SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 30, 1995
OUTLET COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware 05-15367 05-0425681
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
23 Kenney Drive, Cranston, Rhode Island 02920
(Address of principal executives offices) (Zip Code)
(401) 455-9200
(Registrant's telephone number, including area code)
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OUTLET COMMUNICATIONS, INC. FORM 8-K
July 11, 1995
Item 1. Changes in Control of Registrant
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(b) On June 30, 1995, Outlet Communications, Inc. ("Outlet") entered into
a Merger Agreement (the "Agreement") with Renaissance Communications Corp.
("Renaissance") and Renaissance Communications Acquisition Corp. ("Acquisition
Corp."), a wholly-owned subsidiary of Renaissance. The Agreement provides
that, at the "Effective Time" (as defined in the Agreement), Acquisition
Corp. shall be merged with and into Outlet. Acquisition Corp. will then
cease to exist and Outlet will continue as the surviving corporation. By
virtue of such merger, each share of Outlet Class A Common Stock ("Common
Stock") outstanding immediately prior to the Effective Time shall be
converted into the right to receive $42.25 in cash. Renaissance has agreed
to provide funds for payment to holders of Outlet Common Stock an amount
equal to the per share price multiplied by the number of shares of Common
Stock outstanding.
The Agreement also provides for cancellation of each outstanding Outlet
stock option or restricted share award (both referred to herein as "Option" or
"Options") immediately after the Effective Time, upon Outlet making payment at
the rate of $42.25 per outstanding Option, less the applicable per share
exercise price, to each Option holder. Based on the total number of shares
of Common Stock and Options outstanding, aggregate funds required for payment
to the respective holders will be approximately $288,000,000.
This transaction is subject to Federal Communications Commission approval
and the applicable waiting period under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976. It is anticipated that this merger will be
consummated on or before December 31, 1995.
Item 7. Exhibits
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(2) Merger Agreement dated as of June 30, 1995, among Renaissance
Communications Corp., Renaissance Communications Acquisition Corp.,
and Outlet Communications, Inc.
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SIGNATURES
Pursuant to the requirement of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OUTLET COMMUNICATIONS, INC.
-----------------------------
(Registrant)
Date: July 11, 1995 By: /s/ Felix W. Oziemblewski
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Felix W. Oziemblewski
Vice President-
Chief Financial Officer
MERGER AGREEMENT dated as of June 30, 1995 (the "Agreement"), among
RENAISSANCE COMMUNICATIONS CORP., a Delaware corporation ("Parent"),
RENAISSANCE COMMUNICATIONS ACQUISITION CORP., a Delaware corporation
("Parent Sub"), and a wholly owned subsidiary of Parent, and OUTLET
COMMUNICATIONS, INC., a Delaware corporation (the "Company").
WHEREAS, Parent Sub, upon the terms and subject to the conditions of
this Agreement and in accordance with the General Corporation Law of the State
of Delaware ("Delaware Law"), will merge with and into the Company (the
"Merger"); and
WHEREAS, the Board of Directors of the Company has (i) determined
that the Merger is fair to, and in the best interests of, the holders of Common
Stock (as hereinafter defined) and (ii) approved this Agreement and the
transactions contemplated hereby and recommended approval and adoption of this
Agreement by the stockholders of the Company;
WHEREAS, the Board of Directors of Parent has determined that the
Merger is in the best interests of Parent and its stockholders and has
approved this Agreement and the transactions contemplated hereby;
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with Delaware Law,
at the Effective Time (as hereinafter defined), Parent Sub shall be merged
with and into the Company. As a result of the Merger, the separate corporate
existence of Parent Sub shall cease and the Company shall continue as the
surviving corporation of the Merger (the "Surviving Corporation"). The name
of the Surviving Corporation shall be Outlet Communications, Inc.
SECTION 1.02. Effective Time. As promptly as practicable after
the satisfaction or, if permissible, waiver of the conditions set forth in
Article VII, the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger (the "Certificate of Merger") with the
Secretary of State of the State of Delaware, in such form as required by, and
executed in accordance with the relevant provisions of, Delaware Law (the date
and time of the filing of the Certificate of Merger or the time specified
therein being the "Effective Time").
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SECTION 1.03. Effect of the Merger. At the Effective Time, the
effect of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time, except as otherwise provided herein, all the
property, rights, privileges, powers and franchises of Parent Sub and the
Company shall vest in the Surviving Corporation, and all debts, liabilities
and duties of Parent Sub and the Company shall become the debts, liabilities
and duties of the Surviving Corporation.
SECTION 1.04. Certificate of Incorporation; By-Laws. At the
Effective Time, the Certificate of Incorporation and By-Laws of the Surviving
Corporation, as in effect immediately prior to the Effective Time, shall be
the Certificate of Incorporation and By-Laws, respectively, of the Surviving
Corporation.
SECTION 1.05. Directors and Officers. The directors of Parent
Sub immediately prior to the Effective Time shall be the initial directors of
the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and By-Laws of the Surviving Corporation, and the
officers of Parent Sub immediately prior to the Effective Time shall be the
initial officers of the Surviving Corporation, in each case until their
respective successors are duly elected or appointed and qualified.
SECTION 1.06. Closing. (a) The closing (the "Closing") of the
Merger will take place at the offices of Stroock & Stroock & Lavan, New York,
New York at 10:00 a.m., local time, on a date to be mutually agreed upon by
Parent and the Company, which date shall be no later than the fifth business
day following the date upon which the last to occur of the conditions set
forth in Article VII is fulfilled or duly waived.
(b) Subject to the satisfaction or waiver of each of the
conditions set forth in Article VII, at the Closing, (i) the closing
certificates and other documents required by Article VII shall be delivered,
and (ii) the appropriate officers of the Surviving Corporation shall execute
and acknowledge the Certificate of Merger.
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ARTICLE II
CONVERSION OF SECURITIES; EXCHANGE OF CERTIFICATES
SECTION 2.01. Conversion of Securities. At the Effective Time,
by virtue of the Merger and without any action on the part of Parent, Parent
Sub, the Company or the holders of any of the following securities:
(a) Subject to the other provisions of this Section 2.01, each
share of Class A Common Stock, par value $.01 per share ("Common
Stock"), issued and outstanding immediately prior to the Effective Time
(excluding any shares described in Section 2.01(b) and any Dissenting
Shares (as hereinafter defined)) shall be converted into the right to
receive $42.25 in cash, without interest (the "Per Share Amount"). All
such shares of Common Stock shall cease to be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
certificate previously evidencing any such shares shall thereafter
represent only the right to receive the Per Share Amount as described
below. The holders of certificates previously evidencing such shares of
Common Stock outstanding immediately prior to the Effective Time shall
cease to have any rights with respect to such shares of Common Stock,
except as otherwise provided herein or by law. Each such certificate
previously evidencing shares of Common Stock shall be exchanged for the
Per Share Amount multiplied by the number of shares previously evidenced
by the canceled certificate upon the surrender of such certificate in
accordance with the provisions of Section 2.02, without interest;
(b) Each share of Common Stock held in the treasury of the
Company and each share of Common Stock owned by any direct or indirect
subsidiary of the Company immediately prior to the Effective Time shall
be canceled and extinguished without any conversion thereof and no
payment shall be made with respect thereto; and
(c) Each share of Common Stock, par value $.01 per share, of
Parent Sub ("Parent Sub Common Stock") issued and outstanding
immediately prior to the Effective Time shall be converted into and
exchanged for one duly and validly issued, fully paid and nonassessable
share of common stock of the Surviving Corporation.
SECTION 2.02. Payment. (a) Paying Agent. As of the Effective
Time, Parent shall deposit, or shall cause to be deposited, with a bank
theretofore designated by the Company and Parent (the "Paying Agent"), for the
benefit of the holders of shares of Common Stock, for payment in accordance
with this Article II, through the Paying Agent, cash in an amount equal to the
Per Share Amount multiplied by the number of shares of Common Stock
outstanding immediately prior to the Effective Time, (such cash being
<PAGE>
hereinafter referred to as the "Payment Fund"). The Paying Agent shall,
pursuant to irrevocable instructions, deliver the cash contemplated to be paid
pursuant to Section 2.01(a) out of the Payment Fund. The Payment Fund shall
not be used for any other purpose.
(b) Payment Procedures. Promptly after the Effective Time, the
Paying Agent shall mail to each record holder, as of the Effective Time, of an
outstanding certificate that immediately prior to the Effective Time evidenced
outstanding shares of Common Stock (the "Certificates") a form letter of
transmittal and instructions for use in effecting the surrender of the
Certificates for payment therefor. Upon surrender to the Paying Agent of a
Certificate, together with such letter of transmittal duly executed, and any
other required documents, the holder of such Certificate shall be entitled to
receive in exchange therefor the consideration set forth in Section 2.01(a)
(the "Merger Consideration"), and such Certificate shall forthwith be
cancelled. No interest will be paid or accrued on the cash payable upon the
surrender of the Certificates. Until surrendered in accordance with the
provisions of this Section 2.02, each Certificate shall represent for all
purposes only the right to receive the consideration set forth in Section
2.01(a), without any interest thereon.
(c) No Further Rights in Common Stock. All cash paid upon
conversion of the shares of Common Stock in accordance with the terms of this
Article II, and all cash paid pursuant to Section 2.05, shall be deemed to
have been paid in full satisfaction of all rights pertaining to such shares of
Common Stock.
(d) Termination of Payment Fund. Any portion of the Payment
Fund that remains undistributed to the holders of Common Stock for 180 days
after the Effective Time shall be delivered to Parent, upon demand, and any
holders of Common Stock that have not theretofore complied with this Article
II shall thereafter look only to Parent for the Merger Consideration to which
they are entitled.
(e) No Liability. Neither Parent nor the Surviving Corporation
shall be liable to any holder of shares of Common Stock for any cash delivered
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
SECTION 2.03. Options. Parent and the Company shall take all
action necessary to (i) terminate the Company's 1992 Stock Incentive Plan, as
amended to the date of this Agreement (the "1992 Stock Plan"), effective as of
the Effective Time, (ii) provide that each outstanding employee stock option
or "Restricted Share" award to purchase shares of Common Stock granted under
the 1992 Stock Plan (an "Option") shall become fully exercisable and vested,
whether or not previously exercisable or vested, immediately prior to the
Effective Time and (iii) provide that, with respect to any such Option that is
outstanding immediately prior to the Effective Time, such holder shall be
entitled to receive from the Company, immediately after the Effective Time, an
amount in cash in cancelation of such Option equal to the excess, if any, of
the Per Share Amount over the per share exercise price of such Option,
<PAGE>
multiplied by the number of shares of Common Stock to which the Option remains
unexercised. Any such payment shall be subject to all applicable Federal,
state and local tax withholding requirements.
SECTION 2.04. Stock Transfer Books. At the Effective Time, the
stock transfer books of the Company shall be closed and there shall be no
further registration of transfers of shares of Common Stock thereafter on the
records of the Company. On or after the Effective Time, any certificates for
shares of Common Stock presented to the Paying Agent, the Surviving
Corporation or Parent for any reason shall be converted into the Merger
Consideration.
SECTION 2.05. Dissenting Shares. Notwithstanding any other
provisions of this Agreement to the contrary, shares of Common Stock that are
outstanding immediately prior to the Effective Time and that are held by
stockholders who shall not have voted in favor of the Merger or consented
thereto in writing and who shall have demanded properly in writing appraisal
for such shares in accordance with Section 262 of Delaware Law (collectively,
the "Dissenting Shares") shall not be converted into or represent the right to
receive the Merger Consideration. Such stockholders shall be entitled to
receive payment of the appraised value of such shares of Common Stock held by
them in accordance with the provisions of such Section 262, except that all
Dissenting Shares held by stockholders who shall have failed to perfect or who
effectively shall have withdrawn or lost their rights to appraisal of such
shares of Common Stock under such Section 262 shall thereupon be deemed to
have been converted into and to have become exchangeable, as of the Effective
Time, for the right to receive, without any interest thereon, the Merger
Consideration, upon surrender, in the manner provided in Section 2.02, of the
certificate or certificates that formerly evidenced such shares of Common
Stock.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule delivered by the
Company to Parent concurrent with the execution of this Agreement (the
"Company Disclosure Schedule"), the Company hereby represents and warrants to
Parent and Parent Sub that:
SECTION 3.01. Organization and Qualification; Subsidiaries.
(a) The Company and each of its subsidiaries is a corporation duly organized,
validly existing and in good standing under the laws of the jurisdiction of
its incorporation, has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as it is now
being conducted and is duly qualified and in good standing to do business in
each jurisdiction in which the nature of the business conducted by it or the
<PAGE>
ownership or leasing of its properties makes such qualification necessary,
other than where the failure to be so duly organized, validly existing and in
good standing, or to have such power and authority, or to be duly qualified
and in good standing, as the case may be, would not have a Company Material
Adverse Effect (as hereinafter defined). The term "Company Material Adverse
Effect" as used in this Agreement means any change or effect (other than a
change or effect relating to the industry of the Company, the financial
markets or the economy generally) that, individually or when taken together
with all other such changes or effects, would be materially adverse to the
financial condition, business, operations, earnings or prospects of the
Company and its subsidiaries, taken as a whole.
(b) Section 3.01 of the Company Disclosure Schedule sets forth a
complete and correct list of all the Company's directly or indirectly owned
subsidiaries, together with (i) the jurisdiction of incorporation of each
subsidiary and the percentage of each subsidiary's outstanding capital stock
owned by each holder of such stock, and (ii) indication of whether each such
subsidiary is a "Significant Subsidiary" (as hereinafter defined).
SECTION 3.02. Certificates of Incorporation and By-Laws. The
Company has heretofore furnished to Parent complete and accurate copies of the
Certificates of Incorporation and the By-Laws, in each case as amended or
restated to the date of this Agreement, of the Company and each of its
subsidiaries.
SECTION 3.03. Capitalization. (a) The authorized capital stock
of the Company, as of immediately prior to the Effective Time, will consist of
(i) 10,000,000 shares of Common Stock; (ii) 1,879,375 shares of Class B Common
Stock, par value $.01 per share, and (iii) 1,000,000 shares of Preferred
Stock, no par value. As of the date of this Agreement, (i) 6,579,631 shares
of Common Stock (none of which is subject to preemptive rights created by
statute, the Company's Certificate of Incorporation or By-Laws or any
agreement to which the Company is a party or is bound), no shares of Class B
Common Stock, and no shares of Preferred Stock are issued and outstanding,
(ii) no shares of Common Stock are held in the treasury of the Company; (iii)
272,469 shares of Common Stock are reserved for issuance pursuant to
outstanding Options granted pursuant to the 1992 Stock Plan, (iv) no shares of
Common Stock are issued and outstanding as "Restricted Shares" under the 1992
Stock Plan, and (v) no "Limited Rights" are issued and outstanding under the
1992 Stock Plan. Each of the outstanding shares of capital stock of the
Company and each of its subsidiaries is duly authorized and validly issued,
fully paid and nonassessable, and such shares owned by the Company or another
subsidiary of the Company are owned free and clear of all liens, claims,
encumbrances, security interests or other charges ("Encumbrances"), except for
such Encumbrances as would not have a Company Material Adverse Effect.
(b) Immediately prior to the Effective Time, there will be no
options, warrants or other rights (including registration rights), agreements,
<PAGE>
arrangements or commitments of any character to which the Company or any of
its subsidiaries is a party relating to the issued or unissued capital stock
of the Company or any of its subsidiaries or obligating the Company or any of
its subsidiaries to grant, issue or sell any shares of the capital stock of
the Company or any of its subsidiaries, by sale or otherwise. There are no
obligations, contingent or otherwise, of the Company or any of its
subsidiaries to (i) repurchase, redeem or otherwise reacquire any shares of
Common Stock or the capital stock of any subsidiary of the Company; or (ii)
(other than advances to subsidiaries in the ordinary course of business)
provide material funds to, or make any material investment in (in the form of
a loan, capital contribution or otherwise), or provide any guarantee with
respect to the obligations of, any subsidiary of the Company or any other
person. As of the date of this Agreement, none of the Company or any of its
subsidiaries directly or indirectly owns, or has agreed to purchase or
otherwise acquire, the capital stock of, or any interest convertible into or
exchangeable or exercisable for, the capital stock of any corporation,
partnership, joint venture or other business association or entity. Except
for any agreements, arrangements or commitments between the Company and any of
its subsidiaries or between such subsidiaries, there are no material
agreements, arrangements or commitments of any character (contingent or
otherwise) pursuant to which any person is or may be entitled to receive any
payment based on the revenues or earnings, or calculated in accordance
therewith, of the Company or any of its subsidiaries. There are no voting
trusts, proxies or other material agreements or understandings to which the
Company or any of its subsidiaries is a party or by which the Company or any
of its subsidiaries is bound with respect to the voting of any shares of
capital stock of the Company or any of its subsidiaries.
(c) The Company has made available to Parent complete and
accurate copies of the 1992 Stock Plan and the forms of agreements related to
Options and Restricted Shares awarded pursuant to the 1992 Stock Plan,
including all amendments thereto.
SECTION 3.04. Authority. The Company has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby
to be consummated by the Company. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action and no other corporate proceedings on the part of the Company
are necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. This Agreement has been validly executed and delivered
by the Company and, assuming the due authorization, execution and delivery by
Parent and Parent Sub, constitutes a legal, valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by the availability of equitable remedies.
<PAGE>
SECTION 3.05. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by the Company do not, and the
performance of this Agreement by the Company will not, (i) conflict with or
violate the Certificate of Incorporation or By-Laws of the Company or any of
its subsidiaries, (ii) conflict with or violate any Federal, state, local or
foreign law, statute, ordinance, rule, regulation, permit, order, judgment or
decree (collectively, "Laws") applicable to the Company or any of its
subsidiaries or by which any of their respective properties is bound, or (iii)
result in any breach of or constitute a default (or an event that with notice
or lapse of time or both would become a default) under, or give to others any
rights of termination, amendment, acceleration or cancelation of, or require
payment under, or result in the creation of any Encumbrance on any of the
properties or assets of the Company or any of its subsidiaries pursuant to, or
trigger any right of first refusal under, 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 of their respective
properties is bound, except for any thereof that would not have a Company
Material Adverse Effect. The Board of Directors of the Company has taken all
actions necessary under Delaware Law, including approving the transactions
contemplated by this Agreement, to ensure that Section 203 of Delaware Law
does not, or will not, apply to the transactions contemplated by this
Agreement.
(b) The execution and delivery of this Agreement by the Company
do not, and the performance of this Agreement by the Company will not, require
the Company to obtain any consent, approval, authorization or permit of, or to
make any filing with or notification to, any governmental or regulatory
authority, domestic or foreign ("Governmental Entity"), based on the Laws of
any Governmental Entity, except (i) the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Communications Act of 1934, as amended (the
"Communications Act"), and the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"); (ii) the filing and recordation of the
Certificate of Merger as required by Delaware Law; and (iii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent the Company from performing its
obligations under this Agreement and would not have a Company Material Adverse
Effect.
SECTION 3.06. Reports; Financial Statements. (a) Since June 30,
1992, (i) the Company and Outlet Broadcasting, Inc., a Rhode Island
corporation ("Broadcasting") have filed all forms, reports, statements,
schedules and other documents required to be filed with (A) the Securities and
Exchange Commission (the "SEC"), including, without limitation, (I) all Annual
Reports on Form 10-K, (II) all Quarterly Reports on Form 10-Q, (III) all
Current Reports on Form 8-K, (IV) all other forms, reports, statements,
schedules and other documents required to be filed, and (V) all amendments and
supplements to all such forms, reports, statements, schedules and other
documents (collectively, the "Company SEC Reports"); (B) any other applicable
state securities authorities, and (C) the Federal Communications Commission
<PAGE>
(the "FCC") and (ii) the Company and Broadcasting and their respective
subsidiaries have filed all forms, reports, statements, schedules and other
documents required to be filed with any other applicable Federal or state
regulatory authorities, except where the failure to file any such forms,
reports, statements, schedules or other documents would not have a Company
Material Adverse Effect (all such forms, reports, statements, schedules and
other documents in clauses (i) and (ii) of this Section 3.06(a) being referred
to herein, collectively, as the "Company Reports"). The Company Reports,
including all Company Reports filed after the date hereof and prior to the
Effective Time, (i) were or will be prepared in all material respects in
accordance with the requirements of applicable Law (including, with respect to
the Company SEC Reports, the Securities Act of 1933, as amended (the
"Securities Act"), the Exchange Act, and the rules and regulations of the SEC
thereunder applicable to such Company SEC Reports), and (ii) did not at the
time they were filed, or will not at the time they are filed, contain any
untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that, to the extent that the foregoing relates to facts or
omissions regarding persons other than the Company and its affiliates, such
representation and warranty is being made to the Company's knowledge.
(b) Each of the consolidated financial statements (including, in
each case, any related notes thereto) contained in the Company SEC Reports
filed prior to the Effective Time (i) have been or will be prepared in
accordance with the published rules and regulations of the SEC and generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except (A) to the extent required by changes in generally
accepted accounting principles and (B) with respect to Company SEC Reports
filed prior to the date hereof, as may be indicated in the notes thereto) and
(ii) fairly present or will fairly present the consolidated financial position
of the Company and its subsidiaries, as the case may be, as of the respective
dates thereof and the consolidated results of operations and cash flows for
the periods indicated, except that (x) any unaudited interim financial
statements were or will be subject to normal and recurring year-end
adjustments and (y) any pro forma financial information contained in such
consolidated financial statements is not necessarily indicative of the
consolidated financial position of the Company and its subsidiaries, as the
case may be, as of the respective dates thereof and the consolidated results
of operations and cash flows for the periods indicated.
SECTION 3.07. Undisclosed Liabilities. As of the date of this
Agreement, none of the Company or any of its subsidiaries has, to the
knowledge of the Company, any material liability (whether accrued, absolute,
contingent or otherwise) that is required to be reflected on the financial
statements (or the notes thereto) of the Company in accordance with generally
accepted accounting principles, other than liabilities (a) reflected or
reserved against in the consolidated balance sheets included in the Company's
Form 10-Q for the quarter ended March 31, 1995, and Form l0-K for the year
ended December 31, 1994 (the "Balance Sheets") (or in the notes thereto),
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(b) with respect to matters disclosed in the Company Disclosure Schedule or
excluded from the coverage of any of the representations, warranties or
covenants herein, (c) that are covered by enforceable insurance,
indemnification, contribution or comparable arrangements, (d) under the Laws
of any jurisdiction, except for violation of any such Laws that would have a
Company Material Adverse Effect, (e) under any contract or instrument, other
than liabilities arising out of breaches of such contracts or instruments that
would have a Company Material Adverse Effect, (f) under this Agreement or any
agreement entered into in connection herewith, (g) with respect to matters
addressed in Sections 3.13, 3.16 and 3.19 (which shall be governed solely by
the terms of such Sections), and (h) incurred or arising in the ordinary
course of business of the Company or such subsidiary since March 31, 1995.
SECTION 3.08. Material Contracts. Section 3.08 of the Company
Disclosure Schedule sets forth a list, as of the date of this Agreement, of
all (a) written employment, severance, termination, consulting (to the extent
any thereof involve annual payments of at least $25,000 or are not terminable
on less than 366 days' notice without material penalty) and retirement
agreements to which the Company or any of its subsidiaries is a party,
(b) written collective bargaining agreements to which the Company or any of
its subsidiaries is a party, (c) written agreements that require aggregate
future payments by or to the Company or any of its subsidiaries of more than
$500,000 that are not terminable by the Company or any of its subsidiaries on
less than 366 days' notice without material penalty (other than purchase
orders and advertising sales contracts entered into in the ordinary course of
business), (d) written agreements containing covenants limiting the freedom of
the Company or any of its subsidiaries to compete with any person in any line
of business or in any area or territory, (e) license agreements involving
annual payments in excess of $500,000, (f) indentures, mortgages and notes or
other debt instruments evidencing indebtedness (other than purchase money
indebtedness) in excess of $1,000,000, (g) material agreements of the Company
or any of its subsidiaries with any shareholder or director of the Company,
(h) agreements of the Company involving payments in excess of $500,000
containing any provisions with respect to a "change in control" of the
Company, and (i) agreements under which the Company or any of its subsidiaries
has advanced or loaned any amount in excess of $50,000 to any of its
directors, officers or employees (collectively, the "Material Contracts").
Except as would not have a Company Material Adverse Effect, (a) the Company
and its subsidiaries are not in default under any of the Material Contracts,
and (b) to the Company's knowledge, the other parties thereto are not in
default and the Material Contracts are valid and binding obligations of the
other parties thereto, in accordance with their terms.
SECTION 3.09. FCC Licenses; Station Operation. Except for such
matters as would not have a Company Material Adverse Effect, (a) to the
Company's knowledge, it is operating the Licensed Stations (as hereinafter
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defined) in accordance with generally accepted industry practice, in
compliance with the terms of the FCC Licenses (as hereinafter defined), and in
compliance with the Communications Act and all applicable rules, regulations
and policies of the FCC (collectively, the "FCC Rules and Regulations"); (b)
the Company has filed or made all applications, reports and other disclosures
required by the FCC to be filed or made with respect to the Licensed Stations
and has timely paid all FCC regulatory fees with respect thereto; (c) all FCC
Licenses used or useful in connection with the ownership and operation of the
Licensed Stations as commercial broadcast television stations are valid and in
full force and effect; (d) no application, action or proceeding is pending for
the renewal or modification of any of the FCC Licenses and, to the Company's
knowledge, there is not now before the FCC any investigation or complaint
against the Company relating to the Licensed Stations; (e) there is no
proceeding pending before the FCC (other than proceedings affecting the
broadcast industry generally), and there is no outstanding notice of violation
from the FCC, relating to the Licensed Stations; (f) to the Company's
knowledge, there is no reasonable basis for the initiation or issuance by the
FCC of any investigation, proceeding or notice of violation with respect to
the Licensed Stations and there is no reasonable basis on which any third
party could file such a complaint, which could reasonably be expected to
prevent FCC approval of the FCC Application (as defined in Section 6.03); (g)
to the Company's knowledge, no event has occurred which, individually or in
the aggregate, and with or without the giving of notice or the lapse of time
or both, would constitute grounds for revocation or termination of any FCC
License or the imposition of any restriction or limitation on the operation of
the Licensed Stations; and (h) no judgment, decree, order or notice of
violation has been issued by any Governmental Entity which permits, or would
permit, revocation, modification or termination of any FCC License or which
results, or could result, in any impairment of any rights thereunder.
SECTION 3.10. Permits. (a) Each of the Company and its
subsidiaries is in possession of all franchises, grants, authorizations,
licenses, permits, easements, variances, exemptions, consents, certificates,
approvals and orders (collectively, the "Company Permits"), that are necessary
to own, lease and operate the properties of the Company and its subsidiaries
and to carry on their business as they or it are or is owned, leased, operated
or carried on, except, in each case, where the failure to possess such Company
Permits would not have a Company Material Adverse Effect. The Company Permits
are in full force and effect and there is no action, proceeding or
investigation pending or, to the knowledge of the Company, threatened
regarding suspension or cancelation of any of the Company Permits, except, in
each case, where the failure to possess, or the suspension or cancelation of,
such Company Permits would not have a Company Material Adverse Effect.
SECTION 3.11. Properties. Each of the Company and its
subsidiaries has good, valid and, in the case of real property, marketable fee
simple, title to all the material assets and properties that it owns and that
are reflected on the Balance Sheets (except for assets and properties sold,
consumed or otherwise disposed of by them since the dates thereof), and such
assets and properties are owned free and clear of all Encumbrances, except for
<PAGE>
(a) liens for taxes and assessments not yet due and payable or for taxes the
validity of which is being contested in good faith, (b) Encumbrances to secure
indebtedness reflected on the Balance Sheets or indebtedness (including
purchase money indebtedness) incurred in the ordinary course of business and
consistent with past practice after the date thereof, (c) mechanic's,
materialmen's and other Encumbrances that have arisen in the ordinary course
of business and (d) imperfections of title and Encumbrances the existence of
which do not have a Company Material Adverse Effect. All the material
buildings, structures, equipment and other tangible assets of the Company and
its subsidiaries (whether owned or leased) are in normal operating condition
(normal wear and tear excepted) and are fit for use in the ordinary course of
business of the Company.
SECTION 3.12. Intellectual Property. Section 3.12 of the Company
Disclosure Schedule sets forth a complete and accurate list and a brief
description of all patents, patent applications, trademarks, trade names,
service marks and other intellectual property (the "Intellectual Property")
owned, used or licensed by or to the Company and pertaining to the business of
the Company, which is all the Intellectual Property necessary to conduct the
business of the Company, except for Intellectual Property, the lack of which
would not have a Company Material Adverse Effect. Except as would not have a
Company Material Adverse Effect, to the Company's knowledge, the rights of the
Company in or to such Intellectual Property do not conflict with or infringe
on the rights of any other person, and the Company has not received any claim
or notice from any person to such effect.
SECTION 3.13. Taxes. Except for such matters as would not have a
Company Material Adverse Effect, (a) the Company and its subsidiaries have
filed or will timely file all returns and reports required to be filed prior
to the Effective Time by them with any taxing authority with respect to Taxes
(as hereinafter defined) for any period ending on or before the Effective
Time, (b) all Taxes shown to be payable on such returns or reports that are
due prior to the Effective Time have been paid or will be paid, (c) no
deficiency for any material amount of Tax has been asserted or assessed by a
taxing authority against the Company or its subsidiaries, and (d) no consent
under Section 341(f) of the Internal Revenue Code of 1986, as amended (the
"Code"), has been filed with respect to the Company or any of its
subsidiaries. As of the date of this Agreement, there are no examinations of
Federal income tax returns of the Company currently being conducted by the
Internal Revenue Service.
SECTION 3.14. Compliance. To the Company's knowledge, none of
the Company or any of its subsidiaries is in default or violation of (a) any
Law applicable to the Company or any of its subsidiaries or by which any of
their respective properties is bound or (b) any of the Company Permits, except
for any such defaults or violations that would not have a Company Material
Adverse Effect. None of the Company or any of its subsidiaries has received
from any Governmental Entity any written notification with respect to possible
defaults or violations of Laws by the Company or any of its subsidiaries,
<PAGE>
except, in each case, for written notices relating to possible defaults or
violations that would not have a Company Material Adverse Effect or have been
resolved.
SECTION 3.15. Certain Changes or Events. Except as disclosed in
the Company SEC Reports filed prior to the date of this Agreement or as
contemplated by this Agreement, during the period commencing January 1, 1995,
and ending on the date of this Agreement, the Company and its subsidiaries
have conducted their respective businesses only in the ordinary course and in
a manner consistent with past practice and there has not been: (a) any
material damage, destruction or loss (not covered by insurance) with respect
to any material assets of the Company or any of its subsidiaries that has
resulted in a Company Material Adverse Effect; (b) any material change by the
Company or its subsidiaries in their accounting methods, principles or
practices; (c) except for dividends by a subsidiary of the Company to the
Company or another subsidiary of the Company or repurchases of shares of
Common Stock from terminated employees pursuant to the 1992 Stock Plan, any
declaration, setting aside or payment of any dividends or distributions in
respect of shares of Common Stock or the shares of stock of, any subsidiary of
the Company or any redemption, repurchase or other reacquisition of any of the
Company's equity securities or any of the equity securities of any subsidiary
of the Company; (d) any material increase in the benefits under, or the
establishment or amendment of, any material bonus, insurance, severance,
deferred compensation, pension, retirement, profit sharing, stock option
(including, without limitation, the granting of stock options, stock
appreciation rights, performance awards, or restricted stock awards), stock
purchase or other employee benefit plan, or any material increase in the
compensation payable or to become payable to directors, officers or employees
of the Company or its subsidiaries, except for increases in salaries or wages
payable or to become payable in the ordinary course of business and consistent
with past practice; or (e) a Company Material Adverse Effect.
SECTION 3.16. Litigation. As of the date of this Agreement,
there is no claim, action, suit, litigation, proceeding, arbitration or, to
the knowledge of the Company, investigation of any kind, at law or in equity
(including actions or proceedings seeking injunctive relief), pending or, to
the knowledge of the Company, threatened in writing against the Company or any
of its subsidiaries or any properties or rights of the Company or any of its
subsidiaries (except for claims, actions, suits, litigations, proceedings,
arbitrations or investigations that would not have a Company Material Adverse
Effect), and neither the Company nor any of its subsidiaries is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Entity, or any judgment, order, writ,
injunction, decree or award of any Governmental Entity or arbitrator,
including, without limitation, cease-and-desist or other orders, except as
disclosed in the Company SEC Reports filed prior to the date of this Agreement
and except for matters that would not have a Company Material Adverse Effect.
<PAGE>
SECTION 3.17. Employee Benefit Plans; Labor Matters. (a)
Section 3.17(a) of the Company Disclosure Schedule sets forth a complete and
accurate list of 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"), employment agreements, personnel policies or fringe benefit
plans, policies, programs and arrangements, stock bonus, deferred
compensation, pension, severance, bonus, vacation, travel, incentive, and
health, disability and other welfare plans), maintained or 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, 4212(c)
or 4204 of ERISA (the "Company Benefit Plans").
(b) None of the Company or any of its subsidiaries contributes
to, has any material obligation to contribute to or otherwise has any material
liability or potential material liability with respect to (i) any
"multiemployer plan" (as such term is defined in Section 3(37) of ERISA), (ii)
any plan of the type described in Section 4063 and 4064 of ERISA or (iii) any
plan that provides health, life insurance, accident or other "welfare-type"
benefits to current or future retirees or current or future former employees,
their spouses or dependents, other than in accordance with Section 4980B of
the Code, or applicable state benefit continuation law. None of the Company
or any of its subsidiaries has any liability or, to the knowledge of the
Company, potential liability with respect to any employee benefit plan subject
to Title IV of ERISA or Section 412 of the Code that is currently or was
formerly maintained by any other current or former member of the controlled
group of corporations, trades or businesses (within the meaning of Sections
414(b), (c), (m) and (o) of the Code) of which the Company or any of its
subsidiaries is or was a member that would have a Company Material Adverse
Effect.
(c) Each Company Benefit Plan has been maintained, funded and
administered in compliance in all material respects with applicable Law,
including, without limitation, ERISA and the Code. None of the Company or any
of its subsidiaries has engaged in any prohibited transaction (within the
meaning of Section 406 of ERISA or Section 4975 of the Code) with respect to
any Company Benefit Plan that has resulted or could reasonably be expected to
result in any material liability to the Company or any of its subsidiaries.
No Company Benefit Plan that is subject to the funding requirements of Section
412 of the Code or Section 302 of ERISA has incurred any "accumulated funding
deficiency" as such term is defined in such sections of ERISA and the Code,
whether or not waived. No material liability to the Pension Benefit Guaranty
Corporation ("PBGC") (except for payment of premiums in the ordinary course)
has been or is reasonably expected to be incurred with respect to any Company
Benefit Plan that is subject to Title IV of ERISA; no reportable event (as
such term is defined in Section 4043 of ERISA) has occurred with respect to
any such Company Benefit Plan; and the PBGC has not commenced or threatened
the termination of any such Company Benefit Plan. None of the assets of the
Company or any of its subsidiaries is the subject of any lien arising under
<PAGE>
Section 302(f) of ERISA or Section 412(n) of the Code; and none of the Company
or any of its subsidiaries has been required to post any security pursuant to
Section 307 of ERISA or Section 401(a)(29) of the Code.
(d) Each Company Benefit Plan that is intended to be qualified
under Section 401(a) of the Code, and each trust (if any) forming a part
thereof, has received a favorable determination letter from the Internal
Revenue Service as to the qualification under the Code of such Company Benefit
Plan and the tax-exempt status of such related trust.
(e) With respect to each Company Benefit Plan that is subject to
the funding requirements of Section 412 of the Code and Section 302 of ERISA,
all material required contributions for all periods ending prior to or as of
the Effective Time (including periods from the first day of the then-current
plan year to the Effective Time) have been or will be made or properly
accrued.
(f) With respect to each Company Benefit Plan, the Company has
made available to Parent, complete and accurate copies, to the extent
applicable, of (i) all documents embodying or governing such Company Benefit
Plan and any funding medium for the Company Benefit Plan, (ii) the 1993 annual
report (Form 5500 series) filed with the Internal Revenue Service (with
attachments), (iii) the most recent actuarial report, (iv) the two most recent
financial statements and (v) the most recent IRS determination or approval
letter with respect to such Company Benefit Plan under Section 401 or
501(a)(9) of the Code (and pending requests or applications for determinations
or approvals).
(g) The Company and each of its subsidiaries are in compliance
with all applicable Laws relating to the employment of personnel and labor,
except where a failure to be in compliance would not have a Company Material
Adverse Effect.
(h) Except for such exceptions as do not have a Material Adverse
Effect, as of the date of this Agreement, (i) there are no controversies
pending or, to the knowledge of the Company, threatened between the Company or
any of its subsidiaries and any of their respective employees; (ii) none of
the Company or any of its subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or any of its subsidiaries, nor, to the knowledge of the Company, are
there any activities or proceedings of any labor union to organize any such
employees; (iii) there are no grievances outstanding against the Company or
any of its subsidiaries under any such agreement or contract; (iv) there are
no unfair labor practice complaints pending against the Company or any of its
subsidiaries before the National Labor Relations Board or any current union
representation questions involving employees of the Company or any of its
subsidiaries; and (v) there is no strike, slowdown, work stoppage or lockout,
or, to the knowledge of the Company, threat thereof, by or with respect to any
employees of the Company or any of its subsidiaries.
<PAGE>
SECTION 3.18. Insurance. All material insurance policies (the
"Insurance Policies") with respect to the property, assets, operations and
business of the Company and its subsidiaries are in full force and effect in
all material respects. The coverage amounts set forth in such Insurance
Policies (subject to applicable deductibles) are not less than the replacement
cost of the assets insured by such Insurance Policies. There are no pending
material claims against the Insurance Policies by the Company or any of its
subsidiaries as to which the insurers have denied material liability.
SECTION 3.19. Environmental Matters. (a) Except as would not
have a Company Material Adverse Effect, (i) the Company is in compliance with
all applicable Federal, state, local and foreign laws and regulations relating
to pollution and the discharge of materials into the environment
("Environmental Laws"), (ii) the Company holds all the permits, licenses and
approvals of governmental authorities and agencies necessary for the current
use, occupancy or operation of its assets and business under Environmental
Laws ("Environmental Permits"), and (iii) the Company is in compliance with
all its Environmental Permits.
(b) The Company has not received any written request for
information, or been notified that it is a potentially responsible party,
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), or any similar state, local or foreign law
with respect to any real property owned or leased by it.
(c) The Company has not entered into or agreed to any consent
decree or order and is not subject to any judgment, decree or judicial order
relating to compliance with or the cleanup of regulated substances under any
applicable Environmental Law.
(d) None of the real property owned or leased by the Company is
listed or, to the knowledge of the Company, proposed for listing on the
"National Priorities List" under CERCLA, or on the Comprehensive Environmental
Response, Compensation and Liability Information System maintained by the
United States Environmental Protection Agency, as updated through the date of
this Agreement, or any similar state list of sites requiring investigation or
cleanup.
SECTION 3.20. Brokers. Other than Goldman, Sachs & Co., no
broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the Company.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT AND PARENT SUB
Except as set forth in the disclosure schedule delivered by Parent
and Parent Sub to the Company concurrent with the execution of this Agreement
(the "Parent Disclosure Schedule"), Parent and Parent Sub hereby jointly and
severally represent and warrant to the Company that:
SECTION 4.01. Organization and Qualification; Subsidiaries. Each
of Parent and Parent Sub is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted. The
term "Parent Material Adverse Effect" as used in this Agreement means any
change or effect (other than a change or effect relating to the industry of
Parent, the financial markets or the economy generally) that, individually or
when taken together with all such other changes or effects, would be
materially adverse to the financial condition, business, operations, earnings
or prospects of Parent and its subsidiaries, taken as a whole.
SECTION 4.02. Certificate of Incorporation and By-Laws. Parent
has heretofore furnished to the Company a complete and accurate copy of the
Certificate of Incorporation and the By-Laws, as amended or restated to the
date of this Agreement, of each of Parent and Parent Sub.
SECTION 4.03. Authority. (a) Parent has all requisite corporate
power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the transactions contemplated hereby
to be consummated by Parent. The execution and delivery of this Agreement and
the consummation by Parent of the transactions contemplated hereby have been
duly authorized by all necessary corporate action and no other corporate
proceedings on the part of Parent are necessary to authorize this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
validly executed and delivered by Parent and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent, enforceable against Parent in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by the availability of equitable remedies.
(b) Parent Sub has all requisite corporate power and authority
to execute and deliver this Agreement, to perform its obligations hereunder
and to consummate the transactions contemplated hereby to be consummated by
Parent Sub. The execution and delivery of this Agreement by Parent Sub and
the consummation by Parent Sub of the transactions contemplated hereby have
been duly authorized by all necessary corporate action and no other corporate
<PAGE>
proceedings on the part of Parent Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This
Agreement has been validly executed and delivered by Parent Sub and, assuming
the due authorization, execution and delivery by the Company, constitutes a
legal, valid and binding obligation of Parent Sub, enforceable against Parent
Sub in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by the availability of equitable
remedies. Parent, as the sole stockholder of Parent Sub, has duly approved
and adopted this Agreement in accordance with Delaware Law.
SECTION 4.04. No Conflict; Required Filings and Consents. (a)
The execution and delivery of this Agreement by Parent and Parent Sub do not,
and the performance of this Agreement by Parent and Parent Sub will not,
(i) conflict with or violate the Certificate of Incorporation or By-Laws of
Parent, Parent Sub or any of Parent's subsidiaries, (ii) conflict with or
violate any Laws applicable to Parent, Parent Sub or any of Parent's
subsidiaries or by which any of their respective properties is bound, or
(iii) result in any breach of or constitute a default (or an event that with
notice or lapse of time or both would become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
or require payment under, or result in the creation of any Encumbrance on any
of the properties or assets of Parent, Parent Sub or any of Parent's
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent, Parent Sub or any of Parent's subsidiaries is a party or by
which Parent, Parent Sub or any of Parent's subsidiaries or any of their
respective properties is bound, except for any thereof that would not have a
Parent Material Adverse Effect.
(b) The execution and delivery of this Agreement by Parent and
Parent Sub do not, and the performance of this Agreement by Parent and Parent
Sub will not, require Parent or Parent Sub to obtain any consent, approval,
authorization or permit of, or to make any filing with or notification to, any
Governmental Entity based on the Laws of any Governmental Entity, except
(i) for applicable requirements, if any, of the Exchange Act, the
Communications Act and the HSR Act and the filing and recordation of the
Certificate of Merger as required by Delaware Law and (ii) where the failure
to obtain such consents, approvals, authorizations or permits, or to make such
filings or notifications, would not prevent Parent or Parent Sub from
performing its obligations under this Agreement and would not have a Parent
Material Adverse Effect.
SECTION 4.05. Ownership of Parent Sub; No Prior Activities.
Parent Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement. As of the date of this Agreement and the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by
this Agreement and the financing thereof and except for this Agreement and any
<PAGE>
other agreements or arrangements contemplated by this Agreement or related to
the financing of the transactions contemplated hereby, Parent Sub has not and
will not have incurred, directly or indirectly, through any subsidiary or
affiliate, any obligations or liabilities or engaged in any business
activities of any type or kind whatsoever or entered into any agreements or
arrangements with any person.
SECTION 4.06. Vote Required. No vote of the holders of any class
or series of capital stock of Parent is necessary to approve any of the
transactions contemplated hereby. The affirmative vote of the holders of a
majority of the outstanding shares of common stock of Parent Sub is the only
vote of the holders of any class or series of Parent Sub capital stock
necessary to approve any of the transactions contemplated hereby.
SECTION 4.07. Financing. (a) Parent is highly confident that it
will be able to obtain financing from reliable financing sources the aggregate
proceeds of which (along with cash held by Parent and its subsidiaries and
cash held by or available to the Company and its subsidiaries) will be in an
amount sufficient to (i) consummate the Merger (and make all the payments
contemplated by Article II), (ii) pay all related fees and expenses, (iii)
permit Broadcasting to comply with paragraph 4 of the 1988 Agreement (as
hereinafter defined), (iv) permit the Company to comply with Section 5 of the
Babb Agreement (as hereinafter defined), and (v) provide adequate working
capital for the operation of the Company as of the Effective Time.
(b) Parent acknowledges that the financing structure to be
employed by Parent and Parent Sub in connection with the financing for the
transactions contemplated hereby has been and will continue to be devised by
Parent and that the Company makes no representation or warranty with respect
to such financing structure.
(c) Parent and Parent Sub have no reason to believe that they are
not financially qualified under applicable FCC requirements to acquire and
exercise control over the Company as contemplated under this Agreement and are
not aware of any matters or relationships involving the Parent or Parent Sub
or any of their affiliates that could reasonably be expected to cause the FCC
to disapprove the transfer of control of the Company contemplated hereunder
or to designate the FCC Application (as defined in Section 6.03(a)) for
evidentiary hearing.
SECTION 4.8. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Parent or Parent Sub.
<PAGE>
ARTICLE V
COVENANTS
SECTION 5.01. Affirmative Covenants of the Company. The Company
hereby covenants and agrees that, prior to the Effective Time, unless
otherwise expressly contemplated by this Agreement or consented to in writing
by Parent, the Company will and will cause its subsidiaries to (a) operate its
business in the usual and ordinary course consistent with past practices;
(b) use its reasonable efforts to preserve substantially intact its business
organization, maintain its rights and franchises, retain the services of its
respective principal officers and key employees and maintain its relationships
with its respective principal customers and suppliers; (c) use its reasonable
efforts to maintain and keep its properties and assets in as good repair and
condition as at present, ordinary wear and tear excepted; and (d) use its
reasonable efforts to keep in full force and effect insurance comparable in
amount and scope of coverage to that currently maintained; provided, however,
that in the event the Company deems it necessary to take certain actions that
would otherwise be proscribed by clauses (a) - (d) of this Section 5.01, the
Company shall consult with Parent and Parent shall consider in good faith the
Company's request to take such action and not unreasonably withhold or delay
its consent for such action.
SECTION 5.02. Negative Covenants of the Company. Except as
expressly contemplated by this Agreement and except as set forth in Section
5.02 of the Company Disclosure Schedule, or otherwise consented to in writing
by Parent, from the date hereof until the Effective Time, the Company will not
do, and will not permit any of its subsidiaries to do, any of the following:
(a) (i) increase the periodic compensation payable to or to
become payable to any director or executive officer of the Company or any of
its subsidiaries, except for increases in salary, wages or bonuses payable or
to become payable in the ordinary course of business and consistent with past
practice; (ii) grant any severance or termination pay (other than pursuant to
existing severance arrangements or policies as in effect on the date of this
Agreement and "stay" bonuses which do not exceed $200,000 in the aggregate)
to, or enter into any employment or severance agreement with, any director,
officer or employee of the Company or any of its subsidiaries involving an
annual payment of more than $100,000 and not terminable on or before the
Closing (other than employment, severance or similar agreements entered into
with the consent of Parent, which consent shall not be unreasonably withheld
or delayed); or (iii) adopt any employee benefit plan or arrangement, except
as may be required by applicable Law or pursuant to any collective bargaining
agreement between the Company or any of its subsidiaries and their respective
employees;
(b) declare or pay any dividend on, or make any other
distribution in respect of, outstanding shares of capital stock of the
Company;
<PAGE>
(c) (i) redeem, repurchase or otherwise reacquire any shares of
its or any of its subsidiaries' capital stock or any securities or obligations
convertible into or exchangeable for any shares of its or its subsidiaries'
capital stock (other than any such acquisition directly from any wholly owned
subsidiary of the Company in exchange for capital contributions or loans to
such subsidiary, or any options, warrants or conversion or other rights to
acquire any shares of its or its subsidiaries' capital stock or any such
securities or obligations (except in connection with the exercise of
outstanding Options referred to in Section 3.03 in accordance with their
terms); (ii) effect any reorganization or recapitalization of the Company; or
(iii) split, combine or reclassify any of the Company's capital stock or
issue or authorize or propose the issuance of any other securities in respect
of, in lieu of, or in substitution for, shares of its capital stock;
(d) (i) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale (including the grant of
any Encumbrances) of, any shares of any class of its or its subsidiaries'
capital stock (including shares held in treasury), any securities convertible
into or exercisable or exchangeable for any such shares, or any rights,
warrants or options to acquire, any such shares (except for the issuance of
shares upon the exercise of outstanding Options and except for the issuance of
options to employees with the consent of Parent); or (ii) amend or otherwise
modify the terms of any such rights, warrants or options the effect of which
shall be to make such terms more favorable to the holders thereof;
(e) acquire or agree to acquire, by merging or consolidating
with, by purchasing an equity interest in or a portion of the assets of, or by
any other manner, any business or any corporation, partnership, association or
other business organization or division (other than a wholly owned subsidiary)
thereof, or otherwise acquire or agree to acquire any assets of any other
person (other than the purchase of assets in the ordinary course of business
and consistent with past practice) in the case of asset purchases which are
material, individually or in the aggregate, to the Company and its
subsidiaries, taken as a whole, or make or commit to make any capital
expenditures other than capital expenditures in the ordinary course of
business consistent with past practice and with the Company's 1995 Capital
Plan;
(f) sell, lease, exchange, mortgage, pledge, transfer or
otherwise dispose of, or agree to sell, lease, exchange, mortgage, pledge,
transfer or otherwise dispose of, any of its material assets or any material
assets of any of its subsidiaries except for the grant of purchase money
security interests and dispositions in the ordinary course of business and
consistent with past practice;
(g) propose or adopt any amendments to its Certificate of
Incorporation or, as to its By-Laws, any amendments that would have an adverse
impact on the consummation of the transactions contemplated by this Agreement
or would be adverse to Parent's interests;
<PAGE>
(h) (A) change any of its methods of accounting in effect at
March 31, 1995, or (B) make or rescind any express or deemed election relating
to Taxes, settle or compromise any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy relating to Taxes
(except where the amount of such settlements or controversies, individually or
in the aggregate, does not exceed $250,000), or change any of its methods of
reporting income or deductions for federal income tax purposes from those
employed in the preparation of the federal income tax returns for the taxable
year ending December 31, 1993, except, in the case of clause (A) or clause
(B), as may be required by Law or generally accepted accounting principles;
(i) incur any obligation for borrowed money other than purchase
money indebtedness, whether or not evidenced by a note, bond, debenture or
similar instrument, except in the ordinary course of business under existing
loan agreements or capitalized leases, or prepay, before the scheduled
maturity thereof, any of its long-term debt;
(k) agree in writing or otherwise to do any of the foregoing;
(l) initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any Competing Transaction (as hereinafter
defined), 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 or permit any of the officers, directors
or employees of the Company or any of its subsidiaries or any representative
retained by the Company or any of the Company's subsidiaries to take any such
action, and the Company shall promptly notify Parent of all relevant terms of
any such inquiries and proposals received by the Company or any of its
subsidiaries, or by any such officer, director or representative, relating to
any of such matters and if such inquiry or proposal is in writing, the Company
shall deliver or cause to be delivered to Parent a copy of such inquiry or
proposal; provided, however, that nothing contained in this subsection (l)
shall prohibit the Board of Directors of the Company from (i) furnishing
information to, or entering into discussions or negotiations with, any person
or entity that makes an unsolicited bona fide proposal to acquire the Company
pursuant to a merger, consolidation, share exchange, business combination or
other similar transaction, if, and only to the extent that, (A) the Board of
Directors of the Company, after consultation with independent legal counsel,
determines in good faith that such action is required for the Board of
Directors of the Company to comply with its fiduciary duties to shareholders
imposed by Delaware Law, (B) prior to furnishing such information to, or
entering into discussions or negotiations with, such person or entity, the
Company provides written notice to Parent to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such person
or entity, (C) prior to furnishing such information to such person or entity,
the Company receives from such person or entity an executed confidentiality
agreement with terms no less favorable to the Company than those contained in
<PAGE>
the Confidentiality Agreement (as hereinafter defined and (D) the Company
keeps Parent informed, on a current basis, of the status of any such
discussions or negotiations; or (ii) complying with Rule 14e-2 promulgated
under the Exchange Act with regard to a Competing Transaction. For purposes
of this Agreement, "Competing Transaction" shall mean any of the following
involving the Company or any of its subsidiaries: (a) any merger,
consolidation, share exchange, business combination, or other similar
transaction (other than the transactions contemplated by this Agreement); (b)
any sale, lease, exchange, mortgage, pledge, transfer or other disposition of
25% or more of the assets of the Company and its subsidiaries, taken as a
whole, in a single transaction or series of transactions; (c) any tender offer
or exchange offer for 25% or more of the outstanding shares of capital stock
of the Company; (d) any person shall have acquired, after the date hereof,
beneficial ownership or the right to acquire beneficial ownership of, or any
"group" (as such term is defined under Section 13(d) of the Exchange Act and
the rules and regulations promulgated thereunder) shall have been formed that
beneficially owns or has the right to acquire beneficial ownership of, 25% or
more of the then outstanding shares of capital stock of the Company; or (e)
any public announcement of a proposal, plan or intention to do any of the
foregoing;
(m) except in the ordinary course of business and consistent
with prior practice or with the consent of Parent (which shall not be
unreasonably withheld or delayed), enter into, renew, renegotiate, modify,
amend or terminate any time sales contracts involving an annual payment of
more than $100,000; or
(n) except in the ordinary course of business and consistent
with prior practice or with the consent of Parent (which shall not be
unreasonably withheld or delayed), enter into, amend or modify any contract
involving an annual payment of more than $100,000 under which the Company is
authorized to broadcast programming.
SECTION 5.03. Access and Information. Subject to confidentiality
agreements to which the Company or any of its subsidiaries is a party, the
Company shall, and shall cause its subsidiaries to (i) afford to Parent and
its officers, directors, employees, accountants, consultants, legal counsel,
agents, lenders (including representatives of any lenders) and other
representatives (collectively, the "Parent Representatives") reasonable access
at reasonable times upon reasonable prior notice to the officers, employees,
agents, properties, offices and other facilities of the Company and its
subsidiaries and to the books and records thereof and (ii) furnish promptly to
Parent and the Parent Representatives such information concerning the
business, properties, contracts, records and personnel of the Company and its
subsidiaries (including, without limitation, financial, operating and other
data and information) as may be reasonably requested, from time to time, by
Parent.
SECTION 5.04. Confidentiality. The parties hereto will comply or
will cause their respective affiliates to comply with all their respective
obligations under the Confidentiality Agreement between the Company and Parent
<PAGE>
(the "Confidentiality Agreement"). The Company agrees to not use, and to keep
confidential, any information provided to it by Parent or its subsidiaries
(and cause its employees, lenders and advisors to do the same) to the same
extent and under the same covenants as provided in the Confidentiality
Agreement with respect to Parent's treatment of the Company's confidential
information.
SECTION 5.05. Certain Obligations. At the Effective Time, Parent
will cause the Surviving Corporation to discharge its obligations under
Section 5(d) of the Babb Agreement.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Stockholder Approval. The Company shall, promptly
after the date of this Agreement, take all action necessary in accordance with
Delaware Law and its Certificate of Incorporation and By-Laws to convene a
meeting of the Company's stockholders (the "Company Stockholders' Meeting"),
to approve and adopt this Agreement. The Company shall use its reasonable
efforts to solicit from stockholders of the Company proxies in favor of the
approval and adoption of this Agreement, unless otherwise required by
applicable fiduciary duties of the directors of the Company, as determined by
such directors in good faith after consultation with independent legal
counsel.
SECTION 6.02. Proxy Statement. (a) As promptly as practicable
after the execution of this Agreement, the Company shall prepare and file with
the SEC a proxy statement in connection with the matters to be considered at
the Company Stockholders' Meeting (the "Company Proxy Statement"). The
Company shall use its reasonable efforts to cause the Company Proxy Statement
to be "cleared" by the SEC for mailing to the stockholders of the Company as
promptly as practicable and shall mail the Company Proxy Statement to its
stockholders as promptly as practicable thereafter. Parent shall furnish all
information concerning it and the holders of its capital stock as the Company
may reasonably request in connection with such actions. The Company Proxy
Statement shall include the recommendation of the Company's Board of Directors
in favor of approval and adoption of this Agreement, unless otherwise required
by applicable fiduciary duties of the directors of the Company, as determined
by such directors in good faith after consultation with independent legal
counsel. Parent shall have the right to review the Company Proxy Statement
before it is filed with the SEC.
(b) The information supplied by Parent for inclusion in the
Company Proxy Statement shall not, at the date the Company Proxy Statement (or
any supplement thereto) is first mailed to stockholders, at the time of the
<PAGE>
Company Stockholders' Meeting or at 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, in the
light of the circumstances under which they are made, not misleading. If at
any time prior to the Effective Time any event or circumstance relating to
Parent or any of its affiliates, or its or their respective officers or
directors, should be discovered by Parent that should be set forth in a
supplement to the Company Proxy Statement, Parent shall promptly inform the
Company.
(c) All information contained in the Company Proxy Statement
(other than information provided by Parent for inclusion therein) shall not,
at the date the Company Proxy Statement (or any supplement thereto) is first
mailed to stockholders, at the time of the Company Stockholders' Meeting or at
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, in the light of the circumstances under which
they are made, not misleading. If at any time prior to the Effective Time any
event or circumstance relating to the Company or any of its affiliates, or to
its or their respective officers or directors, should be discovered by the
Company that should be set forth in a supplement to the Company Proxy
Statement, the Company shall promptly inform Parent. All documents that the
Company is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the Exchange Act and the
rules and regulations thereunder.
SECTION 6.03. FCC Application. (a) As promptly as practicable
after the execution of this Agreement, Parent and the Company shall prepare an
appropriate application for FCC consent, and such other documents as may be
required, with respect to the transfer of control of the Company to Parent
(the "FCC Application"). Not later than the tenth business day following
execution, Parent shall deliver to the Company its completed portion of the
FCC Application. Not later than the twelfth business day following the
execution, the Company shall file, or cause to be filed, the FCC Application.
Parent and the Company shall prosecute the FCC Application in good faith and
with due diligence in order to obtain such FCC consent as expeditiously as
practicable. If the Closing shall not have occurred for any reason within the
initial effective period of the granting of approval by the FCC of the FCC
Application, and neither Parent nor the Company shall have terminated this
Agreement pursuant to Section 8.01, Parent and the Company shall jointly
request one or more extensions of the effective period of such grant. Neither
Parent nor the Company shall knowingly take, or fail to take, any action the
intent or reasonably anticipated consequence of which action or failure to act
would be to cause the FCC not to grant approval of the FCC Application.
(b) Parent and the Company shall each pay one-half of any FCC
fees that may be payable in connection with the filing or granting of approval
of the FCC Application. Parent and the Company shall each oppose any request
for reconsideration or judicial review of the granting of approval of the FCC
<PAGE>
Application. The Company shall pay any cost incurred in connection with
complying with the FCC notice and advertisement requirements in connection
with the transfer of control of the Company.
SECTION 6.04. Other Appropriate Action; Consents; Filings. (a)
The Company and Parent shall each use their reasonable efforts to (i) take, or
cause to be taken, all appropriate action, and do, or cause to be done, all
things necessary, proper or advisable under applicable Law or otherwise
(including, in the case of Parent, consummating the Financing) to consummate
and make effective the transactions contemplated by this Agreement, (ii)
obtain any consents or approvals with respect to the Merger the absence of
which would result in a Company Material Adverse Effect (it being understood
that obtaining (i) any thereof that are referred to in Section 7.01(a) or
listed on Exhibit 7.02(c) shall be a condition to Parent's obligation to
consummate the Merger, and (ii) any thereof that are not referred to in
Section 7.01(a) or are not listed on Exhibit 7.02(c) shall not be a condition
to Parent's obligation to consummate the Merger), (iii) make all necessary
filings, and thereafter make any other required submissions, with respect to
this Agreement and the Merger required under (A) the Exchange Act and the
rules and regulations thereunder, and any other applicable federal or state
securities laws, (B) the HSR Act, and (C) any other applicable Law; provided
that Parent and the Company shall cooperate with each other in connection with
the making of all such filings, including providing copies of all such
documents (except those filed in connection with the HSR Act) to the nonfiling
party and its advisors prior to filing and, if requested, to accept all
reasonable additions, deletions or changes suggested in connection therewith.
The Company and Parent shall furnish all information required for any
application or other filing to be made pursuant to the rules and regulations
of any applicable Law (including all information required to be included in
the Company Proxy Statement) in connection with the transactions contemplated
by this Agreement.
(b) Each of the Company and Parent agree to cooperate and use
their reasonable efforts to contest and resist any action, including
legislative, administrative or judicial action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other order
(whether temporary, preliminary or permanent) (an "Order") that is in effect
and that restricts, prevents or prohibits the consummation of the Merger or
any other transactions contemplated by this Agreement, including, without
limitation, by pursuing any necessary administrative or judicial appeal or
legislative action.
SECTION 6.05. Public Announcements. Unless otherwise required by
applicable Law or stock exchange or NASDAQ requirements, Parent and the
Company shall consult with each other before issuing any press release or
otherwise making any public statements with respect to the Merger and shall
not issue any such press release or make any such public statement prior to
such consultation.
<PAGE>
SECTION 6.06. Indemnification. (a) The Certificate of
Incorporation and By-Laws of the Surviving Corporation shall contain the
provisions with respect to indemnification set forth in the 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 for a period
of six years after the Effective Time in any manner that would adversely
affect the rights thereunder of persons who at any time prior to the Effective
Time were identified as prospective indemnitees under the Certificate of
Incorporation or By-laws 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.
Parent will not permit the provisions with respect to
indemnification set forth in the Certificate of Incorporation and By-laws of
any of the Company's subsidiaries on the date of this Agreement to be amended,
repealed or otherwise modified for a period of six years after the Effective
Time in any manner that would adversely affect the rights thereunder of
persons who at any time prior to the Effective Time were identified as
prospective indemnitees under any such Certificate of Incorporation or By-laws
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) From and after the Effective Time, the Surviving Corporation
shall indemnify, defend and hold harmless the present and former officers,
directors and employees of the Company (collectively, the "Indemnified
Parties") against all losses, expenses, claims, damages, liabilities or
amounts that are paid in settlement of, with the approval of Parent and the
Surviving Corporation (which approval shall not be unreasonably withheld), or
otherwise in connection with, any claim, action, suit, proceeding or
investigation (a "Claim"), based in whole or in part on the fact that such
person is or was such a director, officer or employee and arising out of
actions or omissions occurring at or prior to the Effective Time (including,
without limitation, the transactions contemplated by this Agreement), in each
case to the fullest extent permitted under Delaware Law (and shall pay
expenses in advance of the final disposition of any such action or proceeding
to each Indemnified Party to the fullest extent permitted under Delaware Law,
upon receipt from the Indemnified Party to whom expenses are advanced of the
undertaking to repay such advances contemplated by Section 145(e) of Delaware
Law). Parent hereby guarantees the Surviving Corporation's obligations
pursuant to this Section 6.06(b).
(c) Without limiting the foregoing, in the event any Claim is
brought against any Indemnified Party (whether arising before or after the
Effective Time) after the Effective Time (i) the Indemnified Parties may
retain the Company's regularly engaged independent legal counsel as of the
date of this Agreement, or other independent legal counsel satisfactory to
them provided that such other counsel shall be reasonably acceptable to Parent
<PAGE>
and the Surviving Corporation, (ii) the Surviving Corporation shall pay all
reasonable fees and expenses of such counsel for the Indemnified Parties
promptly as statements therefor are received and (iii) the Surviving
Corporation will use its reasonable efforts to assist in the vigorous defense
of any such matter, provided that the Surviving Corporation shall not be
liable for any settlement of any Claim effected without its written consent,
which consent shall not be unreasonably withheld. Any Indemnified Party
wishing to claim indemnification under this Section 6.06, upon learning of any
such Claim, shall notify the Surviving Corporation (although the failure so to
notify the Surviving Corporation shall not relieve the Surviving Corporation
from any liability which the Surviving Corporation may have under this
Section 6.06, except to the extent such failure prejudices the Surviving
Corporation), and shall deliver to the Surviving Corporation the undertaking
contemplated by Section 145(e) of Delaware Law. The Indemnified Parties as a
group may retain one law firm (in addition to local counsel) to represent them
with respect to each such matter unless there is, under applicable standards
of professional conduct (as determined by counsel to such Indemnified
Parties), a conflict on any significant issue between the positions of any two
or more of such Indemnified Parties, in which event, an additional counsel as
may be required may be retained by such Indemnified Parties.
(d) Parent shall cause to be maintained in effect for not less
than five years after the Effective Time (except to the extent not generally
available in the market) the current policies of directors' and officers'
liability insurance and fiduciary liability insurance maintained by the
Company with respect to matters occurring prior to the Effective Time;
provided, however, that (i) Parent may substitute therefor policies of
substantially the same coverage containing terms and conditions that are
substantially the same for the Indemnified Parties to the extent reasonably
available and (ii) Parent shall not be required to pay an annual premium for
such insurance in excess of 300% of the last annual premium paid prior to the
date of this Agreement, but in such case shall purchase as much coverage as
possible for such amount.
(e) This Section 6.06 is intended to be for the benefit of, and
shall be enforceable by, the Indemnified Parties referred to herein, their
heirs and personal representatives and shall be binding on Parent and Parent
Sub and the Surviving Corporation and their respective successors and assigns.
SECTION 6.07. Obligations of Parent Sub. Parent shall take all
action necessary to cause Parent Sub to perform its obligations under this
Agreement and to consummate the Merger on the terms and conditions set forth
in this Agreement.
SECTION 6.08. Investigation. Parent acknowledges and agrees that
it (a) has made its own inquiry and investigation into, and based thereon has
formed an independent judgment concerning, the Company, (b) has been furnished
with or given adequate access to such information about the Company as it has
requested, and (c) it will not assert any claim against any of the Company's
<PAGE>
officers, directors, employees, agents, stockholders, affiliates, advisors or
other representatives, or hold any of such persons liable, for any
inaccuracies, misstatements or omissions with respect to information furnished
by the Company or such persons concerning the Company. Parent acknowledges
and agrees that none of the Company's stockholders, officers, directors,
employees, agents, affiliates, advisors or other representatives have made, or
are making, any representations or warranties with respect to the Company,
this Agreement, or any of the transactions contemplated hereby.
ARTICLE VII
CLOSING CONDITIONS
SECTION 7.01. Conditions to Obligations of Each Party Under This
Agreement. The respective obligations of each party to effect the Merger
shall be subject to the satisfaction at or prior to the Effective Time of the
following conditions, any or all of which may be waived, in whole or in part,
to the extent permitted by applicable Law:
(a) FCC Approval. The FCC shall have issued a Final Order (as
hereinafter defined) approving the FCC application, and such Final Order shall
include the granting of such waivers, if any, of the FCC Rules and Regulations
as may be necessary to permit the consummation of the transactions
contemplated hereby. All the terms and conditions contained in the Final
Order required to be satisfied on or prior to the Closing shall have been
satisfied and performed.
(b) Antitrust. The applicable waiting period under the HSR Act
shall have expired or been terminated.
(c) Litigation, etc. No Governmental Entity or Federal or state
court of competent jurisdiction shall have enacted, issued, promulgated,
enforced or entered any statute, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) that
is in effect and that has the effect of making the Merger illegal or otherwise
prohibiting consummation of the Merger.
(d) Stockholder Approval. The holders of a majority of the
outstanding shares of Common Stock shall have approved and adopted this
Agreement in accordance with Delaware Law and the rules and regulations of
NASDAQ.
SECTION 7.02. Additional Conditions to Obligation of Parent. The
obligation of Parent to effect the Merger is also subject to the following
conditions:
<PAGE>
(a) Representations and Warranties. Each of the representations
and warranties of the Company contained in this Agreement (i) in the case of
any thereof that are expressly qualified by any materiality qualification,
shall be true and correct, subject to such materiality qualification, and (ii)
in the case of all other representations and warranties, shall be true and
correct in all material respects, in each case as of the Effective Time as
though made on and as of the Effective Time, and except that those
representations and warranties that address matters only as of a particular
date shall remain true and correct, subject to such materiality qualifications
or in all material respects, as the case may be, as of such date. Parent
shall have received a certificate of the Chief Executive Officer of the
Company to such effect.
(b) Agreements and Covenants. The Company shall have performed
or complied with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time, except
where the failure to so comply would not have a Company Material Adverse
Effect. Parent shall have received a certificate of the Chief Executive
Officer of the Company to that effect.
(c) Consents and Approvals. All consents, approvals and
authorizations that are described on Exhibit 7.02(c) shall have been obtained.
SECTION 7.03. Additional Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is also subject to the
following conditions:
(a) Representations and Warranties. Each of the representations
and warranties of Parent and Parent Sub contained in this Agreement (i) in the
case of any thereof that are expressly qualified by any materiality
qualification, shall be true and correct, subject to such materiality
qualification, and (ii) in the case of all other representations and
warranties, shall be true and correct in all material respects, in each case
as of the Effective Time as though made on and as of the Effective Time, and
except that those representations and warranties that address matters only as
of a particular date shall remain true and correct, subject to such
materiality qualifications or in all material respects, as the case may be, as
of such date. The Company shall have received a certificate of the Chief
Financial Officer of Parent to such effect.
(b) Agreements and Covenants. Parent shall have performed or
complied with all agreements and covenants required by this Agreement to be
performed or complied with by it on or prior to the Effective Time, except
where the failure to comply would not have a Parent Material Adverse Effect.
The Company shall have received a certificate of the Chief Financial Officer
of Parent to that effect.
<PAGE>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination. This Agreement may be terminated at
any time prior to the Effective Time:
(a) by mutual consent of Parent and the Company;
(b) by Parent, upon a material 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 any material respect, in either case such
that the conditions set forth in Section 7.02(a) or Section 7.02(b)
would not be satisfied (a "Terminating Company Breach"), provided that,
if such Terminating Company Breach is curable by the Company through the
exercise of its reasonable efforts and for so long as the Company
continues to exercise such reasonable efforts, Parent may not terminate
this Agreement under this Section 8.01(b);
(c) by the Company, upon a material breach of any
representation, warranty, covenant or agreement on the part of Parent
set forth in this Agreement, or if any representation or warranty of
Parent shall have become untrue in any material respect, in either case
such that the conditions set forth in Section 7.03(a) or Section 7.03(b)
would not be satisfied (a "Terminating Parent Breach"), provided that,
if such Terminating Parent Breach is curable by Parent through the
exercise of its reasonable efforts and for so long as Parent continues
to exercise such reasonable efforts, the Company may not terminate this
Agreement under this Section 8.01(c);
(d) by either Parent or the Company, if there shall be any Order
that is final and nonappealable preventing the consummation of the
Merger, except if the party relying on such Order has not complied with
its obligations under Section 6.03(a) or 6.03(b);
(e) by Parent or the Company, if the Merger shall not have been
consummated before June 30, 1996, except if the party seeking to
terminate the Agreement shall be in breach hereof;
(f) by Parent or the Company, if the approval and adoption of
this Agreement shall fail to receive the requisite vote by the
stockholders of the Company at the Company Stockholders' Meeting;
<PAGE>
(g) by Parent, if (i) the Board of Directors of the Company
withdraws, modifies or changes its recommendation of this Agreement or
the Merger in a manner adverse to Parent or Parent Sub or shall have
resolved to do any of the foregoing, or the Board of Directors of the
Company shall have recommended to the stockholders of the Company any
Competing Transaction or resolved to do so; and
(h) by the Company, if the Board of Directors of the Company
shall have recommended to the stockholders of the Company any Competing
Transaction or resolved to do so; provided that any termination of this
Agreement by the Company pursuant to this Section 8.01(h) shall not be
effective until the close of business on the second full business day
after notice thereof to Parent.
The right of any party hereto to terminate this Agreement
pursuant to this Section 8.01 shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any party
hereto, any person controlling any such party or any of their respective
officers or directors, whether prior to or after the execution of this
Agreement.
SECTION 8.02. Effect of Termination. Except as provided in
Section 8.05 or Section 9.01, in the event of the termination of this
Agreement pursuant to Section 8.01, this Agreement shall forthwith become
void, there shall be no liability on the part of Parent, Parent Sub or the
Company or any of their respective officers or directors to the other and all
rights and obligations of any party hereto shall cease, except that nothing
herein shall relieve any party for any breach of this Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the
parties hereto by action taken by or on behalf of their respective Boards of
Directors at any time prior to the Effective Time. This Agreement may not be
amended except by an instrument in writing signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time,
any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of the other party hereto, (b) waive any
inaccuracies in the representations and warranties of the other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance by the other party with any of the agreements or conditions
contained herein. Any such extension or waiver shall be valid only if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
SECTION 8.05. Expenses. (a) Except as otherwise expressly
provided herein, all expenses incurred by the parties hereto shall be borne
solely by the party that has incurred such expenses.
<PAGE>
(b) In the event that this Agreement shall be terminated
pursuant to Section 8.01(h) and within 12 months thereafter a Competing
Transaction shall be consummated, the Company shall pay Parent a fee of $6.5
million in cash.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Effectiveness of Representations, Warranties and
Agreements. (a) Except as set forth in Section 9.01(b), the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement.
(b) The representations, warranties and agreements in this
Agreement (and in any certificate delivered in connection with the Closing)
shall terminate at the Effective Time or upon the termination of this
Agreement pursuant to Article VIII, except that the agreements set forth in
Articles I and II and Sections 6.06 and 6.08 shall survive the Effective Time
and those set forth in Sections 5.04, 5.05, 6.08, 8.02, 8.05 and Article IX
hereof shall survive termination.
SECTION 9.02. Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed to have
been duly given or made as of the date delivered, mailed or transmitted, and
shall be effective upon receipt, if delivered personally, mailed by registered
or certified mail (postage prepaid, return receipt requested) to the parties
at the following addresses (or at such other address for a party as shall be
specified by like changes of address) or sent by electronic transmission to
the telecopier number specified below:
(a) If to Parent or Parent Sub:
Renaissance Communications Corp.
One Fawcett Place, Suite 120
Greenwich, CT 06830
Attention: Chief Executive Officer
<PAGE>
(b) If to the Company:
23 Kenney Drive
Cranston, R.I. 02920
Attention: Chief Executive Officer
SECTION 9.03. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, the first mentioned person;
(b) "Babb Agreement" means the Employment Agreement dated
January 1, 1993, as amended on December 17, 1993, between Outlet
Commuinications, Inc. and James G. Babb, Jr.
(c) "business day" means any day other than a day on which banks
in the City of New York are authorized or obligated to be closed;
(d) "control" (including the terms "controlled", "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 or policies of a person, whether through the ownership of stock
or as trustee or executor, by contract or credit arrangement or otherwise;
(e) "FCC Licenses" means the licenses described in Section
3.09(a) of the Company Disclosure Schedule;
(f) "Final Order" means an action by the FCC that has not been
reversed, stayed, enjoined, set aside, annulled or suspended, with respect to
which no timely request for stay, petition for reconsideration or appeal or
sua sponte action of the FCC with comparable effect is pending and as to which
the time for filing any such request, petition or appeal or for the taking of
any such sua sponte action by the FCC has expired.
(g) "knowledge" or "known" means, with respect to any matter in
question, if an executive officer of the Company or Parent, as the case may
be, has actual knowledge of such matter;
<PAGE>
(h) "Licensed Station" means each of (i) WJAR (TV), Providence,
Rhode Island, (ii) WCMH (TV), Columbus, Ohio, and (iii) WNCN (TV) Goldsboro,
North Carolina;
(i) "1988 Agreement" means the Agreement dated as of July 26,
1988, among Bruce G. Sundlun, David E. Henderson, the Company, Broadcasting
and the persons and entities listed on the signature pages thereto;
(j) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the Exchange Act);
(k) "Significant Subsidiary" or "Significant Subsidiaries" means
any subsidiary of the Company that would constitute a Significant Subsidiary
of such party within the meaning of Rule 1-02 of Regulation S-X of the SEC;
(l) "subsidiary" or "subsidiaries" of the Company, Parent, the
Surviving Corporation or any other person, means any corporation, partnership,
joint venture or other legal entity of which the Company, Parent, the
Surviving Corporation or such other person, as the case may be (either alone
or through or together with any other subsidiary), owns, directly or
indirectly, 50% or more of the stock or other equity interests the 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;
and
(m) "Tax" or "Taxes" shall mean any and all taxes, charges,
fees, levies, payable to any federal, state, local or foreign taxing authority
or agency, including, without limitation, (i) income, franchise, profits,
gross receipts, minimum, alternative minimum, estimated, ad valorem, value
added, sales, use, real or personal property, payroll, withholding,
employment, social security, workers compensation, unemployment compensation,
utility, severance, excise, stamp, and transfer and gains taxes, (ii) customs
duties, imposts, charges, levies or other similar assessments of any kind, and
(iii) interest, penalties and additions to tax imposed with respect thereto.
SECTION 9.04. Headings. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.05. Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner materially adverse to any party. Upon such determination that any term
<PAGE>
or other provision is invalid, illegal or incapable of being enforced, the
parties hereto shall negotiate in good faith to modify this Agreement so as to
effect the original intent of the parties as closely as possible in an
acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.
SECTION 9.06. Entire Agreement. This Agreement (together with
the Exhibits hereto), and the Confidentiality Agreement constitute the entire
agreement of the parties and supersede all prior agreements and undertakings,
both written and oral, between the parties, or any of them, with respect to
the subject matter hereof.
SECTION 9.07. Assignment. This Agreement shall not be assigned
by operation of law or otherwise; provided, however, that Parent may assign
its rights hereunder (but not its obligations) to any of its wholly owned
subsidiaries.
SECTION 9.08. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied (other than the provisions of Sections
6.06 and 6.08), 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.
SECTION 9.09. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of any party hereto in the
exercise of any right hereunder shall impair such right or be construed to be
a waiver of, or acquiescence in, any breach of any representation, warranty or
agreement herein, nor shall any single or partial exercise of any such right
preclude other or further exercise thereof or of any other right. All rights
and remedies existing under this Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.
SECTION 9.10. Governing Law; Submission to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Delaware, regardless of the laws that might otherwise govern
under applicable principles of conflicts of law, and each party hereto hereby
submits to the exclusive jurisdiction of the Delaware courts sitting in
chancery for the resolution of all disputes under this Agreement.
SECTION 9.11. Counterparts. This Agreement may be executed in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, Parent, Parent Sub and the Company have caused
this Agreement to be executed as of the date first written above by their
respective officers thereunto duly authorized.
RENAISSANCE COMMUNICATIONS CORP.
By /s/ Signature Appears Here
--------------------------------------
Name:
Title:
RENAISSANCE COMMUNICATIONS
ACQUISITION CORP.
By /s/ Signature Appears Here
--------------------------------------
Name:
Title:
OUTLET COMMUNICATIONS, INC.
By /s/ Signature Appears Here
---------------------------------------
Name:
Title:
<PAGE>
Exhibit 7.02(c)
Consents and Approvals
----------------------
1. Consent of the holders of all Outstanding Options to the cancelations of
such Options in accordance with Section 2.03.
2. The Agreement dated as of July 31, 1986, between Harding Service
Corporation and the Company shall have been terminated.
<PAGE>
COMPANY DISCLOSURE SCHEDULE
dated as of June 30, 1995
delivered in connection with
Merger Agreement dated as
of June 30, 1995 among Renaissance Communications Corp.,
Renaissance Communications Acquisition Corp. and Outlet Communications, Inc.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.01
Organization and Qualification; Subsidiaries
---------------------------------------------
(a) No exceptions.
(b) 1. Outlet Broadcasting, Inc.
- Rhode Island
- wholly owned by the Company
- Significant Subsidiary
2. Atlin Communications, Inc.
- Delaware
- wholly owned by the Company
- not a Significant Subsidiary
3. Outlet Productions, Inc.
- Rhode Island
- wholly owned by Broadcasting
- not a Significant Subsidiary
4. Biltout, Inc.
- Rhode Island
- wholly owned by Broadcasting
- not a Significant Subsidiary
5. WATL-TV Pro Wrestling, Inc.
- Georgia
- wholly owned by Broadcasting
- not a Significant Subsidiary
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.02
Certificates of Incorporation and By-Laws
------------------------------------------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.03
Capitalization
---------------
(a) All outstanding common stock of Broadcasting has been pledged to Fleet
National Bank ("Fleet") by the Company pursuant to the Credit and
Guaranty Agreement dated as of June 28, 1993 among Broadcasting, the
Company and Fleet (the "Credit Agreement"). In addition, the capital
stock of the subsidiaries of Broadcasting identified in Schedule 3.01
has also been pledged to Fleet pursuant to the Credit Agreement.
(b) Options for a total of 272,469 shares of Common Stock of the Company
pursuant to stock options and restricted share awards granted under the
Company's Stock Incentive Plan.
Registration Rights (Piggyback) granted to stockholders who are parties
to that certain Stockholders Agreement dated as of December 10, 1986,
as amended on December 1, 1987 and July 26, 1988 (the "Stockholders
Agreement").
Rights of Fant Broadcasting Company of Ohio, Inc. ("Fant") to receive
shares of Common Stock of the Company under Section 5.2 of that certain
Time Brokerage Agreement dated as of March 18, 1994 among Broadcasting,
the Company and Fant (the "Fant Time Brokerage Agreement").
Guaranty by the Company of the obligations of Broadcasting under the
Credit Agreement
Rights of Fant to receive percentage of revenues of WWHO (TV) pursuant
to the Fant Time Brokerage Agreement.
Rights of Harding Service Corporation ("Harding") to receive a
percentage of revenues of Broadcasting pursuant to that certain
Agreement for Management Consulting Services between the Company and
Harding dated as of July 31, 1986.
Voting Agreements with respect to election of directors and certain
transactions set forth in the Stockholders Agreement.
Employment Agreement, dated January 1, 1993, as amended on December 17,
1993, between the Company and James G. Babb, Jr.
<PAGE>
Rights of BAF Enterprises, Inc. ("BAF") to receive a percentage of
revenues of WFDG (TV) pursuant to that certain Time Brokerage Agreement
between Broadcasting and BAF Enterprises, Inc. dated December 14, 1994,
as amended (the "BAF Agreement").
Payments to Katz Communications, Inc. based on a percentage of "Station
Net Billing" for "National Broadcast Advertising" as such terms are
defined in the Katz Representation Agreements for WJAR, WCMH, WHHO and
WNCN, which agreements are identified in Schedule 3.08(c)(3) hereto.
(c) No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.04
Authority
-----------
1. Approval and adoption of the Merger Agreement pursuant to Delaware Law
and the Stockholders Agreement.
2. Filing and recordation of appropriate merger documents pursuant to
Delaware Law.
<PAGE>
Company Disclosure Schedule
-----------------------------
SCHEDULE 3.05
No Conflict; Required Filings and Consents
-------------------------------------------
(a)(i) No exceptions.
(a)(ii) No exceptions.
(a)(iii) 1. Credit and Guaranty Agreement, dated as of June 28,
1993 among Broadcasting, the Company and Fleet National
Bank.
2. Indenture, dated as of July 8, 1993 between
Broadcasting and Bankers Trust Company governing
Broadcasting 10 7/8% Senior Subordinated Notes due
2003.
3. Agreement, dated as of July 26, 1988, by and among
Bruce G. Sundlun, David E. Henderson, the Company,
Broadcasting and certain persons listed on the
signature pages thereto.
4. Employment Agreement dated January 1, 1993, as amended
on December 17, 1993, between the Company, and James G.
Babb, Jr.
5. See Schedule 3.08(h) 10. regarding NBC Affiliation
Agreements.
6. Right of termination by WB Communications ("WB") of the
station affiliation agreement between WB and
Broadcasting dated September 1, 1994 with regard to
WWHO.
7. Right of termination by WB of the station affiliation
agreement between WB and Broadcasting dated November 4,
1994 with regard to WFDG.
<PAGE>
8. Right of Katz Communications, Inc. to earn commissions
on political advertising pursuant to representation
agreements with (i) WJAR, and (ii) WCMH, each dated
1/2/92, as amended 2/7/92.
9. Outlet Communications, Inc. Benefit Trust for
Executives (Section 11).
10. Supplemental Retirement Plan between Outlet
Communications, Inc. and certain employees, effective
7/1/89, as amended (Section 3.05(a)).
11. Most of the Company's film programming/syndication
agreements contain change-of-control provisions that
require consent by the Licensor to the transactions
contemplated by the Agreement. In a few instances
(e.g. agreements with Twentieth Century Fox, Cannell
Distribution Company, Worldvision Enterprises and
Columbia Pictures Television), the Licensor has an
option to accelerate any payments due under the subject
license agreement at the Effective Time. The film
programming and syndication agreements that involve
payments in excess of $500,000 and have change-of-
control provisions are identified in Schedule
3.08(h)(3).
(b) No exceptions.
<PAGE>
Company Disclosure Schedule
---------------------------
SCHEDULE 3.06
Reports; Financial Statements
------------------------------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.07
Undisclosed Liabilities
-----------------------
1. Obligations of Broadcasting under the BAF Agreement.
2. Obligations under purchase orders for materials and equipment as
contemplated by the Company's 1995 Capital Plan and budget.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.08
Material Contracts
-------------------
(a) 1. Employment Agreement dated January 1, 1993, as amended on December
17, 1993, between the Company and James G. Babb, Jr.
2. Employment Agreement dated April 1, 1989, among the Company,
Broadcasting and Felix W. Oziemblewski.
3. Employment Agreement dated January 1, 1995, among the Company,
Broadcasting and Linda Sullivan.
4. Employment Agreement dated May 1, 1993, among the Company,
Broadcasting and Douglas E. Gealy.
5. Employment Agreement dated January 1, 1995, among the Company,
Broadcasting and Steven Soldinger.
6. Employment Agreement dated January 1, 1995, among the Company,
Broadcasting Inc. and Adam G. Polacek.
7. Employment Agreement dated October 4, 1994, between Broadcasting
and Robert M. Singleton.
8. Employment Agreement dated May 10, 1994, between Broadcasting and
Richard M. Skidmore.
9. Employment Agreement dated May 16, 1994, between Broadcasting and
David J. Thompson.
10. Employment Agreement dated September 21, 1994, between Broadcasting
and Douglas B. Lessells.
11. Employment Agreement dated September 9, 1994, between Broadcasting
and David G. Maetzold.
12. Employment Agreement dated October 11, 1994, between Broadcasting
and Coleen L. Marshall.
<PAGE>
13. Employment Agreement dated September 19, 1994, between Broadcasting
and Cary J. Martin.
14. Employment Agreement dated October 9, 1994, between Broadcasting
and Cathleen D. McDougall.
15. Employment Agreement dated September 16, 1994, between Broadcasting
and Andre Moreau.
16. Employment Agreement dated April 26, 1994, between Broadcasting and
Jane Y. Naruse.
17. Employment Agreement dated September 27, 1994, between Broadcasting
and Robert L. Nunnally.
18. Employment Agreement dated September 19, 1994, between Broadcasting
and Clark A. Powell.
19. Employment Agreement dated September 15, 1994, between Broadcasting
and James Cabot Rea.
20. Employment Agreement dated September 16, 1993, between Broadcasting
and Allison Ash-Burke.
21. Employment Agreement dated August 29, 1993, between Broadcasting
and Bret M. Atkins.
22. Employment Agreement dated September 14, 1994, between Broadcasting
and Deena M. Centofanti.
23. Employment Agreement dated May 26, 1994, between Broadcasting and
Harold T. Fisher.
24. Employment Agreement dated January 15, 1994, between Broadcasting
and Jym R. Ganahl.
25. Employment Agreement dated February 23, 1994, between Broadcasting
and Benjamin D. Gelber.
26. Employment Agreement dated October 31, 1994, between Broadcasting
and Phillip Hayes.
27. Employment Agreement dated October 27, 1992, between Broadcasting
and Gail M. Hogan.
<PAGE>
28. Employment Agreement dated September 29, 1994, between Broadcasting
and Carole Houser.
29. Employment Agreement dated July 27, 1994, between Broadcasting and
Kelly M. Jackson.
30. Employment Agreement dated August 30, 1994, between Broadcasting
and Michael D. Jackson.
31. Employment Agreement dated April 7, 1995, between Broadcasting and
Andrea Lynne Brody.
32. Employment Agreement dated September 17, 1993, between Broadcasting
and Frank Carpano.
33. Employment Agreement dated December 22, 1992, between Broadcasting
and Ginger Casey.
34. Employment Agreement dated October 22, 1993, between Broadcasting
and Frank Colletta.
35. Employment Agreement dated April 24. 1995, between Broadcasting and
Elena Echarri.
36. Employment Agreement dated February 2, 1995, between Broadcasting
and R.J. Heim.
37. Employment Agreement dated October 4, 1994, between Broadcasting
and Dyana Koelsch.
38. Employment Agreement dated February 22, 1995, between Broadcasting
and Gary Ley.
39. Employment Agreement dated November 23, 1993, between Broadcasting
and Greg Liggins.
40. Employment Agreement dated September 26, 1994, between Broadcasting
and John McQuiston.
41. Employment Agreement dated February 2, 1995, between Broadcasting
and Karin Reed.
42. Employment Agreement dated April 14, 1994, between Broadcasting and
Stacey Sager.
<PAGE>
43. Employment Agreement dated April 25, 1994, between Broadcasting and
Maria Stephanos.
44. Employment Agreement dated March 6, 1995, between Broadcasting and
Gene Valicenti.
45. Employment Agreement dated February 2, 1995, between Broadcasting
and Robert Ward.
46. Employment Agreement dated November 1, 1993, between Broadcasting
and Douglas C. White.
47. Employment Agreement dated February 3, 1993, between Broadcasting
and Holly Patrice Wood.
48. Employment Agreement dated May 3, 1995 , between Broadcasting and
Arthur Edwards.
49. Employment Agreement dated May 3, 1995, between Broadcasting and
Jennifer Elliot.
50. Employment Agreement dated May 19, 1995, between Broadcasting and
Kathleen Fowler.
51. Employment Agreement dated May 15, 1995, between Broadcasting and
Kristin Fraser.
52. Employment Agreement dated May 17, 1995, between Broadcasting and
David Frick.
53. Employment Agreement dated April 27, 1995, between Broadcasting and
Ann Halloran.
54. Employment Agreement dated May 8, 1995, between Broadcasting and
Dean Simpson Phillips.
55. Employment Agreement dated May 15, 1995, between Broadcasting and
Holly Shepperd.
56. Employment Agreement dated April 19, 1995, between Broadcasting and
Lisa Spencer.
57. Employment Agreement dated April 28, 1994, between Broadcasting and
Monica B. Robins.
<PAGE>
58. Employment Agreement dated July 18, 1994, between Broadcasting and
Lorin Schultz.
59. Employment Agreement dated September 16, 1994, between Broadcasting
and Clarence J. Scott.
60. Employment Agreement dated September 16, 1994, between Broadcasting
and Jill L. Sguardo.
61. Employment Agreement dated June 4, 1994, between Broadcasting and
Sarah M. Shelton.
62. Employment Agreement dated July 13, 1994, between Broadcasting and
Steven Simon.
63. Employment Agreement, dated December 28, 1976, between the Company
and Edward Boghosian.
64. Obligations to pay severance equal to one year's salary (consistent
with the Company's existing severance policy) to the following
individuals in the following amounts:
Employee Salary
--------- ------
Charles Conklin $79,500
Joanne Schenck 55,000
Stan Dyl 52,250
Kathy Scanlon 33,000
Ann Snell 39,670
65. Obligations to pay combination stay bonuses and special bonuses
for efforts related to the proposed transaction to the following
individuals in the following amounts:
Employee Bonus Amount
--------- -------------
Ann Snell $44,670
Stan Dyl 25,000
Joanne Schenck 2,500
Consulting Agreements with annual payments of $25,000 or more:
--------------------------------------------------------------
66. Agreement for Management Consulting Services, dated July 31, 1986,
by and between Harding Service Corporation and the Company
<PAGE>
67. Letter agreements between Leigh Stowell & Company and (i) WJAR
dated 4/20/94, and (ii) WCMH dated 2/21/92, both regarding a study
of shopping and media usage behavior.
68. Letter agreement between Diane Harris and WJAR-TV dated 7/15/94
regarding consulting at $1250/day.
69. Television Consulting Agreement between Media and Marketing
Incorporated and WCMH dated 11/1/93 regarding talent coaching,
station image, etc.
70. Consulting Agreement between The Philippi Group and WCMH dated
2/9/95 ($1000/day).
71. Letter Agreement between The Broadcast Image Group and WNCN dated
10/12/94 retarding station image, news marketing and news
consultation.
72. Agreement between SAS Video Productions and WNCN dated 5/1/95 re
video production services.
73. See Schedule 3.17, pensions and retirement plans of the Company.
(b)
1. Agreement dated April 1, 1993, between Broadcasting (WCMH) and Local
Union No. 71 of the International Brotherhood of Electrical Workers.
Term: 09/01/93 -- 8/31/96;
Cover: Producers/Directors
2(1). Agreement dated February 11, 1993, between Broadcasting (WCMH) Columbus,
Ohio and Local Union No. 71 of the International Brotherhood of
Electrical Workers.
Term: 2/14/93 to 2/13/97
Covering: News Photographers and Film Processing
(2) Letter Agreement dated February 14, 1993, between Broadcasting and
Local Union No. 71 IBEW providing for $250 signing bonus to full-
time employees covered by the agreement dated February 11, 1993.
(3) Side Letter Agreement Letter dated February 14, 1993, between
Local Union No. 71 of the IBEW regarding trainees.
<PAGE>
3(1). Agreement dated June 13, 1993, between Broadcasting (WCMH-TV) and
American Federation of Television and Radio Artists (AFTRA) dated as of
June 13, 1993
(2) Agreement dated September 24, 1994, between Broadcasting (dba)
(WCMH TV) and AFTRA Tri-State relating to Overtime, WWHO 10
O'Clock News and part-time employees' participation in WCMH 401(k)
plan.
(3) Letter of Agreement dated March 1, 1994, regarding the use of
announcers on promotions.
(4) Agreement dated June 13, 1993, between Broadcasting and Tri-State
AFTRA regarding trainees.
(5) Agreement dated June 7, 1993, between Broadcasting (dba) (WCMH-
TV) and AFTRA Tri-State regarding reporting techniques.
(6) Agreement dated June 7, 1993, between Broadcasting (dba) (WCMH-
TV) and AFTRA Tristate regarding student trainees.
(7) Agreement dated June 7, 1993, between Broadcasting (dba) (WCMH-
TV) and AFTRA Tri-State regarding newspaper articles.
(8) Letter of Agreement dated April 18, 1994 between Broadcasting
(dba) (WCMH-TV) and AFTRA Tri-State regarding promotional
announcements.
4. Collective Bargaining Agreement dated December 4, 1989, between
Broadcasting (WJAR-TV) and Local Union No. 1228 of IBEW.
Term: 12/4/89 to 12/3/95
Covering: Announcers and Newspersons
5. Agreement dated as of December 4, 1989, between Broadcasting (WJAR) and
Local Union No. 1228 of IBEW.
Term: 12/489 to 12/3/95
Covering: Broadcast and Production Technicians
6(1). Agreement dated as of December 4, 1989, between Broadcasting (WJAR)
and Local Union No. 1228 of IBEW.
Term: 12/4/89 to 12/3/95
Covering: Directors and Staff Photographers
(2) Side Letter Agreement dated 1/22/91, between Broadcasting (dba)
(WJAR-TV) and IBEW Local 1228 regarding Conrad Ostrawski.
<PAGE>
(3) Side letter dated 12/20/90, between Broadcasting (dba) (WJAR-TV)
and IBEW Local 1228 regarding overtime work provisions.
(4) Side Letter dated 12/20/90, between Broadcasting (dba) (WJAR-TV)
and IBEW Local 1228 re: directors' work rate.
(5) Side Letter dated 12/20/90, between WJAR and IBEW Local 1228 re:
Chief Assignment Editor position.
(6) Side Letter dated 12/20/90, between WJAR and IBEW Local 1228 re:
level of monthly retirement benefits.
7(1) Agreement dated November 16, 1994 between Broadcasting, (WCMH) and Local
Union No. 71 of IBEW.
Term: 11/16/94 to 11/15/97
Covering: Production Assistants
(2) Sideletter #1 dated January 19, 1995 between IBEW-Local 71 and
Broadcasting, regarding $250 bonus.
(3) Sideletter #2 dated January 19, 1995 between IBEW Local 71 and
Broadcasting, regarding Coleen Trimmer.
8. Agreement between Broadcasting (WCMH) and IBEW Local Union 71 for
Engineers and Production Technicians has been reached, formal documents
are being drafted.
9. Broadcasting (WJAR) proposal to IBEW, Local Union No. 1228 dated
September 24, 1994.
(c)
1. Film Contracts (>$500,000)
---------------------------
- - Agreement for Maury Povich Show between Paramount Pictures Corporation
Domestic Television Division ("Paramount") and Broadcasting re WCMH
(9/95-9/98)
- - Agreement with Paramount for Hard Copy (WCMH) ('95-'97)
- - Agreement with Warner Brothers for Jenny Jones (WCMH) (9/95-8/98)
- - Agreement with King World Productions, Inc. for Oprah Winfrey Show
(WJAR) (9/95-8/2000)
<PAGE>
- - Agreement with Warner Brothers for Full House (WNCN) (10/98-9/03)
- - Agreement with Paramount for Entertainment Tonight (WNCN) ('95-'98)
- - Agreements with Buena Vista Television for Empty Nest ('93-'97), Golden
Girls - Original ('91-'95) and Live with Regis & Kathie Lee (WCMH) ('91-
'95).
- - Agreement with Embassy Communications for Who's the Boss (WCMH) ('92-
'95)
- - Agreement with Buena Vista Television for Golden Girls (WJAR) ('91-'95).
2. Real Property Leases
---------------------
- - Lease Agreement for WCMH Tower between WBNS-TV, Inc., as Lessor, and
Broadcasting, as Lessee, dated September 27, 1982.
- - Lease Agreement for roof space on Hospital Trust Tower between Rhode
Island Hospital Trust National Bank, as Lessor, and Outlet
Communications/WJAR, as Lessee, dated March 1, 1982, as amended
- - Lease Agreement for roof space in New Bedford between Claremont
Management Corporation as agent for the New Bedford Regency Limited
Partnership, as Lessor, and Broadcasting effective November 1, 1992
- - Lease Agreement for office space in Raleigh, NC between Northside
Distribution Center, as Landlord, and Broadcasting, as Assignee of
Tenant, dated February 6, 1986, as amended
- - Antenna Site License Agreement for communications equipment in Columbus,
Ohio between Leveque Tower, as Licensor, and Broadcasting/WCMH, as
Licensee, dated February 1, 1989, as amended
- - Agreement to locate and operate communications equipment on tower in
Westerville, Ohio between The Ohio State University and WCMH-TV, dated
August 7, 1987
- - Antenna Lease Agreement between Prism Rader Partners, L.P., as Landlord,
and WNCN-TV, as tenant, effective 6/l/95 (not signed)
- - Lease Agreement between J.L. Canady and Etta Mae P. Canady and Group H
Broadcasting, Inc. re Clayton Township, NC site (WNCN) dated January 1,
1988, as amended
- - Operating Lease regarding Swansea Mall space between HKI Investment
Company, as Lessor, and Broadcasting dated May 12, 1980 (contingent
liability)
<PAGE>
- - Lease Agreement for WTOP office space (and rights to use roof space) in
Washington, D.C. between VMG Associated Limited Partnership as Landlord
and Broadcasting as Tenant dated March 16, 1988 (contingent liability)
- - Hangar Space Lease Agreement between The Ohio State University, as
Lessor, and WCMH-TV, as Lessee, regarding aircraft storage space at the
Ohio State University Airport dated June 1, 1994.
3. Other Contracts
----------------
- - Nielsen Station Index Service Agreement dated 10/21/93 for the period
11/l/93 through 10/31/98 between A.C. Nielsen Company and Broadcasting
re WJAR
- - Nielsen Station Index Agreement dated October 29, 1991 for the period
1/93-12/97 between A.C. Nielsen Company and the Company re WCMH
- - Nielsen Station Index Agreement dated September 13, 1994 for the period
9/94-9/97 between A.C. Nielsen Company and the Company re WNCN
- - Payments under the BAF Time Brokerage Agreement
- - Payments under the Fant Time Brokerage Agreement
- - Payments under the Fleet Credit Agreement
- - Payments under the indenture for the Senior Subordinated Notes
- - Payments under the Representation Agreement between Katz
Communications, Inc. and the Company dated January 2, 1992, as amended,
re WJAR
- - Payments under the Representation Agreement between Katz
Communications, Inc. and the Company dated January 2, 1992, as amended,
re WCMH
- - Payments under the Representation Agreement between Katz
Communications, Inc. and the Company dated May 30, 1994 re WWHO
- - Payments for WNCN renovations to Davidson Jones Beers Construction
Company re WNCN renovations, dated May 5, 1995
- - Supplemental Income Payments to Jimmy Crum (WCMH)
- - Payments under the Agreement for Management Consulting Services with
Harding Services Corporation (See Schedule 3.03(b))
<PAGE>
- - Quotations for construction of tower in East Freetown, MA: quotes from
Central Tower, Inc. and Dielectric Communications Antennas)
- - Payments under the Representation Agreement between Katz Communications,
Inc. and the Company dated _____________________, re WNCN (contract
expected 6/95)
- - See also Schedule 3.12 re intellectual property
- - Affiliation Agreements, dated June 20, 1995 among the Company,
Broadcasting and the National Broadcasting Company, Inc. with regard to
WCMH and WJAR
- - Letter Agreement dated June 28, 1995 among the Company, Broadcasting and
the National Broadcasting Company, Inc. regarding affiliation of WNCN,
WWHO and WFDG with the National Broadcasting Company.
(d) No exceptions
(e) See Section 3.08(c)
(f) 1. Indenture dated as of July 8, 1993, between Broadcasting and
Bankers Trust Company, as Trustee (the "Note Indenture").
---------------
2. Credit and Guaranty Agreement dated June 28, 1993, among
Broadcasting, the Company and Fleet National Bank ("Fleet").
$5,000,000 Revolving Credit Note dated July 15, 1993, payable to
Fleet.
$25,000,000 Term Note dated July 15, 1993, payable to Fleet.
Security Agreement dated as of July 15, 1993, between Broadcasting
and Fleet.
Collateral Assignment and Agreement dated as of July 15, 1993,
between Broadcasting and Fleet.
Open-End Mortgage Deed and Security Agreement dated July 12, 1993,
between Broadcasting as Mortgagor and Fleet as Mortgagee covering
Cranston, RI premises. (Recorded Book 821, Page 805, Cranston, RI
City Clerk).
First Amendment to Open-End Mortgage Deed and Security Agreement
dated July 28, 1993, between Broadcasting and Fleet.
<PAGE>
Open-end Mortgage and Security Agreement dated July 12, 1993,
between Broadcasting, as mortgagor, and Fleet, as mortgagee
covering Rehoboth, MA premises. (Recorded doc. no. 34516,
Book 5587, Page 220, Bristol County, Mass Registry of Deeds).
Open-End Mortgage and Security Agreement dated July 12, 1993,
between Broadcasting as mortgagee and Fleet as mortgagor covering
Franklin County, Ohio premises.
(g) 1. Agreement for Management Consulting Services dated July 31, 1986,
between Harding Service Corporation and the Company.
2. Stockholders' Agreement dated December 10, 1986, among the Company
and the persons named therein.
3. Amendment No. 1 dated as of December 1, 1987, to the Stockholders'
Agreement.
4. Agreement dated July 26, 1988, among the Company and the persons
named therein amending the Stockholders' Agreement.
5. Employment Contracts listed under Section 3.08(a) above between
the Company and/or Broadcasting and Messrs. Babb, Oziemblewski,
Gealy and Ms. Sullivan.
6. All agreements relating to outstanding Options (see Schedule
3.17).
(h)
1. Employment Contracts listed under Section 3.08(a) above between the
Company and/or Broadcasting and Messrs. Babb, Oziemblewski, Gealy,
Soldinger and Polacek and Ms. Sullivan.
2. Agreement dated July 26, 1988, among the Company and the persons named
therein amending the Stockholders' Agreement.
3. Programming Agreements listed under Section 3.08(c).
4. Stockholders Agreement dated December 10, 1986, as amended on December
1, 1987 and July 20, 1988 (Sections 5 of the 12/10/86 Agreement;
Section 4 of the 7/26/88 Agreement)
<PAGE>
5. Indenture governing the 10 7/8% Senior Subordinated Notes dated July 8,
1993 between Broadcasting and Bankers Trust Company (Section 1010)
6. Fleet Credit Agreement (Section VII(P))(See Schedule 3.03)
7. Agreement between Katz Communications, Inc. and the Company dated
January 2, 1992, as amended (re: political advertising)
8. Supplemental Retirement Plan (Section 3.05(a))
9. Outlet Communications, Inc. Benefit Trust for Executives dated July 20,
1988 (Section 11)
10. Affiliation Agreements, dated June 20, 1995 among the Company,
Broadcasting and the National Broadcasting Company, Inc.
11. WB Station Affiliation Agreements, between WB Communications with
Broadcasting re WWHO (9/l/94) and WFDG (11/4/94). Section 7 of each
agreement permits WB to terminate the agreement upon a transfer of
interest in the Station licensee or the Station's license.
12. Collective Bargaining Agreement between Broadcasting and (i) Announcers
and Newspapermen (12/4/89), (ii) Broadcast Production Technicians
(12/4/89), and (iii) Directors and Staff Photographer (12/4/89). under
Article VI, Section 2(b) of each Agreement, upon transfer of control
of WJAR-TV, the new entity shall assume the obligations of each
agreement by a specific provision in the agreement of transfer.
13. Incentive Stock Options. Under Section 2(e) of the form of agreement,
upon a Change-of-Control, the options vests, unless Committee determines
otherwise.
14. Non-Qualified Stock Options. Under Section 2(e) of the form of
agreement, upon a Change-of-Control, the option vests.
15. Restricted Share Award. Under Section 2(f), restrictions on acquisition
are cancelled upon a change-of-control, and individuals, upon payment of
"release price" within 30 days of such change-of-control, shall receive
the shares.
16. WCMH Tower Lease between WBNS-TV and Broadcasting dated September 27,
1982 (Section 12.01)
(i) None.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.09
FCC Licenses; Station Operation
--------------------------------
WCMH(TV), Columbus, Ohio
- -------------------------
1. Main station license for Channel 4, Columbus, Ohio (most recently
renewed in FCC File No. BRCT-920601LG)
2. Main station auxiliary antenna (FCC File No. BLCT-820830KF)
3. Television station call sign "WCMH(TV)"
4. Auxiliary broadcast Remote Pickup System with call sign KPL-705
(FCC File No. BMLRE-891003MD)
5. Auxiliary broadcast Remote Pickup System with call sign KLG-684
(FCC File No. BPLRE-830801MB)
6. Auxiliary broadcast Remote Pickup Systems with call sign KB-55080
(FCC File No. BMLRE-850805MB)
7. Auxiliary broadcast Remote Pickup System with call sign KPE-919
(FCC File No. BPLRE-860808MB)
8. Auxiliary broadcast Remote Pickup System with call sign KC-62793
(FCC File No. BLNRE-861114MG)
9. Auxiliary broadcast Low Power System with call sign BLP-00793
(FCC File No. BPNQ-870306MB)
10. Auxiliary broadcast TV Pickup Station with call sign KQ-9376
(FCC File No. BLTP-790720MB); modification application filed May 11,
1995
(FCC File No. not yet assigned)
<PAGE>
11. Auxiliary broadcast TV Pickup Station with call sign KA-2070
(FCC File No. BMLTP-831014MF); modification application filed May 11,
1995
(FCC File No. not yet assigned)
12. Auxiliary broadcast TV Pickup Station with call sign KK-4979
(FCC File No. BLTP-78073IRC)
13. Auxiliary broadcast TV Relay Station with call sign WHA-916
(FCC File No. BPLTI-810429MH )
14. Auxiliary broadcast TV Relay Station with call sign WHA-917
(FCC File No. BPLTI-810429MG )1
15. Auxiliary broadcast TV Relay Station with call sign WHA-918
(FCC File No. BPLIT-810429MF)
16. Auxiliary broadcast TV Relay Station with call sign WHY 380
(FCC File No. BPLTI-83104MA
17. Auxiliary broadcast TV Relay Station with call sign WLO-412
(FCC File No. BPLTI-880510MG)
18. Auxiliary broadcast TV STL Station with call sign WHA-919
(FCC File No. BPLTS-810429ME)
19. Auxiliary broadcast Low Power System with call sign BLP-00851
(FCC File No. BLNQ-880510MF)
20. Auxiliary broadcast TV Relay Station with call sign WHA-880
(FCC File No. BPLTI-810325MM)
21. Auxiliary broadcast TV Relay Station with call sign WMV-316
(FCC File No. BPLTI-940804MA)
22. Satellite earth station E890582 (FCC File No. 1239-DSE-P/L-89)
23. Satellite earth station E6665 (FCC File No. 298-DSE-P/L-84) (Earth
station is authorized as transmit-receive station. Transmit equipment
has never been installed. Licensee will file application to modify
authorization to a receive-only authorization if buyer desires.)
1 Not in service
<PAGE>
24. Pending application for new TV pickup system, filed May 11, 1995 (FCC
File No. not yet assigned)
25. Microwave Radio Station License WTNK-836 (FCC File No. 775686)
WJAR(TV), Providence, Rhode Island
- -----------------------------------
1. Main station license for Channel 10, Providence, Rhode Island (most
recently renewed in FCC File No. BRCT931130KV)
2. Television station call sign "WJAR(TV)"
3. Auxiliary broadcast TV STL Station with call sign KQR-99
(FCC File No. BPLTS-930312MD)
4. Auxiliary broadcast TV Relay Station with call sign WHS-416
(FCC File No. EMLTI-930312ME)
5. Auxiliary broadcast TV Relay Station with call sign WHS-514
(FCC File No. BMLTI-930312MF)
6. Auxiliary broadcast TV Relay Station with call sign WDD-668
(FCC File No. BMLTI-930312MC)
7. Auxiliary broadcast TV Pickup Station with call sign KA-44234
(FCC File No. BMLTP-830406MC)
8. Auxiliary broadcast TV Pickup Station with call sign KK-4092
(FCC File No. BPLTP-9302180Z)
9. Auxiliary broadcast TV Pickup Station with call sign KA-95378
(FCC File No. BMLTP-930312MG)
10. Auxiliary broadcast Remote Pickup System with call sign WYR-232
(FCC File No. BMLRE-9303913430)
11. Auxiliary broadcast Remote Pickup System with call sign KCI-683
(FCC File No. BMLRE-93034802S0)
12. Auxiliary broadcast Low Power System with call sign BLP00713
(FCC File No. BNLQ-850725MD)
<PAGE>
13. Auxiliary broadcast Low Power System with call sign BLP00749
(FCC File No. BNLQ-860429MH)
14. Auxiliary broadcast Low Power System with call sign BLP00868
(FCC File No. BPLQ-881115ML)
15. Satellite earth station E860671 (FCC File No. 001150-DSE-L-86)
[16. Private licenses -- Awaiting results of check of FCC's Gettysburg,
Pennsylvania records]
WNCN(TV), Goldsboro, North Carolina
- ------------------------------------
1. Main station license for Channel 17, Goldsboro, North Carolina (most
recently renewed in FCC File No. BRCT-91073IKL, and assigned in FCC File
No. BALCT-940503KG)
2. Pending application to increase stations effective radiated power
(FCC File No. BPCT-941214KF)
3. Television station call sign "WNCN(TV)"
4. Auxiliary Broadcast TV STL with call sign WLP-292 (FCC File No. BPLTS-
891114MK)
5. Auxiliary Broadcast R/P Base Station with call sign KPJ-833
(FCC File No. BMLTS-921013MF)
[6. Private radio licenses to follow -- awaiting results of check of FCC's
Gettysburg, Pennsylvania records]
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.10
Permits
--------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.11
Properties
-----------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.12
Intellectual Property
----------------------
1. Connecticut Trademark
----------------------
Service Mark Registration for "newschannel" (No. 9443) - December 16,
1994
Service Mark Registration for "NewsWatch" (No. 9444) - December 16, 1994
2. Massachusetts Trademark
------------------------
Service Mark Registration for "Newschannel" (No. 50253)
Service Mark Registration for "newswatch" (No. 50254)
3. Rhode Island Trademark
-----------------------
Service Mark Registration for "NEWSWATCH" (No. 94-10-11) - October 26,
1994
Service Mark Registration for "NEWSCHANNEL" (No. 94-10-11) - October 26,
1994
4. Licenses
---------
- Broadcast Blanket License between Killer Tracks and WJAR TV dated
2/16/94 regarding use of music, compositions and sound recordings
- Software License Agreement between Jefferson-Pilot Data Services,
Inc. ("JDS") and the Company (WJAR) dated 11/18/91 regarding
sales/traffic and billing systems, general ledger, A/P, Credit
Management System and data retrieval
- Software License Agreement between JDs and the Company (WCMH/WWHO)
dated 11/18/91 regarding sales/traffic, general ledger, A/P
- Software License Agreement between JDs and the Company (WNCN)
dated 7/11/94 regarding broadcast management, media management,
financial management and sales/traffic training
<PAGE>
- ASCAP/License Fee Arrangement for WJAR per correspondence from the
Television Music License Committee ("TMLC") dated 12/20/94 and
1/13/95 (regarding music license fees)
- BMI License Fee Agreement for WJAR dated 5/10/95 and
correspondence from TMLC dated 4/22/94 and 4/21/95 (regarding
music license fees)
- ASCAP License Agreement for WCMH dated 1/1/68
- SESAC License Agreement for WCMH dated 6/26/68
- BMI License Agreement for WWHO dated 5/4/95
- BMI License Agreement for WNCN dated 5/19/95
- News Service Agreement (license to use satellite feed materials)
between Conus Communications Company Limited Partnership and
Broadcasting re WCMH dated 1/21/94
- License to use "WB" logo and broadcast WB programming (i) as
broker to WWHO pursuant to Station Affiliation Agreement dated
9/1/94 between Broadcasting and WB Communications, and (ii) as
broker for WFDG pursuant to Station Affiliation Agreement dated
11/4/94 between Broadcasting and WB Communications
- License to use call letters WJAR, WCMH, WNCN
- License to use AP Newspower report to WNCN.
- License to use AP Newspower to report WCMH dated 9/2/93
- License to use AP Newspower report and "GraphicBank" to WJAR dated
6/30/88, as amended
- License Agreement between Competitive Media Reporting and WNCN
dated 10/20/94 re: Mediawatch reports
- Software License Agreement between Data Center Management, Inc.
and WNCN dated 1/30/95 re: Newsdata newsroom hardware/software
- License Agreement between Tribune Media Services, Inc. and WNCN
dated 3/14/95 regarding news-in-motion images
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.13
Taxes
- -----
1. Subsequent to an audit covering the years 1987 through 1990, the State
of Rhode Island assessed a deficiency of approximately $26,000. This
assessment with interest charges could result in a total claim of
approximately $40,000. The Company is contesting the assessment and a
decision is pending from an Administrative Hearing Officer. The issue
in dispute (the availability of the Rhode Island investment tax credit)
may have a prospective impact on Broadcasting, as it anticipates
claiming an investment tax credit of approximately $84,000 on its Rhode
Island income tax return.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.14
Compliance
-----------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.15
Certain Changes and Events
---------------------------
- - On June 20, 1995 the Company, Broadcasting and the National Broadcasting
Company ("NBC") entered into Affiliation Agreements with regard to WCMH
and WJAR. On June 28, 1995 the Company, Broadcasting and NBC also
entered into a Letter Agreement regarding the affiliation of WNCN with
NBC.
(a) No exceptions.
(b) No exceptions.
(c) No exceptions.
(d) Amendment to 1992 Stock Incentive Plan to increase the number of shares
authorized for issuance under the plan by 300,000 shares (approved by
shareholders on May 2, 1995).
(e) No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.16
Litigation
-----------
1. The New Olde Village Jewelers, Inc., v. Outlet Communications, Inc.
complaint filed with U.S. District Court, Southern District, OH,
September 24, 1994.
2. S.Y. Restaurant, Inc. v. Outlet Communications, Inc. complaint filed
State of Rhode Island Superior Court, April 26, 1994.
3. Tanya Barrett, et al, v. Outlet Broadcasting, Inc. complaint filed US
District Court, Southern District of OH, February 2, 1994.
4. Your Bridal Shop, Inc., v. Outlet Communications, Inc. complaint filed
State of Rhode Island Superior Court, August 19, 1993.
5. Edward F. McVeigh v. Outlet Communications, Inc. complaint filed State
of Rhode Island Superior Court July 6, 1993.
6. Bourgeois, as Building Commissioner of the Town of Freetown v. William
P. Kramer, et al. and BAF Enterprises, Inc., filed Massachusetts
superior court (Bristol County) March 30, 1995 (Neither the Company nor
Broadcasting is a party to this action but its outcome could effect the
BAF Agreement).
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.17
Employee Benefit Plans; Labor Matters
--------------------------------------
(a)
1. Employment Agreements listed in paragraph (a) of Schedule 3.08.
2. Collective Bargaining Agreements listed in paragraph (b) of Schedule
3.08.
3. 1992 Stock Incentive Plan (as amended March 16, 1993 and October 27,
1994)
4. Incentive Stock Option Agreements, Restricted Shares Agreements and Non-
Qualified Stock Option Agreements covering options granted under the
1992 Stock Incentive Plan as follows:
Options Granted
Balance
Optionee/Type Grant Date Number Price Exercised Outstanding
James G. Babb
ISO 7/8/92 30,000 $ 3.25 30,000
Restricted shares 7/8/92 30,000 1.00 30,000
ISO 7/11/94 23,076 13.00 23,076
Non-qualified 7/11/94 21,924 13.00 21,924
Non-qualified 7/11/94 45,000 1.00 45,000
------- -------
150,000 150,000
------- -------
Felix W. Oziemblewski
ISO 7/8/92 10,000 3.25 10,000
Restricted shares 7/8/92 10,000 1.00 6,666 3,334
ISO 10/27/94 8,000 15.75 8,000
------- ------ -------
28,000 6,666 21,334
------- ------ -------
<PAGE>
Douglas E. Gealy
ISO 7/8/92 10,000 3.25 10,000
Restricted shares 7/8/92 10,000 1.00 6,666 3,334
ISO 10/27/94 12,000 15.75 12,000
------- ------ -------
32,000 6,666 25,334
------- ------ -------
Linda W. Sullivan
ISO 7/8/92 10,000 3.25 3,333 6,667
Restricted shares 7/8/92 10,000 1.00 3,333 6,667
ISO 10/27/94 12,000 15.75 12,000
------- ------ -------
32,000 6,666 25,334
------- ------ -------
Joanne E. Schenck
ISO 7/8/92 5,000 3.25 700 4,300
Restricted shares 7/8/92 5,000 1.00 500 4,500
ISO 10/27/94 4,000 15.75 4,000
------- ------ -------
14,000 1,200 12,800
------- ------ -------
Charles G. Conklin
ISO 7/8/92 5,000 3.25 5,000
Restricted shares 7/8/92 5,000 1.00 3,333 1,667
------- ------ -------
10,000 3,333 6,667
------- ------ -------
Patrice Wood
ISO 12/17/92 1,500 5.00 1,000 500
Restricted shares 12/17/92 1,500 1.00 1,000 500
------- ------ -------
3,000 2,000 1,000
------- ------ -------
Douglas C. White
ISO 7/19/93 1,125 7.00 1,125
Non-qualified 7/19/93 1.125 1.00 750 375
------- ------ -------
2,250 750 1,500
------- ------ -------
<PAGE>
Jym R. Ganahl
ISO 1/15/94 2,250 9.50 2,250
Non-qualified 1/15/94 2,250 1.00 2,250
------- -------
4,500 4,500
------- -------
Adam G. Polacek
ISO 7/28/94 7,500 14.25 7,500
Non-qualified 7/28/94 7,500 1.00 7,500
------- -------
15,000 15,000
------- -------
Steven Soldinger
ISO 7/28/94 4,500 14.25 4,500
Non-qualified 7/28/94 4,500 1.00 4,500
------- -------
9,000 9,000
------- -------
Total 299,750 27,281 272,469
======= ====== =======
5. Management Incentive Compensation Plan.
6. Salespeople's Compensation Plan
- WJAR Sales Commission Plan
- WCMH Commission and Bonus Structure
- WNCN-TV Sales Commission Plan
7. Outlet Broadcasting 401(K) and Profit-Sharing Plan dated September 1,
1994.
8. Outlet Broadcasting, Inc. Retirement Plan. Non-contributory defined
benefit plan qualified under Section 401(a) of the Internal Revenue Code
for employees other than those represented by a collective bargaining
agreement with Local Union No. 1228 of the International Brotherhood of
Electrical Workers ("IBEW"). Accrual of benefits suspended as of
August 31, 1994.
9. Pension Plan for Broadcasting Employees of Station WJAR.
Non-contributory defined benefit plan qualified under Section 401(a) of
the Internal Revenue Code for union employees represented under a
collective bargaining agreement with Local Union No. 1228 of the IBEW.
<PAGE>
10. Supplemental Retirement Plan for Eligible Employees of Outlet
Broadcasting, Inc. Non-qualified supplemental defined benefit plan for
officers, and other highly compensated employees as may be designated by
the Board of Directors from time to time, which plan is designed to
supplement other pension or social security benefits.
11. Group Health Plan:
a. WNCN - NCAS of RI, Benefit Summary - HealthMate
b. Blue Cross Blue Shield of RI, Benefit Summary - HealthMate
c. Blue Cross Blue Shield of RI, Benefit Summary - ValueCare
d. Community Mutual Benefit Summaries for WCMH
e. WNCN - NCAS of RI, Benefit Summary - ValueCare
12. Group Insurance Plan: Basic life, AD&D and weekly indemnity benefits
under Group Insurance Policy (No. 100-0432) issued by Phoenix Home Life
Mutual Life Insurance Company.
13. Group Life Plus: (Optional additional group life insurance)
underwritten by Metropolitan Life Insurance Company.
14. Business Travel Plan: AD&D benefits under Policy (No. ETB-8130) issued
by Hartford Life Insurance Company.
15. Long-Term Disability Plan: Benefits under Connecticut General Life
Insurance Company Policy. Component of Executive Disability Program
Company.
16. Salary Compensation Plan: Component of Executive Disability Program.
17. Dental Insurance Plan: Benefits under Connecticut General Life
Insurance Company Policy.
18. Premium Conversion Plan
19. Tuition Reimbursement Plan/Tuition Refund Program.
20. Vacation Policy
21. Termination and Severance Policy.
22. Employee Assistance Program provided through RIEAP Employee Assistance
Services.
<PAGE>
23. Section 125 Flexible Benefits Plan (administered by Peter Zappa &
Associates, Inc.)
24. The Outlet Company Medical Reimbursement Plan (post-retirement
medical reimbursement).
25. Policies as set forth in Outlet Communications, Inc. Policy and
Procedures Manual, covering, inter alia equal employment
opportunity, sexual harassment, conflict of interest, attendance
at conventions, travel and entertainment expenses, hiring,
promotions and transfers, relocation expenses, leave of absence
and substance abuse.
26. Policies set forth in the Outlet Communications, Inc. News Policy
Manual.
(b)(i) No exceptions.
(b)(ii) No exceptions.
(b)(iii) The Outlet Company Medical Reimbursement Plan.
(c) No exceptions.
(d) No exceptions.
(e) No exceptions.
(f) No exceptions.
(g) No exceptions.
(h)(i) No exceptions.
(h)(ii) See Section 3.08(b)
(h)(iii) There are three (3) grievances pending with respect to the change
of the health insurance plan at WJAR. The Company has filed an
unfair labor practice claim with respect to the WJAR grievances.
There is a grievance pending against Broadcasting (WCMH) relating
to the termination of an employee, Roger Smith
(h)(iv) NLRB Case No. 1-CA-31609
(h)(v) No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.18
Insurance
----------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.19
Environmental Matters
----------------------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 3.20
Brokers
--------
No exceptions.
<PAGE>
Company Disclosure Schedule
----------------------------
SCHEDULE 5.02
Negative Covenants of the Company
-----------------------------------
Payment of 1995 executive bonuses pursuant to the Company's
Management Incentive Compensation Plan during the 1995 calendar year.
