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 1, 1996.
RENAISSANCE COMMUNICATIONS CORP.
(Exact name of registrant as specified in charter)
DELAWARE 1-13872 06-1251634
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
ONE FAWCETT PLACE, GREENWICH, CT 06830
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 203-629-1888
(Former name or former address, if changed since last report.)
<PAGE>
ITEM 5. OTHER EVENTS.
On July 1, 1996, Renaissance Communications Corp. (the "Company") entered
into an Agreement and Plan of Merger dated as of July 1, 1996 (the "Merger
Agreement") with Tribune Company ("Tribune") and Tower Acquisition Company,
Inc., a wholly-owned subsidiary of Tribune ("Tower"). Pursuant to the Merger
Agreement, Tower will merge (the "Merger") into the Company and the Company will
become a wholly-owned subsidiary of Tribune. In the Merger, Tribune will pay
$36.00 in cash for each of the outstanding shares of common stock of the
Company, plus $36.00 in cash for each outstanding option or warrant to acquire
common stock of the Company (minus the exercise price), for an aggregate
purchase price of approximately $1.13 billion.
Concurrently with the execution of the Merger Agreement, Warburg, Pincus
Capital Company, L.P. and Michael Finkelstein, the Chairman of the Board of the
Company, who own 17,223,412 and 602,067 shares of common stock of the Company,
respectively, or approximately 59% of the Company's outstanding common stock,
entered into stockholder agreements pursuant to which they agreed to vote all
their shares in favor of the Merger.
Consummation of the Merger Agreement is subject to a number of conditions,
including approval by the stockholders of the Company, approval by the Federal
Communications Commission and compliance with the Hart-Scott-Rodino Antitrust
Improvements Act.
The foregoing description of the Merger is qualified in its entirety by
reference to the complete texts of the Merger Agreement and the Stockholder
Agreements which are filed as exhibits to this Report.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
EXHIBITS
2(a) Agreement and Plan of Merger dated as of July 1, 1996, among the
Company, Tribune Company and Tower Acquisition Company, Inc.
99(a) Stockholder Agreement dated as of July 1, 1996 among Tribune Company,
Tower Acquisition Company, Inc. and Michael Finkelstein.
99(b) Stockholder Agreement dated as of July 1, 1996 among Tribune Company,
Tower Acquisition Company, Inc. and Warburg, Pincus Capital Company, L.P.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
RENAISSANCE COMMUNICATIONS CORP.
Dated: July 9, 1996 By:/S/ JOHN C. FERRARA
-------------------
John C. Ferrara, Vice President
and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
NO. DESCRIPTION NO.
2(a) Agreement and Plan of Merger dated
as of July 1, 1996, among the Company,
Tribune Company and Tower Acquisition
Company, Inc.
99(a) Stockholder Agreement dated as of
July 1, 1996 among Tribune Company,
Tower Acquisition Company, Inc. and
Michael Finkelstein.
99(b) Stockholder Agreement dated as of
July 1, 1996 among Tribune Company,
Tower Acquisition Company, Inc. and
Warburg, Pincus Capital Company, L.P.
Exhibit 2(a)
AGREEMENT AND PLAN OF MERGER
Among
TRIBUNE COMPANY,
TOWER ACQUISITION COMPANY, INC.
and
RENAISSANCE COMMUNICATIONS CORP.
Dated as of July 1, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I The Merger
SECTION 1.01. The Merger...................................... 2
SECTION 1.02. Closing..........................................2
SECTION 1.03. Effective Time...................................3
SECTION 1.04. Effects of the Merger............................3
SECTION 1.05. Certificate of Incorporation and
Bylaws.........................................3
SECTION 1.06. Directors........................................3
SECTION 1.07. Officers.........................................3
ARTICLE II Effect of the Merger on the Capital Stock of
Sub and the Company; Exchange of Certificates
SECTION 2.01. Effect on Capital Stock..........................4
SECTION 2.02. Exchange of Certificates.........................5
ARTICLE III Representations and Warranties of the Company
SECTION 3.01. Organization.....................................7
SECTION 3.02. Subsidiaries.....................................8
SECTION 3.03. Capitalization...................................8
SECTION 3.04. Authority........................................9
SECTION 3.05. Consent and Approvals; No Violations.............10
SECTION 3.06. SEC Reports and Financial Statements.............11
SECTION 3.07. Absence of Certain Changes or Events.............12
SECTION 3.08. No Undisclosed Liabilities.......................13
SECTION 3.09. Information Supplied.............................14
SECTION 3.10. Benefit Plans....................................14
SECTION 3.11. Contracts; Indebtedness..........................16
SECTION 3.12. Litigation.......................................17
SECTION 3.13. Compliance with Applicable Law...................18
SECTION 3.14. Tax Matters......................................18
SECTION 3.15. State Takeover Statutes..........................21
SECTION 3.16. Environmental Matters............................21
SECTION 3.17. Intellectual Property............................22
SECTION 3.18. FCC Qualifications...............................23
SECTION 3.19. Required Vote....................................23
SECTION 3.20. Brokers; Schedule of Fees and Expenses...........23
SECTION 3.21. Opinion of Financial Advisor.....................23
ARTICLE IV Representations and Warranties of Parent and Sub
SECTION 4.01. Organization.....................................24
SECTION 4.02. Authority........................................24
SECTION 4.03. Consents and Approvals; No Violations............25
SECTION 4.04. Information Supplied.............................25
SECTION 4.05. Interim Operations of Sub........................26
SECTION 4.06. Brokers..........................................26
SECTION 4.07. Financing........................................26
SECTION 4.08. FCC Qualifications...............................26
SECTION 4.09. Litigation.......................................26
ARTICLE V Covenants
SECTION 5.01. Covenants of the Company.........................27
SECTION 5.02. No Solicitation..................................31
SECTION 5.03. Third Party Standstill Agreements................34
SECTION 5.04. Other Actions....................................34
ARTICLE VI Additional Agreements
SECTION 6.01. Stockholder Approval; Preparation
of Proxy Statement............................34
SECTION 6.02. Access to Information............................36
SECTION 6.03. Reasonable Efforts...............................36
SECTION 6.04. Company Stock Options and
Management Warrants...........................37
SECTION 6.05. Fees and Expenses................................39
SECTION 6.06. Indemnification..................................41
SECTION 6.07. Obligations of Sub...............................43
SECTION 6.08. Employee Benefits................................43
SECTION 6.09. Certain Litigation...............................43
SECTION 6.10. Transfer of Ownership of Channel 61..............44
ARTICLE VII Conditions Precedent
SECTION 7.01. Conditions to Each Party's
Obligation To Effect the Merger................44
SECTION 7.02. Conditions to the Company's
Obligation to Effect the Merger................46
SECTION 7.03. Conditions to the Parent's and Sub's
Obligations to Effect the Merger...............46
ARTICLE VIII Termination and Amendment
SECTION 8.01. Termination.......................................48
SECTION 8.02. Effect of Termination.............................50
SECTION 8.03. Amendment.........................................50
SECTION 8.04. Extension; Waiver.................................51
ARTICLE IX Tender Offer
SECTION 9.01. Tender Offer......................................51
ARTICLE X Miscellaneous
SECTION 10.01. Nonsurvival of Representations,
Warranties and Agreements.....................53
SECTION 10.02. Notices..........................................53
SECTION 10.03. Interpretation...................................54
SECTION 10.04. Counterparts.....................................55
SECTION 10.05. Entire Agreement; No Third Party
Beneficiaries..................................55
SECTION 10.06. Governing Law....................................56
SECTION 10.07. Publicity........................................56
SECTION 10.08. Assignment.......................................56
SECTION 10.09. Enforcement......................................56
<PAGE>
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of July 1, 1996 among Tribune
Company, a Delaware corporation ("Parent"), Tower Acquisition Company, Inc., a
Delaware corporation and a wholly owned subsidiary of Parent ("Sub"), and
Renaissance Communications Corp., a Delaware corporation (the "Company").
WHEREAS the respective Boards of Directors of Parent, Sub and the Company
have approved the acquisition of the Company by Parent on the terms and subject
to the conditions set forth in this Agreement;
WHEREAS, in furtherance of such acquisition, the respective Boards of
Directors of Parent, Sub and the Company have each approved the merger of Sub
with and into the Company (the "Merger"), upon the terms and subject to the
conditions set forth in this Agreement, whereby each issued and outstanding
share of Common Stock, par value $.01 per share, of the Company (the "Company
Common Stock"; the shares of Company Common Stock being hereinafter referred to
as the "Shares"), other than Shares owned directly or indirectly by Parent or
the Company and Dissenting Shares (as defined in Section 2.01(d)), will be
converted into the right to receive $36.00 per share in cash;
WHEREAS, the Board of Directors of the Company has adopted resolutions
approving the Merger and recommending that the Company's stockholders approve
this Agreement;
WHEREAS, the Board of Directors of the Company has approved the terms of
the Stockholder Agreements (the "Stockholder Agreements") to be entered into by
Parent, Sub and certain stockholders of the Company concurrently with the
execution of this Agreement as an inducement to Parent to enter into this
Agreement, pursuant to which such stockholders have, among other things, agreed
to vote their Shares for approval of the Merger and this Agreement; and
WHEREAS, Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Sub and the Company hereby agree as follows: <PAGE>
ARTICLE I
THE MERGER
SECTION 1.01. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with the Delaware General Corporation
Law (the "DGCL"), Sub shall be merged with and into the Company at the Effective
Time (as defined in Section 1.03). Following the Effective Time, the separate
corporate existence of Sub shall cease and the Company shall continue as the
surviving corporation (the "Surviving Corporation") and shall succeed to and
assume all the rights and obligations of Sub in accordance with the DGCL. At the
election of Parent, any direct or indirect wholly owned subsidiary (as defined
in Section 10.03) of Parent may be substituted for Sub as a constituent
corporation in the Merger. In such event, the parties agree to execute an
appropriate amendment to this Agreement in order to reflect the foregoing.
Notwithstanding the foregoing, Sub may, with the consent of the Company (which
consent shall not be unreasonably withheld), elect at any time prior to the
Merger, instead of merging into the Company as provided above, to merge the
Company with and into Sub; PROVIDED, HOWEVER, that the Company shall not be
deemed to have breached any of its representations, warranties or covenants
herein solely by reason of such election. In such event, the parties agree to
execute an appropriate amendment to this Agreement in order to reflect and,
where appropriate, to provide that Sub shall be the Surviving Corporation.
SECTION 1.02. CLOSING. The closing of the Merger will take place at 10:00
a.m. on a date to be mutually agreed by Parent and the Company (and, failing
such agreement, on the second business day) after satisfaction or waiver of the
conditions set forth in Article VII (the "Closing Date"), at the offices of
Sidley & Austin, One First National Plaza, Chicago, Illinois 60603, unless
another date, time or place is agreed to in writing by the parties hereto.
SECTION 1.03. EFFECTIVE TIME. Subject to the provisions of this Agreement,
as soon as practicable on or after the Closing Date, the parties shall file a
certificate of merger or other appropriate documents (in any such case, the
"Certificate of Merger") executed in accordance with the relevant provisions of
the DGCL and shall make all other filings or recordings required under the DGCL.
The Merger shall become effective at such time as the Certificate of Merger is
duly filed with the Delaware Secretary of State, or at such other time as Sub
and the Company shall agree should be specified in the Certificate of Merger
(the time the Merger becomes effective being hereinafter referred to as the
"Effective Time").
SECTION 1.04. EFFECTS OF THE MERGER. The Merger shall have the effects set
forth in Section 259 of the DGCL.
SECTION 1.05. CERTIFICATE OF INCORPORATION AND BYLAWS. (a) The Restated
Certificate of Incorporation of the Company, as in effect immediately prior to
the Effective Time, shall be amended as of the Effective Time so that Article
FOURTH of such Restated Certificate of Incorporation reads in its entirety as
follows: "The total number of shares of all classes of stock that the
Corporation shall have authority to issue is 1,000 shares of Common Stock, par
value $.01 per share" and, as so amended, such Restated Certificate of
Incorporation shall be the certificate of incorporation of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law.
(b) The By-laws of Sub as in effect immediately prior to the Effective Time
shall be the By-laws of the Surviving Corporation, until thereafter changed or
amended as provided therein or by applicable law.
SECTION 1.06. DIRECTORS. The directors of Sub immediately prior to the
Effective Time shall be the directors of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
SECTION 1.07. OFFICERS. The officers of the Company immediately prior to
the Effective Time shall be the officers of the Surviving Corporation, until the
earlier of their resignation or removal or until their respective successors are
duly elected and qualified, as the case may be.
ARTICLE II
EFFECT OF THE MERGER ON THE CAPITAL STOCK OF
SUB AND THE COMPANY; EXCHANGE OF CERTIFICATES
SECTION 2.01. EFFECT ON CAPITAL STOCK. As of the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any Shares or
any shares of capital stock of Sub:
(a) CAPITAL STOCK OF SUB. Each issued and outstanding share of
capital stock of Sub shall be converted into and become one fully paid
and nonassessable share of Common Stock, par value $.01 per share, of
the Surviving Corporation.
(b) CANCELLATION OF TREASURY STOCK AND PARENT OWNED STOCK.
Each Share that is owned by the Company or by any subsidiary of the
Company and each Share that is owned by Parent, Sub or any other
subsidiary of Parent shall automatically be canceled and retired and
shall cease to exist, and no consideration shall be delivered in
exchange therefor.
(c) CONVERSION OF SHARES. Subject to Section 2.01(d), each
Share issued and outstanding (other than Shares to be canceled in
accordance with Section 2.01(b)) shall be converted into the right to
receive $36.00 in cash (the "Merger Consideration"). As of the
Effective Time, all such Shares shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist,
and each holder of a certificate representing any such Shares shall
cease to have any rights with respect thereto, except the right to
receive the Merger Consideration, without interest.
(d) SHARES OF DISSENTING STOCKHOLDERS.
Notwithstanding anything in this Agreement to the contrary, any issued
and outstanding Shares held by a person (a "Dissenting Stockholder")
who objects to the Merger and complies with all the provisions of
Delaware law concerning the right of holders of Shares to dissent from
the Merger and require appraisal of their Shares ("Dissenting Shares")
shall not be converted as described in Section 2.01(c), but shall
become the right to receive such consideration as may be determined to
be due to such Dissenting Stockholder pursuant to the laws of the State
of Delaware. If, after the Effective Time, such Dissenting Stockholder
withdraws his demand for appraisal or fails to perfect or otherwise
loses his right of appraisal, in any case pursuant to the DGCL, his
Shares shall be deemed to be converted as of the Effective Time into
the right to receive the Merger Consideration. The Company shall give
Parent (i) prompt notice of any demands for appraisal of Shares
received by the Company and (ii) the opportunity to participate in and
direct all negotiations and proceedings with respect to any such
demands. The Company shall not, without the prior written consent of
Parent, make any payment with respect to, or settle, offer to settle or
otherwise negotiate, any such demands.
SECTION 2.02. EXCHANGE OF CERTIFICATES. (a) Paying Agent. Prior to the
Effective Time, Parent shall designate The First National Bank of Chicago (or
such other bank or trust company reasonably acceptable to the Company) to act as
paying agent in the Merger (the "Paying Agent"), and Parent shall, at or prior
to the Effective Time, deposit or cause to be deposited with the Paying Agent in
a separate fund established for the benefit of the holders of Shares (the
"Payment Fund") funds in an amount necessary for the payment of the Merger
Consideration upon surrender of certificates representing Shares as part of the
Merger pursuant to Section 2.01 (it being understood that any and all interest
earned on funds made available to the Paying Agent pursuant to this Agreement
shall be turned over to Parent). At the Effective Time, Parent shall also make
available to the Surviving Corporation funds in an amount necessary for the
payment of the Option Consideration and the Warrant Consideration (as defined in
Section 6.04).
(b) EXCHANGE PROCEDURE. As soon as reasonably practicable after the
Effective Time, the Paying Agent shall mail to each holder of record of a
certificate or certificates that immediately prior to the Effective Time
represented Shares (the "Certificates"), (i) a letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Paying
Agent and shall be in a form and have such other provisions as Parent and the
Company may reasonably specify) and (ii) instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Consideration. Upon
surrender of a Certificate for cancellation to the Paying Agent, together with
such letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Paying Agent, the holder of such Certificate shall
be entitled to receive in exchange therefor the amount of cash into which the
Shares theretofore represented by such Certificate shall have been converted
pursuant to Section 2.01, and the Certificate so surrendered shall forthwith be
canceled. In the event of a transfer of ownership of Shares that is not
registered in the transfer records of the Company, payment may be made to a
person other than the person in whose name the Certificate so surrendered is
registered, if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of such Certificate or establish to the satisfaction of
the Surviving Corporation that such tax has been paid or is not applicable.
Until surrendered as contemplated by this Section 2.02, each Certificate shall
be deemed at any time after the Effective Time to represent only the right to
receive upon such surrender the amount of cash, without interest, into which the
Shares theretofore represented by such Certificate shall have been converted
pursuant to Section 2.01. No interest will be paid or will accrue on the cash
payable upon the surrender of any Certificate.
(c) NO FURTHER OWNERSHIP RIGHTS IN SHARES. All cash paid upon the surrender
of Certificates in accordance with the terms of this Article II shall be deemed
to have been paid in full satisfaction of all rights pertaining to the Shares
theretofore represented by such Certificates. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers on the stock transfer books of the Surviving
Corporation of the Shares that were outstanding immediately prior to the
Effective Time. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Paying Agent for any reason, they shall be canceled
and exchanged as provided in this Article II.
(d) TERMINATION OF PAYMENT FUND. Any portion of the Payment Fund which
remains undistributed to the holders of Shares for six months after the
Effective Time shall be delivered to Parent, upon demand, and any holders of
Shares who have not theretofore complied with this Article II and the
instructions set forth in the letter of transmittal mailed to such holders after
the Effective Time shall thereafter look only to Parent for payment of the
Merger Consideration to which they are entitled.
(e) NO LIABILITY. None of Parent, Sub, the Company or the Paying Agent
shall be liable to any person in respect of any cash delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificates shall not have been surrendered prior to seven years after
the Effective Time (or immediately prior to such earlier date on which any
payment pursuant to this Article II would otherwise escheat to or become the
property of any Governmental Entity (as defined in Section 3.05)), the cash
payment in respect of such Certificate shall, unless otherwise provided by
applicable law, become the property of the Surviving Corporation, free and clear
of all claims or interests of any person previously entitled thereto.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub as
follows:
SECTION 3.01. ORGANIZATION. The Company and each of its subsidiaries is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation and has all requisite corporate power
and authority to carry on its business as now being conducted. The Company and
each of its subsidiaries is duly qualified or licensed to do business and in
good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification or licensing necessary, except in such jurisdictions where the
failure to be so duly qualified or licensed and in good standing would not have
a material adverse effect (as defined in Section 10.03) on the Company or
prevent or materially delay the consummation of the Merger. The Company has
delivered to Parent complete and correct copies of its Restated Certificate of
Incorporation and By-laws and the certificates of incorporation and by-laws (or
similar organizational documents) of its subsidiaries.
SECTION 3.02. SUBSIDIARIES. Item 3.02 of the letter from the Company to
Parent dated the date hereof, which letter relates to this Agreement and is
designated therein as the Company Disclosure Letter (the "Company Disclosure
Letter"), lists each subsidiary of the Company. Except as set forth in Item 3.02
of the Company Disclosure Letter, all the outstanding shares of capital stock of
each such subsidiary are owned by the Company, by another wholly owned
subsidiary of the Company or by the Company and another wholly owned subsidiary
of the Company, free and clear of all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever
(collectively, "Liens"), and are duly authorized, validly issued, fully paid and
nonassessable. Except for the capital stock of its subsidiaries, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity.
SECTION 3.03. CAPITALIZATION. The authorized capital stock of the Company
consists of 97,500,000 Shares and 2,500,000 shares of Preferred Stock, par value
$1.00 per share. At the close of business on June 26, 1996, (i) 30,337,206
Shares were issued and outstanding, (ii) no Shares were held by the Company in
its treasury, (iii) 675,000 Shares were reserved for issuance upon exercise of
options to purchase Shares ("Company Stock Options") issued pursuant to the
Company's stock option plans and (iv) 450,000 Shares were reserved for issuance
upon exercise of the warrants to purchase Shares granted to the chief executive
officer of the Company (and assigned, in part, to certain other individuals)
("Management Warrants"). Except as set forth above, as of the date of this
Agreement, no shares of capital stock or other voting securities of the Company
are issued, reserved for issuance or outstanding. All outstanding shares of
capital stock of the Company are, and all shares which may be issued will be,
when issued, duly authorized, validly issued, fully paid and nonassessable and
not subject to preemptive rights. There are no bonds, debentures, notes or other
indebtedness of the Company having the right to vote (or convertible into, or
exchangeable for, securities having the right to vote) on any matters on which
stockholders of the Company may vote. Except as set forth above or on Item 3.02
of the Company Disclosure Letter, as of the date of this Agreement, there are
not any securities, options, warrants, calls, rights, commitments, agreements,
arrangements or undertakings of any kind to which the Company or any of its
subsidiaries is a party or by which any of them is bound obligating the Company
or any of its subsidiaries to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock or other voting securities
of the Company or of any of its subsidiaries or obligating the Company or any of
its subsidiaries to issue, grant, extend or enter into any such security,
option, warrant, call, right, commitment, agreement, arrangement or undertaking.
Except as set forth on Item 3.02 of the Company Disclosure Letter, as of the
date of this Agreement, there are not any outstanding contractual obligations of
the Company or any of its subsidiaries (i) to repurchase, redeem or otherwise
acquire any shares of capital stock of the Company or (ii) to vote or to dispose
of any shares of the capital stock of any of the Company's subsidiaries.
SECTION 3.04. AUTHORITY. The Board of Directors of the Company, at a
meeting duly called and held, at which all directors were present, has duly and
unanimously adopted resolutions approving this Agreement, the Merger and the
Stockholder Agreements, determining that the terms of the Merger are fair to,
and in the best interests of the Company's stockholders and recommending that
the Company's stockholders approve and adopt this Agreement. The Company has the
requisite corporate power and authority to execute and deliver this Agreement
and, subject to the approval and adoption of this Agreement by the holders of a
majority of the Shares outstanding and entitled to vote thereon (the "Company
Stockholder Approval"), to consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the consummation by
the Company of the Merger and of the other transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of the
Company and no other corporate proceedings on the part of the Company are
necessary to authorize this Agreement or to consummate the transactions so
contemplated (in each case, other than, with respect to the Merger, the Company
Stockholder Approval). This Agreement has been duly executed and delivered by
the Company and, assuming this Agreement constitutes a valid and binding
obligation of Parent and Sub, constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, moratorium or other similar laws relating to
creditors' rights generally and to general principles of equity.
SECTION 3.05. CONSENT AND APPROVALS; NO VIOLATIONS. Except as set forth in
Item 3.05 of the Company Disclosure Letter, and except for filings, permits,
authorizations, consents and approvals as may be required under, and other
applicable requirements of, the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (including the filing with the SEC of a proxy statement in
definitive form relating to any required Company Stockholder Approval (the
"Proxy Statement")), the Communications Act of 1934, as amended, and the rules,
regulations and policies of the Federal Communications Commission or any
successor entity (the "FCC") thereunder (the "Communications Act") (including in
connection with the transfer of licenses relating to the television broadcast
stations owned and operated by the Company or its subsidiaries (the
"Stations")), the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the DGCL, the laws of other states in which the Company
is qualified to do or is doing business and state takeover laws, neither the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby will (i)
conflict with or result in any breach of any provision of the Restated
Certificate of Incorporation or Bylaws of the Company or of the similar
organizational documents of any of its subsidiaries, (ii) require any filing
with, or permit, authorization, consent or approval of, any Federal, state or
local government or any court, tribunal, administrative agency or commission or
other governmental or other regulatory authority or agency, domestic, foreign or
supranational (a "Governmental Entity") (except where the failure to obtain such
permits, authorizations, consents or approvals or to make such filings would not
have a material adverse effect on the Company or would not reasonably be
expected to prevent or materially delay the consummation of the Merger), (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
amendment, cancellation or acceleration) under, any of the terms, conditions or
provisions of any loan or credit agreement, note, bond, mortgage, indenture,
lease, permit, concession, franchise, license, contract, agreement or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which any of them or any of their properties or assets may be bound
or (iv) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to the Company, any of its subsidiaries or any of their properties or
assets, except in the case of clauses (iii) or (iv) for violations, breaches or
defaults that would not, individually or in the aggregate, have a material
adverse effect on the Company or that would not, individually or in the
aggregate, be reasonably expected to prevent or materially delay the
consummation of the Merger.
SECTION 3.06. SEC REPORTS AND FINANCIAL STATEMENTS. The Company and each of
its subsidiaries has filed with the SEC, and has heretofore made available to
Parent true and complete copies of, all forms, reports, schedules, statements
and other documents required to be filed by it since December 31, 1994, under
the Exchange Act or the Securities Act of 1933 (the "Securities Act") (such
forms, reports, schedules, statements and other documents, including any
financial statements or schedules included therein, are referred to as the
"Company SEC Documents"). The Company SEC Documents, at the time filed, (a) did
not 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 light of the circumstances under which they were made, not
misleading and (b) complied in all material respects with the applicable
requirements of the Exchange Act and the Securities Act, as the case may be, and
the applicable rules and regulations of the SEC thereunder. Except to the extent
revised or superseded by a subsequently filed Company Filed SEC Document (as
defined in Section 3.07) (a copy of which has been provided to Parent prior to
the date hereof), none of the Company SEC Documents contains an untrue statement
of a material fact or omits to state a material fact required to be stated or
incorporated by reference therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of the Company included in the Company SEC
Documents comply as to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC with
respect thereto, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the periods involved
(except as may be indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-Q of the SEC) and fairly present
(subject, in the case of the unaudited statements, to normal, recurring audit
adjustments, none of which were or are expected, individually or in the
aggregate, to be material in amount) the consolidated financial position of the
Company and its consolidated subsidiaries as at the dates thereof and the
consolidated results of their operations and cash flows for the periods then
ended.
SECTION 3.07. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in
the Company SEC Documents filed and publicly available prior to the date of this
Agreement (the "Company Filed SEC Documents") or as disclosed in Item 3.07 of
the Company Disclosure Letter, since December 31, 1995, the Company and its
subsidiaries have conducted their respective businesses only in the ordinary
course, and there has not been (i) through the date hereof any material adverse
change (as defined in Section 10.03) with respect to the Company, (ii) any
declaration, setting aside or payment of any dividend or other distribution with
respect to its capital stock or any redemption, purchase or other acquisition of
any of its capital stock, (iii) any split, combination or reclassification of
any of its capital stock or any issuance or the authorization of any issuance of
any other securities in respect of, in lieu of or in substitution for shares of
its capital stock, (iv) (x) any granting by the Company or any of its
subsidiaries to any officer of the Company or any of its subsidiaries of any
increase in compensation, except in the ordinary course of business (including
in connection with promotions) consistent with past practice or as was required
under employment agreements in effect as of December 31, 1995, (y) any granting
by the Company or any of its subsidiaries to any such officer of any increase in
severance or termination pay, except as part of a standard employment package to
any person promoted or hired (but not including the five most senior officers),
or as was required under employment, severance or termination agreements in
effect as of December 31, 1995, or (z) any entry by the Company or any of its
subsidiaries into any employment, severance or termination agreement with any
such employee or executive officer, (v) any damage, destruction or loss, whether
or not covered by insurance, that has or reasonably could be expected to have a
material adverse effect on the Company, (vi) any revaluation by the Company of
any of its material assets, (vii) any material change in accounting methods,
principles or practices by the Company or (viii) through the date hereof any
written notice given to, or other written communication with the Company or any
of its subsidiaries (or any oral notice given to, or other oral communication
with, any director, executive officer or general manager of the Company, any
subsidiary of the Company or any Station), to the effect that the existing
network affiliation agreements relating to the Stations will not be renewed for
a term at least as long as their current term.
SECTION 3.08. NO UNDISCLOSED LIABILITIES. Except as and to the extent set
forth in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 previously filed with the SEC under the Exchange Act, as of
December 31, 1995, neither the Company nor any of its subsidiaries had any
liabilities or obligations of any nature, whether or not accrued, contingent or
otherwise, that would be required by generally accepted accounting principles to
be reflected on a consolidated balance sheet of the Company and its subsidiaries
(or disclosed in the notes thereto). Since December 31, 1995 and to the date of
this Agreement, except as and to the extent set forth in the Company Filed SEC
Documents, neither the Company nor any of its subsidiaries has incurred any
liabilities of any nature, whether or not accrued, contingent or otherwise, that
would be required by generally accepted accounting principles to be reflected on
a consolidated balance sheet of the Company and its subsidiaries (or disclosed
in the notes thereto) and that would be reasonably expected to have a material
adverse effect on the Company.
SECTION 3.09. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by the Company specifically for inclusion or incorporation by
reference in the Proxy Statement, will, at the time the Proxy Statement is first
mailed to the Company's stockholders or at the time of the Stockholders Meeting
(as defined in Section 6.01), contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading, except that no representation or warranty is made
by the Company with respect to statements made or incorporated by reference
therein based on information supplied by Parent or Sub specifically for
inclusion or incorporation by reference therein. The Proxy Statement will comply
as to form in all material respects with the requirements of the Exchange Act
and the rules and regulations thereunder.
SECTION 3.10. BENEFIT PLANS. (a) Except as disclosed in the Company Filed
SEC Documents or as disclosed in Item 3.10 of the Company Disclosure Letter,
since the date of the most recent audited financial statements included in the
Company Filed SEC Documents, there has not been any adoption or amendment in any
material respect by the Company or any of its subsidiaries of any collective
bargaining agreement 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, medical or other plan, arrangement or understanding
(whether or not legally binding) providing benefits to any current or former
employee, officer or director of the Company or any of its subsidiaries
(collectively, "Benefit Plans"). Except as disclosed in the Company Filed SEC
Documents or in Item 3.10 of the Company Disclosure Letter, there exist no
employment, consulting, severance, termination or indemnification agreement,
arrangements or understandings between the Company or any of its subsidiaries
and any current or former employee, officer or director of the Company or any of
its subsidiaries.
(b) Item 3.10 of the Company Disclosure Letter contains a list and brief
description of all "employee pension benefit plans" (as defined in Section 3(2)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
(sometimes referred to herein as "Pension Plans"), "employee welfare benefit
plans" (as defined in Section 3(1) of ERISA) and all other Benefit Plans
maintained, or contributed to, by the Company or any of its subsidiaries for the
benefit of any current or former employees, officers or directors of the Company
or any of its subsidiaries. The Company has delivered to Parent true, complete
and correct copies of (i) each Benefit Plan (or, in the case of any unwritten
Benefit Plans, descriptions thereof), (ii) the most recent annual report on Form
5500 filed with the Internal Revenue Service with respect to each Benefit Plan
(if any such report was required), (iii) the most recent summary plan
description for each Benefit Plan for which such summary plan description is
required and (iv) each trust agreement and group annuity contract relating to
any Benefit Plan.
(c) Except as disclosed in Item 3.10 of the Company Disclosure Letter, all
Pension Plans have been the subject of determination letters from the Internal
Revenue Service to the effect that such Pension Plans are qualified and exempt
from Federal income taxes under Section 401(a) and 501(a), respectively, of the
Internal Revenue Code of 1986, as amended (the "Code"), and no such
determination letter has been revoked nor, to the best knowledge of the Company,
has revocation been threatened, nor has any such Pension Plan been amended since
the date of its most recent determination letter or application therefor in any
respect that would adversely affect its qualification or materially increase its
costs.
(d) No Pension Plan that the Company or any of its subsidiaries maintains,
or to which the Company or any of its subsidiaries is obligated to contribute,
other than any Pension Plan that is a "multiemployer plan" (as such term is
defined in Section 4001(a)(3) of ERISA; collectively, the "Multiemployer Pension
Plans"), had, as of the respective last annual valuation date for each such
Pension Plan, an "unfunded benefit liability" (as such term is defined in
Section 4001(a)(18) of ERISA), based on actuarial assumptions which have been
furnished to Parent. None of the Pension Plans has an "accumulated funding
deficiency" (as such term is defined in Section 302 of ERISA or Section 412 of
the Code), whether or not waived. None of the Company, any of its subsidiaries,
any officer of the Company or any of its subsidiaries or any of the Benefit
Plans which are subject to ERISA, including the Pension Plans, any trusts
created thereunder or any trustee or administrator thereof, has engaged in a
"prohibited transaction" (as such term is defined in Section 406 of ERISA or
Section 4975 of the Code) or any other breach of fiduciary responsibility that
could subject the Company, any of its subsidiaries or any officer of the Company
or any of its subsidiaries to any material tax or penalty on prohibited
transactions imposed by such Section 4975 or to any material liability under
Section 502(i) or (1) of ERISA. None of such Benefit Plans or trusts has been
terminated, nor has there been any "reportable event" (as that term is defined
in Section 4043 of ERISA) with respect thereto, during the last five years.
Neither the Company nor any of its subsidiaries has suffered or otherwise caused
a "complete withdrawal", or a "partial withdrawal" (as such terms are defined in
Section 4203 and Section 4205, respectively, of ERISA) since the effective date
of such Sections 4203 and 4205 with respect to any of the Multiemployer Pension
Plans.
(e) With respect to any Benefit Plan that is an employee welfare benefit
plan, except as disclosed in Item 3.10 of the Company Disclosure Letter, (i) no
such Benefit Plan is unfunded or funded through a "welfare benefits fund", as
such term is defined in Section 419(e) of the Code, (ii) each such Benefit Plan
that is a "group health plan", as such term is defined in Section 5000(b)(1) of
the Code, complies with the applicable requirements of Section 4980B(f) of the
Code and (iii) each such Benefit Plan (including any such Plan covering retirees
or other former employees) may be amended or terminated without material
liability to the Company or any of its subsidiaries on or at any time after the
consummation of the Merger.
SECTION 3.11. CONTRACTS; INDEBTEDNESS. (a) Except as disclosed in the
Company Filed SEC Documents or as set forth on Item 3.11 of the Company
Disclosure Letter, there are no contracts or agreements that are material to the
business, properties, assets, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries taken as a whole. Neither the
Company nor any of its subsidiaries is in (nor has the Company or any subsidiary
thereof received written notice (nor has any director, executive officer or
general manager of the Company, any subsidiary of the Company or any Station
received oral notice) from any third party alleging that the Company or any
subsidiary thereof is in) violation of or in default under (nor does there exist
any condition which upon the passage of time or the giving of notice would cause
such a violation of or default under) any loan or credit agreement, note, bond,
mortgage, indenture, lease, permit, concession, franchise, license or any other
contract, agreement, arrangement or understanding, to which it is a party or by
which it or any of its properties or assets is bound, except for violations or
defaults that could not, individually or in the aggregate, reasonably be
expected to result in a material adverse effect on the Company.
(b) Except as set forth in Item 3.11(b) of the Company Disclosure Letter,
neither the Company nor any of its subsidiaries is a party to or is bound by any
employment agreement, television network affiliation agreement, any credit
agreement, mortgage or indenture, or any material talent, programming or joint
venture agreement which (i) provides that the terms thereof or any or all of the
benefits or burdens thereunder will be affected or altered (including, without
limitation, by means of acceleration) by, or are contingent upon, or (ii) will
be subject to termination or cancellation as a result of, the execution of this
Agreement or the consummation of the transactions contemplated hereby.
(c) Set forth on Item 3.11(c) of the Company Disclosure Letter is (i) a
list of all agreements, instruments and other obligations pursuant to which any
indebtedness for borrowed money or capitalized lease obligations of the Company
or any of its subsidiaries in an aggregate principal amount in excess of
$100,000 is outstanding or may be incurred and (ii) the respective principal
amounts outstanding thereunder.
SECTION 3.12. LITIGATION. As of the date of this Agreement, there is no
suit, claim, action, proceeding or investigation pending or, to the best
knowledge of the Company, threatened against the Company or any of its
subsidiaries that could reasonably be expected to have a material adverse effect
on the Company or prevent or materially delay the consummation of the Merger. As
of the date of this Agreement, neither the Company nor any of its subsidiaries
is subject to any outstanding order, writ, injunction or decree that could
reasonably be expected to have a material adverse effect on the Company or
prevent or materially delay the consummation of the Merger.
SECTION 3.13. COMPLIANCE WITH APPLICABLE LAW. The Company and its
subsidiaries hold all permits, licenses, variances, exemptions, orders,
concessions, franchises, and approvals of all Governmental Entities necessary
for the lawful conduct of their respective businesses (the "Company Permits"),
except for failures to hold such permits, licenses, variances, exemptions,
orders, concessions, franchises and approvals that would not have a material
adverse effect on the Company or prevent or materially delay the consummation of
the Merger. The Company and its subsidiaries are in compliance with the terms of
the Company Permits, except where the failure so to comply would not have a
material adverse effect on the Company or prevent or materially delay the
consummation of the Merger. Except as disclosed in the Company Filed SEC
Documents, to the best knowledge of the Company, the businesses of the Company
and its subsidiaries are not being conducted in violation of any law, ordinance
or regulation of any Governmental Entity, except for possible violations that
would not have a material adverse effect on the Company or reasonably prevent or
materially delay the consummation of the Merger. Except as set forth in Item
3.13 of the Company Disclosure Letter, the Stations have been operated in all
material respects in full compliance with The Childrens Television Act of 1990
and the rules, regulations and policies of the FCC thereunder. As of the date of
this Agreement, to the best knowledge of the Company no investigation or review
by any Governmental Entity with respect to the Company or any of its
subsidiaries is pending or threatened, nor has any Governmental Entity indicated
an intention to conduct any such investigation or review, other than, in each
case, those the outcome of which would not be reasonably expected to have a
material adverse effect on the Company or prevent or materially delay the
consummation of the Merger.
SECTION 3.14. TAX MATTERS. Except as set forth in Item 3.14 of the Company
Disclosure Letter:
(a) The Company and each of its subsidiaries has filed all
Federal income tax returns and all other material tax returns and
reports required to be filed by it. All such returns are complete and
correct in all material respects. The Company and each of its
subsidiaries has paid (or the Company has paid on its subsidiaries'
behalf) all taxes shown as due on such returns and all material taxes
(as defined below) for which no return was required to be filed, and
the most recent financial statements contained in the Company Filed SEC
Documents reflect an adequate reserve for all taxes payable by the
Company and its subsidiaries for all taxable periods and portions
thereof through the date of such financial statements.
(b) No material tax return of the Company or any of its
subsidiaries is under audit or examination by any taxing authority, and
no written or unwritten notice of such an audit or examination has been
received by the Company or any of its subsidiaries. Each material
deficiency resulting from any audit or examination relating to taxes by
any taxing authority has been paid, except for deficiencies being
contested in good faith. No material issues relating to taxes were
raised in writing by the relevant taxing authority during any presently
pending audit or examination, and no material issues relating to taxes
were raised in writing by the relevant taxing authority in any
completed audit or examination that can reasonably be expected to recur
in a later taxable period. None of the Federal income tax returns of
the Company nor any of its subsidiaries consolidated in such returns
for any period have been examined by the Internal Revenue Service.
(c) There is no agreement or other document extending, or
having the effect of extending, the period of assessment or collection
of any taxes and no power of attorney with respect to any taxes has
been executed or filed with any taxing authority.
(d) No material liens for taxes exist with respect to any
assets or properties of the Company or any of its subsidiaries, except
for statutory liens for taxes not yet due.
(e) None of the Company or any of its subsidiaries is a party
to or is bound by any tax sharing agreement, tax indemnity obligation
or similar agreement, arrangement or practice with respect to taxes
(including any advance pricing agreement, closing agreement or other
agreement relating to taxes with any taxing authority).
(f) None of the Company or any of its subsidiaries shall be
required to include in a taxable period ending after the Effective Time
taxable income attributable to income that accrued in a prior taxable
period but was not recognized in any prior taxable period as a result
of the installment method of accounting, the completed contract method
of accounting, the long-term contract method of accounting, the cash
method of accounting or Section 481 of the Code or comparable
provisions of state, local or foreign tax law.
(g) The disallowance of a deduction under Section 162(m) of
the Code for employee remuneration will not apply to any amount paid or
payable by the Company or any of its subsidiaries under any contract,
plan, program, arrangement or understanding currently in effect.
(h) Any amount or other entitlement that could be received
(whether in cash or property or the vesting of property) as a result of
any of the transactions contemplated by this Agreement by any employee,
officer or director of the Company or any of its affiliates who is a
"disqualified individual" (as such term is defined in proposed Treasury
Regulation Section 1.280G-1) under any employment, severance or
termination agreement, other compensation arrangement or Company
Benefit Plan currently in effect would not be characterized as an
"excess parachute payment" (as such term is defined in Section
280G(b)(1) of the Code).
(i) As used in this Agreement, "taxes" shall include all
Federal, state, local and foreign income, profits, franchise, gross
receipts, payroll, employment, property, sales, excise, withholding and
other taxes, tariffs or governmental charges of any nature whatsoever,
together with all interest, penalties and additions imposed with
respect to such amounts.
SECTION 3.15. STATE TAKEOVER STATUTES. The action of the Board of Directors
of the Company in approving the Merger, this Agreement and the Stockholder
Agreements is sufficient to render inapplicable to the Merger, this Agreement
and the Stockholder Agreements and the transactions contemplated by this
Agreement and the Stockholder Agreements the provisions of Section 203 of the
DGCL. To the best knowledge of the Company, no other state takeover statute or
similar statute or regulation applies or purports to apply to the Merger, this
Agreement, the Stockholder Agreements or any of the transactions contemplated by
this Agreement or the Stockholder Agreements.
SECTION 3.16. ENVIRONMENTAL MATTERS. (a) Neither the Company nor any of its
subsidiaries has (i) placed, held, located, released, transported or disposed of
any Hazardous Substances (as defined below) on, under, from or at any of the
Company's or any of its subsidiaries' properties or any other properties, other
than in a manner that could not, in all such cases taken individually or in the
aggregate, reasonably be expected to result in a material adverse effect on the
Company, (ii) any knowledge or reason to know of the presence of any Hazardous
Substances on, under or at any of the Company's or any of its subsidiaries'
properties or any other property but arising from the Company's or any of its
subsidiaries' properties, other than in a manner that could not, in all such
cases taken individually or in the aggregate, reasonably be expected to result
in a material adverse effect on the Company, or (iii) received any written
notice (A) of any violation of any statute, law, ordinance, regulation, rule,
judgment, decree or order of any Governmental Entity relating to any matter of
pollution, protection of the environment, environmental regulation or control or
regarding Hazardous Substances on, under or emanating from any of the Company's
or any of its subsidiaries' properties or any other properties (collectively,
"Environmental Laws"), (B) of the institution or pendency of any suit, action,
claim, proceeding or investigation by any Governmental Entity or any third party
in connection with any such violation, (C) requiring the response to or
remediation of Hazardous Substances at or arising from any of the Company's or
any of its subsidiaries' properties or any other properties or (D) demanding
payment for response to or remediation of Hazardous Substances at or arising
from any of the Company's or any of its subsidiaries' properties or any other
properties, except in each case for the notices set forth in Item 3.16 of the
Company Disclosure Letter and except for notices relating to matters that are
not material. To the best knowledge of the Company, neither the Company nor any
subsidiary of the Company has received any notice of a nature described in
clauses (A) through (D), inclusive, of the immediately preceding sentence. For
purposes of this Agreement, the term "Hazardous Substance" shall mean any toxic
or hazardous materials or substances, including asbestos, buried contaminants,
chemicals, flammable explosives, radioactive materials, petroleum and petroleum
products and any substances defined as, or included in the definition of,
"hazardous substances", "hazardous wastes," "hazardous materials" or "toxic
substances" under any Environmental Law.
(b) Except as set forth in Item 3.16 of the Company Disclosure Letter, no
Environmental Law imposes any obligation upon the Company or its subsidiaries
arising out of or as a condition to any transaction contemplated by this
Agreement or the Stockholder Agreements, including any requirement to modify or
to transfer any permit or license, any requirement to file any notice or other
submission with any Governmental Entity, the placement of any notice,
acknowledgment or covenant in any land records, or the modification of or
provision of notice under any agreement, consent order or consent decree. No
Lien has been placed upon any of the Company's or it subsidiaries' properties
under any Environmental Law.
SECTION 3.17. INTELLECTUAL PROPERTY. The Company and its subsidiaries own,
or are validly licensed or otherwise have the right to use, all patents, patent
rights, trademarks, trademark rights, trade names, trade name rights, service
marks, service mark rights, copyrights, know how, FCC call signs and other
proprietary intellectual property rights and computer programs (collectively,
"Intellectual Property Rights") that are material to the conduct of the business
of the Company and its subsidiaries taken as a whole. Item 3.17 of the Company
Disclosure Letter sets forth a description of all Intellectual Property Rights
that are material to the conduct of the business of the Company and its
subsidiaries taken as a whole. Except as set forth in Item 3.17 of the Company
Disclosure Letter, no claims are pending or, to the best knowledge of the
Company, threatened that the Company or any of its subsidiaries is infringing or
otherwise adversely affecting the rights of any person with regard to any
Intellectual Property Right. To the best knowledge of the Company, except as set
forth in Item 3.17 of the Company Disclosure Letter, no person is infringing the
rights of the Company or any of its subsidiaries with respect to any
Intellectual Property Right.
SECTION 3.18. FCC QUALIFICATIONS. After due investigation, except for the
matters described in Item 3.18 of the Company Disclosure Letter, the Company is
not aware of any facts or circumstances relating to the Company or any of its
subsidiaries that might prevent or delay prompt consent to the transfer of
control applications with respect to the Stations and the issuance of the FCC
Order (as defined in Section 7.01(b)).
SECTION 3.19. REQUIRED VOTE. The affirmative vote of the holders of at
least a majority of the Shares outstanding is the only vote of the holders of
any class or series of capital stock of the Company necessary under applicable
law or otherwise to approve the Merger and this Agreement and the transactions
contemplated hereby.
SECTION 3.20. BROKERS; SCHEDULE OF FEES AND EXPENSES. No broker, investment
banker, financial advisor or other person, other than Morgan Stanley & Co.
Incorporated, the fees and expenses of which will be paid by the Company, is
entitled to any broker's, finder's, financial advisor's or other similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company. The Company has
heretofore furnished Parent with a true and complete copy of its engagement
letter with Morgan Stanley & Co. Incorporated (which letter sets forth the
method of calculation of any fees to be payable to Morgan Stanley & Co.
Incorporated). In connection with this Agreement and the transactions
contemplated hereby, the Company is not subject to any obligation or commitment
to pay the legal fees or related expenses of any stockholder of the Company.
SECTION 3.21. OPINION OF FINANCIAL ADVISOR. The Company has received the
opinion of Morgan Stanley & Co. Incorporated, dated the date of this Agreement,
to the effect that, as of the date of this Agreement, the Merger Consideration
to be received in the Merger by the Company's stockholders is fair to the
Company's stockholders from a financial point of view, and a complete and
correct signed copy of such opinion has been, or promptly upon receipt thereof
will be, delivered to Parent, and such opinion has not been withdrawn or
modified.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF PARENT AND SUB
Parent and Sub represent and warrant to the Company as follows:
SECTION 4.01. ORGANIZATION. Each of Parent and Sub is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to carry on its business as now being conducted.
SECTION 4.02. AUTHORITY. Parent and Sub have requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent and
Sub (including approval of the Merger and this Agreement by the Board of
Directors of Parent) and no other corporate proceedings on the part of Parent
and Sub are necessary to authorize this Agreement or to consummate such
transactions. No vote of Parent stockholders is required to approve this
Agreement or the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Parent and Sub, as the case may be, and, assuming this
Agreement constitutes a valid and binding obligation of the Company, constitutes
a valid and binding obligation of each of Parent and Sub enforceable against
them in accordance with its terms, subject to applicable bankruptcy, insolvency,
moratorium or other similar laws relating to creditors' rights generally and to
general principles of equity.
SECTION 4.03. CONSENTS AND APPROVALS; NO VIOLATIONS. Except for filings,
permits, authorizations, consents and approvals as may be required under, and
other applicable requirements of, the Exchange Act, the Communications Act
(including approvals or waivers of the FCC in connection with the transfer of
the licenses in connection with the ownership or operation of the Stations), the
HSR Act, the DGCL, the laws of other states in which Parent is qualified to do
or is doing business and state takeover laws, neither the execution, delivery or
performance of this Agreement by Parent and Sub nor the consummation by Parent
and Sub of the transactions contemplated hereby will (i) conflict with or result
in any breach of any provision of the respective certificate of incorporation or
by-laws of Parent and Sub, (ii) require any filing with, or permit,
authorization, consent or approval of, any Governmental Entity (except where the
failure to obtain such permits, authorizations, consents or approvals or to make
such filings would not be reasonably expected to prevent or materially delay the
consummation of the Merger), (iii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, amendment, cancellation or acceleration)
under, any of the terms, conditions or provisions of any loan or credit
agreement, note, bond, mortgage, indenture, permit, concession, franchise,
license, lease, contract, agreement or other instrument or obligation to which
Parent or any of its subsidiaries is a party or by which any of them or any of
their properties or assets may be bound or (iv) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to Parent, any of its
subsidiaries or any of their properties or assets, except in the case of clauses
(iii) and (iv) for violations, breaches or defaults which would not,
individually or in the aggregate, be reasonably expected to prevent or
materially delay the consummation of the Merger.
SECTION 4.04. INFORMATION SUPPLIED. None of the information supplied or to
be supplied by Parent or Sub specifically for inclusion or incorporation by
reference in the Proxy Statement will, at the time the Proxy Statement is first
mailed to the Company's stockholders or at the time of the Stockholders Meeting,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading.
SECTION 4.05. INTERIM OPERATIONS OF SUB. Sub was formed solely for the
purpose of engaging in the transactions contemplated hereby, has engaged in no
other business activities and has conducted its operations only as contemplated
hereby.
SECTION 4.06. BROKERS. No broker, investment banker, financial advisor or
other person, other than Merrill Lynch & Co., the fees and expenses of which
will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.
SECTION 4.07. FINANCING. At the Effective Time, Parent will have sufficient
funds available to purchase, or to cause Sub to purchase, all the Shares
pursuant to the Merger and to pay all fees and expenses related to the
transactions contemplated by this Agreement.
SECTION 4.08. FCC QUALIFICATIONS. Except as set forth in Item 4.08 of the
letter from Parent to the Company dated the date hereof, which letter relates to
this Agreement and is designated therein as the Parent Disclosure Letter (the
"Parent Disclosure Letter"), and after due investigation, Parent and Sub are not
aware of any other facts or circumstances relating to Parent or any of its
subsidiaries that might prevent or delay prompt consent by the FCC to the
transfer of control applications relating to the Stations and the issuance of
the FCC Order.
SECTION 4.09. LITIGATION. As of the date of this Agreement, there is no
suit, claim, action, proceeding or investigation pending or, to the best
knowledge of Parent, threatened against Parent or any of its subsidiaries that
could reasonably be expected to prevent or materially delay the consummation of
the Merger. As of the date of this Agreement, neither Parent nor any of its
subsidiaries is subject to any outstanding order, writ, injunction or decree
that could reasonably be expected to prevent or materially delay the
consummation of the Merger.
ARTICLE V
COVENANTS
SECTION 5.01. COVENANTS OF THE COMPANY. During the period from the date of
this Agreement through the Effective Time, the Company agrees as to itself and
its subsidiaries that (except as expressly contemplated or permitted by this
Agreement, or to the extent that Parent shall otherwise consent in writing):
(a) ORDINARY COURSE. The Company shall, and shall cause its subsidiaries
to, carry on their respective businesses in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted and shall use
all reasonable efforts to preserve intact their present business organizations,
keep available the services of their present officers and key employees and
preserve their relationships with customers, suppliers and others having
business dealings with the Company and its subsidiaries.
(b) DIVIDENDS; CHANGES IN STOCK. The Company shall not, and shall not
permit any of its subsidiaries to, (i) declare or pay any dividends on or make
other distributions in respect of any of its capital stock except for dividends
by a direct or indirect wholly owned subsidiary of the Company to its parent,
(ii) split, combine or reclassify any of its capital stock or issue or authorize
or propose the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock or (iii) repurchase, redeem or
otherwise acquire any shares of capital stock of the Company or its subsidiaries
or any other securities thereof or any rights, warrants or options to acquire
any such shares or other securities.
(c) ISSUANCE OF SECURITIES. The Company shall not, and shall not permit any
of its subsidiaries to, issue, deliver, sell, pledge or encumber, or authorize
or propose the issuance, delivery, sale, pledge or encumbrance of, any shares of
its capital stock of any class or any securities convertible into, or any
rights, warrants, calls, subscriptions or options to acquire, any such shares or
convertible securities, or any other ownership interest (including stock
appreciation rights or phantom stock) other than (i) the issuance of Shares upon
the exercise of Company Stock Options outstanding on the date of this Agreement
and in accordance with the terms of such Company Stock Options and (ii) the
issuance of Shares upon the exercise of Management Warrants outstanding on the
date of this Agreement and in accordance with the terms of such Management
Warrants.
(d) GOVERNING DOCUMENTS. The Company shall not, and shall not permit any of
its subsidiaries to, amend or propose to amend its certificate of incorporation
or by-laws (or similar organizational documents).
(e) NO ACQUISITIONS. The Company shall not, and shall not permit any of its
subsidiaries to, acquire or agree to acquire (i) by merging or consolidating
with, or by purchasing a substantial equity interest in or substantial portion
of the assets of, or by any other manner, any business or any corporation,
partnership, limited liability company, joint venture, association or other
business organization or division thereof or (ii) any assets that are material,
individually or in the aggregate, to the Company and its subsidiaries taken as a
whole.
(f) NO DISPOSITIONS. Other than dispositions in the ordinary course of
business consistent with past practice which are not material, individually or
in the aggregate, to the Company and its subsidiaries taken as a whole, the
Company shall not, and shall not permit any of its subsidiaries to, sell, lease,
license, encumber or otherwise dispose of, or agree to sell, lease, license,
encumber or otherwise dispose of, any of its assets.
(g) INDEBTEDNESS. The Company shall not, and shall not permit any of its
subsidiaries to, (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness or issue or sell any debt securities or warrants or rights to
acquire any debt securities of the Company or any of its subsidiaries, guarantee
any debt securities of others, enter into any "keep-well" or other agreement to
maintain any financial statement condition of another person or enter into any
arrangement having the economic effect of any of the foregoing, except for
working capital borrowings incurred in the ordinary course of business
consistent with past practice, or (ii) make any loans, advances or capital
contributions to, or investments in, any other person, other than (A) to the
Company or any direct or indirect wholly owned subsidiary of the Company or (B)
any advances to employees in accordance with past practice.
(h) ADVICE OF CHANGES; FILINGS. To the extent permitted by FCC regulations,
the Company shall confer on a regular and frequent basis with Parent, report on
operational matters and promptly advise Parent orally and in writing of any
material adverse change with respect to the Company. The Company shall promptly
provide to Parent (or its counsel) copies of all filings made by the Company
with any Governmental Entity in connection with this Agreement and the
transactions contemplated hereby.
(i) TAX MATTERS. The Company shall not make any tax election that would
have a material effect on the tax liability of the Company or any of its
subsidiaries or settle or compromise any material income tax liability of the
Company or any of its subsidiaries. The Company shall, before filing or causing
to be filed any material tax return of the Company or any of its subsidiaries,
consult with Parent and its advisors as to the positions and elections that may
be taken or made with respect to such return, and shall take such positions or
make such elections as the Company and Parent shall jointly agree or, failing
such agreement, shall take positions or make elections consistent with its past
practices.
(j) CAPITAL EXPENDITURES. Neither the Company nor any of its subsidiaries
shall make or agree to make any new capital expenditure or expenditures that,
individually, exceeds $1,000,000 or, in the aggregate, exceed $5,000,000.
(k) DISCHARGE OF LIABILITIES. The Company shall not, and shall not permit
any of its subsidiaries to, pay, discharge, settle or satisfy any claims,
liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise), other than the payment, discharge, settlement or
satisfaction, in the ordinary course of business consistent with past practice
or in accordance with their terms, of liabilities recognized or disclosed in the
most recent consolidated financial statements (or the notes thereto) of the
Company included in the Company Filed SEC Documents or incurred since the date
of such financial statements in the ordinary course of business consistent with
past practice, or waive the benefits of, or agree to modify in any manner, any
confidentiality, standstill or similar agreement to which the Company or any of
its subsidiaries is a party.
(l) MATERIAL CONTRACTS. Neither the Company nor any of its subsidiaries
shall (i) enter into, modify in any material respect, amend in any material
respect or terminate any (w) television network affiliation agreement relating
to any of the Stations, (x) any programming agreement having a term longer than
one year or having an aggregate value over its term greater than $500,000, (y)
retransmission consent agreement relating to any of the Stations or (z) any
other material contract or agreement to which the Company or such subsidiary is
a party or (ii) waive, release or assign any material rights or claims.
(m) EMPLOYEE MATTERS. Neither the Company nor any of its subsidiaries shall
(i) grant any increases in the compensation of any of its directors, officers or
key employees, except for increases required under employment agreements
existing on the date hereof and increases for officers and employees in the
ordinary course of business consistent with past practice that, in any event, do
not increase such officer's or employee's aggregate compensation by more than
10% over his aggregate compensation in effect on the date hereof, (ii) pay or
agree to pay any pension retirement allowance or other employee benefit not
required or contemplated by any of the existing Benefit Plans as in effect on
the date hereof to any such director, officer or key employee, whether past or
present, (iii) enter into any new, or materially amend any existing, employment,
severance or termination agreement with any such director, officer or key
employee, (iv) except as required to comply with applicable law, become
obligated under any new Benefit Plan which was not in existence on the date
hereof, or amend any such plan or arrangement in existence on the date hereof if
such amendment would have the effect of enhancing any benefits thereunder. The
Company shall provide Parent with copies of any amendments to any Benefit Plan
prior to the Effective Time or (v) terminate the employment, demote, reassign or
otherwise make any change in the employment status of any existing general
manager of any Station. Notwithstanding the foregoing, the Company may pay "stay
bonuses" to employees who are not parties to employment agreements in an
aggregate amount not exceeding $200,000.
(n) ACCOUNTING. The Company shall not adopt any material change, other than
in the ordinary course of business consistent with past practice or as required
by the SEC or by law, in its accounting policies, procedures or practices.
(o) FCC LICENSE RENEWALS. The Company will, and shall cause its
subsidiaries to, timely file with the FCC all license renewal applications with
respect to the Stations as they become due and shall take all necessary action
to effectuate such license renewals.
In the event the Company shall request Parent to consent in writing to an action
otherwise prohibited by this Section 5.01, Parent shall use its reasonable best
efforts to respond in a prompt and timely fashion, but may otherwise respond
affirmatively or negatively in its sole discretion.
SECTION 5.02. NO SOLICITATION. (a) The Company and its subsidiaries and
their respective officers, directors, employees, representatives, agents or
affiliates (including, without limitation, any investment banker, financial
advisor, attorney or accountant retained by the Company or any of its
subsidiaries) shall immediately cease any discussions or negotiations with any
parties that may be ongoing with respect to a Takeover Proposal (as hereinafter
defined). The Company shall not, nor shall it permit any of its subsidiaries to,
and it shall use its best efforts to cause its officers, directors, employees,
agents, affiliates or any investment banker, financial advisor, attorney,
accountant or other representative retained by it or any of its subsidiaries not
to, directly or indirectly, (i) solicit, initiate or knowingly encourage
(including by way of furnishing information, other than the Company SEC
Documents), or knowingly take any other action to facilitate, any inquiries or
the making of any proposal which constitutes, or would reasonably be expected to
lead to, any Takeover Proposal or (ii) participate in any discussions or
negotiations regarding any Takeover Proposal; PROVIDED, HOWEVER, that if the
Board of Directors of the Company determines in good faith, after consultation
with and based on the advice of outside counsel, that it is required to do so in
order to comply with its fiduciary duties to the Company's stockholders under
applicable law, the Company may, in response to an unsolicited Takeover
Proposal, and subject to compliance with Section 5.02(c), (x) furnish
information with respect to the Company to any person pursuant to a
confidentiality agreement containing terms no less favorable to the Company than
the form entered into between the Company and Parent and (y) participate in
negotiations regarding such Takeover Proposal. For purposes of this Agreement,
"Takeover Proposal" means any inquiry, proposal or offer from any person
relating to any direct or indirect acquisition or purchase of 20% or more of the
assets of the Company and its subsidiaries taken as a whole or 20% or more of
any class of equity securities of the Company or any of its subsidiaries, any
tender offer or exchange offer that if consummated would result in any person
beneficially owning 20% or more of any class of equity securities of the Company
or any of its subsidiaries, any merger, consolidation, business combination,
sale of substantially all the assets, recapitalization, liquidation, dissolution
or similar transaction involving the Company or any of its subsidiaries, other
than the transactions contemplated by this Agreement, or any other transaction
the consummation of which could reasonably be expected to prevent or materially
delay the Merger or which would reasonably be expected to dilute materially the
benefits to Parent of the transactions contemplated by this Agreement and the
Stockholder Agreements.
(b) Except as set forth in this Section 5.02, neither the Board of
Directors of the Company nor any committee thereof shall (i) withdraw or modify,
or propose to withdraw or modify, in a manner adverse to Parent, the approval or
recommendation by such Board of Directors or such committee of the Merger or
this Agreement, (ii) approve or recommend, or propose to approve or recommend,
any Takeover Proposal or (iii) cause the Company to enter into any letter of
intent, agreement in principle, acquisition agreement or other similar agreement
(each, an "Acquisition Agreement") with respect to any Takeover Proposal.
Notwithstanding the foregoing, in the event that the Board of Directors of the
Company determines in good faith, after consultation with and based on the
advice of outside counsel, that it is required to do so in order to comply with
its fiduciary duties to the Company's stockholders under applicable law, the
Board of Directors of the Company may (subject to the following sentences)
withdraw or modify its approval or recommendation of the Merger and this
Agreement (or not to recommend it before the Proxy Statement is sent to
stockholders), approve or recommend a Superior Proposal (as defined below) or
terminate this Agreement, but in each case only at a time that is after the
fifth business day following Parent's receipt of written notice (a "Notice of
Superior Proposal") advising Parent that the Board of Directors of the Company
has received a Superior Proposal, specifying the material terms and conditions
of such Superior Proposal and identifying the person (and, if known and
applicable, its "ultimate parent entity" as defined in the rules and regulations
promulgated under the HSR Act) making such Superior Proposal. In addition, if
the Company proposes to terminate this Agreement, it shall upon such times set
forth in Section 6.05(b) pay to Parent the Expenses and Termination Fee (each as
defined in Section 6.05(b)). For purposes of this Agreement, a "Superior
Proposal" means any bona fide proposal made by a third party to acquire,
directly or indirectly, for consideration consisting of cash and/or securities,
more than 50% of the Company Common Stock then outstanding or all or
substantially all the assets of the Company and otherwise on terms which the
Board of Directors of the Company determines in its good faith judgment (based
on the advice of a financial advisor of nationally recognized reputation) to be
more favorable to the Company's stockholders than the Merger.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 5.02, the Company shall immediately advise Parent
orally and in writing of any request for information (other than the Company SEC
Documents) or of any Takeover Proposal, the material terms and conditions of
such request or Takeover Proposal and the identity of the person making such
request or Takeover Proposal. The Company will keep Parent fully informed of the
status and details (including amendments or proposed amendments) of any such
request or Takeover Proposal.
(d) Nothing contained in this Section 5.02 shall prohibit the Company from
taking and disclosing to its stockholders a position contemplated by Rule
14e-2(a) promulgated under the Exchange Act or from making any disclosure to the
Company's stockholders if, in the good faith judgment of the Board of Directors
of the Company, after consultation with and based on the advice of outside
counsel, failure so to disclose would be inconsistent with its fiduciary duties
to the Company's stockholders under applicable law; PROVIDED, HOWEVER, neither
the Company nor its Board of Directors nor any committee thereof shall, except
as permitted by Section 5.02(b), withdraw or modify, or propose to withdraw or
modify, its position with respect to this Agreement or the Merger or approve or
recommend, or propose to approve or recommend, a Takeover Proposal.
SECTION 5.03. THIRD PARTY STANDSTILL AGREEMENTS. During the period from the
date of this Agreement through the Effective Time, the Company shall not
terminate, amend, modify or waive any provision of any confidentiality or
standstill agreement to which it or any of its subsidiaries is a party (other
than any involving Parent or its subsidiaries). During such period, the Company
agrees to enforce, to the fullest extent permitted under applicable law, the
provisions of any such agreements, including, but not limited to, obtaining
injunctions to prevent any breaches of such agreements and to enforce
specifically the terms and provisions thereof in any court of the United States
or any state thereof having jurisdiction.
SECTION 5.04 OTHER ACTIONS. The Company shall not, and shall not permit any
of its subsidiaries to, take any action that would, or that could reasonably be
expected to, result in (i) any of the representations and warranties of the
Company set forth in this Agreement that are qualified as to materiality
becoming untrue, (ii) any of such representations and warranties that are not so
qualified becoming untrue in any material respect, or (iii) any of the
conditions set forth in Section 7.01 or Section 7.03 not being satisfied
(subject to the Company's right to take actions specifically permitted by
Section 5.02).
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. STOCKHOLDER APPROVAL; PREPARATION OF PROXY STATEMENT. (a) The
Company shall as soon as practicable following the date hereof, duly call, give
notice of, convene and hold a meeting of its stockholders (the "Stockholders
Meeting") for the purpose of obtaining the Company Stockholder Approval. The
Company shall, through its Board of Directors, recommend to its stockholders
that the Company Stockholder Approval be given; provided that in the event that
the Board of Directors of the Company determines in good faith, after
consultation with and based on the advice of outside counsel, that it is
required to do so in order to comply with its fiduciary duties to the Company's
stockholders under applicable law, the Board of Directors of the Company may
decline to make such recommendation. Without limiting the generality of the
foregoing, the Company agrees that its obligations pursuant to the first
sentence of this Section 6.01(a) shall not be affected by (i) the commencement,
public proposal, public disclosure or communication to the Company of any
Takeover Proposal or (ii) the withdrawal or modification by the Board of
Directors of the Company of its approval or recommendation of this Agreement or
the Merger.
(b) The Company shall as soon as practicable following the date hereof,
prepare and file a preliminary Proxy Statement with the SEC and shall use its
reasonable efforts to respond to any comments of the SEC or its staff and to
cause the Proxy Statement to be mailed to the Company's stockholders as promptly
as practicable after responding to all such comments to the satisfaction of such
staff. Parent shall as soon as practicable following the date hereof supply such
information for inclusion in the Proxy Statement as shall reasonably be
requested by the Company. The Company shall notify Parent promptly of the
receipt of any comments from the SEC or its staff and of any request by the SEC
or its staff for amendments or supplements to the Proxy Statement or for
additional information and will supply Parent with copies of all correspondence
between the Company or any of its representatives, on the one hand, and the SEC
or its staff, on the other hand, with respect to the Proxy Statement or the
Merger. If at any time prior to the Stockholders Meeting there shall occur any
event that should be set forth in an amendment or supplement to the Proxy
Statement, the Company shall promptly prepare and mail to its stockholders such
an amendment or supplement. The Company shall not mail any Proxy Statement, or
any amendment or supplement thereto, to which Parent reasonably objects.
(c) At the Stockholders Meeting, Parent agrees to cause all Shares owned by
Parent or any subsidiary of Parent to be voted in favor of the Company
Stockholder Approval.
SECTION 6.02. ACCESS TO INFORMATION. To the extent permitted by FCC
regulations and subject to restrictions contained in confidentiality agreements
to which the Company is subject (from which it shall use reasonable efforts to
be released), upon reasonable notice the Company shall, and shall cause each of
its subsidiaries to, afford to Parent and to the officers, employees,
accountants, counsel and other representatives of Parent access, during normal
business hours during the period prior to the Effective Time, to all their
respective properties, books, contracts, commitments and records and, during
such period, the Company shall (and shall cause each of its subsidiaries to)
furnish promptly to Parent (a) a copy of each report, schedule, registration
statement and other document filed or received by it during such period pursuant
to the requirement of the Federal or state securities laws, the Communications
Act or the Federal tax laws and (b) all other information concerning its
business, properties and personnel as Parent may reasonably request. Except as
otherwise agreed to by the Company, unless and until the consummation of the
Merger, and notwithstanding termination of this Agreement, the terms of the
Confidentiality Agreements dated as of November 8, 1995 and June 5, 1996 between
Parent and the Company (the "Confidentiality Agreements") shall apply to all
information furnished thereunder or hereunder.
SECTION 6.03. REASONABLE EFFORTS. (a) Each of the Company, Parent and Sub
agree to use its reasonable efforts to take, or cause to be taken, all actions
necessary to comply promptly with all legal requirements that may be imposed on
itself with respect to the Merger (which actions shall include furnishing all
information required under the Communications Act, the HSR Act and in connection
with approvals of or filings with any other Governmental Entity) and shall
promptly cooperate with and furnish information to each other in connection with
any such requirements imposed upon any of them or any of their subsidiaries in
connection with the Merger. Each of the Company, Parent and Sub shall, and shall
cause its subsidiaries to, use its reasonable efforts to take all reasonable
actions necessary to obtain (and shall cooperate with each other in obtaining)
any consent, authorization, order or approval of, or any exemption by, any
Governmental Entity or other public or private third party required to be
obtained or made by Parent, Sub, the Company or any of their subsidiaries in
connection with the Merger or the taking of any action contemplated thereby or
by this Agreement, except that no party need waive any substantial rights or
agree to any substantial limitation on its operations or to dispose of any
assets not contemplated by the terms of a Temporary Waiver (as hereinafter
defined); provided that in no event shall Parent be required to dispose of any
assets or operations owned by it or any of its subsidiaries on the date hereof
or otherwise acquired prior to the Effective Time pursuant to an agreement
entered into by Parent or any of its subsidiaries prior to the date hereof.
(b) Each of Parent, Sub and the Company shall use its reasonable efforts to
file the applications for the FCC Order within twenty business days from the
date hereof and to take, or cause to be taken, all actions necessary, proper or
advisable to obtain the FCC Order and to satisfy all conditions therein
(including the acceptance of a Temporary Waiver), in each case so as to come
into compliance with FCC requirements and to consummate the Merger as promptly
as practicable, except that no party need waive any substantial rights or agree
to any substantial limitation on its operations or to dispose of any assets not
contemplated by the terms of a Temporary Waiver; provided that in no event shall
Parent be required to dispose of any assets or operations owned by it or any of
its subsidiaries on the date hereof or otherwise acquired prior to the Effective
Time pursuant to an agreement entered into by Parent or any of its subsidiaries
prior to the date hereof. "Temporary Waiver", as used herein, shall mean a
waiver of the prohibitions contained in 47 C.F.R. Section.73.3555, which waiver
shall expire not earlier than six months from the date of the FCC Order and
which, among other things, shall suspend any obligation of Parent or any of its
subsidiaries to dispose of any assets or operations of the Surviving Corporation
or any subsidiary thereof or to agree to limitations on its or their operations
and which shall not require Parent to dispose of any assets or operations owned
by it or any of its subsidiaries on the date hereof or otherwise acquired prior
to the Effective Time pursuant to an agreement entered into by Parent or any of
its subsidiaries prior to the date hereof.
SECTION 6.04. COMPANY STOCK OPTIONS AND MANAGEMENT WARRANTS. (a) At the
Effective Time, each holder of a then outstanding Company Stock Option, whether
or not then exercisable, shall, in settlement thereof, receive from the Company
for each Share subject to such Company Stock Option an amount (subject to any
applicable withholding tax) in cash equal to the excess, if any, of the Merger
Consideration over the per Share exercise price of such Company Stock Option
(such amount being hereinafter referred to as the "Option Consideration");
PROVIDED, HOWEVER, that with respect to any person subject to Section 16(a) of
the Exchange Act, any such amount shall be paid as soon as practicable after the
first date payment can be made without liability to such person under Section
16(b) of the Exchange Act. Upon receipt of the Option Consideration, the Company
Stock Option and any coupled SAR (as defined in the Company's Executive Stock
Option Plan) shall be canceled. The surrender of any Company Stock Option (and
any coupled SAR) to the Company in exchange for the Option Consideration shall
be deemed a release of any and all rights the holder had or may have had in
respect of such Company Stock Option (and any such coupled SAR). Prior to the
Effective Time, the Company shall use its best efforts to obtain all necessary
consents or releases from holders of Company Stock Options and to take all such
other lawful action as may be necessary to give effect to the transactions
contemplated by this Section 6.04(a) (except for such action that may require
the approval of the Company's stockholders). Except as otherwise agreed to by
the parties, (a) the Company's Executive Stock Option Plan shall terminate as of
the Effective Time and the provisions in any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of the
capital stock of the Company or any of its subsidiaries shall be canceled as of
the Effective Time and (b) the Company shall take all action necessary to ensure
that following the Effective Time no participant in the Company's Executive
Stock Option Plan or other plans, programs or arrangements shall have any right
thereunder to acquire equity securities of the Company, the Surviving
Corporation or any subsidiary of the Company or the Surviving Corporation and to
terminate all such plans, programs or arrangements.
(b) At the Effective Time, each holder of a then outstanding Management
Warrant, whether or not then exercisable, shall, in settlement thereof, receive
from the Company for each Share subject to such Management Warrant an amount
(subject to any applicable withholding tax) in cash equal to the excess, if any,
of the Merger Consideration over the per Share exercise price of such Management
Warrant (such amount being hereinafter referred to as the "Warrant
Consideration"); provided, however, that with respect to any person subject to
Section 16(a) of the Exchange Act, any such amount shall be paid as soon as
practicable after the first date payment can be made without liability to such
person under Section 16(b) of the Exchange Act. Upon receipt of the Warrant
Consideration, the related Management Warrant shall be canceled. The surrender
of any Management Warrant to the Company in exchange for the Warrant
Consideration shall be deemed a release of any and all rights the holder had or
may have had in respect of such Management Warrant. Prior to the Effective Time,
the Company shall use its best efforts to obtain all necessary consents or
releases from the holders of the Management Warrants and to take all such other
lawful action as may be necessary to give effect to the transactions
contemplated by this Section 6.04(b) (except for such action that may require
the approval of the Company's stockholders). Except as otherwise agreed to by
the parties, the Company shall take all action necessary to ensure that
following the Effective Time no holder of Management Warrants shall have any
right thereunder to acquire equity securities of the Company, the Surviving
Corporation or any subsidiary of the Company or the Surviving Corporation and to
cancel the Management Warrants upon payment of the Warrant Consideration
relating thereto.
SECTION 6.05. FEES AND EXPENSES. (a) Except as provided below in this
Section 6.05, all fees and expenses incurred in connection with the Merger, this
Agreement and the transactions contemplated by this Agreement shall be paid by
the party incurring such fees or expenses, whether or not the Merger is
consummated.
(b) The Company shall pay, or cause to be paid, in same day funds to Parent
the sum of (x) the Expenses (as hereinafter defined) and (y) $30,000,000 (the
"Termination Fee") under the circumstances and at the times set forth as
follows:
(i) if Parent or Sub terminates this Agreement under Section
8.01(e) and at the time of such termination there is no pending
Takeover Proposal, the Company shall pay the Expenses and the
Termination Fee upon demand;
(ii) if Parent or Sub terminates this Agreement under Section
8.01(e) and at the time of such termination a Takeover Proposal shall
then be pending, the Company shall pay the Expenses, upon demand; in
addition, if within twelve months after such termination, the Company
shall enter into an Acquisition Agreement providing for a Takeover
Proposal or a Takeover Proposal shall be consummated, the Company shall
pay the Termination Fee concurrently with the earlier of the entering
into of such Acquisition Agreement or the consummation of such Takeover
Proposal;
(iii) if the Company terminates this Agreement under Section
8.01(f), the Company shall pay the Expenses concurrently therewith; in
addition, if within twelve months after such termination, the Company
shall enter into an Acquisition Agreement providing for a Takeover
Proposal or a Takeover Proposal shall be consummated, the Company shall
pay the Termination Fee concurrently with the earlier of the entering
into of such Acquisition Agreement or the consummation of such Takeover
Proposal; and
(iv) if, at the time of any other termination of this
Agreement (other than (A) a termination by the Company pursuant to
Section 8.01(g) or (B) provided that the Company is not at the time of
such termination in breach of its obligations under Section 5.02 or
Section 6.03, a termination pursuant to Section 8.01(a), Section
8.01(b)(i) or Section 8.01(b)(iii)), a Takeover Proposal shall have
been made (other than a Takeover Proposal made prior to the date
hereof), the Company shall pay the Expenses, if terminated by the
Company, concurrently therewith or, if terminated by Parent, upon
demand; in addition, if within twelve months of such termination, the
Company shall enter into an Acquisition Agreement providing for a
Takeover Proposal or a Takeover Proposal shall be consummated, the
Company shall pay the Termination Fee concurrently with the earlier of
the entering into of such Acquisition Agreement or the consummation of
such Takeover Proposal.
"Expenses" shall mean documented out-of-pocket fees and expenses up to an
aggregate $2,500,000 incurred prior to any termination of this Agreement or
otherwise paid by or on behalf of Parent or Sub in connection with the Merger or
the consummation of any of the transactions contemplated by this Agreement,
including all fees and expenses of law firms, commercial banks, investment
banking firms, accountants, experts and consultants to Parent or Sub. In no
event shall more than one Termination Fee be payable.
SECTION 6.06. INDEMNIFICATION. (a) The Certificate of Incorporation and
By-Laws of the Surviving Corporation shall contain the provisions with respect
to indemnification set forth in the Restated Certificate of Incorporation and
By-Laws of the Company on the date of this Agreement, which provisions shall not
be amended, repealed or otherwise modified for a period of six years after the
Effective Time in any manner that would adversely affect the rights thereunder
of persons who at any time prior to the Effective Time were identified as
prospective indemnitees under the Restated Certificate of Incorporation or
By-Laws of the Company in respect of actions or omissions occurring at or prior
to the Effective Time (including, without limitation, the transactions
contemplated by this Agreement), unless such modification is required by law.
Parent will not permit the provisions with respect to indemnification set
forth in the Certificate of Incorporation and By-Laws of any of the Company's
subsidiaries on the date of this Agreement to be amended, repealed or otherwise
modified for a period of six years after the Effective Time in any manner that
would adversely affect the rights thereunder of persons who at any time prior to
the Effective Time were identified as prospective indemnitees under any such
Certificate of Incorporation or By-Laws in respect of actions or omissions
occurring at or prior to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement), unless such modification is
required by law.
(b) From and after the Effective Time, the Surviving Corporation shall
indemnify, defend and hold harmless the present and former officers, directors,
agents and employees of the Company and its subsidiaries (collectively, the
"Indemnified Parties") against all losses, expenses, claims, damages,
liabilities or amounts that are paid in settlement of, with the approval or
Parent and the Surviving Corporation (which approval shall not be unreasonably
withheld), or otherwise in connection with, any claim, action, suit, proceeding
or investigation (a "Claim"), based in whole or in part on the fact that such
person is or was such a director, officer, agent or employee of the Company or
any subsidiary and arising out of actions or omissions occurring at or prior to
the Effective Time (including the transactions contemplated by this Agreement),
in each case to the fullest extent permitted under the DGCL (and, from and after
the Effective Time, shall pay expenses in advance of the final disposition of
any such action or proceeding to each Indemnified Party to the fullest extent
permitted under the DGCL, upon receipt from the Indemnified Party to whom
expenses are advanced of the undertaking to repay such advances contemplated by
Section 145(e) of the DGCL). Parent hereby guarantees the Surviving
Corporation's obligations to the Indemnified Parties pursuant to this Section
6.06.
(c) Without limiting the foregoing, in the event any Claim is brought
against any Indemnified Party (whether arising before or after the Effective
Time) after the Effective Time (i) the Surviving Corporation shall pay all
reasonable fees and expenses of counsel for the Indemnified Parties relating to
such claim (which counsel shall be reasonably acceptable to Parent) and (ii) the
Surviving Corporation shall not be liable for any settlement of any Claim
effected without its written consent, which consent shall not be unreasonably
withheld. Any Indemnified Party wishing to claim indemnification under this
Section 6.06, upon learning of any such Claim, shall promptly notify the
Surviving Corporation (although the failure so to notify the Surviving
Corporation shall not relieve the Surviving Corporation from any liability which
the Surviving Corporation may have under this Section 6.06, except to the extent
such failure prejudices the Surviving Corporation), and shall deliver to the
Surviving Corporation the undertaking contemplated by Section 145(e) of the
DGCL. Notwithstanding anything contained herein to the contrary, the Surviving
Corporation shall not be obligated pursuant to this Section to pay the fees and
expenses of more than one law firm (in addition to any appropriate local
counsel) for all Indemnified Parties as a group with respect to each such matter
unless there is, under applicable standards of professional conduct (as
reasonably determined by counsel to such Indemnified Parties), a conflict on any
significant issue between the positions of any two or more of such Indemnified
Parties, in which event, any additional counsel as may be reasonably required
and shall be reasonably satisfactory to Parent may be retained by such
Indemnified Parties.
(d) This Section 6.06 shall survive the consummation of the Merger and is
intended to be for the benefit of, and shall be enforceable by, the Indemnified
Parties referred to herein, their heirs and personal representatives and shall
be binding on Parent and Sub and the Surviving Corporation and their respective
successors and assigns.
SECTION 6.07. OBLIGATIONS OF SUB. Subject to the terms and conditions set
forth in this Agreement, Parent shall take all actions necessary to cause Sub to
perform its obligations under this Agreement and to consummate the Merger on the
terms and conditions set forth in this Agreement.
SECTION 6.08. EMPLOYEE BENEFITS. (a) For at least twelve months following
the Effective Time, Parent shall cause the Surviving Corporation to maintain
employee benefits and programs for officers and employees of the Company and its
subsidiaries (other than benefits based on equity securities or any equivalent
thereof or any incentive based compensation, bonus, phantom stock or similar
arrangement) that are no less favorable in the aggregate than those in place on
the date hereof. For purposes of eligibility to participate in and vesting in
benefits provided under employee benefit plans maintained by Parent and its
affiliates (but not for purposes of determining benefits (or accruals thereof)
under such plans), all persons previously employed by the Company or its
subsidiaries and then employed by Parent or its affiliates shall be credited
with their years of service with the Company and its subsidiaries. Nothing
contained herein shall be construed to obligate Parent or any subsidiary thereof
to employ, or cause the Company or its subsidiaries from and after the Effective
Time to continue to employ, any officer or employee of the Company or its
subsidiaries.
(b) From and after the Effective Time, Parent shall cause the Surviving
Corporation to assume and perform the Company's obligations as they exist on the
date hereof under the Employment Agreements, each as amended by the Amendment to
Employment Agreement dated as of December 20, 1995, between the Company and each
of Michael Finkelstein, Edward T. Karlik and John C. Ferrara.
SECTION 6.09. CERTAIN LITIGATION. The Company agrees that it shall not
settle any litigation commenced after the date hereof against the Company or any
of its directors by any stockholder of the Company relating to the Merger, this
Agreement or the Stockholder Agreements, without the prior written consent of
Parent. In addition, the Company shall not voluntarily cooperate with any third
party that may hereafter seek to restrain or prohibit or otherwise oppose the
Merger and shall cooperate with Parent and Sub to resist any such effort to
restrain or prohibit or otherwise oppose the Merger, unless the Board of
Directors of the Company determines in good faith, after consultation with and
based on the advice of outside counsel, that failing so to cooperate with such
third party or cooperating with Parent or Sub, as the case may be, would
constitute a breach of the Board's fiduciary duties under applicable law.
SECTION 6.10. TRANSFER OF OWNERSHIP OF CHANNEL 61. The Company agrees that,
promptly after the execution of this Agreement, it shall (a) withdraw its
pending FCC application with respect to the transfer of ownership of WTIC-TV,
Channel 61, Hartford, Connecticut to William Grimes (which withdrawal may be
conditioned upon completion of the Merger, if such conditional withdrawal is
permitted by the FCC) and (b) upon such withdrawal, terminate or amend, in
accordance with the terms and conditions set forth in Item 6.10 of the Company
Disclosure Letter, the Stockholders' Agreement dated March 11, 1994, as amended,
among Hartford Television, Inc., William Grimes and 61 Licensee, Inc. relating
to such transfer of ownership.
ARTICLE VII
CONDITIONS PRECEDENT
SECTION 7.01. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER.
The respective obligation of each party to effect the Merger shall be subject to
the satisfaction prior to the Closing Date of the following conditions:
(a) COMPANY STOCKHOLDER APPROVAL. The Company
Stockholder Approval shall have been obtained.
(b) FCC ORDER. The FCC shall have issued the FCC Order and any
condition or action required to be satisfied or taken to legally effect
the Merger in compliance with the FCC Order shall have been so
satisfied or taken (provided, that in no event shall the foregoing
require the satisfaction of any condition or the taking of any action
that could under the terms of the FCC Order be so satisfied or taken
subsequent to consummation of the Merger). As used in this Agreement,
the term "FCC Order" means an order or decision of the FCC which grants
all consents or approvals required under the Communications Act for the
transfer of control of all FCC licenses held by the Company to Parent
and/or Sub and the consummation of the Merger and the other
transactions contemplated by this Agreement, whether or not any appeal
or request for reconsideration or review of such order is pending, or
whether the time for filing any such appeal or request for
reconsideration or review, or for any sua sponte action by the FCC with
similar effect, has expired. For purposes of this paragraph, the "FCC"
shall mean the FCC or its staff.
(c) HSR PERIOD. The waiting period (and any extension thereof)
applicable to the consummation of the Merger under the HSR Act shall
have expired or been terminated.
(d) NO INJUNCTIONS OR RESTRAINTS. No statute, rule,
regulation, executive order, decree, temporary restraining order,
preliminary or permanent injunction or other order issued by any court
of competent jurisdiction or other Governmental Entity or other legal
restraint or prohibition preventing the consummation of the Merger
shall be in effect; PROVIDED, HOWEVER, that each of the parties shall
have used reasonable efforts to prevent the entry of any such
injunction or other order and to appeal as promptly as possible any
injunction or other order that may be entered except that no party need
waive any substantial rights or agree to any substantial limitation on
its operations or to dispose of any assets not contemplated by the
terms of a Temporary Waiver and in no event shall Parent be required to
dispose of any assets or operations owned by it or any of its
subsidiaries on the date hereof or otherwise acquired prior to the
Effective Time pursuant to an Agreement entered into by Parent prior to
the date hereof.
SECTION 7.02. CONDITIONS TO THE COMPANY'S OBLIGATION TO EFFECT THE MERGER.
The obligation of the Company to effect the Merger shall be subject to the
satisfaction at or prior to the Closing Date of the following additional
conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. Parent and Sub shall have performed in all material
respects each of their agreements contained in this Agreement required
to be performed on or prior to the Closing Date, each of the
representations and warranties of Parent and Sub contained in this
Agreement that is qualified by materiality shall be true and correct on
and as of the Closing Date as if made on and as of such date (other
than to the extent that any such representation and warranty, by its
terms, is expressly limited to a specific date, in which case such
representation and warranty shall be true and correct as of such date)
and each of the representations and warranties that is not so qualified
shall be true and correct in all material respects on and as of the
Closing Date as if made on and as of such date (other than to the
extent that any such representation and warranty, by its terms, is
expressly limited to a specific date, in which case such representation
and warranty shall be true and correct as of such date), in each case
except as contemplated or permitted by this Agreement.
(b) OFFICER'S CERTIFICATE. Parent shall have furnished to the
Company a certificate, dated the Closing Date, signed on behalf of
Parent by an appropriate officer of Parent, certifying to the effect
that the conditions set forth in this Section 7.02, insofar as they
relate to Parent, have been satisfied in full.
(c) OTHER DOCUMENTS. Parent and Sub shall have furnished to
the Company at the closing of the Merger such other customary
documents, certificates or instruments as the Company may reasonably
request evidencing compliance by Parent and Sub with the terms of this
Agreement.
SECTION 7.03. CONDITIONS TO THE PARENT'S AND SUB'S OBLIGATIONS TO EFFECT
THE MERGER. The obligations of Parent and Sub to effect the Merger shall be
subject to the satisfaction at or prior to the Closing Date of the following
additional conditions:
(a) PERFORMANCE OF OBLIGATIONS; REPRESENTATIONS AND
WARRANTIES. The Company shall have performed in all material respects
each of its agreements contained in this Agreement required to be
performed on or prior to the Closing Date, each of the representations
and warranties of the Company contained in this Agreement that is
qualified by materiality shall be true and correct on and as of the
Closing Date as if made on and as of such date (other than to the
extent that any such representation and warranty, by its terms, is
expressly limited to a specific date, in which case such representation
and warranty shall be true and correct as of such date) and each of the
representations and warranties that is not so qualified shall be true
in all material respects on and as of the Closing Date as if made on
and as of such date (other than to the extent that any such
representation and warranty is, by its terms, expressly limited to a
specific date, in which case such representation and warranty shall be
true and correct as of such date), in each case except as contemplated
or permitted by this Agreement.
(b) ABSENCE OF CERTAIN CHANGES. Since the date of this
Agreement, (i) there shall have occurred no extraordinary adverse
change (as hereinafter defined) with respect to the Company, (ii) no
license renewal application filed by the Company or any of its
subsidiaries with the FCC relating to any Station shall have been
denied and (iii) there shall not have occurred and continued to exist
for more than three business days (A) any general suspension of trading
in, or limitation on prices for, securities on a national securities
exchange in the United States (excluding any coordinated trading halt
triggered solely as a result of a specified decrease in a market
index), (B) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States, (C) any limitation
(whether or not mandatory) by any Governmental Entity (exclusive of any
foreign Governmental Entity) on, or other event that materially
adversely affects, the extension of credit by banks or other lending
institutions in the United States, or (D) a commencement of a war or
armed hostilities or other national or international calamity directly
or indirectly involving the United States which in any case is
reasonably expected to have a material adverse effect on the Company or
to materially adversely affect Parent's or Sub's ability to complete
the Merger or materially delay the consummation of the Merger.
(c) COMPANY STOCK OPTIONS AND MANAGEMENT WARRANTS.
All required elections, consents and releases from holders
of Company Stock Options or Management Warrants
contemplated by Section 6.04 shall have been made or
obtained.
(d) OFFICER'S CERTIFICATE. The Company shall have furnished to
Parent a certificate, dated the Closing Date, signed by an appropriate
officer of the Company, certifying to the effect that the conditions
set forth in this Section 7.03, insofar as they relate to the Company,
have been satisfied.
(e) OTHER DOCUMENTS. The Company shall have furnished to
Parent at the closing of such Merger such other customary documents,
certificates or instruments as Parent may reasonably request evidencing
compliance by the Company with the terms of this Agreement.
ARTICLE VIII
TERMINATION AND AMENDMENT
SECTION 8.01. TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, whether before or after approval of the terms of
this Agreement by the stockholders of the Company:
(a) by mutual written consent of Parent and the
Company;
(b) by either Parent or the Company:
(i) if any Governmental Entity shall have issued an
order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the
consummation of the Merger and such order, decree or ruling or
other action shall have become final and nonappealable;
(ii) if, at the Stockholders Meeting (including any
adjournment thereof) this Agreement shall fail to be adopted
and approved by the requisite vote of the stockholders of the
Company;
(iii) if the Merger shall not have been consummated
on or before the one year anniversary of the date hereof
unless the failure to consummate the Merger is the result of a
material breach of this Agreement by the party seeking to
terminate this Agreement;
(c) by Parent or Sub, if the Company shall have failed to
perform in any material respect any material obligation or to comply in
any material respect with any material agreement or covenant of the
Company to be performed or complied with by it under this Agreement,
which failure cannot be or has not been cured within 20 business days
after the giving of written notice thereof to the Company;
(d) by Parent or Sub, if there has been a breach of any of the
representations and warranties of the Company set forth in this
Agreement that are qualified as to materiality or there has been a
material breach of any such representations and warranties that are not
so qualified, in each case which breach cannot be or has not been cured
within 20 business days after the giving of written notice thereof to
the Company;
(e) by Parent or Sub, if (i) the Board of Directors of the
Company or any committee thereof shall have withdrawn or modified in a
manner adverse to Parent or Sub its approval or recommendation of the
Merger or this Agreement, or approved or recommended any Takeover
Proposal or (ii) the Board of Directors of the Company or any committee
thereof shall have resolved to do any of the foregoing;
(f) by the Company in accordance with Section 5.02(b),
provided it has complied with all provisions thereof, including the
notice provisions therein, and that it complies with applicable
requirements relating to the payment (to the extent required to be paid
upon such termination) of the Expenses and the Termination Fee; or
(g) by the Company, if Sub or Parent shall have (i) failed to
perform in any material respect any material obligation or to comply in
any material respect with any material agreement or covenant of Sub or
Parent to be performed or complied with by it under this Agreement or
(ii) breached in any material respect any of their respective
representations or warranties contained in this Agreement, which
failure or breach described in clause (i) or (ii) above is incapable of
being cured or has not been cured within 20 business days after the
giving of written notice thereof to Parent or Sub, as applicable, and
except, in any case described in clause (i) or (ii) above, for such
failures and breaches which are not reasonably likely to affect
adversely Parent's or Sub's ability to complete the Merger.
SECTION 8.02. EFFECT OF TERMINATION. In the event of a termination of this
Agreement by either the Company or Parent as provided in Section 8.01, this
Agreement shall forthwith become void and there shall be no liability or
obligation on the part of Parent, Sub or the Company or their respective
officers or directors, except with respect to Section 3.20, Section 4.06, the
last sentence of Section 6.02, Section 6.05, this Section 8.02 and Article X;
PROVIDED, HOWEVER, that nothing herein shall relieve any party for liability for
any breach hereof.
SECTION 8.03. AMENDMENT. This Agreement may be amended by the parties
hereto, by action taken or authorized by their respective Boards of Directors at
any time before or after obtaining the Company Stockholder Approval (if required
by law), but, after any such approval, no amendment shall be made which by law
requires further approval by such stockholders without obtaining such further
approval. This Agreement may not be amended except by an instrument in writing
signed on behalf of each of the parties hereto.
SECTION 8.04. EXTENSION; WAIVER. At any time prior to the Effective Time,
the parties hereto, by action taken or authorized by their respective Board of
Directors, may, to the extent legally allowed, (i) extend the time for the
performance of any of the obligations or other acts of the other parties hereto,
(ii) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto or (iii) waive compliance
with any of the agreements or conditions contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in a written instrument signed on behalf of such party. The failure of
any party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
ARTICLE IX
TENDER OFFER
SECTION 9.01. TENDER OFFER. (a) If (i) there is a bona fide proposal made
by a person other than Parent, Sub or any respective affiliate thereof to effect
a Takeover Proposal or (ii) the FCC will otherwise permit the filing and grant
of an application for special temporary authority, Parent shall have the right,
in its sole discretion, upon no less than five days' notice to the Company, to
commence a cash tender offer to purchase all the outstanding Shares (with at
least a majority of the fully-diluted Shares minimum condition, which cannot be
waived without the written consent of the Company) at a price equal to or in
excess of what would have been the Merger Consideration. There shall be no
conditions to the acceptance of Shares pursuant to such tender offer except (x)
such conditions as are expressly set forth in Section 7.01 and 7.03 of this
Agreement, (y) grant or approval by the FCC of special temporary authority
pursuant to the Communications Act to consummate the offer and (z) any
additional conditions set forth in Item 9.01 of the Parent Disclosure Letter.
(b) Notwithstanding Parent's exercise of such option to commence such a
tender offer, this Agreement shall remain in full force and effect and, to the
extent applicable, the provisions thereof shall apply to such tender offer and
subsequent merger. Without limiting the foregoing, the parties hereto agree to
amend this Agreement to include customary provisions pertaining to cash tender
offers, including provisions relating to the extension of any such offer, the
preparation, filing and dissemination of such documents as shall be required
under applicable law in connection with tender offers (and the provision of
information required to be included therein), the recommendation of the offer by
the Company's Board of Directors and the appointment by Parent (or the trustee
referred to below) of directors to the Company's Board of Directors. Any Shares
not purchased by Parent in such tender offer shall be, as promptly as possible,
acquired by Parent at the same purchase price paid for Shares accepted in such
tender through a short-form merger (if available) or a long-form merger, subject
to any required approval or order of the FCC.
(c) Parent or Sub, as appropriate, will enter into a voting trust agreement
with respect to the Shares purchased pursuant to the offer with one or more
voting trustees acceptable to the FCC, and the Company will cooperate with the
trustee, Parent and Sub to effect a sale of the Shares if Shares must be sold
pursuant to the voting trust agreement.
(d) The Company agrees that it will, at the time after commencement of the
tender offer, to the extent permitted by applicable law and contractual
obligations of the Company on the date hereof, enter into a loan agreement with
Parent pursuant to which the Company will lend to Parent, during the period from
the consummation of the offer until the sale of all the Shares held by the
trustee as a result of the FCC Order not having been obtained, the Company's
excess cash flow (which will have the meaning, to be set forth in the loan
agreement, customarily ascribed to such term). The terms of any such loan (which
will be unsecured) will be based upon market terms for loans of this nature.
(e) Each of the parties hereto represent that all necessary corporate
action has been taken to duly authorize the consummation of the transactions
contemplated by this Section 9.01.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
None of the representations and warranties in this Agreement or in any
instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 10.01 shall not limit any covenant or agreement of the
parties which by its terms contemplates performance after the Effective Time of
the Merger.
SECTION 10.02. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed), sent by overnight courier (providing proof of
delivery) 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 Parent or Sub, to
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Attention: Dennis J. FitzSimons
Telecopy No.: 312/222-3203
with a copy to :
Tribune Company
435 North Michigan Avenue
Chicago, Illinois 60611
Attention: Crane H. Kenney
Telecopy No.: 312/222-4206; and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Attention: Thomas A. Cole, Esq. and
Larry A. Barden, Esq.
Telecopy No: 312/853-7036
(b) if to the Company, to
Renaissance Communications Corp.
One Fawcett Place - Suite 120
Greenwich, Connecticut 06830
Attention: Michael Finkelstein
Telecopy No.: 203/629-9821
with a copy to :
Stroock & Stroock & Lavan
Seven Hanover Square
New York, New York 10004-2696
Attention: Martin H. Neidell
Telecopy No.: 212/806-6006
SECTION 10.03. INTERPRETATION. When a reference is made in this Agreement
to an Article or a Section, such reference shall be to an Article or a Section
of this Agreement unless otherwise indicated. The table of contents 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
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available. As used in this Agreement, the term "subsidiary" of any person
means another person, an amount of the voting securities, other voting ownership
or voting partnership interests of which is sufficient to elect at least a
majority of its Board of Directors or other governing body (or, if there are no
such voting interests, 50% or more of the equity interests of which) is owned
directly or indirectly by such first person. As used herein, "knowledge" or
"best knowledge," as it relates to the Company or its Subsidiaries, means, with
respect to any matter, that any executive officer or director of the Company or
its subsidiaries or any general manager of the Stations has actual knowledge of
such matter. As used in this Agreement, "material adverse change" or "material
adverse effect" means, when used in connection with the Company, any change or
effect (or any development that, insofar as can reasonably be foreseen is likely
to result in any change or effect) that, individually or in the aggregate with
any such other changes or effects, is materially adverse to the business,
properties, assets, condition (financial or otherwise) or results of operations
of the Company and its subsidiaries taken as a whole. As used in this Agreement,
"extraordinary adverse change" means (i) the revocation of the FCC license
relating to any Station or the receipt by the Company of an order to show cause
with respect to such a revocation, or (ii) the physical destruction of any
facility which has or will have the effect of a loss of broadcast capability at
a Station for three consecutive days or more (provided that a Station shall not
be deemed to have lost broadcast capability with respect to any day during which
such Station's programming is carried on a complete and uninterrupted basis on
such cable television system or systems as are then serving the principal
broadcast market applicable to such Station and which carry such Station);
provided, however, that any such change resulting from a failure to obtain an
authorization, consent or approval relating to the Merger from, or the exercise
of a right to terminate resulting from the Merger by, a party to any of the
Company's network affiliation or programming agreements identified in Item
3.11(b) of the Company Disclosure Letter shall not constitute an extraordinary
adverse change.
SECTION 10.04. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when two 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.
SECTION 10.05. ENTIRE AGREEMENT; NO THIRD PARTY BENEFICIARIES. This
Agreement (including the Confidentiality Agreements and the other documents and
the instruments referred to herein) (a) constitute the entire agreement and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and (b) except as
provided in Section 6.04 and 6.06, are not intended to confer upon any person
other than the parties hereto any rights or remedies hereunder.
SECTION 10.06. GOVERNING LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of Delaware without regard to
any applicable conflicts of law.
SECTION 10.07. PUBLICITY. Except as otherwise required by law or the rules
of the New York Stock Exchange, for so long as this Agreement is in effect,
neither the Company nor Parent shall, or shall permit any of its subsidiaries
to, issue or cause the publication of any press release or other public
announcement with respect to the transactions contemplated by this Agreement
without the consent of the other party, which consent shall not be unreasonably
withheld.
SECTION 10.08. 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) without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
SECTION 10.09. ENFORCEMENT. The parties agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It
is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the State
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent, Sub and the Company have caused this Agreement
to be signed by their respective officers thereunto duly authorized as of the
date first written above.
TRIBUNE COMPANY
By /S/ DONALD C. GRENESKO
Name: Donald C. Grenesko
Title: Sr. Vice President and
Chief Financial Officer
TOWER ACQUISITION COMPANY, INC.
By /s/ Dennis J. FitzSimons
Name: Dennis J. FitzSimons
Title: President
RENAISSANCE COMMUNICATIONS CORP.
By /s/ Michael Finkelstein
Name: Michael Finkelstein
Title: Chief Executive Officer
Exhibit 99(a)
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of July 1, 1996 among Tribune Company, a
Delaware corporation ("Parent"), Tower Acquisition Company, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), and Michael
Finkelstein (the "Stockholder").
WHEREAS Parent, Sub and Renaissance Communications Corp., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger of even date herewith (as the same may be amended or supplemented, the
"Merger Agreement") providing for the merger of Sub with and into the Company
(the "Merger");
WHEREAS, concurrently with the execution of this Agreement, Parent is
entering into a substantially identical agreement with Warburg, Pincus Capital
Company, L.P. (the "Warburg Agreement");
WHEREAS, the Stockholder owns in the aggregate 602,067 shares of Common
Stock, par value $0.01 per share, of the Company (the "Company Common Stock");
such shares of Company Common Stock, as such shares may be adjusted by any stock
dividend, stock split, recapitalization, combination or exchange of shares,
merger, consolidation, reorganization or other change or transaction of or by
the Company (each, an "Adjustment Event"), being referred to herein as the
"Subject Shares"; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The Stockholder
hereby represents and warrants to Parent as follows:
(a) AUTHORITY. The Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity. The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof
will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision
of, any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, notice, decree,
statute, law, ordinance, rule or regulation applicable to the
Stockholder or to the Stockholder's property or assets, the effect of
which would be material and adverse to the ability of the Stockholder
to perform its obligations under this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Stockholder in connection with the
execution and delivery of this Agreement or the ability of the
Stockholder to perform his obligations contemplated hereby.
(b) THE SUBJECT SHARES. The Stockholder has good and
marketable title to the Subject Shares, free and clear of any claims,
liens, encumbrances and security interests whatsoever; provided,
however, that the Subject Shares are subject to (i) Rule 144 under the
Securities Act of 1933, as amended, (ii) that certain Stock Purchase
Agreement dated as of October 28, 1989 among the Company, the
Stockholder and Warburg Pincus Capital Company, L.P., as amended, and
(iii) existing margin arrangements entered into by the Stockholder with
Goldman, Sachs & Co. As of the date hereof, the Stockholder owns no
shares of Company Common Stock other than the Subject Shares and
certain Company Stock Options and Management Warrants.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent and Sub hereby
represent and warrant to the Stockholder that each of Parent and Sub 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 Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of Parent and Sub. This Agreement has been duly executed and
delivered by Parent and Sub and constitutes a valid and binding obligation of
Parent and Sub enforceable in accordance with its terms.
3. COVENANTS OF THE STOCKHOLDER.
(a) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) the Subject
Shares, and any other voting securities of the Company, owned by
Stockholder whether issued heretofore or hereafter, that such person
owns or has the right to vote, in favor of the Merger, the adoption by
the Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not
have been amended to adversely affect the Stockholder.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares, and
any other voting securities of the Company, owned by Stockholder
whether issued heretofore or hereafter, that such person owns or has
the rights to vote, against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any
other Takeover Proposal, or (ii) any amendment of the Company's
certificate of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any
of the other transactions contemplated by the Merger Agreement or which
could result in any of the conditions to the Company's obligations
under the Merger Agreement not being fulfilled.
(c) The Stockholder agrees not to (i) sell, transfer, pledge,
assign or otherwise dispose of, or enter into any contract, option or
other arrangement (including any profit sharing arrangement) with
respect to the sale, transfer, pledge, assignment or other disposition
of, the Subject Shares to any person other than Sub or Sub's designee
or (ii) enter into any voting arrangement, whether by proxy, voting
arrangement, voting agreement or otherwise, in connection, directly or
indirectly, with any Takeover Proposal; provided, however, that nothing
contained in clause (i) above shall affect the Stockholder's
obligations under his currently existing margin arrangements with
Goldman, Sachs & Co.
(d) Until the Merger Agreement is terminated and subject to
Section 8 hereof, the Stockholder shall not, and shall use its best
efforts to cause any investment banker, attorney or other adviser or
representative of the Stockholder not to, (i) directly or indirectly
solicit, initiate or knowingly encourage the submission of, any
Takeover Proposal or (ii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any
information with respect to, or knowingly take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or would reasonably be expected to lead to, any Takeover
Proposal.
(e) In the event Parent elects to exercise its rights under
Article IX of the Merger Agreement to commence a cash tender offer (the
"Tender Offer") for the Company Common Stock, Stockholder shall tender
all of the Subject Shares in the Tender Offer and shall not withdraw
any of the Subject Shares tendered pursuant to the Tender Offer.
(f) The Stockholder agrees, as to each Company Stock Option
and Management Warrant held by him, to the treatment thereof
contemplated by Section 6.04 of the Merger Agreement. The Stockholder
further agrees to pay, or cause payment of, (i) the Promissory Note
dated June 24, 1996 in the principal amount of $3,062,218.75, issued by
himself and (ii) promissory notes issued by his children (or trusts for
their benefit), in the aggregate principal amount of $2,000,000, such
payments to be made at the Effective Time. In the event such Notes are
not paid, then the Stockholder agrees that the Company may (A) direct
the Paying Agent to pay an amount equal to principal of and accrued but
unpaid interest thereon to the Company from the Merger Consideration
which would be payable in respect of the Subject Shares or (B) deduct
such amount from the payment which would otherwise be made under
Section 6.04 of the Merger Agreement.
4. FURTHER ASSURANCES. The Stockholder will, from time to time, execute and
deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as Parent
or Sub may reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
6. TERMINATION. This Agreement shall terminate upon the earliest of (i) the
close of business on the first anniversary of the date hereof, (ii) the
Effective Time (as defined in the Merger Agreement), (iii) the termination of
the Merger Agreement in accordance with its terms (other than pursuant to
Section 8.01(e) and (f) thereof), (iv) the receipt by Parent of the Termination
Fee pursuant to Section 6.05(b) of the Merger Agreement and (v) the termination
of the Warburg Agreement in accordance with its terms. In the event that the
Warburg Agreement is amended, modified or waived, Parent and Sub shall notify
the Stockholder promptly and, at the Stockholder's option, this Agreement shall
be so amended, modified or waived.
7. GENERAL PROVISIONS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages would be an inadequate remedy for any breach of the provisions
of this Agreement and agree that the obligations of the parties
hereunder shall be specifically enforceable.
(b) EXPENSES. All costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expense.
(c) AMENDMENTS. Subject to Section 6 hereof, this Agreement
may not be amended except by an instrument in writing signed by each of
the parties hereto.
(d) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to Parent, to:
Tribune Company
435 N. Michigan Avenue
Chicago, Illinois 60611
Facsimile: (312) 222-3203
Attention: Dennis J. FitzSimons
with a copy to:
Tribune Company
435 N. Michigan Avenue
Chicago, Illinois 60611
Facsimile: (312) 222-4206
Attention: Crane H. Kenney
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Facsimile: (312) 853-7036
Attention: Thomas A. Cole, Esq. and
Larry A. Barden, Esq.; and
(ii) if to the Stockholder, to
Michael Finkelstein
c/o Renaissance Communications Corp.
One Fawcett Place - Suite 120
Greenwich, Connecticut 06830
with a copy to:
Nixon, Hargrave, Devans & Doyle
437 Madison Avenue
New York, New York 10022
Attention: Lauren E. Wiesenberg, Esq.
(e) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. 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. Wherever the words
"include", "includes", or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
Capitalized terms used herein but not otherwise defined herein shall
have the meanings set forth in the Merger Agreement.
(f) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the
counterparts have been signed by each of the parties and delivered to
the other party, it being understood that each party need not sign the
same counterpart.
(g) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
(h) GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State
of Delaware.
8. STOCKHOLDER CAPACITY. The Stockholder signs solely in its capacity as
the record holder and beneficial owner of the Subject Shares and nothing herein
shall limit or affect any actions taken by the Stockholder in his capacity as an
officer or director of the Company to the extent specifically permitted by the
Merger Agreement.
9. ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the State
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent and Sub have caused this Agreement to be signed
by their respective officers thereunto duly authorized and the Stockholder has
signed this Agreement, all as of the date first written above.
TRIBUNE COMPANY
By: /S/ DONALD C. GRENESKO
Name: Donald C. Grenesko
Title: Sr. Vice President and
Chief Financial Officer
TOWER ACQUISITION COMPANY, INC.
By: /S/ DENNIS J. FITZSIMONS
Name: Dennis J. FitzSimons
Title: President
/S/ MICHAEL FINKELSTEIN
Michael Finkelstein
Exhibit 99(b)
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of July 1, 1996 among Tribune Company, a
Delaware corporation ("Parent"), Tower Acquisition Company, Inc., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), and Warburg, Pincus
Capital Company, L.P., a Delaware limited partnership (the "Stockholder").
WHEREAS Parent, Sub and Renaissance Communications Corp., a Delaware
corporation (the "Company"), propose to enter into an Agreement and Plan of
Merger of even date herewith (as the same may be amended or supplemented, the
"Merger Agreement") providing for the merger of Sub with and into the Company
(the "Merger");
WHEREAS, concurrently with the execution of this Agreement, Parent is
entering into a substantially identical agreement with Mr. Michael Finkelstein;
WHEREAS, the Stockholder owns in the aggregate 17,223,412 shares of Common
Stock, par value $0.01 per share, of the Company (the "Company Common Stock");
such shares of Company Common Stock, as such shares may be adjusted by any stock
dividend, stock split, recapitalization, combination or exchange of shares,
merger, consolidation, reorganization or other change or transaction of or by
the Company (each, an "Adjustment Event"), being referred to herein as the
"Subject Shares"; and
WHEREAS, as a condition to their willingness to enter into the Merger
Agreement, Parent and Sub have requested that the Stockholder enter into this
Agreement;
NOW, THEREFORE, to induce Parent and Sub to enter into, and in
consideration of their entering into, the Merger Agreement, and in consideration
of the premises and the representations, warranties and agreements contained
herein, the parties agree as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The Stockholder
hereby represents and warrants to Parent as follows:
(a) AUTHORITY. The Stockholder has all requisite power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Stockholder and constitutes a
valid and binding obligation of the Stockholder enforceable in
accordance with its terms, subject to applicable bankruptcy,
insolvency, moratorium or other similar laws relating to creditors'
rights generally and to general principles of equity. The execution and
delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby and compliance with the terms hereof
will not, conflict with, or result in any violation of, or default
(with or without notice or lapse of time or both) under any provision
of, any trust agreement, loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise, license, judgment, order, notice, decree,
statute, law, ordinance, rule or regulation applicable to the
Stockholder or to the Stockholder's property or assets, the effect of
which would be material and adverse to the ability of the Stockholder
to perform its obligations under this Agreement. No consent, approval,
order or authorization of, or registration, declaration or filing with,
any court, administrative agency or commission or other governmental
authority or instrumentality, domestic, foreign or supranational, is
required by or with respect to the Stockholder in connection with the
execution and delivery of this Agreement or the ability of Stockholder
to perform its obligations contemplated hereby.
(b) THE SUBJECT SHARES. The Stockholder has good and
marketable title to the Subject Shares, free and clear of any claims,
liens, encumbrances and security interests whatsoever. The Stockholder
owns no shares of Company Common Stock other than the Subject Shares.
2. REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB. Parent and Sub hereby
represent and warrant to the Stockholder that each of Parent and Sub 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 Parent and Sub, and the consummation of the transactions
contemplated hereby, have been duly authorized by all necessary corporate action
on the part of Parent and Sub. This Agreement has been duly executed and
delivered by Parent and Sub and constitutes a valid and binding obligation of
Parent and Sub enforceable in accordance with its terms.
3. COVENANTS OF THE STOCKHOLDER.
(a) At any meeting of stockholders of the Company called to
vote upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote, consent or
other approval with respect to the Merger and the Merger Agreement is
sought, the Stockholder shall vote (or cause to be voted) the Subject
Shares, and any other voting securities of the Company, owned by
Stockholder whether issued heretofore or hereafter, that such person
owns or has the right to vote, in favor of the Merger, the adoption by
the Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the Merger
Agreement, provided that the terms of the Merger Agreement shall not
have been amended to adversely affect the Stockholder.
(b) At any meeting of stockholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Stockholder's vote, consent or other approval is sought, the
Stockholder shall vote (or cause to be voted) the Subject Shares, and
any other voting securities of the Company, owned by Stockholder
whether issued heretofore or hereafter, that such person owns or has
the rights to vote, against (i) any merger agreement or merger (other
than the Merger Agreement and the Merger), consolidation, combination,
sale of substantial assets, reorganization, recapitalization,
dissolution, liquidation or winding up of or by the Company or any
other Takeover Proposal, or (ii) any amendment of the Company's
certificate of incorporation or by-laws or other proposal or
transaction involving the Company or any of its subsidiaries, which
amendment or other proposal or transaction would in any manner impede,
frustrate, prevent or nullify the Merger, the Merger Agreement or any
of the other transactions contemplated by the Merger Agreement or which
could result in any of the conditions to the Company's obligations
under the Merger Agreement not being fulfilled.
(c) The Stockholder agrees not to (i) sell, transfer, pledge,
assign or otherwise dispose of, or enter into any contract, option or
other arrangement (including any profit sharing arrangement) with
respect to the sale, transfer, pledge, assignment or other disposition
of, the Subject Shares to any person other than Sub or Sub's designee
or (ii) enter into any voting arrangement, whether by proxy, voting
arrangement, voting agreement or otherwise, in connection, directly or
indirectly, with any Takeover Proposal.
(d) Until the Merger Agreement is terminated and subject to
Section 8 hereof, the Stockholder shall not, and shall use its best
efforts to cause any investment banker, attorney or other adviser or
representative of the Stockholder not to, (i) directly or indirectly
solicit, initiate or knowingly encourage the submission of, any
Takeover Proposal or (ii) directly or indirectly participate in any
discussions or negotiations regarding, or furnish to any person any
information with respect to, or knowingly take any other action to
facilitate any inquiries or the making of any proposal that
constitutes, or would reasonably be expected to lead to, any Takeover
Proposal.
(e) In the event Parent elects to exercise its rights under
Article IX of the Merger Agreement to commence a cash tender offer (the
"Tender Offer") for the Company Common Stock, Stockholder shall tender
all of the Subject Shares in the Tender Offer and shall not withdraw
any of the Subject Shares tendered pursuant to the Tender Offer.
4. FURTHER ASSURANCES. The Stockholder will, from time to time, execute and
deliver, or cause to be executed and delivered, such additional or further
transfers, assignments, endorsements, consents and other instruments as Parent
or Sub may reasonably request for the purpose of effectively carrying out the
transactions contemplated by this Agreement.
5. ASSIGNMENT. Neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by any of the parties without the prior
written consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned subsidiary of Parent. Subject
to the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns.
6. TERMINATION. This Agreement shall terminate upon the earliest of (i) the
close of business on the first anniversary of the date hereof, (ii) the
Effective Time (as defined in the Merger Agreement), (iii) the termination of
the Merger Agreement in accordance with its terms (other than pursuant to
Section 8.01(e) and (f) thereof) and (iv) the receipt by Parent of the
Termination Fee pursuant to Section 6.05(b) of the Merger Agreement.
7. GENERAL PROVISIONS.
(a) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages would be an inadequate remedy for any breach of the provisions
of this Agreement and agree that the obligations of the parties
hereunder shall be specifically enforceable.
(b) EXPENSES. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby
shall be paid by the party incurring such expense.
(c) AMENDMENTS. This Agreement may not be amended
except by an instrument in writing signed by each of the
parties hereto.
(d) NOTICE. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally
or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to Parent, to:
Tribune Company
435 N. Michigan Avenue
Chicago, Illinois 60611
Facsimile: (312) 222-3203
Attention: Dennis J. FitzSimons
with a copy to:
Tribune Company
435 N. Michigan Avenue
Chicago, Illinois 60611
Facsimile: (312) 222-4206
Attention: Crane H. Kenney
and
Sidley & Austin
One First National Plaza
Chicago, Illinois 60603
Facsimile: (312) 853-7036
Attention: Thomas A. Cole, Esq. and
Larry A. Barden, Esq.; and
(ii) if to the Stockholder, to
Warburg, Pincus Capital Company, L.P.
466 Lexington Avenue
New York, New York 10017
Attention: Sidney Lapidus
with a copy to:
Willkie Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Facsimile: (212) 821-8111
Attention: Steven A. Seidman, Esq.
(e) INTERPRETATION. When a reference is made in this Agreement
to Sections, such reference shall be to a Section to this Agreement
unless otherwise indicated. 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. Wherever the words
"include", "includes", or "including" are used in this Agreement, they
shall be deemed to be followed by the words "without limitation".
Capitalized terms used herein but not otherwise defined herein shall
have the meanings set forth in the Merger Agreement.
(f) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same
agreement, and shall become effective when one or more of the
counterparts have been signed by each of the parties and delivered to
the other party, it being understood that each party need not sign the
same counterpart.
(g) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES. This
Agreement (including the documents and instruments referred to herein)
(i) constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and (ii) is not intended to
confer upon any person other than the parties hereto any rights or
remedies hereunder.
(h) GOVERNING LAW. This Agreement shall be governed
by and construed in accordance with the laws of the State
of Delaware.
8. STOCKHOLDER CAPACITY. The Stockholder signs solely in its capacity as
the record holder and beneficial owner of the Subject Shares and nothing herein
shall limit or affect any actions taken by any officer, director, partner,
employee or affiliate of the Stockholder in his or her capacity as an officer or
director of the Company to the extent specifically permitted by the Merger
Agreement.
9. ENFORCEMENT. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States
located in the State of Delaware or in a Delaware state court, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (i) consents to submit such party to the
personal jurisdiction of any Federal court located in the State of Delaware or
any Delaware state court in the event any dispute arises out of this Agreement
or any of the transactions contemplated hereby, (ii) agrees that such party will
not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, (iii) agrees that such party will not
bring any action relating to this Agreement or any of the transactions
contemplated hereby in any court other than a Federal court sitting in the State
of Delaware or a Delaware state court and (iv) waives any right to trial by jury
with respect to any claim or proceeding related to or arising out of this
Agreement or any of the transactions contemplated hereby.
IN WITNESS WHEREOF, Parent and Sub have caused this Agreement to be signed
by their respective officers thereunto duly authorized and the Stockholder has
caused this Agreement to be signed by its general partner, all as of the date
first written above.
TRIBUNE COMPANY
By: /S/ DONALD C. GRENESKO
Name: Donald C. Grenesko
Title: Sr. Vice President and
Chief Financial Officer
TOWER ACQUISITION COMPANY, INC.
By: /S/ DENNIS J. FITZSIMONS
Name: Dennis J. FitzSimons
Title: President
WARBURG, PINCUS CAPITAL COMPANY,
L.P.
By: Warburg, Pincus & Co.,
General Partner
By: /S/ SIDNEY LAPIDUS
Name: Sidney Lapidus
Title: Partner
