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): July 23, 1996
OSBORN COMMUNICATIONS CORPORATION
(Exact name of registrant as specified in charter)
State of Delaware 1-8309 06-1142367
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
130 Mason Street, Greenwich, CT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 629-0905
Not Applicable
(Former name or former address, if changed since last report)
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Item 5. Other Events.
On July 23, 1996, Osborn Communications
Corporation, a Delaware corporation (the "Company"),
entered into an Agreement and Plan of Merger (the
"Merger Agreement") with OCC Holding Corporation,
a Delaware corporation ("OCC"), and OCC
Acquisition Company, Inc., a Delaware corporation
("Mergeco"), pursuant to which the Company will
merge with and into Mergeco (the "Merger"). As a
result of the Merger, the outstanding shares of the
Company's common stock, par value $0.01 per share
("Company Common Stock"), will be converted into
the right to receive, $15.375 per share in cash. The
Merger is conditioned upon, among other things,
approval by holders of a majority of the Company
Common Stock and upon receipt of certain regulatory
and governmental approvals. Concurrently with the
execution of the Merger Agreement and as security for
liquidated damages that may be payable by Mergeco to
the Company for Mergeco's failure to consummate the
Merger, Mergeco has deposited in an escrow account
with Citibank, N.A. an irrevocable letter of credit in
favor of the Company for the sum of $5,000,000. The
Merger Agreement is attached as Exhibit 2 hereto and
is incorporated herein by reference.
In addition, pursuant to a Voting Agreement dated as
of July 23, 1996 among the Company, Mergeco and
certain directors of the Company, each such director,
in his individual capacity as a shareholder, has agreed
to vote his shares of Company Common Stock in favor of the
Merger. A form of the Voting Agreement is attached
hereto as Exhibit 4 and is incorporated herein by
reference.
A copy of the Press Release issued by the Company
relating to the Merger Agreement is attached as Exhibit
99 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits.
(c) Exhibits:
Exhibit Number
(Referenced to Item 601
of Regulation S-K) Description of Exhibit
<PAGE>
2 Agreement and Plan of Merger dated as of July 23,
1996 among OCC Acquisition Company, Inc., Osborn
Communications Corporation and OCC Holding
Corporation.
4 Form of Voting Agreement
99 Press Release dated July 23, 1996
Signatures
Pursuant to the requirements of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused
this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Date: July 26, 1996
OSBORN COMMUNICATIONS CORPORATION
By: /s/ Thomas S. Douglas
Name: Thomas S. Douglas
Title: Senior Vice President
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EXHIBIT INDEX
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Exhibit number Page Number in Rule 0-3(b)
Referenced to sequential numbering system
Item 601 of where Exhibit can be found
Regulation S-K) Description of Exhibit
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2 Agreement and Plan of Merger
dated as of July 23, 1996
between OCC Acquisition Company,
Inc., Osborn Communications
Corporation and OCC Holding
Corporation.
4 Form of Voting Agreement
99 Press Release dated
July 23, 1996
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
OCC ACQUISITION COMPANY, INC.,
OSBORN COMMUNICATIONS CORPORATION,
AND
OCC HOLDING CORPORATION
(FOR CERTAIN LIMITED PURPOSES SET FORTH HEREIN)
DATED AS OF
JULY 23, 1996
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Page i
TABLE OF CONTENTS
PAGE
ARTICLE I
THE MERGER
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1.1. The Merger 1
1.2. Effective Time 2
1.3. Effect of the Merger 2
1.4. Certificate of Incorporation; Bylaws 2
1.5. Directors and Officers 2
1.6. Merger Consideration; Conversion and Cancellation of Securities 2
1.7. Employee Stock Options 3
1.8. Warrants 4
1.9. Dissenting Shares 4
1.10. Payment; Surrender of Certificates 4
1.11. Stock Transfer Books 5
1.12. Stockholder Approval 6
1.13. Proxy Statement 6
1.14. Letter of Credit 7
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
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2.1. Representations and Warranties Regarding Osborn 8
2.2. Representations and Warranties of Mergeco 22
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ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
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3.1. Covenants of Osborn 23
3.2. Negative Trade Balance 26
3.3. Environmental Site Assessments 26
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ARTICLE IV
ADDITIONAL AGREEMENTS OF OSBORN
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4.1. No Solicitation of Transactions 26
4.2. Access and Information 27
4.3. Assistance 29
4.4. Compliance With Station Licenses 29
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Page ii
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4.5. Notification of Certain Matters 30
4.6. Third Party Consents 30
4.7. Frank D. Osborn Employment Agreement 30
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ARTICLE V
COVENANTS OF MERGECO
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5.1. Notification of Certain Matters 30
5.2. Commitment Letter 31
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ARTICLE VI
MUTUAL COVENANTS
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6.1. Application for Commission Consent 31
6.2. Control of Stations 31
6.3. Other Governmental Consents 32
6.4. Brokers or Finders 32
6.5. Additional Agreement 32
6.6. Escrow Agreement 32
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ARTICLE VII
CONDITIONS PRECEDENT
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7.1. Conditions to Each Party's Obligation 33
7.2. Conditions to Obligation of Mergeco 33
7.3. Conditions to Obligations of Osborn 34
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ARTICLE VIII
CLOSING
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8.1. Closing 35
8.2. Actions to Occur at Closing 36
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ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
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9.1. Termination 37
9.2. Fees and Expenses 39
9.3. Effect of Termination 39
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ARTICLE X
GENERAL PROVISIONS
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10.1. Non-Survival of Representations, Warranties and Covenants 40
10.2. Knowledge 40
10.3. Amendment and Modification 40
10.4. Waiver of Compliance 40
10.5. Severability 40
10.6. Expenses and Obligations 41
10.7. Parties in Interest 41
10.8. Notices 41
10.9. Interpretation 42
10.10. Counterparts 42
10.11. Entire Agreement 42
10.12. Governing Law 42
10.13. Public Announcements 43
10.14. Assignment 43
10.15. Further Assurances 43
10.16. Director, Officer and Stockholder Liability 43
10.17. Certain Definitions 43
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Page iv
EXHIBITS:
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Exhibit A - Form of Certificate of Incorporation of the Surviving Corporation
Exhibit B - Form of Employment Agreement
Exhibit C - Form of Subscription Agreement
Exhibit D - Form of Opinion of Paul, Weiss, Rifkind, Wharton & Garrison
Exhibit E - Form of Opinion of Haley, Bader & Potts
Exhibit F - Form of Opinion of Vinson & Elkins L.L.P.
Exhibit G - Form of Opinion of Fisher, Wayland, Cooper & Leader
Exhibit H - Form of Voting Agreement
Exhibit I - Form of Escrow Agreement
Exhibit J - Form of Letter of Credit
Exhibit K - Form of Commitment Letter
Exhibit L - Form of Release
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SCHEDULES:
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Schedule 2.1(b) - Subsidiaries
Schedule 2.1(c) - Options, Warrants and Capitalization of Subsidiaries
Schedule 2.1(f) - Unrecorded Liabilities and Conduct of Business
Schedule 2.1(g) - Licenses and Permits
Schedule 2.1(h) - Litigation
Schedule 2.1(i) - Insurance
Schedule 2.1(j) - Real Estate
Schedule 2.1(l) - Liens and Encumbrances
Schedule 2.1(m) - Environmental Matters
Schedule 2.1(o) - Certain Agreements
Schedule 2.1(p) - Collective Bargaining Agreements
Schedule 2.1(q) - Patents, Trademarks; Etc.
Schedule 2.1(r) - Affiliate Relationships
Schedule 3.1(k) - Permitted Acquisitions and Dispositions
</TABLE>
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Page 1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the
"Agreement"), dated as of July 23, 1996, is entered into by and among
OCC Acquisition Company, Inc., a Delaware corporation
("Mergeco"), Osborn Communications Corporation, a Delaware
corporation ("Osborn"), and for purposes of Sections 1.12 and 10.14
only, OCC Holding Corporation, a Delaware corporation which holds
all of the outstanding capital stock of Mergeco ("Parent").
RECITALS:
WHEREAS, Mergeco, upon the terms and subject to the
conditions of this Agreement and in accordance with the General
Corporation Law of the State of Delaware ("Delaware Law"), will
merge with and into Osborn (the "Merger");
WHEREAS, the Board of Directors (the "Osborn Board") of
Osborn has determined that the Merger is fair to, and in the best
interests of, Osborn and its stockholders and has approved and
adopted this Agreement and the transactions contemplated hereby,
and recommended approval and adoption of this Agreement and the
transactions contemplated hereby by the stockholders of Osborn;
WHEREAS, the Board of Directors (the "Mergeco Board")
of Mergeco, a wholly-owned subsidiary of Parent, has determined that
the Merger is fair to, and in the best interests of, Mergeco and the
Parent and has approved and adopted this Agreement and the
transactions contemplated hereby, and recommended approval and
adoption of this Agreement and the transactions contemplated hereby
by the Parent; and
WHEREAS, the Parent, by its execution of this Agreement,
has consented to, and has authorized, approved and adopted, this
Agreement and the transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and
the mutual covenants, representations, warranties and agreements
herein contained, the parties hereto covenant and agree as follows:
ARTICLE I
THE MERGER
1.1. The Merger. Upon the terms and subject to the
conditions set forth in this Agreement, and in accordance with
Delaware Law, at the Effective Time (as defined in Section 1.2),
Mergeco shall be merged with and into Osborn. As a result of the
Merger, the separate corporate existence of Mergeco shall cease and
Osborn shall continue as the surviving corporation of the Merger (the
"Surviving Corporation"). The name of the Surviving Corporation
shall be "Osborn Communications Corporation."
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Page 2
1.2. Effective Time. The Merger shall be consummated, as
and when provided in Section 8.1 hereof, by filing a Certificate of
Merger with the Secretary of State of the State of Delaware, in such
form as is required by, and executed in accordance with the relevant
provisions of, Delaware Law (the date and time of the completion of
such filing being the "Effective Time").
1.3. Effect of the Merger. At the Effective Time, the effect
of the Merger shall be as provided in the applicable provisions of
Delaware Law. Without limiting the generality of the foregoing, and
subject to the applicable provisions of Delaware Law, at the Effective
Time, all the property, rights, privileges, powers and franchises of
Mergeco and Osborn shall vest in the Surviving Corporation, and all
debts, liabilities and duties of Mergeco and Osborn shall become the
debts, liabilities and duties of the Surviving Corporation.
1.4. Certificate of Incorporation; Bylaws.
(a) At the Effective Time, the Certificate of
Incorporation of Osborn, as in effect immediately prior to the
Effective Time, shall be amended and restated as of the
Effective Time by operation of this Agreement and by virtue
of the Merger without any further action by the stockholders
or directors of the Surviving Corporation to read in its entirety
as set forth on Exhibit A hereto.
(b) At the Effective Time, the Bylaws of Osborn,
as in effect immediately prior to the Effective Time, shall be
the Bylaws of the Surviving Corporation.
1.5. Directors and Officers. The directors of Mergeco
immediately prior to the Effective Time shall be the directors of the
Surviving Corporation at the Effective Time, each to hold office in
accordance with the Certificate of Incorporation and Bylaws of the
Surviving Corporation, and the officers of Mergeco immediately prior
to the Effective Time shall be the officers of the Surviving
Corporation at the Effective Time, except that the president and chief
executive officer of Osborn immediately prior to the Effective Time
shall be the president and chief executive officer of the Surviving
Corporation at the Effective Time, in each case until their respective
successors are duly elected or appointed and qualified.
1.6. Merger Consideration; Conversion and Cancellation of
Securities. At the Effective Time, by virtue of the Merger and without
any action on the part of Mergeco, Osborn or the holders of Osborn's
securities:
(a) Subject to the other provisions of this
Section 1.6, each share of common stock, par value $0.01 per share,
of Osborn ("Common Stock") issued and outstanding immediately
prior to the Effective Time (other than any share of Common Stock
to be canceled pursuant to Section 1.6(b), any Dissenting Shares (as
defined in Section 1.9) and any share of Common Stock described in
Section 1.6(c)) shall, by virtue of the Merger and without any action
on the part of the holder thereof, be converted into the right to receive
$15.375 in cash (the "Merger Consideration"), without any interest
thereon, payable to the holder thereof upon surrender of the certificate
formerly
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Page 3
representing such share. As a result of its conversion each
converted share of Common Stock (collectively, the "Converted
Shares") shall cease to be outstanding and shall automatically be
canceled and retired. Until surrendered to the Surviving Corporation,
each certificate previously evidencing the Converted Shares
outstanding immediately prior to the Effective Time shall be deemed
for all purposes to evidence solely the right to receive the
consideration described in this Section 1.6(a). Notwithstanding the
foregoing, if between the date of this Agreement and the Effective
Time the outstanding shares of Common Stock shall have been
changed into a different number of shares or a different class, by
reason of any stock dividend, subdivision, reclassification,
recapitalization, split, combination or exchange of shares, the Merger
Consideration shall be correspondingly adjusted to reflect such stock
dividend, subdivision, reclassification, recapitalization, split,
combination or exchange of shares. The aggregate Merger
Consideration payable to each stockholder shall be rounded to the
nearest penny.
(b) Notwithstanding any provision of this
Agreement to the contrary, each share of Common Stock held in the
treasury of Osborn immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof and no
payment shall be made with respect thereto.
(c) Notwithstanding any provision of this
Agreement to the contrary, each share of Common Stock held by the
Parent or Mergeco immediately prior to the Effective Time shall be
canceled and extinguished without any conversion thereof and no
payment shall be made with respect thereto.
(d) Each share of common stock, par value $0.01
per share ("Mergeco Common Stock"), of Mergeco issued and
outstanding immediately prior to the Effective Time shall be converted
into one share of common stock, par value $0.01 per share, of the
Surviving Corporation ("Surviving Corporation Common Stock").
1.7. Employee Stock Options. At the Effective Time, each
holder of then outstanding options ("Options") to purchase shares (the
"Option Shares") of Common Stock granted by Osborn pursuant to
the Osborn Communications Corporation Incentive Stock Plan, as
amended (the "Option Plan"), (whether or not then presently
exercisable) shall be entitled to receive, and shall receive, in settlement
of each Option, a cash payment (the "Option Consideration") from the
Surviving Corporation in an amount equal to the product of
(a) $15.375 minus the exercise price per Option Share and (b) the
number of Option Shares (including any fractional Option Shares)
covered by such Option, less any applicable withholding taxes. Each
agreement previously evidencing the Options immediately prior to the
Effective Time that are settled pursuant to this Section 1.7 (the
"Settled Options") shall be deemed for all purposes to evidence solely
the right to receive the Option Consideration. The Committee (the
"Committee") administering the Option Plan shall have the right at any
time or from time to time following the execution hereof to accelerate
and vest, in full or in part, any and all Settled Options not currently
exercisable in full. Osborn, acting through the Osborn Board or the
Committee, shall take all necessary actions to make the Option Plan
consistent with this treatment of the Options and shall cause each
holder of an Option to consent to the settlement of its
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Options
pursuant to the terms of this Section 1.7. The Option Consideration
payable to each Option holder shall be rounded to the nearest penny.
1.8. Warrants. Immediately prior to the Effective Time,
each holder of then outstanding warrants (the "Warrants") to purchase
shares of Common Stock granted by Osborn (whether or not then
presently exercisable) shall be entitled to receive, and shall receive, in
settlement of each Warrant, where the amount set forth in clause (i)
below is positive, a cash payment (the "Warrant Consideration") from
Osborn in an amount equal to the product of (i) $15.375 minus the
exercise price per share of the Warrant and (ii) the number of shares
of Common Stock (including any fractional shares) covered by such
Warrant, less any applicable withholding taxes. Each agreement or
certificate previously evidencing such Warrants (the "Settled
Warrants") immediately prior to the Effective Time shall be deemed
for all purposes to evidence solely the right to receive the Warrant
Consideration. Osborn, acting through the Osborn Board or any
committee thereof, shall have the right at any time or from time to
time following the execution hereof to accelerate and vest, in full or
in part, any and all Settled Warrants not currently exercisable in full.
Osborn, acting through the Osborn Board or any committee thereof,
shall take all necessary actions to make the terms of the Warrants
consistent with this treatment of the Warrants and shall cause each
holder of a Warrant to consent to the settlement of its Warrants
pursuant to the terms of this Section 1.8. The Warrant Consideration
payable to each Warrant holder shall be rounded to the nearest penny.
1.9. Dissenting Shares. Notwithstanding anything
in this Agreement to the contrary, shares of Common Stock that are
issued and outstanding immediately prior to the Effective Time and
that are held by stockholders who have properly exercised appraisal
rights with respect thereto under Section 262 of the Delaware Law
(the "Dissenting Shares") shall not be converted into the right to
receive the Merger Consideration as provided in Section 1.6(a), but
the holders of Dissenting Shares shall be entitled to receive such
payment as shall be determined pursuant to Section 262 of the
Delaware Law; provided, however, that if any such holder shall have
failed to perfect or shall withdraw or lose the right to appraisal and
payment under the Delaware Law, each such holder's shares of
Common Stock shall thereupon be deemed to have been converted as
of the Effective Time into the right to receive the Merger
Consideration, without any interest thereon, as provided in
Section 1.6(a), and such shares shall no longer be Dissenting Shares.
1.10. Payment; Surrender of Certificates.
(a) Exchange Fund. At or prior to the Effective
Time, Mergeco shall deposit, or cause to be deposited, with a bank or
trust company designated by Mergeco or, at Mergeco's election, with
the Surviving Corporation (such bank or trust company or the
Surviving Corporation being referred to as the "Exchange Agent"), for
the benefit of the former holders of Converted Shares, Settled Options
or Settled Warrants, for exchange in accordance with this
Section 1.10(a) through the Exchange Agent, cash in an amount
equal to the sum of (i) the sum of the Merger Consideration applicable
to all Converted Shares, (ii) the sum of the Option Consideration
applicable to all Settled Options, and (iii) the sum of the Warrant
Consideration applicable to all Settled Warrants. The cash deposited
with the Exchange Agent in accordance with this Subsection 1.10(a)
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Page 5
is hereinafter referred to as the "Exchange Fund." The Exchange
Agent shall, pursuant to irrevocable instructions, deliver cash, as
described above, in exchange for surrendered certificates or
agreements pursuant to the terms of this Agreement out of the
Exchange Fund.
(b) Exchange Procedures. As soon as practicable
after the Effective Time, the Surviving Corporation shall cause the
Exchange Agent to send to each record holder of Common Stock,
Settled Options or Settled Warrants at the Effective Time (i) a letter
of transmittal (which shall specify that delivery shall be effected, and
risk of loss and title to certificates theretofore representing Common
Stock and certificates or agreements representing Settled Options or
Settled Warrants (collectively, the"Certificates") shall pass, only upon
delivery of the Certificates to the Exchange Agent and shall be in such
form and contain such other provisions as the Surviving Corporation
shall determine) and (ii) instructions for use in effecting the surrender
of the Certificates in exchange for cash. Upon surrender of a
Certificate for cancellation to the Exchange Agent, together with such
letter of transmittal, duly executed, the holder of such Certificate shall
be entitled to receive in exchange therefor cash in the amount such
holder has the right to receive pursuant to the provisions of this
Article I, and the Certificate so surrendered shall forthwith be
canceled. Until surrendered for exchange in accordance with the
provisions of this Section 1.9, each Certificate theretofore
representing Converted Shares, Settled Options or Settled Warrants
shall from and after the Effective Time represent for all purposes only
the right to receive the Merger Consideration, Option Consideration
or Warrant Consideration, as applicable, as set forth in this
Agreement. If any holder of Converted Shares, Settled Options or
Settled Warrants shall be unable to surrender such holder's Certificates
because such Certificates have been lost or destroyed, such holder
may deliver in lieu thereof an affidavit and indemnity bond in form and
substance and with surety reasonably satisfactory to the Surviving
Corporation. If payment is to be made to a person other than the
person in whose name the surrendered Certificate is registered, it shall
be a condition of payment that the Certificate so surrendered shall be
properly endorsed or otherwise in proper form for transfer and that
the person requesting such payment shall pay transfer or other taxes
required by reason of the payment to a person other than the
registered holder of the surrendered Certificate or shall establish to the
satisfaction of the Surviving Corporation that such tax has been paid
or is not applicable. No interest shall be paid on any Merger
Consideration, Option Consideration or Warrant Consideration
payable to former holders of Converted Shares, Settled Options or
Settled Warrants.
(c) Termination of Exchange Fund. Any portion
of the Exchange Fund that remains unclaimed by the former holders
of Converted Shares, Settled Options or Settled Warrants on the
six-month anniversary of the Closing Date shall be delivered to the
Surviving Corporation, upon demand, and any former holders of
Converted Shares, Settled Options or Settled Warrants who have not
theretofore complied with this Section 1.10 shall thereafter look only
to the Surviving Corporation for the Merger Consideration, Option
Consideration or Warrant Consideration to which they are entitled,
without any interest thereon.
1.11. Stock Transfer Books. At the Effective Time, the
stock transfer books of Osborn shall be closed and there shall be no
further registration of transfers of shares of Common Stock on the
records of Osborn.
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1.12. Stockholder Approval.
(a) Osborn, acting through the Osborn Board,
shall, in accordance with applicable law and Osborn's Certificate of
Incorporation and Bylaws, (i) duly call, give notice of, convene and
hold an annual or special meeting of its stockholders as soon as
practicable for the purpose of considering and taking action on this
Agreement and the transactions contemplated hereby (the "Osborn
Stockholders Meeting") and (ii) subject to the fiduciary obligations of
the Osborn Board as advised by independent legal counsel, include in
the proxy statement (the "Proxy Statement") the recommendation of
the Osborn Board that the stockholders of Osborn approve and adopt
this Agreement and the transactions contemplated hereby, including,
without limitation, the Merger, and use its commercially reasonable
efforts to obtain such approval and adoption. To the extent permitted
by law, Mergeco and Parent agree to vote all shares of Common
Stock then beneficially owned by the Parent or Mergeco in favor of
approval and adoption of this Agreement and the transactions
contemplated hereby.
(b) Parent, in its capacity as the sole stockholder
of Mergeco, by its execution hereof, approves and adopts this
Agreement and the transactions contemplated hereby.
1.13. Proxy Statement.
(a) As promptly as practicable after the execution
of this Agreement, Osborn shall prepare and file with the Securities
and Exchange Commission (the "SEC") the preliminary Proxy
Statement with respect to the actions to be taken at the Osborn
Stockholders Meeting, which shall be in form and substance
reasonably satisfactory to Mergeco based on Mergeco's review of the
preliminary Proxy Statement prior to it being filed with the SEC.
Mergeco and Osborn shall cooperate with each other in the
preparation of the Proxy Statement, and Osborn shall notify Mergeco
of the receipt of any comments of the SEC with respect to the Proxy
Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to
Mergeco promptly copies of all correspondence between Osborn or
any representative of Osborn and the SEC. As promptly as
practicable after comments are received from the SEC with respect to
the preliminary Proxy Statement, Osborn shall use its commercially
reasonable efforts to respond to the comments of the SEC, which
responses shall be in form and substance reasonably satisfactory to
Mergeco based on Mergeco's review of Osborn's proposed responses
to the SEC. Osborn shall give Mergeco and its counsel the
opportunity to review all amendments and supplements to the Proxy
Statement and all responses to requests for additional information and
replies to comments of the SEC prior to their being filed with or sent
to the SEC. Mergeco shall provide Osborn with such information as
may be required to be included in the Proxy Statement or as may be
reasonably required to respond to any comment of the SEC. After all
the comments received from the SEC have been cleared by the SEC
staff and all information required to be contained in the Proxy
Statement, to the reasonable satisfaction of Mergeco, has been
included therein by Osborn, Osborn shall file with the SEC the Proxy
Statement and Osborn shall use its commercially reasonable efforts to
have the Proxy Statement cleared by the SEC as soon thereafter as
practicable. Osborn shall cause the Proxy Statement to be mailed to
its stockholders of record as promptly as practicable after
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Page 7
clearance
by the SEC. Unless Osborn is advised in writing by independent legal
counsel that such a recommendation is no longer consistent with the
discharge of applicable fiduciary duties of the directors of Osborn,
Osborn shall cause the Proxy Statement to include, and continue to
include until the vote is taken at the Osborn Stockholders Meeting,
the recommendation of the Osborn Board in favor of the Merger.
(b) None of the information supplied or to be
supplied by Osborn for inclusion or incorporation by reference in the
Proxy Statement will, at the mailing date of the Proxy Statement and
at the time of the Osborn Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements made therein,
in light of the circumstances in which they were made, not misleading.
If at any time prior to the Osborn Stockholders' Meeting any event or
circumstance relating to Osborn or any of its affiliates, or its or their
respective officers or directors, should be discovered by Osborn that
should be set forth in a supplement to the Proxy Statement, Osborn
shall promptly inform Mergeco. All documents that Osborn is
responsible for filing with any Governmental Entity (as defined in
Section 2.1(e)) in connection with the transactions contemplated
hereby, including the Proxy Statement to the extent that the
information contained therein relates to Osborn and its subsidiaries or
the transactions contemplated hereby, will comply as to form in all
material respects with the provisions of applicable law, including
applicable provisions of the Securities Act of 1933 (the "Securities
Act"), the Securities Exchange Act of 1934 (the "Exchange Act"), and
the rules and regulations thereunder, and each such document required
to be filed with any Governmental Entity other than the SEC will
comply with the provisions of applicable law as to the information
required to be contained therein.
(c) None of the information supplied or to be
supplied by Mergeco for inclusion or incorporation by reference in the
Proxy Statement will, at the mailing date of the Proxy Statement and
at the time of the Osborn Stockholders' Meeting, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements contained
therein, in light of the circumstances in which they were made, not
misleading. If at any time prior to the Osborn Stockholders' Meeting
any event or circumstance relating to Mergeco or any of its affiliates,
or its or their respective officers or directors, should be discovered by
Mergeco that should be set forth in a supplement to the Proxy
Statement, Mergeco shall promptly inform Osborn. All documents
that Mergeco is responsible for filing with any Governmental Entity
in connection with the transactions contemplated hereby, to the extent
that the information contained therein relates to Mergeco and its
subsidiaries or the transactions contemplated hereby, will comply as
to form in all material respects with the provisions of applicable law,
including applicable provisions of the Securities Act, the Exchange
Act and the rules and regulations thereunder, and each such document
required to be filed with any Governmental Entity other than the SEC
will comply with the provisions of applicable law as to the information
required to be contained therein.
1.14. Letter of Credit.
(a) Concurrently with the execution of this
Agreement and as security for liquidated damages that may be payable
by Mergeco to Osborn pursuant to Section 9.3, Mergeco
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shall
deposit, or cause to be deposited, an original, irrevocable letter of
credit issued by Bankers Trust Company ("Bankers Trust") in favor
of Osborn (the "Letter of Credit") for the sum of $5,000,000 in an
escrow account with Citibank, N.A., a national banking association
(the "Escrow Agent"), to be held in escrow and released therefrom in
accordance with the terms of the Escrow Agreement (herein so called)
in substantially the form of Exhibit I attached hereto to be entered into
on or before such date of deposit.
(b) If this Agreement is terminated and Osborn
seeks liquidated damages pursuant to Section 9.3, then (i) if (A)
Osborn is otherwise paid liquidated damages due under Section 9.3,
or (B) Osborn and Mergeco agree that Osborn is not entitled to the
$5,000,000 as liquidated damages, Osborn and Mergeco shall deliver
joint written instructions to the Escrow Agent authorizing the release
of the Letter of Credit to Mergeco, or as directed by Mergeco, for
cancellation; (ii) if Osborn and Mergeco agree that Osborn is entitled
to the $5,000,000 as liquidated damages, Osborn and Mergeco shall
deliver joint written instructions to the Escrow Agent authorizing the
Escrow Agent to release the Letter of Credit to Osborn; (iii) if a final
non-appealable judgment of a court of competent jurisdiction (a "Final
Determination") establishes Osborn's right to liquidated damages
pursuant to Section 9.3, Osborn shall deliver a copy of the Final
Determination to the Escrow Agent authorizing the Escrow Agent to
release the Letter of Credit to Osborn; or (iv) if a Final Determination
establishes Mergeco's right to the Letter of Credit, Mergeco shall
deliver a copy of the Final Determination to the Escrow Agent
authorizing the release of the Letter of Credit to Mergeco, or as
directed by Mergeco, for cancellation. Immediately prior to the
Effective Time and upon satisfaction of the conditions to Osborn's
obligation to consummate the Merger set forth in Article VII, Osborn
and Mergeco shall jointly instruct the Escrow Agent to release and
return the Letter of Credit to Mergeco, or as directed by Mergeco, for
cancellation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties Regarding Osborn.
Osborn represents and warrants to Mergeco as follows (with the
understanding that Mergeco is relying on such representations and
warranties in entering into and performing this Agreement).
(a) Organization, Good Standing, Etc. Each of
Osborn and its subsidiaries (as defined in Section 10.17) is a
corporation or other entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation (or
organization), has all requisite corporate power and authority to own,
lease and operate its properties and to carry on its business as now
being conducted and is duly qualified and in good standing to do
business in each state in which the nature of its business or the
ownership or leasing of its properties makes such qualification
necessary, except where the failure to so qualify or be in good
standing could not have a material adverse effect on the business,
operations, properties, condition (financial or otherwise), results of
operations, assets or liabilities of Osborn and its subsidiaries, taken as
a whole (a "Material Adverse
<PAGE>
Page 9
Effect"). Osborn has delivered to
Mergeco true and complete copies of the Certificates or Articles of
Incorporation and Bylaws (or equivalent organizational documents)
of Osborn and each of its subsidiaries, as in effect at the date of this
Agreement. Neither Osborn nor any subsidiary is in violation of any
provisions of its Certificate or Articles of Incorporation, Bylaws or
equivalent organizational documents.
(b) Subsidiaries of Osborn. Schedule 2.1(b) sets
forth a true and complete list of all of Osborn's directly or indirectly
owned subsidiaries, together with the jurisdiction of incorporation or
organization of each subsidiary and the percentage of each subsidiary's
outstanding capital stock or other equity interests owned by Osborn
or another subsidiary of Osborn. Except as disclosed on Schedule
2.1(b), Osborn does not own, directly or indirectly, any subsidiaries
or have the right, pursuant to a contract or otherwise, to acquire any
capital stock, equity interest or other similar investment in any
corporation, partnership, joint venture association, limited liability
company, trust or other entity.
(c) Capital Structure. The authorized capital stock
of Osborn consists of 7,425,000 shares of Common Stock, 75,000
shares of non-voting common stock, par value $0.01 per share
("Non-Voting Common Stock"), and 5,000,000 shares of preferred stock,
par value $0.01 per share ("Preferred Stock"), none of which are
designated. At the close of business on the date hereof, 5,423,014
shares of Common Stock were issued and outstanding, no shares of
Common Stock were held by Osborn in its treasury, and 860,205
shares of Common Stock were reserved for issuance as follows: (x)
338,031 shares were reserved for issuance upon exercise of all of the
issued and outstanding warrants, (y) 486,875 shares were reserved for
issuance upon exercise of all of the stock options outstanding under
the Option Plan, and (z) 35,299 shares were reserved for issuance and
available for grant pursuant to the Option Plan. At the close of
business on the date hereof, no shares of Non-Voting Common Stock
and no shares of Preferred Stock were issued and outstanding.
Except as described in this Section 2.1(c) and Schedule 2.1(c), no
shares of capital stock of Osborn are reserved for issuance for any
other purpose. As of the date hereof, there are no bonds, debentures,
notes or other indebtedness issued or outstanding having the right to
vote ("Voting Debt") on any matters on which holders of Common
Stock may vote. All the issued and outstanding shares of capital stock
of Osborn are duly authorized, validly issued, fully paid and
nonassessable and have not been, and as to shares issued in the future,
will not be, issued in violation of any preemptive or similar rights.
The shares of Surviving Corporation Common Stock will, when
issued, be duly authorized, validly issued, fully paid and nonassessable
and will not be issued in violation of any preemptive or similar rights.
Except as described in this Section 2.1(c), as of the date hereof, there
are no options, warrants, calls, rights, commitments or agreements of
any character to which Osborn or any of its subsidiaries is a party or
by which any of them is bound obligating Osborn or any of its
subsidiaries to issue, deliver or sell, or cause to be, delivered or sold,
additional shares of capital stock or any Voting Debt of Osborn or any
of its subsidiaries, or obligating Osborn or any of its subsidiaries to
grant, extend or enter into any such option, warrant, call, right,
commitment or agreement. All shares of Common Stock which may
be issued upon exercise of stock options granted pursuant to the
Option Plan will, when issued in accordance with the terms of such
options and the Option Plan, be validly issued, fully paid and
nonassessable and not subject to any preemptive or similar rights.
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Page 10
All shares of Common Stock which may be issued upon exercise of issued
warrants will, when issued in accordance with the terms of such
warrants and the respective warrant agreement, be validly issued, fully
paid and nonassessable and not subject to any preemptive or similar
rights. There are no outstanding contractual obligations of Osborn or
any subsidiary to repurchase, redeem or otherwise acquire any shares
of Common Stock or other capital stock of Osborn or any capital
stock of, or any equity interest in, any subsidiary listed on Schedule
2.1(b). Except for the Voting Agreement (as defined in Section
10.17), there are no voting trusts, proxies or other agreements or
understandings to which Osborn or any of its subsidiaries is a party or
by which Osborn or any of its subsidiaries is bound with respect to the
voting of any shares of capital stock or other equity interests of
Osborn or any of its subsidiaries. Schedule 2.1(c) sets forth a
complete and correct list as of the date hereof, of (i) (A) the number
of stock options outstanding, (B) the exercise price of each
outstanding stock option and (C) the number of stock options then
exercisable and (ii) (A) the number of warrants outstanding, (B) the
exercise price of each outstanding warrant, (C) the number of shares
of Common Stock attributable to each warrant and (D) the number of
warrants then exercisable. Schedule 2.1(c) also sets forth the
capitalization of each subsidiary of Osborn listed on Schedule 2.1(b),
including the number of authorized shares of each class of capital
stock and the par value (if any) thereof, the number of shares of each
class of capital stock held in the treasury of the subsidiary, and the
number of issued and outstanding shares of each class of capital stock
and the names of ( and number of shares held by) the record owners
thereof. All the issued and outstanding shares of capital stock of each
subsidiary of Osborn are duly authorized, validly issued, fully paid and
nonassessable and have not been issued in violation of any preemptive
or similar rights.
(d) Authority. Osborn has all requisite corporate
power and authority to enter into this Agreement, the Voting
Agreement and any other agreement executed by Osborn in
connection with the transactions contemplated by this Agreement
(collectively, the "Transaction Documents") and to consummate the
transactions contemplated hereby or thereby. The execution and
delivery of the Transaction Documents by Osborn and the
consummation by it of the transactions contemplated hereby or
thereby have been duly authorized by all necessary corporate action
on the part of Osborn (subject to the approval and adoption of this
Agreement and the transactions contemplated hereby by the
stockholders of Osborn as set forth in Section 1.12 of this
Agreement). The Transaction Documents have been duly executed
and delivered and constitute the valid and binding obligations of
Osborn, enforceable against it in accordance with their terms, subject
to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).
(e) No Conflict; Required Filings and Consents.
The execution and delivery of the Transaction Documents by Osborn
do not and the performance by Osborn of the transactions
contemplated hereby or thereby will not , subject to (i) with respect to
the Merger, the approval and adoption of this Agreement and the
transactions contemplated hereby by the stockholders of Osborn as set
forth in Section 1.12 of this Agreement, and (ii) obtaining the
consents, approvals, authorizations and permits and making the filings
described in this Section 2.1(e), (A) violate, conflict
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Page 11
with or result in
any breach of any provision of the Certificates or Articles of
Incorporation or Bylaws or equivalent organizational documents, in
each case as amended or restated, of Osborn or any of its subsidiaries,
(B) violate, conflict with or result in a violation or breach of, or
constitute a default (with or without due notice or lapse of time or
both) under, or permit the termination of, or result in the acceleration
of, or entitle any party to accelerate (whether as a result of a change
of control of Osborn or otherwise) any obligation, or result in the loss
of any benefit, or give any person the right to require any security to
be repurchased, or give rise to the creation of any lien, charge,
security interest or encumbrance upon any of the properties or assets
of Osborn or any of its subsidiaries under any of the terms, conditions
or provisions of any loan or credit agreement, note, bond, mortgage,
indenture or deed of trust, or any license, lease, agreement or other
instrument or obligation to which any of them is a party or by which
they or any of their properties or assets may be bound or subjected, or
(C) violate any order, writ, judgment, injunction, decree, statute, rule
or regulation, of any court or any federal, state or local administrative
agency or commission or other governmental authority or
instrumentality (a "Governmental Entity") applicable to Osborn or any
of its subsidiaries or by which or to which any of their respective
properties or assets is bound or subject. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Osborn or any
of its subsidiaries in connection with the execution and delivery of the
Transaction Documents by Osborn or the consummation of the
transactions contemplated hereby or thereby, except for (1) the filing
of a premerger notification report under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
(2) the consents of the Federal Communications Commission (the
"FCC") to the transfers of control of the Station Licenses (as defined
in Section 2.l(g)(ii) below) as contemplated by Section 6.1 hereof, (3)
the filing of the Certificate of Merger with the Secretary of State of
the State of Delaware, and (4) applicable requirements, if any, of the
Securities Act and the Exchange Act and state securities or blue sky
laws. The Osborn Board has taken all actions necessary under
Delaware Law, including approving the transactions contemplated by
the Transaction Documents, to ensure that the prohibitions on
business combinations set forth in Section 203 of Delaware Law do
not, and will not, apply to the transactions contemplated by the
Transaction Documents.
(f) Reports; Financial Statements; Absence of
Certain Changes or Events.
(i) Osborn and its subsidiaries have filed
(A) all forms, reports, statements and other documents
required to be filed with (1) the SEC, including without
limitation (v) all Annual Reports on Form 10-K, (w) all
Quarterly Reports on Form 10-Q, (x) all proxy statements
relating to meetings of stockholders (whether annual or
special), (y) all Current Reports on Form 8-K and (z) all other
reports, schedules, registration statements or other documents
(collectively referred to as the "Company SEC Reports"), and
(2) any applicable state securities authorities and (B) all
material forms, reports, statements and other documents
required to be filed with any other Governmental Entities,
including the FCC (all such forms, reports, statements and
other documents in clauses (A) and (B) of this Subsection
3.1(e)(i) being referred to herein, collectively, as the
"Company Reports"). The Company Reports were prepared
in all material respects in accordance with the requirements of
applicable law (including, with respect to the Company SEC
Reports, the Securities Act or the Exchange
<PAGE>
Page 12
Act, as the case
may be, and the rules and regulations of the SEC promulgated
thereunder applicable to such Company SEC Reports) and the
Company SEC Reports did not at the time they were filed
contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ii) Osborn has delivered to Mergeco
copies of the audited consolidated balance sheets as of
December 31, 1995 and December 31, 1994, together with the
related audited consolidated statements of income, cash flows
and changes in stockholders' equity of Osborn for the years
ended December 31, 1995, 1994 and 1993, and the notes
thereto, accompanied by the reports thereon of Ernst &
Young LLP, independent public accountants (such audited
financial statements collectively being referred to as the
"Financial Statements"). The Financial Statements, including
the notes thereto, were prepared in accordance with generally
accepted accounting principles in the United States ("GAAP")
applied on a consistent basis throughout the periods covered
thereby (except to the extent disclosed therein or required by
changes in GAAP) and present fairly in all material respects
the consolidated financial position, results of operations and
changes in stockholders' equity and cash flows of Osborn as of
such dates and for the periods then ended. The consolidated
financial statements (including, in each case, any related notes
thereto) contained in the Company SEC Reports filed
subsequent to January 1, 1993 (A) have been prepared in
accordance with the published rules and regulations of the
SEC and GAAP applied on a consistent basis throughout the
periods involved (except (1) to the extent disclosed therein or
required by changes in GAAP, (2) with respect to Company
SEC Reports filed prior to the date of this Agreement, as may
be indicated in the notes thereto, and (3) in the case of the
unaudited financial statements, as permitted by the rules and
regulations of the SEC) and (B) fairly present in all material
respects the consolidated financial position of Osborn and its
subsidiaries as of the respective dates thereof and the
consolidated results of operations and changes in stockholders'
equity and cash flows for the periods indicated (subject, in the
case of unaudited consolidated financial statements for interim
periods, to adjustments, consisting only of normal, recurring
accruals, necessary to present fairly such results of operations
and cash flows), except that any pro forma financial
statements contained in such consolidated financial statements
are not necessarily indicative of the consolidated financial
position of Osborn and its subsidiaries as of the respective
dates thereof and the consolidated results of operations and
cash flows for the periods indicated.
(iii) Except as disclosed in Schedule 2.1(f),
there is no liability or obligation of any kind, whether accrued,
absolute, fixed, contingent or otherwise, of Osborn or its
subsidiaries which would have a Material Adverse Effect and
that is not reflected or reserved against in the balance sheet
contained in the Quarterly Report on Form 10-Q for the
quarter ended March 31, 1996 (the "Balance Sheet"), other
than (A) liabilities incurred in the ordinary course of business
in a manner consistent with past practice since March 31,
1996 (the "Balance Sheet Date"), or (B) any such liability or
obligation which would not be required to be presented in
financial statements or the notes thereto prepared in
conformity with GAAP
<PAGE>
Page 13
applied, in a manner consistent with
past practice, in the preparation of the Financial Statements
and the consolidated financial statements contained in
Company SEC Reports.
(iv) Except as disclosed in Schedule 2.1(f),
since the Balance Sheet Date, Osborn and its subsidiaries have
conducted their respective businesses only in the ordinary
course consistent with past practice and nothing has occurred
that would have been prevented by Section 3.1 if the terms of
such section had been in effect as of and after the Balance
Sheet Date. Except as disclosed in Schedule 2.1(f), since the
Balance Sheet Date, there has not occurred, and Osborn and
its subsidiaries have not incurred or suffered, any Material
Adverse Effect.
(g) Compliance with Applicable Laws: FCC
Matters.
(i) Except as permitted or contemplated
hereby, the businesses of Osborn and its subsidiaries have been
conducted in compliance with each applicable law, ordinance,
regulation, judgment, decree, injunction, rule or order of the
FCC or any other Governmental Entity binding on Osborn or
any of its subsidiaries or their respective properties or assets,
except for such instances of noncompliance as would not have
a Material Adverse Effect. No investigation or review by any
Governmental Entity with respect to Osborn or any of its
subsidiaries is pending or, to Osborn's knowledge, threatened,
except for such investigations or reviews as would not have a
Material Adverse Effect. Without limiting the generality of
the foregoing, Osborn and its subsidiaries have complied with
the Communications Act of 1934, as amended (the
"Communications Act") in all material respects, all material
rules, regulations and written policies of the FCC thereunder,
all material obligations with respect to equal opportunity
under applicable law, and all material rules and regulations of
the Federal Aviation Administration applicable to the towers
used by the radio broadcast stations operated by Osborn and
its subsidiaries (the "Stations"). In addition, Osborn and its
subsidiaries have duly and timely filed, or caused to be so
filed, with the FCC all material reports, statements,
documents, registrations, filings or submissions with respect
to the operation of the Stations and the ownership thereof,
including, without limitation, applications for renewal of
authority required by applicable law to be filed. All such FCC
filings complied with all material applicable laws when made
and no material deficiencies have been asserted with respect to
any such filings. The material required by 47 C.F.R.
SS 73.3526 to be kept in the public inspection files of the
Stations is in such files.
(ii) Schedule 2.1(g) lists (A) all licenses,
permits and other authorizations, including the expiration
dates thereof, issued to Osborn or any of its subsidiaries by the
FCC relating to the Stations and held by them as of the date of
this Agreement and (B) all licenses, permits or authorizations
issued to Osborn or any of its subsidiaries by any other
Governmental Entities which are material to the operations of
the Stations and held by them as of the date of this
Agreement, the loss of which could have a Material Adverse
Effect. Such licenses, permits and authorizations, and all
applications for modification, extension or renewal thereof or
for new licenses, permits, permissions or authorizations, are
collectively
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Page 14
referred to herein as the "Station Licenses."
Schedule 2.1(g) lists the legally authorized holder(s) of the
Station Licenses, each of which is in full force and effect. The
Stations have been operated in all material respects in
accordance with the terms of the Station Licenses. There are
no material proceedings pending or, to Osborn's knowledge,
threatened with respect to Osborn's or any of its subsidiaries
ownership or operation of the Stations which reasonably may
be expected to result in the revocation, material adverse
modification, non-renewal or suspension of any of the Station
Licenses, the denial of any pending applications for Station
Licenses, the issuance against Osborn or any of its subsidiaries
of any cease and desist order, or the imposition of any
administrative actions by the FCC or any other Governmental
Entity with respect to the Station Licenses, or which
reasonably may be expected to adversely affect the Stations'
ability to operate as currently operated or the Surviving
Corporation's ability to obtain control of the Station Licenses.
To Osborn's knowledge, no other broadcast station or radio
communications facility is causing interference to the Stations'
transmissions beyond that which is allowed by FCC rules and
regulations. Osborn has no reason to believe that the FCC
will not renew the Station Licenses issued by the FCC in the
ordinary course of business. Osborn knows of no facts
relating to Osborn under the Communications Act or the rules,
regulations or written policies of the FCC in effect on the date
of this Agreement that reasonably may be expected to
disqualify Osborn from transferring control of the Station
Licenses pursuant to the terms of this Agreement or that
would prevent the consummation by them of the transactions
contemplated by this Agreement.
(h) Absence of Litigation. Except as set forth on
Schedule 2.1(h), there is no claim, action, suit, inquiry, judicial or
administrative proceeding, grievance or arbitration pending or, to the
knowledge of Osborn, threatened against Osborn or any of its
subsidiaries or any of their respective properties or assets by or before
any arbitrator or Governmental Entity, nor to Osborn's knowledge are
there any investigations relating to Osborn or any of its subsidiaries or
any of their respective properties or assets pending or threatened by
or before any arbitrator or Governmental Entity which would have a
Material Adverse Effect. Except as set forth in Schedule 2.1(h), there
is no judgment, decree, injunction, order, determination, award,
finding, or letter of deficiency of any Governmental Entity or
arbitrator outstanding against Osborn or any of its subsidiaries or any
of their respective properties or assets which would have a Material
Adverse Effect. As of the date of this Agreement, there is no action,
suit, inquiry, judicial or administrative proceeding pending or, to the
knowledge of Osborn, threatened against Osborn or any of its
subsidiaries relating to the transactions contemplated by this
Agreement.
(i) Insurance. Schedule 2.1(i) sets forth a
summary of all fire, general liability, malpractice liability, theft and
other forms of insurance and all fidelity bonds held by or applicable to
Osborn or any of its subsidiaries. No event has occurred, including,
without limitation, the failure by Osborn or any of its subsidiaries to
give any notice or information or the delivery of any inaccurate or
erroneous notice or information, which limits or impairs the rights of
Osborn or any of its subsidiaries under any such insurance policies in
such a manner as could have a Material Adverse
<PAGE>
Page 15
Effect. Excluding
insurance policies that have expired and been replaced in the ordinary
course of business, no insurance policy has been canceled within the
last two years prior to the date hereof.
(j) Real Estate. Each of Osborn and its
subsidiaries has good and marketable title in fee simple to all real
properties owned by it and valid leaseholds in the Leased Real
Property (as defined herein), except to the extent marketability may
be affected by the existence of Permitted Liens (as defined in Section
2.1(l)). Each lease is valid without default thereunder by the lessee or,
as of the date hereof and to Osborn's knowledge, the lessor. Schedule
2.1(j) lists as of the date hereof (i) the street address and use of each
parcel of real property owned by Osborn or any of its subsidiaries (the
"Owned Real Property"), (ii) the street address and use of each parcel
of real property leased by Osborn or any of its subsidiaries (the
"Leased Real Property") and (iii) two grants of easements pursuant to
which a subsidiary of Osborn is a grantee.
(k) Personal Property. Except for property held
under capital leases, Osborn has good title to all the items of
machinery, equipment, furniture, fixtures, inventory, receivables and
other tangible or intangible personal property reflected on the Balance
Sheet and all such property acquired since the Balance Sheet Date,
except for any such property or assets sold or otherwise disposed of
in the ordinary course of business and consistent with past practices
since such date or which would not have a Material Adverse Effect.
The tangible personal property and fixtures owned or used by Osborn
or any of its subsidiaries that are necessary for the operation of the
Stations, including all broadcasting equipment and broadcast towers,
are in good operating condition and repair (subject to normal wear
and tear) and permit the conduct of the business of the Stations in
compliance with all material FCC rules and regulations. Osborn or
any of its subsidiaries owns or holds under valid leases all of the
tangible personal property and fixtures necessary to conduct the
business of the Stations as presently conducted except where the
failure to own or hold under valid lease any tangible property or
fixtures would not have a Material Adverse Effect.
(l) Liens and Encumbrances. All properties and
assets, including leases, owned by Osborn and its subsidiaries are free
and clear of all liens, pledges, claims, security interests, restrictions,
mortgages, tenancies and other possessory interests, conditional sale
or other title retention agreements, assessments, easements, rights of
way, covenants, restrictions, rights of first refusal, defects in title,
encroachments and other burdens, options or encumbrances of any
kind (collectively, "Liens") except (i) statutory Liens securing
payments not yet delinquent or the validity of which are being
contested in good faith by appropriate actions, (ii) purchase money
Liens arising in the ordinary course, (iii) Liens for taxes not yet
delinquent, (iv) Liens reflected in the Balance Sheet (which have not
been discharged), (v) Liens which in the aggregate do not materially
detract from the value for use for broadcasting purposes or materially
impair the present and continued use of the properties or assets
subject thereto in the usual and normal conduct of the business of the
Stations, and (vi) Liens on leases arising from the provisions of such
leases, (vii) any liens set forth on the title reports for the Owned Real
Property, copies of which reports have been provided to Mergeco,
(viii) any leases of Leased Real Property listed on Schedule 2.1(l) and
(ix) any other liens set forth on Schedule 2.1(l) (the Liens referred to
in clauses (i) through (ix) being "Permitted Liens").
<PAGE>
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(m) Environmental Matters. Except as set forth on
Schedule 2.1(m):
(i) The real property and facilities owned,
operated and leased by Osborn or its subsidiaries and the
operations of Osborn or its subsidiaries thereon comply in all
material respects and have at all times complied in all material
respects with all applicable federal, state and local laws,
statutes, codes, rules, regulations, ordinances, orders,
determinations or rules of common law pertaining to the
environment, natural resources and public or employee health
and safety including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of
1980, as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986, as amended, the Resource
Conservation and Recovery Act of 1976, as amended, the
Clean Air Act, as amended, the Federal Water Pollution
Control Act, as amended, The Oil Pollution Act of 1990, as
amended, the Safe Drinking Water Act, as amended, the
Hazardous Materials Transportation Act, as amended, the
Toxic Substances Control Act, as amended, and other
environmental conservation or protection laws
("Environmental Laws");
(ii) No judicial proceedings are pending or,
to Osborn's knowledge, threatened against Osborn or its
subsidiaries alleging the violation of any Environmental Laws,
and there are no administrative proceedings pending or, to
Osborn's knowledge, threatened against Osborn or its
subsidiaries, alleging the violation of any Environmental Laws
and no notice (in the case of clause (ii)(B), directed to Osborn
or any of its subsidiaries) from any Governmental Entity or
any private or public person has been received by Osborn or
its subsidiaries (A) claiming any violation of any
Environmental Laws in connection with any real property or
facility owned, operated or leased by Osborn or its subsidiaries
that has not been complied with or otherwise resolved to the
satisfaction of the party giving notice, or (B) requiring any
remediation, clean-up, modification, repairs, work,
construction, alterations or installations on or in connection
with any real property or facility owned, operated or leased by
Osborn or its subsidiaries that are necessary to comply with
any Environmental Laws and that have not been complied
with or otherwise resolved to the satisfaction of the party
giving notice;
(iii) All material permits, registrations,
licenses, authorizations, and the like ("Permits") required to be
obtained or filed by each of Osborn and its subsidiaries under
any Environmental Laws in connection with Osborn's and its
subsidiaries' operations, including, without limitation, those
activities relating to the generation, use, storage, treatment,
disposal, release, or remediation of Hazardous Substances (as
such term is defined in Section 2.1(m)(iv) hereof), have been
duly obtained or filed, and each of Osborn and its subsidiaries
are and have at all times been in compliance in all material
respects with the terms and conditions of all such Permits;
(iv) All Hazardous Substances used or
generated by Osborn or its subsidiaries or, to Osborn's
knowledge, any of their predecessors, on, in, or under any of
the owned, operated, or leased real property or facilities are
and have at all times been generated,
<PAGE>
Page 17
stored, used, treated,
disposed of, and released by such persons or on their behalf in
such manner as not to result in any material Environmental
Costs or Liabilities. "Hazardous Substances" means (A) any
hazardous materials, hazardous wastes, hazardous substances,
toxic wastes, and toxic substances as those or similar terms
are defined under any Environmental Laws; (B) any asbestos
or any material which contains any hydrated mineral silicate,
including chrysolite, amosite, crocidolite, tremolite,
anthophylite and/or actinolite, whether friable or non-friable;
(C) PCBs, or PCB-containing materials, or fluids; (D) radon;
(E) any other hazardous, radioactive, toxic or noxious
substance, material, pollutant, contaminant, constituent, or
solid, liquid or gaseous waste; (F) any petroleum, petroleum
hydrocarbons, petroleum products, crude oil and any fractions
or derivatives thereof, any oil or gas exploration or production
waste, and any natural gas, synthetic gas and any mixtures
thereof; (G) any substance that, whether by its nature or its
use, is subject to regulation under any Environmental Laws or
with respect to which any Environmental Laws or
Governmental Entity requires environmental investigation,
monitoring or remediation; and (H) any underground storage
tanks, dikes, or impoundments as defined under any
Environmental Laws. "Environmental Costs or Liabilities"
means any losses, liabilities, obligations, damages, fines,
penalties, judgments, settlements, actions, claims, costs and
expenses (including, without limitation, reasonable fees,
disbursements and expenses of legal counsel, experts,
engineers and consultants, and the costs of investigation or
feasibility studies and performance of remedial or removal
actions and cleanup activities) arising from or under any
Environmental Laws, order of, or contract of Osborn or its
subsidiaries with, any Governmental Entity or any private or
public persons;
(v) There are not now, nor have there been
in the past, on, in or under any property or facilities when
owned, leased or operated by Osborn or its subsidiaries or, to
Osborn's knowledge, when owned, leased or operated by any
of their predecessors, any Hazardous Substances that are in a
condition that violates any Environmental Law in any material
respect or that reasonably could be expected to require
remediation under any Environmental Law;
(vi) Osborn and its Subsidiaries have not
received, and to the knowledge of Osborn do not expect to
receive, any notification from any source advising Osborn or
such subsidiaries that: (A) it is a potentially responsible party
under CERCLA or any other Environmental Laws; (B) any
real property or facility currently or previously owned,
operated, or leased by it is identified or proposed for listing as
a federal National Priorities List ("NPL") (or state-equivalent)
site or a Comprehensive Environmental Response,
Compensation and Liability Information System ("CERCLIS")
list (or state-equivalent) site; and (C) any facility to which it
has ever transported or otherwise arranged for the disposal of
Hazardous Substances is identified or proposed for listing as
an NPL (or state-equivalent) site or CERCLIS (or state-equivalent)
site; and
(vii) The Stations' operations do not have a
significant environmental impact, as defined by 47 C.F.R.
SS1.1307.
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Page 18
(n) Taxes. Each of Osborn and its subsidiaries has
filed, or has timely applied for extensions of time to file, all tax
returns, reports, statements and other documents ("Tax Returns"')
required to be filed, and all such Tax Returns which have been filed
are accurate and complete in all material respects. Each of Osborn
and its subsidiaries has paid (or there has been paid on its behalf), or
has set up an adequate reserve for the payment of, all taxes required
to be paid, withheld, or deducted, or for which any of Osborn or its
subsidiaries are liable, in respect of the periods covered by such Tax
Returns, and with respect to each tax, from the end of the period
covered by the most recently filed Tax Return to the date hereof, and
the Balance Sheet reflects an adequate reserve for all taxes payable,
or required to be withheld and remitted, by Osborn or any of its
subsidiaries, or for which Osborn or any of its subsidiaries are liable,
accrued through the Balance Sheet Date. No material deficiencies for
any taxes have been proposed, asserted or assessed against Osborn or
any of its subsidiaries and are pending, and no requests for waivers of
the time to assess any such taxes are pending. The federal income tax
returns of Osborn and its subsidiaries have not been examined by the
Internal Revenue Service. None of Osborn or its subsidiaries (i) has
filed a consent under section 341(f) of the Internal Revenue Code of
1986, as amended (the "Code"), (ii) has made, or is obligated or may
become obligated to make, any payments that will not be deductible
by reason of section 280G of the Code, or (iii) has been a member of
an affiliated group of corporations which has filed a consolidated
federal income tax return (other than the group of which Osborn is the
common parent) or otherwise has any liability for the taxes of any
person (other than Osborn and its subsidiaries) under Treas. Reg. SS
1.1502-6, any similar provision of state, local or foreign law, or by
reason of its status as a transferee, successor, indemnitor or otherwise.
For the purposes of this Agreement, the term "taxes" shall include all
federal, state, local and foreign income, property, sales, excise,
withholding, unemployment compensation, social security, and other
taxes and charges of any nature whatsoever (including interest,
penalties and additions to tax relating to any of the specified items).
(o) Certain Agreements. Except as set forth in
Schedule 2.1(o) and for oral or written agreements, plans or
arrangements, the benefits of which do not in the aggregate exceed
$75,000, neither Osborn nor any of its subsidiaries is a party to any
oral or written agreement, plan or arrangement with any officer,
director, employee or other station or broadcast personnel (whether
an employee or an independent contractor) of Osborn or its
subsidiaries (i) the benefits of which are contingent, or the terms of
which are materially altered, upon, or result from, the occurrence of
a transaction involving Osborn of the nature of any of the transactions
contemplated by this Agreement, (ii) providing severance benefits or
other benefits after the termination of employment or other
contractual relationship regardless of the reason for such termination
and regardless of whether such termination is before or after a change
of control, (iii) under which any person may receive payments subject
to the tax imposed by Section 4999 of the Code or (iv) any of the
benefits of which will be increased, or the vesting of benefits of which
will be accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Schedule 2.1(o) hereto lists (and,
in the case of clause (iv), describes) each oral or written (i) agreement,
contract, indenture or other instrument relating to the borrowing of
money or the guarantee of any obligation for the borrowing of money,
(ii) Employee Benefit Plan, as defined in Section 2.1(p),
(iii) employment
<PAGE>
Page 19
or consulting contract which is not terminable
without liability or penalty to Osborn or any of its subsidiaries on 30
days or less notice, other than such employment or consulting
contracts the payments under which do not in the aggregate exceed
$75,000, (iv) covenant, agreement, or arrangement under which
Osborn's or any of its subsidiary's ability or right to compete with
another Person is restricted or impaired, or (v) contract, agreement or
commitment (except for trade or barter agreements) under which any
party thereto remains obligated to provide goods or services having
a value, or to make payments aggregating, in excess of $75,000 per
year, in any such case to which Osborn or any of its subsidiaries is a
party or bound. Each such agreement, contract or obligation
described in Schedule 2.1(o) or required to be so described is a valid
and binding obligation of Osborn or one of its subsidiaries, as the case
may be, and is in full force and effect without amendment, except
where not being a valid and binding obligation or in full force and
effect without amendment could not have a Material Adverse Effect.
Osborn or one of its subsidiaries, as the case may be, has performed
in all material respects the obligations required to be performed by it
under the agreements so described and is not (with or without lapse
of time or the giving of notice, or both) in material breach or default
thereunder. As of the date hereof and to the knowledge of Osborn,
each other party to such contracts has performed in all material
respects the obligations required to be performed by it under the
agreements so described and is not (with or without lapse of time or
the giving of notice, or both) in material breach or default thereunder.
Schedule 2.1(o) identifies, as to each agreement, contract or
obligation listed thereon, whether the consent of the other party
thereto is required in order for such agreement, contract or obligation
to continue in full force and effect upon the consummation of the
transactions contemplated hereby or whether such agreement, contract
or obligation can be canceled by the other party without liability to
such other party due to the consummation of the transactions
contemplated hereby. A copy of each written agreement, contract,
obligation, plan or arrangement and a description of each oral
agreement, contract, obligation, plan or arrangement set forth in
Schedule 2.1(o) has been provided to Mergeco.
(p) ERISA Compliance; Labor.
(i) The present value of all accrued
benefits (vested and unvested) under each "employee pension
benefit plan" as such term is defined in Section 3(2) of the
Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), which Osborn or any other trades or
businesses under common control within the meaning of
Section 4001(b)(1) of ERISA with Osborn (collectively, the
"ERISA Group") maintains, or to which Osborn or any
member of the ERISA Group is obligated to contribute (the
"Pension Plans"), did not, as of the respective last annual
valuation dates for such Pension Plans, exceed the value of the
assets of such Pension Plan allocable to such benefits. None
of the Pension Plans subject to Section 302 of ERISA has
incurred any "accumulated funding deficiency," as such term
is defined in Section 302 of ERISA (whether or not waived),
since the effective date of such Section 302. Neither Osborn
or any member of the ERISA Group, nor any officer of
Osborn or any member of the ERISA Group or any of the
employee benefit plans of Osborn or any member of the
ERISA Group which are subject to ERISA, including the
Pension Plans, or any trusts created thereunder, or any trustee
or administrator thereof, has engaged in a "prohibited
transaction," as such term is described in Section 4975 of the
Code, which has
<PAGE>
Page 20
subjected or which could subject Osborn or
any member of the ERISA Group, any officer of Osborn or
any of its subsidiaries or any of such plans or any trust to any
material tax or penalty on prohibited transactions imposed by
such Section 4975. None of such Pension Plans subject to
Title IV of ERISA or any of their related trusts has been
terminated or partially terminated, nor has there been any
"reportable event," as that term is defined in Section 4043 of
ERISA, with respect thereto since the effective date of such
Section 4043. Neither Osborn or any member of the ERISA
Group has contributed or been obligated to contribute to any
"multiemployer plan" as such term is defined in Section 3(37)
or Section 4001(a)(3) of ERISA. Except as set forth on
Schedule 2.1(p), there are no "employee benefit plans" within
the meaning of Section 3(3) of ERISA or any bonus, pension,
profit sharing, deferred compensation, incentive
compensation, stock ownership, stock purchase, stock option,
phantom stock, retirement, vacation, severance, disability,
death benefit, hospitalization, insurance or other plan or
arrangement or understanding providing benefits to any
present or former employee or contractor of Osborn or any
member of the ERISA Group maintained by Osborn or any
member of the ERISA Group or as to which Osborn or any
member of the ERISA Group has any material liability or
obligation (collectively, "Employee Benefit Plans").
(ii) True, correct and complete copies of
each of the Employee Benefit Plans, and related trusts, if
applicable, have been furnished to Mergeco, along with the
most recent report filed on Form 5500 and summary plan
description with respect to each Employee Benefit Plan
required to file Form 5500. All reports and disclosures
relating to the Employee Benefit Plans required to be filed
with or furnished to governmental agencies or plan
participants or beneficiaries have been furnished in accordance
with applicable law in a timely manner. Each Employee
Benefit Plan has been maintained in compliance in all material
respects with ERISA and the Code, and each Employee
Benefit Plan intended to be qualified under Section 401 of the
Code satisfies the requirements of such Section and has
received a favorable determination letter from the Internal
Revenue Service regarding the qualified status and has not,
since receipt of the most recent favorable determination letter,
been amended or, to the knowledge of Osborn, operated in a
manner which would adversely affect such qualified status.
There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of Osborn,
threatened against, or with respect to any of the Employee
Benefit Plans. All contributions required to be made to the
Employee Benefit Plans pursuant to their terms have been
timely made. To the knowledge of Osborn, there is no matter
pending with respect to any of the Employee Benefit Plans
before the Internal Revenue Service, Department of Labor or
the Pension Benefit Guaranty Corporation. Except as
required by applicable law, none of the Employee Benefit
Plans provides medical insurance coverage following
retirement. Each Employee Benefit Plan which is an
"employee welfare benefit plan," as defined in Section 3(1) of
ERISA, may be unilaterally amended or terminated in its
entirety without liability except as to benefits accrued prior to
such amendment or termination.
<PAGE>
Page 21
(iii) Schedule 2.1(p) lists each collective
bargaining agreement to which Osborn or any of its
subsidiaries is a party. Except for those unions which are
parties to one or more of the listed collective bargaining
agreements or as otherwise listed on Schedule 2.1(p) neither
Osborn nor any of its subsidiaries has agreed to recognize any
union or other collective bargaining representative, nor has
any union or other collective bargaining representative been
certified as the exclusive bargaining representative of any of
their employees. Each of Osborn and its subsidiaries (A) is,
and has been since January 1, 1993, in substantial compliance
with all applicable laws regarding labor, employment and
employment practices, terms and conditions of employment,
affirmative action, wages and hours, plant closing and mass
layoff, occupational safety and health, immigration, and
workers' compensation, (B) is not engaged, nor has it since
January 1, 1993, engaged, in any unfair labor practices, and
has no, and has not had since January 1, 1993, any, unfair
labor practice charges or complaints before the National Labor
Relations Board pending or, to Osborn's knowledge,
threatened against it, (C) has no, and has not had since
January 1, 1993, any, grievances, arbitrations or other
proceedings arising or asserted to arise under any collective
bargaining agreement, pending or, to Osborn's knowledge,
threatened against it and (D) has no, and has not had since
January 1, 1993, any, charges, complaints or proceedings
before the Equal Employment Opportunity Commission,
Department of Labor or any other federal, state or local
agency responsible for regulating employment practices,
pending, or, to Osborn's knowledge, threatened against it.
There is no labor strike, slowdown, work stoppage or lockout
pending or, to the knowledge of Osborn, threatened against or
affecting Osborn or its subsidiaries, and Osborn or its
subsidiaries has not experienced any labor strike, slowdown,
work stoppage or lockout since January 1, 1993. Except as
set forth on Schedule 2.1(p), to Osborn's knowledge, no union
organizational campaign or representation petition is currently
pending with respect to the employees of Osborn or its
subsidiaries.
(q) Patents, Trademarks, Etc. Schedule 2.1(q) sets
forth each material patent, patent application, trademark, trade name,
trade name and trademark registration, service mark, trade secret,
copyright, copyright registration and any other proprietary intellectual
property rights (collectively, "Intellectual Rights") owned by or
registered in the name of Osborn or any of its subsidiaries, or in which
Osborn or any of its subsidiaries has any right, license or interest.
Osborn or its subsidiaries owns or has the unencumbered right to use
pursuant to a valid, binding and enforceable license agreement or
other contract or arrangement all such Intellectual Rights. To the
knowledge of Osborn, neither Osborn nor any of its subsidiaries is
infringing any such Intellectual Rights, and Osborn is not aware of any
infringement by others of any such rights owned by Osborn or any of
its subsidiaries.
(r) Affiliate Relationships. Schedule 2.1(r) sets
forth a complete list and summary description of all contracts or other
arrangements involving Osborn or any of its subsidiaries in which any
officer, director, stockholder or any of their affiliates has a financial
interest, including indebtedness to Osborn or its subsidiaries, other
than such contracts or arrangements which in the aggregate do not
exceed $75,000.
<PAGE>
Page 22
(s) Vote Required. The only votes of the holders
of any class or series of capital stock of Osborn necessary to approve
the Merger and adopt this Agreement are the affirmative votes of the
holders of a majority of the outstanding shares of the Common Stock.
(t) Opinion of Financial Advisor. Osborn has
received the opinion of Alex. Brown & Sons Incorporated ("Alex.
Brown") to the effect that, as of the date of this Agreement, the
Merger is fair, from a financial point of view to the holders of
Common Stock. The fees of Alex. Brown in connection with the
transactions contemplated by this Agreement shall not exceed
$825,000.
2.2. Representations and Warranties of Mergeco. Mergeco
represents and warrants to Osborn as follows (with the understanding
that Osborn is relying on such representations and warranties in
entering into and performing this Agreement):
(a) Organization Standing and Power. Mergeco
is a corporation duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation and has all requisite
corporate power and authority to own, lease and operate its properties
and to carry on its business as now being conducted.
(b) Authority. Mergeco has all requisite corporate
power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. The execution and delivery of
this Agreement by Mergeco and the consummation by it of the
transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Mergeco (including the
approval and adoption of this Agreement and the transactions
contemplated hereby by the Parent). This Agreement has been duly
executed and delivered and constitutes the valid and binding obligation
of Mergeco, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights
and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial
reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity). The
execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby and
compliance with the provisions hereof will not, conflict with, or result
in any violation of, or default (with or without notice or lapse of time,
or both) under, or give rise to a right of termination, cancellation or
acceleration of any material obligation or to a loss of a material benefit
under, any provision of the Certificate of Incorporation or Bylaws of
Mergeco or any loan or credit agreement, note, bond, mortgage,
indenture, lease or other agreement, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to Mergeco or its properties or assets,
except for any such conflicts, violations or defaults or terminations,
cancellations or accelerations which individually or in the aggregate
do not have a material adverse effect on Mergeco's ability to
consummate its obligations hereunder. No consent, approval, order
or authorization of, or registration, declaration or filing with, any
Governmental Entity is required by or with respect to Mergeco in
connection with the execution and delivery of this Agreement by
Mergeco or the consummation by it of the transactions contemplated
hereby, except for (i) the filing
<PAGE>
Page 23
of a premerger notification report
under the HSR Act, (ii) the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware, (iii) the filing with the
FCC and the grant of the consent of the FCC to the transfer of control
of the Station Licenses pursuant to the terms of this Agreement (as
contemplated by Section 6.1), and (iv) applicable requirements, if any,
of the Securities Act and the Exchange Act and the rules and
regulations thereunder and state securities or blue sky laws. Mergeco
is acquiring the shares of Surviving Corporation Common Stock for
investment purposes and without a view to the distribution thereof in
violation of the Securities Act.
(c) Litigation. As of the date hereof, there is no
action, suit, inquiry, judicial or administrative proceeding pending or,
to the knowledge of Mergeco, threatened against it relating to the
transactions contemplated by this Agreement.
(d) FCC Matters. Mergeco knows of no facts
relating to it under the Communications Act or the rules, regulations
or written policies of the FCC in effect on the date of this Agreement
that reasonably may be expected to disqualify it from obtaining control
of the Station Licenses or that would prevent it from consummating
the transactions contemplated by this Agreement. Mergeco is able to
certify on an FCC Form 315 that it is financially qualified.
(e) Real Estate. As of the date hereof, Mergeco
does not own or lease any real property.
ARTICLE III
COVENANTS RELATING TO CONDUCT OF BUSINESS
3.1. Covenants of Osborn. Except as contemplated by this
Agreement or to the extent that Mergeco shall otherwise consent in
writing, from the date of this Agreement until the Effective Time,
Osborn covenants and agrees that it shall not, and shall not permit any
of its subsidiaries to:
(a) conduct its business in any material respect
except in the ordinary course consistent with past practice; or
(b) if it would cause a Material Adverse Effect, fail
to use its commercially reasonable efforts to preserve intact Osborn's
present business organization and to keep available the services of its
present officers, station managerial personnel (including the General
Manager, Station Manager, General Sales Manager, Local Sales
Manager, National Sales Manager, Programming Director and
Business Manager, or persons performing comparable duties, of each
Station (collectively, the "Station Management")) and over-the-air
employees or independent contractors and preserve its relationships
with customers, suppliers and others having business dealings with it
to the end that its goodwill and ongoing business shall not be
materially impaired at the Closing Date. The (i) failure to renew an
employment agreement pursuant to Section 3.1(g) due to a failure by
Mergeco to consent to an increase in compensation or (ii) renewal of
an employment agreement pursuant to
<PAGE>
Page 24
Section 3.1(g) with an increase
in compensation thereunder which has been consented to by Mergeco,
shall not be deemed to be a violation of this Section 3.1(b); or
(c) other than as previously disclosed in writing,
fail to use its commercially reasonable efforts to maintain the present
format of the Stations and with programming consistent with past
practices; or
(d) split, combine, divide, distribute or reclassify
any shares of its capital stock, declare, pay or set aside for payment
any dividend or other distribution in respect of its capital stock, or
directly or indirectly, redeem, purchase or otherwise acquire any
shares of its capital stock or other securities; provided that nothing
herein shall prevent any of its subsidiaries from paying dividends or
making other distributions to Osborn; or
(e) issue, sell, pledge, dispose of, encumber or
deliver (whether through the issuance or granting of any options,
warrants, commitments, subscriptions, rights to purchase or
otherwise) any stock of any class or any securities convertible into or
exercisable or exchangeable for shares of stock of any class (other
than the issuance of certificates in replacement of lost certificates); or
(f) change or amend its charter documents or
bylaws; or
(g) except for amendments, terminations (without
payment of penalty or damages), renewals or failures to renew
(without payment of penalty or damages) of employment agreements
with over-the-air personnel in the ordinary course of business and
consistent with past practice (subject to prior consultation with
Mergeco reasonably in advance thereof), enter into, materially amend,
terminate, or fail to use its commercially reasonable efforts to renew
any material contract (i.e., a contract or agreement of the type
required to be described in Schedule 2.1(o) (provided that neither
Osborn nor its subsidiaries shall be required to renew any material
contract on terms that are less favorable to Osborn or its subsidiaries)
or default in any material respect (or take or omit to take any action
that, with or without the giving notice or passage of time, would
constitute a material default) under any material contract or enter into
any new material contract; or
(h) merge or consolidate with or into any other
legal entity, dissolve or liquidate; or
(i) incur or assume any long-term debt (including
obligations in respect of capital leases and for interest), assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other
person (other than endorsements of checks in the ordinary course) or
make any loans, advances or capital contributions to, or investments
in, any person (other than advances to employees in the ordinary
course of business); or
<PAGE>
Page 25
(j) adopt or amend any Employee Benefit Plan or
collective bargaining agreement, or increase in any manner the
compensation or fringe benefits of any director, officer or employee
or other station and broadcast personnel (whether employees or
independent contractors) or pay any benefit not by any existing
agreement, except in the ordinary course of business and consistent
with past practices and as required by law, provided that, before
entering into any employment agreement or increasing or agreeing to
increase the compensation, bonuses or other benefits of any Station
Management or over-the-air talent in the ordinary course of business
and as required by law, Osborn shall first have consulted in good faith
with Mergeco with respect to the terms of any such employment
agreement or increase or change in compensation, bonuses or other
benefits; or
(k) except as set forth on Schedule 3.1(k), acquire
(including, without limitation, by merger, consolidation or the
acquisition of any equity interest or assets) or sell (whether by merger,
consolidation or the sale of an equity interest or assets), lease or
dispose of any assets except in the ordinary course of business and
consistent with past practice or, even if in the ordinary course of
business and consistent with past practices (other than sales of surplus
or obsolete equipment), whether in one or more transactions, in no
event having a fair market value in excess of $75,000; or
(l) mortgage, pledge or subject to any material
Lien any of its properties or assets, tangible or intangible, other than
in the ordinary course of business consistent with past practice; or
(m) except as required by GAAP, applicable law or
circumstances which did not exist as of the Balance Sheet Date,
change any of the material accounting principles or practices used by
it; or
(n) make any settlement of or compromise any tax
liability, change any tax election or tax method of accounting or make
any new tax election or adopt any new tax method of accounting
which settlement, compromise, method or election is material to
Osborn and its subsidiaries, taken as a whole; or
(o) pay, discharge or satisfy any material claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than in the ordinary course of business
consistent with past practice, or fail to pay or otherwise satisfy (except
if being contested in good faith) any material accounts payable, claims,
liabilities or obligations on a basis, and within the time, consistent with
past practice; or
(p) change in any material respect its existing
practices and procedures with respect to the collection of accounts
receivable of the Stations and, except with respect to good faith
attempts consistent with past practice to obtain payment of a past due
receivable, or except in accordance with existing practices, a
contested receivable, offer to discount the amount of any outstanding
receivable or extend any other incentive (whether to the account
debtor or any employee or third party responsible for the collection of
receivables) to accelerate the collection thereof, or change any
Station's advertising rates or policies, procedures or methods in
connection with the sale of advertising time in a manner primarily
intended to accelerate the receipt of cash payments or fail
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to incur
annual advertising and promotional department expenses in cash and
trade below 90% of that budgeted for 1996 (as such budget
previously has been delivered to Mergeco); or
(q) except as contemplated by that certain Option
Agreement dated as of July 8, 1996, by and between Wheeling Radio
Company and Mountain Radio Corporation, enter into, or enter into
negotiations or discussions with any person other than Mergeco with
respect to, any local marketing agreement, time brokerage agreement,
joint sales agreement or any other similar agreement; or
(r) agree to or make any commitment, orally or in
writing, to take any actions prohibited by this Agreement.
3.2. Negative Trade Balance. Osborn shall use
commercially reasonable efforts to ensure that the Osborn Negative
Trade Balance, as defined below, of the Stations, taken as a whole,
does not exceed $75,000 (excluding the Station in Fresno, California)
in the aggregate at the Closing Date. "Osborn Negative Trade
Balance" means the difference, if negative, between the value of time
owed under barter agreements to which any of the Stations is a party
or by which any of them is bound and the value of the goods and
services to be received under such agreements.
3.3. Environmental Site Assessments. If Mergeco or its
lenders or other financing sources require Phase I or Phase II
environmental site assessments ("ESAs"), Osborn covenants and
agrees that, upon written notice from Mergeco to Osborn identifying
the locations at which such ESAs are required, Osborn shall at its sole
cost and expense cause to be performed by a nationally recognized
and duly qualified environmental consultant reasonably acceptable to
Mergeco and Osborn an ESA at each identified transmission site
owned, operated or leased by Osborn or its subsidiaries and at such
other identified real properties and facilities owned, operated or leased
by Osborn or its subsidiaries. The ESAs which are to be conducted for
the benefit of Mergeco shall be performed in a manner that at a
minimum satisfies the requirements of ASTM Practice E 1527-94.
Osborn covenants and agrees that, upon receipt of the notice referred
to above, it shall diligently pursue the performance of the requisite
ESAs to their completion, with final copies of the Phase I
environmental site assessment reports (and, if applicable, Phase II
Environmental Site Assessment reports) made available to Mergeco
by no later than 45 days following the date on which Osborn receives
the notice referred to above.
ARTICLE IV
ADDITIONAL AGREEMENTS OF OSBORN
4.1. No Solicitation of Transactions. Osborn shall not, nor
shall it permit its subsidiaries to, directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or encourage the
submission of any proposal or offer from any person relating to any
acquisition or purchase of all or any material portion of the assets of,
or any equity interest in, Osborn or any of its
<PAGE>
Page 27
subsidiaries or any
merger, consolidation, share exchange, business combination or other
similar transaction with Osborn or any of its subsidiaries or participate
in any negotiations regarding, or furnish to any other person any
information with respect to, or otherwise cooperate in any way with,
or assist or participate in, facilitate or encourage, any effort or attempt
by any other person to do or seek any of the foregoing; provided,
however, that prior to the receipt of the requisite vote or consent for
approval and adoption by the holders of Common Stock of this
Agreement and the transactions contemplated hereby, nothing
contained in this Section 4.1 shall prohibit Osborn from furnishing
information to, or entering into discussions or negotiations with, any
person in connection with an unsolicited proposal by such person to
acquire Osborn pursuant to a merger, consolidation, share exchange,
business combination or other similar transaction or to acquire all or
substantially all of the assets of Osborn received by Osborn after the
date of the Agreement, if, and only to the extent that, (a) the Osborn
Board determines in good faith that such action is required in order
for the Osborn Board not to breach its fiduciary duties to stockholders
imposed by applicable law, such determination being based on
consultations with Alex. Brown and the opinion of its independent
legal counsel that such action is required in order for the Osborn
Board not to breach its fiduciary duties to stockholders imposed by
applicable law, and (b) prior to furnishing such information to, or
entering into discussions or negotiations with, such person, Osborn
(i) gives Mergeco as promptly as practicable prior written notice of
Osborn's intention to furnish such information or begin such
discussions and (ii) receives from such person an executed
confidentiality agreement on terms no less favorable to Osborn than
those contained in the Confidentiality Agreement (as defined in
Section 4.2). Osborn shall promptly communicate to Mergeco the
material terms of any such proposal (and the identity of the party
making such proposal) which it may receive. Osborn agrees not to
release any third party from, or waive any provision of, any
confidentiality or standstill agreement to which Osborn is a party.
Osborn immediately shall cease and cause to be terminated all existing
discussions or negotiations with any parties conducted heretofore with
respect to any of the foregoing. From and after the receipt of the
requisite vote or consent for approval and adoption by the holders of
Common Stock of this Agreement and the transactions contemplated
hereby, Osborn shall not, nor shall it permit its subsidiaries to, directly
or indirectly, through any officer, director, agent or otherwise, solicit,
initiate or encourage the submission of any proposal or offer from any
person relating to any acquisition or purchase of all or any material
portion of the assets of, or any equity interest in, Osborn or any of its
subsidiaries or any merger, consolidation, share exchange, business
combination or other similar transaction with Osborn or any of its
subsidiaries or participate in any negotiations regarding, or furnish to
any other person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate or
encourage, any effort or attempt by any other person to do or seek
any of the foregoing.
4.2. Access and Information. (a) Until the Closing, subject
only to applicable rules and regulations of the FCC, Osborn shall
afford to Mergeco and its representatives (including accountants and
counsel) full access, during normal business hours, upon reasonable
notice and in such manner as will not unreasonably interfere with the
conduct of the business of Osborn or its subsidiaries, to all properties,
books, records and returns of Osborn and its subsidiaries and all other
information with respect to its business, together with the opportunity
to make copies of such books, records and other documents and to
discuss the business of Osborn and its subsidiaries with such corporate
officers,
<PAGE>
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station managerial personnel (including the General Manager,
Station Manager, General Sales Manager, Programming Director,
Business Manager and Traffic Manager, or persons performing
comparable duties, of each Station), accountants, consultants and
counsel for Osborn as Mergeco deems reasonably necessary or
appropriate for the purposes of familiarizing itself with Osborn and the
Stations, including, without limitation, the right to visit each Station
at least monthly; provided that such Station visits shall be scheduled
at least five business days in advance and shall be conducted in a
manner intended to minimize the disruption to the operations of the
Stations. In furtherance of the foregoing, Osborn shall authorize and
instruct Ernst & Young LLP to meet with Mergeco and its
representatives, including its independent public accountants, to
discuss the business and accounts of Osborn and to make available
(with the opportunity to make copies) to Mergeco and its
representatives, including its independent public accountants, all the
work papers of Ernst & Young LLP related to their audit of the
consolidated financial statements and tax returns of Osborn. All
information provided pursuant to this Agreement shall remain subject
in all respects to the Confidentiality Agreement (herein so called)
dated May 30, 1996 between Hicks, Muse, Tate & Furst Incorporated
and Osborn until such time as the transactions contemplated by this
Agreement have been consummated. Osborn waives any provisions
in the Confidentiality Agreement that would otherwise prohibit the
execution of this Agreement and the consummation of the transactions
contemplated hereby.
(b) Within 30 days after the end of each calendar
month (other than in the case of December 1996, and then within 90
days after the end of such month), Osborn shall deliver to Mergeco,
for each of the Stations, and for Osborn as a whole, monthly operating
statements (in a form consistent with the monthly operating statements
previously supplied to Mergeco) prepared in the ordinary course of
business for internal purposes, including comparisons to comparable
prior year periods and current year budget. Further, within 45 days
after the end of each calendar quarter, Osborn shall deliver to
Mergeco, for each of the Stations, quarterly statements prepared in
the ordinary course for internal purposes containing the dollar amount
of all trade and barter agreements of each Station. Osborn shall
deliver to Mergeco the rating books and such other ratings
information subscribed to by Osborn including, without limitation,
Arbitrends, Accuratings or any other written information reflective of
the quantitative or qualitative nature of the audiences of the Stations
for each of the Stations upon receipt of the same by the corporate
officers of Osborn. Osborn shall instruct the Station Management of
each Station to provide such information and reports to Osborn's
corporate officers promptly upon receipt by such Station
Management. In addition, as soon as the same are distributed to
Osborn's corporate officers by each Station, Osborn will provide
Mergeco with copies of each Station's weekly sales pacing reports,
with comparisons to sales pacing in the corresponding period of the
prior year.
(c) Without duplication of Sections 4.2(b), at such
time as Osborn provides the same to its lenders, Osborn shall provide
Mergeco with copies of the financial statements and other information
delivered by Osborn to such lenders.
(d) Osborn shall promptly deliver to Mergeco true
and correct copies of any report, statement or schedule filed with the
SEC subsequent to the date of this Agreement.
<PAGE>
4.3. Assistance. If Mergeco requests, Osborn will
cooperate, and will cause Ernst & Young LLP to cooperate, in all
reasonable respects with the efforts of Mergeco to finance the
transactions contemplated by this Agreement, including without
limitation, providing assistance in the preparation of one or more
registration statements or other offering documents relating to debt
and/or equity financing and any other filings that may be made by
Mergeco with the SEC, all at the sole expense of Mergeco. Osborn
(a) shall furnish to Ernst & Young LLP, as independent accountants
to Osborn, such customary management representation letters as Ernst
& Young LLP may require of Osborn as a condition to its execution
of any required accountants' consents necessary in connection with
any filing by Mergeco with the SEC or in connection with the delivery
of any "comfort" letters requested by Mergeco's financing sources and
(b) shall furnish to Mergeco all financial statements (audited and
unaudited) and other information in the possession of Osborn or its
representatives or agents as Mergeco shall reasonably determine is
necessary or appropriate for the preparation of such offering
documents, registration statements or filings. Mergeco will indemnify
and hold harmless Osborn and its officers, directors and controlling
persons against any and all claims, losses, liabilities, damages, costs or
expenses (including reasonable attorneys' fees and expenses) that may
arise out of or with respect to the efforts by Mergeco to finance the
transactions contemplated hereby, including, without limitation, any
registration statement, prospectus, offering documents and other
filings related thereto; provided, however, that subject to the
limitations and provisions of this Agreement, nothing herein shall
prevent Mergeco from asserting any claim for breach of representation
or warranty under this Agreement.
4.4. Compliance With Station Licenses. Osborn shall cause
the Stations to be operated in all material respects in accordance with
the Station Licenses and all applicable rules and regulations of the
FCC and in compliance in all material respects with all other
applicable laws, regulations, rules and orders. Osborn shall use its
commercially reasonable efforts not to cause or permit any of the
Station Licenses to expire or be surrendered, adversely modified or
terminated. Osborn shall file or cause to be filed with the FCC all
applications (including license renewals) or other documents required
to be filed in connection with the operation of the Stations. In
addition, if requested by Mergeco and at Mergeco's expense, Osborn
shall file or cause to be filed with the FCC applications for new,
specifically identified frequencies that may be useful in connection
with the operation of the Stations. Should the FCC institute any
proceedings for the suspension, revocation or adverse modification of
any of the Station Licenses, Osborn will use its commercially
reasonable efforts to promptly contest such proceedings and to seek
to have such proceedings terminated in a manner that is favorable to
the Stations. Osborn will use its commercially reasonable efforts to
maintain the FCC construction permits (if any) listed in
Schedule 2.1(g) in effect until the applicable construction projects are
complete and to diligently prosecute all pending FCC applications
listed in Schedule 2.1(g). If Osborn (or its FCC counsel) receives an
administrative or other order or notification relating to any violation
or claimed violation of the rules and regulations of the FCC, or of any
other Governmental Entity, that could affect Osborn's ability to
consummate the transactions contemplated hereby, or should Osborn
(or its FCC counsel) become aware of any fact relating to the
qualifications of Osborn that reasonably could be expected to cause
the FCC to withhold its consent to the transfer of control of the
Station Licenses, Osborn shall promptly notify Mergeco in
<PAGE>
Page 29
writing and
use its commercially reasonable efforts to take such steps as may be
necessary to remove any such impediment to the transactions
contemplated by this Agreement.
4.5. Notification of Certain Matters. Osborn shall give
prompt written notice to Mergeco of (a) the occurrence, or failure to
occur, of any event of which it becomes aware that has caused or that
would be likely to cause any representation or warranty of Osborn
contained in this Agreement to be untrue or inaccurate (in any material
respect for any representation or warranty not already qualified for
materiality) at any time from the date hereof to the Closing Date,
(b) the failure of Osborn to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or
satisfied by it hereunder, (c) the occurrence of a Station Event (as
defined in Section 8.1) and (d) the occurrence of any threat by any
officer of Osborn or any of its subsidiaries or any General Manager,
Station Manager, General Sales Manager or Programming Director of
a Station to resign or otherwise terminate their employment or
independent contractor relationship with Osborn or its subsidiaries.
No such notification shall affect the representations or warranties of
the parties or the conditions to their respective obligations hereunder.
4.6. Third Party Consents. After the date hereof and prior
to the Closing, Osborn shall use its commercially reasonable efforts to
obtain the written consent from any party to an agreement or
instrument identified in Schedule 2.1(o) which is required to permit
the consummation of the transactions contemplated hereby.
4.7. Frank D. Osborn Employment Agreement.
Immediately prior to the Effective Time, Osborn hereby agrees to
execute and deliver an employment agreement to Frank D. Osborn in
substantially the form of Exhibit B attached hereto.
ARTICLE V
COVENANTS OF MERGECO
5.1. Notification of Certain Matters. If Mergeco (or its
FCC counsel) receives an administrative or other order or notification
relating to any violation or claimed violation of the rules and
regulations of the FCC, or of any Governmental Entity, that could
affect Mergeco's ability to consummate the transactions contemplated
hereby, or should Mergeco (or its FCC counsel) become aware of any
fact relating to the qualifications of Mergeco that reasonably could be
expected to cause the FCC to withhold its consent to the transfer of
control of the Station Licenses, Mergeco shall promptly notify Osborn
thereof and shall use its commercially reasonable efforts to take such
steps as may be necessary to remove any such impediment to the
transactions contemplated by this Agreement. In addition, Mergeco
shall give to Osborn prompt written notice of (a) the occurrence, or
failure to occur, of any event of which it becomes aware that has
caused or that would be likely to cause any representation or warranty
of Mergeco contained in this Agreement to be untrue or inaccurate at
any time from the date hereof to the Closing Date, and (b) the failure
of Mergeco, or any officer, director, employee or agent thereof, to
comply with or satisfy in any material respect any
<PAGE>
Page 30
covenant, condition
or agreement to be complied with or satisfied by it hereunder. No
such notification shall affect the representations or warranties of the
parties or the conditions to their respective obligations hereunder.
5.2. Commitment Letter. On or before September 3, 1996,
Mergeco shall deliver to Osborn a binding commitment letter from
Hicks, Muse, Tate & Furst Equity Fund III, L.P., a Delaware limited
partnership ("Fund III"), to provide financing in an amount of $27.2
million to provide Mergeco a portion of the funds necessary to enable
Mergeco to consummate the transactions contemplated hereby. Fund
III shall at such time have subscription commitments for unallocated
capital equal to at least its committed amount and there shall be no
restrictions on Fund III's ability to call such capital.
ARTICLE VI
MUTUAL COVENANTS
6.1. Application for Commission Consent. By the tenth
business day after the date hereof, Osborn and Mergeco will join in
one or more applications filed with the FCC requesting the FCC's
written consent to the transfer of control of the Station Licenses
pursuant to this Agreement (the "Applications"). The parties will take
all proper steps reasonably necessary (a) to diligently prosecute the
Applications and (b) to obtain the Commission's determination that the
grant of each Application will serve the public interest, convenience
and necessity (the "Commission Consent"). The failure by either party
to timely file or diligently prosecute its portion of any Application
shall be a material breach of this Agreement.
6.2. Control of Stations. This Agreement will not be
consummated until after the Commission Consents with respect to the
Applications referred to in Section 6.1 are granted without any
material adverse conditions not customarily imposed on the grant of
such applications and have become Final Orders. "Final Order" means
an order, action or decision of the FCC (without the inclusion of any
material adverse conditions not customarily imposed with respect to
such consents) that has not been reversed, stayed, enjoined, annulled
or suspended and as to which (a) no timely request for stay, appeal,
petition for reconsideration, application for review, or reconsideration
by the FCC on its own motion is pending and (b) the time for filing
any such request, appeal, petition or application, or for
reconsideration by the FCC on its own motion, has expired. Between
the date of this Agreement and the Closing Date, Mergeco will not
directly or indirectly control, supervise or direct the operation of the
Stations. Further, between the date of this Agreement and the Closing
Date, Osborn shall, directly or indirectly, supervise or control the
operation of the Stations. Such operation shall be the sole
responsibility of Osborn.
6.3. Other Governmental Consents. Promptly following the
execution of this Agreement, the parties shall proceed to prepare and
file with the appropriate governmental authorities (other than the
FCC) such requests, reports or notifications as may be required in
connection with this
<PAGE>
Page 31
Agreement, and shall diligently and expeditiously
prosecute, and shall cooperate fully with each other in the prosecution
of, such matters. Without limiting the foregoing, the parties shall
(a) file promptly with the Federal Trade Commission and the Antitrust
Division of the Department of Justice the notifications and other
information (if any) required to be filed under the HSR Act with
respect to the transactions contemplated hereby and shall use their
commercially reasonable efforts to cause all applicable waiting periods
under the HSR Act to expire or be terminated as of the earliest
possible date and (b) make all necessary filings, and thereafter make
any other required submissions with respect to the transactions
contemplated hereby under the Securities Act and the Exchange Act
and the rules and regulations thereunder, including filing the Proxy
Statement, and any other applicable federal or state securities laws.
6.4. Brokers or Finders. Mergeco represents and warrants
to Osborn, and other than Bankers Trust and Robert Chaisson,
Osborn represents and warrants to Mergeco, that no agent, broker,
investment banker or other or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in
connection with any of the transactions contemplated by this
Agreement. Osborn also represents and warrants that the aggregate
fees payable to Bankers Trust and Robert Chaisson in connection with
any of the transactions contemplated by this Agreement shall not
exceed $1,250,000.
6.5. Additional Agreement. Subject to the terms and
conditions of this Agreement, each of the parties hereto will use its
commercially reasonable efforts to do, or cause to be taken all action
and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement,
including, entering into the Release (as defined in Section 9.3) as
contemplated by Section 9.3 and, if Mergeco has preferred stock
issued and outstanding prior to the Closing, at the request of
Mergeco, amending Sections 1.4 and 1.6 to provide that such
preferred stock shall be converted into preferred stock of the
Surviving Corporation and amending the Certificate of Incorporation
of Osborn to the extent necessary to allow such preferred stock to
become preferred stock of the Surviving Corporation.
6.6. Escrow Agreement. The parties hereto who are to be
parties to the Escrow Agreement hereby covenant and agree to
execute and deliver the Escrow Agreement on the date of this
Agreement.
ARTICLE VII
CONDITIONS PRECEDENT
7.1. Conditions to Each Party's Obligation. The respective
obligations of each party to effect the transactions contemplated
hereby are subject to the satisfaction on or prior to the Closing Date
of the following conditions:
<PAGE>
Page 32
(a) Stockholder Approval. The Merger and this
Agreement and the other transactions contemplated hereby shall have
been approved and adopted by the requisite vote or consent of the
stockholders of Osborn.
(b) Other Approvals. All authorizations, consents,
orders or approvals of, or declarations or filings with, or expirations
of waiting periods imposed by, any Governmental Entity necessary for
the consummation of the transactions contemplated by this Agreement
shall have been filed, occurred or been obtained. The Commission
Consents shall have become Final Orders.
(c) No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint
or prohibition preventing the consummation of the transactions
contemplated hereby shall be in effect.
(d) No Action. No action shall have been taken
nor any statute, rule or regulation shall have been enacted by any
Governmental Entity that makes the consummation of the transactions
contemplated hereby illegal.
7.2. Conditions to Obligation of Mergeco. The obligation
of Mergeco to effect the Merger and the transactions contemplated
hereby is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by Mergeco:
(a) Representations and Warranties. The
representations and warranties of Osborn set forth in this Agreement
shall be true and correct (in all material respects for any representation
or warranty not already qualified for materiality) as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date (unless otherwise limited to the date of this
Agreement), and Mergeco shall have received a certificate signed on
behalf of Osborn by the chief executive officer or by the chief financial
officer to such effect with respect to Osborn.
(b) Performance of Obligations. Osborn shall have
performed in all material respects all obligations required to be
performed by it under this Agreement prior to the Closing Date, and
Mergeco shall have received a certificate signed on behalf of Osborn
by the chief executive officer or by the chief financial officer to such
effect.
(c) Consents Under Agreements. Mergeco shall
have been furnished with evidence reasonably satisfactory to it of the
consent or approval of each person that is a party to a contract or
agreement identified in Schedule 2.1(o) whose consent or approval
shall be required in order to permit the consummation of the
transactions contemplated hereby.
(d) Legal Opinions. Mergeco shall have received
from (i) Paul, Weiss, Rifkind, Wharton & Garrison, counsel to
Osborn, and (ii) Haley, Bader & Potts, special FCC counsel to
Osborn, one or more opinions dated the Closing Date, in substantially
the forms attached as Exhibits D and E hereto, which opinions shall
expressly provide that they may be relied upon by
<PAGE>
Page 33
Mergeco's lenders,
underwriters or other sources of financing with respect to the
transactions contemplated hereby.
(e) Subscription. Concurrently with the execution
of this Agreement, Frank D. Osborn shall have entered into a
Subscription Agreement in substantially the form of Exhibit C
attached hereto and thereby subscribed for one share of the common
stock, par value $0.01 per share, of the Parent in exchange for each
share of Common Stock held of record by him. The closing
contemplated by the Subscription Agreement shall have occurred
immediately prior to the Effective Time.
(f) Options and Warrants. Osborn shall have
obtained the consent of each holder of Options or Warrants, as
applicable, to the settlement of such holder's Options or Warrants
pursuant to the terms of Sections 1.7 and 1.8, respectively.
(g) Closing Deliveries. All documents,
instruments, certificates or other items required to be delivered by
Osborn pursuant to Section 8.2 shall have been delivered.
(h) Frank D. Osborn Employment Agreement.
Osborn shall have executed and delivered the employment agreement
to Frank D. Osborn as required by Section 4.7.
(i) Fees and Expenses. The aggregate fees and
expenses payable to Alex. Brown, Bankers Trust and Robert Chaisson
which have been incurred in connection with any of the Transactions
contemplated by this Agreement, shall not have exceeded $2,075,000.
7.3. Conditions to Obligations of Osborn. The obligation
of Osborn to effect the Merger and the transactions contemplated
hereby is subject to the satisfaction of the following conditions unless
waived, in whole or in part, by Osborn:
(a) Representations and Warranties. The
representations and warranties of Mergeco set forth in this Agreement
shall be true and correct (in all material respects for any representation
or warranty not already qualified for materiality) as of the date of this
Agreement and as of the Closing Date as though made on and as of
the Closing Date, and Osborn shall have received a certificate signed
on behalf of Mergeco by the chief executive officer or by the chief
financial officer of Mergeco to such effect.
(b) Performance of Obligations of Mergeco.
Mergeco shall have performed in all material respects the obligations
required to be performed by it under this Agreement prior to the
Closing Date, and Osborn shall have received a certificate signed on
behalf of Mergeco by the chief executive officer or by the chief
financial officer of Mergeco to such effect.
(c) Legal Opinions. Osborn shall have received
from (i) Vinson & Elkins L.L.P., counsel to Mergeco, and (ii) Fisher,
Wayland, Cooper & Leader, special FCC counsel to Mergeco,
opinions dated the Closing Date, in substantially the forms attached
hereto as Exhibits F and G.
<PAGE>
Page 34
(d) Closing, Deliveries. All documents and
instruments required to be delivered by Mergeco pursuant to Section
8.2 shall have been delivered.
ARTICLE VIII
CLOSING
8.1. Closing. The closing of the Merger (the "Closing")
will take place at the offices of Vinson & Elkins L.L.P., Dallas, Texas,
at 10:00 a.m., local time, or at such other place and time as Mergeco
and Osborn may agree, subject to the satisfaction or waiver of the
conditions set forth in Article VII, on or before the 10th business day
after the Commission Consent has become a Final Order, upon five
business days' prior written notice, given within the first 5 business
days after the Commission Consent has become a Final Order, from
Mergeco to Osborn of the date on which the Closing shall occur (the
"Closing Date"); provided, however, that in no event shall the Closing
occur prior to February 20, 1997. Notwithstanding the foregoing,
(a) in the case of a Trading Event, a Banking Event or a Station Event
(in each case as defined below), (i) if the Cessation Date (as defined
below) is less than 60 days after the Event Date (as defined below),
Mergeco, in its discretion, may extend the Closing Date to a date not
later than the 30th day after the Cessation Date, (ii) if the Cessation
Date is more than 60, but less than 90, days after the Event Date,
Mergeco, in its discretion, shall elect on the first to occur of the 10th
business day after the Cessation Date or the 90th day (or, if not a
business day, the next business day) after the Event Date (the
"Election Date") to either (A) close the Merger on the later to occur
of the 5th business day after the Election Date or the 90th day (or, if
not a business day, the next business day) after the Event Date or
(B) terminate this Agreement, or (iii) if the Cessation Date has not
occurred by the 90th day after the Event Date, then on the 90th day
(or, if not a business day, the next business day) after the Event Date
Mergeco, in its discretion, shall elect to close the Merger on the 5th
business day thereafter or terminate this Agreement, (b) in the case of
a Conflict Event, Mergeco, in its discretion, may only extend the
Closing Date to a date not to exceed the 90th day after the Event
Date, (c) if a Cure Period (as defined in Section 9.1(b)(i)) has not
ended on or before the Closing Date, the Closing Date shall be
extended to the end of the Cure Period, and (d) if the Closing does not
occur within 20 days after the date of the Final Order, the parties
hereby agree to request approval from the FCC to extend the Closing
so that the Closing contemplated hereunder will not violate any FCC
rules or regulations. For purposes of this Agreement, a "Trading
Event" shall mean that trading generally in securities on the New York
Stock Exchange shall have been suspended or materially limited; a
"Banking Event" shall mean that a general moratorium on commercial
banking activities in New York, New York shall have been declared
by any federal or state authority; a "Conflict Event" shall mean the
occurrence of any major armed conflict involving a substantial
participation by the armed forces of the United States of America; a
"Station Event" shall mean any act of nature, calamity or casualty
(including but not limited to fires, floods, earthquakes and storms) that
has caused one or more Stations representing an aggregate of 3% of
the consolidated gross revenues of Osborn for the last full 12 calendar
months not to be operating in compliance with its or their respective
Station License(s); an "Event Date" shall mean the date on which a
Trading Event, Banking Event, Conflict Event or a Station Event
occurs; and a "Cessation Date" shall mean the date on which a
Trading Event, Banking Event, Conflict Event
<PAGE>
Page 35
or a Station Event
ends. Pro forma adjustments shall be made for purposes of calculating
gross revenues for the 12-month period specified in the definition of
"Station Event" to (i) eliminate the gross revenues of any Station sold
during such 12-month period and (ii) with respect to any radio
broadcast station acquired during such 12-month period, to assume
that such station was acquired at the beginning of such 12-month
period and include the gross revenues of such station for the full
12-month period.
8.2. Actions to Occur at Closing.
(a) At the Closing, Mergeco shall deliver to
Osborn the following:
(i) the certificates in Section 7.3(a) and
(b); and
(ii) the opinions of counsel in Section
7.3(c).
(b) At the Closing, Osborn shall deliver to
Mergeco the following:
(i) the certificates described in Section
7.2(a) and (b); and
(ii) the opinions of counsel in Section
7.2(d).
(c) At the Closing, Mergeco shall receive from
Osborn an affidavit described in Section 1445(b)(3) of the Code.
(d) At the Closing, the Certificate of Merger shall
be signed by the parties and filed with the Secretary of State of the
State of Delaware.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
9.1. Termination. This Agreement may be terminated prior
to the Closing:
(a) by mutual consent of Mergeco and Osborn;
(b) by either Mergeco or Osborn:
(i) if there shall have been any breach of
any representation or warranty, or any material breach of any
covenant or agreement, on the part of Mergeco, on the one hand, or
Osborn, on the other hand, set forth in this Agreement which breach
shall not have been cured within twenty (20) days (the "Cure Period")
following receipt by the breaching party of written notice of such
breach;
<PAGE>
Page 36
(ii) if a court of competent jurisdiction or
other Governmental Entity shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties
hereto shall use their best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and nonappealable;
(iii) if, for any reason, the FCC denies or
dismisses any of the Applications and the time for reconsideration or
court review under the Communications Act with respect to such
denial or dismissal has expired and there is not pending with respect
thereto a timely filed petition for reconsideration or request for
review;
(iv) if, for any reason, any of the
Applications is designated for an evidentiary hearing by the FCC;
(v) if this Agreement and the transactions
contemplated hereby, when presented to the holders of Common
Stock for their consideration, whether by vote or by consent, shall fail
to receive the requisite vote or consent for approval and adoption by
the holders of Common Stock; or
(vi) if the Closing shall not have occurred
by the later of the first anniversary date of this Agreement, or the date
to which the Closing Date is extended pursuant to the second sentence
of Section 8.1; provided, however, that the right to terminate this
Agreement under this clause (vi) shall not be available to any party
whose breach of this Agreement has been the cause of, or resulted in,
the failure of the Closing to occur on or before such date; or
(c) by Mergeco:
(i) with respect to a Trading Event,
Banking Event, or a Station Event, at its option, as provided in the
second sentence of Section 8.1;
(ii) if the FCC grants any of the
Applications with any material adverse conditions not generally
imposed on grants of such applications and the time for
reconsideration or court review under the Communications Act with
respect to such material adverse conditions has expired and there is
not pending with respect thereto a timely filed petition for
reconsideration or request for review;
(iii) if (A) the Osborn Board (1) withdraws
its recommendation of this Agreement or the Merger (whether or not
under the circumstances permitted by this Agreement) or shall have
resolved to do so or (2) shall have recommended to the stockholders
of Osborn any Business Combination Transaction (as defined in
Section 9.2), whether or not in the circumstances under which Osborn
has a right to terminate this Agreement pursuant to Section 9.1(d)(i)
of this Agreement, or resolved to do so or (B) a tender offer or
exchange offer for 50% or more of the outstanding shares of capital
stock of Osborn is commenced (other than by Osborn or its affiliates)
<PAGE>
Page 37
and the Osborn Board fails to recommend against the stockholders of
Osborn tendering their shares into such tender offer or exchange offer;
or
(iv) if Osborn shall fail to perform its
obligations under Section 8.2; or
(d) by Osborn:
(i) by Osborn if, prior to the receipt of the
requisite vote or consent for approval and adoption by the holders of
Common Stock of this Agreement and the transactions contemplated
hereby, in the exercise of its good faith judgment (subject to Section
4.1) as to its fiduciary duties to its stockholders under applicable law,
the Osborn Board determines that such termination is required by such
fiduciary duties by reason of a proposal that either constitutes a
Business Combination Transaction or may reasonably be expected to
lead to a Business Combination Transaction on terms more favorable
to the stockholders of Osborn than the Merger and which has a
reasonable prospect of being consummated in accordance with its
terms (such determination being based on consultations with Alex.
Brown and the opinion of its independent legal counsel that such
termination is required in order for the Osborn Board not to breach its
fiduciary duties to stockholders imposed by applicable law) (a
"Business Combination Transaction Proposal"); provided that Osborn
has provided Mergeco with at least 48 hours prior written notice of its
intent to so terminate this Agreement (together with a summary of the
material terms of such Business Combination Transaction Proposal);
and provided further that any termination of this Agreement by
Osborn pursuant to this Section 9.1(d)(i) shall not be effective until
Osborn has made payment of the Alternative Proposal Fee (as
hereinafter defined) and the Acquiror Expenses (as hereinafter
defined) as required by Section 9.2 hereof; or
(ii) if Mergeco shall fail to perform any of
its obligations under Section 8.2.
The right of any party hereto to terminate this Agreement pursuant to
this Section 9.1 shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any party
hereto, any person controlling any such party or any of their
respective officers, directors, employees, accountants, consultants,
legal counsel, agents or other representatives whether prior to or after
the execution of this Agreement. Notwithstanding anything in the
foregoing to the contrary, no party that is in material breach of this
Agreement shall be entitled to terminate this Agreement except with
the consent of the other parties hereto.
9.2. Fees and Expenses. Osborn shall pay Mergeco a fee
(an "Alternative Proposal Fee") of $3,750,000 if this Agreement is
terminated pursuant to Section 9.1(c)(iii) or simultaneously with any
termination of this Agreement pursuant to Section 9.1(d)(i). As used
herein, the term "Business Combination Transaction" shall mean any
of the following involving Osborn: (a) any merger, consolidation,
share exchange, business combination or other similar transaction
(other than the Merger); (b) any sale, lease, exchange, transfer or
other disposition (other than a pledge or mortgage) of 50% or more
of the assets of Osborn and its subsidiaries in a single transaction or
series of related transactions; or (c) the acquisition by a person or
entity or any "group" (as such term is defined under
<PAGE>
Page 38
Section 13(d) of
the Exchange Act and the rules and regulations thereunder) of
beneficial ownership of 35% or more of the shares of Common Stock,
whether by tender offer, exchange offer or otherwise.
9.3. Effect of Termination. In the event of termination of
this Agreement by either Osborn or Mergeco as provided in Section
9.1, this Agreement shall forthwith become void, the Merger shall be
abandoned and there shall be no liability on the part of Osborn or
Mergeco of any kind whatsoever, except (i) with respect to
Section 9.2 which shall continue to apply in accordance with its terms
and (ii) each party shall remain liable for a breach of this Agreement.
Termination of this Agreement shall have no effect on the rights and
obligations of the parties under the Confidentiality Agreement. In the
event that Osborn terminates this Agreement under Section 9.1(b)(i),
the parties agree and acknowledge that Osborn will suffer damages
that are not practicable to ascertain at the time of execution of this
Agreement. Accordingly, Osborn and Mergeco agree that, in such
event, Osborn shall be entitled to the sum of $5,000,000 as liquidated
damages. The parties agree that the foregoing liquidated damages are
reasonable considering all the circumstances existing as of the date
hereof and constitute the parties' good faith estimate of the actual
damages reasonably expected to result from the termination of this
Agreement by Osborn pursuant to Section 9.1(b)(i). Osborn agrees
that, to the fullest extent permitted by law, the right to payment of the
$5,000,000 as liquidated damages under this Section 9.3 shall be its
sole and exclusive remedy if the Closing does not occur with respect
to any damages whatsoever that Osborn may suffer or allege to suffer
as a result of any claim or cause of action asserted by Osborn relating
to or arising from breaches of the representations, warranties or
covenants of Mergeco contained in this Agreement and to be made or
performed at or prior to the Closing; provided that as a condition to
payment, and upon receipt, of liquidated damages under this Section
9.3, Osborn hereby (a) irrevocably and unconditionally releases,
acquits, and forever discharges Mergeco, Parent and their respective
successors, assigns, employees, agents, stockholders, partners,
subsidiaries, parent companies and other affiliates (corporate or
otherwise) (the "Released Parties") of and from any and all claims,
demands, causes of action, or liabilities of any kind whatsoever,
whether known or unknown, matured or unmatured, suspected or
unsuspected, liquidated or unliquidated, absolute or contingent, direct
or derivative, against the Released Parties, including, without
limitation, any claim, demand, cause of action, or liability arising out
of, based upon, resulting from or relating to the negotiation,
execution, performance, breach or otherwise related to or arising out
of this Agreement or any agreement entered into in connection
herewith or related hereto, and (b) agrees to deliver a Release (herein
so called) in the form of Exhibit L attached hereto, to Mergeco and
Parent.
ARTICLE X
GENERAL PROVISIONS
10.1. Non-Survival of Representations, Warranties and
Covenants. The representations and warranties in this Agreement
shall terminate at the Effective Time. Except for those covenants and
<PAGE>
Page 39
agreements which are fully performed on or prior to the Effective
Time, all covenants and agreements in this Agreement shall survive
the Effective Time indefinitely.
10.2. Knowledge. Wherever reference is made in this
Agreement to a particular statement being "to the knowledge of
Osborn" (or any correlative phrase), such phrase shall be deemed to
include the actual knowledge of any officer of Osborn or its
subsidiaries, and the General Managers and/or Station Managers and
Chief Engineers of each of the Stations.
10.3. Amendment and Modification. This Agreement may
be amended by the parties hereto by action taken by or on behalf of
their respective Boards of Directors at any time prior to the Effective
Time; provided, however, that, after the approval and adoption of this
Agreement and the transactions contemplated hereby by the
stockholders of Osborn, no amendment may be made that would
reduce the amount or change the type of consideration into which
each share of Common Stock shall be converted pursuant to this
Agreement upon consummation of the Merger. This Agreement may
not be amended except by an instrument in writing signed by the
parties hereto.
10.4. Waiver of Compliance. Any failure of Mergeco on the
one hand, or Osborn, on the other hand, to comply with any
obligation, covenant, agreement or condition contained herein may be
waived only if set forth in an instrument in writing signed by the party
or parties to be bound thereby, but such waiver or failure to insist
upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to,
any other failure.
10.5. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule
of applicable law, or public policy, all other conditions and provisions
of this Agreement shall nevertheless remain in full force and effect so
long as the economic or legal substance of the Merger is not affected
in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in a mutually acceptable manner in order
that the Merger be consummated as originally contemplated to the
fullest extent possible.
10.6. Expenses and Obligations. Except as otherwise
expressly provided in this Agreement or as provided by law, all costs
and expenses incurred by the parties hereto in connection with the
consummation of the transactions contemplated hereby shall be borne
solely and entirely by the party which has incurred such expenses. In
the event of a dispute between the parties in connection with this
Agreement and the transactions contemplated hereby, each of the
parties hereto hereby agrees that the prevailing party shall be entitled
to reimbursement by the other party of reasonable legal fees and
expenses incurred in connection with any action or proceeding.
10.7. Parties in Interest. This Agreement shall be binding
upon and, except as provided below, inure solely to the benefit of each
party hereto and their successors and assigns, and nothing in this
Agreement, except as set forth below, express or implied, is intended
to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
<PAGE>
Page 40
10.8. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) If to Mergeco or Parent, to
OCC Acquisition Company, Inc.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart
Facsimile: (214) 740-7313
with a copy to
Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
Attn: Michael D. Wortley
Facsimile: (214) 220-7716
(b) If to Osborn,
Osborn Communications Corporation
130 Mason Street
Greenwich, Connecticut 06830
Attn: Frank D. Osborn
Facsimile: (203) 629-1749
with a copy to
Paul, Weiss, Rifkind, Wharton & Garrison
1385 Avenue of the Americas
New York, New York 10019
Attn: Robert M. Hirsh
Facsimile: (212) 757-3990
10.9. Interpretation. When a reference is made in this
Agreement to Sections or Exhibits, such reference shall be to a
Section or Exhibit to this Agreement unless otherwise indicated. The
table of contents, if any, and headings contained in this Agreement are
for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the words
<PAGE>
Page 41
"include," "includes," or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation."
10.10. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more
counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
10.11. Entire Agreement. This Agreement (which term shall
be deemed to include the Confidentiality Agreement referred to in
Section 4.2(a), the exhibits and schedules hereto and the other
certificates, documents and instruments delivered hereunder)
constitutes the entire agreement of the parties hereto and supersedes
all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof. There are no
representations or warranties, agreements or covenants other than
those expressly set forth in this Agreement (as so defined).
10.12. Governing Law. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE. ANY SUIT OR
PROCEEDING BROUGHT HEREUNDER SHALL BE SUBJECT
TO THE EXCLUSIVE JURISDICTION OF THE COURTS
LOCATED IN DELAWARE.
10.13. Public Announcements. (a) Mergeco and Osborn shall
consult with each other before issuing any press release or otherwise
making any public statements with respect to this Agreement or the
transactions contemplated hereby and shall not issue any such press
release or make any such public statement prior to such consultation
and (b) prior to the Effective Time, Osborn will not issue any other
press release or otherwise make any public statements regarding its
business, except as may be required by applicable law or any listing
agreement with the National Association of Securities Dealers, Inc. to
which Osborn is a party.
10.14. Assignment. Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of
the parties hereto, whether by operation of law or otherwise;
provided, however, that (a) upon notice to Osborn and without
releasing Mergeco from any of its obligations or liabilities hereunder,
Mergeco may assign or delegate any or all of its rights or obligations
under this Agreement to any affiliate thereof, and (b) nothing in this
Agreement shall limit Mergeco's ability to make a collateral
assignment of its rights under this Agreement to any institutional
lender that provides funds to Mergeco without the consent of
Osborn. Osborn shall execute an acknowledgment of such
assignment(s) and collateral assignments in such forms as Mergeco or
its institutional lenders may from time to time reasonably request;
provided, however, that unless written notice is given to Osborn that
any such collateral assignment has been foreclosed upon, Osborn shall
be entitled to deal exclusively with Mergeco as to any matters arising
under this Agreement or any of the other agreements delivered
pursuant hereto. In the event of such an assignment, the provisions of
this Agreement shall inure to the benefit of and be binding on
Mergeco's
<PAGE>
Page 42
assigns. Nothing in this Agreement shall prevent the Parent
from assigning its interest in Mergeco to an affiliate of the Parent.
10.15. Further Assurances. At the Closing or from time to
time thereafter, the Surviving Corporation shall execute and deliver
such other instruments of assignment, transfer and delivery and shall
take such other actions as the other reasonably may request in order
to consummate, complete and carry out the transactions contemplated
by this Agreement.
10.16. Director, Officer and Stockholder Liability. The
directors, officers and stockholders of Mergeco and the directors,
officers and stockholders of the Parent shall not have any personal
liability for any liabilities arising under this Agreement. The directors,
officers and stockholders of Osborn and its subsidiaries shall not have
any personal liability for any liabilities arising under this Agreement.
10.17. Certain Definitions. For purposes of this Agreement,
the term:
(a) "affiliate" of a specified person means a person
who, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with, such
specified person;
(b) "beneficial owner" with respect to any shares
means a person who shall be deemed to be the beneficial owner of
such shares (i) which such person or any of its affiliates or associates
(as such term is defined in Rule 12b-2 promulgated under the
Exchange Act) beneficially owns, directly or indirectly, (ii) which such
person or any of its affiliates or associates has, directly or indirectly,
(A) the right to acquire (whether such right is exercisable immediately
or subject only to the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of rights, exchange
rights, warrants or options, or otherwise, or (B) the right to vote
pursuant to any agreement, arrangement or understanding, (iii) which
are beneficially owned, directly or indirectly, by any other persons
with whom such person or any of its affiliates or associates or any
person with whom such person or any of its affiliates or associates has
any agreement, arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of any such shares, or
(iv) pursuant to Section 13(d) of the Exchange Act and any rules or
regulations promulgated thereunder;
(c) "business day" means any day on which the
principal offices of the SEC in Washington, D.C. are open to accept
filings, or, in the case of determining a date when any payment is due,
any day on which banks are not required or authorized to close in
New York, New York.
(d) "control" (including the terms "controlled by"
and "under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or cause the
direction of the management and policies of a person, whether
through the ownership of voting securities, as trustee or executor, by
contract or credit arrangement or otherwise;
<PAGE>
Page 43
(e) "person" means an individual, corporation,
limited liability company, partnership, limited partnership, syndicate,
person (including, without limitation, a "person" as defined in
Section 13(d)(3) of the Exchange Act), trust, association or other
legal entity or government, political subdivision, agency or
instrumentality of a government; and
(f) "subsidiary" or "subsidiaries" of any person
means any corporation, partnership, joint venture or other legal entity
of which such person (either alone or through or together with any
other subsidiary), owns or has rights to acquire, directly or indirectly,
50% or more of the capital stock or other equity interests the holders
of which are generally entitled to vote for the election of the board of
directors or other governing body of such corporation or other legal
entity.
(g) "Voting Agreement" shall mean the Voting
Agreement in substantially the form of Exhibit H hereto dated as of
even date herewith, by and among Mergeco and the stockholders of
Osborn named therein.
<PAGE>
Page 44
IN WITNESS WHEREOF, Mergeco, Osborn, and the Parent
have caused this Agreement to be signed, all as of the date first
written above.
MERGECO:
OCC ACQUISITION
COMPANY, INC.
By: Eric C. Neuman
Its: President
OSBORN:
OSBORN COMMUNICATIONS CORPORATION
By:
Its:
PARENT:
OCC HOLDING CORPORATION
By:
Its:
<PAGE>
EXHIBIT A
FORM OF CERTIFICATE OF INCORPORATION
OF THE SURVIVING CORPORATION
<PAGE>
EXHIBIT B
FORM OF EMPLOYMENT AGREEMENT
<PAGE>
EXHIBIT C
FORM OF SUBSCRIPTION AGREEMENT
<PAGE>
EXHIBIT D
FORM OF OPINION OF PAUL, WEISS, RIFKIND,
WHARTON & GARRISON
<PAGE>
EXHIBIT E
FORM OF OPINION OF HALEY, BADER & POTTS
<PAGE>
EXHIBIT F
FORM OF OPINION OF VINSON & ELKINS L.L.P.
<PAGE>
EXHIBIT G
FORM OF OPINION OF FISHER, WAYLAND, COOPER & LEADER
<PAGE>
EXHIBIT H
FORM OF VOTING AGREEMENT
<PAGE>
EXHIBIT I
FORM OF ESCROW AGREEMENT
<PAGE>
EXHIBIT J
FORM OF LETTER OF CREDIT
<PAGE>
EXHIBIT K
FORM OF COMMITMENT LETTER
<PAGE>
EXHIBIT L
FORM OF RELEASE
EXHIBIT H
VOTING AGREEMENT
THIS VOTING AGREEMENT, dated as of July 23, 1996
(this "Agreement"), is entered into by and among OCC Acquisition
Company, Inc., a Delaware corporation ("Mergeco"), Osborn
Communications Corporation, a Delaware corporation ("Osborn"),
and the other signatories hereto (collectively, the "Stockholders").
WHEREAS, concurrently herewith, Mergeco, Osborn and
OCC Holding Corporation, a Delaware corporation, are entering into
that certain Agreement and Plan of Merger of even date herewith (the
"Merger Agreement"), providing for the merger (the "Merger") of
Mergeco with and into Osborn;
WHEREAS, each Stockholder is the beneficial owner of the
number of shares of Common Stock set forth beside his name in
Schedule I hereto (all such shares of Common Stock now owned and
which may hereafter be acquired by such Stockholder prior to
termination of this Agreement being referred to herein as the
"Shares");
WHEREAS, approval of the Merger Agreement by Osborn's
stockholders is a condition to the consummation of the Merger;
WHEREAS, the Stockholders fully support the Merger and,
in order to encourage Mergeco to enter into the Merger Agreement
with Osborn, the Stockholders are willing to enter into certain
arrangements with respect to Shares owned by them; and
WHEREAS, all capitalized terms used without definition
herein have the meanings given to such terms in the Merger
Agreement.
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements set forth herein, the parties hereto
agree as follows:
ARTICLE I
VOTING
Section 1.1 Agreement to Vote or Consent. Each
Stockholder hereby agrees (a) to attend the Osborn Stockholders
Meeting, in person or by proxy, and to vote, or cause to be voted (or,
if the stockholders of Osborn act by written consent, to consent in
writing, or cause to consent in writing, with respect to) his Shares,
and any other voting securities of Osborn that such Stockholder owns
or has the right to vote or consent with respect to, (i) for approval and
adoption of the Merger Agreement and the Merger, such agreement
to vote to apply also to any adjournment or adjournments of Osborn
Stockholders Meeting, and (ii) against any proposal or other matter
that may interfere or be inconsistent with the Merger (including,
without limitation, a Business Combination
<PAGE>
PAGE 2
Transaction) and (b) not
to solicit, encourage or recommend to other stockholders of Osborn
that (A) they vote their shares of Common Stock in any contrary
manner, (B) they not vote their shares at all, (C) they sell, transfer,
tender or otherwise dispose of their shares of Common Stock or (D)
they attempt to execute any statutory dissenters' or other similar
rights they may have.
Section 1.2 Revocation of Proxies and Consents. To the
extent inconsistent with Section 1.1 hereof, each Stockholder hereby
revokes any and all previous proxies or written consents with respect
to such Stockholder's Shares or any other voting securities of Osborn.
Section 1.3 Stockholders' Support of the Merger. From the
date hereof until the first to occur of the Closing or the termination of
the Merger Agreement:
(a) No Stockholder or affiliate or associate
thereof, other than Osborn and its subsidiaries (collectively
with respect to each Stockholder, a "Stockholder Group"),
will, directly or indirectly, sell, transfer, pledge or otherwise
dispose of, or grant a proxy with respect to, any Shares to any
person other than Mergeco or its designee, or grant an option
with respect to any of the foregoing, or enter into any other
agreement or arrangement with respect to any of the
foregoing.
(b) No Stockholder or any other member of any
Stockholder Group will , directly or indirectly, through any
officer, director, agent or otherwise, solicit, initiate or
encourage the submission of any proposal or offer from any
person relating to any acquisition or purchase of all or any
material portion of the assets of, or any equity interest in,
Osborn or any of its subsidiaries or any merger, consolidation,
share exchange, business combination or other similar
transaction with Osborn or any of its subsidiaries or
participate in any negotiations regarding, or furnish to any
other person any information with respect to, or otherwise
cooperate in any way with, or assist or participate in, facilitate
or encourage, any effort or attempt by any other person to do
or seek any of the foregoing; provided, however, that prior to
the receipt of the requisite vote or consent for approval and
adoption by the holders of Common Stock of the Merger
Agreement and the transactions contemplated thereby, nothing
contained in this Section 1.3(b) shall prohibit any Stockholder
or any officer, director, employee or agent of any Stockholder
who is a member of the Osborn Board, and who is acting in
such capacity, from furnishing information to, or entering into
discussions or negotiations with, any person in connection
with an unsolicited proposal by such person to acquire Osborn
pursuant to a merger, consolidation, share exchange, business
combination or other similar transaction or to acquire all or
substantially all of the assets of Osborn received by Osborn
after the date of the Merger Agreement, if, and only to the
extent that, (i) the Osborn Board determines in good faith that
such action is required in order for the Osborn Board not to
breach its fiduciary duties to stockholders imposed by
applicable law, such determination being based on
consultations with Alex. Brown and the written opinion of its
independent legal counsel that such action is required in order
for the Osborn Board not to breach its fiduciary duties to
stockholders imposed by applicable law, and prior to
furnishing such information to, or entering into discussions or
negotiations with, such person, the Stockholder or the Osborn
Board gives Mergeco as promptly as practicable prior written
notice of Osborn's intention to furnish such information or
begin such discussions and
<PAGE>
PAGE 3
(ii) receives from such person an
executed confidentiality agreement on terms no less favorable
to Osborn than those contained in the Confidentiality
Agreement. Any Stockholder or any officer, director,
employee or agent of any Stockholder who is a member of the
Osborn Board, and who is acting in such capacity, shall
promptly communicate to Mergeco the material terms of any
such proposal (and the identity of the party making such
proposal) which it may receive. Any Stockholder or any
officer, director, employee or agent of any Stockholder who
is a member of the Osborn Board, and who is acting in such
capacity, shall not agree to release any third party from, or
waive any provision of, any confidentiality or standstill
agreement to which Osborn is a party. From and after the
receipt of the requisite vote or consent for approval and
adoption by the holders of Common Stock of the Merger
Agreement and the transactions contemplated thereby, no
Stockholder or any other member of any Stockholder Group
will , directly or indirectly, through any officer, director, agent
or otherwise, solicit, initiate or encourage the submission of
any proposal or offer from any person relating to any
acquisition or purchase of all or any material portion of the
assets of, or any equity interest in, Osborn or any of its
subsidiaries or any merger, consolidation, share exchange,
business combination or other similar transaction with Osborn
or any of its subsidiaries or participate in any negotiations
regarding, or furnish to any other person any information with
respect to, or otherwise cooperate in any way with, or assist
or participate in, facilitate or encourage, any effort or attempt
by any other person to do or seek any of the foregoing.
Section 1.4 Legend. From and after the date of this
Agreement, each certificate representing Shares shall bear the
following legend:
On the front side:
VOTING OF THE SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE PROVISIONS OF A
VOTING AGREEMENT.
On the reverse side:
VOTING OF SHARES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE PROVISIONS OF A
VOTING AGREEMENT DATED AS OF JULY __, 1996
(THE "AGREEMENT"), BY AND AMONG OCC
ACQUISITION COMPANY, INC., A DELAWARE
CORPORATION, OSBORN COMMUNICATIONS
CORPORATION, A DELAWARE CORPORATION
("OSBORN"), AND THE OTHER SIGNATORIES
THERETO, A COUNTERPART OF WHICH HAS BEEN
DEPOSITED WITH OSBORN AT ITS PRINCIPAL
OFFICE. IN ADDITION, THE TRANSFER OF
SECURITIES REPRESENTED BY THIS CERTIFICATE IS
RESTRICTED PURSUANT TO THE AGREEMENT.
OSBORN SHALL FURNISH A COPY OF THE
AGREEMENT WITHOUT CHARGE TO THE
RECORDHOLDER OF THIS CERTIFICATE UPON
WRITTEN REQUEST TO OSBORN AT ITS PRINCIPAL
PLACE OF BUSINESS OR REGISTERED OFFICE.
<PAGE>
PAGE 4
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 2.1 Representations, Warranties and Covenants of
the Stockholders. Each Stockholder hereby represents and warrants
to, and covenants and agrees with, Mergeco as follows:
(a) Other than the Shares set forth by such
Stockholder's name in Schedule I hereto and, in the case of
Frank D. Osborn, options granted to Frank D. Osborn under
the Option Plan, such Stockholder does not own of record or
beneficially, or have any interest in, any shares of capital stock
of Osborn, any securities exercisable for, convertible into or
exchangeable for capital stock of Osborn, or any other right to
acquire any such capital stock or other securities.
(b) Such Stockholder has good and marketable
title to all his Shares, free and clear of all security interests,
liens, claims, pledges, charges, options, rights of first refusal
agreements and other encumbrances of any nature. Such
Stockholder has not appointed or granted any proxy, which
appointment or grant is still effective, with respect to his
Shares. Such Stockholder has sole voting power with respect
to his Shares.
(c) Such Stockholder has full legal capacity to
execute and deliver this Agreement and to perform his
obligations hereunder. This Agreement has been duly and
validly executed and delivered by such Stockholder and,
assuming the due authorization, execution and delivery by
Mergeco, constitutes a legal, valid and binding obligation of
such Stockholder enforceable against him in accordance with
its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(d) The execution and delivery of this Agreement
by such Stockholder does not, and the performance of this
Agreement by such Stockholder will not, (i) conflict with or
violate any law, rule, regulation, order, judgment or decree
applicable to such Stockholder, (ii) 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 result in the creation of a lien or
encumbrance on any of its Shares pursuant to any note,
indenture, agreement, lease, license, permit or other
instrument or obligation to which such Stockholder is a party
or by which such Stockholder or its Shares are bound or
affected, or (iii) require any consent, approval, authorization
or permit from any governmental regulatory body, except
where such breach or default or failure to obtain such
consents, approvals, authorizations or permits or to make such
filings would not prevent or delay the performance by such
Stockholder of its obligations under this Agreement.
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PAGE 5
Section 2.2 Representations and Warranties of Mergeco.
Mergeco represents and warrants to each Stockholder as follows:
(a) Mergeco has all requisite corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery
of this Agreement by Mergeco and the consummation by it of
the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of
Mergeco. This Agreement has been duly executed and
delivered and constitutes the valid and binding obligation of
Mergeco, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally and subject,
as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
(b) The execution and delivery of this Agreement
does not, and the consummation of the transactions
contemplated hereby and compliance with the provisions
hereof will not, conflict with, or result in any violation of, or
default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancellation or
acceleration of any material obligation or to a loss of a
material benefit under, any provision of the Certificate of
Incorporation or Bylaws of Mergeco or any loan or credit
agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license,
judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Mergeco or its properties or assets,
except for any such conflicts, violations or defaults or
terminations, cancellations or accelerations which individually
or in the aggregate do not have a material adverse effect on
Mergeco's ability to consummate its obligations hereunder.
No consent, approval, order or authorization of, or
registration, declaration or filing with, any Governmental
Entity is required by or with respect to Mergeco in connection
with the execution and delivery of this Agreement by Mergeco
or the consummation by it of the transactions contemplated
hereby, except in connection with the HSR Act, the
Communications Act, and the applicable requirements of the
Securities Act and the Exchange Act and the rules and
regulations thereunder and state securities laws.
Section 2.3 Waivers of Appraisal Rights. Each Stockholder
hereby irrevocably waives any appraisal rights such Stockholder may
have pursuant to Section 262 of Delaware Law by reason of the
Merger and agrees that such Stockholder shall not attempt to perfect
any such appraisal right pursuant to such Section 262.
Section 2.4 Further Assurances. Each party hereto shall
execute and deliver such additional instruments and other documents
and shall take such further actions as may be necessary or appropriate
to effectuate, carry out and comply with all of such party's obligations
under this Agreement, including without limitation any actions
reasonably requested by Mergeco in connection with obtaining any
required consents or approvals to the actions contemplated hereby
under the HSR Act, the Communications Act and the applicable
requirements of the Securities Act and the Exchange Act and the rules
and regulations thereunder and state securities laws. Without limiting
the generality
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PAGE 6
of the foregoing, none of the parties hereto shall enter
into any agreement or arrangement (or alter, amend or terminate any
existing agreement or arrangement) if such action would materially
impair the ability of any party to effectuate, carry out or comply with
all of the terms of this Agreement.
ARTICLE III
GENERAL
Section 3.1 Notices. All notices and other communications
given or made pursuant hereto shall be in writing and shall be deemed
to have been duly given upon receipt, if delivered personally, mailed
by, nationally recognized overnight courier service, 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 Mergeco, to:
OCC Acquisition Company, Inc.
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart
Facsimile: (214) 740-7313
with a copy to:
Vinson & Elkins L.L.P.
3700 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201-2975
Attention: Michael D. Wortley
Facsimile: (214) 220-7716
(b) If to Osborn, to:
Osborn Communications Corporation
130 Mason Street
Greenwich, Connecticut 06830
Attn: Frank D. Osborn
Facsimile: (203) 629-1749
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PAGE 7
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1385 Avenue of the Americas
New York, New York 10019
Attn: Robert M. Hirsch
Facsimile: (212) 757-3990
(c) If to the Stockholders, to the address set forth
below such Stockholder's name on the
signature pages hereto.
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1385 Avenue of the Americas
New York, New York 10019
Attention: Robert M. Hirsh
Facsimile: (212) 757-3990
Section 3.2 Amendments. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified or
terminated except by an instrument in writing signed by Mergeco,
Osborn and each Stockholder.
Section 3.3 Successors and Assigns. This Agreement shall
be binding upon and shall inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns,
including without limitation in the case of any corporate party hereto
any corporate successor by merger or otherwise, and in the case of
any individual party hereto any trustee, executor, heir, legatee or
personal representative succeeding to the ownership of such party's
Shares or other securities subject to this Agreement. Notwithstanding
any transfer of such Shares, the transferor shall remain liable for the
performance of all obligations of the transferor under this Agreement.
Section 3.4 Entire Agreement. This Agreement embodies
the entire Agreement and understanding among the parties hereto
relating to the subject matter hereof and supersedes all prior
agreements and understandings relating to such subject matter. There
are no representations, warranties or covenants by the parties hereto
relating to such subject matter other than those expressly set forth in
this Agreement.
Section 3.5 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 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 transactions contemplated hereby are fulfilled to the
extent possible.
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PAGE 8
Section 3.6 Specific Performance. The parties hereby
acknowledge and agree that the failure of any party to this Agreement
to perform such party's agreement and covenants hereunder will cause
irreparable injury to the other parties to this Agreement for which
damages, even if available, will not be an adequate remedy.
Accordingly, each of the parties hereto hereby consents to the
issuance of injunctive relief by any court of competent jurisdiction to
compel performance of any party's obligations and to the granting by
any such court of the remedy of specific performance of such party's
obligations hereunder. If any action is brought by a party to enforce
this Agreement, the other party shall waive the defense that there is an
adequate remedy at law.
Section 3.7 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 in addition to, and not exclusive
of, any rights or remedies otherwise available.
Section 3.8 No Third Party Beneficiaries. This Agreement
is not intended to be for the benefit of and shall not be enforceable by
any person or entity who or which is not a party hereto.
Section 3.9 Governing Law. THIS AGREEMENT AND
ALL DISPUTES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF DELAWARE. ANY SUIT OR
PROCEEDING BROUGHT HEREUNDER SHALL BE SUBJECT
TO THE EXCLUSIVE JURISDICTION OF THE COURTS
LOCATED IN DELAWARE.
Section 3.10 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 3.11 Counterparts. This Agreement may be executed
and delivered (including by facsimile transmission) in multiple
counterparts, and by the different parties hereto in separate
counterparts, each of which when executed and delivered (including
by facsimile transmission) shall be deemed to be an original but all of
which taken together shall constitute one and the same agreement.
Section 3.12 Expenses. Mergeco, Osborn and each
Stockholder shall bear their own expenses incurred in connection with
this Agreement and the transactions contemplated hereby.
Section 3.13 Capacity. The parties hereto acknowledge and
agree that the obligations of the Stockholders hereunder are
obligations of such Stockholders in their respective capacities as
stockholders of Osborn and shall not obligate such Stockholders with
respect to actions to be taken by any of such Stockholders as a
director or officer of Osborn.
Section 3.14 Termination. This Agreement shall terminate
upon termination of the Merger Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
MERGECO:
OCC ACQUISITION COMPANY,INC.
By:
Name: Eric C. Neuman
Title: President
OSBORN:
OSBORN COMMUNICATIONS CORPORATION
By:
Name:
Title:
STOCKHOLDERS:
Frank D. Osborn
Address:
Telecopier No:
Brownlee O. Currey, Jr.
Address:
Telecopier No:
<PAGE>
Robert K. Zelle
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
<PAGE>
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
__________________________
Address:
Telecopier No:
<PAGE>
SPOUSAL CONSENT
By executing this Agreement, ________________________,
____________________'s spouse agrees (i) to be bound in all
respects by the terms hereof with respect to her spouse's Shares to the
same extent as ____________________ and (ii) to bind her
community property interest, if any, in such Shares.
<PAGE>
SCHEDULE I
Common Stock
Frank D. Osborn
Brownlee O. Currey, Jr.
Robert K. Zelle
_____________________
_____________________
_____________________
_____________________
Contacts : Hicks Muse / Capstar
Roy Winnick
Kekst and Company
Osborn Communications
Thomas S. Douglas
203 -629-0905
CAPSTAR BROADCASTING PARTNERS TO ACQUIRE
OSBORN COMMUNICATIONS CORPORATION
-- Transaction represents Second acquisition for New Middle-Market Radio
Initiative Sponsored by Hicks, Muse, Tate & Furst --
DALLAS, TX and GREENWICH, CT, July 23, 1996 -- Hicks, Muse,
Tate & Furst Incorporated, of Dallas, a leading private investment firm,
and Osborn Communications Corporation (NASDAQ:OSBN), of
Greenwich, Connecticut, an owner/operator of diverse media properties,
currently including a total of 17 FM and AM stations in mid-sized
markets in the eastern United States , today announced the signing of a
definitive agreement under which Capstar Broadcasting Partners will
acquire Osborn in a transaction valued at more than $100 million. The
cash merger, which values Osborn common stock outstanding at $15.375
per share, is expected to be completed by the end of the third week of
February. All of the Osborn directors have agreed to vote their shares of
Osborn common stock in favor of the transaction. It is the second
Transaction, and brings to 50 the number of middle-market radio stations
Capstar has agreed to acquire, since May 1996, when Hicks Muse
announced the formation of a new middle-market radio investment
initiative to be headed by radio industry veteran R. Steven Hicks.
Upon consummation of all its pending acquisitions and dispositions,
Osborn -- which was formed in 1984 by Frank D. Osborn, its
President and Chief Executive Officer -- will own 11 FM and 6 AM
radio stations in the following markets: Wheeling, West Virginia ( 4
FM and 2 AM, including its heritage stations WWVA-AM and
WOVK-FM); Fort Myers-Naples, Florida (2 FM/1 AM); Gadsden,
Alabama (1 FM/1 AM): Asheville, North Carolina (1 FM/1 AM); and
Dayton/Springfield, Ohio, where Osborn owns an FM station operated
under an LMA (local marketing agreement) by another company.
<PAGE>
The acquisition of Osborn is the second for Capstar since launching its
initiative to acquire, in leveraged transactions, up to $1 billion of
middle-market radio station properties. On June 24, Capstar
announced that it had signed a definitive agreement to aquire
Commodore Media, Inc. a Privately held company based in New York
City that owns and operates, or provides sales and marketing services
for, 33 radio stations (19 FM/14 AM) in six medium-sized markets.
That transaction was valued at approximately $200 million, including
debt and equity.
As previously announced, Hicks Muse has agreed to commit $100
million of equity capital to this miidle-market radio investment
initiative. Having completed his commitments to SFX Broadcasting,
Inc., where he served until recently as President and Chief Executive
Officer, R. Stevens Hicks has assumed responsibility for this effort,
which will now be known as Capstar Broadcasting Partners. Mr.
Hicks is a brother of Hicks Muse Chairman and Chief Executive
Officer Thomas O. Hicks.
Under terms of the agreement, Osborn Communications will maintain
its corporate identity as an autonomous subsidary, and will continue to
operate under the direction of Mr. Osborn, who will maintain a
substantial equity stake in the company.
Thomas O. Hicks, Chairman and Chief Executive ofiicer of Hicks Muse,
said: "Osborn Communications adds another jewel to the crown in our
initiative to build a major group of middle-market radio properties
under the Capstar banner. We look forward to working with Frank
Osborn and his colleagues at Osbourne Communications, who will
continue to operate their radio stations and will function as our partners
as we seek to take maximum advantage of the investment and operation
oppurtunities created by the new Telecommunications Act for the benefit
of our investors and business partners"
R. Steven Hicks, Chairman and Chief Executive Officer of Capstar,
said: "I am tremendously pleased to be partnering with my brother Tom
and his colleagues at Hicks Muse at this exciting time in the history of
the American radio industry. Osborn Communications and Commodore
Media are both premier radio enterprises that set a high standard for the
further transactions w plan to pursue. I believe the future of Capstar,
and of the American radio industry, is very bright."
Mr. Osborn siad: "I've been very impressed by the expertise of Steve
Hicks and by the commitment of Tom Hicks and his colleagues at Hicks
Muse to build the value of Osborn and of Capstar. I am pleased to be
joint Commodore Media in the Capstar family. Together, we intend to
achieve the leading position among radio groups focusing on mid-sized
markets."
<PAGE>
Bankers Trust Company acted as advisor to Hicks, Muse, Tae & Furst
for the proposed transaction. Alex, Brown & Sons acted as financial
advisor to the Board of Directors of Osborn and has rendered its opinion
that the transaction is fair from a financial point of view to the
stocvkholders of Osborn. In addition, Robert Chaisson is a broker in the
transaction.
Consummation of the merger is conditioned upon, among other things,
approval of the transaction by the stockholders of Osborn and Federal
Communications Commission approval of the change of control of
Osborn.
Osborn Communications is principally engaged in the operation of
radtion stations. Osborn also owns Muzak franchises in Atlanta, Macon
and Albany, Georgia, and in Fort Myers, Florida, and a country music
entertainment complex in the Wheeling, West Virgina area. For its
fiscal year ended December 31, 1995, Osborn report net income of $27
millio n on net revenues of $39.1 million.
Hicks, Muse, Tate & Furst Incorporated, with offices in Dallax, New
York, St. Louis and Mexico City, is a leading private investment firm,
with more than 50 transactions completed or pending since 1989 having
an aggregate value approaching $6 billion.
