1
EXHIBIT 2.1
EXECUTION
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
COX RADIO, INC.,
NEW COX RADIO II, INC.,
NEWCITY COMMUNICATIONS, INC.,
CERTAIN STOCKHOLDERS OF NEWCITY COMMUNICATIONS, INC.
AND
THE STOCKHOLDERS' AGENT
DATED AS OF JULY 1, 1996
2
TABLE OF CONTENTS
PAGE
----
ARTICLE I
THE MERGER
1.1 The Merger . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Closing . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time of the Merger . . . . . . . . . . . . . . 2
1.4 Effect of the Merger . . . . . . . . . . . . . . . . . . 2
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation . . . . . . . . . . . . . . 2
2.2 By-laws . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Board of Directors; Officers . . . . . . . . . . . . . . 3
ARTICLE III
MERGER CONSIDERATION AND REDEMPTION OF SHARES
3.1 Merger Consideration . . . . . . . . . . . . . . . . . . 3
3.2 Redemption of Shares . . . . . . . . . . . . . . . . . . 3
3.3 Adjustment to Merger Consideration as of Closing Date . 4
3.4 Dissenting Shares . . . . . . . . . . . . . . . . . . . 5
3.5 Payment . . . . . . . . . . . . . . . . . . . . . . . . 6
3.6 No Further Rights . . . . . . . . . . . . . . . . . . . 7
3.7 Closing of the Company's Transfer Books . . . . . . . . 7
3.8 Final Adjustment of Merger Consideration . . . . . . . . 8
3.9 Escrow Agreement . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
4.1 Organization and Qualification . . . . . . . . . . . . 10
4.2 Capitalization . . . . . . . . . . . . . . . . . . . . 11
4.3 Authority Relative to This Merger Agreement . . . . . 11
4.4 No Conflicts, Required Filings and Consents . . . . . 12
4.5 Reports and Financial Statements . . . . . . . . . . . 13
4.6 Litigation . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Absence of Certain Changes or Events . . . . . . . . . 14
4.8 Employee Matters . . . . . . . . . . . . . . . . . . . 15
4.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Taxes . . . . . . . . . . . . . . . . . . . . . . . . 18
4.11 State Takeover Statutes . . . . . . . . . . . . . . . 20
4.12 Brokers . . . . . . . . . . . . . . . . . . . . . . . 20
4.13 Environmental Matters . . . . . . . . . . . . . . . . 20
4.14 Contracts . . . . . . . . . . . . . . . . . . . . . . 22
4.15 Tangible Personal Property . . . . . . . . . . . . . . 23
4.16 Intangible Property . . . . . . . . . . . . . . . . . 24
4.17 Real Property . . . . . . . . . . . . . . . . . . . . 24
4.18 Undisclosed Liabilities . . . . . . . . . . . . . . . 26
4.19 Governmental Authorizations . . . . . . . . . . . . . 26
3
PAGE
----
4.20 Compliance with FCC Requirements . . . . . . . . . . . 27
4.21 Insurance . . . . . . . . . . . . . . . . . . . . . . 28
4.22 Powers of Attorney . . . . . . . . . . . . . . . . . . 28
4.23 Payment of Indebtedness . . . . . . . . . . . . . . . 28
4.24 Disclosure . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
5.1 Ownership of Class A Common Stock . . . . . . . . . . 28
5.2 Authority; Binding Effect . . . . . . . . . . . . . . 29
5.3 No Conflicts, Required Filings and Consents . . . . . 29
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
6.1 Organization and Qualification . . . . . . . . . . . . 29
6.2 Ownership of Sub . . . . . . . . . . . . . . . . . . . 30
6.3 Authority Relative to This Merger Agreement . . . . . 30
6.4 No Conflicts; Required Filings and Consents . . . . . 30
6.5 Litigation . . . . . . . . . . . . . . . . . . . . . . 31
6.6 Voting Requirements . . . . . . . . . . . . . . . . . 31
6.7 Brokers . . . . . . . . . . . . . . . . . . . . . . . 31
6.8 Financing . . . . . . . . . . . . . . . . . . . . . . 31
6.9 FCC Applications . . . . . . . . . . . . . . . . . . . 31
6.10 State Takeover Statutes . . . . . . . . . . . . . . . 31
6.11 Disclosure . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
7.1 Conduct of Business by the Company Pending the Merger 32
7.2 Control of the Stations . . . . . . . . . . . . . . . 34
7.3 Intentionally Omitted . . . . . . . . . . . . . . . . 35
7.4 Massachusetts Income Tax Assessment . . . . . . . . . 35
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Access to Information . . . . . . . . . . . . . . . . 35
8.2 Filings . . . . . . . . . . . . . . . . . . . . . . . 35
8.3 Employee and Other Arrangements . . . . . . . . . . . 36
8.4 Public Announcements . . . . . . . . . . . . . . . . . 36
8.5 Efforts; Consents . . . . . . . . . . . . . . . . . . 36
8.6 Notice of Breaches . . . . . . . . . . . . . . . . . . 38
8.7 Transfer and Certain Other Taxes and Expenses . . . . 38
8.8 Financial and FCC Reports . . . . . . . . . . . . . . 38
8.9 Updating of Information . . . . . . . . . . . . . . . 38
8.10 Release of Liens . . . . . . . . . . . . . . . . . . . 39
8.11 Environmental Audit . . . . . . . . . . . . . . . . . 39
8.12 Agreement to Vote . . . . . . . . . . . . . . . . . . 39
8.13 Tax Matters. . . . . . . . . . . . . . . . . . . . . . 39
4
PAGE
----
8.14 Event of Loss . . . . . . . . . . . . . . . . . . . . 43
8.15 Further Assurances . . . . . . . . . . . . . . . . . . 44
8.16 Solicitation of Employees . . . . . . . . . . . . . . 44
8.17 Capital Expenditures . . . . . . . . . . . . . . . . . 44
8.18 Exercise of Stock Options . . . . . . . . . . . . . . 44
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation to
Effect the Merger. . . . . . . . . . . . . . . . . . . 44
9.2 Conditions to Obligation of the Company and the
Stockholders to Effect the Merger . . . . . . . . . . 45
9.3 Conditions to Obligations of Parent and Sub to
Effect the Merger. . . . . . . . . . . . . . . . . . . 46
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
10.1 Termination . . . . . . . . . . . . . . . . . . . . . 49
10.2 Effect of Termination . . . . . . . . . . . . . . . . 49
10.3 Fees and Expenses . . . . . . . . . . . . . . . . . . 50
10.4 No Solicitation . . . . . . . . . . . . . . . . . . . 50
10.5 Amendment . . . . . . . . . . . . . . . . . . . . . . 50
10.6 Waiver . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification Out of Closing Escrow. . . . . . . . . 50
11.2 Indemnification By Parent . . . . . . . . . . . . . . 51
11.3 Notification of Claims. . . . . . . . . . . . . . . . 52
ARTICLE XII
GENERAL PROVISIONS
12.1 Stockholders' Agent . . . . . . . . . . . . . . . . . 53
12.2 Notices . . . . . . . . . . . . . . . . . . . . . . . 53
12.3 Specific Performance . . . . . . . . . . . . . . . . . 55
12.4 Entire Agreement . . . . . . . . . . . . . . . . . . . 55
12.5 Assignments; Parties in Interest . . . . . . . . . . . 55
12.6 Governing Law . . . . . . . . . . . . . . . . . . . . 55
12.7 Headings . . . . . . . . . . . . . . . . . . . . . . . 56
12.8 Remedies . . . . . . . . . . . . . . . . . . . . . . . 56
12.9 Certain Definitions . . . . . . . . . . . . . . . . . 56
12.10 Counterparts . . . . . . . . . . . . . . . . . . . . . 58
12.11 Severability . . . . . . . . . . . . . . . . . . . . . 58
12.12 Gender and Number . . . . . . . . . . . . . . . . . . 58
12.13 List of Definitions . . . . . . . . . . . . . . . . . 58
5
EXHIBITS
Exhibit A Surviving Corporation Certificate of
Incorporation
Exhibit B Selling Stockholders
Exhibit C Form of Estimated Closing Statement
Exhibit D Form of Closing Escrow Agreement
Exhibit E Form of Opinion of Dow, Lohnes &
Albertson, PLLC
Exhibit F Form of Opinions of Tyler Cooper &
Alcorn, LLP and Kaye, Scholer, Fierman,
Hays & Handler, LLP
SCHEDULES
Schedule 3.2 Redemption of Shares
Schedule 4.1 Company Subsidiaries
Schedule 4.2 Capitalization
Schedule 4.4 Conflicts, Required Filings and Consents
Schedule 4.5 Reports and Financial Statements
Schedule 4.6 Litigation
Schedule 4.7 Absence of Certain Changes or Events
Schedule 4.8 Employee Matters
Schedule 4.9 ERISA
Schedule 4.10 Taxes
Schedule 4.13 Environmental Matters
Schedule 4.14 Contracts and Third Party Consents
Schedule 4.15 Tangible Personal Property
Schedule 4.16 Intangible Property
Schedule 4.17 Real Property
Schedule 4.18 Undisclosed Liabilities
Schedule 4.19 Governmental Authorizations
Schedule 4.20 Compliance with FCC Requirements
Schedule 4.21 Insurance
Schedule 4.22 Powers of Attorney
Schedule 4.23 Payment of Indebtedness
Schedule 5.1 Ownership of Company Capital Stock
Schedule 6.9 FCC Applications
Schedule 7.1 Conduct of Business Pending the Merger
6
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Merger Agreement"), is dated
as of July 1, 1996, by and among COX RADIO, INC., a Delaware corporation
("Parent"), NEW COX RADIO II, INC., a Delaware corporation ("Sub"), NEWCITY
COMMUNICATIONS, INC., a Delaware corporation (the "Company"), the holders of
shares of the Company's Class A Common Stock (as defined below) and listed on
the signature pages hereof (each, a "Stockholder" and collectively, the
"Stockholders"), and the Chief Financial Officer of the Company, currently John
Riccardi, as agent (the "Stockholders' Agent") for all of the holders of the
issued and outstanding capital stock of the Company (the "Selling
Stockholders").
WHEREAS, Parent is engaged in the business of owning and operating
radio broadcast stations;
WHEREAS, the Company, through wholly-owned subsidiaries, owns and
operates, pursuant to licenses issued by the Federal Communications Commission
("FCC"), Radio Stations WODL(FM), Birmingham, Alabama; WZZK(AM), Birmingham,
Alabama; WZZK-FM, Birmingham, Alabama; WEZN(FM), Bridgeport, Connecticut;
WDBO(AM), Orlando, Florida; WWKA(FM), Orlando, Florida; WZKD(AM), Orlando,
Florida; WCFB(FM), Daytona Beach, Florida; WJZF(FM), La Grange, Georgia;
WBBS(FM), Fulton, New York; WSYR(AM), Syracuse, New York; WYYY(FM), Syracuse,
New York; KRMG(AM), Tulsa, Oklahoma; KWEN(FM), Tulsa, Oklahoma; KJSR(FM),
Tulsa, Oklahoma; KKYX(AM), San Antonio, Texas; KCYY(FM), San Antonio, Texas;
and KCJZ(FM), Terrell Hills, Texas (each a "Station" and collectively, the
"Stations"); and
WHEREAS, the respective Boards of Directors of Parent, Sub and the
Company have approved the merger of Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions
hereof, at the Effective Time (as defined in SECTION 1.3), Sub shall be merged
with and into the Company and the separate existence of Sub shall thereupon
cease, and the Company shall continue as the surviving corporation in the
Merger (the "Surviving Corporation") under the laws of the State of Delaware
under the name set forth in the Certificate of Incorporation of the Surviving
Corporation.
7
1.2 Closing. Unless this Merger Agreement shall have been
terminated and the transactions herein contemplated shall have been abandoned
pursuant to SECTION 10.1, and subject to the satisfaction or waiver of the
conditions set forth in Article IX, the closing of the Merger (the "Closing")
will take place as promptly as practicable (and in any event within two
Business Days) after satisfaction or waiver of the conditions set forth in
SECTIONS 9.1(A) and (C) and 9.3(P), at the offices of Dow, Lohnes & Albertson,
PLLC, 1200 New Hampshire Avenue, N.W., Suite 800, Washington, D.C. 20036,
unless another date, time or place is agreed to in writing by the parties
hereto (the "Closing Date").
1.3 Effective Time of the Merger. The Merger shall become
effective upon the filing of a Certificate of Merger (the "Certificate of
Merger") with the Secretary of State of Delaware in accordance with the
provisions of the Delaware General Corporation Law (the "DGCL"), or at such
other time as Sub and the Company shall agree should be specified in the
Certificate of Merger, which filing shall be made as soon as practicable on the
Closing Date. When used in this Merger Agreement, the term "Effective Time"
shall mean the time at which the Certificate of Merger is accepted for filing
by the Secretary of State of Delaware or such time as otherwise specified in
the Certificate of Merger.
1.4 Effect of the Merger. The Merger shall, from and after the
Effective Time, have all the effects provided by the DGCL. If at any time after
the Effective Time the Surviving Corporation shall consider or be advised that
any further deeds, conveyances, assignments or assurances in law or any other
acts are necessary, desirable or proper to vest, perfect or confirm, of record
or otherwise, in the Surviving Corporation, the title to any property or rights
of Sub or the Company (the "Constituent Corporations") to be vested in the
Surviving Corporation, by reason of, or as a result of, the Merger, or
otherwise to carry out the purposes of this Merger Agreement, the Constituent
Corporations agree that the Surviving Corporation and its proper officers and
directors shall execute and deliver all such deeds, conveyances, assignments
and assurances in law and do all things necessary, desirable or proper to vest,
perfect or confirm title to such property or rights in the Surviving
Corporation and otherwise to carry out the purposes of this Merger Agreement,
and that the proper officers and directors of the Surviving Corporation are
fully authorized in the name of each of the Constituent Corporations or
otherwise to take any and all such action.
ARTICLE II
THE SURVIVING CORPORATION
2.1 Certificate of Incorporation. The Certificate of
Incorporation of the Surviving Corporation after the Effective Time shall be in
the form set forth in EXHIBIT A hereto, until thereafter changed or amended as
provided therein or by applicable law.
- 2 -
8
2.2 By-laws. The By-laws of the 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.
2.3 Board of Directors; Officers. The directors of Sub
immediately prior to the Effective Time and Richard A. Ferguson shall be the
directors of the Surviving Corporation, and the officers of Sub immediately
prior to the Effective Time and Richard A. Ferguson and James T. Morley shall
be the officers of the Surviving Corporation, in each case until the earlier of
their respective resignations or the time that their respective successors are
duly elected or appointed and qualified.
ARTICLE III
MERGER CONSIDERATION AND REDEMPTION OF SHARES
3.1 Merger Consideration. The total consideration for the
capital stock of the Company shall be One Hundred and Sixty-Five Million
Dollars ($165,000,000) (the "Merger Consideration") as adjusted pursuant to the
provisions of SECTIONS 3.3 and 3.8 hereof, and shall be paid in cash at Closing
in accordance with the procedures set forth in SECTION 3.5.
3.2 Redemption of Shares. As of the Effective Time, by virtue
of the Merger:
(a) Each issued and outstanding share of Class A
Common Stock, $.01 par value, of the Company ("Class A Common Stock"), other
than any Dissenting Shares (as defined in SECTION 3.3), shall be redeemed in
exchange for cash in the amount per share set forth on SCHEDULE 3.2 (such
amount of cash being referred to herein as the "Class A Common Merger
Consideration").
(b) Each issued and outstanding share of the Class B
Common Stock, $.01 par value, of the Company ("Class B Common Stock"), other
than any Dissenting Shares, shall be redeemed in exchange for cash in the
amount per share set forth on SCHEDULE 3.2 (the "Class B Common Merger
Consideration").
(c) Each issued and outstanding share of 9%
Convertible Preferred Stock, $.05 par value, of the Company ("Convertible
Preferred Stock") shall be redeemed in exchange for cash in the amount per
share set forth on SCHEDULE 3.2 (the "Convertible Preferred Merger
Consideration").
(d) Each issued and outstanding share of the $166.67
Redeemable Preferred Stock, par value $.05, of the Company ("Redeemable
Preferred Stock") shall be redeemed by the Company in accordance with the
requirements of the Certificate of Incorporation of the Company.
(e) All shares of Class A Common Stock, Class B Common
Stock and all shares of Preferred Stock, par value $.05, of the Company
("Preferred Stock") unissued or which are held in
- 3 -
9
treasury by the Company shall be canceled and retired and shall cease to exist,
and no consideration shall be delivered in exchange therefor.
(f) Set forth on EXHIBIT B is a true and complete list
of the Selling Stockholders and the holders of any Stock Options, as defined
below, and, for each such Selling Stockholder and Stock Option holder, the
number of shares of such Stock or such Options held.
3.3 Adjustment to Merger Consideration as of Closing Date.
(a) Working Capital Adjustment. The Merger
Consideration shall be (i) increased by the amount by which the Working Capital
as of the Closing Date (as defined below) of the Company exceeds the Target
Working Capital (as defined below); or (ii) decreased by the amount by which
the Working Capital as of the Closing Date is less than the Target Working
Capital. "Working Capital" as of any date shall mean on a consolidated basis,
current assets less current liabilities determined in accordance with generally
accepted accounting principles ("GAAP") consistently applied. "Target Working
Capital" shall mean Six Million Dollars ($6,000,000). Current assets shall
include cash, accounts receivable and prepaid expenses, and other current
assets consistently reported in accordance with past practices, excluding
deferred expenses incurred under trade and barter agreements. Current
liabilities shall include accounts payable, accrued expenses and, until
resolved at which time the Working Capital computation shall reflect the amount
of such resolution, a reserve of Two Hundred Thousand Dollars ($200,000)
representing the Company's best estimate of the contingent tax liability of the
Company to the Commonwealth of Massachusetts for calendar years 1987 through
1989, excluding deferred revenue under trade and barter agreements, accrued
interest payable, the current portion of the Company's long-term indebtedness
and excess income tax reserves.
(b) Indebtedness Adjustment. The Merger Consideration
shall be (i) decreased by the amount by which the aggregate amount of the
Company's outstanding long-term indebtedness for money borrowed plus interest
accrued thereon determined in accordance with GAAP (the "Indebtedness") as of
the Closing Date exceeds the Target Debt Amount; or (ii) increased by the
amount by which the Indebtedness of the Company as of the Closing Date is less
than the Target Debt Amount. The "Target Debt Amount" shall mean the amount of
Eighty-Five Million Dollars ($85,000,000). Notwithstanding the foregoing, for
purposes of this SECTION 3.3 and SECTION 3.8 only, the Indebtedness shall not
include any amounts owing to AmSouth Bank of Alabama pursuant to that certain
Loan Agreement dated as of February 22, 1996 between NewCity Communications of
Alabama, Inc. and AmSouth Bank of Alabama (the "Birmingham Loan Agreement").
- 4 -
10
(c) The Merger Consideration, as adjusted pursuant to
paragraphs (a) and (b) shall be the "Adjusted Merger Consideration." To the
extent that the Adjusted Merger Consideration exceeds or is less than the
Merger Consideration taking into account the adjustments described in
paragraphs (a) and (b) of this SECTION 3.3, the payment per share described in
SECTION 3.2(A), (B) and (C) shall be adjusted accordingly.
(d) Adjustment Procedures.
(i) Not later than five (5) Business Days
before the Closing Date, the Company shall prepare and deliver to Parent a
closing statement of the Company (the "Estimated Closing Statement"), in the
form attached as EXHIBIT C, which shall set forth (A) the Company's best
estimate of the Working Capital of the Company as of the Closing Date
(including without limitation an estimate of those adjustments set forth in
SECTION 3.8(B)(5), (6) AND (7)), and (B) the Company's best estimate of the
Indebtedness as of the Closing Date. Subject to the provisions of this SECTION
3.3(D), the Estimated Closing Statement shall be prepared in accordance with
GAAP and shall fairly present the Company's best estimate of the current assets
and current liabilities (as described in SECTION 3.3(A)) of the Company as of
the Closing Date. Accounts receivable shall be valued consistent with the
Company's past practices.
(ii) Parent may object to such Estimated Closing
Statement by written notice provided to the Company within three Business Days
after receipt thereof. In the event of a dispute between the Company and
Parent as to any matter set forth in this SECTION 3.3(D), as of the Closing,
any amounts in dispute in respect of the Estimated Closing Statement shall be
deposited in the Adjustment Escrow Fund (as defined below) in addition to the
amount required to be deposited in such Fund under SECTION 3.9(B), to be held
by the Closing Escrow Agent until the resolution of such dispute in accordance
with SECTION 3.8.
3.4 Dissenting Shares. Notwithstanding anything in this
Agreement to the contrary, any issued and outstanding share of Class A Common
Stock, Class B Common Stock, or Convertible Preferred Stock held by a Selling
Stockholder who objects to the Merger and complies with all of the provisions
of the DGCL concerning the right of holders of Class A Common Stock, Class B
Common Stock and Convertible Preferred Stock to dissent from the Merger and
require appraisal of his shares of Class A Common Stock, Class B Common Stock
and Convertible Preferred Stock ("Dissenting Shareholder") shall not be
redeemed as described in SECTION 3.2, but instead shall become the right to
receive such consideration as may be determined to be due to such Dissenting
Shareholder pursuant to the DGCL; provided, however, that each share of Class A
Common Stock, Class B Common Stock, and Convertible Preferred Stock issued and
outstanding immediately prior to the Effective Time of the Merger and held by a
Dissenting Shareholder ("Dissenting Shares") who shall, after the
- 5 -
11
Effective Time of the Merger, withdraw his demand for appraisal or lose his
right of appraisal, in either case pursuant to the DGCL, shall be deemed to be
redeemed as of the Effective Time of the Merger in exchange for the Class A
Common Merger Consideration, the Class B Common Merger Consideration, or the
Convertible Preferred Merger Consideration as the case may be. The Company
shall give Parent (i) prompt notice of any written demands for appraisal of
shares of Class A Common Stock, Class B Common Stock, or Convertible Preferred
Stock received by the Company, and (ii) the opportunity to direct all
negotiations and proceedings with respect to any such demands. The Company
shall not, without the prior written consent of Parent, voluntarily make any
payment with respect to, or settle, or offer to settle or otherwise negotiate,
any such demands.
3.5 Payment.
(a) Pursuant to an agreement in form and substance
reasonably acceptable to the Company to be entered into prior to the Effective
Time between Parent and The Bank of New York (the "Disbursing Agent"), one day
prior to the Effective Time, Parent or Sub shall make available to the
Disbursing Agent the aggregate amount in cash of the Adjusted Merger
Consideration. Immediately after Parent or Sub makes available to the
Disbursing Agent the cash referred to in the preceding sentence, the Sub and
the Company shall file the Certificate of Merger with the Secretary of State of
the State of Delaware in accordance with the provisions of the DGCL.
(b) Seven days prior to the Closing Date, the Company
shall cause the Disbursing Agent to send a notice and a letter of transmittal
to each holder of certificates representing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock advising such holder of the
anticipated Closing Date of the Merger and the procedure for surrendering to
the Disbursing Agent such certificates for redemption and that delivery shall
be effected, and risk of loss and title to the shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock shall pass, only upon
proper delivery to the Disbursing Agent of the certificates for the shares of
Class A Common Stock, Class B Common Stock or Convertible Preferred Stock and a
duly executed letter of transmittal and any other required documents of
transfer. Each holder of certificates theretofore evidencing shares of Class A
Common Stock, Class B Common Stock, or Convertible Preferred Stock upon
surrender thereof to the Disbursing Agent together with such letter of
transmittal (duly executed) and any other required documents of transfer, shall
be entitled to receive as of the Effective Time in exchange therefor the
amounts payable with respect to such stock pursuant to SECTION 3.2 hereof.
Upon such surrender, the Disbursing Agent shall promptly pay such amounts (less
any amount required to be withheld under applicable law) in accordance with the
instructions set forth in the related letter of transmittal, and the
certificates so surrendered shall promptly be canceled. After the Effective
Time and until
- 6 -
12
surrendered, certificates formerly evidencing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock (other than Dissenting
Shares) shall be deemed for all purposes to evidence only the right to receive
payment pursuant to SECTION 3.2 hereof or, in the case of Dissenting Shares,
the fair value of such Dissenting Shares. No interest shall accrue or be paid
on any cash payable upon the surrender of certificates which immediately prior
to the Effective Time represented outstanding shares of Class A Common Stock,
Class B Common Stock, or Convertible Preferred Stock (other than Dissenting
Shares in accordance with the DGCL).
(c) If the amount payable to a Selling Stockholder
pursuant to SECTION 3.2 hereof is to be delivered to a Person other than the
Person in whose name the certificates surrendered in exchange therefor are
registered, it shall be a condition to the payment of such amount that the
certificates so surrendered shall be properly endorsed or accompanied by
appropriate stock powers and otherwise in proper form for transfer, that such
transfer otherwise be proper and that the Person requesting such transfer pay
to the Disbursing Agent any transfer or other taxes payable by reason of the
foregoing or establish to the satisfaction of the Disbursing Agent that such
taxes have been paid or are not required to be paid.
(d) Unless required otherwise by applicable law, any
portion of the amount payable under SECTION 3.2 and SECTION 3.8 hereof which
remains undistributed to holders of shares of Class A Common Stock, Class B
Common Stock or Convertible Preferred Stock six (6) months after the Effective
Time shall be delivered by the Disbursing Agent to the party who provided such
funds to the Disbursing Agent and any holders of such stock who have not
theretofore complied with the provisions of this Article III shall thereafter
look only to Parent for payment of any amounts to which they are entitled
pursuant to this Article III. Neither Parent nor the Disbursing Agent shall be
liable to any holder of shares of Class A Common Stock, Class B Common Stock or
Convertible Preferred Stock for any cash held by Parent or the Disbursing Agent
for payment pursuant to this Article III delivered to a public official
pursuant to any applicable abandoned property, escheat or similar law.
3.6 No Further Rights. From and after the Effective Time,
holders of certificates theretofore evidencing shares of Class A Common Stock,
Class B Common Stock or Convertible Preferred Stock shall cease to have any
rights as stockholders of the Company, except as provided herein or by law.
3.7 Closing of the Company's Transfer Books. At the Effective
Time, the stock transfer books of the Company shall be closed and no transfer
of any shares of Class A Common Stock, Class B Common Stock or Convertible
Preferred Stock shall be made thereafter. If after the Effective Time,
certificates for shares of the Class A Common Stock, Class B Common Stock or
Convertible Preferred Stock are presented to Parent or the Surviving
- 7 -
13
Corporation, they shall be canceled and exchanged for Class A Common Merger
Consideration, Class B Common Merger Consideration or Convertible Preferred
Merger Consideration, as the case may be, subject to applicable law in the case
of Dissenting Shares.
3.8 Final Adjustment of Merger Consideration. The Adjusted
Merger Consideration shall be subject to further adjustment after the Closing
as provided in this SECTION 3.8:
(a) No more than ninety (90) days after the Closing
Date, Parent shall prepare and deliver to Stockholders' Agent a final closing
statement of the Company, prepared on a basis consistent with the accounting
standards used for the preparation of the Estimated Closing Statement, and in
the form of the Estimated Closing Statement (the "Final Closing Statement")
which shall, based upon the books and records of the Company, set forth (i) the
actual Working Capital of the Company as of the Closing Date (the "Final
Working Capital"), and (ii) the actual Indebtedness of the Company as of the
Closing Date (the "Final Debt Amount").
(b) The Adjusted Merger Consideration shall be
adjusted dollar for dollar as follows:
(1) increased if and to the extent the
Indebtedness as estimated in accordance with SECTIONS 3.3(B) and 3.3(D) exceeds
the Final Debt Amount; and
(2) decreased if and to the extent the Final
Debt Amount exceeds the Indebtedness as estimated in accordance with SECTIONS
3.3(B) and 3.3(D); and
(3) increased if and to the extent the Final
Working Capital exceeds the Working Capital estimated in accordance with
SECTIONS 3.3(A) and 3.3(D); and
(4) decreased if and to the extent the Working
Capital estimated in accordance with SECTIONS 3.3(A) and 3.3(D) exceeds the
Final Working Capital; and
(5) decreased by the sum of the adjustments
set forth in SECTIONS 3.8(E), 8.7 AND 10.3;
(6) increased by the amount owed by Parent to
the Company pursuant to SECTION 8.17(B); and
(7) increased or decreased, as appropriate, by
the amount set forth in SECTION 8.3.
(c) In the event that the Adjusted Merger
Consideration shall have been increased, Parent shall pay the amount of such
adjustment at the direction of the Stockholders' Agent by wire transfer of same
day funds within two Business Days of the final determination of the Final
Closing Statement as described in SECTION 3.8(E).
- 8 -
14
(d) In the event that the Adjusted Merger
Consideration shall have been decreased, Parent shall deliver written notice to
the Closing Escrow Agent (as defined below) and the Stockholders' Agent,
specifying the amount of such decrease of the Adjusted Merger Consideration,
and the Closing Escrow Agent shall, within two Business Days of its receipt of
such notice and in accordance with the terms of the Closing Escrow Agreement,
pay such amount to Parent out of the Adjustment Escrow Fund (as defined in the
Closing Escrow Agreement) by wire transfer in same day funds. In the event
that the Adjustment Escrow Fund is insufficient to cover the amount of such
decrease, then the Closing Escrow Agent shall distribute the entire Adjustment
Escrow Fund to Parent as provided above and the Closing Escrow Agent shall, in
accordance with the terms of the Closing Escrow Agreement, pay any shortfall to
Parent out of the Indemnity Escrow Fund (as defined in the Closing Escrow
Agreement) by wire transfer in same day funds. In the event that the amount of
funds in the Adjustment Escrow Fund exceeds the amount of the decrease of the
Adjusted Merger Consideration, the Closing Escrow Agent shall, after paying the
amount of such decrease to Parent, pay the remaining amount of funds in the
Adjustment Escrow Fund to the Selling Stockholders in accordance with the
Closing Escrow Agreement.
(e) The Stockholders' Agent may object to the Final
Closing Statement by written notice provided to Parent within four Business
Days after receipt thereof. In the event of a dispute between the Selling
Stockholders and Parent, as to any matter set forth in SECTION 3.8(A), the
Selling Stockholders and Parent shall use all reasonable efforts to resolve any
such dispute, and shall provide the other party with access to and the right to
copy any books and records in its possession relating to determination of the
final adjustments. If a final resolution is not obtained within thirty (30)
days after the Final Closing Statement is delivered to the Stockholders' Agent,
any remaining dispute shall be resolved by a nationally recognized firm of
independent public accountants, as shall be mutually agreed upon by the
Stockholders' Agent and Parent. Such accounting firm may use such auditing
procedures as it may deem appropriate and the decision of such accounting firm
shall be binding and conclusive upon the parties. The fees and expenses of
such accounting firm shall be borne one-half by the Selling Stockholders (by a
decrease to the Adjusted Merger Consideration in accordance with SECTION
3.8(B)) and one-half by Parent.
(f) Any payments required to be made pursuant to
SECTIONS 3.8(C) or (D) shall bear interest from the Closing Date through the
date of payment at the rate publicly announced by The Bank of New York or any
successor thereto from time to time as its base rate.
3.9 Escrow Agreement.
(a) On the Closing Date, the Stockholders' Agent,
Parent and The Bank of New York as escrow agent (the "Closing
- 9 -
15
Escrow Agent") shall enter into a Closing Escrow Agreement substantially in the
form of EXHIBIT D hereto.
(b) In accordance with the terms of the Closing Escrow
Agreement, and if the Closing occurs on the last day of a calendar month, at
the Closing Parent shall deposit as a credit to the Merger Consideration an
amount equal to Two Hundred Fifty Thousand Dollars ($250,000). If the Closing
occurs on any other day of a calendar month, at the Closing Parent shall
deposit with the Closing Escrow Agent as a credit to the Merger Consideration
an amount equal to Five Hundred Thousand Dollars ($500,000). In either case,
the amount of $250,000 or $500,000 is referred to herein as the "Adjustment
Escrow Amount."
(c) In accordance with the terms of the Closing Escrow
Agreement, at the Closing, Parent shall deposit with the Closing Escrow Agent
an amount equal to Four Million Dollars ($4,000,000) (the "Indemnity Escrow
Amount" and together with the "Adjustment Escrow Amount" the "Closing Escrow
Amount").
(d) The Closing Escrow Agent shall maintain the
Adjustment Escrow Amount and the Indemnity Escrow Amount in two separate
accounts to be managed and paid out by the Closing Escrow Agent in accordance
with the terms of the Closing Escrow Agreement.
3.10 Conversion of the Shares of Sub. On the Closing Date, each
share of the Common Stock of Sub held by Parent shall be converted into and
represent 100 shares of the Common Stock of the Surviving Corporation.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Parent and Sub that:
4.1 Organization and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and each Subsidiary of the Company is a
corporation duly organized, validly existing and in good standing under the
laws of the States of Delaware, Connecticut or Oklahoma. The Company and each
of its Subsidiaries has the requisite corporate power and authority to carry on
its business as it is now being conducted and is duly qualified or licensed to
do business, and is in good standing, in each jurisdiction where the character
of its properties owned or held under lease or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect. SCHEDULE 4.1 includes a list of the
Company's Subsidiaries. At the Closing, the Company shall deliver to Parent
and Sub a complete and correct copy of the Certificates of Incorporation and
By-laws or comparable organizational documents, each as amended to the Closing
Date, of the Company and each of its Subsidiaries.
- 10 -
16
4.2 Capitalization.
(a) The authorized capital stock of the Company
consists of 500,000 shares of Class A Common Stock, 700,000 shares of Class B
Common Stock, 8,000 shares of Convertible Preferred Stock, 6,000 shares of
Redeemable Preferred Stock and 30,000 shares of Preferred Stock. As of the
date hereof, 262,000 shares of Class A Common Stock, 166,817 shares of Class B
Common Stock, 8,000 shares of Convertible Preferred Stock and 6,000 shares of
Redeemable Preferred Stock are validly issued and outstanding, fully paid and
nonassessable. As of the date hereof, there are no bonds, debentures, notes or
other indebtedness issued or outstanding having general voting rights under
ordinary circumstances. As of the date hereof, except as disclosed on SCHEDULE
4.2, and except for (i) stock options to acquire 3,534 shares of Class B Common
Stock (the "Stock Options"), (ii) the conversion rights of holders of the
Convertible Preferred Stock, and (iii) as contemplated by this Merger
Agreement, there are no options, warrants, calls or other rights, agreements or
commitments presently outstanding obligating the Company to issue, deliver or
sell shares of its capital stock, or obligating the Company to grant, extend or
enter into any such option, warrant, call or other such right, agreement or
commitment.
(b) Except as disclosed on SCHEDULE 4.2, all the
outstanding shares of capital stock of each Subsidiary of the Company are
validly issued, fully paid and nonassessable and owned by the Company or by a
wholly-owned Subsidiary of the Company, free and clear of any lien, charge,
security interest, pledge, or encumbrance of any kind or nature (any of the
foregoing being a "Lien"). There are no existing options, warrants, calls or
other rights, agreements or commitments of any character relating to the sale,
issuance or voting of any shares of the issued or unissued capital stock of any
of the Subsidiaries of the Company which have been issued, granted or entered
into by the Company or any of its Subsidiaries.
(c) Except for the capital stock of its Subsidiaries
and except for the ownership interests set forth on SCHEDULE 4.2, the Company
does not own, directly or indirectly, any capital stock or other ownership
interest in any corporation, partnership, joint venture or other entity.
4.3 Authority Relative to This Merger Agreement. The Company
has the necessary corporate power and authority to execute and deliver this
Merger Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Merger Agreement and the consummation of the
transactions contemplated hereby by the Company have been duly and validly
authorized and approved by the Company's Board of Directors and except for the
approval of the holders of the Redeemable Preferred Stock, the Convertible
Preferred Stock, the Class A Common Stock and the Class B Common Stock, no
other corporate or stockholder proceedings on the part of the Company are
necessary to authorize or approve this Merger Agreement or to consummate
- 11 -
17
the transactions contemplated hereby. This Merger Agreement has been duly
executed and delivered by the Company, and assuming its due authorization,
execution and delivery by Parent and Sub, constitutes the valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms except as such enforceability may be limited by general principles of
equity or principles applicable to creditors' rights generally. The Company
has delivered to Parent and Sub a certified copy of the minutes of the meetings
of the Board of Directors of the Company at which the execution and delivery of
this Merger Agreement and the transactions contemplated hereby were authorized
and approved.
4.4 No Conflicts, Required Filings and Consents.
(a) Except as disclosed on SCHEDULE 4.4, none of the
execution and delivery of this Merger Agreement by the Company, the
consummation by the Company of the transactions contemplated hereby, or
compliance by the Company with any of the provisions hereof, will (i) conflict
with or violate the Certificate of Incorporation or By-laws of the Company or
the comparable organizational documents of any of the Company's Subsidiaries,
(ii) subject to receipt or filing of the required Consents referred to in
SECTION 4.4(B), result in a violation of any statute, ordinance, rule,
regulation, order, judgment or decree applicable to the Company or any of its
Subsidiaries, or by which any of them or any of their respective properties or
assets may be bound or affected, or (iii) result in a violation or breach of or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of any
Lien on any of the property or assets of the Company or any of the Company's
Subsidiaries, any of the foregoing referred to in clause (ii) or this clause
(iii) being a "Violation" pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their respective
properties or assets is bound or affected that involves a payment by the
Company or any of its Subsidiaries of Fifty Thousand Dollars ($50,000) or more
on an annual basis, except in the case of the foregoing clauses (ii) and (iii)
for any such Violation which would not have a Material Adverse Effect.
(b) None of the execution and delivery of this Merger
Agreement by the Company, the consummation by the Company of the transactions
contemplated hereby or compliance by the Company with any of the provisions
hereof will require any consent, waiver, license, approval, authorization,
order or permit of, or registration or filing with, or notification to (any of
the foregoing being a "Consent"), any government or subdivision thereof,
domestic, foreign, multinational, or any administrative, governmental, or
regulatory authority, agency, commission, court, tribunal or body, domestic,
foreign or
- 12 -
18
multinational (a "Governmental Entity"), except for (i) the filing of the
Certificate of Merger pursuant to the DGCL, (ii) compliance with the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (iii) such filings as may be required in connection with the taxes
described in SECTION 8.7, and (iv) Consents from the FCC in connection with the
transfer of control of the FCC licenses applicable to the Company's radio
broadcast operations (such licenses being referred to herein collectively as
the "FCC Licenses," and such consents, without the requirement of obtaining a
Final Order, being referred to herein collectively as the "FCC Consents"), and
(v) Consents the failure of which to obtain would not have a Material Adverse
Effect.
4.5 Reports and Financial Statements.
(a) The audited consolidated balance sheets as of
December 31, 1995 and 1994 and the related consolidated statements of
operations, stockholders' deficiency and cash flows for each of the years ended
December 31, 1995 and 1994 (including the related notes and schedules thereto)
of the Company, true and complete copies of which have previously been
delivered to Parent (the "Audited Financial Statements"), present fairly, in
all material respects, the consolidated financial position, and the
consolidated results of operations and cash flows of the Company and its
consolidated Subsidiaries as of the dates or for the periods presented therein
in conformity with GAAP applied on a consistent basis during the periods
involved except as otherwise noted therein, including in the related notes.
(b) The unaudited consolidating and consolidated
balance sheets and the related consolidating and consolidated statements of
operations and consolidated cash flows of the Company for the period ended May
31, 1996 (the "Interim Financial Statements"), true and complete copies of
which have previously been delivered to Parent, have been prepared in
accordance with GAAP consistently applied as to both the consolidated and
separate operating entities for Interim Financial Statements and on a basis
consistent with the Audited Financial Statements except for year-end
adjustments for interest, general, administrative and overhead expenses of the
Company and the allocation thereof among its Subsidiaries. The Interim
Financial Statements present fairly, in condensed or summary form in all
material respects, the consolidated financial position, results of operations
and cash flows of the Company and its consolidated Subsidiaries as of the dates
and for the periods presented therein; subject, however, to the absence of
footnotes which otherwise would be required under GAAP. All appropriate
adjustments are reflected in the Interim Financial Statements.
(c) Except as disclosed in the Company's Audited
Financial Statements or in the Interim Financial Statements or as otherwise
disclosed on SCHEDULE 4.5 as of the date hereof, neither the Company nor any of
its Subsidiaries has any liabilities or any obligations of any nature whether
accrued,
- 13 -
19
contingent or otherwise, that would be required by GAAP to be reflected on a
consolidated balance sheet of the Company and its Subsidiaries (including the
notes thereto), except for liabilities or obligations incurred in the ordinary
course of business since December 31, 1995. The accounting methods, practices
and procedures employed at each of the Subsidiaries of the Company in the
preparation of the Audited Financial Statements and the Interim Financial
Statements have been applied on a basis consistent with the Company's past
practices.
4.6 Litigation. Except as disclosed on SCHEDULE 4.6, there is
no suit, action or proceeding pending or, to the knowledge of the Company,
threatened, against or affecting the Company or any of its Subsidiaries that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, nor is there any judgment, decree, injunction or order
of any Governmental Entity or arbitrator outstanding against the Company or any
of its Subsidiaries, having, or which could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
4.7 Absence of Certain Changes or Events. Except as disclosed
on SCHEDULE 4.7, since December 31, 1995, the Company has conducted its
business only in the ordinary course, and there has not been
(i) any change that could reasonably be expected to have a
Material Adverse Effect, as defined below, other than changes relating to or
arising from general economic, market or financial conditions or generally
affecting the industries in which the Company operates,
(ii) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash, stock or property) with
respect to any of the Company's capital stock, or, except in connection with
the Stock Options, any redemption, purchase or other acquisition of its capital
stock,
(iii) any split, combination or reclassification of any of
the Company's capital stock or, except with respect to the Stock Options or
with respect to the conversion of the Convertible Preferred Stock, any
issuance, or the authorization of any other securities in respect of, in lieu
of or in substitution for shares of the Company's capital stock,
(iv) except as previously disclosed to Parent and Sub, any
granting by the Company or any of its Subsidiaries to any employee of the
Company of any increase in compensation, except in the ordinary course of
business or as required under employment agreements in effect as of or prior to
the date of this Merger Agreement,
(v) any granting by the Company or any of its Subsidiaries
to any such employee of any increase in severance or
- 14 -
20
termination pay, except as required under employment agreements in effect as of
or prior to the date of this Merger Agreement,
(vi) any entry by the Company or any of its Subsidiaries
into any employment, severance or termination agreement with any such employee,
except in the ordinary course of business,
(vii) any damage, destruction or loss, whether or not
covered by insurance, that could reasonably be expected to have a Material
Adverse Effect, or
(viii) any change in accounting methods, principles or
practices by the Company or any of its Subsidiaries materially affecting their
respective assets, liabilities or business, except insofar as may have been
required by a change in GAAP.
4.8 Employee Matters. SCHEDULE 4.8 lists the names and current
annual salary or hourly rates of pay of all employees of the Company and its
Subsidiaries, which list includes for each such person the amounts paid or
payable as base salary and such list identifies each Company Benefit Plan or
Compensation Arrangement, as defined below, which provides benefits to such
employees. SCHEDULE 4.8 lists each Company Benefit Plan and each Compensation
Arrangement. The Company has provided to Parent true and complete copies of
all written, and descriptions of any unwritten Company Benefit Plans and
Compensation Arrangements (or related insurance policies) and any amendments
thereto, along with copies of any employee handbooks or similar documents
describing such Company Benefit Plans and Compensation Arrangements and copies
of any employment agreements. Except as set forth on SCHEDULE 4.8, neither the
Company nor any Subsidiary is a party to any written or oral contract of
employment with any employee, other than oral employment agreements terminable
at will without penalty. The Company and its Subsidiaries are not subject to
or bound by any labor agreement or collective bargaining agreement (other than
employment contracts disclosed on SCHEDULE 4.8). There is no labor dispute,
grievance, controversy, strike or request for union representation pending or
threatened against the Company or its Subsidiaries relating to or materially
affecting the business or operations of the Company or any of its Subsidiaries
and, to the knowledge of the Company or any of its Subsidiaries, there has been
no occurrence of any events which would give rise to any material labor
dispute, controversy, strike or request for representation. Except as
disclosed on SCHEDULE 4.8, neither the Company nor any Subsidiary is a party to
or has in effect any Company Benefit Plan or Compensation Arrangement, and
there are no Company Benefit Plans or Compensation Arrangements which shall
become effective after the date of this Merger Agreement.
For purposes of this Merger Agreement:
(i) the term "Company Benefit Plan" shall mean
any plan, program or arrangement, whether or not written, that is
- 15 -
21
or was an "employee benefit plan" as such term is defined in Section 3 (3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and
(a) which was or is established or maintained by the Company or any ERISA
Affiliate; (b) to which either the Company or any ERISA Affiliate contributed
or were obligated to contribute or to fund or provide benefits; or (c) which
provides or promises benefits to any person who performs or who has performed
services for the Company or any ERISA Affiliate and because of those services
is or has been (A) a participant therein or (B) entitled to benefits
thereunder;
(ii) the term "Compensation Arrangement" shall
mean any plan or compensation arrangement other than a Company Benefit Plan,
whether written or unwritten, which provides to employees, former employees,
officers, directors or shareholders of the Company or any ERISA Affiliate any
compensation or other benefits, whether deferred or not, in excess of base
salary or wages (excluding overtime pay), including, but not limited to, any
bonus or incentive plan, stock rights plan, employee stock ownership plan,
deferred compensation arrangement, life insurance, stock purchase plan,
severance pay plan and any other perquisites and employee fringe benefit plan;
(iii) the term "ERISA Affiliate" shall mean any
corporation, partnership, sole proprietorship or other entity related to the
Company or any Subsidiary within the meaning of Sections 414(b), (c), (m) or
(o) of the Code.
4.9 ERISA.
(a) All Company Benefit Plans have been administered
without material exception in accordance with their terms and with the
applicable provisions of ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). Each of the Company Benefit Plans which is intended to
meet the requirements of Section 401(a) of the Code, and each amendment
thereto, is the subject of a favorable determination letter, and no plan
amendment that is not the subject of a favorable determination letter would
adversely affect the validity of any Company Benefit Plan's letter. No Company
Benefit Plan is a "multiemployer plan" within the meaning of Section 3(37) of
ERISA. No Company Benefit Plan is subject to Title IV of ERISA or Section 412
of the Code. Neither the Company nor any of its Subsidiaries has engaged in
any non-exempt "prohibited transactions," as such term is defined in Section
4975 of the Code or Section 406 of ERISA, involving the Company Benefit Plans
which would subject the Company or its Subsidiaries to any material penalty or
tax imposed under Section 502(i) of ERISA or Section 4975 of the Code. Neither
the Company nor any of its Subsidiaries has made a complete or partial
withdrawal, within the meaning of Section 4201 of ERISA, from any multiemployer
plan which has resulted in, or is reasonably expected to result in, any
withdrawal liability to the Company or any of its Subsidiaries. Neither the
Company nor any of its Subsidiaries has engaged in any transaction described in
Section 4069 of ERISA within the last five years. Except as disclosed on
- 16 -
22
SCHEDULE 4.9, neither the execution and delivery of this Merger Agreement nor
the consummation of the transactions contemplated hereby will (i) result in any
material payment (including, without limitation, severance, unemployment
compensation or golden parachute) becoming due to any director or employee of
the Company, (ii) materially increase any benefits otherwise payable under any
Company Benefit Plan or Compensation Agreement or (iii) result in the
acceleration of the time of payment or vesting of any such benefits to any
material extent. No Company Benefit Plan is a multiple employer welfare
arrangement as defined in ERISA Section 3(40).
(b) Except as disclosed on SCHEDULE 4.9, the Company
and its Subsidiaries, as applicable, have: (i) filed or caused to be filed all
returns and reports on the Company Benefit Plans that they are required to
file; and (ii) paid or made adequate provision for all fees, interest,
penalties, assessments or deficiencies that have become due pursuant to those
returns or reports or pursuant to any assessment or adjustment that has been
made relating to those returns or reports. All other material fees, interest,
penalties and assessments that are payable by or for the Company or any of its
Subsidiaries have been timely reported, fully paid and discharged. There are
no material unpaid fees, penalties, interest or assessments due from the
Company or any of its Subsidiaries with respect to any Company Benefit Plan.
(c) The Company and its Subsidiaries are not aware of
the existence of any governmental audit or examination of any Company Benefit
Plan or Compensation Arrangement or of any facts which would lead the Company
and its Subsidiaries to believe that any such audit or examination is pending
or threatened. There exists no action, suit or claim (other than routine
claims for benefits) with respect to any Company Benefit Plan or Compensation
Arrangement pending or, to the knowledge of the Company and its Subsidiaries,
threatened against any of such plans or arrangements, and the Company and its
Subsidiaries do not have knowledge of any facts which could give rise to any
such action, suit or claim.
(d) Except as disclosed on SCHEDULE 4.9, neither the
Company nor any ERISA Affiliate sponsors, maintains or contributes to any
Company Benefit Plan or Compensation Arrangement that provides medical or life
insurance coverage to retirees or other former employees of the Company or any
of its Subsidiaries.
(e) SCHEDULE 4.9 contains a complete and accurate list
of all qualified beneficiaries, as defined under Section 4980B of the Code, who
currently are covered by the Company's or any Subsidiary's group health plan,
and the Company and each of its Subsidiaries agrees to provide to Parent, at
the Closing, an updated list of qualified beneficiaries as of the Closing Date.
- 17 -
23
(f) SCHEDULE 4.9 contains a complete and accurate list
of all qualified domestic relations orders, as defined in Section 414(p) of the
Code, which affect benefits under any Company Benefit Plan.
(g) Neither the Company nor any of its Subsidiaries is
a party to any agreement, contract, arrangement or plan that has resulted or
would result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code.
(h) Fewer than fifty full-time employees are employed
by the Company and its Subsidiaries at the Company's corporate headquarters in
the Bridgeport, Connecticut metropolitan area.
4.10 Taxes. Except as set forth in SCHEDULE 4.10:
(a) For purposes of this Agreement, "Tax" (and, with
correlative meaning, "Taxes") means all federal, state, local or foreign
income, gross receipts, windfall profits, severance, property, production,
sales, use, license, excise, franchise, capital, transfer, employment,
withholding and other taxes and assessments, together with any interest,
additions or penalties with respect thereto and any interest in respect of such
additions or penalties; and "Tax Returns" means all federal, state, local and
foreign income and franchise Tax returns and Tax reports (including any
attached schedules) and other Tax statements and other similar filings required
to be filed, including any information return, claim for refund, amended
return, extension or declaration of estimated Tax.
(b) The Company and each of its Subsidiaries have duly
and timely filed all Tax Returns required to be filed by them, either on a
separate, combined or consolidated basis, and the Company has delivered to
Parent true and complete copies of all of the Tax Returns of the Company and
its Subsidiaries.
(c) The Company and its Subsidiaries have paid or,
prior to the Effective Time will pay, all Taxes that are due and payable or
required to be withheld by them, including Taxes for which no Tax Return was
required to be filed, and all Taxes claimed to be due by any federal or state
taxing authority (except to the extent such Taxes are being contested in good
faith by appropriate proceedings and a reserve or other appropriate provision
as required in conformity with GAAP has been made in the Audited Financial
Statements). The Company and its Subsidiaries have paid or made adequate
reserve or other appropriate provision as required in accordance with GAAP in
the Audited Financial Statements of the Company for all material Taxes payable
in respect of all periods ending on or prior to December 31, 1995. Any unpaid
Taxes of the Company and its Subsidiaries relating to all periods ending on or
prior to the Closing Date and not reflected on the Audited Financial Statements
of the Company will be included or recorded as a
- 18 -
24
current liability or properly reserved against in the Estimated Closing
Statement.
(d) Neither the Company nor any of its Subsidiaries
has waived or been requested to waive any statute of limitations in respect of
Taxes.
(e) Except as disclosed on SCHEDULE 4.10, no material
issues have been raised (and are currently pending) by any taxing authority in
connection with any of the Tax Returns referred to in SECTION 4.10(B) and all
material deficiencies asserted or assessments made as a result of any
examinations by taxing authorities have been paid in full.
(f) The Company and each of its Subsidiaries have
filed their federal income tax returns as a member of an affiliated group (as
defined in Section 1504(a) of the Code) of which the Company is the common
parent (the "Company Consolidated Group"). Neither the Company nor any of its
Subsidiaries has been a member of any other affiliated group.
(g) Except as disclosed on SCHEDULE 4.10, neither the
Company nor any of its Subsidiaries has any liability for Taxes, whether
currently due or deferred, of any entity or person (i) under Treasury
Regulation Section 1.1502-6 (or any similar provision of state or local law),
(ii) as a transferee or successor, (iii) by contract, or (iv) otherwise.
(h) No consent under Section 341(f) of the Code has
ever been filed with respect to any of the Company Consolidated Group. Neither
the Company nor any of its Subsidiaries will be required to include any amount
in its income or exclude any amount from its deductions in any taxable period
ending after the Closing Date by reason of a change in method of accounting or
use of the installment method of accounting in any period ending on or prior to
the Closing Date.
(i) Neither the Company nor any of its Subsidiaries
is, and for the five years preceding the Closing Date has not been, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
(j) SCHEDULE 4.10 includes a summary setting forth:
(i) the tax basis of the assets of the Company and its Subsidiaries as of
December 31, 1995 and estimated as of December 31, 1996; (ii) the net operating
loss carryover, general business credit carryover, alternative minimum tax
carryover and capital loss carryover of the Company Consolidated Group
available for federal, state and local income tax purposes as of December 31,
1995 and estimated as of December 31, 1996; (iii) all federal, state and local
tax elections in effect for the Company Consolidated Group as of December 31,
1995 and (iv) the Company's basis including the earnings and profits (and any
adjustment required by Section 1503(e) of the Code) and excess loss
- 19 -
25
accounts, if any, in the stock of each Subsidiary as of December 31, 1995 and
estimated as of December 31, 1996.
(k) The aggregate basis of "3-year property," "5-year
property," "7-year property,", "10-year property," "15-year property," and
"nonresidential real property" (each as defined in Section 168 of the Code) of
the Company and its Subsidiaries for their taxable year ending on December 31,
1996 is estimated to be not less than the following:
3-year property $__________
5-year property $__________
7-year property $__________
10-year property $__________
15-year property $__________
Nonresidential real property $__________
(l) The aggregate net operating loss carryover under
Section 172 of the Internal Revenue Code of the Company Consolidated Group for
the taxable year ending on December 31, 1996 is estimated to be not less than
$__________.
(m) Within 60 days of the date of this Merger
Agreement, the Company shall deliver to Parent an updated SCHEDULE 4.10
including the information set forth in paragraphs (j), (k) and (l) above.
4.11 State Takeover Statutes. The Board of Directors of the
Company has approved the Merger and this Merger Agreement, and such approval is
sufficient to render inapplicable to the Merger, this Merger Agreement, and the
transactions contemplated by this Merger Agreement, the provisions of Section
203 of DGCL. To the Company's knowledge, no other state takeover statute or
similar statute or regulation, applies or purports to apply to the Merger, this
Merger Agreement, or any of the transactions contemplated by this Merger
Agreement.
4.12 Brokers. No broker or finder is entitled to any broker's
or finder's fee in connection with the transactions contemplated by this Merger
Agreement based upon arrangements made by or on behalf of the Company.
4.13 Environmental Matters. Except as set forth on SCHEDULE
(a) To the best knowledge of the Company and its
Subsidiaries, the Company and each of its Subsidiaries have materially complied
and are in material compliance with, and the Real Property is in material
compliance with, all rules and regulations of the FCC, the Environmental
Protection Agency and any other federal, state or local government authority
pertaining to human exposure to RF radiation and all applicable rules and
regulations of federal, state and local laws, including statutes, regulations,
ordinances, codes, rules, as amended, relating to the discharge of air
pollutants, water pollutants or process
- 20 -
26
waste water or otherwise relating to the environment or Hazardous Materials or
toxic substances including, but not limited to, the Federal Solid Waste
Disposal Act, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservation and Recovery Act of 1976, the Federal
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
regulations of the Environmental Protection Agency, the Toxic Substance Control
Act, regulations of the Nuclear Regulatory Agency, and regulations of any state
department of natural resources or state environmental protection agency now in
effect (the "Environmental Laws").
(b) None of the Company or its Subsidiaries is a party
to any material litigation or administrative proceeding nor, to the knowledge
of the Company and its Subsidiaries, is any material litigation or
administrative proceeding threatened against the Company or any of its
Subsidiaries, which in either case: (i) asserts or alleges that the Company or
any of its Subsidiaries has violated any Environmental Laws; (ii) asserts or
alleges that the Company or any of its Subsidiaries is required to clean up,
remove or take remedial or other responsive action due to the disposal,
depositing, discharge, leaking or other release of any wastes, substances, or
materials (whether solids, liquids or gases) that under Environmental Laws are
deemed hazardous, toxic, pollutants, or contaminants, including, without
limitation, substances defined as "hazardous wastes," "hazardous substances,"
"toxic substances," "radioactive materials," or other similar designations in
any Environmental Laws, including, but not limited to polychlorinated biphenyls
(PCBs), asbestos, lead-based paints, infectious wastes, radioactive materials
and wastes and petroleum and petroleum products (including, without limitation,
crude oil or any fraction thereof) ("Hazardous Materials"); or (iii) asserts or
alleges that the Company or any of its Subsidiaries is required to pay all or a
portion of the cost of any past, present or future cleanup, removal or remedial
or other responsive action which arises out of or is related to the disposal,
depositing, discharge, leaking or other release of any Hazardous Materials by
the Company or any of its Subsidiaries.
(c) Except as set forth in the following sentence, to
the best knowledge of the Company and its Subsidiaries, with respect to the
time before the Company and its Subsidiaries owned or occupied any Real
Property, no Person has caused or permitted Hazardous Materials to be stored,
deposited, treated, recycled or disposed of on, under or at any Real Property
owned, leased, used or occupied by the Company or any of its Subsidiaries,
except in accordance with applicable Environmental Laws and except for such
matters as have not had, and are not reasonably anticipated by any of the
Company or its Subsidiaries to have a Material Adverse Effect. To the best
knowledge of the Company and its Subsidiaries, if any Person owning or
occupying the Real Property before the Company and its Subsidiaries caused or
permitted Hazardous Materials to be stored, treated, recycled or disposed
- 21 -
27
of on, under or at any Real Property, such condition has been remedied in
compliance with Environmental Laws.
(d) There are not now, nor to the knowledge of the
Company and its Subsidiaries have there previously been, tanks or other
facilities on, under, or at the Real Property which contained any Hazardous
Materials which, if known to be present in soils or ground water, would require
cleanup, removal or some other remedial action under Environmental Laws.
(e) None of the Company or its Subsidiaries has
received notice that it is subject to any judgment, order or citation related
to or arising under any Environmental Laws or that it is named or listed as a
potentially responsible party by any governmental body or agency in a matter
related to or arising under any Environmental Laws.
(f) The operation of the Stations does not exceed the
permissible levels of exposure to RF radiation specified in the FCC's
applicable rules, regulations and policies concerning RF radiation.
(g) The Company and each of its Subsidiaries have been
duly issued, and currently have and will maintain through the Closing Date, all
permits, licenses, certificates and approvals required under any Environmental
Law ("Environmental Permits"), except where the failure to have such
Environmental Permits would not have a Material Adverse Effect. Except in
accordance with the Environmental Permits, or as otherwise permitted by
applicable laws, there has been no discharge by any of the Company or its
Subsidiaries of any Hazardous Materials or any other material regulated by such
permits, licenses, certificates or approvals, which would require remediation
under the Environmental Laws.
4.14 Contracts.
(a) SCHEDULE 4.14 lists all contracts, agreements,
leases, arrangements, commitments or understandings, written or oral, expressed
or implied to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries or any of their properties or
assets is bound (the "Contracts") other than contracts for the sale of
advertising time for cash at standard rates.
(b) Except as set forth in SCHEDULE 4.14:
(1) The Company and each of its Subsidiaries
have performed each material term, covenant and condition of each of the
Contracts, and no material default on the part of the Company or any of its
Subsidiaries, and to the knowledge of the Company and its Subsidiaries, any
other party thereto, exists under any of the Contracts;
- 22 -
28
(2) No event has occurred under any of the
Contracts which would constitute a material default thereunder on the part of
the Company or any of its Subsidiaries and, to the knowledge of the Company and
its Subsidiaries, any other party thereto but for the requirement that notice
be given or time elapse or both;
(3) Each of the Contracts: (i) is in full
force and effect, unimpaired by any acts or omissions of the Company or its
Subsidiaries; (ii) constitutes the legal and binding obligation of, and is
legally enforceable against, the Company and its Subsidiaries as applicable;
and (iii) constitutes the legal and binding obligations of any other party
thereto in accordance with its terms, except as enforcement of such Contracts
may be limited by general principles of equity or principles applicable to
creditors' rights generally;
(4) The Company and its Subsidiaries have
furnished to Parent and Sub true and complete copies of all Contracts,
including all amendments, modifications and supplements thereto; and
(5) Set forth on SCHEDULE 4.14 is a list of
third party consents (other than Consents of Governmental Entities) required
for the consummation of the Merger with consents marked with an asterisk
designating consents that the Company shall be required to have obtained in
order to satisfy the condition precedent to the Merger referred to in SECTION
9.3(F) (the "Required Consents"). Except to the extent that any such third
party consents are not obtained, each Contract shall, on and after the
Effective Time, continue in full force and without penalty or other adverse
consequence.
For purposes of this SECTION 4.14 only, the term "material default"
shall mean any default which would allow the other party to such Contract to
terminate such contract or accelerate any material amounts due thereunder.
4.15 Tangible Personal Property. SCHEDULE 4.15 lists all items
of tangible personal property used or useful in the business or operations of
the Company and its Subsidiaries, other than property acquired or leased
pursuant to trade and barter agreements with a value at the time of the
acquisition thereof of at least Two Thousand Dollars ($2,000) (the "Personal
Property"). All items of leased Personal Property listed in SCHEDULE 4.15 are
marked with an asterisk. Except as disclosed on SCHEDULE 4.15, the Company or
its Subsidiaries, as the case may be, have good title to, or valid leasehold
interests in, all items of Personal Property free and clear of all Liens and
all Personal Property is in working condition, ordinary wear and tear excepted,
and is not in need of imminent repair or replacement.
- 23 -
29
4.16 Intangible Property.
(a) SCHEDULE 4.16 lists (i) all copyrights and
copyright applications owned by the Company or any of its Subsidiaries related
to the Stations (the "Copyrights"); (ii) all trade names, trademarks, service
marks, jingles, slogans, logos, trademark and service mark registrations and
trademark and service mark applications owned, used, held for use, licensed by
or leased by the Company or any of its Subsidiaries (the "Trademarks"),
together with all of the rights of each of the Company and its Subsidiaries in
and to the call letters for each Station, all rights to and goodwill in the
name "NewCity Communications" or any logo, variation or derivation thereof, and
all goodwill associated with any of such items (the "Intangible Property").
(b) Except as set forth on SCHEDULE 4.16:
(1) there are no claims, demands or
proceedings instituted, pending or, to the knowledge of any of the Company and
its Subsidiaries, threatened by any third party pertaining to or challenging
the right of the Company or any of its Subsidiaries to use any of the
Intangible Property;
(2) there are no facts which would render any
of the Intangible Property invalid or unenforceable;
(3) there is no trademark, trade name, patent
or copyright owned by a third party which any of the Company and its
Subsidiaries are using without license or other legal right to do so (which
licenses, if any, constitute part of the Contracts); and
(4) there are no royalty agreements (which
royalty agreements, if any, constitute part of the Contracts) between any of
the Company or any of its Subsidiaries and any third party relating to any of
the Intangible Property which provide for annual payments or receipts by any of
the Company or any of its Subsidiaries of more than Five Thousand Dollars
($5,000) in the case of any single agreement and One Hundred Thousand Dollars
($100,000) in the aggregate.
4.17 Real Property.
(a) SCHEDULE 4.17 lists all fee simple and leasehold
interests in real property of the Company and its Subsidiaries including all
buildings, improvements and fixtures thereon, together with all strips and
gores, rights of way, easements, privileges and appurtenances pertaining
thereto along with any right, title and interest of any of the Company or any
of its Subsidiaries in and to any street adjoining any portion of the Real
Property (the "Real Property").
(b) Except as disclosed on SCHEDULE 4.17:
- 24 -
30
(1) The Company or its Subsidiaries, as the
case may be, has good, valid and insurable fee simple absolute or leasehold
interest in the Real Property. Attached to SCHEDULE 4.17 are all policies of
title insurance currently existing in favor of each of the Company and its
Subsidiaries, as applicable, with respect to the Real Property. Except for
Permitted Liens and the items set forth on SCHEDULE 4.17, there are no material
Liens, restrictions or encumbrances to title to any portion of the Real
Property. The Company and its Subsidiaries have not subjected the Real
Property to any material easements, rights, duties, obligations, covenants,
conditions, restrictions, limitations or agreements not of record.
(2) There is no pending condemnation or
similar proceeding affecting the Real Property or any portion thereof, and to
the knowledge of any of the Company and its Subsidiaries, no such action is
presently contemplated or threatened.
(3) None of the Company or any of its
Subsidiaries has received any notice from any insurance company of any material
defects or inadequacies in the Real Property or any part thereof which would
materially and adversely affect the insurability of all or any portion of the
Real Property or the premiums for the insurance thereof. None of the Company
or any of its Subsidiaries has received any notice from any insurance company
which has issued or refused to issue a policy with respect to any portion of
the Real Property or by any board of fire underwriters (or other body
exercising similar functions) requesting the performance of any material
repairs, alterations or other work with which compliance has not been made.
(4) There are no parties in possession of any
portion of the Real Property other than the Company or its Subsidiaries, as
applicable, whether as lessees, tenants at will, trespassers or otherwise,
except for lessees of transmission towers which do not impair the ability of
the Company and its Subsidiaries to use such towers and which are disclosed on
SCHEDULE 4.17.
(5) No zoning, building, environmental,
land-use, fire or other federal, state or municipal law, ordinance, regulation
or restriction is violated by the continued maintenance, operation or use of
the Real Property or any tract or portion thereof or interest therein in its
present manner except for such violations which would not have a Material
Adverse Effect. The current use of the Real Property and all parts thereof as
aforesaid does not violate any restrictive covenants affecting the Real
Property the violation of which would have a Material Adverse Effect.
(6) There is no law, ordinance, order,
regulation or requirement now in existence, including, without limitation, any
Environmental Law which would require any material expenditure to modify or
improve any of the Real Property in order to bring it into compliance
therewith.
- 25 -
31
(7) The Real Property has adequate access to
dedicated and accepted public roads either directly or pursuant to perpetual
easements, and there is no pending or, to the knowledge of any of the Company
and its Subsidiaries, threatened governmental or other proceeding which would
impair or curtail such access.
(8) There are presently in existence water,
sewer, gas and/or electrical lines or private systems on the Real Property
which are sufficient to serve adequately the current operations of each
building or other facility located on the Real Property.
(9) There are no material structural,
electrical, mechanical, plumbing, air conditioning, heating or other defects in
the buildings located on the Real Property and the roofs of the building
located on the Real Property are free from material leaks and in good
condition.
4.18 Undisclosed Liabilities. The Company and its Subsidiaries
have no debt, liability or obligation whether accrued, absolute, contingent or
otherwise, including, without limitation, any liability or obligation on
account of Taxes or any governmental charges or penalty, interest or fines,
except: (i) those liabilities reflected or disclosed in the Audited Financial
Statements and the Interim Financial Statements; (ii) liabilities disclosed in
SCHEDULE 4.18 including any contingent liabilities; (iii) liabilities incurred
in the ordinary course of business (other than contingent liabilities) since
December 31, 1995; and (iv) liabilities incurred in connection with the
transactions provided for in this Merger Agreement.
4.19 Governmental Authorizations.
(a) Each of the Company and its Subsidiaries holds,
and on the Closing Date each of the Company and its Subsidiaries will hold,
regular and valid Licenses from the FCC to operate the Stations as currently
operated in accordance with the terms of the FCC License for each main Station
disclosed on SCHEDULE 4.19. Applications are pending at the FCC for the
renewal of the FCC Licenses for Radio Station WWKA(FM), licensed to Orlando,
Florida and Radio Station WCFB(FM), licensed to Daytona Beach, Florida. Each
of the Company and its Subsidiaries has obtained all material qualifications,
registrations, privileges, franchises, licenses, permits, approvals and
authorizations required for each of the Company and each of its Subsidiaries to
own and lease its properties and assets, to operate the Stations in the manner
operated on the date hereof and to carry on the businesses of the Stations
substantially as they are now conducted (the "Company Permits"). Except as
listed on SCHEDULE 4.19, no action or proceeding is pending or, to the
knowledge of the Company and its Subsidiaries, threatened before the FCC or any
other governmental body to revoke, refuse to renew or modify such Licenses or
other authorizations of any Station other than those requests for modification
initiated and submitted by the Company or any of its
- 26 -
32
Subsidiaries, none of which is adverse. To the best knowledge of the Company
and its Subsidiaries, the Company and its Subsidiaries are in compliance in all
material respects with applicable laws and the terms of the Company Permits.
To the best knowledge of the Company and its Subsidiaries, except as disclosed
on SCHEDULE 4.19, the business operations of the Company and its Subsidiaries
are being conducted in compliance in all material respects with any applicable
law, ordinance or regulation of any Governmental Entity.
(b) To the best knowledge of the Company and its
Subsidiaries, except as disclosed on SCHEDULE 4.19, there are no facts or
circumstances which would disqualify the Company or any of its Subsidiaries
under the Communications Act of 1934, as amended (the "Communications Act"),
from transferring control of the Company's radio broadcast operations. Except
as disclosed on SCHEDULE 4.19, there are no FCC notices of violations or
adverse orders against the Company or its Subsidiaries and, as of the date
hereof, there are no actions, suits or proceedings pending or, to the knowledge
of the Company and its Subsidiaries, threatened before the FCC for the
cancellation, material involuntary modification or non-renewal of any FCC
Licenses, except for any such notice of violation, adverse order, action, suit
or proceeding generally affecting the industries in which the Company operates
or which would not, individually or in the aggregate, have a Material Adverse
Effect and except for FCC License renewal proceedings which the Company
reasonably expects will result in renewals of the FCC Licenses.
4.20 Compliance with FCC Requirements. Except as set forth on
SCHEDULE 4.20, the Company and each of its Stations, their physical facilities,
electrical and mechanical systems and transmitting and studio equipment are
being and have been operated in all material respects in accordance with the
specifications of the applicable FCC Licenses, and the Company, its
Subsidiaries and the Stations are in substantial compliance with all material
requirements, rules and regulations of the FCC. The Company and its Stations
have complied in all material respects with all requirements of the FCC and the
Federal Aviation Administration with respect to the construction and/or
alteration of the Company's and the Stations' antenna structures, and "no
hazard" determinations for each antenna structure have been obtained, where
required. Except as set forth in SCHEDULE 4.20, all reports and other filings
required by the FCC with respect to the Company, its Subsidiaries and the
Stations, including, without limitation, material required to be placed in the
public inspection files of each of the Stations, have been duly filed by the
Company and its Subsidiaries as of the date hereof, and are true and complete
in all material respects. Except as set forth on SCHEDULE 4.20, there is
currently pending no proceeding before the FCC relating to the Company, its
Subsidiaries or the Stations, other than regularly scheduled license renewal
proceedings, or proceedings relating to the radio industry in general.
- 27 -
33
4.21 Insurance. The Company and its Subsidiaries have in full
force and effect property, liability and casualty insurance and broadcasters'
insurance insuring the business, properties and assets of the Stations.
SCHEDULE 4.21 lists all such insurance policies held by the Company and each of
its Subsidiaries.
4.22 Powers of Attorney. Except as set forth on SCHEDULE 4.22,
there are no Persons holding a power of attorney on behalf of the Company or
any of its Subsidiaries.
4.23 Payment of Indebtedness. Except as set forth on SCHEDULE
4.23, the only Indebtedness of the Company or any of its Subsidiaries of any
kind is (i) that owed by the Company to the lenders under the Loan Agreement
between Fleet National Bank and the Company dated as of November 1, 1993, as
amended (the "Loan Agreement"), (ii) that owed under the 11 3/8 Senior
Subordinated Notes of the Company (the "Senior Subordinated Notes") issued
pursuant to the Indenture dated as of November 2, 1993, as amended, by and
among the Company, certain guarantors and Shawmut Bank National Association,
(iii) that owed under the Term Note made by the Company on May 16, 1995 to
Central Broadcast Company in connection with its acquisition of KJSR (the "KJSR
Promissory Note"), and (iv) that owed under the Birmingham Loan Agreement. On
the Closing Date, the Parent will be permitted to repay, without any further
notice by Parent or Sub or any other required action by Parent or Sub or any
premium, penalty or other charge (other than filing fees to release any Liens)
of any kind, all principal and interest then owed by the Company under the Loan
Agreement and the Birmingham Loan Agreement.
4.24 Disclosure. No statement of material fact by the Company
contained in this Agreement, and all agreements and documents related thereto
and all EXHIBITS and SCHEDULES related hereto and thereto contains or will
contain any untrue statement of a material fact or omits or will omit to state
a material fact necessary in order to make the statements herein or therein
contained not misleading. There is no significant fact presently known to any
Stockholder, the Company or its Subsidiaries (other than matters of a general
economic or political nature which do not affect the Company, or its
Subsidiaries or the Stations uniquely), which has, or will have, a Material
Adverse Effect, which has not been set forth in this Merger Agreement.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
Each Stockholder with respect to himself only represents and warrants
to Parent and Sub as follows:
5.1 Ownership of Class A Common Stock. Such Stockholder is the
lawful owner of the number of shares of Class A Common Stock listed opposite
the name of such Stockholder in EXHIBIT B attached hereto, free and clear of
all Liens. Except as disclosed on SCHEDULE 5.1, such Stockholder has full
legal right, power and authority to enter into this Merger Agreement and to
- 28 -
34
sell, assign, transfer and convey his shares of Class A Common Stock.
5.2 Authority; Binding Effect. All necessary action required
to have been taken by or on behalf of such Stockholder by applicable law or
otherwise to authorize (a) the approval, execution, and delivery on behalf of
such Stockholder of this Merger Agreement and (b) the performance by such
Stockholder of his obligations under this Merger Agreement and the consummation
of the transactions contemplated by this Merger Agreement has been taken.
Assuming that this Merger Agreement constitutes a valid, binding, and
enforceable agreement of Parent and Sub, this Merger Agreement constitutes a
valid and binding agreement of such Stockholder, enforceable against him in
accordance with its terms, except as enforcement of this Agreement may be
limited by general principles of equity or principles applicable to creditors'
rights generally.
5.3 No Conflicts, Required Filings and Consents.
(a) None of the execution and delivery of this Merger
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof will (i) conflict with or violate any organizational
documents of any such Stockholder (to the extent applicable), (ii) subject to
receipt or filing of the required Consents referred to in SECTION 4.4(B),
result in a violation of any statute, ordinance, rule, regulation, order,
judgment or decree applicable to such Stockholder, or by which he or any of his
properties or assets may be bound or affected, or (iii) result in a Violation
of any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which he is a party or
by which such Stockholder or any of his properties or assets is bound or
affected.
(b) None of the execution and delivery of this Merger
Agreement by such Stockholder, the consummation by such Stockholder of the
transactions contemplated hereby or compliance by such Stockholder with any of
the provisions hereof will require any Consent of any Governmental Entity,
except for (i) the filing of the Certificate of Merger pursuant to the DGCL,
(ii) compliance with the HSR Act, (iii) such filings as may be required in
connection with the taxes described in SECTION 8.7, and (IV) the FCC Consents.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PARENT AND SUB
Parent and Sub jointly and severally represent and warrant to the
Company as follows:
6.1 Organization and Qualification. Each of Parent and Sub is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Each of Parent
- 29 -
35
and Sub has the requisite corporate power and authority to carry on its
business as it is now being conducted and is duly qualified or licensed to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned or held under lease or the nature of its activities makes
such qualification necessary, except where the failure to be so qualified will
not, individually or in the aggregate, have a material adverse effect on the
business, operations or financial condition of Parent and Sub taken as a whole,
or have a material adverse effect on Parent's proposed arrangements for
financing the transactions contemplated by this Merger Agreement or on Parent's
ability to consummate such financing arrangements (a "Parent Material Adverse
Effect").
6.2 Ownership of Sub. Sub is a direct wholly-owned subsidiary
of Parent.
6.3 Authority Relative to This Merger Agreement. Each of
Parent and Sub has the necessary corporate power and authority to execute and
deliver this Merger Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Merger Agreement and the
consummation of the transactions contemplated hereby by Parent and Sub have
been duly and validly authorized and approved by the respective Boards of
Directors of Parent and Sub, by Parent as the sole stockholder of Sub, and by
Cox Enterprises, Inc., as the ultimate parent of Parent, and no other corporate
proceedings on the part of Parent, Sub or Cox Enterprises, Inc. are necessary
to authorize and approve this Merger Agreement or to consummate the
transactions contemplated hereby. This Merger Agreement has been duly executed
and delivered by each of Parent and Sub, and assuming due authorization,
execution and delivery by the Company and the Stockholders, constitutes the
valid and binding obligation of Parent and Sub enforceable against each of them
in accordance with its terms except as such enforceability may be limited by
general principles of equity or principles applicable to creditors' rights
generally.
6.4 No Conflicts; Required Filings and Consents.
(a) None of the execution and delivery of this Merger
Agreement by Parent or Sub, the consummation by Parent or Sub of the
transactions contemplated hereby or compliance by Parent or Sub with any of the
provisions hereof will (i) conflict with or violate the Certificate of
Incorporation or By-laws of Parent or Sub, (ii) subject to receipt or filing of
the required Consents referred to in SECTION 6.4(B), result in a violation of
any statute, ordinance, rule, regulation, order, judgment or decree applicable
to Parent or Sub, or by which any of them or any of their respective properties
or assets may be bound or affected, or (iii) result in a Violation of any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which Parent or Sub is a party
or by which Parent or Sub or any of their respective properties may be bound or
affected that involves a
- 30 -
36
payment by Parent or Sub of Fifty Thousand Dollars ($50,000) or more on an
annual basis, except in the case of the foregoing clauses (ii) and (iii) for
any such Violations which would not have a Parent Material Adverse Effect.
(b) None of the execution and delivery of this Merger
Agreement by Parent or Sub, the consummation by Parent or Sub of the
transactions contemplated hereby or compliance by Parent or Sub with any of the
provisions hereof will require any Consent of any Governmental Entity, except
for (i) the filing of the Certificate of Merger pursuant to the DGCL, (ii)
compliance with the HSR Act, (iii) such filings as may be required in
connection with the taxes described in SECTION 8.7, (iv) the FCC Consents in
connection with the transfer of control of the FCC Licenses, and (v) Consents
the failure of which to obtain would not have a Parent Material Adverse Effect.
6.5 Litigation. There is no suit, action or proceeding pending
or, to the knowledge of Parent or Sub, threatened against or affecting Parent
or Sub that, individually or in the aggregate, could reasonably be expected to
have a Parent Material Adverse Effect, nor is there any judgment, decree,
injunction or order of any Governmental Entity or arbitrator outstanding
against Parent or Sub having, or which could reasonably be expected to have,
individually or in the aggregate, a Parent Material Adverse Effect.
6.6 Voting Requirements. No vote of the holders of any class
or series of the capital stock of Parent is necessary to approve this Merger
Agreement or the transactions contemplated hereby.
6.7 Brokers. No broker or finder is entitled to any broker's
or finder's fee in connection with the transactions contemplated by this Merger
Agreement based upon arrangements made by or on behalf of Parent or Sub.
6.8 Financing. Parent has delivered the Guaranty to the
Company and the Selling Stockholders.
6.9 FCC Applications. Except as disclosed on SCHEDULE 6.9,
Parent and Sub are and will as of the Closing Date be legally, financially and
otherwise qualified to hold or control the entities which hold and will hold,
the FCC Licenses and are not aware of any facts or circumstances (other than
facts or circumstances relating solely to the Company or its Subsidiaries) that
could reasonably be expected to prevent or delay consent to the FCC
Applications, and Parent and Sub further represent and warrant that no waiver
of the FCC's rules is necessary to obtain the FCC Consents.
6.10 State Takeover Statutes. The Board of Directors of each of
the Parent and Sub has approved the Merger and this Merger Agreement, and such
approval is sufficient to render inapplicable to the Merger, this Merger
Agreement, and the
- 31 -
37
transactions contemplated by this Merger Agreement, the provisions of Section
203 of DGCL. To each of the Parent's and Sub's knowledge, no other state
takeover statute or similar statute or regulation, applies or purports to apply
to the Merger, this Merger Agreement, or any of the transactions contemplated
by this Merger Agreement.
6.11 Disclosure. No statement of material fact by either the
Parent or Sub contained in this Agreement, and all agreements and documents
related thereto and all EXHIBITS and SCHEDULES related hereto and thereto
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary in order to make the statements
herein or therein contained not misleading.
ARTICLE VII
CONDUCT OF BUSINESS PENDING THE MERGER
7.1 Conduct of Business by the Company Pending the Merger.
From and after the date hereof, prior to the Effective Time, except as
contemplated by this Merger Agreement (including SECTION 7.2) and except for
the matters set forth on SCHEDULE 7.1 or unless Parent shall otherwise agree in
writing, the Company shall, and shall cause its Subsidiaries to:
(a) not (i) declare, set aside, or pay any dividends
on, or make any other distributions in respect of, any of its capital stock,
other than dividends and distributions by any direct or indirect Subsidiary of
the Company to its parent, (ii) split, combine or reclassify any of its capital
stock or issue or, other than pursuant to the exercise of the Stock Options or
upon the conversion of the Convertible Preferred Stock, authorize the issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock, or (iii) purchase, redeem or otherwise acquire, other
than pursuant to the exercise of the Stock Options, any shares of capital stock
of the Company or any of its Subsidiaries or any other equity securities
thereof or any rights, warrants, or options to acquire any such shares or other
securities;
(b) not, except for issuances of capital stock of the
Company's Subsidiaries to the Company or a wholly-owned Subsidiary of the
Company, issue, deliver, sell, pledge or otherwise encumber any shares of its
capital stock, any other voting securities issued by the Company or any
securities convertible into, or any rights, warrants or options to acquire, any
such shares or voting securities (other than the issuance of Class B Common
Stock upon the exercise of the Stock Options outstanding on the date of this
Merger Agreement);
(c) not amend its Certificate of Incorporation,
By-laws or other comparable organizational documents;
(d) not acquire or agree to acquire (i) by merging or
consolidating with, or by purchasing a substantial portion of
- 32 -
38
the assets of, or by any other manner, any business or any corporation,
partnership, joint venture, association or other business organization or
division thereof, or (ii) any properties or assets with a cost in excess of
$100,000 or that are otherwise material, individually or in the aggregate, to
the Company or any of its Subsidiaries, except, in any such case, in the
ordinary course of business, and except transactions between a wholly-owned
Subsidiary of the Company and the Company or another wholly-owned Subsidiary of
the Company;
(e) not subject to a Lien or sell, lease or otherwise
dispose of any properties or assets with a net book value in excess of $100,000
or that are otherwise material, individually or in the aggregate to the Company
or any of its Subsidiaries, except in the ordinary course of business and
except transactions between a wholly-owned Subsidiary of the Company and the
Company or another wholly-owned Subsidiary of the Company;
(f) not (i) incur any indebtedness for borrowed money
or guarantee any such indebtedness of another Person or issue or sell any debt
securities of the Company or any of its Subsidiaries, guarantee any debt
securities of another Person (other than indebtedness to, guarantees of, or
issuances or sales to the Company or a wholly-owned Subsidiary of the Company)
or enter into any "keep well" or other agreement to maintain any financial
condition of another Person, except, in any such case, for borrowings or other
transactions incurred in the ordinary course of business, including to repay
existing indebtedness pursuant to the terms thereof, or (ii) except in the
ordinary course of business, make any loans, advances or capital contributions
to, or investments in, any other Person, other than to the Company or any
direct or indirect Subsidiary of the Company or settle or compromise any
material claim or litigation;
(g) not increase or otherwise change the rate or
nature of the compensation (including wages, salaries and bonuses) which is
paid or payable to any employee or independent contractor of the Company or any
Subsidiary, except pursuant to existing Company Benefit Plans, Compensation
Arrangements, and practices which have been disclosed to Parent;
(h) not adopt, or commit to adopt, any employee
benefit plan, compensation arrangement, and not to make material amendments to
any Company Benefit Plan or Compensation Arrangement except to the extent
required by law or necessary to preserve the nature of the benefits provided
under such plan or arrangement;
(i) not enter into, renew or allow the renewal of, any
employment or consulting agreement or other contract or arrangement with
respect to the performance of personal services for a term of more than one
year or requiring the payment of more than $75,000 in annual compensation,
except in the ordinary course of business consistent with past practices;
- 33 -
39
(j) not voluntarily agree to enter into any collective
bargaining agreement applicable to any employees of the Company or its
Subsidiaries or otherwise recognize any union as the bargaining representative
of any such employees, and will promptly notify Parent of any attempt or actual
collective bargaining organizing activity with respect to any such employees;
(k) not amend, modify or consent to the termination of
any Contract or the rights of the Company or any of its Subsidiaries
thereunder;
(l) not promote any corporate or executive officers of
the Company;
(m) not authorize any of, or commit or agree to take
any of, the foregoing actions (a) through (l);
(n) carry on their respective businesses in the usual,
regular and ordinary course in substantially the same manner as heretofore
conducted;
(o) use all reasonable efforts to preserve intact
their present business organizations, keep available the services of their
employees and preserve their relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with
them to the end that their goodwill and on-going businesses shall not be
impaired in any material respect at the Effective Time; provided, however, that
the resignation of one or more officers of the Company or any of its
Subsidiaries or the loss of one or more customers of the Company or any of its
Subsidiaries shall not be deemed a breach of the foregoing requirement unless
such resignation or loss could reasonably be expected to have a Material
Adverse Effect;
(p) operate the Stations in accordance with applicable
FCC requirements, rules and regulations in all material respects;
(q) maintain all Personal Property in good operating
condition, ordinary wear and tear and usage excepted, and replace any of the
Personal Property which is material to the operation of the Company, a Station
or a Subsidiary which shall be worn out; and
(r) maintain in full force and effect policies of
property, liability and casualty insurance and errors and omissions insurance
of the same type, character and coverage as the policies currently carried with
respect to the business, operations and assets of the Company, the Stations and
its Subsidiaries.
7.2 Control of the Stations. Prior to the Effective Time,
control of the Company's radio broadcast operations along with all of the
Company's other operations (including without
- 34 -
40
limitation control over the finances, personnel and programming of each
Station), shall remain with the Company. The Company, Parent and Sub
acknowledge and agree that neither Parent nor Sub nor any of their respective
employees, agents or representatives, directly or indirectly, shall, or have
any right to, control, direct or otherwise supervise, or attempt to control,
direct or otherwise supervise, such broadcast and other operations, it being
understood that supervision of all programs, equipment, operations and other
activities of such broadcast and other operations shall be the sole
responsibility, and at all times prior to the Effective Time remain with the
complete control and discretion, of the Company, subject to the terms of
SECTION 7.1 above.
7.3 Intentionally Omitted.
7.4 Massachusetts Income Tax Assessment. The Company shall
continue to defend vigorously the proceedings before the Commonwealth of
Massachusetts Department of Revenue pertaining to the Company's income tax
liability for calendar years 1987 through 1989, and shall promptly inform
Parent of all material developments arising with respect to such proceeding.
ARTICLE VIII
ADDITIONAL AGREEMENTS
8.1 Access to Information. From the date hereof through the
Effective Time, the Company and its Subsidiaries shall afford to Parent and
Parent's accountants, counsel, agents and other representatives (collectively,
"Parent's Agents") reasonable access during normal business hours (and at such
other times as the parties may mutually agree) upon reasonable prior notice to
and approval of the Company, which shall not be unreasonably withheld, to its
properties, books, contracts, commitments, records and personnel and, during
such period, shall furnish promptly to Parent all information concerning its
business, properties and personnel as Parent may reasonably request ("Company
Information"). Parent shall hold, and shall cause its employees and Parent's
Agents to hold, in strict confidence all Company Information including, without
limitation, in the event of termination of this Merger Agreement. In the event
of termination of this Merger Agreement, Parent shall promptly return, and
Parent shall cause Parent's Agents to promptly return, all Company Information
or copies or summaries of Company Information that Parent or Parent's Agents
may have made either on paper or electronic format, to the Company. Parent and
Parent's Agents shall, in the exercise of the rights described in this SECTION
8.1, not unduly interfere with the operation of the business of the Company or
its Subsidiaries.
8.2 Filings. The Company shall promptly provide Parent, and
Parent and Sub shall promptly provide the Company, copies of all filings made
by the Company or Parent and Sub, as the case may be, with any Governmental
Entity in connection with this Merger Agreement and the transactions
contemplated hereby.
- 35 -
41
8.3 Employee and Other Arrangements. No later than six (6)
months after the date hereof, Parent shall provide the Company with a list of
those corporate employees of the Company or its Subsidiaries whose services
will not be required by the Surviving Corporation subsequent to the Closing.
To the extent that severance payments are owed to such employees, Parent and
the Company shall cooperate in establishing appropriate levels of severance
payments to such employees. Parent shall be responsible for Eighty Thousand
Dollars ($80,000) of such severance payments, and the Company shall be
responsible for any severance and related expenses exceeding Eighty Thousand
Dollars ($80,000).
8.4 Public Announcements. So long as this Merger Agreement is
in effect, Parent, Sub and the Company agree to use their respective reasonable
efforts to consult with each other before issuing any press release or
otherwise making any public statement with respect to the transactions
contemplated by this Merger Agreement except as may be required by any
applicable law, rule or regulation.
8.5 Efforts; Consents.
(a) Subject to the terms and conditions herein
provided and, in the case of the Company, fiduciary duties under applicable
law, each of the parties hereto agrees to use all reasonable efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Merger Agreement and the
Merger and to cooperate with each other in connection with the foregoing.
Without limiting the generality of the foregoing, each of the Company, Sub and
Parent shall make or cause to be made all required filings with or applications
to Governmental Entities (including under the HSR Act and applicable
requirements of the FCC, and the Communications Act), and use all reasonable
efforts to (i) obtain all necessary waivers of any Violations and other
Consents of all Governmental Entities and other third parties, necessary for
the parties to consummate the transactions contemplated hereby, (ii) oppose,
lift or rescind any injunction or restraining order or other order adversely
affecting the ability of the parties to consummate the transactions
contemplated hereby, and (iii) fulfill all conditions to this Merger Agreement.
(b) Without limiting the foregoing, the Company and
Parent shall use all reasonable efforts and cooperate in promptly preparing and
filing (i) within twenty Business Days of executing this Merger Agreement,
notifications under the HSR Act, and (ii) within seven Business Days of
executing this Merger Agreement, the FCC applications in connection with the
Merger and the other transactions contemplated hereby ("FCC Applications"), and
to respond as promptly as practicable to any inquiries or requests received
from the Federal Trade Commission (the "FTC"), the Antitrust Division of the
United States Department of Justice
- 36 -
42
(the "Antitrust Division"), and the FCC for additional information or
documentation and to respond as promptly as practicable to all inquiries and
requests received from any State Attorney General or other Governmental Entity
in connection with antitrust matters or matters relating to the FCC
Applications. Each of Parent, Sub and the Company, to the extent applicable,
further agrees to file contemporaneously with the filing of the FCC
Applications any requests for waivers of applicable FCC rules as may be
required to prosecute expeditiously such waiver requests and to diligently
submit any additional information or amendments for which the FCC may ask with
respect to such waiver requests. Parent and Sub further covenant to prosecute
each such waiver request in good faith and to supply any information requested
by the FCC in connection with such waiver in a timely and complete manner. In
the event Parent becomes aware of any facts or circumstances which might cause
the FCC to determine that Parent is not qualified to acquire the Stations,
Parent shall promptly notify the Company in writing thereof and shall use its
best efforts to prevent or cure such disqualification. All fees to be paid to
the FTC and the Antitrust Division in respect of the notifications under the
HSR Act shall be divided equally between the Company on the one hand and Parent
and Sub on the other hand.
(c) In furtherance and not in limitation of the
foregoing, the Company, Parent and Sub shall use all reasonable efforts to
resolve such objections, if any, as may be asserted with respect to the
transactions contemplated by this Merger Agreement under any antitrust,
competition or trade regulatory laws, rules or regulations of any Governmental
Entity ("Antitrust Laws") or any laws, rules or regulations of the FCC or other
Governmental Entities relating to the broadcast, cable, newspaper, mass media
or communications industries (collectively, "Communications Laws") and will use
all reasonable efforts (such efforts not to include agreeing to hold separate,
to place in trust or to divest any of the businesses or assets of Parent or any
of its Subsidiaries or Affiliates) as may be required (i) for securing the
expeditious termination of any applicable waiting period or the expeditious
grant of the FCC Applications and for resolving any objections to the
transactions contemplated hereby of any Governmental Entities under the
Antitrust Laws or Communications Laws or (ii) by any domestic or foreign court
or similar tribunal, in any suit brought by a private party or Governmental
Entity challenging the transactions contemplated by this Merger Agreement as
violative of any Antitrust Law or Communications Law, in order to avoid the
entry of, or to effect the dissolution of, any injunction, temporary
restraining order or other order that has the effect of preventing the
consummation of any of such transactions.
(d) Each of Parent and the Company shall promptly
provide the other with a copy of any inquiry or request for information
(including notice of any oral request for information), pleading, order or
other document either party
- 37 -
43
receives from any Governmental Entities with respect to the matters referred to
in this SECTION 8.5.
8.6 Notice of Breaches. Each Stockholder and the Company shall
give prompt notice to Parent, and Parent or Sub shall give prompt notice to the
Company and the Stockholders, of (i) any representation or warranty made by it
contained in this Merger Agreement which has become untrue or inaccurate in any
material respect, or (ii) the failure by it to comply with or satisfy in any
material respect any covenant, condition, or agreement to be complied with or
satisfied by it under this Merger Agreement; provided, however, that such
notification shall not excuse or otherwise affect the representations,
warranties, covenants or agreements of the parties or the conditions to the
obligations of the parties under this Merger Agreement.
8.7 Transfer and Certain Other Taxes and Expenses. Payment of
all real property transfer taxes and all documentary stamps, filing fees,
recording fees and sales and use taxes, if any, and any penalties or interest
with respect thereto, payable in connection with consummation of the Merger
shall be divided equally between the Company on the one hand and Parent and Sub
on the other hand; provided that any such taxes and expenses that are allocable
to the Selling Stockholders shall constitute a decrease to the Adjusted Merger
Consideration as provided in SECTION 3.8(B).
8.8 Financial and FCC Reports. Within twenty (20) days after
the end of each month ending after May 31, 1996 through the Closing Date, the
Company will furnish Parent and Sub with copies of the Company's monthly
financial reports for each Station prepared after the date hereof (including a
balance sheet and operating statement) for each such month and the fiscal year
to the end of such month, and the Company will furnish to Parent and Sub,
within five (5) days after filing, all material reports filed with the FCC with
respect to the Stations after the date hereof. All of the foregoing financial
statements shall comply with the requirements concerning financial statements
set forth in SECTION 4.5(B).
8.9 Updating of Information. Not more than ten (10) Business
Days prior to the Closing Date, the Company will deliver to Parent and Sub, and
Parent will deliver to the Company, updated SCHEDULES including (a) information
necessary to update the SCHEDULES and the lists, documents and other
information furnished by the Company or Parent and Sub, as the case may be, as
contemplated by this Merger Agreement, and (b) updated copies of documents
relating to or included as a part of the SCHEDULES, in order that all such
SCHEDULES, lists, documents and other information shall be complete and
accurate in all material respects as of the Closing Date. No such updating of
the SCHEDULES shall be deemed to cure any breach of a representation or
warranty made hereunder which was not true and correct as of the time made.
- 38 -
44
8.10 Release of Liens. At or prior to the Closing, the Company
shall obtain the release of all Liens on the property or assets of the Company,
its Subsidiaries and the Stations disclosed in the SCHEDULES hereto and any
other Liens on the property or assets of the Company, its Subsidiaries or the
Stations, other than (a) Permitted Liens, (b) Liens pursuant to the Loan
Agreement, and (c) Liens against the Company or any of its Subsidiaries with
respect to leased Personal Property having a value of no more than Twenty-Five
Thousand Dollars ($25,000), and either shall file such releases of Liens in
each governmental agency or office in which any such Lien or evidence thereof
shall have been previously filed, or deliver the release to Parent and Sub to
file or obtain payoff letters from such Lien holder, which shall include a
statement that upon receipt of certain funds, the Lien holder will release its
Lien.
8.11 Environmental Audit. The Company shall permit Parent and
Sub and their agents, as soon as practical after the date hereof, access to the
Real Property and improvements thereon for the purpose of conducting Phase I
and Phase II environmental audits or updating existing environmental audits.
The cost of such audits shall be split evenly between Parent and Sub, on the
one hand, and the Company, on the other hand. Any such environmental audits
shall be conducted by a reputable environmental investigatory firm of the
Parent's and Sub's choice. Such audits shall be conducted in a manner as will
not unreasonably interfere with the normal business and operations of any of
the Stations. The Company shall take all action reasonably necessary and
required under any applicable Environmental Law or Environmental Permit to
clean up, remove or treat any Hazardous Materials located on, at or under the
Real Property prior to the Closing Date.
8.12 Agreement to Vote. At any shareholders meeting of the
Company subsequent to the date hereof at which a vote is taken regarding this
Merger Agreement and the transactions contemplated hereby, each Stockholder
shall vote all of his shares of Class A Common Stock in support of the
consummation of this Merger Agreement and the transactions contemplated hereby.
The Company shall take such actions, as necessary, immediately following the
execution of this Merger Agreement to secure the approval of all of the holders
of shares of the Class A Common Stock, Class B Common Stock, the Convertible
Preferred Stock and the Redeemable Preferred Stock to the transactions
contemplated by this Merger Agreement.
8.13 Tax Matters.
(a) "Booked Taxes" means Taxes of the Company and its
Subsidiaries payable with respect to a Reporting Period (as defined below)
ending on or before the Effective Time, or with respect to a Short Period (as
defined below), that are reflected on the Final Closing Statement with respect
to such Taxes and that are taken into account in computing the Final Working
Capital under SECTION 3.8 hereof.
- 39 -
45
(b) Taxes of the Company and its Subsidiaries with
respect to the period ending on (and including) the Effective Time, other than
the Booked Taxes, shall be the responsibility of the Selling Stockholders,
subject to the terms, conditions and limitations set forth in the Closing
Escrow Agreement. Taxes of the Company and its Subsidiaries with respect to
the period after the Effective Time shall be the responsibility of Parent (and
the Company and its Subsidiaries).
(i) In accordance with the terms of this
SECTION 8.13, and subject to the terms, conditions and limitations set forth in
the Closing Escrow Agreement, the Selling Stockholders agree to pay and,
notwithstanding any disclosure of potential Tax liabilities made by the Company
and its Subsidiaries, to indemnify, reimburse, and hold harmless Parent, its
Affiliates, and the Company and its Subsidiaries, and their respective
successors, and their respective officers, directors, employees, agents, and
representatives, from and against any and all Taxes of the Company and its
Subsidiaries payable with respect to, and any and all claims, liabilities,
losses, damages, costs and expenses (including without limitation court costs
and reasonable professional fees incurred in the investigation, defense or
settlement of any claims covered by this indemnity) (herein referred to as
"Indemnifiable Tax Damages"), arising out of or in any manner incident,
relating or attributable to Taxes of the Company and its Subsidiaries payable
with respect to, or Tax Returns required to be filed by the Company and its
Subsidiaries with respect to, (i) any taxable year (or other applicable
reporting period) ("Reporting Period") of the Company and its Subsidiaries
ending on or before the Effective Time, and (ii) any period beginning on the
first day of any Reporting Period that is not completed as of the Effective
Time and ending as of the Effective Time (a "Short Period"), to the extent that
such Taxes exceed the amount of the Booked Taxes.
(ii) Parent agrees to pay and to indemnify,
reimburse and hold harmless the Selling Stockholders, their agents and
representatives, from and against (i) any and all Booked Taxes and (ii) any and
all Taxes of the Company and its Subsidiaries payable with respect to, and any
and all Indemnifiable Tax Damages, arising out of or in any manner incident,
relating or attributable to, Taxes of the Company and its Subsidiaries payable
with respect to, or Tax Returns required to be filed by the Company and its
Subsidiaries with respect to, (A) any Reporting Period of the Company and its
Subsidiaries beginning after the Effective Time; and (B) that portion of any
Reporting Period that includes the Effective Time which commences the day after
the Effective Time.
(iii) If an item claimed as a deduction or credit
in a period prior to the Effective Time subsequently is adjusted by a Tax
authority into a period after the Effective Time, or an item of income in a
period after the Effective Time is accelerated into a period prior to the
Effective Time, then the amount of any reduction in Taxes to the Company and
its
- 40 -
46
Subsidiaries for periods after the Effective Time resulting from such
adjustment shall offset the payment obligations of the Selling Stockholders
pursuant to SECTION 8.13(B)(I); provided, however, that if the only benefit
available to the Company and its Subsidiaries is recovery of basis through a
sale, such benefit shall not be taken into account hereunder unless an actual
sale occurs prior to the date such payment is required to be made by the
Selling Stockholders thereunder. The amount of any offset shall take into
account the difference between the time the payment would otherwise be made
pursuant to SECTION 8.13(B)(I) and the time a benefit is derived by the Company
and its Subsidiaries (using a discount rate equal to the "overpayment rate"
under section 6221(a) of the Code, compounded semi-annually). Any offset
pursuant to this paragraph shall be reduced to the extent, if any, that items
claimed as a deduction or credit for periods after the Effective Time are
adjusted by a Tax authority to periods prior to the Effective Time or items of
income are moved from a period prior to the Effective Time to a period after
the Effective Time.
(c) Parent shall be responsible for preparing and
filing on behalf of the Company and its Subsidiaries all Tax Returns for the
Company and its Subsidiaries which have not been filed as of the Effective
Time, including (i) all Tax Returns for Reporting Periods of the Company and
its Subsidiaries ending on or before the Effective Time which have not been
filed on or before the Effective Time; (ii) all Tax Returns of the Company and
its Subsidiaries for Reporting Periods beginning before and ending after the
Effective Time; and (iii) all Tax Returns for Reporting Periods of the Company
and its Subsidiaries beginning on or after the Effective Time; provided,
however, that with respect to Tax Returns described in clauses (i) and (ii),
Parent shall consult with the Stockholders' Agent in preparing such returns,
and such Tax Returns shall not report any item in a manner that is inconsistent
with the manner in which any corresponding item has been previously reported in
any such Tax Return already filed, unless such inconsistent treatment is (x)
required due to a change in law or circumstances, or (y) if permitted by law,
Parent elects to make such change in treatment, and such change would not be
prejudicial to the Selling Stockholders or to the Company. Parent shall
furnish the Stockholders' Agent with copies of Tax Returns described in
clauses (i) and (ii) of this paragraph (c) within 30 days
following the filing date.
(d) Any tax sharing agreement, practice, or other
similar arrangement between the Company and its Subsidiaries and corporations
or other entities related to the Company or any of its Subsidiaries shall be
terminated as of the Effective Time.
(e) Except as otherwise provided in this SECTION 8.13,
any amounts owed by the Selling Stockholders to any party under this SECTION
8.13 shall be paid within ten business days of notice from such party; provided
that if such party has not paid such amounts and such amounts are being
contested before the
- 41 -
47
appropriate governmental authorities in good faith, the Selling Stockholders
shall not be required to make payment until it is determined finally by an
appropriate governmental authority or court that payment is due, provided that
the Selling Stockholders post appropriate security as necessary to protect such
party from (i) the immediate imposition of a lien that arises or attaches from
nonpayment after assessment and demand of such amounts, or (ii) seizures of
assets. Except as otherwise provided in this SECTION 8.13, any amounts owed by
Parent to any party under this SECTION 8.13 shall be paid within ten business
days of notice from such party; provided that if such party has not paid such
amounts and such amounts are being contested before the appropriate
governmental authorities in good faith, Parent shall not be required to make
payment until it is determined finally by an appropriate governmental authority
or court that payment is due if Parent posts appropriate security as necessary
to protect such party from (A) the immediate imposition of a lien that arises
or attaches from nonpayment after assessment and demand of such amounts, or (B)
seizures of assets. Any amounts that are not paid within the period provided
in this SECTION 8.13(D) shall accrue interest at the "Underpayment Rate" under
Section 6621 of the Code for the underpayment of taxes by corporations.
(f) The Tax liabilities for each Short Period for the
Company and its Subsidiaries shall be determined by closing the books and
records of the Company and its Subsidiaries as of the Effective Time, by
treating each such Short Period as if it were a separate Reporting Period, and
by employing accounting methods which are consistent with those employed in
preparing the Tax Returns for the Company and its Subsidiaries in prior
Reporting Periods and which do not have the effect of distorting income or
expenses (taking into account the transactions contemplated by this Merger
Agreement), except that Taxes based on items other than income or sales shall
be computed for the Reporting Period beginning on the first day of the
applicable Short Period and prorated on a time basis between the Short Period
and the period beginning on the first day after the Effective Time and ending
on the last day of the Reporting Period which includes the Effective Time;
provided that with respect to any Tax which is not in effect during the entire
Short Period, the proration of such Tax shall be based on the period during the
Short Period that such Tax was in effect.
(g) Parent shall promptly notify the Stockholders'
Agent in writing of any notice, letter, correspondence, claim, determination,
decision or decree ("Tax Claim") received by the Parent or the Company and its
Subsidiaries or their successors for any Reporting Period ending on or before
the Effective Time or any Short Period that might raise a claim for
indemnification hereunder. Parent shall have the sole right to handle, answer,
defend, compromise or settle any such Tax Claim; provided, however, that the
Stockholders' Agent, at the cost and expense of the Selling Stockholders, shall
have the right to (and shall promptly notify Parent as to whether or not he
will) participate in any Tax examination, audit, contest or litigation in
- 42 -
48
connection with such Tax Claim. Parent shall cause the Company and its
Subsidiaries and their successors to give promptly to the Stockholders' Agent
any relevant information relating to such Tax Claim which may be particularly
within the knowledge of the Company and its Subsidiaries or their successors
and otherwise to cooperate fully with the Stockholders' Agent in good faith
with respect to such Tax Claim. If the Stockholders' Agent fails within a
reasonable time after notice to participate in any Tax Claim or any
examination, audit, contest or litigation as provided herein, the Selling
Stockholders shall be bound by the results obtained by Parent, or its
successors or assigns, in connection with such Tax Claim and such examination,
audit, contest or litigation. Notwithstanding the foregoing, the Parent shall
not agree, without the consent of the Stockholders' Agent (which consent shall
not be unreasonably withheld or delayed), to any adjustment for any period
ending on or prior to the Effective Time which will require a payment by the
Selling Stockholders hereunder in excess of One Hundred Thousand Dollars
($100,000) for any Reporting Period (or for any Short Period).
(h) Each of the parties hereto will provide the other
with such assistance as may reasonably be requested by any of them in
connection with the preparation of any Tax Return (including amended Tax
Returns and claims for Tax refunds), any audit or other examination by any
taxing authority, or any judicial or administrative proceedings relating to
liability for Taxes, and each will retain until the expiration of any relevant
statutes of limitations (and, to the extent notified by the other party, any
extension thereof) and provide the other, at all reasonable times, with any
work papers, records or other information which may be relevant to such return,
audit or examination, proceeding or determination (including, but not limited
to, determinations under this SECTION 8.13). The party requesting assistance
or documents hereunder shall reimburse the other parties for reasonable
expenses incurred in providing such assistance or documents.
(i) Parent shall not make any election under Section
338 of the Code with respect to the Merger.
(j) The obligations of the Selling Stockholders under
this SECTION 8.13 are subject to the terms, conditions and limitations set
forth in the Closing Escrow Agreement.
8.14 Event of Loss. Upon the occurrence of any loss, taking,
condemnation, damage or destruction of or to any of the Stations (an "Event of
Loss") after the date hereof in excess of $100,000 prior to the Closing, the
Company or its Subsidiaries, as applicable, shall take steps to repair, replace
and restore the damaged, destroyed or lost property to the condition existing
prior to having been damaged. The condition set forth in the preceding
sentence shall be satisfied if at the Closing neither Parent, the Surviving
Corporation nor Sub can bring a claim pursuant to SECTION 11.1 with respect to
such matter. If such condition has not been satisfied at or prior to Closing,
the
- 43 -
49
Company or its Subsidiaries, as applicable, shall assign (or deliver any cash
received, if not assignable) to the Surviving Corporation all of their rights
under any insurance and all proceeds of insurance (excluding business
interruption proceeds for periods prior to the Closing Date) covering the
property damage, destruction or loss not so repaired, replaced or restored
prior to the Closing Date.
8.15 Further Assurances. Subject to the terms and conditions of
this Merger Agreement, each of the parties hereto will use all reasonable
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Merger contemplated by this
Merger Agreement.
8.16 Solicitation of Employees. From the date of this Merger
Agreement through the second anniversary of the Closing Date, each Stockholder
agrees that it will not, directly or indirectly, persuade or attempt to
persuade any employee of the Company or any of its Subsidiaries, or any
individual who was its employee at any time during the two years prior to the
date of this Merger Agreement, to become employed by any Stockholder or any
Affiliate of any Stockholder.
8.17 Capital Expenditures.
(a) In cooperation with Parent and Sub, the Company
shall establish a budget for capital expenditures to be made in 1996, taking
into account actual capital expenditures made by the Company or any Subsidiary
prior to the date hereof.
(b) Parent agrees to reimburse the Company for
expenses incurred by the Company prior to the Closing Date in making capital
improvements, to be mutually agreed upon by Parent and the Company, to the
office building or property site owned by NewCity Communications of Alabama,
Inc. in Birmingham, Alabama and any equipment or furnishings contained therein.
The Company and Parent agree to develop an appropriate budget for such capital
expenditures.
8.18 Exercise of Stock Options. The Company shall take such
actions, as necessary, to ensure that the holders of any Stock Options exercise
such Stock Options prior to the Closing.
ARTICLE IX
CONDITIONS PRECEDENT
9.1 Conditions to Each Party's Obligation to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the following
conditions:
(a) The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired
- 44 -
50
or been terminated and there shall have been no material adverse change to the
transactions contemplated by this Merger Agreement required in order to obtain
approval under the HSR Act, and any other Consents from Governmental Entities
(including specifically the FCC Consents) and other third parties required
prior to the Effective Time with respect to the transactions contemplated
hereby shall have been either filed or received.
(b) The consummation of the Merger shall not be
restrained, enjoined or prohibited by any order, judgment, decree, injunction
or ruling of a court of competent jurisdiction; provided, however, that the
parties shall comply with the provisions of SECTION 8.5 and shall further use
all reasonable efforts to cause any such order, judgment, decree, injunction or
ruling to be vacated or lifted.
(c) Each of the FCC Consents shall have been obtained
without conditions materially adverse to the Company, Parent or Sub, and each
party shall have satisfied any such conditions that are not materially adverse
to such party.
9.2 Conditions to Obligation of the Company and the
Stockholders to Effect the Merger. The obligation of the Company and the
Stockholders to effect the Merger shall be subject to the fulfillment at or
prior to the Effective Time of the additional following conditions, unless
waived by the Company:
(a) Parent and Sub shall have performed in all
material respects their respective agreements contained in this Merger
Agreement required to be performed at or prior to the Effective Time and the
representations and warranties of Parent and Sub contained in this Merger
Agreement shall be true in all material respects when made and (except for
representations and warranties made as of a specified date, which need only be
true in all material respects as of such date) at and as of the Effective Time
as if made at and as of such time, except as contemplated by this Merger
Agreement; and the Company shall have received a certificate of the Chief
Executive Officer or a Vice President of Parent and Sub to that effect.
(b) All material proceedings, corporate or other, to
be taken by Parent and Sub in connection with the performance of this Merger
Agreement, and all material documents incident thereto, shall be complete in
all material respects and Parent and Sub shall have made available to the
Company for examination the originals or true and correct copies of all
documents which the Company and Stockholders' Agent may reasonably request in
connection with the transactions contemplated by this Merger Agreement.
(c) Parent and Sub shall have delivered or caused to
be delivered to the Company the documents, each properly executed and dated as
of the Closing Date, as required pursuant to this Merger Agreement.
- 45 -
51
(d) The Company shall have received an opinion of Dow,
Lohnes & Albertson, PLLC, counsel to Parent and Sub, dated the Closing Date, in
substantially the form attached hereto as EXHIBIT E.
(e) Parent and Sub shall have delivered to the Company
such documents and certificates of officers of Parent and Sub and public
officials as shall be reasonably requested by the Company's counsel to
establish the existence of Parent and Sub and good standing of Parent and Sub
and the due authorization of this Merger Agreement and the transactions
contemplated hereby by Parent and Sub.
9.3 Conditions to Obligations of Parent and Sub to Effect the
Merger. The obligations of Parent and Sub to effect the Merger shall be
subject to the fulfillment at or prior to the Effective Time of the additional
following conditions, unless waived by Parent, that:
(a) The Stockholders and the Company shall have
performed in all material respects their respective agreements contained in
this Merger Agreement required to be performed at or prior to the Effective
Time and the representations and warranties of the Company and the Stockholders
contained in this Merger Agreement shall be true in all material respects when
made and (except for representations and warranties made as of a specified
date, which need only be true in all material respects as of such date) at and
as of the Effective Time as if made at and as of such time; and Parent and Sub
shall have received a certificate of the Chief Executive Officer or a Vice
President of the Company and from each Stockholder to that effect.
(b) Intentionally omitted.
(c) All material proceedings, corporate or other, to
be taken by the Company in connection with the performance of this Merger
Agreement, and all material documents incident thereto, shall be complete in
all material respects and the Company shall have made available to Parent and
Sub for examination the originals or true and correct copies of all documents
which Parent and Sub may reasonably request in connection with the transactions
contemplated by this Merger Agreement.
(d) Between the date of this Merger Agreement and the
Closing, there shall not have occurred any Material Adverse Effect.
(e) The Company shall have delivered or caused to be
delivered to Parent and Sub the documents, each properly executed and dated as
of the Closing Date, as required pursuant to this Merger Agreement.
- 46 -
52
(f) There shall have been secured all Consents
required by any Governmental Entity and all Required Consents as set forth in
SCHEDULE 4.14.
(g) The Company or its Subsidiaries shall be the
holders of the FCC Licenses and there shall not have been any adverse material
modification of any of the FCC Licenses since the date hereof.
(h) Between the date of this Merger Agreement and the
Closing, none of the Company, any of its Subsidiaries or any of the Stations
shall have sustained any loss, taking, condemnation, damage or destruction to
any property or asset which individually or in the aggregate would cost in
excess of $500,000 to repair, unless such repair has been completed on or prior
to the Closing Date to the condition existing prior to having been damaged or
sufficient insurance proceeds are available to effect such repair; provided,
however, that the Company may elect to extend the Closing Date for a reasonable
period not to exceed ninety (90) days necessary to complete such repairs; and
provided, further if Parent and Sub waive this condition, the provisions of
SECTION 8.14 shall be applicable.
(i) Parent and Sub shall have received the opinions of
Tyler Cooper & Alcorn, LLP, corporate counsel to the Company, and Kaye,
Scholer, Fierman, Hays & Handler, LLP, communications counsel to the Company,
both dated the Closing Date, in substantially the forms attached hereto as
EXHIBIT F.
(j) The Company shall have delivered to Parent and Sub
such documents and certificates of officers of the Company and public officials
as shall be reasonably requested by the Parent's counsel to establish the
existence and good standing of the Company and the due authorization of this
Merger Agreement and the transactions contemplated hereby by the Company.
(k) The Parent and Sub shall have received the
resignations effective as of the Closing Date of all the directors and officers
of the Company except for such persons as shall have been designated in writing
prior to the Closing Date by Parent and Sub to the Company, the employment
agreements in respect of all such persons shall have been terminated and all
such persons shall have executed and delivered to Parent a full release
releasing the Company and Parent, their respective Subsidiaries, all related
entities and all of their representatives from any and all claims of such
persons.
(l) The Company shall have effected the cancellation
or exercise of all Stock Options.
(m) The only FCC Licenses for which a license renewal
proceeding is pending shall be the FCC Licenses for KRMG(AM), KWEN(FM), and
KJSR(FM), Tulsa, Oklahoma (the "Renewal Stations"), and Parent and Sub shall be
satisfied with the status thereof. The status of the renewals for the Renewal
Stations
- 47 -
53
shall be deemed satisfactory to Parent and Sub if (i) no petition to deny or
other objection shall have been filed against the applications for renewal of
the Renewal Stations; (ii) the applications for renewal of license of each of
the Renewal Stations shall have demonstrated compliance with the FCC's rules
with respect to each of those matters required to be addressed in the renewal
application; (iii) the Company shall have responded on behalf of each of the
Renewal Stations to each inquiry of the FCC relating to the renewal
applications of the Renewal Stations; and (iv) the Company shall have certified
to Parent and Sub that it is not aware of any reason why the FCC would not
grant an unconditional renewal to the Renewal Stations in the normal course.
(n) The Phase I and Phase II environmental audits
referred to in SECTION 8.11 shall have been obtained and shall report the
absence of any environmental conditions or circumstances that could materially
and adversely affect the Real Property or the value thereof or result in
material liability or material costs if cleaned up or removed from the Real
Property pursuant to the requirements of applicable Environmental Laws.
(o) The Company shall have furnished to the Parent and
Sub (i) an extended coverage owner's policy of title insurance from a reputable
title insurance company for each parcel of Real Property designated with an
asterisk on SCHEDULE 4.17 subject only to Permitted Liens (and without a survey
exception) and for an amount equal to the fair market value for each such
parcel, and (ii) a current and complete survey of each such parcel of land made
by a competent registered surveyor in accordance with the American Land Title
Association guidelines.
(p) Each of the FCC Consents shall have become a Final
Order (as defined in SECTION 12.9) without conditions materially adverse to
Parent or Sub.
(q) The Closing Escrow Agreement shall have been
executed by all parties thereto and the Adjustment Escrow Amount and the
Indemnity Escrow Amount shall have been fully funded.
(r) No action or proceeding shall be pending before
any court or Governmental Entity in which it is sought to restrain or prohibit
or obtain damages or other relief in connection with this Merger or the
consummation of the transactions contemplated hereby.
(s) The Company shall have taken all necessary steps
and given all necessary notices to enable Parent to repay immediately, without
premium, penalty or other charge of any kind, all principal and interest owed
by the Company in respect of the Loan Agreement and the Birmingham Loan
Agreement.
ARTICLE X
TERMINATION, AMENDMENT AND WAIVER
- 48 -
54
10.1 Termination. This Merger Agreement may be terminated at
any time prior to the Effective Time:
(a) by mutual written consent of Parent and the
Company;
(b) by the Company, upon a material breach of this
Merger Agreement on the part of Parent or Sub or upon a material breach of the
Guaranty by Cox Broadcasting, Inc., which has not been cured and which would
cause the conditions set forth in SECTION 9.2 to be incapable of being
satisfied by June 30, 1997;
(c) by Parent, upon a material breach of this Merger
Agreement on the part of the Stockholders or the Company which has not been
cured and which would cause the conditions set forth in SECTION 9.3 to be
incapable of being satisfied by June 30, 1997;
(d) subject to SECTION 8.15 hereof, by either Parent
or the Company if any court of competent jurisdiction shall have issued,
enacted, entered, promulgated or enforced any order, judgment, decree,
injunction or ruling which restrains, enjoins or otherwise prohibits the Merger
and such order, judgment, decree, injunction or ruling shall have become final
and nonappealable; or
(e) by either Parent or the Company if the Merger
shall not have been consummated on or before June 30, 1997 (provided the
terminating party is not otherwise in material breach of its representations,
warranties or obligations under this Merger Agreement).
10.2 Effect of Termination.
(a) In the event of termination of this Merger
Agreement by either Parent or the Company as provided in SECTION 10.1, this
Merger Agreement shall forthwith become void and there shall be no liability
hereunder on the part of any of the Stockholders, the Company, Parent or Sub or
their respective officers or directors; provided that SECTIONs 10.2, 10.3,
12.3, and 12.6 and the second and third sentences of SECTION 8.1 shall survive
the termination.
(b) If the Merger is not consummated because of a
material breach of this Merger Agreement by any party and this Merger Agreement
is terminated pursuant to SECTION 10.1(B) or SECTION 10.1(C), and subject to
the terms of this SECTION 10.2 and SECTION 12.3 the nonbreaching party shall be
entitled to pursue all legal and equitable remedies against the breaching party
for such breach, including in the case of Parent and Sub specific performance,
and all fees and expenses incurred by the nonbreaching party or parties in
connection with enforcing its rights under this Merger Agreement with respect
to such breach shall be paid by the party breaching this Merger Agreement.
- 49 -
55
10.3 Fees and Expenses. Except as otherwise specified
in this Agreement, all costs and expenses, including, without limitation, fees
and disbursements of counsel, financial advisors and accountants, incurred in
connection with this Merger Agreement and the transactions contemplated hereby
shall be paid by the party incurring such costs and expenses; provided that any
such costs and expenses incurred by the Company or by the Selling Stockholders
that are to be paid by the Company which remain unpaid as of the Closing Date
shall to the extent they are so unpaid constitute a decrease to the Adjusted
Merger Consideration as provided in SECTION 3.8(B).
10.4 No Solicitation. Neither the Company, any of its
Subsidiaries, officers, directors, representatives or agents nor any
Stockholder shall, directly or indirectly, knowingly encourage, solicit,
initiate or, except as otherwise provided in this SECTION 10.4, participate in
any way in discussions or negotiations with, or knowingly provide any
confidential information to, any corporation, partnership, person or other
entity or group (other than Parent or any affiliate or associate of Parent and
their respective directors, officers, employees, representatives and agents)
concerning any merger of the Company, or any of its Subsidiaries, the sale of
any substantial part of the assets of the Company, sale of shares of capital
stock of the Company, or any of its Subsidiaries or similar transactions
involving the Company.
10.5 Amendment. This Merger Agreement may not be amended except
by an instrument in writing signed on behalf of the parties hereto.
10.6 Waiver. At any time prior to the Effective Time, the
parties hereto may, to the extent permitted by applicable law, (i) extend the
time for the performance of any of the obligations or other acts of any other
party hereto, (ii) waive any inaccuracies in the representations and warranties
by any other party contained herein or in any documents delivered by any other
party pursuant hereto and (iii) waive compliance with any of the agreements of
any other party or with any conditions to its own obligations 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 an instrument in writing signed on behalf
of such party.
ARTICLE XI
INDEMNIFICATION
11.1 Indemnification Out of Closing Escrow.
(a) After the Closing, the Selling Stockholders
jointly and severally, in accordance with the terms of this Article XI and
subject to the terms and conditions of the Closing Escrow Agreement, agree to
indemnify, and hold Parent and Sub and the employees, officers, directors and
stockholders of Parent and Sub (collectively, the "Buyer Indemnified Parties")
harmless from
- 50 -
56
and against, and agree to promptly defend the Buyer Indemnified Parties from
and reimburse the Buyer Indemnified Parties for any and all actual damages,
out-of-pocket costs and expenses, liabilities, obligations and claims of third
persons of any kind, including, without limitation, reasonable attorneys' fees,
other legal costs and expenses (hereinafter, collectively, "Claims" and,
individually, a "Claim") which the Buyer Indemnified Parties may suffer or
incur, or become subject to, as a result of or in connection with:
(1) the breach of any of the representations
and warranties made by the Company and any of the Stockholders in this Merger
Agreement or in any instrument, document, certificate or affidavit delivered at
the Closing by the Company or any of the Selling Stockholders in accordance
with the provisions of this Merger Agreement;
(2) the failure of the Company or any of the
Stockholders to carry out, perform, satisfy and discharge any of the covenants,
agreements, undertakings, liabilities or obligations to be performed by the
Company or any of the Stockholders pursuant to this Merger Agreement or under
any of the documents and materials delivered at the Closing by the Company or
any of the Selling Stockholders pursuant to this Merger Agreement;
(3) any breach of the representations and
warranties of the Company or any of its Subsidiaries contained in SECTION 4.10;
(4) liabilities or obligations of the Company
or any of its Subsidiaries arising from or relating to any litigation or
proceeding listed on the SCHEDULES hereto and any litigation or proceeding
initiated, filed, established or threatened against the Company or any of its
Subsidiaries after the execution of this Merger Agreement and relating to
matters before the Closing; and
(5) any suit, action or other proceeding
brought by any governmental authority or Person arising out of, or in any way
related to any of the matters referred to in SECTION 11.1.
(b) Intentionally omitted.
11.2 Indemnification By Parent. After the Closing, Parent, in
accordance with the terms of this Article XI, agrees to indemnify, and hold all
of the Selling Stockholders (collectively, the "Seller Indemnified Parties")
harmless from and against, and agree to promptly defend the Seller Indemnified
Parties from and reimburse the Seller Indemnified Parties for any Claim which
the Seller Indemnified Parties may suffer or incur, or become subject to, as a
result of or in connection with:
- 51 -
57
(a) the breach of any of the representations and
warranties made by Parent or Sub in this Merger Agreement or in any instrument,
document, certificate or affidavit delivered at the Closing by Parent or Sub in
accordance with the provisions of this Merger Agreement;
(b) the failure of Parent or Sub to carry out,
perform, satisfy and discharge any of the covenants, agreements, undertakings,
liabilities or obligations to be performed by Parent or Sub pursuant to this
Merger Agreement or under any of the documents and materials delivered at the
Closing by Parent or Sub pursuant to this Merger Agreement;
(c) liabilities or obligations of the Company or any
of its Subsidiaries arising from or relating to the business of the Company or
its Subsidiaries after the Closing or to any litigation or proceeding
initiated, filed, established or threatened against the Company or any of its
Subsidiaries after the Closing and relating to matters after the Closing;
(d) any suit, action or other proceeding brought by any
governmental authority or Person arising out of, or in any way related to any
of the matters referred to in this SECTION 11.2.
11.3 Notification of Claims.
(a) A party believing itself entitled to be
indemnified pursuant to SECTION 11.1(A) or 11.2 above (the "Indemnified Party")
shall give the party liable for such indemnification (the "Indemnifying Party")
notice in writing of a specific Claim which the Indemnified Party believes has
given rise to a right of indemnification under this Merger Agreement (the
"Notice of Claim"). Notwithstanding anything to the contrary contained herein,
no Claim shall be considered as a valid Claim under SECTION 11.1(A)(1), (2),
(4), OR (5) to the extent such Claim relates to SECTION 11.1(A)(1), (2), (4),
or (5), or under Section 11.2 to the extent such Claim relates to SECTION
11.2(A), (B), (C), OR (D) above unless the Indemnified Party shall have given
the Indemnifying Party a Notice of Claim regarding such Claim within three (3)
years and sixty (60) days after the Closing Date and with respect to a Claim
arising from a dispute, controversy or claim of a third Person, such third
Person must have asserted the dispute, controversy or claim within three (3)
years and sixty (60) days of the Closing Date. Subject to the Indemnifying
Party's right to dispute Claims asserted by the Indemnified Party or to defend
in good faith Claims by third parties as hereinafter provided, the Indemnifying
Party shall satisfy its obligations under SECTION 11.1(A) or 11.2 above within
thirty (30) days after the receipt of the Notice of Claim.
(b) If the Indemnified Party shall give the
Indemnifying Party a Notice of Claim pursuant to SECTION 11.3(A) above, and if
such Claim relates to a Claim asserted by a third
- 52 -
58
party against the Indemnified Party (excluding a Claim by the Internal Revenue
Service or any other tax authority pursuant to SECTION 11.1(A)(3) hereof), the
Indemnifying Party shall have the right to employ counsel reasonably acceptable
to the Indemnified Party to defend such Claim. The Indemnified Party shall
have the right, at its own expense, to participate in the defense of any such
Claim. The Indemnifying Party shall notify the Indemnified Party in writing,
as promptly as possible after its receipt of a Notice of Claim given by the
Indemnified Party pursuant to SECTION 11.3(A) above (but in any case before the
due date for the answer or response to a Claim if the Indemnifying Party has
been given a Notice of Claim within a reasonable time prior to such due date),
of its election to defend any Claim raised by a third party. So long as the
Indemnifying Party is defending in any such Claim or demand asserted by a third
party against the Indemnified Party, the Indemnified Party shall not settle or
compromise such Claim. The Indemnified Party shall make available to the
Indemnifying Party or its agents all records and other materials in the
Indemnified Party's possession reasonably required by it for its use in
contesting any Claim asserted by a third party. Whether or not the
Indemnifying Party elects to defend any such Claim asserted by a third party,
the Indemnified Party shall have no obligation to do so.
(c) The provisions of SECTION 11.3(B) shall not apply to
any Claim asserted by the Internal Revenue Service or any other tax authority,
which claim shall be subject to the provisions of SECTION 8.13.
ARTICLE XII
GENERAL PROVISIONS
12.1 Stockholders' Agent. The Company has appointed the
Company's Chief Financial Officer, currently John Riccardi, as the
Stockholders' Agent and each Selling Stockholder's attorney-in-fact and
representative, to do any and all things and to execute any and all documents
or other papers, in such Selling Stockholder's name, place and stead, in any
way which such Selling Stockholder could do if personally present, in
connection with this Merger Agreement and the transactions contemplated hereby,
including, without limitation, to resolve issues relating to the adjustment of
the Adjusted Merger Consideration on such Selling Stockholder's behalf, or to
amend, cancel or extend, or waive the terms of, this Merger Agreement and
Parent and Sub shall be entitled to rely, as being binding upon such Selling
Stockholder, upon any document or other paper believed by them to be genuine
and correct and to have been signed or sent by the Stockholders' Agent, and
Parent and Sub shall not be liable to any Selling Stockholder for any action
taken or omitted to be taken by it in such reliance.
12.2 Notices. All notices or other communications under this
Merger Agreement shall be in writing and shall be given (and shall be deemed to
have been duly given upon receipt) by delivery in person, by telecopy (with
confirmation of receipt), by
- 53 -
59
commercial delivery service or by registered or certified mail, postage
prepaid, return receipt requested, addressed as follows:
If to the Company: NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Attention: Mr. Richard A. Ferguson
Telecopy : (203) 367-9346
With copies (which shall not Tyler Cooper & Alcorn
constitute notice) to: 205 Church Street
P.O. Box 1936
New Haven, Connecticut 06510
Attention: Irving S. Schloss, Esq.
Telecopy : (203) 789-2133
and
Kaye, Scholer, Fierman, Hays & Handler
901 15th Street, N.W.
Washington, D.C. 20005
Attention: Irving Gastfreund, Esq.
Telecopy : (202) 682-3580
and
Mr. John Riccardi
Chief Financial Officer
NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Telecopy : (203) 367-9346
If to the Stockholders' Agent:
Mr. John Riccardi
Chief Financial Officer
NewCity Communications, Inc.
10 Middle Street
Bridgeport, Connecticut 06604
Telecopy : (203) 367-9346
If to Parent or Sub:
Cox Radio, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Mr. Nicholas D. Trigony
Telecopy : (404) 843-5280
and
Cox Radio, Inc.
1400 Lake Hearn Drive, N.E.
Atlanta, Georgia 30319
Attention: Mr. Robert F. Neil
Telecopy : (404) 843-5686
- 54 -
60
With a copy (which shall not Dow, Lohnes & Albertson, PLLC
constitute notice) to: 1200 New Hampshire Avenue, N.W.
Suite 800
Washington, D.C. 20036
Attention: Kevin F. Reed, Esq.
Telecopy : (202) 776-2222
or to such other address as any party may have furnished to the other parties
in writing in accordance with this SECTION.
12.3 Specific Performance. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Merger Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that Parent shall be entitled
to an injunction or injunctions to prevent breaches of this Merger Agreement
and to enforce specifically the terms and provisions hereof, this being in
addition to any other remedy to which Parent is entitled at law or in equity.
12.4 Entire Agreement. This Merger Agreement (including the
documents and instruments referred to herein) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written and
oral, among the parties, or any of them, with respect to the subject matter
hereof (other than as provided in the second sentence of SECTION 8.1). There
are no other representations or warranties, whether written or oral, between
the parties in connection with the subject matter hereof, except as expressly
set forth herein.
12.5 Assignments; Parties in Interest. Neither this Merger
Agreement nor any of the rights, interests or obligations hereunder may be
assigned by any of the parties hereto (whether by operation of law or
otherwise) without the prior written consent of the other parties. Subject to
the preceding sentence, this Merger Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Merger
Agreement, express or implied, is intended to or shall confer upon any Person
not a party hereto any right, benefit or remedy of any nature whatsoever under
or by reason of this Merger Agreement, including to confer third party
beneficiary rights.
12.6 Governing Law. This Merger Agreement, except to the extent
that the DGCL is mandatorily applicable to the Merger and the rights of the
Selling Stockholders, shall be governed in all respects by the laws of the
State of Delaware (without giving effect to the provisions thereof relating to
conflicts of law). The exclusive venue for the adjudication of any dispute or
proceeding arising out of this Merger Agreement or the performance thereof
shall be the courts located in the City of Wilmington, Delaware, and the
parties hereto and their Affiliates hereby consent to and submit to the
jurisdiction of any court located in the City of Wilmington, Delaware.
- 55 -
61
12.7 Headings. The descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Merger Agreement.
12.8 Remedies. The remedies of the parties hereto are
cumulative and not intended to be limited by the doctrine of election of
remedies. Without limiting the generality of the foregoing, neither Parent and
Sub nor the Company and the Selling Stockholders may rely on the failure of any
condition precedent set forth in Article IX, as applicable, to be satisfied if
such failure was caused by such other party's (or parties') failure to act in
good faith, or a breach of or failure to perform its representations,
warranties, covenants or other obligations in accordance with the terms of this
Merger Agreement.
12.9 Certain Definitions. As used in this Merger Agreement:
(a) the term "Affiliate," as applied to any Person,
shall mean any other Person directly or indirectly controlling, controlled by,
or under common control with, that Person; for purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with"), as applied to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of that Person, whether through
the ownership of voting securities, by contract or otherwise;
(b) "Business Day" means a day that is not a Saturday,
a Sunday or other day on which banks are required or authorized by law to be
closed in the City of Wilmington, Delaware;
(c) the term "Final Order" means an action or order by
the FCC (a) that has not been reversed, stayed, enjoined, set aside, annulled
or suspended, and (b) with respect to which (i) no requests have been timely
filed for administrative or judicial review, reconsideration, appeal or stay
and the FCC has not initiated a review of such action or order on its own
motion and the periods provided by statute or FCC regulations for filing any
such requests and for the FCC to set aside the action on its own motion have
expired, or (ii) in the event of review, reconsideration or appeal, the period
provided by statute or FCC regulations for further review, reconsideration or
appeal has expired without any such request for further review, reconsideration
or appeal having been filed;
(d) the term "Guaranty" shall mean the Guaranty of Cox
Broadcasting, Inc. of even date herewith, guaranteeing the obligations of
Parent and Sub under this Merger Agreement;
(e) the terms "knowledge," "best knowledge," or any
similar formulation of knowledge shall mean, with respect to any
- 56 -
62
Subsidiary of the Company, the actual knowledge of its senior executive
officers, and with respect to the Company, the actual knowledge of the Chief
Executive Officer, the Chief Operating Officer and the Chief Financial Officer
of the Company and the general managers of the Stations;
(f) "Material Adverse Effect" shall mean any of (i) a
Company Material Adverse Effect; and (ii) a Significant Station Material
Adverse Effect. For purposes of this definition, a "Company Material Adverse
Effect" shall mean a material adverse effect on the aggregate operations,
assets, prospects or financial condition of the Company, taken as a whole,
other than matters affecting the radio industry generally (including without
limitation legislative, regulatory or litigation matters) and matters relating
to or arising from national economic conditions (including financial and
capital markets); a "Significant Station Material Adverse Effect" shall mean a
material adverse effect on the operations, assets, prospects or financial
condition of any Station other than matters affecting the radio industry
generally (including without limitation legislative, regulatory or litigation
matters) and matters relating to or arising from national economic conditions
(including financial and capital markets);
(g) "Permitted Liens" means such of the following as
to which no enforcement, collection, execution, levy or foreclosure proceeding
shall have been commenced: (a) Liens for taxes, assessments and governmental
charges or levies not yet due and payable; (b) Liens imposed by law, such as
materialmen's, mechanics', carriers', workmen's and repairmen's liens and other
similar liens arising in the ordinary course of business securing obligations
that (i) are not overdue for a period of more than 30 days and (ii) are not in
excess of $5,000 in the case of a single property or $50,000 in the aggregate
at any time; (c) pledges or deposits to secure obligations under workers'
compensation laws or similar legislation or to secure public or statutory
obligations; (d) minor survey exceptions, reciprocal easement agreements and
other customary encumbrances on title to real property that (i) were not
incurred in connection with any Indebtedness, (ii) do not render title to the
property encumbered thereby unmarketable and (iii) do not, individually or in
the aggregate, materially adversely affect the value or use of such property
for its current and anticipated purposes; and (e) Liens pursuant to the Loan
Agreement;
(h) the term "Person" shall include individuals,
corporations, partnerships, limited liability companies, trusts, other entities
and groups (which term shall include a "group" as such term is defined in
Section 13(d)(3) of the Exchange Act);
(i) the term "Subsidiary" or "Subsidiaries" means,
with respect to Parent, the Company or any other Person, any corporation,
partnership, joint venture or other legal entity of which Parent, the Company
or such other Person, as the case may be (either alone or through or together
with any other
- 57 -
63
Subsidiary) owns, directly or indirectly, stock or other equity interests the
holders of which are generally entitled to more than 50% of the vote for the
election of the board of directors or other governing body of such corporation
or other legal entity.
12.10 Counterparts. This Merger Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of
which taken together shall constitute a single agreement.
12.11 Severability. If any term or other provision of this
Merger Agreement is invalid, illegal or incapable of being enforced by any rule
of law or public policy, all other conditions and provisions of this Merger
Agreement shall nevertheless remain in full force and effect so long as the
economics or legal substance of the transactions contemplated hereby are not
affected in any manner materially adverse to any party. Upon determination that
any term or other provision hereof is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Merger Agreement so as to effect the original intent of the parties as closely
as possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to
the extent possible.
12.12 Gender and Number. Words used herein, regardless of the
gender and number specifically used, shall be deemed and construed to include
any other gender, masculine, feminine, or neuter, and any other number,
singular or plural, as the context requires.
12.13 List of Definitions. The following is a list of certain
terms used in this Agreement and a reference to the Section hereof in which
such term is defined.
Terms Section
Adjusted Merger Consideration 3.3(c)
Adjustment Escrow Amount 3.9(b)
Affiliate 12.9(a)
Antitrust Division 8.5(b)
Antitrust Laws 8.5(c)
Audited Financial Statements 4.5(a)
Birmingham Loan Agreement 3.3(b)
Booked Taxes 8.13(a)
Business Day 12.9(b)
Buyer Indemnified Parties 11.1(a)
Certificate of Merger 1.3
Claims 11.1(a)
Class A Common Merger Consideration 3.2(a)
Class A Common Stock 3.2(a)
Class B Common Merger Consideration 3.2(b)
Class B Common Stock 3.2(b)
Closing 1.2
- 58 -
64
Closing Date 1.2
Closing Escrow Agent 3.9(a)
Closing Escrow Agreement 3.9(a)
Closing Escrow Amount 3.9(c)
Code 4.9(a)
Communications Act 4.19(b)
Communications Laws 8.5(c)
Company Preamble
Company Benefit Plan 4.8(i)
Company Consolidated Group 4.10(f)
Company Information 8.1
Company Material Adverse Effect 12.9(f)
Company Permits 4.19(a)
Compensation Arrangement 4.8(ii)
Consent 4.4(b)
Constituent Corporations 1.4
Contracts 4.14(a)
Control 12.9(a)
Convertible Preferred Merger
Consideration 3.2(c)
Convertible Preferred Stock 3.2(c)
Copyrights 4.16(a)
DGCL 1.3
Disbursing Agent 3.5(a)
Dissenting Shares 3.4
Dissenting Shareholder 3.4
Effective Time 1.3
Environmental Permits 4.13(g)
Environmental Laws 4.13(a)
ERISA 4.8(i)
ERISA Affiliate 4.8(iii)
Estimated Closing Statement 3.3(d)(i)
Event of Loss 8.14
FCC Preamble
FCC Applications 8.5(b)
FCC Consents 4.4(b)
FCC Licenses 4.4(b)
Final Closing Statement 3.8(a)
Final Debt Amount 3.8(a)
Final Order 12.9(c)
Final Working Capital 3.8(a)
FTC 8.5(b)
GAAP 3.3(a)
Governmental Entity 4.4(b)
Guaranty 12.9(d)
Hazardous Materials 4.13(b)
HSR Act 4.4(b)
Indebtedness 3.3(b)
Indemnifiable Tax Damages 8.13(b)(i)
Indemnified Party 11.3(a)
Indemnifying Party 11.3(a)
Indemnity Escrow Amount 3.9(c)
Intangible Property 4.16(a)
Interim Financial Statements 4.5(b)
KJSR Promissory Note 4.23
- 59 -
65
Knowledge 12.9(e)
Lien 4.2(b)
Loan Agreement 4.23
Material Adverse Effect 12.9(f)
Material Default 4.14
Merger Preamble
Merger Agreement Preamble
Merger Consideration 3.1
Notice of Claim 11.3(a)
Parent Material Adverse Effect 6.1
Parent Preamble
Parent's Agents 8.1
Permitted Liens 12.9(g)
Person 12.9(h)
Personal Property 4.15
Preferred Stock 3.2(e)
Real Property 4.17(a)
Redeemable Preferred Stock 3.2(d)
Renewal Stations 9.3(m)
Reporting Period 8.13(b)(i)
Required Consents 4.14(b)(5)
Seller Indemnified Parties 11.2
Selling Stockholders Preamble
Senior Subordinated Notes 4.23
Short Period 8.13(b)(i)
Significant Station
Material Adverse Effect 12.9(f)
Stations Preamble
Stock Options 4.2(a)
Stockholders Preamble
Stockholders' Agent Preamble
Sub Preamble
Subsidiary 12.9(i)
Surviving Corporation 1.1
Target Debt Amount 3.3(b)
Target Working Capital 3.3(a)
Tax Claim 8.13(g)
Tax Returns 4.10(a)
Taxes 4.10(a)
Trademarks 4.16(a)
Violation 4.4(a)
Working Capital 3.3(a)
- 60 -
66
IN WITNESS WHEREOF, Parent, Sub, the Company and the Stockholders have
caused this Merger Agreement to be signed all as of the date first written
above.
COX RADIO, INC.
By: /s/ John J. Rouse, Jr.
----------------------------------
Title: Treasurer
-----------------------------
NEW COX RADIO II, INC.
By: /s/ John J. Rouse, Jr.
----------------------------------
Title: Vice President and Treasurer
----------------------------
NEWCITY COMMUNICATIONS, INC.
By: /s/ Richard A. Ferguson
----------------------------------
Title: President and CEO
---------------------------
STOCKHOLDERS, FOR THE LIMITED
PURPOSES STATED ABOVE:
/s/ Richard A. Ferguson
-------------------------------------
Richard A. Ferguson
/s/ James T. Morley
-------------------------------------
James T. Morley
/s/ Richard A. Reis
-------------------------------------
Richard A. Reis
STOCKHOLDERS' AGENT
/s/ John Riccardi
-------------------------------------
John Riccardi
- 61 -