EXHIBIT 10.4
EXECUTION COPY
LOCK UP, VOTING AND CONSENT AGREEMENT
This Lock Up, Voting and Consent Agreement (the "Agreement"), dated as
of June 4, 2002, is entered into and made by and among Stations Holding Company,
Inc., a Delaware corporation ("Debtor" or the "Company"), Xxxx Communications
Systems, Inc., a Georgia corporation ("Xxxx") and each of the undersigned
holders (each, a "Consenting Holder" and, together, the "Consenting Holders") of
the Senior Discount Notes (as defined below). All capitalized terms not
otherwise defined herein have the meanings given to said terms in the Plan
Summary (as hereinafter defined).
WHEREAS, Debtor has issued 13.25% Senior Subordinated Discount Notes
due May 15, 2006 (the "Senior Discount Notes");
WHEREAS, Debtor and the Consenting Holders have engaged in good faith
negotiations with the objective of reaching an agreement with regard to
satisfying the Debtor's obligations under the Senior Discount Notes;
WHEREAS, Debtor and Xxxx are, concurrently with the execution of this
Agreement, entering into a Merger Agreement of even date herewith (the "Merger
Agreement"), a copy of which is annexed hereto, pursuant to which, subject to
the terms and conditions set forth in the Merger Agreement, a wholly-owned
subsidiary of Xxxx will be merged into and with the Debtor;
WHEREAS, Debtor and each of the Consenting Holders now desire to
implement a financial restructuring that gives effect to the Merger Agreement
(the "Financial Restructuring"), and in order to implement the Financial
Restructuring, the Debtor intends to prepare and file its disclosure statement
(the "Disclosure Statement") and its plan of reorganization (the "Plan" and,
together with all related agreements including the Merger Agreement, the
"Related Agreements") consistent in all material respects with the terms set
forth in this Agreement and the summary of the Plan attached hereto as Exhibit A
(the "Plan Summary") which, if confirmed, will implement the terms of the
Financial Restructuring in the Debtor's bankruptcy case number 02-10882 (MFW)
(the "Chapter 11 Case") filed under the United States Bankruptcy Code, 11 U.S.C.
ss. 101 et seq. (the "Bankruptcy Code"), and the Debtor intends to use its best
efforts to have the Disclosure Statement approved and such Plan confirmed by the
United States Bankruptcy Court for the District of Delaware (the "Bankruptcy
Court") in the Chapter 11 Case as expeditiously as possible under the Bankruptcy
Code and the Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules");
WHEREAS, each Consenting Holder is the legal owner, beneficial owner
and/or the investment adviser or manager for the beneficial owner (with the
power to vote and dispose of such claims on behalf of such beneficial owner) of
the aggregate principal amount of Senior Discount Notes (for each such party,
the "Relevant Claim"), in each case as set forth below each such Consenting
Holder's signature attached hereto;
WHEREAS, each Consenting Holder has reviewed, or has had the
opportunity to review, with the assistance of professional financial and legal
advisors of its choosing, the Plan Summary and the Merger Agreement; and
WHEREAS, each Consenting Holder desires to support and vote for
confirmation of the Plan, and the Debtor and Xxxx desire to obtain the
commitment of the Consenting Holders to support and vote for the Plan, in each
case subject to the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Debtor, Xxxx and the Consenting Holders, intending to be legally bound, agree as
follows:
Section 1. Voting. Each Consenting Holder represents and
warrants, severally and not jointly, that, as of the date hereof, it is the
legal owner, beneficial owner and/or the investment adviser or manager for the
beneficial owner (with the power to vote and dispose of such claims on behalf of
such beneficial owner) of such legal or beneficial owner's Relevant Claim and
that there is no Senior Discount Notes of which it is the legal owner,
beneficial owner and/or investment advisor or manager for such legal or
beneficial owner which are not part of its Relevant Claim. Each Consenting
Holder agrees for itself that (i) it shall timely vote (or cause to be voted)
its Relevant Claim and any other claims or interests that it holds (and not
revoke or withdraw such vote) to accept the Plan; provided that the terms of the
Plan and Disclosure Statement are consistent in all material respects with the
Plan Summary, the treatment of the Senior Discount Notes is exactly as set forth
in the Plan Summary, and the Bankruptcy Court has approved the Disclosure
Statement; and (ii) to the extent such election is available, it shall not elect
on its ballot to preserve any claims, if any, such Consenting Holder may have
that may be affected by the releases provided for under the Plan.
Section 2. Support of the Plan. Each Consenting Holder agrees
that subject to (w) Section 7 hereof, (x) the Company and Xxxx (as applicable)
being in compliance in all material respects with its obligations hereunder and
under the Related Agreements, (y) the Company's and Xxxx'x representations and
warranties set forth herein being true and correct, and (z) receipt by such
Consenting Holder of, and subsequent Bankruptcy Court approval of a disclosure
statement and other solicitation materials in respect of the Plan required by
the Bankruptcy Code that are consistent with the material terms of this
Agreement, the Plan Summary and with any applicable law:
(1) it will (i) from and after the date hereof not agree
to, consent to, provide any support to, participate in the formulation of, or
vote for any plan of reorganization or liquidation, other than the Plan; (ii)
execute and deliver a customary letter(s), in form and substance reasonably
satisfactory to the Company from the Consenting Holders for distribution to the
holders of any impaired claims against or interests in the Company, stating that
the Consenting Holders support and have committed to vote to approve the Plan;
and (iii) agree to permit disclosure in the Disclosure Statement and any filings
by the Company with the Securities and Exchange Commission of the contents of
this Agreement, including, but not limited to, the commitments given in clause
(i) of this Section 2(1) and the aggregate Relevant Claims held by all
Consenting Holders; provided that the Company shall not disclose the aggregate
principal
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amount of Senior Discount Notes comprising the Relevant Claim of any individual
Consenting Holder, except as otherwise required by applicable law; and
(2) it shall not object to, or otherwise commence any
proceeding, or take any other action, to oppose or alter, any of the terms of
the Plan or any other document filed in connection with the confirmation of the
Plan (hereinafter a "Reorganization Document") and shall not take any action
which is inconsistent with, or that would delay approval or confirmation of any
of the Disclosure Statement, the Plan or any of the Reorganization Documents;
provided that the terms of all such Reorganization Documents are customary and
otherwise consistent with the material terms of the Plan. Without limiting the
generality of the foregoing, no Consenting Holder may directly or indirectly
seek, solicit, support or encourage any other plan, sale, proposal or offer of
dissolution, winding up, liquidation, reorganization, merger or restructuring of
the Company or any of its subsidiaries that could reasonably be expected to
prevent, delay or impede the restructuring of the Company as contemplated by the
Plan or any Reorganization Document.
Section 3. Restrictions on Transfer. Each of the Consenting
Holders hereby agrees that, for so long as this Agreement shall remain in
effect, it shall not sell, transfer or assign all or any of its Relevant Claims
or any option thereon or any right, interest (voting or otherwise) therein,
unless the transferee agrees in writing to be bound by the terms of this
Agreement with respect to the Relevant Claims being transferred to such
purchaser, which agreement shall be confirmed in writing (which writing shall
include a trade confirmation issued by a broker or dealer, acting as principal
or agent for the purchaser, stating that such agreement is a term of such
transfer) and the transferor promptly provides the Company with a copy thereof,
in which event the Company shall be deemed without any further action to have
acknowledged that its obligations to the Consenting Holders hereunder shall be
deemed to constitute obligations in favor of such transferee. Upon request of
such transferee, the Company shall promptly confirm such acknowledgment in
writing.
Section 4. Further Acquisition of Senior Discount Notes. This
Agreement shall in no way be construed to preclude the Consenting Holders or any
of their respective subsidiaries or affiliates from selling Senior Discount
Notes subject to the terms of this Agreement or from acquiring additional
amounts of Senior Discount Notes. However, any such additional Senior Discount
Notes acquired by a Consenting Holder shall automatically be deemed to be
Relevant Claims and to be subject to the terms of this Agreement. The Consenting
Holder agrees that it shall not create any subsidiary or affiliate for the sole
purpose of acquiring any Senior Discount Notes unless such subsidiary or
affiliate signs this Agreement. Upon the request of the Company, each Consenting
Holder shall provide an accurate and current list of the Relevant Claims held by
such Consenting Holder, which the Company agrees to keep confidential unless
otherwise ordered by a court of competent jurisdiction. This Agreement shall in
no way be construed to preclude the Consenting Holders from acquiring any other
claims against or securities of the Company or any of its subsidiaries,
provided, however, that such securities may not be utilized by the Consenting
Holders in contravention of this Agreement. The Consenting Holders further agree
that, subject to their receipt of solicitation materials in respect of the Plan
that are consistent in all material respects with the Plan Summary and with the
terms of this Agreement and are not inconsistent with any applicable law, they
shall vote (or cause to be voted) any such additional Senior Discount Notes in
favor of the Plan, and shall not change or
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withdraw (or cause to be changed or withdrawn) such vote(s), for so long as this
Agreement remains in effect by its terms.
Section 5. Agreement.
(1) The Company hereby covenants and agrees (i) to
propose promptly the Plan such that the Plan is consistent in all material
respects with the terms described in the Plan Summary, to use its commercially
reasonable efforts to have the Disclosure Statement approved by the Bankruptcy
Court, and thereafter or in conjunction therewith to use its commercially
reasonable efforts to obtain an order of the Bankruptcy Court confirming the
Plan, and to close the transaction set forth in the Merger Agreement in each
case as expeditiously as commercially reasonable under the Bankruptcy Code and
Bankruptcy Rules, and consistent in all material respects (including with
respect to the treatment of claims and interests) with the terms and conditions
of the Plan Summary and this Agreement, (ii) not to modify the Plan in a manner
that is inconsistent with the Plan Summary terms as to the treatment to be
afforded each of the Consenting Noteholders in any respect without the consent
of each of the Consenting Noteholders, (iii) not to propose, file, support,
encourage, vote for, or engage in discussions with any person or entity
concerning any restructuring, workout or plan of reorganization other than the
Plan unless otherwise required by the Bankruptcy Code or the Bankruptcy Court,
(iv) if necessary, to disclose in the Disclosure Statement the existence and
substance of this Agreement, (v) subject to its fiduciary duties, not to take
any action to encourage or support any Consenting Noteholder to break its
Agreement, and (vi) subject to its fiduciary duties, not to take any action to
encourage or support any creditor, equity interest holders, or Xxxx to vote
against the Plan or, in any regard, to oppose approval of the Disclosure
Statement or confirmation of the Plan or to take any actions inconsistent with
the Merger Agreement.
(2) Xxxx hereby covenants and agrees to close the
transaction set forth in the Merger Agreement as expeditiously as commercially
reasonable under the Bankruptcy Code and Bankruptcy Rules, and consistent in all
material respects (including with respect to the treatment of claims and
interests) with the terms and conditions of the Plan Summary and this Agreement
and subject to the terms and conditions of the Merger Agreement.
Section 6. Acknowledgment. This Agreement is not and shall not
be deemed to be a solicitation for consents to the Plan. The acceptance of the
Consenting Holders will not be solicited until the Consenting Holders have
received the Disclosure Statement and related ballot, as approved by the
Bankruptcy Court.
Section 7. Termination. (1) This Agreement shall terminate upon
the occurrence of any Agreement Termination Event (as defined below), unless the
occurrence of such Agreement Termination Event is waived in writing by a
Consenting Holder, such waiver to be applicable only to such Consenting Holder.
If any Agreement Termination Event occurs (and has not been waived) at a time
when Bankruptcy Court permission shall be required for a Consenting Holder to
change or to withdraw (or cause to be changed or withdrawn) its vote(s) in favor
of the Plan, the Company and the other Parties to this Agreement shall not
oppose any attempts by such Consenting Holder to change or to withdraw (or cause
to be changed or withdrawn) its vote(s) in favor of the Plan. (2) For the
purposes hereof an "Agreement Termination Event" shall mean any of the
following: (i) the Company takes any action materially inconsistent with any of
the Related Agreements; (ii) the filing of the Plan and the Disclosure Statement
shall not have
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occurred by June 30, 2002; (iii) the solicitation of acceptances with respect to
the Plan shall not have occurred by August 30, 2002; (iv) the effective date of
the Plan shall not have occurred by November 15, 2002; (v) there occurs any
change in the terms of the Plan materially affecting the treatment of the Senior
Discount Notes, as a class, not previously consented to by the Consenting Holder
whose obligations hereunder are to be terminated; (vi) the Company files a plan,
or solicits votes on a Chapter 11 plan of reorganization, which contains terms
as to the treatment of the Senior Discount Notes that are inconsistent in any
respect with the Plan Summary and materially inconsistent with any of its other
material terms; (vii) the Merger Agreement is terminated for any reason; (viii)
the Company's Chapter 11 case is dismissed or is converted to a case under
Chapter 7 of the Bankruptcy Code; and (ix) section 20.13 of the Asset Purchase
Agreement of even date herewith between Benedek Broadcasting Corporation ("BBC")
and Xxxxxxx Broadcasting Company, LLC is amended or modified or for any reason
is no longer in effect. The Consenting Holders shall have no liability to the
Company or each other in respect of any termination of this Agreement in
accordance with the terms hereof.
Section 8. Good Faith Negotiation of Documents. Each party
hereby further covenants and agrees to negotiate the Reorganization Documents
and any definitive documents relating thereto, in good faith and, in any event,
in all material respects consistent with the Plan Summary.
Section 9. Representations and Warranties. Each of the
Consenting Holders, severally and not jointly, represents and warrants to Debtor
and Xxxx, and the Debtor and Xxxx each represents and warrants, only as to
itself and not as to the other, to each Consenting Holder that the following
statements, as applicable, are true, correct and complete as of the date hereof:
(1) Power and Authority. It has all requisite corporate,
partnership, or limited liability company power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and to perform
its obligations hereunder.
(2) Due Organization. It is duly organized, validly
existing and in good standing under the laws of its state of organization and it
has the requisite power and authority to execute and deliver this Agreement and
to perform its obligations hereunder.
(3) Authorization. The execution and delivery of this
Agreement and the performance of its obligations hereunder have been duly
authorized by all necessary corporate, partnership or limited liability company
action on its part (other than the approval of the Bankruptcy Court in the case
of the Debtor which the Debtor will promptly seek).
(4) No Conflicts. The execution, delivery and performance
of this Agreement does not and shall not: (i) violate any provision of law, rule
or regulation applicable to it or any of its subsidiaries, (ii) violate its
certificate of incorporation, bylaws or other organizational documents or those
of any of its subsidiaries; or (iii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it or any of its subsidiaries is a
party.
(5) Governmental Consents. The execution, delivery and
performance by it of this Agreement do not and shall not require any
registration or filing with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental authority
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or regulatory body (other than the approval of the Bankruptcy Court in the case
of the Debtor which the Debtor will promptly seek).
(6) Binding Obligation. Subject to the provision of
sections 1125 and 1126 of the Bankruptcy Code, this Agreement is a legally valid
and binding obligation, enforceable in accordance with its terms.
Section 10. Complete Agreement, Modification of Agreement. This
Agreement and the other agreements referenced herein constitute the complete
agreement between the parties with respect to the subject matter hereof. This
Agreement may not be modified, altered, amended or supplemented except by an
agreement in writing signed by the Company, Xxxx and each of the Consenting
Holders.
Section 11. Specific Performance. It is understood and agreed by
the parties that money damages would not be a sufficient remedy for any breach
of this Agreement by any party and each non-breaching party shall be entitled to
the sole and exclusive remedy of specific performance and injunctive or other
equitable relief, including attorneys' fees and costs, as a remedy of any such
breach, and each party agrees to waive any requirement for the securing or
posting of a bond in connection with such remedy.
Section 12. Impact of Appointment to Creditors' Committee.
Notwithstanding anything contained herein to the contrary, if any Consenting
Holder is (or has been) appointed to and serves on a committee of creditors in
the Company's Chapter 11 case, the terms of this Agreement shall not limit such
Consenting Holder's exercise, in its sole discretion, of its fiduciary duties to
any person arising from its serving on such committee of creditors, and any such
exercise in the sole discretion of such Consenting Holder of its fiduciary
duties arising from it serving on such committee of creditors shall not be
deemed to constitute a breach of the terms of this Agreement (but the fact of
such service on such committee shall not otherwise affect the continuing
validity or enforceability of this Agreement). The foregoing shall not modify or
limit the obligations of Consenting Holders to vote their individual holdings of
Relevant Claims and to take the other actions required under this Agreement in
their non-committee capacity.
Section 13. Assignment. Except as set forth in Section 4, no
rights or obligations of any party under this Agreement may be assigned or
transferred to any other person or entity.
Section 14. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE WITHOUT REGARD TO ANY CONFLICTS
OF LAW PROVISION WHICH WOULD REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER
JURISDICTION. By its execution and delivery of this Agreement, each of the
parties hereto hereby irrevocably and unconditionally agrees for itself that any
legal action, suit or proceeding against it with respect to any matter under or
arising out of or in connection with this Agreement or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding, may
be brought in the Bankruptcy Court. By execution and delivery of this Agreement,
each of the parties hereto hereby irrevocably accepts and submits itself to the
exclusive jurisdiction of each such court, generally and unconditionally, with
respect to any such action, suit or proceeding. In the event any such action,
suit or proceeding is commenced, the Parties hereby agree and consent
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that service of process may be made, and personal jurisdiction over any party
hereto in (but only with respect to) any such action, suit or proceeding may be
obtained by service of a copy of the summons, complaint and other pleadings
required to commence such action, suit or proceeding upon the party at the
address of such party set forth in Section 15 hereof unless another address has
been designated by such party in a notice given to the other parties in
accordance with Section 15 hereof.
Section 15. Modification of Plan. No modification or change to
the Plan shall release the Consenting Holder from obligations under this
Agreement if the Plan remains substantially similar in all economic and other
respects to the Plan Summary, and if such modification or change does not
negatively impact or lessen the economic recovery or other rights in any respect
that such Consenting Holder will receive under the Plan.
Section 16. Independent Due Diligence and Decision-Making. Each
party hereby confirms that its decision to execute this Agreement has been based
upon its independent investigation of the operations, businesses, financial and
other conditions and prospects of Debtor. To the extent any materials or
information have been furnished to it by Debtor, the undersigned hereby
acknowledges that they have been provided for informational purposes only,
without any representation or warranty.
Section 17. Headings. The headings of the sections, paragraphs
and subsections of this Agreement are inserted for convenience only and shall
not affect the interpretation hereof.
Section 18. Prior Negotiations. This Agreement, the Plan Summary
and the Reorganization Documents supersede all prior negotiations with respect
to the subject matter hereof.
Section 19. Consideration. It is hereby acknowledged by the
Company, Xxxx and each of the Consenting Holders that no consideration shall be
due or paid to the Consenting Holders for their agreement to vote to accept the
Plan in accordance with the terms and conditions of this Agreement, other than
the Company's agreement to use its reasonable best efforts to obtain approval of
the Disclosure Statement and to confirm the Plan in accordance with the terms
and conditions of this Agreement and other obligations set forth herein.
Section 20. No Third Party Beneficiaries. This Agreement shall
be solely for the benefit of the parties hereto, including their permitted
assigns, and no other person or entity shall be a third party beneficiary
hereof. Nothing in this Agreement, express or implied, shall give to any party
or entity other than the parties any benefit or any legal or equitable right,
remedy or claim under this Agreement.
Section 21. Several Obligations. The obligations of the
Consenting Holders hereunder are several and not joint. Each of the Consenting
Noteholders is agreeing only with the Company and not with any other holders of
Senior Discount Notes.
Section 22. Notices. All notices hereunder shall be deemed given
if in writing and delivered or sent by telecopy, courier or by registered or
certified mail (return receipt requested) to the following addresses or
telecopier numbers (or at such other addresses or telecopier numbers as shall be
specified by like notice):
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(a) If to the Company, to:
Stations Holding Company, Inc.
c/o Xxxx X. Xxxxxxx
Shack Xxxxxx Xxxx Xxxxxxxx & Xxxxxxx P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000-000-0000
with copies to:
Xxxxxxxx & Xxxxx
000 X. Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx
Fax: 000-000-0000
(b) If to any Consenting Holder, to:
Such Consenting Holder at the address or telecopy
number shown for such holder on the applicable
signature page hereto, to the attention of the person
who has signed this Agreement o behalf of such holder
with a copy to:
Xxxx X. Xxxxx, Esq.
Kasowitz, Benson, Xxxxxx & Xxxxxxxx LLP
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Telecopy: 212-506-1800
(c) If to Xxxx, to:
Xxxx Communications Systems, Inc.
0000 Xxxxxxxxx Xxxx, XX
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Xx.
Telecopy: 000-000-0000
with copies to:
Xxxxxx & Bird LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopy: 000-000-0000
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Section 23. Counterparts. This Agreement may be executed in any
number of counterparts (including by telecopier), each of which shall,
collectively and separately, constitute one and the same agreement.
Section 24. Approval of the Term Sheet. Each of the Parties
hereto agree to the Plan Summary, the terms of which are incorporated herein by
reference as if fully set forth herein.
Section 25. Effectiveness of the Agreement. Unless waived in the
sole discretion of the Company, this Agreement and the obligations described
herein shall become effective only upon the Company and Consenting Holders
holding at least 80% of the Senior Discount Notes in principal amount executing
this Agreement no later than June 14, 2002 unless extended by the Company at its
sole discretion.
* * * * *
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
STATIONS HOLDING COMPANY, INC.
By: /s/ K. Xxxxx Xxxxx
------------------------------------------
Its: President and Chief Operating Officer
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HOLDER OF RELEVANT CLAIM:
Name of Holder:
------------------------
Aggregate Principal Amount
of Senior Discount Notes: $
-----------------------
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XXXX COMMUNICATIONS SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------------
Its: Vice President and Chief Financial Officer
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