCLA......................................................................36
Certificate of Merger........................................................3
Certificates................................................................14
change in control...........................................................19
Class B Common Stock.........................................................1
Closing.....................................................................20
Closing Buyer Share Value....................................................7
Closing Date................................................................21
Closing Price...............................................................13
Closing Transaction Value....................................................7
Code.........................................................................1
Common Stock.................................................................1
Common Stock Equivalents.....................................................1
Communications Act..........................................................27
Company......................................................................1
Company Benefit Plans.......................................................32
Company Disclosure Schedule.................................................22
Company Employees...........................................................68
Company FCC Licenses........................................................28
Company Financial Advisor...................................................42
Company Intellectual Property Rights........................................37
Company Material Adverse Effect.........................................23, 27
Company Options.............................................................18
Company Permits.............................................................27
Company SEC Reports.........................................................30
Company Stations............................................................28
Company Stock Plans.........................................................24
Company Systems.............................................................41
Company Year 2000 Compliant.................................................42
Company Year 2000 Plan......................................................41
Competing Transaction.......................................................62
Confidentiality Agreement...................................................61
control.....................................................................82
controlled by...............................................................82
Convertible Preferred Stock..................................................1
Costs.......................................................................64
Covered Affiliates..........................................................64
Delaware Law.................................................................1
Deposit Agreement...........................................................14
Depositary..................................................................14
Dissenting Shares........................................................8, 20
dollars.....................................................................81
DTV.........................................................................29
DTV Stations................................................................30
Effective Time...............................................................3
Election Deadline...........................................................10
Elections....................................................................9
Environmental Laws..........................................................37
Environmental Permits.......................................................37
ERISA.......................................................................32
ERISA Affiliates............................................................33
Excess Buyer Shares.........................................................16
excess parachute payment....................................................34
Exchange Act................................................................19
Exchange Agent...............................................................9
Exchange Fund...............................................................16
Exchange Ratio...............................................................8
Exchangeable Shares..........................................................8
Exchanged Shares.............................................................8
Excluded Matters............................................................22
Expenses................................................................65, 79
FCC.........................................................................27
FCC Application.............................................................59
FCC Consent.................................................................74
FCC Failure.................................................................72
FCC Multiple Ownership Rules................................................59
FEG.........................................................................71
Form of Election.............................................................9
Forward Merger...............................................................1
FTH..........................................................................1
GAAP........................................................................30
Governmental Authority......................................................82
Hazardous Materials.........................................................37
Holders......................................................................8
HSR Act.....................................................................27
incentive stock options.....................................................19
Indemnifiable Claim.........................................................64
Indemnifying Party..........................................................64
Indemnitees.............................................................64, 66
Intellectual Property Rights................................................37
IRS.........................................................................32
IRS Ruling..................................................................76
knowledge...................................................................82
Laws........................................................................26
Liens.......................................................................23
Merger.......................................................................1
Merger Consideration.........................................................3
Multiemployer Plans.........................................................32
Newco.......................................................................71
Newco-FTH Agreement.........................................................71
Non-Election.................................................................9
Non-Election Fraction.......................................................12
Non-Election Shares.........................................................11
NYSE.........................................................................7
Opinions....................................................................35
Option Registration Statement...............................................55
Order.......................................................................60
Partial Cash Election........................................................4
Partial Cash Election Shares.................................................4
Partial Exchange Ratio.......................................................4
Per Share Amount.............................................................8
Person.......................................................................9
Post-Signing Returns........................................................55
Preferred Stock.............................................................23
Prior Preferred Stock.......................................................23
Pro-Rata Bonus..............................................................68
Program Agreement...........................................................54
Proxy Statement.............................................................55
Registration Statement......................................................55
Representatives.............................................................61
Restated Certificate of Incorporation........................................5
Restructuring Trigger.......................................................72
Reverse Merger...............................................................1
Reverse Merger Exchange Ratio................................................4
Ruling Failure..............................................................72
SEC..........................................................................7
Secretary of State...........................................................3
Securities Act..............................................................27
Share Registration Statement................................................55
Stock Election...............................................................9
Stock Election Number........................................................8
Stock Election Shares.......................................................11
Stock Fraction..............................................................12
Stockholders' Meeting.......................................................58
subsidiaries................................................................82
subsidiary..................................................................82
Subsidiary Merger Agreements.................................................2
Subsidiary Mergers...........................................................2
Substituted Option..........................................................18
Superior Proposal...........................................................63
Surviving Corporation........................................................3
Tax.........................................................................38
Tax Returns.................................................................38
Taxes.......................................................................38
Terminating Buyer Breach....................................................78
Terminating Company Breach..................................................78
Termination Date............................................................77
Total Consideration.........................................................13
under common control with...................................................82
UTV..........................................................................2
UTV Common Shares...........................................................43
UTV Merger...................................................................2
UTV Merger Agreement.........................................................2
UTV Preferred Stock.........................................................43
Valuation Period.............................................................7
VEBA........................................................................32
AGREEMENT AND PLAN OF MERGER dated as of August 13, 2000 (this
"Agreement") by and among XXXXX-CRAFT INDUSTRIES, 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 ("FTH") (but solely as to
Section 6.3 and Section 6.20 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"), whereby each share of the issued and outstanding
shares of Common Stock of the Company, par value $.50 per share (the
"Common Stock"), each share of the issued and outstanding shares of Class B
Common Stock of the Company, par value $.50 per share (the "Class B Common
Stock"), and each share of the issued and outstanding shares of Convertible
Preferred Stock of the Company, par value $1.00 per share (the "Convertible
Preferred Stock" and, collectively with the Common Stock and the Class B
Common Stock, the "Common Stock Equivalents") will, upon the terms and
subject to the conditions and limitations set forth herein, be converted
into the Merger Consideration (as defined herein) as determined in
accordance with Article I hereof;
WHEREAS, the Board of Directors of the Company (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 is entering into an agreement and plan of merger with BHC
Communications, Inc. ("BHC"), a Delaware corporation and a direct
subsidiary of the Company (the "BHC Merger Agreement"), providing for the
merger of BHC with and into Acquisition Sub or, if a Restructuring Trigger
has occurred, the merger of a direct or indirect subsidiary of Buyer (or of
the Company) with and into BHC, in each case upon the terms and subject to
the conditions set forth in the BHC Merger Agreement (the "BHC Merger");
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Buyer is entering into an agreement and plan of merger with
United Television, Inc. ("UTV"), a Delaware corporation and an indirect
subsidiary of the Company (the "UTV Merger Agreement" and, together with
the BHC Merger Agreement, the "Subsidiary Merger Agreements"), providing
for the merger of UTV with and into Acquisition Sub or, if a Restructuring
Trigger has occurred, the merger of a direct or indirect 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" and, together with the BHC Merger, the "Subsidiary Mergers"); and
WHEREAS, it is intended that the mergers heretofore referred to
shall be completed in the following order: first, the Merger; second, the
BHC Merger; and third, the UTV Merger;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained 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 1.10
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."
(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. Each share of Common Stock
Equivalents held by the Company as treasury stock or held by Buyer or its
subsidiaries immediately prior to the Effective Time shall automatically be
cancelled and retired and revert to the status of authorized but unissued
shares and no consideration or payment shall be delivered therefor or in
respect thereto.
(b) Conversion of Securities. Except as otherwise provided in
this Agreement and subject to Section 1.4 hereof, each share of Common
Stock Equivalents 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 1.9 hereof)) shall be converted
into the following (the "Merger Consideration"):
Either (X) in the case of the Forward Merger:
(i) for each share of Common Stock Equivalents 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 Common Stock Equivalents 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 $34,
or if the Effective Time shall occur after the one year anniversary
of the date hereof, $35 and (B) 1.1591 (the "Partial Exchange Ratio")
Buyer Shares (such shares of Common Stock Equivalents 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 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 Common Stock Equivalents,
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 Common Stock Equivalents, (A) the right to
receive from Buyer an amount in cash equal to $36 or, if the
Effective Time shall occur after the one year anniversary of the date
hereof, $37 and (B) 1.2273 Buyer Shares (the "Reverse Merger Exchange
Ratio").
(c) All shares of Common Stock Equivalents 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 Common Stock Equivalents 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) The shares of Convertible Preferred Stock shall be entitled
to make elections (in the case of the Forward Merger) and shall be entitled
to receive the Merger Consideration in all cases as if such shares had been
converted in accordance with the Restated Certificate of Incorporation of
the Company (the "Restated Certificate of Incorporation").
(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 Common Stock Equivalents who has the right to receive the
Merger Consideration pursuant to Section 1.2 hereof would have
received had such Common Stock Equivalents been converted into Buyer
Shares or Buyer Preferred Stock as of the date hereof.
(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 Skadden, Arps, Slate, Xxxxxxx & Xxxx 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 Common Stock
Equivalents 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 Common Stock,
Buyer Shares, Buyer Preferred Stock and any newly issued securities)
to the holders of Common Stock Equivalents 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 Common Stock Equivalents (on
an as converted basis) issued and outstanding immediately prior to
the Effective Time, less the number of outstanding shares of Common
Stock Equivalents cancelled pursuant to Section 1.2(a) hereof, and
(y) 1.9318, 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) the product of (x)
the number of shares of Common Stock Equivalents (on an as converted
basis) issued and outstanding immediately prior to the Effective
Time, less the number of outstanding shares of Common Stock
Equivalents cancelled pursuant to Section 1.2(a) hereof and (y) $34
or, if the Effective Time shall occur after the one year anniversary
of the date hereof, $35, 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 Common Stock Equivalents as shall be equal to the quotient
obtained by dividing 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 $85.
(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 Common Stock Equivalents (on an as converted basis) 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 Common Stock Equivalents (on an as converted basis) 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 Common Stock Equivalents 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.
(xii) "Dissenting Shares" means shares of Common Stock
Equivalents 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 Common Stock Equivalents (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 Common Stock Equivalents
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
business days, but not more than five business days, prior thereto;
provided, however, that the Closing Date 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 7.2(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(h), so long as the foregoing
enumerated conditions are anticipated by the parties hereto to be satisfied
on the Closing Date). 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, Common Stock Equivalents 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-Electing 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 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 Stockholder's 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. In the case of the
Forward Merger:
(a) Notwithstanding anything in this Agreement to the contrary,
the maximum number of shares of Common Stock Equivalents (on an as
converted basis) 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 Common Stock Equivalents (on an as converted
basis) 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 Common Stock
Equivalents covered by All Cash Elections (the "All Cash Election Shares")
exceeds the All Cash Election Number, all shares of Common Stock
Equivalents covered by Stock Elections (the "Stock Election Shares") and
all shares of Common Stock Equivalents 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 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) (A) (1)
$34 or (2) if the Effective Time shall occur after the one year anniversary
of the date hereof, $35, multiplied by (B) 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) 1.9318 multiplied by (C) 60% of the excess of the number of Common
Stock Equivalents (on an as converted basis) outstanding immediately prior
to the Effective Time over the number of outstanding shares of Common Stock
Equivalents 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 Common
Stock Equivalents (on an as converted basis) (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 the amount of cash payable in respect of Partial Election
Shares, and issuing in lieu 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 Common
Stock Equivalents 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 cash 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
Skadden, Arps, Slate, Xxxxxxx & Xxxx 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 Common Stock Equivalents, 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 the holders of shares of Common Stock Equivalents 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 Common Stock Equivalents (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 (A) a
certificate or certificates representing that number of whole Buyer Shares,
if any, into which the number of shares of Common Stock Equivalents
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 Common Stock Equivalents
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 Common Stock Equivalents 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 Common Stock Equivalents 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 I. 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
Common Stock Equivalents, 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 Common Stock Equivalents otherwise entitled to a fraction of a
Buyer Share will be entitled to receive in accordance with the 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 Common Stock Equivalents, 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 Common Stock
Equivalents in lieu of any fractional Buyer Share interests, the Exchange
Agent shall make available such amounts to such holders of shares of Common
Stock Equivalents 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 Common Stock Equivalents 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.
(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 Common Stock Equivalents.
Section 1.6 Transfer Taxes; Withholding. 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 Common Stock Equivalents (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 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 Common Stock Equivalents 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 Common Stock Equivalents in respect of whom such deduction and
withholding was made by Buyer or the Exchange Agent.
Section 1.7 Stock Options and Other Stock.
(a) Prior to the Effective Time, Buyer and the Company shall
take such action as may be necessary (including, without limitation,
enacting such amendments, if any, to the Company Stock Plans (as
hereinafter defined) as necessary to comply with the requirements of the
Australian Stock Exchange ("ASX") or Australian Law; provided, however,
that any such amendments shall not affect in any respect the number of
Buyer Shares issuable upon exercise of Substituted Options (as defined
below) or the exercise price thereof) to cause each unexpired and
unexercised option to purchase shares of Common Stock which is outstanding
immediately prior to the Effective Time (collectively, "Company Options"),
to be automatically converted at the Effective Time into an option
(collectively, a "Substituted Option") to purchase a number of Buyer Shares
equal to the number of shares of Common Stock that could have been
purchased under such Company Option multiplied by the Exchange Ratio in the
case of the Forward Merger and by the product of one and two-thirds and the
Reverse Merger Exchange Ratio in the case of the Reverse Merger (in each
case, rounded to the nearest whole number of Buyer Shares) at a price per
Buyer Share equal to the per-share option exercise price specified in the
Company Option divided by the Exchange Ratio in the case of the Forward
Merger and by the product of one and two-thirds and the Reverse Merger
Exchange Ratio in the case of the Reverse Merger (in each case, rounded
down to the nearest whole cent). Except as otherwise provided in this
Agreement, such Substituted Option shall otherwise be subject to the same
terms and conditions as were applicable to such Company Option, except as
mandated by the requirements of the ASX or Australian Law; provided,
however that clarification of the terms of the Substitute Options shall be
made so as to make clear that, to the extent permitted by applicable law
(without the need for obtaining additional Buyer shareholder approval), the
optionee may use shares of capital stock of Buyer that have been held for
six months by the option holder (including any period prior to the
Effective Time during which such stock was stock of the Company) as payment
of the exercise price thereof and in respect of the legally required
withholding obligation. The date of the grant of the Substituted Option
shall be the date on which the corresponding Company Option was granted and
at the Effective Time all references in the related stock option agreements
to the Company shall be deemed to refer to Buyer. Except as otherwise
provided herein or in the applicable plan or program, employee deferrals
and all other equity based compensation that reference Common Stock will,
as of and after the Effective Time, be deemed to refer to Buyer Shares (as
adjusted to reflect the Exchange Ratio or one and two-thirds multiplied by
the Reverse Merger Exchange Ratio, as applicable). The adjustments provided
for herein with respect to any options which are "incentive stock options"
(as defined in Section 422 of the Code) shall be effected in a manner
consistent with the requirements of Section 424(a) of the Code. Nothing
contained herein shall alter or affect any provision providing for the
accelerated vesting of Company Options in the event of a termination of
employment following a "change in control" of the Company contained in any
severance plans or employment agreements of the Company in effect as of the
date hereof (or as may be amended pursuant to Section 6.12(e) and Section
6.12(e) of the Company Disclosure Schedule), as such terms are set forth in
such plans or agreements, and Buyer agrees not to amend such provisions of
any such plans following the Closing.
(b) Buyer shall take such corporate action as may be necessary
or appropriate within two (2) business days following the Effective Time,
file with the SEC a registration statement on Form S-8 (or any successor or
other appropriate form) with respect to the Buyer Shares subject to the
Substituted Options to the extent such registration is required under
applicable law in order for such Buyer Shares to be sold without
restriction in the United States, and Buyer shall use its reasonable best
efforts to obtain and maintain the effectiveness of such registration
statement for so long as such Substituted Options remain outstanding. Buyer
shall promptly prepare and submit to the NYSE applications covering the
Buyer Shares subject to the Substituted Options and use commercially
reasonable efforts to cause such securities to be approved for listing on
the NYSE prior to the Effective Time, subject to official notice of
issuance, and within ten days after the Effective Time, prepare and submit
to the ASX, pursuant to the applicable listing rules of the ASX,
applications covering the Buyer Preferred Stock underlying the Buyer Shares
to be issued upon the exercise of Substituted Options.
(c) 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.
(d) At the time that a Substituted Option is exercised in
accordance with the terms hereof, Buyer shall, pursuant to the terms of the
Deposit Agreement, (x) deposit with the Custodian the shares of Buyer
Preferred Stock underlying the Buyer Shares to be issued upon such exercise
and (y) instruct the Depositary to deliver the Buyer Shares to be issued
upon such exercise in accordance with the written instructions of the
holder of such Substituted Option so exercised.
Section 1.8 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.
Section 1.9 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 Common Stock Equivalents
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
Common Stock Equivalents 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 1.10Merger 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 and the
certificate of incorporation of the Company in the case of the Reverse
Merger, in each case 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; provided,
however, in the case of the Reverse Merger, the certificate of
incorporation of the Company shall be 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, then reads.
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.
Section 2.3 Officers and Board of Directors.
(a) From and after the Effective Time, the officers of the
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 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 BHC Merger Agreement or the UTV Merger Agreement, (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) and (iii) (other than with respect to the
representations of the Company set forth in Section 3.12(a) hereof, as to
which this clause (iii) shall not be applicable) for the litigations and
administrative proceedings set forth in Section 3.0 of the Company
Disclosure Schedule (including claims made in relation thereto, the subject
matter thereof and claims arising with respect thereto) and for any actions
or omissions or alleged actions or omissions relating to or arising from
environmental liabilities that are the subject matter of the litigations
and administrative proceedings set forth in such Section 3.0 (including
claims made in relation thereto, the subject matter thereof and claims
arising with respect thereto) by (A) Montrose Chemical Corporation of
California or (B) the Company (including its predecessors in interest,
including, without limitation, Montrose Chemical Company and
Xxxxxxx-Xxxxxxxx Chemical Company, Inc.) ("Excluded Matters"), 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, operations, results of operations or financial condition of
the Company 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 Montrose Chemical Corporation of
California (in which the Company owns a 50% equity interest and which is
therefore not a subsidiary of the Company) and BHC and UTV (the
capitalizations of which are described in Section 3.22 hereof) and their
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. The authorized capital stock of the
Company consists of 100,000,000 shares of Common Stock, 50,000,000 shares
of Class B Common Stock, 73,399 shares of Prior Preferred Stock, no par
value per share (the "Prior Preferred Stock"), 233,668 shares of
Convertible Preferred Stock and 10,000,000 shares, par value $1.00 per
share, of preferred stock (the "Preferred Stock"). As of the close of
business on June 30, 2000, (i) 26,904,118 shares of Common Stock (excluding
treasury shares) were issued and outstanding, (ii) no shares of Common
Stock were held by the Company in its treasury, (iii) 5,033,732 shares of
Common Stock were reserved for issuance pursuant to the Company 1999
Management Incentive Plan, the Company 1994 Management Incentive Plan and
the Company 1994 Director Stock Option Plan (such plans, collectively, the
"Company Stock Plans") (of which 3,693,992 shares were subject to
outstanding Company Options ), (iv) 8,395,525 shares of Common Stock were
reserved for issuance upon conversion of the Convertible Preferred Stock,
including shares of Class B Common Stock, (v) 8,013,860 shares of Common
Stock were reserved for issuance upon conversion of the Class B Common
Stock, (vi) 8,013,860 shares of Class B Common Stock (excluding treasury
shares) were issued and outstanding, (vii) no shares of Class B Common
Stock were held by the Company in its treasury, (viii) no shares of Class B
Common Stock were reserved for issuance pursuant to the Company Stock
Plans, (ix) 73,399 shares of Prior Preferred Stock (excluding treasury
shares) were issued and outstanding, (x) no shares of Prior Preferred Stock
were held by the Company in its treasury, (xi) 233,668 shares of
Convertible Preferred Stock (excluding treasury shares) were issued and
outstanding and (xii) no shares of Convertible Preferred Stock were held by
the Company in its treasury and (xiii) no shares of Preferred Stock were
issued and outstanding or were held by the Company in its treasury. The
redemption price of the Prior Preferred Stock is $25.00 per share plus
accrued dividends for the period through and including September 30, 2000
in the amount of $0.25 per share. There are no outstanding stock
appreciation rights or other rights that are linked to the price of Common
Stock granted under any Company Stock Plan that were not granted in tandem
with a related Company Option. No shares of Common Stock or Class B Common
Stock or any other class of capital stock are owned by any subsidiary of
the Company. The Company has delivered to Buyer a true and complete list,
as of June 30, 2000, of all outstanding options to purchase Common Stock
granted under the Company Stock Plans and all other rights, if any, to
purchase or receive Common Stock granted under the Company Stock Plans, the
number of shares subject to each such Company Option, the grant dates and
exercise prices of each such Company Option and the names of the holder
thereof. As of the date hereof, all outstanding Company Options have an
exercise price on a per share basis lower than $85, and the weighted
average exercise price of such Company Options was equal to $45.96. Except
as set forth above and for the exercise of Company Options since June 30,
2000, as of the date of this Agreement, no shares of capital stock of, or
other equity or voting interests in, the Company, or options, warrants or
other rights to acquire any such stock or securities were issued, reserved
for issuance or outstanding. During the period from June 30, 2000 to the
date of this Agreement, (x) there have been no issuances by the Company of
shares of capital stock of, or other equity or voting interests in, the
Company other than (i) issuances of shares of Common Stock pursuant to the
exercise of Company Options outstanding on such date, (ii) the issuance of
shares of Common Stock and Class B Common Stock issued upon conversion of
shares of Convertible Preferred Stock and (iii) the issuance of shares of
Common Stock issued in exchange for shares of Class B Common Stock and (y)
there have been no issuances by the Company of options, warrants or other
rights to acquire shares of capital stock of, or other equity or voting
interests in, the Company. All outstanding shares of capital stock of the
Company are, and all shares that may be issued pursuant to the Company
Stock Plans will be, 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 for borrowed money of the Company or any of its subsidiaries,
and, except as disclosed in this Section 3.3, 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 above and
except as specifically permitted under Section 5.1, there are no contracts
of any kind to which the Company or any of its subsidiaries is a party or
by which the Company or any of its subsidiaries 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 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, the Company or any of its subsidiaries
(other than BHC, UTV and their respective subsidiaries) or obligating the
Company or any of its subsidiaries to issue, grant, extend or enter into
any such security, option, warrant, call, right or contract. Except for the
redemption of the Prior Preferred Stock contemplated by this Agreement,
there are not any outstanding contractual obligations of the Company 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, the
Company or any of its subsidiaries (other than BHC, UTV and their
respective 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 (other than BHC, UTV and their respective subsidiaries). To
the knowledge of the Company, 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 the Company or any of
its subsidiaries.
Section 3.4 Authority Relative to Agreement. 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 class, and the adoption of this Agreement and
the approval of the Merger by the affirmative vote of the holders of the
Convertible Preferred Stock, voting separately as a class (after giving
effect to the redemption of the Prior Preferred Stock required pursuant to
Section 5.2 hereof)). 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.
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 Subsidiary Mergers; 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 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 Subsidiary Mergers; 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
subsidiaries' New York, Los Angeles, San Francisco or Minneapolis
television stations and would not have a Company Material Adverse Effect
and (ii) would not result in the loss of the Company subsidiaries' main
station license issued by the FCC with respect to any of the Company's New
York, Los Angeles, San Francisco or Minneapolis television 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 Subsidiary Mergers.
(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.
(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, BHC 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, BHC and UTV since January
1, 1997 (together with all information incorporated therein by reference,
the "Company SEC Reports"). Except for BHC and 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 Form 10-Q 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, BHC
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. 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 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 BHC or BHC'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 or regular cash dividends
on the Convertible Preferred Stock or Prior Preferred Stock or the UTV
regular annual cash dividend paid in April 2000 or the BHC special dividend
which was paid in January 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 or any of its subsidiaries, or with
respect to which the Company or any of its subsidiaries could incur
liability under Section 4069 of ERISA (the "Company Benefit Plans"). 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 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 and its subsidiaries 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 or any of its subsidiaries 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 or any
subsidiary been notified of any audit or investigation. Neither the Company
nor any member of the same "controlled group" (as defined in Section
414(b), (e), (m) or (o) of the Code or Section 4001 of ERISA) as the
Company or any of its subsidiaries (collectively, the "ERISA Affiliates")
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 4001(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 of all severance agreements, programs and
policies of the Company or any of its subsidiaries with or relating to its
or its subsidiaries' employees; and (iii) copies of all plans, programs,
agreements and other arrangements of the Company or any of its subsidiaries
with or relating to its or its subsidiaries' employees which contain change
in control provisions. Except as disclosed in Section 3.10(c) or Section
6.12(e) 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 an employee of the Company will entitle such 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. Except as contemplated hereby, or
as otherwise disclosed in Sections 3.10(c) or 6.12(e) of the Company
Disclosure Schedule, the Company has taken no action with respect to the
Company Options that would result in any acceleration of vesting of the
Company Options in connection with the execution and delivery of this
Agreement or the consummation of any transactions contemplated hereby or
otherwise. Without limiting the generality of the foregoing, except as set
forth in Section 3.10(c) or Section 6.12(e) 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) Except as set forth in Section 3.10(e) of the Company
Disclosure Schedule, 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.
(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.
(a) Notwithstanding clause (iii) of the introductory paragraph
to Article III hereof, the Company represents and warrants to Buyer that
prior to the date of this Agreement none of the persons set forth on
Section 3.12(a) of the Company Disclosure Schedule have knowingly made to
Buyer any materially false statements with respect to any material fact
relating to Excluded Matters; provided, however, that the foregoing
representation shall not apply to any opinions, estimates, predictions,
projections, valuations or matters of judgment (collectively, "Opinions")
made with respect to Excluded Matters, except to the extent any such
Opinion was made by such specified persons with the willful intent to
deceive Buyer.
(b) 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
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 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 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, BHC and UTV filed for
periods ending after December 31, 1993 and (B) income Tax returns filed on
behalf of UTV of San Francisco, 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.
Section 3.15Tax 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 as set forth in Section 3.16 of
the Company Disclosure Schedule and, 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, Los Angeles, San Francisco or Minneapolis
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.
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 Company has
received the written opinion of Xxxxx & Company Incorporated (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 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 a majority of the votes cast by all stockholders
entitled to vote at the Stockholders' Meeting (including the holders of the
Convertible Preferred Stock) voting together as a single class, and the
majority vote of the holders of the Convertible Preferred Stock, voting as
a separate class, are the only votes of the holders of any class or series
of capital stock of the Company necessary to adopt this Agreement, after
giving effect to the redemption of the Prior Preferred Stock required
pursuant to Section 5.2 hereof.
Section 3.20 Brokers. The Company Financial Advisor has entered
into a letter of engagement with the Company 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 transactions contemplated hereby 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.
Section 3.22 BHC and UTV.
(a) As of the date of this Agreement, the authorized capital
stock of (i) BHC consists of 200,000,000 shares of Class A Common Stock,
par value $0.01 per share ("BHC Class A Shares"), 200,000,000 shares of
Class B Common Stock, par value $0.01 per share ("BHC Class B Shares"), and
50,000,000 shares of Preferred Stock, par value $0.01 per share ("BHC
Preferred Stock"), and (ii) UTV consists of 25,000,000 shares of Common
Stock, par value $0.10 per share ("UTV Common Shares"), 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) 4,510,823 BHC Class
A Shares were issued and outstanding, 18,000,000 BHC Class B Shares were
issued and outstanding, no shares of BHC Preferred Stock were issued and
outstanding, 9,486,173 UTV Common Shares were issued and outstanding and no
shares of UTV Preferred Stock were issued and outstanding; (ii) (A) no
shares were held by BHC in its treasury and (B) no shares were held by UTV
in its treasury; and (iii) (X) no BHC Class A Shares and no BHC Class B
Shares were reserved for issuance upon the exercise of outstanding options
to purchase such shares and (Y) 234,570 UTV Common Shares were reserved for
issuance upon the exercise of outstanding options to purchase such shares.
Since January 31, 2000, no shares of capital stock of BHC or 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 BHC or 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 BHC or any of its
subsidiaries or UTV or any of its subsidiaries is a party or by which any
of them is bound obligating BHC or any of its subsidiaries or 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 BHC or any of its subsidiaries or UTV or of any of its
subsidiaries or obligating BHC or any of its subsidiaries or 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 BHC and 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 BHC, UTV or any of their respective subsidiaries, and
no securities or other instruments or obligations of BHC, UTV or any of
their respective subsidiaries the value of which is in any way based upon
or derived from any capital or voting stock of BHC or 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 BHC or 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 BHC or any of its
subsidiaries or UTV or any of its subsidiaries (i) to repurchase, redeem or
otherwise acquire any shares of capital stock of BHC or UTV or (ii) to vote
or to dispose of any shares of the capital stock of any of BHC's or UTV's
subsidiaries.
(b) As of the date of this Agreement (i) the Company, directly
or indirectly, owns 10,000 BHC Class A Shares, 18,000,000 BHC Class B
Shares and no shares of BHC Preferred Stock, and (ii) BHC directly or
indirectly, owns 5,509,027 UTV Common Shares.
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
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, as applicable, 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, 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 Buyer 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 persons in whose names the Buyer Shares are
registered will be entitled to the rights of registered holders of Buyer
Shares specified therein and in the Deposit Agreement, and the Buyer Shares
will conform in all material respects to the description of the Buyer
Shares set forth in 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 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, 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 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.
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 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 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 or any
subsidiary 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 the Company, will be a
Delaware corporation and, when formed, will have been formed solely for the
purpose of engaging in the transactions contemplated hereby and the
Subsidiary Mergers, 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 a Subsidiary 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
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 to BHC and UTV, as the case may be, of the Company, and, in the case
of UTV, of BHC, and in either case, the members of the Boards of Directors
of BHC and 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 (except for the issuance of shares issuable pursuant to any
Company Options outstanding as of the date hereof), (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;
(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
regular cash dividends in respect of the Company's Convertible Preferred
Stock or the Prior Preferred Stock or cash dividends payable by any wholly
owned subsidiary (or by BHC or UTV (if permitted under the BHC Merger
Agreement or 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 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) 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 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; or (iv) taking any actions necessary and
appropriate to effectuate the provisions of Section 6.12(e) of the Company
Disclosure Schedule;
(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 3.5 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 5.4
hereof), other than any such matter which, if settled or compromised, would
not be materially detrimental to the Company and its subsidiaries taken as
a whole; provided, however that the Company shall not in any event settle
any arbitration action, suit, investigation or proceeding arising out of
this Agreement or the matters contemplated hereby without Buyer's consent
(other than those related to Tax matters, which shall be governed
exclusively by the provisions of Section 5.4 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 BHC 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, (ii) $5,000,000 in the aggregate 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 Prior Preferred Stock. The Company shall (i) take
all actions required pursuant to the Restated Certificate of Incorporation
to cause a notice (as defined in paragraph III.A(2) of Article Fourth of
the Restated Certificate of Incorporation) of redemption to be mailed to
the holders of the Prior Preferred Stock not less than 30 days prior to the
date fixed for redemption which date shall be set by the Company to be no
fewer than five (5) or greater than ten (10) days prior to the date set by
the Company pursuant to Section 6.2 hereof for the Stockholders' Meeting
and (ii) prior to the Stockholders' Meeting (a) cause the redemption price
(as specified in the Restated Certificate of Incorporation) to be deposited
with the redemption depository (as specified in the Restated Certificate of
Incorporation) and (b) take all necessary action to effectuate such
redemption.
Section 5.3 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 5.4 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.
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, (ii) Buyer shall prepare and file
with the SEC a registration statement on the appropriate form (together
with all amendments thereto, the "Share 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 and (iii) Buyer
shall prepare and file with the SEC a registration statement on the
appropriate form (together with all amendments thereto, the "Option
Registration Statement," and together with the Share Registration
Statement, the "Registration Statement") in which the Proxy Statement will
be included as a prospectus, in connection with the registration under the
Securities Act of the Buyer Shares to the issued upon exercise of the
Substituted Options, it being understood that the Option Registration
Statement shall be considered filed as promptly as practicable if it is
filed by Buyer within at least two (2) business days following the
Effective Time. 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 recommendation of 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 Board of Directors of the Company may take or
disclose to its stockholders 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 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 accordance with Article VIII, the
Company shall submit this Agreement to its stockholders at its
Stockholders' Meeting even if 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.
Section 6.2 Stockholders' Meetings; Approvals.
(a) The Company shall, as promptly as practicable following the
date of this Agreement, establish a record date (which will be set in
accordance with Section 5.2 hereof and 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
Subsidiary Mergers. 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 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
CFR 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, 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 or San Francisco television stations 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 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 the Company, 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.
(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 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 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 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 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 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 Squadron,
Ellenoff, Plesent & Xxxxxxxxx LLP, tax counsel to Buyer, and Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel to the Company, (i) 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)
representations required by the U.S. Internal Revenue Service 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
applications covering the Buyer Shares to be issued in the Merger and the
Buyer Shares underlying the Company Options outstanding immediately prior
to the Effective Time, 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 the 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.
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 employees and former employees of the Company and any of its
subsidiaries ("Company Employees") 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 either (a) is a participant in the Company's 2000
Management Incentive Compensation Plan or (b) received an annual bonus in
respect of 1999 and is eligible to receive an annual bonus for the year
2000 and who, in either case, 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 (other than any person who
is a party to an Employment Agreement (as defined in Section 6.12(e) of the
Company Disclosure Schedule)) 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 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 (1) 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 Buyer Plan, 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, 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 Company
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.
(e) Buyer and the Surviving Corporation agree to the terms and
conditions set forth on Section 6.12(e) of the Company Disclosure Schedule
with respect to certain employee benefit matters.
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 BHC Merger Agreement and the UTV Merger
Agreement. The Company shall comply with its obligations under the voting
and proxy agreement related to the BHC Merger and shall cause BHC to comply
with its obligations under the voting and proxy 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 case of the Forward Merger 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 a member of the consolidated group for U.S. federal income tax purposes
of News Publishing Australia Limited ("Newco") of Fox Entertainment Group,
Inc. ("FEG"). As of or promptly following the Effective Time, Newco and
either FTH or a wholly owned subsidiary thereof 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 B 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 the IRS Ruling;
provided that it shall not contain any provisions as to which the Company
reasonably objects by reason of concerns as to the Federal income tax
treatment of the Forward Merger or the ability to obtain the FCC Consent
(without any Adverse Condition) or the IRS Ruling for the Forward 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 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 of the
Reverse Merger, 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 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. 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 Internal Revenue Service (unless a
responsible officer of the Internal Revenue Service 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 Internal Revenue Service has indicated to representatives of both the
Company 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 Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP or Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP
indicates in writing to the Company 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 "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 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 or 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 (including the holders of the Convertible
Preferred Stock) voting together as a single class, and the majority of the
holders of the Convertible Preferred Stock, voting as a separate class;
(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 its subsidiaries 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 and to holders of Company Options outstanding immediately prior
to the Effective Time shall have been authorized for listing on the NYSE,
subject to official notice of issuance; and
(h) all conditions to all parties' obligations to consummate
the Subsidiary Mergers, except completion of the Merger and, in the case of
the UTV Merger, completion of the BHC Merger, shall have been satisfied or
waived; provided, however, that this condition may not be enforced by a
party whose actions or failure to act has prevented the conditions to the
consummation of the Subsidiary Mergers from being satisfied; and provided
further that this condition may not be enforced by the Company by reason of
the failure to obtain the requisite stockholder vote by the stockholders of
BHC or UTV, as the case may be, 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 A 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) the redemption of the Prior Preferred Stock shall have been
consummated in accordance with Section 5.2;
(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 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 Common Stock Equivalents 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 Skadden, Arps, Slate, Xxxxxxx & Xxxx 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 Common Stock Equivalents 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, Skadden,
Arps, Slate, Xxxxxxx & Xxxx 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; or
(g) by Buyer or the Company if either of the Subsidiary Merger
Agreements shall have been terminated; provided, however, that a party
shall not have the right to terminate this Agreement pursuant to this
Section 8.1(g) if its actions or failure to act shall have prevented the
consummation of either such Subsidiary Merger; and provided further that
this condition may not be enforced by the Company by reason of the failure
to obtain the requisite stockholder vote by the stockholders of BHC or UTV,
as the case may be, 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. 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 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, BHC 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 6.20.
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 to FTH:
The News Corporation Limited
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: 000-000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Senior Executive Vice President and
Group General Counsel
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:
Xxxxx-Craft Industries, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel
with copies to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Telecopier No.: (000) 000-0000
Attention: Xxx X. Xxxxx, Esq.
- and -
Xxxxxx X. Xxxxx, 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 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 to "$" or
"dollars" herein shall be deemed to be references to US$.
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 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.
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) and the
Confidentiality Agreement constitute 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 and 6.11 and as specified in paragraph
nine (9) of Section 6.12(e) of the Company Disclosure Schedule (which are
intended to be for the benefit of the Persons covered thereby and may be
enforced by such Persons), 6.20 and, in the event that the Forward Merger
is consummated, Sections 6.8 and 6.18 (which three sections 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.
(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]
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
FOX TELEVISION HOLDINGS, INC.
(solely as to Section 6.3 and Section
6.20 of this Agreement)
By: /s/ Xxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
XXXXX-CRAFT INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Chairman and President
