<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: FEBRUARY 13, 1996
CITICASTERS INC.
(EXACT NAME OF REGISTRANT AS
SPECIFIED IN CHARTER)
FLORIDA 1-8283 59-2054850
(STATE OR OTHER (COMMISSION (IRS EMPLOYER
JURISDICTION OF FILE NUMBER) IDENTIFICATION NO.)
INCORPORATION)
ONE EAST FOURTH STREET
CINCINNATI, OHIO 45202
PHONE: (513) 562-8000
(ADDRESS OF PRINCIPAL EXECUTIVE
OFFICES AND TELEPHONE NUMBER,
INCLUDING AREA CODE)
PAGE 1 OF 4
<PAGE> 2
Item 5. Other Events.
On February 12, 1996, Citicasters Inc., a Florida corporation (the
"Company"), entered into an Agreement and Plan of Merger (the "Merger
Agreement") with Jacor Communications, Inc., an Ohio corporation ("Jacor"), and
JCAC, Inc., a Florida corporation and a wholly owned subsidiary of Jacor
("JCAC"), pursuant to which JCAC will merge with and into the Company, with the
Company as the surviving corporation (the "Merger"). Accordingly, after
consummation of the Merger, the Company will be a wholly owned subsidiary of
Jacor. A copy of the Merger Agreement, certain of the exhibits thereto and the
press release issued by the Company announcing the execution of the Merger
Agreement are attached as exhibits hereto.
Item 7. Exhibits.
2.1 Agreement and Plan of Merger, dated as of February 12, 1996,
among Citicasters Inc., Jacor Communications, Inc. and JCAC,
Inc.
2.2 Stockholders Agreement, dated as of February 12, 1996, among
Jacor Communications, Inc., JCAC, Inc., Great American
Insurance Company, American Financial Corporation, American
Financial Enterprises, Inc., Carl H. Lindner, The Carl H.
Lindner Foundation and S. Craig Lindner.
2.3 Jacor Shareholders Agreement, dated as of February 12, 1996,
among Citicasters Inc. and Zell/Chilmark Fund L.P.
2.4 Form of Escrow Agreement dated as of February __, 1996,
among Jacor Communications, Inc., Citicasters Inc. and
______________, as Escrow Agent.
2.5 Form of Employment Continuation Agreement (Executive Officer
Form), dated as of _______, 1996, between Citicasters Inc.
and _________________.
2.6 Form of Employment Continuation Agreement (Management Form),
dated as of ________, 1996, between Citicasters Inc. and
________________.
2.7 Warrant Agreement, dated as of ________, 1996, between Jacor
Communications, Inc. and KeyCorp Shareholder Services, Inc.
as Warrant Agent.
99.1 Press Release dated February 12, 1996.
Page 2 of 4
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITICASTERS INC.
February 13, 1996 By: /s/Samuel J. Simon
--------------------------------------
Samuel J. Simon
Senior Vice President, General Counsel
and Secretary
Page 3 of 4
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Document Page
-------- ----
<S> <C> <C>
2.1 Agreement and Plan of Merger dated as of February
12, 1996, among Citicasters Inc., Jacor
Communications, Inc. and JCAC, Inc.
2.2 Stockholders Agreement, dated as of February 12,
1996, among Jacor Communications, Inc., JCAC, Inc.,
Great American Insurance Company, American
Financial Corporation, American Financial
Enterprises, Inc., Carl H. Lindner, The Carl H.
Lindner Foundation and S. Craig Lindner.
2.3 Jacor Shareholders Agreement, dated as of February
12, 1996, among Citicasters Inc. and Zell/Chilmark
Fund L.P.
2.4 Form of Escrow Agreement dated as of February __,
1996, among Jacor Communications, Inc., Citicasters
Inc. and Escrow Agent.
2.5 Form of Employment Continuation Agreement
(Executive Officer Form), dated as of __________,
1996, between Citicasters Inc. and
___________________.
2.6 Form of Employment Continuation Agreement
(Management Form), dated as of _____________, 1996,
between Citicasters Inc. and _____________________.
2.7 Warrant Agreement, dated as of _______________,
1996, between Jacor Communications, Inc. and
KeyCorp Shareholder Services, Inc., a Warrant
Agent.
99.1 Press Release dated February 12, 1996.
</TABLE>
Page 4 of 4
<PAGE> 1
_________________________________________________________________
AGREEMENT AND PLAN OF MERGER
by and among
JACOR COMMUNICATIONS, INC.,
JCAC, INC.
and
CITICASTERS INC.
Dated as of February 12, 1996
_________________________________________________________________
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C> <C>
ARTICLE 1 THE MERGER; EFFECTIVE TIME; CLOSING 1
1.1 The Merger. 1
1.2 The Closing. 2
1.3 Effective Time. 2
ARTICLE 2 ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION 2
2.1 Articles of Incorporation. 2
2.2 By-Laws. 2
2.3 Directors. 2
ARTICLE 3 CONVERSION OF SHARES 3
3.1 Conversion of Shares; Options. 3
3.2 Exchange Procedures. 5
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE COMPANY 6
4.1 Organization and Standing. 6
4.2 Authorization, Validity and Effect. 7
4.3 Capitalization. 7
4.4 Company Subsidiaries. 8
4.5 No Conflict; Required Filings and Consents. 9
4.6 Company Reports; Financial Statements. 10
4.7 Tax and Accounting Matters. 11
4.8 Properties. 12
4.9 Compliance with Laws; FCC Authorizations. 12
4.10 Employee Benefit Plans. 13
4.11 Material Contracts. 15
4.12 Legal Proceedings. 16
4.13 Certain Information. 17
4.14 No Brokers. 17
4.15 Opinion of Financial Advisor. 18
4.16 Environmental. 18
4.17 Personnel. 19
4.18 Takeover Statutes. 19
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF ACQUIROR
AND SUB 19
5.1 Organization and Standing. 20
5.2 Authorization, Validity and Effect. 20
5.3 Capitalization. 20
5.4 No Conflict; Required Filings and Consents 20
5.5 Acquiror Reports; Financial Statements. 21
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
5.6 Legal Proceedings. 22
5.7 Certain Information. 23
5.8 Ownership of Company Common Stock. 23
5.9 Merger Sub. 24
5.10 Acquiror's Financing. 24
5.11 Qualification as a Licensee. 24
5.12 No Brokers. 24
ARTICLE 6 COVENANTS AND AGREEMENTS 24
6.1 No Solicitation and Other Actions. 24
6.2 Interim Operations of the Company. 26
6.3 Shareholder Approval. 28
6.4 Information Statement; Registration Statement. 29
6.5 Notification. 30
6.6 Employee Benefits. 30
6.7 Investigation and Confidentiality. 31
6.8 Filings; Other Action. 31
6.9 Indemnification and Insurance. 32
6.10 Publicity. 32
6.11 Transfer Taxes. 33
6.12 Letter of Credit. 33
6.13 Environmental Inspection. 33
6.14 Acknowledgement of Consents. 33
6.15 Rule 145 Affiliates. 33
6.16 Actions With Respect to the Warrants. 34
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE MERGER 34
7.1 Conditions to Obligations of the Parties. 34
7.2 Conditions to Obligations of the Company. 35
7.3 Conditions to Obligations of Acquiror and Sub. 36
ARTICLE 8 TERMINATION OF AGREEMENT 37
8.1 Termination. 37
8.2 Effect of Termination. 38
ARTICLE 9 MISCELLANEOUS AND GENERAL 40
9.1 Expenses. 40
9.2 Successors and Assigns. 40
9.3 Third Party Beneficiaries. 40
9.4 Notices. 40
9.5 Complete Agreement. 41
9.6 Captions; References. 42
9.7 Amendment. 42
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
9.8 Waiver. 42
9.9 Governing Law. 42
9.10 Non-Survival of Representations, Warranties and Covenants. 42
9.11 Severability. 42
9.12 Enforcement of Agreement. 43
9.13 Counterparts. 43
</TABLE>
iii
<PAGE> 5
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of February
12, 1996, among CITICASTERS INC. (the "Company"), a Florida corporation, JACOR
COMMUNICATIONS, INC. ("Acquiror"), an Ohio corporation, and JCAC, INC. ("Sub"),
a Florida corporation and a direct wholly owned Subsidiary of Acquiror.
RECITALS
WHEREAS, the respective Boards of Directors of the Company, Acquiror and
Sub have determined that a business combination between the Company, Acquiror
and Sub is in the best interests of their respective companies and
shareholders;
WHEREAS, concurrently with the execution hereof, in order to induce
Acquiror to enter into this Agreement, Acquiror is entering into a Stockholders
Agreement (the "Stockholders Agreement") with Great American Insurance Company,
American Financial Corporation, American Financial Enterprises, Inc., Carl H.
Lindner, S. Craig Lindner and The Carl H. Lindner Foundation (the "Consenting
Stockholders") providing for certain voting and other restrictions with respect
to the shares of Company Common Stock (as defined in subsection ) beneficially
owned by the Consenting Stockholders upon the terms and conditions specified
therein; and
WHEREAS, Acquiror, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
transactions contemplated hereby.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, and
subject to the terms and conditions set forth herein, the Company, Acquiror and
Sub hereby agree as follows:
ARTICLE 1
THE MERGER; EFFECTIVE TIME; CLOSING
1.1 The Merger. (a) Subject to the terms and conditions contained in
this Agreement, at the Effective Time (as defined in Section ), Sub shall be
merged with and into the Company in accordance with the applicable provisions
of the Florida Business Corporation Act (the "FBCA"), and the separate
corporate existence
<PAGE> 6
of Sub shall thereupon cease (the "Merger"). Following the Merger, the Company
shall continue as the surviving corporation (sometimes hereinafter referred to
as the "Surviving Corporation") and shall be a wholly owned Subsidiary of
Acquiror.
(b) At the Effective Time, the corporate existence of the Company, with
all its rights, privileges, powers and franchises, shall continue unaffected
and unimpaired by the Merger. The Merger shall have the effects specified in
the FBCA.
1.2 The Closing. The closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of Graydon, Head &
Ritchey, 1900 Fifth Third Center, Cincinnati, Ohio, at 10:00 a.m., local time,
on the first business day immediately following the date on which the last of
the conditions (excluding conditions that by their terms cannot be satisfied
until the Closing Date) set forth in Article 7 is satisfied or waived in
accordance herewith, or at such other date, time and place as the Company and
Acquiror may agree in writing. The date on which the Closing occurs is
hereinafter referred to as the "Closing Date".
1.3 Effective Time. At or as promptly as practicable after the Closing,
the parties hereto shall cause articles of merger, in the form attached hereto
as Schedule 1.3 (the "Articles of Merger"), executed in accordance with the
relevant provisions of the FBCA, to be filed with the Department of State of
the State of Florida as provided in Section 607.1105 of the FBCA. Upon the
completion of such filing, or at such other time as may be specified in such
filing, the Merger shall become effective in accordance with the FBCA. The
time and date on which the Merger becomes effective is herein referred to as
the "Effective Time".
ARTICLE 2
ARTICLES OF INCORPORATION, BY-LAWS, DIRECTORS
AND OFFICERS OF THE SURVIVING CORPORATION
2.1 Articles of Incorporation. At the Effective Time and without any
further action on the part of the Company or Sub, the articles of incorporation
of Sub, as in effect immediately prior to the Effective Time and amended as set
forth in the Articles of Merger, shall become the articles of incorporation of
the Surviving Corporation until thereafter amended as provided therein and
under the FBCA.
2
<PAGE> 7
2.2 By-Laws. At the Effective Time and without any further action on the
part of the Company or Sub, the by-laws of Sub, as in effect immediately prior
to the Effective Time, shall become the by-laws of the Surviving Corporation
until thereafter amended or repealed in accordance with their terms and the
articles of incorporation of the Surviving Corporation and as provided under
the FBCA.
2.3 Directors. The directors and officers of Sub at the Effective time
shall, from and after the Effective Time, be the directors and officers of the
Surviving Corporation until the successors of all such persons shall have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the Surviving Corporation's articles
of incorporation and by-laws.
ARTICLE 3
CONVERSION OF SHARES
3.1 Conversion of Shares; Options.
(a) At the Effective Time, each share of Class A Common Stock, par
value $.01 per share, of the Company (the "Company Common Stock") issued and
outstanding immediately prior to the Effective Time (other than Company Common
Stock owned by the Company, Acquiror, Sub or any direct or indirect Subsidiary
of the Company, Acquiror or Sub, or any Company Common Stock held in the
treasury of the Company) shall, by virtue of the Merger and without any action
on the part of the holders thereof, be converted into and represent the right to
receive: (i) $29.50 in cash, plus, in the event that the Closing does not occur
prior to October 1, 1996, for each full calendar month ending prior to the
Closing, commencing with October, 1996, an additional amount of $.22125 in cash
(the "Cash Consideration"); plus (ii) a warrant to acquire a fractional share
(determined as provided below) of the Acquiror Common Stock (as defined below)
(the "Warrant Consideration") (the Cash Consideration and the Warrant
Consideration being collectively referenced as the "Merger Consideration") on
the terms described in the Warrant Agreement to be executed at Closing
substantially in the form attached hereto as Exhibit 3.1 (a "Warrant"). The
Warrant Consideration shall consist of a fractional share the numerator of which
is 4,400,000 and the denominator of which is the number of shares of Company
Common Stock, on a fully diluted basis, outstanding on the Closing Date.
Subject to the terms of the Warrant Agreement, the Warrants
3
<PAGE> 8
shall expire on the fifth anniversary of the Effective Time and shall have an
exercise price of $28.00 per full share if the Effective Time is prior to
October 1, 1996 and $26.00 per full share if the Effective Time is on or after
October 1, 1996. The Merger Consideration shall be paid net to the shareholders
(without interest) upon surrender of the certificate or certificates that,
immediately prior to the Effective Time, represented issued and outstanding
Company Common Stock (the "Certificates"). At the time of the exercise of the
Warrant each holder of a Warrant shall receive, in lieu of any fractional share
of Acquiror Common Stock, the fair market value of such fractional share
determined at the time of the exercise of the Warrant.
(b) At the Effective Time, all of the Company Common Stock issued and
outstanding immediately prior to the Effective Time, by virtue of the Merger
and without any action on the part of the holders thereof, shall no longer be
outstanding and shall be cancelled and retired and shall cease to exist, and
each holder of a Certificate representing any such Company Common Stock shall
thereafter cease to have any rights with respect to such Company Common Stock,
except each holder (other than the Company, Acquiror or Sub or any direct or
indirect Subsidiary of the Company, Acquiror or Sub) will have the right to
receive, without interest, the Merger Consideration for such Company Common
Stock upon the surrender of such Certificate or Certificates in accordance with
subsection .
(c) At the Effective Time, by virtue of the Merger and without any action
on the part of the holders thereof, each share of Company Common Stock issued
and outstanding immediately prior to the Effective Time and owned by the
Company, Acquiror, Sub or any direct or indirect Subsidiary of the Company,
Acquiror or Sub, or held in the treasury of the Company immediately prior to
the Effective Time, shall no longer be outstanding, shall be cancelled without
payment of any consideration therefor and shall cease to exist, and each holder
of a Certificate representing any such Company Common Stock shall thereafter
cease to have any rights with respect to such Company Common Stock.
(d) At the Effective Time, each share of common stock, of Sub issued and
outstanding immediately prior to the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof, shall be converted
into and become one fully-paid and non-assessable share of common stock, par
value $.01 per share, of the Surviving Corporation.
4
<PAGE> 9
(e) The Company shall use its reasonable best efforts to (i) cause all
outstanding options to purchase shares of Company Common Stock (each, an
"Option") issued pursuant to the Company's 1993 Stock Option Plan or the 1994
Directors Stock Option Plan (collectively, the "Stock Option Plans") to become
fully vested and exercisable and (ii) obtain from each holder of any Option an
agreement, in form and substance reasonably satisfactory to Acquiror, to
surrender as of the Effective Time all outstanding Options, in consideration of
the payment at the Effective Time of an amount of cash per share subject to each
such Option equal to the difference between the exercise price of such Option
and the Cash Consideration (less an amount equal to all taxes required to be
withheld from such payment), plus for each share subject to such Option, the
Warrant Consideration, or, alternatively, acquire upon payment of the exercise
price an amount of cash equal to the Cash Consideration, less an amount equal to
all taxes required to be withheld, in lieu of each share formerly covered
thereby, plus for each share covered by such Option, the Warrant Consideration.
3.2 Exchange Procedures.
(a) Securities Transfer Company shall act as exchange agent (the
"Exchange Agent") for the payment of the Merger Consideration upon surrender of
Certificates converted into the right to receive the Merger Consideration
pursuant to the Merger. Immediately after the Effective Time, Acquiror shall
make available, or cause Sub or the Surviving Corporation to make available, to
the Exchange Agent immediately available funds in an amount necessary for the
payment of the Cash Consideration (the "Funds"), and the Warrants necessary for
payment of the Warrant Consideration.
(b) Promptly after the Effective Time, the Exchange Agent shall mail to
each Person (as defined in Section hereof) who was, at the Effective Time, a
holder of record of a Certificate or Certificates (other than the Company,
Acquiror or Sub or any direct or indirect Subsidiary of the Company, Acquiror or
Sub), a letter of transmittal and instructions for use in effecting the
surrender of the Certificates, in exchange for payment of the Merger
Consideration therefor. The letter of transmittal shall specify that delivery
shall be effected, and risk of loss and title shall pass, only upon proper
delivery to and receipt of such Certificates by the Exchange Agent and shall be
in such form and have such provisions as Acquiror shall reasonably specify. Upon
surrender to the Exchange Agent of such Certificates, together with the letter
of transmittal, duly
5
<PAGE> 10
executed and completed in accordance with the instructions thereto and such
other documents as may be reasonably required by the Exchange Agent, the
Exchange Agent shall promptly issue to the persons entitled thereto, out of the
Funds, by check, the amount of cash to which such Persons are entitled pursuant
to Section after giving effect to any required tax withholdings, and the
Warrants to which such Persons are entitled, and such Certificates shall
forthwith be marked to evidence cancellation. No interest will be paid or will
accrue on any portion of the Merger Consideration. If payment is to be made to
a Person other than the registered holder of the Certificates surrendered, it
shall be a condition of such payment that the Certificates so surrendered shall
be properly endorsed or otherwise in proper form for transfer and that the
Person requesting such payment shall pay any transfer or other taxes required by
reason of the payment to a Person other than the registered holder of the
Certificates surrendered or establish to the satisfaction of the Surviving
Corporation or the Exchange Agent that such tax has been paid or is not
applicable. Until surrendered as contemplated by this Section , each
Certificate shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender the Merger Consideration into
which the Company Common Stock represented by such Certificate shall have been
converted pursuant to Section 0.
(c) One hundred eighty days following the Effective Time, Acquiror shall
be entitled to cause the Exchange Agent to deliver to it any Funds (including
any interest, dividends, earnings or distributions received with respect
thereto which shall be paid as directed by Acquiror) and Warrants made
available to the Exchange Agent by Acquiror which have not been disbursed, and
thereafter holders of Certificates who have not theretofore complied with the
instructions for exchanging their Certificates shall be entitled to look only
to the Acquiror for payment as general creditors thereof with respect to the
cash payable and Warrants issuable upon due surrender of their Certificates.
(d) Acquiror shall pay all charges and expenses, including those of the
Exchange Agent, in connection with the exchange of the Merger Consideration for
Certificates.
(e) Notwithstanding anything to the contrary in this Section , none of the
Exchange Agent, Acquiror, the Company, the Surviving Corporation or Sub shall
be liable to a holder of a Certificate formerly representing Company Common
Stock for any amount properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
6
<PAGE> 11
(f) From and after the Effective Time, there shall be no transfers on
the stock transfer books of the Surviving Corporation of Company Common Stock
that was outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to Acquiror, the Surviving
Corporation or the Exchange Agent, they shall be cancelled and exchanged for the
Merger Consideration, as provided in this Article 3.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to Acquiror (the "Company Disclosure Memorandum") or in the
Company Reports (as defined in Section 4.6), the Company represents and
warrants to Acquiror as of the date of this Agreement as follows:
4.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida. The Company is duly qualified to do business, and in good standing,
in the states of the United States in which the character of the properties
owned or leased by it or the conduct of its business requires it to be so
qualified, except where the failure to be so qualified or to be in good
standing would not have a Material Adverse Effect. For purposes of this
Agreement, the term "Material Adverse Effect" means, with respect to the
Company, the Surviving Corporation, Acquiror or Sub, a material adverse effect
on the business, assets, liabilities, financial condition or results of
operations of such party and its Subsidiaries taken as a whole or a material
adverse effect on the ability of such party to perform its obligations
hereunder; provided, however, that results of operations shall not be a
component of Material Adverse Effect for events that occur after the date of
this Agreement, provided, further, however, that no Material Adverse Effect
shall be deemed to have occurred by reason of a general deterioration in the
economy or in the broadcasting industry after the date of this Agreement. The
Company has furnished to Acquiror complete and correct copies of its Articles
of Incorporation and By-laws, as amended through the date hereof. Such
Articles of Incorporation and By-laws are in full force and effect and no other
organizational documents are applicable to or binding upon the Company.
7
<PAGE> 12
4.2 Authorization, Validity and Effect. The Company has the requisite
corporate power and authority to execute and deliver this Agreement and all
agreements and documents contemplated hereby to be executed and delivered by it,
and, subject to receipt of necessary shareholder approval, to consummate the
transactions contemplated hereby and thereby. The execution and delivery of
this Agreement and such other agreements and documents, and the consummation of
the transactions contemplated herein and therein, have been duly and validly
authorized by all necessary corporate action in respect thereof on the part of
the Company, subject, with respect to this Agreement, to the approval of the
shareholders of the Company as set forth below. This Agreement has been duly
and validly executed and delivered by the Company and represents the legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms.
4.3 Capitalization. (a) The authorized capital stock of the Company
consists of (i) 500,000,000 shares of Company Common Stock, of which, as of
February 9, 1996, 20,236,633 shares were issued and outstanding, (ii)
125,000,000 shares of Class B Common Stock, par value $.01 per share (the
"Class B Shares"), of which no shares are issued and outstanding, and (iii)
9,500,000 shares of Preferred Stock, par value $.01 per share (the "Company
Preferred Shares"), of which no shares are issued and outstanding (the Company
Common Stock, the Class B Shares and the Company Preferred Shares are referred
to herein, collectively, as the "Company Capital Stock"). All of the issued
and outstanding shares of Company Common Stock are duly and validly issued and
outstanding and are fully paid and nonassessable. As of February 9, 1996, the
Company had outstanding Options representing the right to acquire from the
Company not more than 1,611,437.5 shares of Company Common Stock. All such
Options, the recipient of the Option, the grant date, exercise price, vesting
and other material terms are described in Section 4.3(b) of the Company
Disclosure Memorandum.
(b) Except as set forth in subsection , there are no shares of capital
stock or other equity securities of the Company outstanding, and except as set
forth in subsection 4.3(b) of the Company Disclosure Memorandum, no outstanding
options, warrants or rights to subscribe for, securities or rights convertible
into or exchangeable for, or contracts, commitments or arrangements by which the
Company is or may be required to issue or sell (collectively, "Equity Rights")
additional shares of the Company Capital Stock.
8
<PAGE> 13
(c) Since February 9, 1996, the Company has not (i) issued any shares
of Company Capital Stock or Equity Rights for shares of Company Capital Stock,
other than pursuant to the exercise of Options that were issued and outstanding
on February 9, 1996, (ii) purchased, redeemed or otherwise acquired, directly or
indirectly through one or more Company Subsidiaries, any shares of Company
Capital Stock, or (iii) declared, set aside, made or paid to the shareholders of
the Company dividends or other distributions on the outstanding Company Common
Stock.
4.4 Company Subsidiaries. (a) Subsection 4.4(a) of the Company
Disclosure Memorandum lists all material Subsidiaries of the Company (the
"Material Company Subsidiaries") and all other Subsidiaries. No Subsidiary
other than the Material Company Subsidiaries has any material operations, or
any liabilities. Except as indicated in subsection 4.4(a) of the Company
Disclosure Memorandum, all of the outstanding shares of capital stock of each
such Material Company Subsidiary are owned by the Company either directly or
indirectly through another Material Company Subsidiary. Except as set forth in
subsection 4.4(a) of the Company Disclosure Memorandum, no equity securities of
any Material Company Subsidiary may be required to be issued (other than to the
Company or another Material Company Subsidiary) by reason of any Equity Rights
for shares of the capital stock of any Material Company Subsidiary. Except as
set forth in subsection 4.4(a) of the Company Disclosure Memorandum, there are
no contracts, commitments, understandings or arrangements by which the Company
or any Material Company Subsidiary is or may be obligated to transfer any
shares of the capital stock of any Material Company Subsidiary. Except as set
forth in subsection 4.4(a) of the Company Disclosure Memorandum, all of the
outstanding shares of capital stock of each Material Company Subsidiary held by
the Company or any Material Company Subsidiary are fully paid and nonassessable
and are owned by the Company or such Material Company Subsidiary free and clear
of any claim, lien or encumbrance. Each Material Company Subsidiary is duly
organized, validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated or organized, has the corporate power
and authority necessary for it to own or lease its properties and assets and to
carry on its business as it is now being conducted, and is duly qualified to do
business and in good standing in the states of the United States in which the
ownership of its property or the conduct of its business requires it to be so
qualified, except for such jurisdictions in which the failure to be so
qualified and in good standing would not have a Material Adverse Effect. As
used in this Agreement, the term "Subsidiary"
9
<PAGE> 14
shall mean, with respect to the Company or Acquiror, any corporation or other
legal entity of which such party or any of its subsidiaries controls or owns,
directly or indirectly, more than 50% of the stock or other equity interest
entitled to vote on the election of members to the board of directors or similar
governing body.
(b) Except for interests in the Company's Subsidiaries and except as
set forth in subsection 4.4(b) of the Company Disclosure Memorandum, neither the
Company nor any of the Material Company Subsidiaries owns, directly or
indirectly, any interest or investment (whether equity or debt) in any
corporation, partnership, joint venture, business, trust or entity, other than
(i) investments of less than $1,000,000 in the aggregate and (ii) promotional
activities undertaken in the ordinary course of business.
4.5 No Conflict; Required Filings and Consents. (a) None of the execution
and delivery of this Agreement by the Company, nor the consummation by the
Company of the transactions contemplated herein, nor compliance by the Company
with any of the provisions hereof, will (i) conflict with or result in a breach
of any provision of the articles of incorporation or by-laws or equivalent
organizational documents of the Company or any of the Material Company
Subsidiaries, (ii) except as set forth in clause 4.5(a)(ii) of the Company
Disclosure Memorandum, constitute or result in the breach of any term,
condition or provision of, or constitute a default under, or give rise to any
right of termination, cancellation or acceleration with respect to, or result
in the creation of any lien, charge or encumbrance upon, any property or assets
of the Company or the Material Company Subsidiaries, pursuant to any note,
bond, mortgage, indenture, license, agreement, lease or other instrument or
obligation to which any of them is a party or by which any of them or any of
their properties or assets may be subject, and that would, in any such event,
have a Material Adverse Effect, or (iii) subject to receipt of the requisite
approvals referred to in subsection 4.5(b), violate any order, writ,
injunction, decree, statute, rule or regulation of any governmental,
quasi-governmental, judicial, quasi-judicial or regulatory authority with
jurisdiction, domestic or foreign (each, a "Governmental Authority") applicable
to the Company or any of the Material Company Subsidiaries or any of their
properties or assets.
(b) Other than (i) in connection or compliance with the provisions of
applicable state and federal securities laws, and the rules and regulations of
the Securities and Exchange
10
<PAGE> 15
Commission (the "SEC") thereunder, (ii) notices under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), (iii) applicable
approvals of the Federal Communications Commission (the "FCC") pursuant to
applicable laws and regulations ("Communications Law"); (iv) filings with the
Department of State of the State of Florida required to effect the Merger under
the FBCA, (v) in connection or compliance with the applicable requirements of
the Internal Revenue Code of 1986, as amended, (the "Code") and state, local and
foreign tax laws, (vi) as set forth in subsection 4.5(b) of the Company
Disclosure Memorandum, and (vii) where the failure to give such notice, make
such filing or receive such order, authorization, exemption, consent or approval
would not have a Material Adverse Effect, no notice to, filing with,
authorization of, exemption by or consent or approval of any Governmental
Authority is necessary for the consummation by the Company of the transactions
contemplated in this Agreement.
(c) The affirmative written consents of the Consenting Stockholders are
the only votes or consents of the holders of any class or series of Company
Capital Stock necessary to approve this Agreement, the Merger and the
transactions contemplated hereby on behalf of the Company.
4.6 Company Reports; Financial Statements. (a) The Company has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 1994 (collectively, the "Company Reports"). As of their respective
dates, the Company Reports and any such reports, forms and other documents
filed by the Company with the SEC after the date of this Agreement (i) complied
when made, or shall comply when made, as to form in all material respects with
the applicable requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder and (ii)
did not when made, or shall not when made, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The representation in clause (ii)
of the preceding sentence does not apply to any misstatement or omission in any
Company Report filed prior to the date of this Agreement that was superseded by
a subsequent Company Report filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Company and its Subsidiaries
as of December 31, 1993 and December 31, 1994
11
<PAGE> 16
and the related statements of operations, changes in shareholders' equity and
cash flows for the year ended December 31, 1994, together with the notes
thereto, are included in the Company's Annual Reports on Form 10-K for the
fiscal years ended December 31, 1993 and December 31, 1994, respectively, as
filed with the SEC, and the unaudited consolidated balance sheets of the Company
and its Subsidiaries as of March 31, 1995, June 30, 1995 and September 30, 1995,
and the related unaudited statements of operations, changes in shareholders'
equity and cash flows for the periods then ended are included in the Company's
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1995, June 30,
1995 and September 30, 1995, respectively, as filed with the SEC (together, the
"Company Financial Statements"). The Company Financial Statements have been
prepared in accordance with United States generally accepted accounting
principles ("GAAP") applied on a consistent basis (except as disclosed therein)
and fairly present, in all material respects, the consolidated financial
position and the consolidated results of operations, changes in shareholders'
equity and cash flows of the Company and its consolidated Subsidiaries as of the
dates and for the periods indicated (subject, in the case of interim financial
statements, to normal recurring year-end adjustments, none of which are expected
to be material, and the absence of footnote disclosure).
(c) As of the date of this Agreement, except as set forth in the
Company Financial Statements or the notes thereto, or as described in the
Company Disclosure Memorandum, neither the Company nor any Subsidiary has any
material outstanding claims against it, liabilities or indebtedness, contingent
or otherwise, nor does there exist any condition, fact or circumstances which
the Company reasonably anticipates will create such claim or liability, other
than liabilities incurred subsequent to September 30, 1995, in the ordinary
course of business, consistent with past practices and which individually and in
the aggregate do not have a Material Adverse Effect.
(d) Since December 31, 1994 and except as disclosed in the Company
Reports, the Company and the Material Company Subsidiaries have conducted their
respective businesses only in the ordinary course and consistent with past
practices and have not subjected any of their assets or properties to any Liens
(except in connection with acquisitions disclosed in the Company Reports).
(e) From December 31, 1994 through the date of this Agreement, except
as disclosed in the Company Disclosure
12
<PAGE> 17
Memorandum and the Company Reports, there has been no event, condition or
operation that has caused or is reasonably anticipated to cause a Material
Adverse Effect on the Company.
4.7 Tax and Accounting Matters. The Company and each of the Material
Company Subsidiaries have filed all material federal, state, county, local and
foreign tax returns, including information returns, required to be filed by it,
and paid or made adequate provision for the payment of all taxes shown on such
returns to be owed by it, including those with respect to income, withholding,
social security, unemployment, workers compensation, franchise, ad valorem,
premium, excise and sales taxes. The federal income tax returns of the Company
and the Material Company Subsidiaries for the fiscal year ended December 31,
1985 and for all fiscal years prior thereto and fiscal years ended December 31,
1989, December 31, 1990 and December 31, 1991 are closed by the relevant
statute of limitations, and no claims for additional taxes for such fiscal
years are pending. Except as disclosed in Section 4.7 of the Company
Disclosure Memorandum, neither the Company nor any of the Material Company
Subsidiaries is a party to any pending action or proceeding, nor, to the actual
knowledge of the officers of the Company listed in Section 4.7 of the Company
Disclosure Memorandum (the "Company's Knowledge"), is any such action or
proceeding threatened, by any Governmental Authority for the assessment or
collection of taxes, interest, penalties or deficiencies that would reasonably
be expected to have a Material Adverse Effect.
4.8 Properties. Except as disclosed or reserved against in the Company
Financial Statements, the Company and the Material Company Subsidiaries have
good and marketable title to all of the material properties and assets,
tangible or intangible, reflected in the Company Financial Statements as being
owned by the Company and the Material Company Subsidiaries as of the dates
thereof, free and clear of all liens, encumbrances, charges, defaults or
equities of whatever character, except such imperfections or irregularities of
title, liens, encumbrances, charges or defaults that are publicly disclosed or
such imperfections or irregularities of title as do not affect the use thereof
in any material respect and statutory liens securing payments not yet due
("Liens"). All leased buildings and all leased fixtures, equipment and other
property and assets that are material to its business on a consolidated basis
are held under leases or subleases that are valid instruments enforceable in
accordance with their respective terms. Section 4.8 of the Company Disclosure
Memorandum contains a list of all real estate owned or leased by the Company or
a Material Company Subsidiary,
13
<PAGE> 18
identifying which properties are owned and which are leased. All such leases
were entered into in the ordinary course of business. Other than as indicated
in the Company Disclosure Memorandum, none of the leases are with an Affiliate
or contain any material terms or conditions which make any such lease
unreasonably onerous or commercially unreasonable.
4.9 Compliance with Laws; FCC Authorizations. (a) Except as set forth in
subsection 4.9(a) of the Company Disclosure Memorandum, and except for
environmental matters, which shall be covered by Section and which shall not be
covered by this Section , to the Company's Knowledge, each of the Company and
the Material Company Subsidiaries:
(i) is in material compliance with all laws, regulations,
reporting and licensing requirements and orders applicable to its
business or employees conducting its business, the breach or
violation of which would have a Material Adverse Effect;
(ii) has received no notification or communication from any
Governmental Authority (i) asserting that the Company or any of
the Material Company Subsidiaries is not in compliance with any of
the statutes, regulations or ordinances that such Governmental
Authority enforces, which noncompliance would have a Material
Adverse Effect or (ii) threatening to revoke any license,
franchise, permit or authorization of any Governmental Authority,
which revocation would have a Material Adverse Effect.
14
<PAGE> 19
(b) Set forth in subsection 4.9(b) of the Company Disclosure Memorandum is
a list of the FCC licenses (the "Station Licenses") that are required for the
lawful conduct of the radio and television broadcasting business and operations
of the Company and its Material Company Subsidiaries (the "Stations") in the
manner and to the full extent they are now conducted. The Company or a
Subsidiary thereof is the authorized legal holder of the Station Licenses, none
of which is subject to any material restriction or condition which would limit
the full operation of the Stations as now operated. Except as set forth in
subsection 4.9(b) of the Company Disclosure Memorandum, there are no
applications, complaints or proceedings pending or, to the Company's Knowledge,
threatened before the FCC relating to the business or operations of the Stations
other than applications, complaints or proceedings which generally affect the
radio or television broadcasting industries or those that would not have,
individually or in the aggregate, a Material Adverse Effect on the Company. The
Station Licenses listed in subsection 4.9(b) of the Company Disclosure
Memorandum are validly held, are in good standing and are in full force and
effect and are unimpaired by any act. Except as set forth in subsection 4.9(b)
of the Company Disclosure Memorandum, to the Company's Knowledge, there is no
reason related to the Company why the FCC would not approve the transfer of
control of the Company to Acquiror or any of its Subsidiaries and the renewal of
the Station Licenses upon the expiration of the current term of each such
Station License. Except as set forth in subsection 4.9(b) of the Company
Disclosure Memorandum, all reports, forms and statements required to be filed by
the Company with the FCC with respect to the Stations since the grant of the
last renewal of the Station Licenses have been timely filed and are complete and
accurate, except where the failure to so file or where the failure to be
complete and accurate would, individually or in the aggregate, not have a
Material Adverse Effect on the Company. Except as set forth in subsection
4.9(b) of the Company Disclosure Memorandum, each Station is being operated in
compliance with the Communications Law and the specifications of the Station
Licenses, in each case in all material respects.
15
<PAGE> 20
4.10 Employee Benefit Plans.
(a) Except as specified in the Company Disclosure Memorandum, neither
the Company nor any Material Company Subsidiary has an "employee pension benefit
plan" as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), including any "multiemployer plan" as defined in
Section 3(37) of ERISA (such plans so noted shall be referred to as the
"Retirement Plans"), "employee welfare benefit plan" as defined in Section 3(1)
of ERISA including without limitation post-employment benefit and retiree
medical plans, funds and programs ("Benefit Plans") or a "specified fringe
benefit plan" as defined in Section 6039D of the Code ("SFB Plans") (together,
the Retirement Plans, Benefit Plans and SFB Plans noted in the Company
Disclosure Memorandum shall be referred to collectively as the "Plans" and
individually as a "Plan"). All Plans are maintained by the Company.
(b) Each Plan is, and has been at all times, operated in material
compliance with all statutes, orders or governmental rules or regulations,
including but not limited to ERISA and the Code, and any and all collective
bargaining agreements and other contracts applicable thereto.
(c) The Retirement Plans, and their related trusts, if any, are
qualified and tax-exempt under Sections 401 and 501 of the Code. The Company
has received favorable determination letters from the Internal Revenue Service
with respect to the qualification and tax exempt status of the Retirement Plans
and their related trusts, if any, under the Code, and nothing has occurred (or
failed to occur) since the receipt of such determination letters to cause a loss
of the Plans' qualification and tax-exempt status.
(d) All material required reports and descriptions of the Plans
(including IRS Form 5500 Annual Reports, Summary Annual Reports and Summary Plan
Descriptions) have been appropriately filed and distributed.
(e) All material notices required by ERISA, the Code or any other
state or federal law, ruling or regulation with respect to the Plans have been
appropriately filed.
(f) All contributions to the Plans for all periods ending on or before
the Closing Date will be made prior to the Closing Date by the Company and each
Material Company Subsidiary
16
<PAGE> 21
in accordance with past practice and no Plans are currently or shall be unfunded
or underfunded as of the Closing Date.
(g) All insurance premiums (including premiums to the Pension Benefit
Guaranty Corporation) relating to the Plans have been paid in full in a timely
manner.
(h) With respect to the Plans, no prohibited transactions (as defined in
Section 406 of ERISA or Section 4975 of the Code) that would result in
liability to the Company have occurred and no reportable events (as defined in
Section 4043 of ERISA) have occurred.
(i) There is not, and has not been, an accumulated funding deficiency with
respect to the Retirement Plans subject to the minimum funding requirements of
Section 412 of the Code or Section 302 of ERISA that has resulted in any
material liability to the Company that has not been satisfied in full.
(j) No material action, suit, grievance, arbitration or other manner of
litigation, or claim with respect to the Plans or the assets thereof (other
than routine claims for benefits made in the ordinary course of plan
administration) are pending, threatened against or with respect to the Plans,
the Company, any Material Company Subsidiary or any fiduciaries (as defined in
Section 3(21) of ERISA) of the Plans (including any action, suit, grievance,
arbitration or other manner of litigation, or claim regarding conduct which
allegedly interferes with the attainment of rights under a Plan).
(k) Except as set forth in the Company Disclosure Memorandum, neither the
Company nor any Material Company Subsidiary has ever contributed, nor has it
ever been required to contribute, to any "multiemployer plans" (as defined in
Section 3(37) of ERISA) and neither the Company nor any Material Company
Subsidiary has or will incur any withdrawal liability with respect to any such
plans.
(l) Except as set forth in the Company Disclosure Memorandum, neither the
Company nor any Material Company Subsidiary has any stock purchase plan, stock
option plan, phantom stock plan, stock appreciation rights plan, bonus plan or
any severance, deferred compensation or retirement plans or similar agreements
(whether or not subject to ERISA).
(m) The Company and each Material Company Subsidiary has complied with
COBRA in all material respects.
17
<PAGE> 22
(n) Any and all post-employment benefit plans, funds and programs and
retiree medical plans, funds and programs of the Company or its Material Company
Subsidiaries have been fully funded and neither the Company nor any Material
Company Subsidiary has any further obligation to make any additional
contributions to such plans.
4.11 Material Contracts. Set forth in Section 4.11 of the Company
Disclosure Memorandum is a list, as of the date hereof, of the following
agreements (the "Company Contracts"):
(a) each partnership or joint venture agreement to which the Company or
any Material Company Subsidiary is a party;
(b) each agreement limiting the right of the Company or any Material
Company Subsidiary to engage in or compete with any Person in any business or
geographical area;
(c) each agreement or other arrangement of or involving the Company or any
Material Company Subsidiary with respect to indebtedness for money borrowed,
including letters of credit, guaranties, indentures, swaps and similar
agreements;
(d) each management, consulting, employment, severance or similar
agreement requiring the payment of compensation in excess of $150,000 annually,
to which the Company or any of the Material Company Subsidiaries is a party,
other than agreements with on-air talent;
(e) each collective bargaining agreement to which the Company or any
Material Company Subsidiary is a party;
(f) each agreement with a national sales representative to which the
Company or any Material Company Subsidiary is a party;
(g) each network affiliation agreement to which the Company or any
Material Company Subsidiary is a party; and
(h) each agreement with any Affiliate of the Company (other than
employment agreements) to which the Company or any Material Company Subsidiary
is a party which involves total payments or liabilities to or from the Company
or any Material Company Subsidiary in excess of $60,000.
18
<PAGE> 23
Each of the Company Contracts is in full force and effect and is a legal, valid
and binding contract or agreement, and there is no default or breach (or, to the
Company's Knowledge, any event that, with the giving of notice or lapse of time
or both would result in a material default or breach) by the Company or any of
the Material Company Subsidiaries, or, to the Company's Knowledge, any other
party, in the timely performance of any obligation to be performed or paid
thereunder or any other material provision thereof, that, individually or in the
aggregate, would have a Material Adverse Effect. The Company acknowledges that
there are certain material contracts (including without limitation agreements
concerning radio syndicated programming and network affiliation and other
material agreements which are not available at the Company's corporate offices
on the date hereof), some of which are listed on Section 4.11 of the Company
Disclosure Memorandum and some of which are not, that have not been furnished to
Acquiror as of the date of this Agreement (the "Undisclosed Contracts"). Within
ten days after the date hereof, the Company will deliver to Acquiror copies of
all Undisclosed Contracts.
4.12 Legal Proceedings. As of the date of this Agreement, except as
disclosed in the Company Reports or as set forth in Section 4.12 of the Company
Disclosure Memorandum, there are no actions, suits, investigations or
proceedings instituted or pending, or to the Company's Knowledge, overtly
threatened, against the Company or any of the Material Company Subsidiaries, or
against any property, asset, interest or right of any of them, that involve
more than $100,000 in controversy, or that seek relief other than money damages
from the Company or a Subsidiary, or that would have, either individually or in
the aggregate, a Material Adverse Effect if adversely decided. Neither the
Company nor any of the Material Company Subsidiaries is subject to any
judgment, order, writ, injunction or decree that would have a Material Adverse
Effect.
4.13 Certain Information. (a) When the Registration Statement (as
defined in Section ) to be filed with the SEC by Acquiror pursuant to Section
hereof or any post-effective amendment thereto shall become effective, and at
all times subsequent to such effectiveness up to and including the Effective
Time, such Registration Statement and all amendments or supplements thereto,
with respect to all information set forth therein furnished by the Company
relating to the Company or its Subsidiaries, shall comply as to form in all
material respects with the provisions of all applicable securities laws. Any
written information supplied or to be supplied by the Company specifically for
inclusion in the Registration Statement will not
19
<PAGE> 24
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made not misleading.
(b) None of the information supplied or to be supplied by the Company for
inclusion in the Information Statement (as defined in Section ) shall, at the
time such document is filed with the SEC and when it is first mailed to the
shareholders of the Company, be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which they are
made, not misleading. If at any time prior to the Effective Time any event
occurs which should be described in the Information Statement or any supplement
or amendment thereto, the Company will file and disseminate, as required, a
supplement or amendment which complies as to form in all material respects with
the provisions of all applicable securities laws. Prior to its filing with the
SEC, the Information Statement and each amendment or supplement thereto shall
be delivered to Acquiror and its counsel. All documents that the Company is
responsible for filing with the SEC or any other Governmental Authority in
connection with the transactions contemplated hereby shall comply as to form in
all material respects with the provisions of applicable law and the applicable
rules and regulations thereunder.
4.14 No Brokers. The Company has not entered into any contract,
arrangement or understanding with any Person or firm that may result in the
obligation of the Company, Acquiror or Sub to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby, except that the Company has retained Salomon Brothers Inc
as its financial advisor (the "Company Financial Advisor"), which Financial
Advisor may be entitled to an advisor fee of up to $3.0 million in connection
with the transactions contemplated hereby. In addition, the Company may
reimburse certain third parties for legal expenses incurred by such third
parties not to exceed $250,000 in the aggregate.
4.15 Opinion of Financial Advisor. The Company has received the opinion
of the Company Financial Advisor to the effect that, as of the date hereof, the
consideration to be received by the holders of the Company Common Stock in the
Merger is fair to such holders from a financial point of view. A copy of
20
<PAGE> 25
such opinion shall be delivered to Acquiror within 24 hours of its receipt by
the Company.
4.16 Environmental. Except insofar as inaccuracies in the following
statements would not have a Material Adverse Effect on the Company: (i) The
properties owned or leased by the Company or any Subsidiary and properties
formerly owned or leased by the Company or any Subsidiary for which the Company
has contractual liability (the "Company Properties") are in compliance in all
material respects with all applicable federal, state and local environmental and
hazardous waste laws and regulations; (ii) no enforcement actions are pending or
threatened against the Company or any Subsidiary and no notice of potential
liability or administrative or judicial proceedings (including notices regarding
clean up of off-site third party hazardous waste sites) has been received; (iii)
there does not now exist on the Company Properties, and there has not occurred
on, from or under the Company Properties, a material disposal or release of,
Hazardous Substances, Hazardous Wastes or Contaminants; (iv) the Company
Properties contain no unregistered underground storage tanks; (v) neither the
Company nor any Subsidiary nor any of their respective predecessors has any
contingent liability in connection with the release of any Hazardous Substances,
Hazardous Wastes or Contaminants into the environment; (vi) all broadcast
facilities operated by the Company or any Subsidiary are, and at all times prior
hereto were, in compliance with all applicable rules and regulations relating to
RF radiation produced by a broadcast station; and (vii) neither the Company or
any Subsidiary nor any of their respective predecessors has (A) given any
release or waiver of liability that would waive or impair any claim based on
Hazardous Substances, Hazardous Wastes or Contaminants to any current or prior
tenant or owner of any real property owned or leased at any time by either the
Company or any Subsidiary or to any party who may be potentially responsible for
the presence of Hazardous Substances, Hazardous Wastes or Contaminants on any
such real property; or (B) made any promise of indemnification to any party
regarding Hazardous Substances, Hazardous Wastes or Contaminants that may be
located on any real property owned or leased at any time by either the Company
or any Subsidiary or any of their respective predecessors. Section 4.16 of the
Company Disclosure Memorandum contains a description of environmental
indemnities of which either the Company or any Subsidiary is a beneficiary.
4.17 Personnel.
21
<PAGE> 26
(a) Except as disclosed in Sections 4.10 and 4.11 of the Company Disclosure
Memorandum, or as required pursuant to Section 6.6(c) hereof, there is no
employment agreement, employee benefit or incentive compensation plan or program
or severance policy or program to which the Company or any Material Company
Subsidiary is a party (i) that is or could, pursuant to its terms, be triggered
or accelerated by reason of or in connection with the execution of this
Agreement or the consummation of the transactions contemplated by this Agreement
or (ii) which contains "change in control" provisions pursuant to which the
payment, vesting or funding of compensation or benefits is or by reason of or in
connection with the execution of or consummation of the transactions
contemplated by this Agreement or the transactions contemplated by this
Agreement.
(b) Except as set forth on Section 4.11 of the Company Disclosure
Memorandum, there are no labor disputes existing, or to the Company's
Knowledge, threatened, involving strikes, work stoppages, slow downs or
lockouts. There are no grievance proceedings or claims of unfair labor
practices filed or, to the Company's Knowledge, threatened to be filed with the
National Labor Relations Board against the Company or any Material Company
Subsidiary. To the Company's Knowledge, there is no union representation or
organizing effort pending or threatened against the Company or any Material
Company Subsidiary. Neither the Company nor any Material Company Subsidiary
has agreed to recognize any union or other collective bargaining unit except
those governed by the terms of the agreements listed in Section 4.11 of the
Company Disclosure Memorandum.
4.18 Takeover Statutes. No "fair price", "moratorium", "control share
acquisition" or other similar anti-takeover statute or regulation enacted under
any federal or state or other foreign law, applicable to the Company is
applicable to the Merger or the other transactions contemplated hereby.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF ACQUIROR AND SUB
Except as set forth in the disclosure letter delivered at or prior to the
execution hereof to the Company (the "Acquiror Disclosure Memorandum"),
Acquiror and Sub represent and warrant to the Company as of the date of this
Agreement as follows:
22
<PAGE> 27
5.1 Organization and Standing. Each of Acquiror and Sub is a corporation
duly organized, validly existing and in good standing under the laws of the
State of its incorporation. Each of Acquiror and Sub is duly qualified to do
business, and in good standing, in the states of the United States in which the
character of the properties owned or leased by it or in which the conduct of its
business requires it to be so qualified, except where the failure to be so
qualified or to be in good standing would not have a Material Adverse Effect.
Acquiror has furnished to the Company complete and correct copies of its
Articles of Incorporation and Code of Regulations as amended, through the date
hereof. Such Articles of Incorporation and Code of Regulations are in full force
and effect and no other organizational documents are applicable to or binding
upon Acquiror.
5.2 Authorization, Validity and Effect. Each of Acquiror and Sub has the
requisite corporate power and authority to execute and deliver this Agreement
and all agreements and documents contemplated hereby to be executed and
delivered by it, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and such other
agreements and documents, and the consummation of the transactions contemplated
herein and therein, have been duly and validly authorized by all necessary
corporate action in respect thereof on the part of each of Acquiror and Sub.
This Agreement has been duly and validly executed and delivered by each of
Acquiror and Sub and represents the legal, valid and binding obligation of each
of Acquiror and Sub, enforceable against each of them in accordance with its
terms.
5.3 Capitalization. The authorized capital stock of Acquiror consists of
40,000,000 Common Shares, of which, as of February 1, 1996, 18,163,425 shares
were issued and outstanding (the "Acquiror Common Stock"). The Automatic
Conversion (as such term is defined in the Amended and Restated Articles of
Acquiror) has occurred. Except as set forth in this Section or Section 5.3 of
the Acquiror Disclosure Memorandum, there are no shares of capital stock or
other equity securities of Acquiror outstanding and there are no outstanding
Equity Rights for additional shares of Acquiror Capital Stock. All of the
issued and outstanding shares of Acquiror Common Stock are duly and validly
issued and outstanding and are fully paid and nonassessable.
5.4 No Conflict; Required Filings and Consents. (a) None of the execution
and delivery of this Agreement by Acquiror or Sub, nor the consummation by
Acquiror or Sub of the transactions contemplated herein, nor compliance by
Acquiror or Sub with any of
23
<PAGE> 28
the provisions hereof, will (i) conflict with or result in a breach of any
provision of the articles of incorporation or by-laws or equivalent
organizational documents of Acquiror or Sub, (ii) constitute or result in the
breach of any term, condition or provision of, or constitute a default under, or
give rise to any right of termination, cancellation or acceleration with respect
to, or result in the creation of any lien, charge or encumbrance upon, any
property or assets of Acquiror or Sub or, pursuant to any note, bond, mortgage,
indenture, license, agreement, lease or other instrument or obligation to which
either of them is a party or by which either of them or their respective
properties or assets may be subject, and that would, in any such event, have a
Material Adverse Effect, or (iii) subject to receipt of the requisite approvals
referred to in subsection 5.4(b) of the Acquiror Disclosure Memorandum, to the
actual knowledge of the officers of Acquiror listed in clause 5.4(a)(iii) of the
Acquiror Disclosure Memorandum ("Acquiror's Knowledge"), violate any order,
writ, injunction, decree, statute, rule or regulation of any Governmental
Authority applicable to Acquiror, Sub or any of their respective properties or
assets.
(b) Other than (i) in connection or compliance with the provisions of
applicable state and federal securities laws, and the rules and regulations of
the SEC thereunder, including the registration of Warrants issuable in the
Merger at the Effective Time pursuant to the Registration Statement, (ii)
notices and completion of waiting periods under the HSR Act, (iii) applicable
approvals of the FCC, (iv) filings with the Department of State of the State of
Florida required to effect the Merger under the FBCA, (v) in connection or
compliance with the applicable requirements of the Code and state, local and
foreign tax laws, (vi) as set forth in subsection 5.4(b) of the Acquiror
Disclosure Memorandum, and (vii) where the failure to give such notice, make
such filing, or receive such authorization, exemption, consent or approval
would not have a Material Adverse Effect, no notice to, filing with,
authorization of, or exemption by, or consent or approval of any Governmental
Authority is necessary for the consummation by Acquiror or Sub of the
transactions contemplated in this Agreement.
(c) The affirmative vote of the shares of Acquiror Common Stock
beneficially owned by The Zell/Chilmark Fund L.P. at a meeting of the
shareholders of Acquiror duly called for such purpose is sufficient, and no
further vote or consent of any class or series of capital stock of Acquiror is
necessary, to approve the authorization for issuance by Acquiror of shares of
Acquiror
24
<PAGE> 29
Common Stock and Warrants in an amount necessary for payment of the Merger
Consideration.
5.5 Acquiror Reports; Financial Statements. (a) The Acquiror has filed all
forms, reports and documents required to be filed by it with the SEC since
January 1, 1994 (collectively, the "Acquiror Reports"). As of their respective
dates, the Acquiror Reports and any such reports, forms and other documents
filed by the Acquiror with the SEC after the date of this Agreement (i) complied
when made, or shall comply when made, as to form in all material respects with
the applicable requirements of the Securities Act, the Exchange Act and the
rules and regulations promulgated thereunder and (ii) did not when made, or
shall not when made, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The representation in clause (ii) of the preceding
sentence does not apply to any misstatement or omission in any Acquiror Report
filed prior to the date of this Agreement that was superseded by a subsequent
Acquiror Report filed prior to the date of this Agreement.
(b) The consolidated balance sheets of the Acquiror and its Subsidiaries
as of December 31, 1993 and December 31, 1994 and the related statements of
operations, changes in shareholders' equity and cash flows for the year ended
December 31, 1994, together with the notes thereto, are included in the
Acquiror's Annual Reports on Form 10-K for the fiscal years ended December 31,
1993 and December 31, 1994, respectively, as filed with the SEC, and the
unaudited consolidated balance sheets of the Acquiror and its Subsidiaries as
of March 31, 1995, June 30, 1995 and September 30, 1995, and the related
unaudited statements of operations, changes in shareholders' equity and cash
flows for the periods then ended are included in the Acquiror's Quarterly
Reports on Form 10-Q for the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995, respectively, as filed with the SEC (together, the
"Acquiror Financial Statements"). The Acquiror Financial Statements have been
prepared in accordance with GAAP applied on a consistent basis (except as
disclosed therein) and fairly present, in all material respects, the
consolidated financial position and the consolidated results of operations,
changes in shareholders' equity and cash flows of the Acquiror and its
consolidated Subsidiaries as of the dates and for the periods indicated
(subject, in the case of interim financial statements, to normal recurring
year-end adjustments, none of which are expected to be material, and the
absence of footnote disclosure).
25
<PAGE> 30
The Acquiror and its Subsidiaries do not have any material liabilities not
disclosed on the Acquiror Financial Statements.
5.6 Legal Proceedings. As of the date of this Agreement and except as set
forth in Section 5.6 of the Acquiror Disclosure Memorandum, there are no
actions, suits or proceedings instituted or pending, or to Acquiror's Knowledge,
overtly threatened, against Acquiror or Sub, or against any property, asset,
interest or right of any of them, that involve more than $100,000 in
controversy, or that seek relief other than money damages from the Acquiror or
any Subsidiary, or that would have, either individually or in the aggregate, a
Material Adverse Effect on Acquiror if adversely decided. Neither Acquiror nor
Sub is subject to any judgment, order, writ, injunction or decree that would
have a Material Adverse Effect.
5.7 Certain Information.
(a) When the Registration Statement or any post-effective amendment
thereto shall become effective, and at times subsequent to such effectiveness
up to and including the Effective Time, the Registration Statement and all
amendments or supplements thereto, shall comply as to form in all material
respects with the provisions of all applicable securities laws. If at any time
prior to the Effective Time any event occurs which should be described in the
Registration Statement or any supplement or amendment thereto, Acquiror will
file and disseminate, as required, a supplement or amendment which complies as
to form in all material respects with the provisions of all applicable
securities laws. Prior to its filing with the SEC, the Registration Statement
and each amendment or supplement thereto shall be delivered to the Company and
its counsel. With respect to any information supplied by Acquiror, the
Registration Statement will not, at the time the prospectus included therein is
mailed to shareholders of the Company, and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(b) None of the information supplied or to be supplied by Acquiror or Sub
for inclusion in the Information Statement shall, at the time such document is
filed with the SEC or when it is first mailed to the shareholders of the
Company, be false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements therein, in
light of the circumstances under which they are made,
26
<PAGE> 31
not misleading. All documents that Acquiror or Sub are responsible for filing
with the SEC or any other Governmental Authority in connection with the
transactions contemplated hereby shall comply as to form in all material
respects with the provisions of applicable law and the applicable rules and
regulations thereunder.
(c) When the Registration Statement or any post-effective amendment thereto
shall become effective, and at times subsequent to such effectiveness up to and
including the Effective Time, the Registration Statement and all amendments or
supplements thereto, except with respect to information set forth therein
provided by the Company, shall not be false or misleading with respect to any
material fact, or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5.8 Ownership of Company Common Stock. Except as set forth in Section 5.8
of the Acquiror Disclosure Memorandum, none of Acquiror nor, to Acquiror's
Knowledge, any Affiliates (as defined below) of Acquiror or Sub, owns any
shares of Company Common Stock or other securities convertible into shares of
Company Common Stock. For purposes of this Agreement, an "Affiliate" of a
specified Person is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
the Person specified.
5.9 Merger Sub. Sub was formed solely for the purpose of engaging in the
transactions contemplated hereby. Sub is, and shall be on the Closing Date, a
wholly owned direct Subsidiary of Acquiror. Except for obligations or
liabilities incurred in connection with its incorporation or organization, and
the transactions contemplated hereby, Sub has not incurred any obligations or
liabilities or engaged in any business or activities of any type or kind
whatsoever or entered into any agreements or arrangements with any Person or
entity.
5.10 Acquiror's Financing. Acquiror has or will have sufficient funds
available to consummate the transactions contemplated by this Agreement and to
pay all transaction related fees and expenses.
5.11 Qualification as a Licensee. Acquiror will, from and after the date
upon which Acquiror executes the applications described in subsection , be
legally, financially and otherwise qualified under the Communications Law to be
owner and operator of
27
<PAGE> 32
the properties and assets of the Surviving Corporation, any of its Material
Company Subsidiaries, or any Station. Except as disclosed in Section 5.11 of
the Acquiror Disclosure Memorandum or in the Acquiror Reports, no fact exists
that would under the Communications Law disqualify Acquiror as the owner and
operator of the properties or assets of any Station.
5.12 No Brokers. Neither Acquiror nor Sub has entered into a contract,
arrangement or understanding with any Person or firm that may result in the
obligation of Acquiror, Sub or the Company to pay any finder's fees, brokerage
or agent's commissions or other like payments in connection with the
negotiations leading to this Agreement or the consummation of the transactions
contemplated hereby.
ARTICLE 6
COVENANTS AND AGREEMENTS
6.1 No Solicitation and Other Actions. (a) From and after the date of
this Agreement and except as set forth in subsection , the Company shall not,
and the Company shall direct and use its reasonable best efforts to cause the
officers, directors, employees, agents, advisors and other representatives of
the Company not to, directly or indirectly, (i) solicit, initiate, knowingly
encourage, or participate in discussions or negotiations regarding, any
proposals or offers from any individual, corporation, partnership, limited
liability corporation, joint venture, trust, association, unincorporated
organization, other entity, group or Governmental Authority ("Person") relating
to any Competing Transaction (as defined in subsection ) or (ii) furnish to any
other Person any nonpublic information or access to such information with
respect to, or otherwise concerning, any Competing Transaction. The Company
shall immediately cease and cause to be terminated any existing discussions or
negotiations with any third parties conducted heretofore with respect to any
proposed Competing Transaction. The Company shall promptly disclose the
identity of any Person who attempts to initiate any discussions contemplating a
Competing Transaction.
(b) Notwithstanding anything to the contrary contained in this Section or
in any other provision of this Agreement, until the consents required by the
Stockholders Agreement have been duly executed and delivered, the Company shall
not be prohibited by this Agreement from (i) participating in
28
<PAGE> 33
discussions or negotiations with, and, during such period, the Company may
furnish information to, a Person that seeks to engage in discussions or
negotiations, requests information or makes a proposal to acquire the Company
pursuant to a Competing Transaction, if the Company's directors determine in
good faith that such action is required for the discharge of their fiduciary
obligations, based upon the written advice of independent legal counsel, who may
be the Company's regularly engaged legal counsel (a "Director Duty"); (ii)
complying with Rule 14d-9 or Rule 14e-2 promulgated under the Exchange Act with
regard to a tender or exchange offer; (iii) making any disclosure to the
Company's shareholders in accordance with a Director Duty; (iv) failing to make,
modifying or amending its recommendations, consents or approvals referred to
herein in accordance with a Director Duty; or (v) terminating this Agreement and
entering into an agreement providing for a Competing Transaction in accordance
with a Director Duty. In the event that the Company or any of its officers,
directors, employees, agents, advisors or other representatives participate in
discussions or negotiations with, or furnish information to a Person that seeks
to engage in such discussions or negotiations, requests information or makes a
proposal to acquire the Company pursuant to a Competing Transaction pursuant to
this subsection , then: (i) the Company shall immediately disclose to the
Acquiror the decision of the Company's directors; (ii) the identity of the
Person; and (iii) copies of all information or material not previously furnished
to Acquiror which the Company, or its agents, provides or causes to be provided
to such Person or any of its officers, directors, employees, agents, advisors or
representatives.
(c) For the purposes of this Agreement, "Competing Transaction" shall mean
any of the following involving the Company: (i) any merger, consolidation,
share exchange, business combination or other similar transaction; (ii) any
sale, lease, exchange, transfer or other disposition of all or substantially
all of the assets of the Company and the Material Company Subsidiaries, taken
as a whole, in a single transaction or series of related transactions; or (iii)
any tender offer or exchange offer for shares of Company Common Stock.
6.2 Interim Operations of the Company. Prior to the Effective Time,
except as contemplated by any other provision of this Agreement or as set forth
in Section 6.2 of the Company Disclosure Memorandum, unless Acquiror has
previously consented in writing thereto (which consent may be withheld only
after substantive discussions with representatives of the Company) the
29
<PAGE> 34
Company shall not, and shall not permit any of the Material Company Subsidiaries
to:
(a) grant any general increase in compensation or benefits to its employees
or to its officers, except in the ordinary course consistent with past practice
or as required by law; pay any bonus compensation except in the ordinary course
consistent with past practice or in accordance with the provisions of any
applicable program or plan adopted by the Board of Directors of the Company or
such Material Company Subsidiary prior to the date hereof; enter into or amend
the terms of any severance agreements with its officers; or effect any change in
retirement benefits for any class of its employees or officers (unless such
change is required by applicable law) that would materially increase the
retirement benefit liabilities of the Company and the Material Company
Subsidiaries on a consolidated basis; provided, however, that nothing in this
subsection (a) shall prevent the payment or other performance of any award or
grant made prior to the date hereof and disclosed in the Company Reports filed
prior to the date hereof, the Company Disclosure Memorandum or pursuant to this
Agreement;
(b) amend, alter or revise any existing employment contract,
understanding, arrangement or agreement between the Company or any of the
Material Company Subsidiaries and any Person receiving compensation (including
salary and bonus) in excess of $150,000 per year (unless such amendment is
required by law) to increase the compensation (including bonus) or benefits
payable thereunder or pursuant thereto or enter into any new employment
contract, understanding, arrangement or agreement with any Person having a
salary thereunder in excess of $150,000 that the Company or such Material
Company Subsidiary does not have the unconditional right to terminate without
liability (other than liability for services already rendered) at any time on
or after the Effective Time;
(c) adopt any new employee benefit plan or make any change in or to any
existing Company ERISA Plans or Company Benefit Arrangements other than any
such change that (i) is required by law, (ii) in the opinion of counsel is
necessary or advisable to maintain the tax qualified status of any such, plan,
or (iii) would not materially increase, in the aggregate, the employee benefit
plan liabilities of the Company and the Material Company Subsidiaries, taken as
a whole;
(d) sell, lease or otherwise dispose of any of its assets (including
capital stock of Material Company Subsidiaries)
30
<PAGE> 35
or acquire any business or assets, except in the ordinary course of business, in
each case for an amount not exceeding $1,000,000;
(e) incur any material amount of indebtedness for borrowed money or make
any loans, advances or capital contributions to, or investments (other than
non-controlling investments in the ordinary course of business) in, any other
Person other than a Subsidiary of the Company, or issue or sell any debt
securities, other than (i) borrowings in connection with acquisitions permitted
by subsection , (ii) borrowings under existing lines of credit in the ordinary
course of business not to exceed $5,000,000 in the aggregate at any time
outstanding and (iii) borrowings made or indebtedness incurred to fund payments
made in connection with the exercise of Options pursuant to Section .
(f) except as set forth in subsection 6.2(f) of the Company Disclosure
Memorandum, authorize, commit to or make capital expenditures in each case in an
amount exceeding $6,000,000;
(g) mortgage or otherwise encumber or subject to any Lien any material
amount of properties or assets owned by the Company or any of the Material
Company Subsidiaries as of the date of this Agreement except for such of the
foregoing as are in the normal course of business;
(h) make any material change to its accounting (including tax accounting)
methods, principles or practices, except as may be required by GAAP;
(i) amend or propose to amend its articles of incorporation or by-laws or
equivalent organizational documents;
(j) declare or pay any dividend or distribution with respect to the
Company Capital Stock;
(k) except pursuant to Options already granted as of the date of this
Agreement, issue, sell, deliver or agree to issue, sell, deliver (whether
through issuance or granting of options, warrants, commitments, subscriptions
or rights to purchase) any Company Capital Stock or split, combine, reclassify
or subdivide the Company Capital Stock;
(l) make any tax election or settle or compromise any material tax
liability for an amount greater than reflected on the Company's Financial
Statements;
31
<PAGE> 36
(m) except pursuant to Options already granted as of the date of this
Agreement, directly or indirectly redeem, purchase or otherwise acquire any
shares of its capital stock or other securities;
(n) enter into any new lines of business or otherwise make material
changes to the operation of its business;
(o) except as to liabilities accrued on the books of the Company as of the
date of this Agreement, pay or agree to pay in settlement or compromise of any
suits or claims of liability against the Company, its directors, officers,
employees or agents, more than an aggregate of $100,000 for all such suits and
claims;
(p) enter into any agreement providing the acceleration or payment or
performance or other consequence as a result of a change in control of the
Company;
(q) purchase any radio or television stations, enter into any local
marketing arrangements, joint sales agreement or similar agreements;
(r) except as permitted under Sections , , and , enter into any contract,
agreement or understanding, whether in the ordinary course of business or not,
which would be the type of agreement which, if entered into prior to the date
hereof, would have to be disclosed pursuant to Section 4.11 or which would
obligate the Company or any Subsidiary to make payments of more than $150,000
per year;
(s) take any action or agree, in writing or otherwise, to take any of the
foregoing actions or any action which would make any representation or warranty
in Article 4 hereof materially untrue or incorrect; or
(t) commit to any of the foregoing.
6.3 Shareholder Approval. (a) With respect to the Company, this
Agreement, the Merger, and the other transactions contemplated hereby are
subject to approval of the shareholders of the Company, and in connection
therewith, the Consenting Stockholders have entered into the Stockholders
Agreement, which requires the Consenting Stockholders to execute written
consents in favor of this Agreement and the Merger by 5:00 p.m. Eastern
Standard Time on the thirtieth day after the execution of this
32
<PAGE> 37
Agreement by the Company unless the Agreement is terminated prior to such date.
(b) The authorization for issuance of shares of Acquiror Common Stock and
Warrants is subject to the approval of the shareholders of Acquiror and in
connection therewith, Zell/Chilmark L.P., the holder of in excess of 69% of the
outstanding Acquiror Common Stock has entered into the Jacor Shareholder
Agreement, the form of which is attached as Exhibit 6.3, pursuant to which
Zell/Chilmark L.P. has granted an irrevocable proxy to the Company solely for
the purpose of voting its shares of Acquiror Common Stock in favor of any
proposal for the authorization for issuance of such number of shares of
Acquiror Common Stock and Warrants as are necessary for payment of the Merger
Consideration.
(c) The Company and Acquiror shall each cause an information statement to
be mailed to their respective shareholders, and the Company and Acquiror shall
each furnish to the other all information concerning itself that the other may
reasonably request in connection with the preparation, filing and mailing of
such information statement.
6.4 Information Statement; Registration Statement. (a) As soon as
practicable following the date hereof, Acquiror and the Company shall cooperate
to prepare promptly and file with the SEC an Information Statement with respect
to the Merger (the "Information Statement") and a registration statement on
Form S-4 relating to the Warrants issuable in the Merger at the Effective Time
(the "Registration Statement"), subject, however, to deferral until such time
as Acquiror and the Company may reasonably agree in writing. As soon as
practicable following receipt of final comments from the staff of the SEC on
the Information Statement and Registration Statement (or advice that such staff
will not review such filing), Acquiror shall use its best efforts to have the
Registration Statement declared effective by the SEC and to maintain the
effectiveness of such Registration Statement until completion of the Merger.
Promptly after the effectiveness of the Registration Statement, the Company
shall mail the Information Statement to all holders of Company Common Stock and
holders of Acquiror Common Stock. Acquiror and the Company shall cooperate
with each other in the preparation of the Information Statement and the
Registration Statement and shall advise the other in writing if, at any time
prior to the Effective Time, any such party shall obtain knowledge of any facts
that might make it necessary or appropriate to amend or supplement the
Information Statement or the Registration Statement in order to make the
33
<PAGE> 38
statements contained or incorporated by reference therein not misleading or to
comply with applicable law. Notwithstanding the foregoing, each party shall be
responsible for the information and disclosures which it makes or incorporates
by reference in all regulatory filings, the Information Statement and the
Registration Statement.
(b) Acquiror shall file, no later than the third business day following
the Closing, a registration statement with the SEC relating to the issuance of
shares of Acquiror Common Stock issuable upon exercise of the Warrants ("Warrant
Shares") (such registration statement to be referred to herein as the "Warrant
Shares Registration Statement"). Acquiror shall use its reasonable best efforts
to have the Warrant Shares Registration Statement declared effective and to
cause the issuance of Warrant Shares to be registered, qualified or exempted
under applicable state securities laws as soon as is reasonably practicable.
Acquiror shall use its reasonable best efforts to amend or supplement the
Warrant Shares Registration Statement or the prospectus contained therein and to
take such actions as may be necessary to cause the Warrant Shares Registration
Statement to remain effective until the earlier of (i) the seventh anniversary
of the Closing and (ii) the expiration or exercise of all outstanding Warrants.
Prior to the Effective Time, Acquiror will exercise its reasonable best efforts
to cause the Warrants to be included for trading in the National Association of
Securities Dealers quotation system.
6.5 Notification. Each of the Company and Acquiror shall, after obtaining
knowledge of the occurrence, non-occurrence or threatened occurrence or
non-occurrence of any fact or event that would cause or constitute a material
breach or failure of any of the representations and warranties, covenants or
conditions set forth herein, or that would constitute or result in a Material
Adverse Effect to such party, notify the other parties in writing thereof with
reasonable promptness.
6.6 Employee Benefits. (a) For a period of at least two years after the
Effective Time, Acquiror shall cause the Surviving Corporation and each
Material Company Subsidiary to maintain compensation and benefit arrangements,
plans and programs for the benefit of current, former and retired salaried
employees of the Company and such subsidiaries and their respective
predecessors that are, in the aggregate, considering all compensation and
benefits, not less favorable than those provided by Acquiror or any of its
Affiliates to their similarly situated current, former and retired salaried
employees; provided, however, that nothing in
34
<PAGE> 39
this Agreement shall preclude or restrict the Surviving Corporation from
terminating the employment of any employee.
(b) If any salaried employee of the Company or any Material Company
Subsidiary becomes a participant in any employee benefit plan, practice or
policy of Acquiror, any of its Affiliates or the Surviving Corporation,
Acquiror shall cause such employee to be given credit under such plan, practice
or policy for all service prior to the Effective Time with the Company and its
subsidiaries, or any predecessor employer, for all purposes (including
eligibility, vesting and determination of benefits) for which such service is
either taken into account or recognized.
(c) Following the Effective Time, Acquiror shall, or shall cause the
Surviving Corporation to, honor the terms of all consulting, employment,
severance and similar agreements set forth in Section 4.11 of the Company
Disclosure Memorandum that were in effect immediately prior to the date hereof.
Within sixty days after the date hereof, the Company shall offer to enter into
Employment Continuation Agreements which will be binding upon the Surviving
Corporation with each of the persons and at the compensation listed on Exhibit
6.6(c) substantially in the forms attached hereto as Exhibit 6.6(c)(i) and
Exhibit 6.6.(c)(ii).
6.7 Investigation and Confidentiality. Prior to the Effective Time,
Acquiror and the Company each shall keep the other advised of all material
developments relevant to the transactions contemplated hereby and may make or
cause to be made such investigation, if any, of the business and properties of
the other party and its subsidiaries and of their respective financial and
legal condition as Acquiror or the Company reasonably deems necessary or
advisable to familiarize itself and its advisors with such business, properties
and other matters; provided, however, that such investigation shall be
reasonably related to the transactions contemplated hereby and shall not
interfere unnecessarily with normal operations. Acquiror and, except as
otherwise may be required by a Director Duty, the Company each agree to furnish
the other party and the other party's advisors with such financial and
operating data and other information with respect to its businesses, properties
and employees as Acquiror or the Company shall from time to time reasonably
request. All information furnished to the Company or Acquiror by the other
party hereunder (including, without limitation, all environmental information
obtained pursuant to Section or otherwise) shall be maintained by such party
pursuant to the terms of the confidentiality agreement (the "Confidentiality
Agreement") between the Company and Acquiror dated February 1, 1996, which
35
<PAGE> 40
shall survive the execution of this Agreement and remain in full force and
effect until the Effective Time.
6.8 Filings; Other Action. Subject to the terms and conditions herein
provided, the parties shall (a) within seven business days hereof make their
respective filings and thereafter make any other required submissions under the
HSR Act and the Communications Law; (b) use their reasonable best efforts to
cooperate with each other in (i) determining which filings are required to be
made prior to the Effective Time with, and which consents, approvals, permits or
authorizations are required to be obtained prior to the Effective Time from,
Governmental Authorities in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby and (ii)
timely making all such filings and timely seeking all such consents, approvals,
permits or authorizations; and (c) use their reasonable best efforts to take, or
cause to be taken, all other action and do, or cause to be done, all other
things necessary, proper or appropriate to consummate and make effective the
transactions contemplated by this Agreement and satisfy the conditions to the
transactions contemplated hereby; provided, however, that nothing in this
Section 0 shall require the Acquiror or Sub, or require the Acquiror or Sub to
cause the Surviving Corporation, to divest or hold separate any Station or
Stations, or asset or groups of assets, or enter into new arrangements or
terminate any existing arrangement, or take any other specific action requested
by any Governmental Authorities. If, at any time after the Effective Time, any
further action is necessary or desirable to carry out the purposes of this
Agreement, subject to the remaining provisions hereof, the officers and
directors of the parties shall promptly take all such necessary action.
6.9 Indemnification and Insurance.
(a) For not less than six years following the Effective Time, Acquiror
shall indemnify and hold harmless each present and former employee, agent,
director or officer of the Company and its Subsidiaries ("Indemnified Parties")
from and against any and all claims arising out of or in connection with
activities in such capacity, or on behalf of, or at the request of, the
Company, its Subsidiaries or their Affiliates, and shall advance expenses
incurred with respect to the foregoing, as they are incurred, to the fullest
extent permitted under applicable law; provided, however, that if any claim or
claims are asserted or made within such six-year period, all rights to
indemnification in respect of such claims shall continue until the final
disposition of any and all such claims.
36
<PAGE> 41
(b) Acquiror shall cause the Surviving Corporation to keep in effect
provisions in the Company's Restated Articles of Incorporation and By-laws
providing for exculpation of director and officer liability and its
indemnification of or advancement of expenses to the Indemnified Parties to the
fullest extent permitted under the FBCA, which provisions shall not be amended
except as required by applicable law or except to make changes permitted by law
that would enhance the Indemnified Parties' right of indemnification or
advancement of expenses.
(c) If, after the Effective Time, Acquiror or any of its successors or
assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers all or substantially all of its property and assets
to any Person, then, in each such case, proper provision shall be made so that
the successors and assigns of Acquiror assume all of the obligations set forth
in this Section . The provisions of this Section are intended to be for the
benefit of, and shall be enforceable by each Person who is now, or has been at
any time prior to the date of this Agreement, or who becomes prior to the
Effective Time, an officer, director, employee or agent of the
Company or any of its Subsidiaries (and their heirs and representatives).
6.10 Publicity. Acquiror and the Company shall each issue press releases
relating to this Agreement. Each such release will be reviewed by the other
party and all such initial press releases shall be mutually satisfactory to the
parties. Thereafter the Company and Acquiror shall, subject to their
respective legal obligations (including requirements of national securities
exchanges and other similar regulatory bodies), consult with each other
regarding the text of any press release before issuing any such press release
with respect to the transactions contemplated hereby and in making any filings
with any Governmental Authority or with any national securities exchange with
respect thereto.
6.11 Transfer Taxes. Acquiror shall pay any and all transfer taxes
(including, without limitation, any real estate transfer taxes) incurred in
connection with the Merger, whether such taxes are imposed on Acquiror, the
Company, their respective Subsidiaries or their shareholders.
6.12 Letter of Credit. Simultaneously with the execution and delivery of
the consents of the Consenting Stockholders in accordance with Section 0, the
parties shall enter into the Letter
37
<PAGE> 42
of Credit Escrow Agreement substantially in the form attached hereto as Exhibit
6.13 (the "Letter of Credit Escrow Agreement"). Pursuant to the Letter of
Credit Escrow Agreement, the Acquiror will deliver or cause to be delivered to
the Escrow Agent (as defined in the Letter of Credit Escrow Agreement) an
irrevocable letter of credit in the amount of $75,000,000 to be issued by an
issuer reasonably acceptable to the Company (the "Letter of Credit"). The
Letter of Credit shall be held and drawn on only as provided in Section 8.2(b)
and in the Letter of Credit Escrow Agreement.
6.13 Environmental Inspection. Within 100 days of the date of this
Agreement, Acquiror and Sub shall have the right, at their own expense, to
cause the inspection of the properties of the Company and its subsidiaries to
verify the accuracy of the Company's representations and warranties in Section
4.16. Any invasive testing or sampling, including, without limitation, testing
of soil, ground or surface water, at any of such properties shall be conducted
only following reasonable advance written notice to the Company and without any
unreasonable interference with the conduct of the Company's business.
6.14 Acknowledgement of Consents. The Company shall promptly forward to
Acquiror a copy of all consents received from the Consenting Stockholders and
shall promptly acknowledge in writing to Acquiror that consents have been
received from the holders of a majority of the outstanding voting stock of the
Company and that accordingly the Agreement and Plan of Merger has been duly
approved pursuant to Florida law.
6.15 Rule 145 Affiliates. At least 40 days prior to the Closing, the
Company shall deliver to Acquiror a letter identifying all persons who are, at
the time the Consenting Stockholders approve this Agreement and the Merger,
deemed to be "affiliates" of the Company for purposes of Rule 145 under the
Securities Act (the "Rule 145 Affiliates"). The Company shall use its
reasonable best efforts to cause each Rule 145 Affiliate to deliver to Acquiror
at least 30 days prior to the Closing an agreement substantially in the form of
Exhibit 6.15 to this Agreement.
6.16 Actions With Respect to the Warrants. If, after the date hereof and
prior to issuance of the Warrants, Acquiror shall take any action which, if the
Warrants had been issued and outstanding as of the date of any such action,
would have required an adjustment in the exercise price of the Warrants or in
the number of shares purchasable upon exercise of the Warrants, then
38
<PAGE> 43
the exercise price of the Warrants or such number of shares shall be adjusted
upon issuance of the Warrants to give effect to the adjustment which would have
been required as a result of such action.
ARTICLE 7
CONDITIONS TO CONSUMMATION OF THE MERGER
7.1 Conditions to Obligations of the Parties. The respective
obligations of the Company, Acquiror and Sub to effect the Merger shall be
subject to the satisfaction or waiver at or prior to the Closing of each of the
following conditions:
(a) This Agreement and the transactions contemplated
hereby shall have been approved in the manner required by applicable law by the
holders of a majority of the Company Common Stock as required by the
Stockholders Agreement and by the holders of Acquiror Common Stock as required
by the By-Laws of the National Association of Securities Dealers.
(b) The waiting period applicable to the consummation of
the Merger under the HSR Act shall have expired or been terminated.
(c) None of the parties hereto shall be subject to any
order or injunction of a court or Governmental Authority of competent
jurisdiction that prohibits the consummation of the transactions contemplated by
this Agreement. In the event any such order or injunction shall have been
issued, each party agrees to use its reasonable best efforts to have any such
order overturned or injunction lifted.
(d) All orders, approvals, and consents of the FCC
required in connection with the consummation of the transactions contemplated
hereby shall have been obtained or granted, whether or not any appeal or request
for reconsideration of such order is pending, or whether the time for filing any
such appeal or request for reconsideration or for any sua sponte action by the
FCC has expired.
(e) All consents, authorizations, orders and approvals of
(or filings or registrations with) any Governmental Authority (other than the
FCC) required in connection with the execution, delivery and performance of this
Agreement shall have been obtained or made, except for filings in connection
with the
39
<PAGE> 44
Merger and any other documents required to be filed after the Effective Time and
except where the failure to have obtained or made any such consent,
authorization, order, approval, filing or registration would not have a Material
Adverse Effect on the Surviving Corporation following the Effective Time.
(f) The Registration Statement shall have become
effective in accordance with the provisions of the Securities Act and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued by the SEC and remain in effect.
7.2 Conditions to Obligations of the Company. The obligations of
the Company to effect the Merger shall be subject to the satisfaction or waiver
at or prior to the Closing of each of the following additional conditions:
(a) The representations and warranties of Acquiror and
Sub set forth in this Agreement shall be true and correct in all respects as of
the date of this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as of the
Effective Time (except for any such representations and warranties made as of
specified date, which shall be true and correct in all respects as of such
date), except to the extent that the aggregate effect of the inaccuracies in
such representations and warranties as of the applicable times (each considered
without any exclusions for lack of Material Adverse Effect set forth in the
individual representation or warranty) does not constitute a Material Adverse
Effect on Acquiror when compared to the state of facts which would exist if all
such representations and warranties were true in all respects as of the
applicable times.
(b) Each of the agreements and covenants of Acquiror and
Sub to be performed and complied with by Acquiror and Sub pursuant to this
Agreement prior to the Effective Time shall have been duly performed and
complied with in all material respects.
(c) Acquiror shall have delivered to the Company a
certificate, dated as of the Closing Date and signed on its behalf by its chief
executive officer and its chief financial officer, as to the satisfaction by it
of the conditions set forth in subsections 0 and 0.
7.3 Conditions to Obligations of Acquiror and Sub. The obligations
of Acquiror and Sub to effect the Merger shall be subject to the satisfaction or
waiver at or prior to the Closing of the following conditions:
40
<PAGE> 45
(a) The representations and warranties of the Company set forth in
this Agreement shall be true and correct in all respects as of the date of this
Agreement and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective Time
(except for (i) any such representations and warranties made as of specified
date, which shall be true and correct in all respects as of such date) and (ii)
the representations and warranties in Section 0, the accuracy of which shall be
tested pursuant to Section 0 and therefore shall not be a condition to the
obligations of Acquiror and Sub to effect the Merger), except to the extent that
the aggregate effect of the inaccuracies in such representations and warranties
as of the applicable times (each considered without any exclusions for lack of
Material Adverse Effect set forth in the individual representation or warranty)
does not constitute a Material Adverse Effect on the Company when compared to
the state of facts which would exist if all such representations and warranties
were true in all respects as of the applicable times.
(b) Each of the agreements and covenants of the Company to be
performed and complied with by the Company pursuant to this Agreement prior to
the Effective Time shall have been duly performed and complied with except to
the extent that the aggregate effect of any non-performance or noncompliance by
the Company (each considered without any exclusions for lack of Material Adverse
Effect set forth in the individual covenant or agreement) does not constitute a
Material Adverse Effect on the Company when compared to the state of facts which
would exist if all such agreements and covenants had been performed and complied
with by the Company.
(c) From the date of this Agreement through June 30, 1996, the
Cash Flow (as defined in Section 7.3 of the Company Disclosure Memorandum) of
the Company shall have been at least 90% of that projected in the forecast set
forth in Section 7.3 of the Company Disclosure Memorandum (the "Forecast"), and
from July 1, 1996 through September 30, 1996 (or through the end of the month
preceding the month in which the Closing occurs if the Closing occurs after
August 1, 1996, but earlier than September 30, 1996), the Cash Flow of the
Company shall have been at least 75% of that projected in the Forecast.
(d) The Company shall have delivered to Acquiror a certificate,
dated as of the Closing Date and signed on its behalf by its chief executive
officer and its chief financial officer, as
41
<PAGE> 46
to the satisfaction by it of the conditions set forth in subsections 0, 0 and 0.
ARTICLE 8
TERMINATION OF AGREEMENT
8.1 Termination. Notwithstanding any other provision of this
Agreement, this Agreement may be terminated at any time prior to the Effective
Time:
(a) by mutual written consent of the Company and
Acquiror;
(b) by the Company or Acquiror, upon written notice to
the other party, if the Merger shall not have been consummated on or prior to
May 31, 1997 (the "Outside Date"), unless such failure of consummation shall be
due to the failure of the party seeking such termination to perform or observe
in all material respects the covenants and agreements hereof to be performed or
observed by such party;
(c) by the Company or Acquiror, upon written notice to
the other party, if a Governmental Authority of competent jurisdiction shall
have issued an injunction, order or decree enjoining or otherwise prohibiting
the consummation of the transactions contemplated by this Agreement, and such
injunction, order or decree shall have become final and non-appealable or if a
Governmental Authority has otherwise made a final determination that any
required Regulatory Authorization would not be forthcoming; provided, however,
that the party seeking to terminate this Agreement pursuant to this clause has
used all required efforts as specified in Section 6.8 to remove such injunction,
order or decree;
(d) by the Company or Acquiror, if any condition to such
party's obligations to consummate the transactions contemplated hereby is
incapable of being satisfied on or prior to the Outside Date; provided, however,
that (i) the terminating party has not breached the terms of this Agreement;
(ii) if the Company is the terminating party, the Consenting Stockholders have
not breached the terms of the Stockholders Agreement; and (iii) if Acquiror is
the terminating party, Zell/Chilmark Fund L.P. has not breached the terms of the
Jacor Shareholders Agreement, in each case in any manner that proximately
contributes to the failure to consummate the Merger by the Outside Date;
42
<PAGE> 47
(e) by the Company or Acquiror, if the FCC shall have
issued an order or ruling or taken other action denying approval of the
transactions contemplated by this Agreement, and such order, ruling or other
action shall have become final and non-appealable; provided, however, that the
party seeking to terminate this Agreement pursuant to this clause has used all
required efforts as specified in Section 6.8 to obtain such FCC approval;
(f) by the Company, if prior to the delivery of the
consents of the Consenting Stockholders delivered pursuant to the Stockholder
Agreement, the Board of Directors of the Company determines in accordance with a
Director Duty that such termination is required by reason of a Competing
Transaction being proposed;
(g) by the Company or Acquiror, if prior to the delivery
of the consents of the Consenting Stockholders delivered pursuant to the
Stockholders Agreement, the Board of Directors of the Company shall have
withdrawn or modified in a manner materially adverse to Acquiror its approval of
the adoption of this Agreement or the approval of the Merger, because the Board
of Directors has determined to recommend to the Company's shareholders or
approve a Competing Transaction, in accordance with a Director Duty;
(h) by Acquiror, if any Consenting Stockholder shall have
breached any material representation or warranty, or failed to perform any
covenant or duty contained in, the Stockholders Agreement, other than a breach
or noncompliance that would not materially affect the benefits Acquiror is
receiving from the Stockholders Agreement;
(i) by Acquiror, within 100 days of the date of this
Agreement, if Acquiror reasonably believes, on the basis of the inspection
conducted pursuant to Section 6.13, that the Company's representations and
warranties in Section 4.16 are not true and correct both as of the date of this
Agreement and at all times within 100 days after the date of this Agreement;
(j) by Acquiror, within 20 days of the date of this
Agreement, if (i) the termination, if any, of any of the Undisclosed Contracts
because of the consummation of the Merger would constitute a Material Adverse
Effect on the Company or (ii) any or all of the Undisclosed Contracts constitute
a Material Adverse Effect on the Company when compared to the state of facts
43
<PAGE> 48
which would exist if the Company were not a party to any or all of the
Undisclosed Contracts; or
(k) by the Company if (i) Zell/Chilmark Fund L.P. shall
have breached any material representation or warranty, or failed to perform any
covenant or duty contained in, the Jacor Shareholders Agreement, other than a
breach or noncompliance that would not materially affect the benefits the
Company is receiving from the Jacor Shareholders Agreement, or (ii) in the event
that all required authorizations of the shareholders of Acquiror to effect the
transactions contemplated by this Agreement shall not be obtained.
8.2 Effect of Termination. (a) In the event that (i) this Agreement is
terminated pursuant to clause 0, clause 0, or clause 8.1(h) and (ii) at the time
of termination, there has been no misrepresentation by or breach of any
obligation of Acquiror or Sub under this Agreement other than a breach of or
noncompliance with any obligation which would not constitute a Material Adverse
Effect on Acquiror, then the Company shall pay the Acquiror a fee of
$20,000,000, which amount shall be payable by wire transfer of same day funds
within two business days after the date this Agreement is terminated. Such
amount shall be in addition to the amounts payable by certain of the Consenting
Stockholders to the Acquiror pursuant to the Stockholders Agreement.
(b) If after the execution of the Letter of Credit Escrow
Agreement and the issuance of the Letter of Credit this Agreement is terminated:
(i) pursuant to Section 0, except if there has been a failure to satisfy any of
the conditions specified in Section 0; (ii) pursuant to Section 0; (iii) by the
Company, pursuant to Section 0; (iv) pursuant to Section 0; or (v) pursuant to
Section 0, then the Company shall be permitted to draw on the Letter of Credit.
The Company shall not be permitted to draw on the Letter of Credit under any
other circumstances. The obligations of the parties to this Agreement under the
last sentence of Section 0 and under Sections 0 and 0 shall survive any
termination of this Agreement.
(c) From and after the execution of the Letter of Credit
Escrow Agreement and the issuance of the Letter of Credit and except as set
forth in Section 0, the right to terminate this Agreement and receive $75
million pursuant to a draw on the Letter of Credit under the circumstances
permitted in Sections 0 and 0 shall be the Company's exclusive remedy and $75
million shall be the maximum measure of damages for any claim the Company might
have against Acquiror or its Affiliates in connection with the
44
<PAGE> 49
transactions contemplated by this Agreement, including without limitation, any
claim for breach or nonperformance of this Agreement or any tort claim.
(d) If (i) the Merger has not been consummated, (ii) this
Agreement has not been terminated by the Company, (iii) the Letter of Credit
Escrow Agreement has been executed and the Letter of Credit has been issued, and
(iv) the Company believes that Acquiror has wilfully breached this Agreement,
the Company may choose to irrevocably waive the right to draw on the Letter of
Credit and instead bring an action against Acquiror or its Affiliates for such
alleged wilful breach of this Agreement (a "Letter of Credit Waiver"). A Letter
of Credit Waiver must be made in writing and delivered by the Company to
Acquiror and the Escrow Agent (as defined in the Letter of Credit Escrow
Agreement). If the Company makes a Letter of Credit Waiver, the Company and the
Acquiror will take all necessary steps to cancel the Letter of Credit.
(e) Prior to the execution of the Letter of Credit Escrow
Agreement and the issuance of the Letter of Credit, the Company's sole remedies
in connection with the transactions contemplated in this Agreement shall be to
terminate this Agreement (if permitted under Section 8.1) and/or bring an action
against Acquiror or its Affiliates for wilful breach of this Agreement if the
Company believes that Acquiror has wilfully breached this Agreement; provided,
however, that the bringing of such an action shall not affect Acquiror's right
to immediately receive any fee it is entitled to under Section 0 and that if
such a lawsuit is brought or the Company exercises such a right of termination,
the Letter of Credit Escrow Agreement shall not be executed and the Letter of
Credit shall not be issued.
45
<PAGE> 50
ARTICLE 9
MISCELLANEOUS AND GENERAL
9.1 Expenses. Whether or not the Merger is consummated, all costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such expenses except as
expressly provided herein and except that (a) the filing fee in connection with
the HSR Act filing, (b) the filing fee in connection with the filing of the
Information Statement with the SEC, (c) the filing fees in connection with
necessary applications to the FCC, and (d) the expenses incurred in connection
with printing and mailing the Information Statement shall be shared equally by
the Company and Acquiror.
9.2 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, but shall not be assignable by any party hereto without the prior
written consent of the other parties hereto, provided however that Acquiror may
assign its rights under this Agreement to an Affiliate at any time and to a
non-Affiliate if the Acquiror, in its sole discretion, determines that it is
appropriate to do so because of difficulties encountered in satisfying the
conditions in Article 0 of this Agreement. Any such assignment shall not affect
Acquiror's liability hereunder.
9.3 Third Party Beneficiaries. Except as set forth in Article 0 and
Sections 0, 0 and 0 (all of which shall inure to the benefit of the persons or
entities benefitting from the provisions thereof, which persons are intended to
be third party beneficiaries thereof), each party hereto intends that this
Agreement shall not benefit or create any right or cause of action in or on
behalf of any Person other than the parties hereto.
9.4 Notices. Any notice or other communication provided for herein or
given hereunder to a party hereto shall be sufficient if in writing, and sent by
facsimile transmission (electronically confirmed), delivered in Person, mailed
by first class registered or certified mail, postage prepaid, or sent by Federal
Express or other overnight courier of national reputation, addressed as follows:
46
<PAGE> 51
If to Acquiror or Sub:
Randy Michaels
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-0090
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
and
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
If to the Company:
Citicasters Inc.
One East Fourth Street
Cincinnati, Ohio 45202
Facsimile: (513) 562-8075
with a copy to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attn: Lyle G. Ganske, Esq.
Facsimile: (216) 579-0212
or to such other address with respect to a party as such party shall notify the
other parties in writing as above provided.
9.5 Complete Agreement. This Agreement, the Company Disclosure
Memorandum, the Acquiror Disclosure Memorandum and the
47
<PAGE> 52
other documents and agreements delivered by the parties in connection herewith,
together with the Confidentiality Agreement, contain the complete agreement
among the parties hereto with respect to the Merger and the other transactions
contemplated hereby and thereby and supersede all prior agreements and
understandings among the parties hereto with respect thereto.
9.6 Captions; References. The captions contained in this Agreement are
for convenience of reference only and do not form a part of this Agreement. When
a reference is made in this Agreement to a clause, a Section, a subsection or an
Article, such reference shall be to such clause, Section, subsection or Article
of this Agreement unless otherwise indicated.
9.7 Amendment. At any time, the parties hereto, by action taken by
their respective Board of Directors or pursuant to authority delegated by their
respective Boards of Directors, may amend this Agreement; provided, however,
that no amendment after approval by the shareholders of the Company shall be
made that changes in a manner adverse to such shareholders the Merger
Consideration without the further approval of such shareholders. This Agreement
may not be amended except by an instrument in writing signed on behalf of each
of the parties hereto.
9.8 Waiver. At any time prior to the Effective Time, the parties hereto
may (a) extend the time for the performance of any of the obligations or other
acts of the parties hereto, (b) waive any inaccuracies in the representations
and warranties contained herein or in any document delivered pursuant hereto, or
(c) waive compliance with any of the agreements or conditions contained herein,
to the extent permitted by applicable law. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
writing signed on behalf of such party.
9.9 Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Florida, without
regard to its rules of conflict of laws.
9.10 Non-Survival of Representations, Warranties and Covenants. Except
as set forth in this Section 0, no representation, warranty or covenant
contained in this Agreement shall survive the Merger or, except as set forth in
Section 0, the earlier termination of this Agreement. The obligations set forth
in Article 0 and Sections 0, 0, 0 and 0 shall survive the Merger.
48
<PAGE> 53
9.11 Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
9.12 Enforcement of Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
9.13 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute but one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above written.
CITICASTERS INC.
By:________________________
Its:_______________________
JACOR COMMUNICATIONS, INC.
By:________________________
Its:_______________________
JCAC, INC.
By:________________________
Its:_______________________
49
<PAGE> 54
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
<S> <C>
Acquiror .............................................................. 1
Acquiror Common Stock ................................................. 20
Acquiror Disclosure Memorandum ........................................ 19
Acquiror Financial Statements ......................................... 22
Acquiror Reports ...................................................... 21
Acquiror's Knowledge .................................................. 21
Affiliate ............................................................. 23
Agreement ............................................................. 1
Articles of Merger .................................................... 2
Benefit Plans ......................................................... 14
Cash Consideration .................................................... 3
Certificates .......................................................... 3
Class B Shares ........................................................ 7
Closing ............................................................... 2
Closing Date .......................................................... 2
Code .................................................................. 10
Communications Law .................................................... 10
Company ............................................................... 1
Company Capital Stock ................................................. 7
Company Common Stock .................................................. 3
Company Contracts ..................................................... 15
Company Disclosure Memorandum ......................................... 6
Company Financial Advisor ............................................. 18
Company Financial Statements .......................................... 11
Company Preferred Shares .............................................. 7
Company Properties .................................................... 18
Company Reports ....................................................... 10
Company's Knowledge ................................................... 12
Competing Transaction ................................................. 25
Confidentiality Agreement ............................................. 31
Consenting Stockholders ............................................... 1
Director Duty ......................................................... 25
Effective Time ........................................................ 2
Employee pension benefit plan ......................................... 13
Employee welfare benefit plan ......................................... 14
Equity Rights ......................................................... 8
ERISA ................................................................. 13
Exchange Act .......................................................... 10
Exchange Agent ........................................................ 5
FBCA .................................................................. 1
FCC ................................................................... 10
Funds ................................................................. 5
GAAP .................................................................. 11
Governmental Authority ................................................ 9
HSR Act ............................................................... 9
Indemnified Parties ................................................... 32
</TABLE>
<PAGE> 55
<TABLE>
<S> <C>
Information Statement ................................................. 29
Letter of Credit ...................................................... 33
Letter of Credit Escrow Agreement ..................................... 33
Liens ................................................................. 12
Material Adverse Effect ............................................... 6
Material Company Subsidiaries ......................................... 8
Merger ................................................................ 1
Merger Consideration .................................................. 3
Multiemployer plan .................................................... 13
Multiemployer plans ................................................... 15
Option ................................................................ 4
Outside Date .......................................................... 37
Person ................................................................ 25
Plan .................................................................. 14
Plans ................................................................. 14
Registration Statement ................................................ 29
Retirement Plans ...................................................... 14
Rule 145 Affiliates ................................................... 34
SEC ................................................................... 9
Securities Act ........................................................ 10
SFB Plans ............................................................. 14
Station Licenses ...................................................... 13
Stations .............................................................. 13
Stock Option Plans .................................................... 4
Stockholders Agreement ................................................ 1
Sub ................................................................... 1
Subsidiary ............................................................ 9
Surviving Corporation ................................................. 1
Undisclosed Contracts ................................................. 16
Warrant ............................................................... 3
Warrant Consideration ................................................. 3
Warrant Shares ........................................................ 29
Warrant Shares Registration Statement ................................. 29
</TABLE>
ii
<PAGE> 56
iii
<PAGE> 1
EXHIBIT 2.2
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT, dated as of February 12, 1996, is
among JACOR COMMUNICATIONS, INC., an Ohio corporation ("Parent"), JCAC, INC., a
Florida corporation and a wholly owned subsidiary of Parent ("Acquisition"),
GREAT AMERICAN INSURANCE COMPANY, an Ohio corporation ("Seller A"), AMERICAN
FINANCIAL CORPORATION, an Ohio corporation ("Seller B"), AMERICAN FINANCIAL
ENTERPRISES, INC., a Connecticut corporation ("Seller C"), CARL H. LINDNER
("Seller D"), THE CARL H. LINDNER FOUNDATION, a charitable foundation ("Seller
E") and S. CRAIG LINDNER ("Seller F"). Seller A, Seller B, Seller C, Seller D,
Seller E and Seller F are sometimes individually referred to herein as a
"Seller" and are sometimes collectively referred to herein as the "Sellers".
WHEREAS, Parent, Acquisition, and Citicasters Inc., a Florida
corporation (the "Company"), are, concurrently with the execution of this
Agreement, entering into an Agreement and Plan of Merger (the "Merger
Agreement"), which provides, among other things, upon the terms and subject to
the conditions thereof, that Acquisition will be merged with and into the
Company in accordance with the Florida Business Corporation Act (the "Merger")
such that each share of Class A Common Stock, par value $.01 per share, of the
Company (the "Shares") issued and outstanding immediately prior to the effective
time of the Merger (other than Shares owned by the Company, Parent, Acquisition
or any direct or indirect subsidiary of the Company, Parent or Acquisition, and
any Shares held in the treasury of the Company) will be converted into the right
to receive the Merger Consideration (as defined in the Merger Agreement);
WHEREAS, each Seller owns the number of Shares (the "Seller's
Shares") set forth on Schedule A hereto opposite the name of such Seller; and
WHEREAS, in order to induce Parent and Acquisition to enter
into the Merger Agreement, each Seller has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, and intending to be legally
bound hereby, Parent, Acquisition and the Sellers hereby agree as follows.
<PAGE> 2
Section 1. Representations and Warranties of Sellers. Each
Seller represents and warrants to Parent and Acquisition as follows:
(a) Each of Seller A, Seller B and Seller C is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation.
(b) Each of Seller A, Seller B, Seller C and Seller E has
all necessary power and authority to execute and deliver this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.
(c) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the board of directors of each of Seller A,
Seller B, Seller C and Seller E and no other proceedings on the part of any of
Seller A, Seller B, Seller C or Seller E are necessary to authorize this
Agreement or to consummate the transactions so contemplated.
(d) This Agreement has been duly and validly executed and
delivered by each Seller and constitutes a legal, valid and binding agreement of
each Seller enforceable against each Seller in accordance with its terms, except
that the enforceability hereof may be subject to applicable bankruptcy,
insolvency or other similar laws now or hereinafter in effect affecting
creditors' rights generally.
(e) The execution, delivery and performance by the
Sellers of this Agreement and the consummation of the transactions contemplated
hereby do not and will not (i) contravene or conflict with the Certificate of
Incorporation or By-Laws of any of Seller A, Seller B or Seller C or any
organizational or governing documents of Seller E; (ii) contravene or conflict
with or constitute a violation of any provision of any law, regulation,
judgment, injunction, order or decree binding upon or applicable to any Seller,
any of their respective subsidiaries or any of their respective properties;
(iii) conflict with, or result in the breach or termination of any provision of
or constitute a default (with or without the giving of notice or the lapse of
time or both) under, or give rise to any right of termination, cancellation, or
loss of any benefit to which any Seller or any of its subsidiaries is entitled
under any provision of any agreement, contract, license or other instrument
binding upon such Seller, any of its subsidiaries or any of their respective
properties, or allow the acceleration of the performance of, any obligation of
2
<PAGE> 3
any Seller or any of its subsidiaries under any indenture, mortgage, deed of
trust, lease, license, contract, instrument or other agreement to which such
Seller or any of its subsidiaries is a party or by which any Seller or any of
its subsidiaries or any of their respective assets or properties is subject or
bound; or (iv) result in the creation or imposition of any security interests,
liens, claims, pledges, charges, voting agreements or other encumbrances of any
nature whatsoever (collectively, "Liens") on any asset of any Seller or any of
its subsidiaries, except in the case of clauses (ii), (iii) and (iv) for any
such contraventions, conflicts, violations, breaches, terminations, defaults,
cancellations, losses, accelerations and Liens which would not individually or
in the aggregate materially interfere with the consummation of the transactions
contemplated by this Agreement.
(f) As of the date hereof, none of the Sellers and none
of their respective properties is subject to any order, writ, judgment,
injunction, decree, determination or award which would prevent or delay the
consummation of the transactions contemplated hereby.
(g) Each Seller has, and at all times between the date of
this Agreement and the consummation of the Merger such Seller will have, (i)
good and valid title to such Seller's Shares, free and clear of any Liens and
(ii) the right to vote such Seller's Shares.
(h) There are no options or rights to acquire, or any
agreements to which any Seller is a party relating to, any Seller's Shares,
other than this Agreement.
(i) The Seller's Shares described in Schedule A represent
all of the Shares beneficially owned (within the meaning of Rule 13d-3 under the
Exchange Act) by any of the Sellers.
Section 2. Representations and Warranties of Parent and Acquisition.
Each of Parent and Acquisition represents and warrants to the Sellers as
follows:
(a) Each of Parent and Acquisition is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Each of Parent and Acquisition has all necessary
corporate power and authority to execute and deliver this
3
<PAGE> 4
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(c) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly and validly authorized by the board of directors of each of Parent and
Acquisition and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions so contemplated.
(d) This Agreement has been duly and validly executed and
delivered by each of Parent and Acquisition and constitutes a legal, valid and
binding agreement of each of Parent and Acquisition enforceable against each of
Parent and Acquisition in accordance with its terms, except that the
enforceability hereof may be subject to applicable bankruptcy, insolvency, or
other similar laws, now or hereinafter in effect affecting creditors' rights
generally.
Section 3. Negative Covenants of Sellers. Except as provided
for herein or in the Merger Agreement, each Seller agrees not to (either
directly or indirectly):
(a) sell, transfer, pledge, assign, hypothecate or
otherwise dispose of, or enter into any contract, option or other arrangement or
understanding with respect to the sale, transfer, pledge, assignment,
hypothecation or other disposition of such Seller's Shares (including, without
limitation, through the disposition or transfer of control of another person)
other than to an affiliate of Seller D that agrees to be bound by this
Agreement;
(b) grant any proxies with respect to such Seller's
Shares, deposit such Seller's Shares into a voting trust or enter into a voting
agreement with respect to any of such Seller's Shares; or
(c) take any action which would make any representation
or warranty of any Seller herein untrue or incorrect in any material respect.
4
<PAGE> 5
Section 4. No Solicitation. (a) From and after the date of
this Agreement and except as set forth in subsection 0, the Sellers shall not,
and the Sellers shall use their reasonable best efforts to cause the Company not
to, directly or indirectly, (i) solicit, initiate, knowingly encourage, or
participate in discussions or negotiations regarding, any proposals or offers
from any individual, corporation, partnership, limited liability corporation,
joint venture, trust, association, unincorporated organization, other entity,
group or governmental authority ("Person") relating to any Competing Transaction
(as defined in subsection 0) or (ii) furnish to any other Person any nonpublic
information or access to such information with respect to, or otherwise
concerning, any Competing Transaction. The Sellers shall immediately cease and
cause to be terminated any existing discussions or negotiations with any third
parties conducted heretofore with respect to any proposed Competing Transaction.
The Sellers shall promptly disclose to Parent the identity of any Person who
attempts to initiate any discussions contemplating a Competing Transaction.
(b) Notwithstanding anything to the contrary contained in
this Section 0 or in any other provision of this Agreement, until the consents
required by Section 0 have been duly executed and delivered, the Sellers shall
not be required to cause the Company to refrain from (i) participating in
discussions or negotiations with, and, during such period, furnishing
information to, a Person that seeks to engage in discussions or negotiations,
requests information or makes a proposal to acquire the Company pursuant to a
Competing Transaction, if the Company's directors have determined in good faith
that such action is required for the discharge of their fiduciary obligations,
based upon the written advice of independent legal counsel, who may be the
Company's regularly engaged legal counsel (a "Director Duty"); or (ii)
terminating this Agreement and entering into an agreement providing for a
Competing Transaction in accordance with a Director Duty. In the event that the
Sellers participate (directly or indirectly) in discussions or negotiations
with, or furnish information to, a Person that seeks to engage in such
discussions or negotiations, requests information or makes a proposal to acquire
the Company pursuant to a Competing Transaction pursuant to this subsection 0,
then: (i) the Sellers shall immediately disclose to Parent the decision of the
Company's directors; (ii) the identity of the Person; and (iii) copies of all
information or material not previously furnished to Parent or Acquisition which
the Sellers, the Company, or their respective agents provides or causes to be
provided to such Person or any of
5
<PAGE> 6
its officers, directors, employees, agents, advisors or representatives.
(c) For the purposes of this Agreement, "Competing
Transaction" shall mean any of the following involving the Company: (i) any
merger, consolidation, share exchange, business combination or other similar
transaction; (ii) any sale, lease, exchange, transfer or other disposition of
all or substantially all of the assets of the Company and its subsidiaries,
taken as a whole, in a single transaction or series of related transactions; or
(iii) any tender offer or exchange offer for Shares.
Section 5. Written Consent.
(a) Prior to the close of business on the thirtieth day
following the date of this Agreement (the "Delivery Date"), unless the Merger
Agreement has been terminated on or prior to the Delivery Date, each Seller will
execute and deliver to the corporate secretary of the Company a written consent
with respect to such Seller's Shares in the form attached hereto as Exhibit A,
which written consent will not be withdrawn or revoked. Such written consents of
the Sellers will constitute the irrevocable written consent of each of the
Sellers with respect to his or its Seller's Shares to the approval and adoption
of the Merger Agreement.
(b) For so long as this Agreement is in effect, in any
meeting of the stockholders of the Company, however called, and in any action by
consent of the stockholders of the Company, each Seller shall vote or cause to
be voted all of such Seller's Shares: (i) against any action or agreement that
would result in a breach in any material respect of any covenant, representation
or warranty or other obligation of any Seller under this Agreement or of the
Company, Parent or Acquisition under the Merger Agreement; (ii) against any
action or agreement that would impede, interfere with or discourage the
transactions contemplated by this Agreement or the Merger Agreement, including,
without limitation: (1) any extraordinary corporate transaction, such as a
merger, reorganization or liquidation involving the Company or any of its
subsidiaries, (2) a sale or transfer of a material amount of assets of the
Company, or any of its subsidiaries or the issuance of securities by the Company
or any of its subsidiaries, (3) any change in the board of directors of the
Company, (4) any change in the present capitalization or dividend policy of the
Company (other than as contemplated by the Merger Agreement) or (5) any other
material change in the Company's corporate structure or business; and (iii) in
favor of any action or agreement that would
6
<PAGE> 7
further the consummation of the transactions contemplated by this Agreement or
the Merger Agreement.
Section 6. Registration Agreement. Prior to the closing of the
Merger, the parties will enter into an agreement providing for shelf
registration of resale of the Warrants and the Warrant Shares (each as defined
in the Merger Agreement) with terms and conditions customary for transactions
that are similar to the Merger.
Section 7. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
Section 8. Expenses. Each party shall bear its own expenses
and costs in connection with this Agreement and the transactions contemplated
hereby.
Section 9. Amendment; Assignment. This Agreement may not be
modified, amended, altered or supplemented except upon the execution and
delivery of a written agreement executed by the parties hereto. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and shall be assignable by the parties hereto;
provided, however, that this Agreement shall not be assignable by any Seller
without the prior written consent of Parent other than to an affiliate of Seller
D that agrees to be bound by this Agreement. No assignment hereunder will
relieve any party to this Agreement of its obligations hereunder.
Section 10. Parties in Interest. This Agreement shall be
binding upon and inure solely to the benefit of each party hereto and its
successors and permitted assigns, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other person any rights,
benefits or remedies of any nature whatsoever under or by reason of this
Agreement.
Section 11. Notices. All notices, requests, claims, demands
and other communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly given upon receipt) by delivery in person, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested), to the other party as follows:
7
<PAGE> 8
(a) If to Parent or Acquisition, to:
Randy Michaels
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 621-0090
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
and
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
(b) If to the Sellers, to:
James C. Kennedy, Esq.
American Financial Group, Inc.
One East Fourth Street
Suite 919
Cincinnati, Ohio 45202
Facsimile: (513) 579-2113
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 12. Reasonable Best Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things reasonably necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement.
8
<PAGE> 9
Section 13. Governing Law. This Agreement shall be governed by
and construed in accordance with the law of the State of Florida, without regard
to the principles of conflicts of law thereof.
Section 14. Termination.
(a) This Agreement shall terminate upon termination of the
Merger Agreement without the consummation of the Merger. No such termination
shall relieve any party from liability for any breach of this Agreement.
(b) If (i) the Merger Agreement is terminated pursuant to
Sections 8.1(f), 8.1(g) or 8.1(h) of that Agreement and (ii) a transaction is
consummated within eighteen months after the termination of the Merger Agreement
that results (1) in the sale, exchange, conversion or other disposition (by
merger or otherwise) of some or all of the Shares owned by Seller D or Seller F
(2) a payment (by dividend or otherwise) to Seller D or Seller F following a
sale of all or substantially all of the assets of the Company, a
recapitalization, a restructuring or other similar event (in the case of (1) or
(2), an "Other Transaction"), Seller D and Seller F shall, immediately after the
consummation of the Other Transaction, pay to Parent a sum (the "Compensating
Payment") equal to the number of Shares sold, exchanged, converted, or otherwise
disposed or with respect to which Seller D or Seller F received a payment, in
the Other Transaction multiplied by one half of the Per Share Difference. The
Per Share Difference shall equal (x) the fair market value, valued as of the
time the Other Transaction is consummated, of the consideration per Share
received by Seller D or Seller F in the Other Transaction less (y) the expected
fair market value per Share, valued as of December 1, 1996, that Seller D or
Seller F would have received in the Merger. If Seller D, Seller F and Parent
cannot agree on the amount of the Compensating Payment, Seller D and Seller F
shall pay Parent immediately a sum equal to what Seller D and Seller F believe
the Compensating Payment to be (the "Immediate Payment") plus interest at 9% per
year on the Immediate Payment for the period between the time the Other
Transaction is consummated and the time the Immediate Payment is made, and the
final amount of the Compensating Payment shall be determined in accordance with
the commercial arbitration rules of the American Arbitration Association by an
arbitrator or arbitrators appointed in accordance with such rules. Such
arbitration shall take place in Cincinnati, Ohio, and judgment upon any award
rendered in such arbitration may be entered in any court of appropriate
9
<PAGE> 10
jurisdiction; the parties hereto consent to the entry of such judgment and agree
that no appeal shall be taken therefrom. Parent shall be entitled to receive
immediately the difference between the final amount of the Compensating Payment
determined by the arbitrators and the Immediate Payment (the "Difference") and
interest at 9% per year on the Difference for the period between the date the
Competing Transaction is consummated and the date the Difference is paid to
Parent.
In no event shall Parent be required to make any payment under this Agreement.
(c) This Section 0 shall survive the termination of this
Agreement.
Section 15. Severability. The provisions of this Agreement
shall be deemed severable and the invalidity or unenforceability of any
provision shall not affect the validity and enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any person or entity or any circumstance, is invalid or
unenforceable, (a) a suitable and equitable provision shall be substituted
therefor in order to carry out, so far as may be valid and enforceable, the
intent and purpose of such invalid and unenforceable provision and (b) the
remainder of this Agreement and the application of such provision to other
persons, entities or circumstances shall not be affected by such invalidity or
unenforceability, nor shall such invalidity or unenforceability affect the
validity or enforceability of such provision, or the application thereof, in any
other jurisdiction.
Section 16. Entire Agreement. This Agreement constitutes the
entire agreement among the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
Section 17. Descriptive 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 Agreement.
Section 18. Certain Definitions. For purposes of this
Agreement, the term:
(a) "affiliate" of a person means a person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first mentioned person;
10
<PAGE> 11
(b) "control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(c) "knowledge" means knowledge after reasonable inquiry;
(d) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d)(3) of the Exchange Act); and
(e) "subsidiary" or "subsidiaries" of any person means any
corporation, partnership, joint venture or other legal entity of which such
person (either alone or through or together with any other subsidiary), owns,
directly or indirectly, 50% or more of the stock or other equity interests the
holder of which is generally entitled to vote for the election of the board of
directors or other governing body of such corporation, partnership, joint
venture or other legal entity.
Section 19. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
GREAT AMERICAN INSURANCE COMPANY
By:
---------------------------
Name:
Title:
11
<PAGE> 12
AMERICAN FINANCIAL CORPORATION
By:
---------------------------
Name:
Title:
AMERICAN FINANCIAL ENTERPRISES, INC.
By:
---------------------------
Name:
Title:
CARL H. LINDNER
------------------------------
Carl H. Lindner
12
<PAGE> 13
THE CARL H. LINDNER FOUNDATION
By:
-------------------------
Name:
Title:
S. CRAIG LINDNER
-----------------------------
S. Craig Lindner
JACOR COMMUNICATIONS, INC.
By:
--------------------------
Name:
Title:
JCAC, INC.
By:
--------------------------
Name:
Title:
13
<PAGE> 14
SCHEDULE A
TO THE
STOCKHOLDERS AGREEMENT
Capitalized terms used in this Schedule A and not otherwise defined in
this Schedule A have the respective meanings assigned to such terms in the
attached Stock Purchase Agreement.
<TABLE>
<CAPTION>
NAME OF EACH SELLER NUMBER OF SHARES
- ------------------- ----------------
<S> <C>
GREAT AMERICAN INSURANCE COMPANY 3,455,698 Shares
AMERICAN FINANCIAL CORPORATION 1,500,000 Shares
AMERICAN FINANCIAL ENTERPRISES, INC. 2,611,191 Shares
CARL H. LINDNER 3,257,913 Shares
THE CARL H. LINDNER FOUNDATION 170,253 Shares
S. CRAIG LINDNER 85,500 Shares
============================= =======================
Total 11,080,555 Shares
</TABLE>
<PAGE> 15
EXHIBIT A
WRITTEN CONSENT
OF A SHAREHOLDER OF
CITICASTERS, INC.
PURSUANT TO SECTION 607.0704
OF THE FLORIDA BUSINESS CORPORATION ACT
The undersigned, being the holder of shares of Class A Common
Stock, par value $.01 per share, of Citicasters, Inc., a Florida corporation
(the "Company"), by executing this written consent, hereby approves the
Agreement and Plan of Merger (the "Merger Agreement") dated as of February 12,
1996 among the Company, Jacor Communications, Inc., an Ohio corporation
("Acquiror") and JCAC, Inc., a Florida corporation and wholly owned subsidiary
of Acquiror ("Acquisition") and thereby approves the adoption by the surviving
corporation in the merger contemplated by the Merger Agreement of the Articles
of Incorporation and By-Laws of Acquisition.
IN WITNESS WHEREOF, the undersigned has executed this written consent
as of the date written below.
Date:
- --------------
[Shareholder]
-----------------------
[Shareholder]
15
<PAGE> 1
Exhibit 2.3
JACOR SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT, dated as of February ___, 1996, is among
Citicasters Inc., a Florida corporation ("Citicasters"), and the Zell/Chilmark
Fund L.P., a Delaware limited partnership ("ZCF").
WHEREAS, Jacor Communications, Inc., an Ohio corporation (the
"Company"), JCAC, Inc., a Florida corporation ("Acquisition") and Citicasters
are, concurrently with the execution of this Agreement, entering into an
Agreement and Plan of Merger (the "Merger Agreement"), which provides, among
other things, upon the terms and subject to the conditions thereof, that
Acquisition will be merged with and into Citicasters in accordance with the
Florida Business Corporation Act (the "Merger") such that each share of Class A
Common Stock, par value $.01 per share, of Citicasters (the "Shares") issued and
outstanding immediately prior to the effective time of the Merger (other than
Shares owned by Citicasters, the Company, Acquisition or any direct or indirect
subsidiary of Citicasters, the Company or Acquisition, and any Shares held in
the treasury of the Company) will be converted into the right to receive the
Merger Consideration (as defined in the Merger Agreement);
WHEREAS, ZCF owns in excess of 69.0% of the outstanding shares (the
"ZCF Shares") of the Company's common stock, without par value ("Common Stock");
and
WHEREAS, in order to induce Citicasters to enter into the Merger
Agreement, ZCF has agreed to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, ZCF and Citicasters hereby agree as follows.
Section 1. Representations and Warranties of ZCF. ZCF represents and
warrants to Citicasters as follows:
(a) ZCF is a limited partnership duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(b) ZCF has all necessary power and authority to execute and deliver
this Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
<PAGE> 2
(c) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly and validly
authorized by ZCF and no other proceedings on the part of ZCF are necessary to
authorize this Agreement or to consummate the transactions so contemplated.
(d) This Agreement has been duly and validly executed and delivered by
ZCF and constitutes a legal, valid and binding agreement of ZCF enforceable
against ZCF in accordance with its terms, except that the enforceability hereof
may be subject to applicable bankruptcy, insolvency or other similar laws now or
hereinafter in effect, affecting creditors' rights generally.
(e) For so long as this Agreement is in effect, ZCF hereby grants
Citicasters an irrevocable proxy and irrevocably appoints Citicasters or its
designees, with full power of substitution, its attorney and proxy to vote all
the ZCF Shares, and any shares of Common Stock hereafter acquired by ZCF, at any
meeting of the shareholders of the Company, however called, in favor of any
proposal to approve for issuance shares of Common Stock and warrants to purchase
shares of Common Stock, in each case, in an amount necessary for the payment of
the Merger Consideration pursuant to the Merger Agreement, and if required, the
adoption of the Merger Agreement and the approval of the Merger. This Agreement
does not grant to Citicasters or its designees any right to vote on any other
matters which may be presented to the Company's shareholders at such meeting.
The proxy granted hereby shall be deemed to be a proxy coupled with an interest
for purposes of Section 1701.48(D) of the Ohio Revised Code.
(f) For so long as this Agreement is in effect, in any meeting of the
stockholders of the Company, however called, ZCF shall vote or cause to be voted
all of the ZCF Shares, and any shares of Common Stock hereafter acquired by ZCF,
in favor of any proposal to approve for issuance shares of Common Stock and
warrants to purchase shares of Common Stock, in each case, in an amount
necessary for the payment of the Merger Consideration pursuant to the Merger
Agreement.
(g) As of the date of this Agreement, ZCF is the beneficial owner of at
least 69.0% of the outstanding shares of Common Stock.
Section 2. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement was
not performed in accordance with
2
<PAGE> 3
the terms hereof and that the parties shall be entitled to specific performance
of the terms hereof, in addition to any other remedy at law or in equity.
Section 3. Expenses. Each party shall bear its own expenses and costs
in connection with this Agreement and the transactions contemplated hereby.
Section 4. Amendment; Assignment. This Agreement may not be modified,
amended, altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto. No party may assign any of its
rights or obligations under this Agreement without the prior written consent of
the other party.
Section 5. Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and its successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other person any rights, benefits or
remedies of any nature whatsoever under or by reason of this Agreement.
Section 6. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party as follows:
(a) If to ZCF, to:
David J. Rosen
Zell/Chilmark Fund L.P.
Two North Riverside Plaza
Suite 1900
Chicago, Illinois 60606
Facsimile: (312) 902-1573
with a copy to:
Thomas W. Kahle, Esq.
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Facsimile: (513) 651-3836
3
<PAGE> 4
and
Scott J. Davis, Esq.
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Facsimile: (312) 701-7711
(b) If to Citicasters, to:
Samuel J. Simon, Esq.
Citicasters Inc.
Suite 600
One East Fourth Street
Cincinnati, Ohio 45202
Facsimile: (513) 562-8075
with a copy to:
James C. Kennedy, Esq.
American Financial Group, Inc.
One East Fourth Street
Suite 919
Cincinnati, Ohio 45202
Facsimile: (513) 579-2113
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 7. Reasonable Best Efforts. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things reasonably necessary, proper or advisable under applicable laws
and regulations to consummate and make effective the transactions contemplated
by this Agreement.
Section 8. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio, without regard to the
principles of conflicts of law thereof.
Section 9. Termination. This Agreement shall terminate upon the earlier
to occur of the consummation of the Merger or the termination of the
4
<PAGE> 5
Merger Agreement without the consummation of the Merger. No such termination
shall relieve any party from liability for any breach of this Agreement.
Section 10. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity and enforceability of the other provisions hereof. If
any provision of this Agreement, or the application thereof to any person or
entity or any circumstance, is invalid or unenforceable, (a) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid and
unenforceable provision and (b) the remainder of this Agreement and the
application of such provision to other persons, entities or circumstances shall
not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction.
Section 11. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof.
Section 12. Descriptive 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 Agreement.
Section 13. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its representatives thereunto duly authorized, all as
of the day and year first above written.
Zell/Chilmark Fund L.P.
By:
-------------------------------
Name:
Title:
5
<PAGE> 6
Citicasters Inc.
By:
-------------------------------
Name:
Title:
6
<PAGE> 1
Exhibit 2.4
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Agreement"), dated as of ,
1996, is made by and among Jacor Communications, Inc., an Ohio corporation
("Acquiror"), Citicasters, Inc., a Florida corporation (the "Company"), and
[Star Bank, National Association], as Escrow Agent ("Escrow Agent").
Acquiror and the Company are the parties to an Agreement and Plan of
Merger dated as of the date hereof (as in effect from time to time, the "Merger
Agreement"). Each capitalized term which is used but not otherwise defined in
this Agreement has the meaning assigned to that term in the Merger Agreement.
If the Merger Agreement is terminated by the Company pursuant to any
Escrow-Surrender Provision (as defined below), then the Company will be entitled
to a payment in the amount of the Escrow Payment (as defined below). As security
for the obligations to make such payment, Acquiror is depositing or causing to
be deposited a Letter of Credit (as defined below) in accordance with the terms
of this Agreement, to be held and acted upon by Escrow Agent in accordance with
the provisions of this Agreement.
The parties agree as follows:
1 Definitions. As used in this Agreement:
(a) "Escrow-Surrender Event" means solely the termination of the
Merger Agreement under the circumstances defined in Sections 8.2(b)(i),
8.2(b)(ii), 8.2(b)(iii), 8.2(b)(iv) or 8.2(b)(v) of the Merger Agreement.
(b) "Escrow-Retention Event" means the termination of the Merger
Agreement in any manner that is not an Escrow-Surrender Event.
2 Escrow Payment. (a) Simultaneously with the delivery of the consents
by the Consenting Shareholders (as defined in the Merger Agreement) (the
"Delivery Date"), Acquiror will deliver or cause to be delivered to Escrow Agent
an irrevocable, direct pay letter of credit issued to Escrow Agent on behalf of
Acquiror by (the "Initial Issuing Bank") in the amount of
$75,000,000.00 (the "Escrow Payment"). If Acquiror fails to comply with the
requirements of the preceding sentence, Acquiror will on the day immediately
following the Delivery Date pay to the Escrow Agent in immediately available
funds the sum of
<PAGE> 2
$75,000,000.00. Acquiror, at its option and at its expense, may replace the
Initial Letter of Credit (or any Replacement Letter of Credit) by delivery of
another irrevocable, direct pay letter of credit in the amount of $75,000,000.00
issued by an institution that is reasonably acceptable to the Company, and in a
form that is reasonably acceptable to the Company (any such other letter of
credit being referred to herein as a "Replacement Letter of Credit"). Upon
receipt of a Replacement Letter of Credit, Escrow Agent will surrender the
replaced letter of credit to the issuing institution for cancellation. Any
letter of credit held by the Escrow Agent at any time pursuant to this Agreement
is referred to herein as the "Letter of Credit," and any institution that has
issued such Letter of Credit is referred to herein as the "Issuing Bank".
(b) Notwithstanding anything in this Agreement to the contrary, the
Letter of Credit (or any Replacement Letter of Credit) may have any expiration
date reasonably determined by Acquiror; provided, however, that (i) if the
Merger Agreement shall not have been terminated and (ii) if a Replacement Letter
of Credit in the amount of $75,000,000.00 issued by an institution reasonably
acceptable to the Company and in a form that is reasonably acceptable to the
Company shall not have been delivered and accepted by the Escrow Agent at least
two business days prior to the expiration date of the then outstanding Letter of
Credit (the "Expiration Date"), then the Escrow Agent shall (x) on the business
day immediately preceding the Expiration Date, present to the Issuing Bank in
accordance with the Letter of Credit a draft for payment to the Escrow Agent of
an amount equal to $75,000,000.00 (the "Letter of Credit Proceeds"); and (y)
upon receipt of the Letter of Credit Proceeds, hold such proceeds in escrow
until Acquiror shall have delivered, and the Escrow Agent shall have accepted, a
Letter of Credit in the amount of $75,000,000.00 issued by an institution
reasonably acceptable to the Company and in a form that is reasonably acceptable
to the Company.
3 Appointment of Escrow Agent. Acquiror and the Company hereby
designate and appoint Escrow Agent as their joint escrow agent pursuant to the
terms of this Agreement. Escrow Agent agrees to (a) act as Escrow Agent, (b)
hold and act upon the Letter of Credit and (c) deliver the proceeds of any
payment under the Letter of Credit, in each case in accordance with the terms
and conditions of this Escrow Agreement.
4 Disbursement Requests. At any time after termination of the Merger
Agreement pursuant to any Escrow-Surrender Event,
2
<PAGE> 3
the Company may deliver to Escrow Agent and simultaneously to Acquiror a written
notice (a "Company Payment Request") which states that such termination has
occurred and requests that Escrow Agent, unless the Escrow Agent shall have
already drawn on the Letter of Credit pursuant to Section 0 of this Agreement,
(i) present to the Issuing Bank in accordance with the Letter of Credit a draft
for payment to Escrow Agent of an amount equal to $75,000,000.00, and (ii) upon
receipt of proceeds of such payment under the Letter of Credit, pay such
proceeds in the manner indicated in such notice. If the Escrow Agent shall have
already drawn on the Letter of Credit pursuant to Section 0 of this Agreement,
the Escrow Agent shall, on the second business day after the Escrow Agent's
receipt of the Company Payment Request, pay the proceeds of the Letter of Credit
to the Company in the manner indicated in the Company Payment Request. Promptly
upon termination of the Merger Agreement pursuant to an Escrow-Retention
Provision, the Company shall deliver to Escrow Agent and Acquiror a written
notice (a "Company Surrender Request") which states that such termination has
occurred and requests that Escrow Agent surrender the Letter of Credit to the
Issuing Bank for cancellation, or if the Escrow Agent shall have already drawn
on the Letter of Credit pursuant to Section 0, requests the Escrow Agent to pay
the proceeds of the Letter of Credit to Acquiror in the manner indicated in the
Company Surrender Request.
5 Escrow Agent's Release of the Escrow Fund.
(a) Actions upon Joint Instructions. Escrow Agent will give
instructions to the Issuing Bank or take other actions with respect to the
Letter of Credit, and make disbursements, in accordance with the joint written
instructions of the Company and Acquiror.
(b) Consummation of Merger. At the closing of the Merger, pursuant to
joint written instructions executed by Acquiror and the Company, Escrow Agent
will surrender the Letter of Credit to the Issuing Bank for cancellation, or if
the Escrow Agent shall have drawn on the Letter of Credit pursuant to Section 0,
the Escrow Agent will pay the proceeds of the Letter of Credit to Acquiror as
directed by Acquiror. If the Letter of Credit is cancelled pursuant to this
paragraph 0, then this Agreement will terminate.
(c) Actions upon Company Payment Request. Upon receipt from the
Company of a Company Payment Request pursuant to paragraph 0, Escrow Agent will
immediately (and in any event within one business day) give Acquiror notice of
such Company
3
<PAGE> 4
Payment Request. Escrow Agent will take the requested actions set forth in such
Company Payment Request on the second business day following receipt of such
Company Payment Request.
(d) Actions upon Company Surrender Request. Immediately upon receipt
from the Company of a Company Surrender Request pursuant to paragraph 0, Escrow
Agent will take the requested actions set forth in such Company Surrender
Request.
(e) Letter of Credit Waiver. Immediately upon receipt from the
Company or Acquiror of a Letter of Credit Waiver (as defined in the Merger
Agreement), Escrow Agent will surrender the Letter of Credit to the Issuing Bank
for cancellation, or if the Escrow Agent shall have already drawn on the Letter
of Credit pursuant to Section 2(b), pay the proceeds of the Letter of Credit to
Acquiror. Upon such surrender or payment, this Agreement will terminate.
6 Liability of Escrow Agent. Escrow Agent's duties and obligations
under this Agreement will be determined solely by the express provisions of this
Agreement. Escrow Agent will be under no obligation to refer to any documents
other than this Agreement and the instructions and requests delivered to Escrow
Agent hereunder. Escrow Agent will not have any duties or responsibilities
except as expressly provided in this Agreement. Escrow Agent will not be
obligated to recognize, and will not have any liability or responsibility
arising under, any agreement to which Escrow Agent is not a party, even though
reference thereto may be made herein. With respect to Escrow Agent's
responsibility, the Company and Acquiror further agree that:
(a) Escrow Agent will have no liability by reason of any error of
judgment or for any act done or step taken or omitted by Escrow Agent, or for
any mistake of fact or law or anything which Escrow Agent may do or refrain from
doing in Agent's gross negligence, bad faith or willful misconduct. Escrow Agent
may consult with counsel of its own choice (other than counsel for Acquiror or
the Company or any of their affiliates) and will have full and complete
authorization and protection for any action taken or suffered by Escrow Agent
hereunder in good faith and in accordance with the opinion of such counsel. The
reasonable costs of such counsel's services will be paid to Escrow Agent in
accordance with paragraph 0. The Company and Acquiror will jointly indemnify and
hold Escrow Agent harmless from and against any and all liability and expense
which may arise out of any action taken or omitted by Escrow Agent in accordance
with this
4
<PAGE> 5
Agreement, except for such liability and expenses which results from Escrow
Agent's gross negligence, bad faith or willful misconduct.
(b) The Company or Acquiror may examine the Escrow Agent's records
pertaining to this Agreement at any time during normal business hours at Escrow
Agent's office upon 24 hours' prior notice.
(c) This Agreement is a personal one, Escrow Agent's duties hereunder
being only to the other parties hereto, their successors, permitted assigns and
legal representatives, and to no other Person.
(d) No succession to, or assignment of, the interest of Acquiror or
the Company will be binding upon the Escrow Agent unless and until written
evidence of such succession or assignment, in form satisfactory to Escrow Agent,
has been filed with and accepted by Escrow Agent.
(e) Escrow Agent may rely or act upon requests or instructions signed
by the proper parties or bearing a signature or signatures reasonably believed
by Escrow Agent to be genuine of the proper parties.
(f) In case any emergency held by Escrow Agent will be attached,
garnished or levied upon under a court order, or the delivery thereof will be
stayed or enjoined by a court order, or any writ, order, judgment or decree will
be made or entered by any court, or any order, judgment or decree will be made
or entered by any court affecting the property deposited under this Agreement or
any party thereof, Escrow Agent is hereby expressly authorized, in its sole
discretion, to obey and comply with all writs, orders, judgments or decrees so
entered or issued, whether or with or without jurisdiction, and in case Escrow
Agent obeys or complies with any such writ, order, judgment or decree, Escrow
Agent will not be liable to Acquiror or the Company or to any other Person by
reason of such compliance in connection with such litigation, and the Company
and Acquiror jointly and severally agree to pay to Escrow Agent on demand its
reasonable costs, attorneys' fees, charges, disbursements and expenses in
connection with such litigation
(g) Subject to the terms of this paragraph 0, Escrow Agent reserves
the right to resign at any time by giving written notice of resignation to
Acquiror and the Company specifying the effective date thereof. Within 30 days
after receiving such
5
<PAGE> 6
notice, Acquiror and the Company jointly will appoint a successor escrow agent
to which Escrow Agent may distribute the property then held hereunder, less
Escrow Agent's accrued fees and reasonable costs and expenses. Escrow Agent
hereby agrees to use commercially reasonable efforts to comply with the Issuing
Bank's conditions for transfer of the Letter of Credit to a successor escrow
agent. If a successor escrow agent has not been appointed or has not accepted
such appointment by the end of such 30-day period, Escrow Agent may apply to a
court of competent jurisdiction for the appointment of a successor escrow agent,
and Acquiror and the Company will pay the reasonable costs, expenses and
attorneys' fees which are incurred in connection with such proceeding.
Notwithstanding the above, if a transfer of the Letter of Credit is prohibited
by this terms, or if the Letter of Credit does not expressly permit a subsequent
holder to draw on such Letter of Credit, then Escrow Agent shall not deliver the
Letter of Credit to the clerk for any such court, but instead either (i)
Acquiror shall arrange for the replacement of such Letter of Credit with another
Letter of Credit permitting such transfer and permitting the subsequent holder
to draw on the replacement Letter of Credit in accordance with the terms hereof
and as specified in the replacement Letter of Credit (which shall be on the same
terms and conditions contained in the Letter of Credit), in which event the
Escrow Agent may deposit such replacement Letter of Credit with the clerk of any
such court, or (ii) the Escrow Agent shall draw on such non-transferable Letter
of Credit and deliver the proceeds to the clerk of such court.
(h) Escrow Agent does not have any interest in the escrow fund, but
is serving as escrow holder only and has possession thereof. If any payments of
income from the escrow fund will be subject to withholding regulations then in
force with respect to United States taxes, Acquiror and the Company agree to
provide Escrow Agent with appropriate forms for or with respect to such
withholder. This paragraph 0 and paragraphs 0, 0, 0 and 0 will survive
notwithstanding any termination of this Agreement or Escrow Agent's resignation.
7 Compensation of Escrow Agent. Escrow Agent will be entitled to a
reasonable fee for services rendered and for reimbursement of extraordinary
expenses incurred in performance of its duties, which extraordinary expenses are
not included in said fee. Said fee and expenses will be divided equally between
Acquiror, on the one hand, and the Company, on the other hand.
8 Notices. All notices, requests, demands, claims and other
communications hereunder ("Notices") will be in writing,
6
<PAGE> 7
personally delivered or sent by facsimile and addressed to the intended
recipient as set forth below:
Notices to the Company:
Citicasters Inc.
Suite 600
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Samuel J. Simon, Esq.
Phone: (513) 562-8019
Facsimile: [Need Fax Number]
with a copy (which will not constitute notice to
the Company to:
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
Attention: Lyle G. Ganske, Esq.
Phone: (216) 586-7264
Facsimile: (216) 579-0212
Notices to Acquiror:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, OH 45202
Attention: Mr. Randy Michaels
Phone: (513) 621-1300
Facsimile: (513) 621-0090
with a copy (which will not constitute notice to
Acquiror) to:
Graydon, Head & Ritchey
1900 Fifth Third Center
511 Walnut Street
Cincinnati, Ohio 45202
Attention: Thomas W. Kahle
Phone: (513) 621-6464
Facsimile: (513) 651-3836
and to:
7
<PAGE> 8
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, IL 60603-3441
Attention: Scott J. Davis, Esq.
Phone: (312) 701-7311
Facsimile: (312) 701-7711
Notices to Escrow Agent:
[Star Bank, National Association]
--------------------------------
--------------------------------
Attention: ---------------------
Phone: -------------------------
Facsimile: [Need Fax Number]
Any notices will be deemed to have been given pursuant to this Agreement when
personally delivered or sent by facsimile (electronically confirmed). Any party
may change the address to which Notices are to be delivered by giving the other
parties notice in the manner provided in this paragraph 0.
9 Binding Effect: Assignment. This Agreement and all of the provisions
hereof will be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns.
10 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws effective during
the term of this Agreement, such provision will be fully severable; this
Agreement will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement; and the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid, or unenforceable provision or by
its severance from this Agreement.
11 No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any Person.
12 Headings. The headings used in this Agreement are for convenience of
reference only and do not constitute a part of this Agreement and will not be
deemed to limit, characterize or in any way affect any provision of
8
<PAGE> 9
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no heading had been used in this Agreement.
13 Counterparts. This Agreement may be executed in two or more
counterparts, any one of which need not contain the signatures of more than one
Person, but all such counterparts taken together will constitute one and the
same instrument.
14 Governing Law. This Agreement will be governed by and construed in
accordance with the domestic laws of the State of Ohio, without giving effect to
any choice of law or conflict of law provision (whether of the State of Ohio or
any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Ohio.
15 Number. Each defined term used in this Agreement has a comparable
meaning used in its plural or singular form.
16 Including. Whenever the term "including" (whether or not that term
is followed by the word "but not limited to" or "without limitation" or words of
similar effect) is used in this Agreement in connection with a listing of items
within a particular classification, that listing will be interpreted to be
illustrative only and will not be interpreted as a limitation on, or exclusive
listing of, the items within that classification.
17 Termination. If the Letter of Credit is cancelled pursuant to the
terms of this Agreement, then this Agreement will terminate. This Agreement
shall survive any termination of the Merger Agreement.
* * * * *
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year first above written.
[ACQUIROR]
By:
----------------------------------
Its:
----------------------------------
CITICASTERS INC.
9
<PAGE> 10
By:
----------------------------------
Its:
----------------------------------
[STAR BANK, NATIONAL ASSOCIATION]
as Escrow Agent
By:
----------------------------------
Its:
----------------------------------
10
<PAGE> 11
EXHIBIT A
[To Come]
11
<PAGE> 1
Exhibit 2.5
[Executive Officer Form]
EMPLOYMENT CONTINUATION AGREEMENT
This EMPLOYMENT CONTINUATION AGREEMENT (this "Agreement"), is made and
entered into on this ____ day of February, 1996, by Citicasters Inc., a Florida
corporation (the "Company"), and _________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive presently is the ____________________ of the
Company and has made and is expected to continue to make major contributions to
the profitability, growth and financial strength of the Company;
WHEREAS, the Company wishes to assure itself of both present and future
continuity of management in the event of any Change in Control (as that term is
hereafter defined);
WHEREAS, the Company wishes to ensure that certain of its executives
are not practically disabled from discharging their duties upon a Change in
Control; and
WHEREAS, although effective and binding as of the date hereof, this
Agreement shall become operative only upon the occurrence of a Change in
Control;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Operation of the Agreement.
(a) This Agreement shall be effective and binding immediately
upon its execution, but anything in this Agreement to the contrary
notwithstanding, this Agreement shall not be operative unless and until there
shall have occurred a Change in Control. For purposes of this Agreement, a
"Change in Control" shall have occurred if at any time during the Term (as that
term is hereafter defined) the Company is merged or consolidated or reorganized
into or with another corporation or other legal person and as a result of such
merger, consolidation or reorganization less than 51% of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such
<PAGE> 2
transaction is held in the aggregate by the holders of then-outstanding
securities entitled to vote generally in the election of directors ("Voting
Stock") of the Company immediately prior to such transaction.
(b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.
(c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the date hereof and shall expire as of the
later of (i) the close of business on June 1, 1997 or (ii) the expiration of the
Period of Employment (as that term is hereafter defined); provided, however,
that if, prior to a Change in Control, the Executive ceases for any reason to be
an elected officer or assistant officer of the Company, thereupon the Term shall
be deemed to have expired and this Agreement shall immediately terminate and be
of no further effect.
2. Employment; Period of Employment.
(a) Subject to the terms and conditions of this Agreement,
upon the occurrence of a Change in Control, the Company shall continue the
Executive in its employ and the Executive shall remain in the employ of the
Company for the period set forth in Section 2(b) below (the "Period of
Employment"). So long as the Executive remains in the employ of the Company, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of the Company as in effect for executives immediately prior to the
Change in Control) to the business and affairs of the Company.
(b) The Period of Employment shall commence on the date of the
occurrence of a Change in Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the Executive's death; (ii)
the Executive's attainment of age 65; or (iii) the second anniversary of the
occurrence of the Change in Control.
3. Compensation During Period of Employment.
(a) Upon the occurrence of a Change in Control, the Executive
shall receive during the Period of Employment (i) annual base salary at a rate
not less than [specify the rate listed in Exhibit 6.6(c) to Agreement and Plan
of Merger], payable monthly
2
<PAGE> 3
or otherwise as in effect immediately prior to a Change in Control ("Base Pay");
and (ii) an annual amount equal to not less than [specify the amount listed on
Exhibit 6.6(c) to Agreement and Plan of Merger] ("Incentive Pay"); provided,
however, that nothing herein shall preclude a change in the mix of Base Pay and
Incentive Pay by an increase in the relative amount of Base Pay, provided that
the aggregate compensation received by the Executive in any one year is not
reduced and provided, further, that in no event shall any increase in the
Executive's aggregate compensation or any portion thereof in any way diminish
any other obligation of the Company under this Agreement.
(b) For his service pursuant to Section 2(a) hereof, during
the Period of Employment the Executive shall be a full participant in any and
all employee retirement income and welfare benefit policies, plans, programs or
arrangements which are made available generally to other executives of the
Company during the Period of Employment, including without limitation any
executive automobile, stock option, stock purchase, stock appreciation,
performance improvement, long-term incentive, medical or health, life insurance,
vacation, disability, salary continuation and any other retirement income or
welfare benefit policy, plan, program or arrangement or any equivalent successor
policy, plan, program or arrangement that may now exist or be adopted hereafter
by the Company or any successor thereto (collectively, "Employee Benefits");
provided, however, that the Executive's rights thereunder shall be governed by
the terms thereof and shall not be enlarged or limited hereunder or otherwise
affected hereby.
4. Termination Following a Change in Control.
(a) In the event of the occurrence of a Change in Control,
this Agreement may be terminated by the Company during the Period of Employment
only upon the occurrence thereafter of one or more of the following events:
(i) If the Executive shall become permanently
disabled and begins actually to receive disability benefits pursuant to
the disability plan of the Company applicable to the Executive or any
successor plan adopted prior to a Change in Control; or
(ii) For "Cause", which for purposes of this
Agreement shall mean that, prior to any termination pursuant to Section
4(b) hereof, the Executive shall have committed:
3
<PAGE> 4
(A) an act of fraud, embezzlement or theft
in connection with his duties or in the course of his
employment with the Company or a felony or any crime involving
moral turpitude;
(B) intentional wrongful damage to the
property of the Company;
(C) intentional wrongful disclosure of
secret processes or confidential information of the Company;
(D) failure to comply with the policies,
rules, or directives of the management of the Company; or
(E) gross or repeated neglect of duties;
and any such act shall have been harmful to the Company or would tend
to bring discredit upon the Company.
(b) In the event of the occurrence of a Change in Control,
this Agreement may be terminated by the Executive with the right to receive
benefits under Section 5 hereof, only upon the occurrence thereafter of one or
more of the following events:
(i) Any termination by the Company of the
employment of the Executive during the Period of Employment, unless (x)
Cause for termination shall exist or (y) as a result of the death of
the Executive or (z) by reason of the Executive's disability and the
actual receipt of disability benefits as provided in Section 4(a)(i)
hereof; or
(ii) Termination by the Executive of his employment
with the Company during the Period of Employment and upon the
occurrence of any of the following events:
(A) The liquidation, dissolution, merger,
consolidation or reorganization of the Company or transfer of
all or a significant portion of its business and/or assets
unless the successor or successors (by liquidation, merger,
consolidation, reorganization or otherwise) to which all or a
significant portion of its business and/or assets have been
transferred (directly or by operation of law) shall have
assumed all duties and obligations of the
4
<PAGE> 5
Company under this Agreement pursuant to Section 7 hereof; or
(B) Without limiting the generality or
effect of the foregoing, any material breach of this Agreement
by the Company.
(c) Notwithstanding anything contained in this Agreement to
the contrary, in the event of a Change in Control, the Executive may decline the
Company's offer of continued employment hereunder, or terminate employment with
the Company for any reason, or without reason, during the 60-day period
immediately following the first occurrence of a Change in Control, with the
right to severance compensation as provided in Section 5 hereof.
(d) A termination by the Company pursuant to Section 4(a)
hereof or by the Executive pursuant to Section 4(b) or Section 4(c) hereof shall
not affect any rights which the Executive may have pursuant to any other
agreement, policy, plan, program or arrangement of the Company providing
Employee Benefits, which rights shall be governed by the terms thereof. If this
Agreement or the employment of the Executive is terminated under circumstances
in which the Executive is not entitled to any payments under Sections 3 or 5
hereof, the Executive shall have no further obligation or liability to the
Company hereunder with respect to his prior or any future employment by the
Company.
5. Severance Compensation.
(a) If, following the occurrence of a Change in Control, the
Company shall terminate the Executive's employment other than pursuant to
Section 4(a) hereof, or if the Executive shall terminate his employment pursuant
to Section 4(b) or Section 4(c) hereof, the Company shall pay or cause to be
paid to the Executive, the Base Pay which the Executive would have received
pursuant to this Agreement for the remainder of the Period of Employment had his
employment with the Company continued for such period; plus the aggregate
Incentive Pay which the Executive would have received pursuant to this Agreement
with respect to the Period of Employment had his employment continued for such
period.
(b) Any Incentive Pay that is payable to the Executive with
respect to a period that is less than a full calendar year (a "partial calendar
year") shall be prorated by multiplying (i) the Incentive Pay that would have
been payable to
5
<PAGE> 6
the Executive with respect to the entire calendar year had the Executive's
employment with the Company continued until the end of such year by (ii) a
fraction the numerator of which equals the number of days in the partial
calendar year and the denominator of which equals 365.
6. No Mitigation Obligation. The parties thereto expressly agree that
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise.
7. Successors and Binding Agreement.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement and each of the Company's obligations
hereunder. This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of or to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the "Company" for the purposes of this Agreement), but shall not
otherwise be assignable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Section 7(a) hereof. Without limiting the generality of
the foregoing, the Executive's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security interest
or otherwise, other than by a transfer by his will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary
to this Section
6
<PAGE> 7
7(c), the Company shall have no liability to pay to the purported assignee or
transferee any amount so attempted to be assigned or transferred.
8. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Ohio, without giving effect to the principles of conflict of laws
of such State.
9. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement.
10. Validity. The invalidity or unenforceability of any provision of
this Agreements shall not affect the validity or enforceability of any other
provision of this Agreement which shall remain in full force
and effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same agreement.
12. Employment Rights. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the Executive to
have the Executive continue as an officer or assistant officer of the Company or
to remain in the employment of the Company prior to any Change in Control.
13. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.
14. Limitation on Payments and Benefits. Notwithstanding any provision
of this Agreement to the contrary, if any amount or benefit to be paid or
provided under this Agreement would be an "Excess Parachute Payment," within the
meaning of Section 280G of
7
<PAGE> 8
the Internal Revenue Code of 1986, as amended (the "Code"), or any successor
provision thereto, but for the application of this sentence, then the payments
and benefits to be paid or provided under this Agreement shall be reduced to the
minimum extent necessary (but in no event to less than zero) so that no portion
of any such payment or benefit, as so reduced, constitutes an Excess Parachute
Payment. The determination of whether any reduction in such payments or benefits
to be provided under this Agreement or otherwise is required pursuant to the
preceding sentence shall be made at the expense of the Company, if requested by
the Executive or the Company, by the Company's independent accountants. The fact
that the Executive's right to payments or benefits may be reduced by reason of
the limitations contained in this Section 14 shall not of itself limit or
otherwise affect any other rights of the Executive other than pursuant to this
Agreement. In the event that any payment or benefit intended to be provided
under this Agreement or otherwise is required to be reduced pursuant to this
Section 14, the Executive shall be entitled to designate the payments and/or
benefits to be so reduced in order to give effect to this Section 14. The
Company shall provide the Executive with all information reasonably requested by
the Executive to permit the Executive to make such designation. In the event
that the Executive fails to make such designation within 10 business days of the
date the Executive's employment with the Company terminates, the Company may
effect such reduction in any manner it deems appropriate.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.
___________________________________
[EXECUTIVE]
CITICASTERS INC.
By:________________________________
Title:_____________________________
8
<PAGE> 1
Exhibit 2.6
[Management Form]
EMPLOYMENT CONTINUATION AGREEMENT
This EMPLOYMENT CONTINUATION AGREEMENT (this "Agreement"), is made and
entered into on this ____ day of February, 1996, by Citicasters Inc., a Florida
corporation (the "Company"), and _________________ (the "Executive").
WITNESSETH:
WHEREAS, the Executive presently is the ____________________ of the
Company and has made and is expected to continue to make major contributions to
the profitability, growth and financial strength of the Company;
WHEREAS, the Company wishes to assure itself of both present and future
continuity of management in the event of any Change in Control (as that term is
hereafter defined);
WHEREAS, the Company wishes to ensure that certain of its executives
are not practically disabled from discharging their duties upon a Change in
Control; and
WHEREAS, although effective and binding as of the date hereof, this
Agreement shall become operative only upon the occurrence of a Change in
Control;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. Operation of the Agreement.
(a) This Agreement shall be effective and binding immediately
upon its execution, but anything in this Agreement to the contrary
notwithstanding, this Agreement shall not be operative unless and until there
shall have occurred a Change in Control. For purposes of this Agreement, a
"Change in Control" shall have occurred if at any time during the Term (as that
term is hereafter defined) the Company is merged or consolidated or reorganized
into or with another corporation or other legal person and as a result of such
merger, consolidation or reorganization less than 51% of the combined voting
power of the then-outstanding securities of such corporation or person
immediately after such transaction is held in the aggregate by the holders of
then-outstanding securities entitled to vote generally in the election of
directors ("Voting Stock") of the Company immediately prior to such transaction.
<PAGE> 2
(b) Upon the occurrence of a Change of Control at any time
during the Term, this Agreement shall become immediately operative.
(c) The period during which this Agreement shall be in effect
(the "Term") shall commence as of the date hereof and shall expire as of the
later of (i) the close of business on June 1, 1997 or (ii) the expiration of the
Period of Employment (as that term is hereafter defined); provided, however,
that if, prior to a Change in Control, the Executive ceases for any reason to be
an elected officer or assistant officer of the Company, thereupon the Term shall
be deemed to have expired and this Agreement shall immediately terminate and be
of no further effect.
2. Employment; Period of Employment.
(a) Subject to the terms and conditions of this Agreement,
upon the occurrence of a Change in Control, the Company shall continue the
Executive in its employ and the Executive shall remain in the employ of the
Company for the period set forth in Section 2(b) below (the "Period of
Employment"). So long as the Executive remains in the employ of the Company, the
Executive shall devote substantially all of his time during normal business
hours (subject to vacations, sick leave and other absences in accordance with
the policies of the Company as in effect for executives immediately prior to the
Change in Control) to the business and affairs of the Company.
(b) The Period of Employment shall commence on the date of the
occurrence of a Change in Control and, subject only to the provisions of Section
4 hereof, shall continue until the earlier of (i) the Executive's death; (ii)
the Executive's attainment of age 65; or (iii) the second anniversary of the
occurrence of the Change in Control.
3. Compensation During Period of Employment.
(a) Upon the occurrence of a Change in Control, the Executive
shall receive during the Period of Employment annual base salary at a rate not
less than [specify the rate listed in Exhibit 6.6(c) to the Agreement and Plan
of Merger], payable monthly or otherwise as in effect immediately prior to a
Change in Control ("Base Pay"); provided, however, that in no event shall any
increase in the Executive's aggregate compensation or any portion thereof in any
way diminish any other obligation of the Company under this Agreement.
(b) For his service pursuant to Section 2(a) hereof, during
the Period of Employment the Executive shall be a full
2
<PAGE> 3
participant in any and all employee retirement income and welfare benefit
policies, plans, programs or arrangements which are made available generally to
other executives of the Company during the Period of Employment, including
without limitation any executive automobile, stock option, stock purchase, stock
appreciation, performance improvement, long-term incentive, medical or health,
life insurance, vacation, disability, salary continuation and any other
retirement income or welfare benefit policy, plan, program or arrangement or any
equivalent successor policy, plan, program or arrangement that may now exist or
be adopted hereafter by the Company or any successor thereto (collectively,
"Employee Benefits"); provided, however, that the Executive's rights thereunder
shall be governed by the terms thereof and shall not be enlarged or limited
hereunder or otherwise affected hereby.
4. Termination Following a Change in Control.
(a) In the event of the occurrence of a Change in Control,
this Agreement may be terminated by the Company during the Period of Employment
only upon the occurrence thereafter of one or more of the following events:
(i) If the Executive shall become permanently disabled and
begins actually to receive disability benefits pursuant to the
disability plan of the Company applicable to the Executive or any
successor plan adopted prior to a Change in Control; or
(ii) For "Cause", which for purposes of this Agreement
shall mean that, prior to any termination pursuant to Section 4(b)
hereof, the Executive shall have:
(A) committed an act of fraud, embezzlement or theft
in connection with his duties or in the course of his
employment with the Company or a felony or any crime involving
moral turpitude;
(B) caused intentional wrongful damage to the
property of the Company;
(C) wrongfully disclosed secret processes or
confidential information of the Company;
(D) failed to comply with the policies, rules, or
directives of the management of the Company;
(E) grossly or repeatedly neglected his or her
duties; or
3
<PAGE> 4
(F) engaged in any Competitive Activity (as that term
is hereinafter defined);
and any such act shall have been harmful to the Company or would tend
to bring discredit upon the Company.
(b) In the event of the occurrence of a Change in Control,
this Agreement may be terminated by the Executive with the right to receive
benefits under Section 5 hereof, only upon the occurrence thereafter of one or
more of the following events:
(i) Any termination by the Company of the employment of
the Executive during the Period of Employment, unless (x) Cause for
termination shall exist or (y) as a result of the death of the
Executive or (z) by reason of the Executive's disability and the actual
receipt of disability benefits as provided in Section 4(a)(i) hereof;
or
(ii) Termination by the Executive of his employment with
the Company during the Period of Employment and upon the occurrence of
any of the following events:
(1)(A) A significant adverse change in the nature or
scope of the authorities, powers, functions, responsibilities
or duties in respect of the Company which the Executive had
immediately prior to the Change in Control;
(B) The liquidation, dissolution, merger,
consolidation or reorganization of the Company or transfer of
all or a significant portion of its business and/or assets
unless the successor or successors (by liquidation, merger,
consolidation, reorganization or otherwise) to which all or a
significant portion of its business and/or assets have been
transferred (directly or by operation of law) shall have
assumed all duties and obligations of the Company under this
Agreement pursuant to Section 7 hereof; or
(C) Without limiting the generality or effect of the
foregoing, any material breach of this Agreement by the
Company.
- -----------------
(1) To be included only in Agreements with general managers.
4
<PAGE> 5
(c) A termination by the Company pursuant to Section 4(a)
hereof or by the Executive pursuant to Section 4(b) hereof shall not affect any
rights which the Executive may have pursuant to any other agreement, policy,
plan, program or arrangement of the Company providing Employee Benefits, which
rights shall be governed by the terms thereof. If this Agreement or the
employment of the Executive is terminated under circumstances in which the
Executive is not entitled to any payments under Sections 3 or 5 hereof, the
Executive shall have no further obligation or liability to the Company hereunder
with respect to his prior or any future employment by the Company.
5. Severance Compensation. If, following the occurrence of a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 4(a) hereof, or if the Executive shall terminate his
employment pursuant to Section 4(b) hereof, the Company shall pay or cause to be
paid to the Executive, the Base Pay which the Executive would have received
pursuant to this Agreement for the remainder of the Period of Employment had his
employment with the Company continued for such period, provided however that the
Company's obligation to make any payment hereunder shall terminate if Executive
engages in any Competitive Activity.
5
<PAGE> 6
6. No Mitigation Obligation. The parties thereto expressly agree that
the Executive shall not be required to mitigate the amount of any payment
provided for in this Agreement by seeking other employment or otherwise, nor
shall any profits, income, earnings or other benefits from any source whatsoever
create any mitigation, offset, reduction or any other obligation on the part of
the Executive hereunder or otherwise, except as expressly provided in Section 5
hereof.
7. Successors and Binding Agreement.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization or otherwise) to
all or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, expressly to
assume and agree to perform this Agreement and each of the Company's obligations
hereunder. This Agreement shall be binding upon and inure to the benefit of the
Company and any successor of or to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially all of the
business and/or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor shall thereafter
be deemed the "Company" for the purposes of this Agreement), but shall not
otherwise be assignable or delegable by the Company.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or legatees.
(c) This Agreement is personal in nature and neither of the
parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Section 7(a) hereof. Without limiting the generality of
the foregoing, the Executive's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a security interest
or otherwise, other than by a transfer by his will or by the laws of descent and
distribution and, in the event of any attempted assignment or transfer contrary
to this Section 7(c), the Company shall have no liability to pay to the
purported assignee or transferee any amount so attempted to be assigned or
transferred.
8. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed
6
<PAGE> 7
by the laws of the State of Ohio, without giving effect to the principles of
conflict of laws of such State.
9. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, expressed or implied with respect to the subject matter
hereof have been made by either party which are not set forth expressly in this
Agreement.
10. Validity. The invalidity or unenforceability of any provision of
this Agreements shall not affect the validity or enforceability of any other
provision of this Agreement which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same agreement.
12. Employment Rights. Nothing expressed or implied in this Agreement
shall create any right or duty on the part of the Company or the Executive to
have the Executive continue as an officer or assistant officer of the Company or
to remain in the employment of the Company prior to any Change in Control.
13. Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or government regulation or ruling.
14. Competitive Activity. For the purpose of this Agreement, the term
"Competitive Activity shall mean:
(i) rendering any services as an officer, director, employee,
agent, consultant or in any other capacity to, or own any interest
(other than an interest of less than five percent (5%) of the stock of
a publicly held company), as an individual owner, stockholder, partner
or in any other manner in any person, firm, corporation, partnership or
other entity which is a Competitive Business; or
7
<PAGE> 8
(ii) soliciting or otherwise attempting to employ or engage
any current or future employee of the Company or any successor for
employment or association in any Competitive Business or otherwise
offer any inducement to any current or future employee of the Company
or any successor to leave the employ or association of the Company or
any successor.
For purposes of this Agreement, Competitive Business shall mean any
business operation located in the viewer or listener market area in which the
Executive performed services for the Company and which engages, as all or a part
of its business, in radio or television broadcasting.
15. Limitation on Payments and Benefits. Notwithstanding any provision
of this Agreement to the contrary, if any amount or benefit to be paid or
provided under this Agreement would be an "Excess Parachute Payment," within the
meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor provision thereto, but for the application of this
sentence, then the payments and benefits to be paid or provided under this
Agreement shall be reduced to the minimum extent necessary (but in no event to
less than zero) so that no portion of any such payment or benefit, as so
reduced, constitutes an Excess Parachute Payment. The determination of whether
any reduction in such payments or benefits to be provided under this Agreement
or otherwise is required pursuant to the preceding sentence shall be made at the
expense of the Company, if requested by the Executive or the Company, by the
Company's independent accountants. The fact that the Executive's right to
payments or benefits may be reduced by reason of the limitations contained in
this Section 15 shall not of itself limit or otherwise affect any other rights
of the Executive other than pursuant to this Agreement. In the event that any
payment or benefit intended to be provided under this Agreement or otherwise is
required to be reduced pursuant to this Section 15, the Executive shall be
entitled to designate the payments and/or benefits to be so reduced in order to
give effect to this Section 15. The Company shall provide the Executive with all
information reasonably requested by the Executive to permit the Executive to
make such designation. In the event that the Executive fails to make such
designation within 10 business days of the date the Executive's employment with
the Company terminates, the Company may effect such reduction in any manner it
deems appropriate.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first set forth above.
8
<PAGE> 9
_____________________________
[EXECUTIVE]
CITICASTERS INC.
By:________________________
Its:_______________________
<PAGE> 1
Exhibit 2.7
JACOR COMMUNICATIONS, INC.
AND
KEYCORP SHAREHOLDER SERVICES, INC.
AS WARRANT AGENT
****************
WARRANT AGREEMENT
DATED AS OF , 1996
****************
<PAGE> 2
WARRANT AGREEMENT, dated as of ___________, 1996 between Jacor
Communications, Inc., an Ohio corporation (the "Company"), and KeyCorp
Shareholder Services Inc., of ___________, a national banking association, as
Warrant Agent (the "Warrant Agent") ("Agreement").
The Company proposes to issue Common Stock Purchase Warrants, as
hereinafter described (the "Warrants"), to purchase up to an aggregate of
[_______] shares of its Common Stock without par value ("Common Stock") (the
shares of Common Stock issuable on exercise of the Warrants being referred to
herein as the "Warrant Shares"), pursuant to an Agreement and Plan of Merger
among the Company, JCAC, Inc. and Citicasters, Inc. dated as of February, 1996,
pursuant to which the Company will issue the Warrants, each Warrant entitling
the holder thereof to purchase _____ of a share of Common Stock.
The Company wishes the Warrant Agent to act on behalf of the Company
and the Warrant Agent is willing to act in connection with the issuance,
division, transfer, exchange and exercise of Warrants.
In consideration of the foregoing and for the purpose of defining the
terms and provisions of the Warrants and the respective rights and obligations
thereunder of the Company and the registered owners of the Warrants (the
"Holders"), the Company and the Warrant Agent hereby agree as follows:
SECTION 1. APPOINTMENT OF WARRANT AGENT. The Company hereby appoints
the Warrant Agent to act as agent for the Company in accordance with the
instructions hereinafter set forth in this Agreement, and the Warrant Agent
hereby accepts such appointment.
SECTION 2. TRANSFERABILITY AND FORM OF WARRANT.
2.1 REGISTRATION. The Warrants shall be numbered and shall be
registered in a Warrant Register as they are issued. The Company and the Warrant
Agent shall be entitled to treat the Holder of any Warrant as the owner in fact
thereof for all purposes and shall not be bound to recognize any equitable or
other claim to or interest in such Warrant on the part of any other person, and
shall not be liable for any registration of transfer of Warrants which are
registered or to be registered in the name of a fiduciary or the nominee of a
fiduciary unless made with the actual knowledge that a fiduciary or nominee is
committing a breach of trust in requesting such registration of transfer, or
with such knowledge of such acts that its participation therein amounts to bad
faith.
2.2 TRANSFER. The Warrants shall be transferable only on the
books of the Company maintained at the principal office of the Warrant Agent
upon delivery thereof duly endorsed by the Holder or by his duly authorized
attorney or representative, or accompanied by proper evidence of succession,
assignment or authority to transfer, which endorsement shall be guaranteed by a
bank or trust company or a broker or dealer which is a member of the National
Association of Securities Dealers, Inc. In all cases of transfer by an attorney,
the original power of attorney, duly approved, or a copy thereof, duly
certified, shall be deposited and remain with the Warrant Agent. In case of
transfer by executors, administrators, guardians or other legal representatives,
duly authenticated evidence of their authority shall be produced, and may be
-2-
<PAGE> 3
required to be deposited and remain with the Warrant Agent in its discretion.
Upon any registration of transfer, the Warrant Agent shall countersign and
deliver a new Warrant or Warrants to the persons entitled thereto.
2.3 FORM OF WARRANT. The text of the Warrant and of the
Purchase Form shall be substantially as set forth in Exhibit A attached hereto.
The price per Warrant Share and the number of Warrant Shares issuable upon
exercise of each Warrant are subject to adjustment upon the occurrence of
certain events, all as hereinafter provided. The Warrants shall be executed on
behalf of the Company by its President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or an Assistant
Secretary. The signature of any such officers on the Warrants may be manual or
facsimile.
Warrants bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any one of them shall have
ceased to hold such offices prior to the delivery of such Warrants or did not
hold such offices on the date of this Agreement.
Warrants shall be dated as of the date of countersignature
thereof by the Warrant Agent either upon initial issuance or upon division,
exchange, substitution or transfer.
SECTION 3. COUNTERSIGNATURE OF WARRANTS. The Warrants shall be
countersigned by the Warrant Agent (or any successor to the Warrant Agent then
acting as warrant agent under this Agreement) and shall not be valid for any
purpose unless so countersigned. Warrants may be countersigned, however, by the
Warrant Agent (or by its successor as warrant agent hereunder) and may be
delivered by the Warrant Agent, notwithstanding that the persons whose manual or
facsimile signatures appear thereon as proper officers of the Company shall have
ceased to be such officers at the time of such countersignature, issuance or
delivery. The Warrant Agent shall, upon written instructions of the Chairman of
the Board, the President, a Vice President, the Treasurer or the Secretary of
the Company, countersign, issue and deliver Warrants entitling the Holders
thereof to purchase not more than [_______] Warrant Shares (subject to
adjustment pursuant to Section 10 hereof) and shall countersign and deliver
Warrants as otherwise provided in this Agreement.
SECTION 4. EXCHANGE OF WARRANT CERTIFICATES. Each Warrant certificate
may be exchanged for another certificate or certificates entitling the Holder
thereof to purchase a like aggregate number of Warrant Shares as the certificate
or certificates surrendered then entitle such Holder to purchase. Any Holder
desiring to exchange a Warrant certificate or certificates shall make such
request in writing delivered to the Warrant Agent, and shall surrender, properly
endorsed, the certificate or certificates to be so exchanged. Thereupon, the
Warrant Agent shall countersign and deliver to the person entitled thereto a new
Warrant certificate or certificates, as the case may be, as so requested.
SECTION 5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
5.1 TERM OF WARRANTS. Subject to the terms of this Agreement,
each Holder shall have the right, which may be exercised commencing the date of
issuance of the Warrants
-3-
<PAGE> 4
and until 5:00 P.M., Eastern Time, on ___________, [2001] [the fifth anniversary
of the date of the Effective Time as defined in the Agreement and Plan of Merger
among the Company, JCAC, Inc., and Citicasters, Inc.] (the "Expiration Date"),
to purchase from the Company the number of fully paid and nonassessable Warrant
Shares which the Holder may at the time be entitled to purchase on exercise of
such Warrants.
5.2 EXERCISE OF WARRANTS. A Warrant may be exercised upon
surrender to the Warrant Agent, at its principal office, of the certificate or
certificates evidencing the Warrants to be exercised, together with the form of
election to purchase on the reverse thereof duly filled in and signed, which
signature shall be guaranteed by a bank or trust company or a broker or dealer
which is a member of the National Association of Securities Dealers, Inc., and
upon payment to the Warrant Agent for the account of the Company of the Warrant
Price (as defined in and determined in accordance with the provisions of
Sections 9 and 10 hereof), for the number of Warrant Shares in respect of which
such Warrants are then exercised. Payment of the aggregate Warrant Price shall
be made in cash or by certified or bank cashier's check drawn on a banking
institution chartered by the government of the United States or any state
thereof.
Subject to Section 6 hereof, upon such surrender of Warrants
and payment of the Warrant Price as aforesaid, the Warrant Agent shall cause to
be issued and delivered with all reasonable dispatch to or upon the written
order of the Holder and in such name or names as the Holder may designate, a
certificate or certificates for the number of full Warrant Shares so purchased
upon the exercise of such Warrants, together with cash, as provided in Section
11 hereof, in respect of any fractional Warrant Shares otherwise issuable upon
such surrender. Such certificate or certificates shall be deemed to have been
issued and any person so designated to be named therein shall be deemed to have
become a holder of record of such Warrant Shares as of the date of the surrender
of such Warrants and payment of the Warrant Price, as aforesaid. The rights of
purchase represented by the Warrants shall be exercisable, at the election of
the Holders thereof, either in full or from time to time in part and, in the
event that a certificate evidencing Warrants is exercised in respect of less
than all of the Warrant Shares purchasable on such exercise at any time prior to
the date of expiration of the Warrants, a new certificate evidencing the
remaining Warrant or Warrants will be issued, and the Warrant Agent is hereby
irrevocably authorized to countersign and to deliver the required new Warrant
certificate or certificates pursuant to the provisions of this Section and of
Section 3 hereof, and the Company, whenever required by the Warrant Agent, will
supply the Warrant Agent with Warrant certificates duly executed on behalf of
the Company for such purpose.
5.3 RESTRICTION ON EXERCISE. A Warrant may not be exercised in
whole or in part if in the reasonable opinion of counsel to the Company the
issuance of the Common Stock upon such exercise would cause the Company to be in
violation of the Telecommunications Act of 1996 or the rules and regulations in
effect thereunder. A Holder desiring to exercise Warrants shall, if requested by
the Company, furnish to the Company such additional information as the Company
deems reasonably necessary in order to determine if exercise of a Warrant may
cause the Company to be in said violation. In the event the Company's counsel
determines that, in such counsel's opinion after review of such information, if
any, requested by and delivered to, the Company, the exercise of a Warrant would
cause the Company to be in violation of the Telecommunications Act of 1996 or
the rules and regulations in effect thereunder, the Company
-4-
<PAGE> 5
shall notify such Holder to that effect. Upon receipt of said notice, such
Holder may take such steps, at its own expense, as it reasonably determines
necessary so that the exercise of the Warrant would not cause such a violation;
provided, that upon completion of said steps, such Holder shall notify the
Company and the provisions of this Section 5.3 shall then apply with respect to
the proposed revised transaction.
5.4 LEGEND ON CERTIFICATE. The certificates evidencing the
Warrants may, in the sole discretion of the Company, bear a legend relating to
certain limitations on the ownership of Common Stock imposed by the
Telecommunications Act of 1996.
SECTION 6. PAYMENT OF TAXES. The Company will pay all documentary stamp
taxes, if any, attributable to the initial issuance of Warrant Shares upon the
exercise of Warrants; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issue or delivery of any Warrants or certificates for Warrant Shares in a
name other than that of the registered Holder of Warrants in respect of which
such Warrant Shares are issued.
SECTION 7. MUTILATED OR MISSING WARRANTS. In case any of the
certificates evidencing the Warrants shall be mutilated, lost stolen or
destroyed, the Company shall issue, and the Warrant Agent shall countersign and
deliver in exchange and substitution for and upon cancellation of the mutilated
Warrant certificate, or in lieu of and substitution for the Warrant certificate
lost, stolen or destroyed, a new Warrant certificate of like tenor and
representing an equivalent right or interest, but only upon receipt of evidence
satisfactory to the Company and the Warrant Agent of such loss, theft or
destruction of such Warrant and indemnity or bond, if requested, also
satisfactory to them. An applicant for such a substitute Warrant certificate
shall also comply with such other reasonable regulations and pay such other
reasonable charges as the Company or the Warrant Agent may prescribe.
SECTION 8. RESERVATION OF WARRANT SHARES; PURCHASE, CALL AND
CANCELLATION OF WARRANTS.
8.1 RESERVATION OF WARRANT SHARES. There have been reserved,
and the Company shall at all times keep reserved, out of its authorized Common
Stock, a number of shares of Common Stock sufficient to provide for the exercise
of the rights of purchase represented by the outstanding Warrants. The Transfer
Agent for the Common Stock and every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of any of the rights of
purchase aforesaid will be irrevocably authorized and directed at all times to
reserve such number of authorized shares as shall be required for such purpose.
The Company will keep a copy of this Agreement on file with the Transfer Agent
for the Common Stock and with every subsequent transfer agent for any shares of
the Company's capital stock issuable upon the exercise of the rights of purchase
represented by the Warrants. The Warrant Agent is hereby irrevocably authorized
to requisition from time to time from such Transfer Agent the stock certificates
required to honor outstanding Warrants upon exercise thereof in accordance with
the terms of this Agreement. The Company will supply such Transfer Agent with
duly executed stock certificates for such purposes and will provide or otherwise
make available any cash which may be payable as provided in Section 11 hereof.
All Warrants surrendered in the
-5-
<PAGE> 6
exercise of the rights thereby evidenced shall be canceled by the Warrant Agent
and shall thereafter be delivered to the Company.
8.2 PURCHASE OF WARRANTS BY THE COMPANY. The Company shall
have the right, except as limited by law, other agreements or herein, to
purchase or otherwise acquire Warrants at such times, in such manner and for
such consideration as it may deem appropriate.
8.3 CANCELLATION OF WARRANTS. In the event the Company shall
purchase or otherwise acquire Warrants, the same shall thereupon be delivered to
the Warrant Agent and be canceled by it and retired. The Warrant Agent shall
cancel any Warrant surrendered for exchange, substitution, transfer or exercise
in whole or in part.
SECTION 9. WARRANT PRICE. The price per share at which Warrant Shares
shall be purchasable upon exercise of Warrants shall be $______ (the "Warrant
Price"), subject to adjustment pursuant to Section 10 hereof.
SECTION 10. ADJUSTMENT OF WARRANT PRICE AND NUMBER OF WARRANT SHARES.
The number and kind of securities purchasable upon the exercise of each Warrant
and the Warrant Price shall be subject to adjustment from time to time upon the
happening of certain events, as hereinafter defined.
10.1 MECHANICAL ADJUSTMENTS. The number of Warrant Shares
purchasable upon the exercise of each Warrant and the Warrant Price shall be
subject to adjustment as follows:
(a) In case the Company shall (i) pay a dividend in
shares of Common Stock or make a distribution in shares of
Common Stock, (ii) subdivide its outstanding shares of Common
Stock, (iii) combine its outstanding shares of Common Stock
into a smaller number of shares of Common Stock, or (iv) issue
by reclassification of its shares of Common Stock other
securities of the Company (including any such reclassification
in connection with a consolidation or merger in which the
Company is surviving corporation), the number of Warrant
Shares purchasable upon exercise of each Warrant immediately
prior thereto shall be adjusted so that the Holder of each
Warrant shall be entitled to receive the kind and number of
Warrant Shares or other securities of the Company which he
would have owned or have been entitled to receive after the
happening of any of the events described above, had such
Warrant been exercised immediately prior to the happening of
such event or any record date with respect thereto. An
adjustment made pursuant to this paragraph (a) shall become
effective immediately after the effective date of such event
retroactive to the record date, if any, or such event.
(b) In case the Company shall issue rights, options
or warrants to all holders of its outstanding Common Stock,
without any charge to such holders, entitling them (for a
period within 45 days after the record date mentioned below)
to subscribe for or purchase shares of Common Stock at a price
per share which is
-6-
<PAGE> 7
lower at the record date mentioned below than the then current
market price per share of Common Stock (as defined in
paragraph (d) below) the number of Warrant Shares thereafter
purchasable upon the exercise of each Warrant shall be
determined by multiplying the number of Warrant Shares
theretofore purchasable upon exercise of each Warrant by a
fraction, of which the numerator shall be the number of shares
of Common Stock outstanding on the date of issuance of such
rights, options or warrants plus the number of additional
shares of Common Stock offered for subscription or purchase,
and of which the denominator shall be the number of shares of
Common Stock outstanding on the date of issuance of such
rights, options or warrants plus the number of shares which
the aggregate offering price of the total number of shares of
Common Stock so offered would purchase at the then current
market price per share of Common Stock. Such adjustment shall
be made whenever such rights, options or warrants are issued,
and shall become effective retroactively immediately after the
record date for the determination of stockholders entitled to
receive such rights, options or warrants.
(c) In case the Company shall distribute to all
holders of its shares of Common Stock evidences of its
indebtedness or assets (excluding cash dividends or
distributions payable out of consolidated earnings or surplus
legally available for dividends and dividends or distributions
referred to in paragraph (a) above) or rights, options or
warrants, or convertible or exchangeable securities containing
the right to subscribe for or purchase shares of Common Stock
(excluding those referred to in paragraph (b) above), then in
each case the number of Warrant Shares thereafter purchasable
upon the exercise of each Warrant shall be determined by
multiplying the number of Warrant Shares theretofore
purchasable upon the exercise of each Warrant, by a fraction,
of which the numerator shall be the then current market price
per share of Common Stock (as defined in paragraph (d) below)
on the date of such distribution, and of which the denominator
shall be the then current market price per share of Common
Stock, less the then fair value (as determined by the Board of
Directors of the Company, whose determination shall be
conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such subscription rights,
options or warrants, or of such convertible or exchangeable
securities applicable to one share of Common Stock. Such
adjustment shall be made whenever any such distribution is
made, and shall become effective on the date of distribution
retroactive to the record date for the determination of
shareholders entitled to receive such distribution.
In the Company's sole discretion, in the event of a
distribution by the Company to all holders of its shares of
Common Stock of the capital stock of a subsidiary or
securities convertible into or exercisable for such stock,
then in lieu of an adjustment in the number of Warrant Shares
purchasable upon the exercise of each Warrant, the Holder of
each Warrant, upon the exercise thereof at any time after such
distribution shall be entitled to receive the stock or other
securities to which such Holder would have been entitled if
such Holder had exercised such Warrant immediately prior
thereto, all subject to further adjustment as provided in this
subsection 10.1; provided, however, that no adjustment in
respect of dividends
-7-
<PAGE> 8
or interest on such stock or other securities shall be made
during the term of a Warrant or upon the exercise of a
Warrant.
(d) For the purpose of any computation under paragraphs (b)
and (c) of this Section, the current market price per share of Common
Stock at any date shall be the average of the daily closing prices for
20 consecutive trading days commencing 30 trading days before the date
of such computation. The closing price for each day shall be the last
reported sales price regular way or, in case no reported sale takes
place on such day, the average of the closing bid and asked prices
regular way for such day, in each case on the principal national
securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if not listed or admitted to trading, the
average of the closing bid and asked prices of the Common Stock in the
over-the-counter market as reported by NASDAQ or any comparable system.
In the absence of one or more such quotations, the Company shall
determine the current market price on the basis of such quotations as
it considers appropriate.
(e) No adjustment in the number of Warrant Shares purchasable
hereunder shall be required unless and until such adjustment would
require an increase or decrease of at least one percent (1%) in the
number of Warrant Shares purchasable upon the exercise of each Warrant;
provided, however, that any adjustments which by reason of this
paragraph (e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations shall
be made to the nearest one-thousandth of a share.
(f) Whenever the number of shares purchasable upon the
exercise of each Warrant is adjusted as provided in paragraphs (a), (b)
and (c) above, the Warrant Price payable upon exercise of each Warrant
shall be adjusted by multiplying such Warrant Price immediately prior
to such adjustment by a fraction, of which the numerator shall be the
number of Warrant Shares purchasable upon the exercise of each Warrant
immediately prior to such adjustment, and of which the denominator
shall be the number of Warrant Shares purchasable immediately
thereafter.
(g) No adjustment in the number of Warrant Shares purchasable
upon the exercise of each Warrant need be made under paragraphs (b) and
(c) if the Company issues or distributes to each Holder of Warrants the
rights, options, warrants, or convertible or exchangeable securities,
or evidence of indebtedness or assets referred to in those paragraphs
which each Holder of Warrants would have been entitled to receive had
the Warrants been exercised prior to the happening of such event or the
record date with respect thereto. No adjustment in the number of
Warrant Shares purchasable upon the exercise of each Warrant need be
made for sales of Warrant Shares pursuant to a Company plan for
reinvestment of dividends or interest. No adjustment need be made for a
change in the par value of the Warrant Shares.
(h) For the purpose of this subsection 10.1, the term "shares
of Common Stock" shall mean (i) the class of stock designated as the
Common Stock of the Company at the date of this Agreement, or (ii) any
other class of stock resulting from successive
-8-
<PAGE> 9
changes or reclassification of such shares consisting solely of changes
in par value, or from par value to no par value, or from no par value
to par value. In the event that at any time, as a result of an
adjustment made pursuant to paragraph (a) above, the Holders shall
become entitled to purchase any shares of the Company other than shares
of Common Stock, thereafter the number of such other shares so
purchasable upon exercise of each Warrant and the Warrant Price of such
shares shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with
respect to the Warrant Shares contained in paragraph (a) through (c),
inclusive, above, and the provisions of Section 5 and subsections 10.2
through 10.4, inclusive, with respect to the Warrant Shares, shall
apply on like terms to any such other shares.
(i) Upon the expiration of any rights, options, warrants or
conversion or exchange privileges, if any thereof shall not have been
exercised, the Warrant Price and the number of shares of Common Stock
purchasable upon the exercise of each Warrant shall, upon such
expiration, be readjusted and shall thereafter be such as it would have
been had it been originally adjusted (or had the original adjustment
not been required, as the case may be) as if (A) the only shares of
Common Stock so issued were the shares of Common Stock, if any,
actually issued or sold upon the exercise of such rights, options,
warrants or conversion or exchange rights and (B) such shares of Common
Stock, if any, were issued or sold for the consideration, if any,
actually received by the Company for the issuance, sale or grant of all
such rights, options, warrants or conversion or exchange rights whether
or not exercised; provided, further, that no such readjustment shall
have the effect of increasing the Warrant Price by an amount in excess
of the amount of the adjustment initially made in respect to the
issuance, sale or grant of such rights, options, warrants or conversion
or exchange rights.
10.2 DETERMINATION OF CONSIDERATION. Upon any issuance or sale
for a consideration other than cash, or a consideration part of which is other
than cash, of any shares of Common Stock or Convertible Securities or any rights
or options to subscribe for, purchase or otherwise acquire any shares of Common
Stock or Convertible Securities, the amount of the consideration other than cash
received by the Company shall be deemed to be the fair value of such
consideration as determined in good faith by the Board of Directors of the
Company. In case any shares of Common Stock or Convertible Securities or any
rights, options or warrants to subscribe for, purchase or otherwise acquire any
shares of Common Stock or Convertible Securities shall be issued or sold
together with other shares, stock or securities or other assets of the Company
for a consideration which covers both, the consideration for the issue or sale
of such shares of Common Stock or Convertible Securities or such rights or
options shall be deemed to be the portion of such consideration allocated
thereto in good faith by the Board of Directors of the Company.
10.3 VOLUNTARY ADJUSTMENT BY THE COMPANY. The Company may at
its option, at any time during the term of the Warrants, reduce the then current
Warrant Price to any amount deemed appropriate by the Board of Directors of the
Company.
10.4 NOTICE OF ADJUSTMENT. Whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Warrant Price of
such Warrant Shares is
-9-
<PAGE> 10
adjusted, as herein provided, to an extent that such adjustment is equal to or
greater than 5% of the Warrant Price in effect prior to such adjustment, the
Company shall cause the Warrant Agent promptly to mail by first class mail,
postage prepaid, to each Holder notice of such adjustment or adjustments and
shall deliver to the Warrant Agent a certificate of a firm of independent public
accountants selected by the Board of Directors of the Company (who may be the
regular accountants employed by the Company) setting forth the number of Warrant
Shares purchasable upon the exercise of each Warrant and the Warrant Price of
such Warrant Shares after such adjustment, setting forth a brief statement of
the facts requiring such adjustment and setting forth the computation by which
such adjustment was made. Such certificate shall be conclusive evidence of the
correctness of such adjustment. The Warrant Agent shall be entitled to rely on
such certificate and shall be under no duty or responsibility with respect to
any such certificate, except to exhibit the same, from time to time, to any
Holder desiring an inspection thereof during reasonable business hours. The
Warrant Agent shall not at any time be under any duty or responsibility to any
Holders to determine whether any facts exist which may require any adjustment of
the Warrant Price or the number of Warrant Shares or other stock or property
purchasable on exercise thereof, or with respect to the nature or extent of any
such adjustment when made, or with respect to the method employed in making such
adjustment.
10.5 NO ADJUSTMENT OF DIVIDENDS. Except as provided in
subsection 10.1, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
10.6 PRESERVATION OF PURCHASE RIGHTS RECLASSIFICATION,
CONSOLIDATION, ETC. In case of any consolidation of the Company with or merger
of the Company into another corporation or in case of any sale, transfer or
lease to another corporation of all or substantially all the property of the
Company, the Company or such successor or purchasing corporation, as the case
may be, shall execute with the Warrant Agent an agreement that (i) each Holder
shall have the right thereafter upon payment of the Warrant Price in effect
immediately prior to such action to purchase upon exercise of each Warrant the
kind and amount of shares and other securities and property (including cash)
which he would have owned or have been entitled to receive after the happening
of such consolidation, merger, sale, transfer or lease had such Warrant been
exercised immediately prior to such action; or (ii) in the event that all of the
property to which a Holder would be entitled to receive in such an action had
such Warrant been exercised immediately prior to such action is cash, then upon
surrender of a certificate representing Warrants each Holder shall be entitled
to receive cash in the amount of the difference between the amount which such
Holder would have paid to exercise such Warrants in full at the Warrant Price in
effect immediately prior to such action and the amount of cash which he would
have been entitled to receive after the happening of such consolidation, merger,
sale, transfer or lease had such Warrant been exercised immediately prior to
such action; provided, however, that no adjustment in respect of dividends,
interest or other income on or from such shares or other securities and property
shall be made during the term of a Warrant or upon the exercise of a Warrant.
The Company shall mail by first class mail, postage prepaid, to each Holder,
notice of the execution of any such agreement. Such agreement shall provide for
adjustments, which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 10. The provisions of this subsection
10.6 shall similarly apply to successive consolidations, mergers, sales,
transfers or leases. The Warrant Agent shall be under no duty or responsibility
to determine the correctness of any
-10-
<PAGE> 11
provisions contained in any such agreement relating to the kind or amount of
shares of stock or other securities or property receivable upon exercise of
Warrants or with respect to the method employed and provided therein for any
adjustments and shall be entitled to rely upon the provisions contained in any
such agreement.
10.7 STATEMENT ON WARRANTS. Irrespective of any adjustments in
the Warrant Price or the number or kind of shares purchasable upon the exercise
of the Warrants, Warrants theretofore or thereafter issued may continue to
express the same price and number and kind of shares as are stated in the
Warrants initially issuable pursuant to this Agreement.
SECTION 11. FRACTIONAL INTERESTS. The Company shall not be required to
issue fractional Warrant Shares on the exercise of Warrants. If more than one
Warrant shall be presented for exercise in full at the same time by the same
Holder, the number of full Warrant Shares which shall be issuable upon the
exercise thereof shall be computed on the basis of the aggregate number of
Warrant Shares purchasable on exercise of the Warrants so presented. If any
fraction of a Warrant Share would, except for the provisions of this Section 11,
be issuable on the exercise of any Warrant (or specified portion thereof), the
Warrant Agent shall pay (and shall be promptly reimbursed by the Company upon
demand therefor) an amount in cash equal to the closing price for one share of
the Common Stock, as defined in paragraph (d) of subsection 10.1, on the trading
day immediately preceding the date the Warrant is presented for exercise,
multiplied by such fraction.
SECTION 12. NO RIGHTS AS STOCKHOLDERS; NOTICES TO HOLDERS. Nothing
contained in this Agreement or in any of the Warrants shall be construed as
conferring upon the Holders or their transferees the right to vote or to receive
dividends or to consent or to receive notice as stockholders in respect of any
meeting of stockholders for the election of directors of the Company or any
other matter, or any rights whatsoever as stockholders of the Company. If,
however, at any time prior to the expiration of the Warrants and prior to their
exercise, any of the following events shall occur:
(a) the Company shall declare any dividend payable in any
securities upon its shares of Common Stock or make any distribution
(other than a cash dividend as to which no adjustment in the Warrant
Price is to be made as herein provided) to the holders of its shares of
Common Stock; or
(b) the Company shall offer to the holders of its shares of
Common Stock any additional shares of Common Stock or securities
convertible into shares of Common Stock or any right to subscribe
thereto; or
(c) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation, merger, transfer or
lease of all or substantially all of its property, assets, and business
as an entirety) shall be proposed.
then in any one or more of said events the Company shall (a) give notice in
writing of such event to the Warrant Agent and the Holders as provided in
Section 18 hereof and (b) cause notice of such event to be published once in The
Wall Street Journal, such giving of notice and publication
-11-
<PAGE> 12
to be completed at least 20 days prior to the date fixed as a record date or the
date of closing the transfer books for the determination of the stockholders
entitled to such dividend, distribution, or subscription rights, or for the
determination of stockholders entitled to vote on such proposed dissolution,
liquidation or winding up. Such notice shall specify such record date or the
date of closing the transfer books, as the case may be. Failure to publish or
mail such notice or any defect therein or in the publication or mailing thereof
shall not affect the validity of any action taken in connection with such
dividend, distribution or subscription rights, or such proposed dissolution,
liquidation or winding up.
SECTION 13. DISPOSITION OF PROCEEDS ON EXERCISE OF WARRANTS; INSPECTION
OF WARRANT AGREEMENT. The Warrant Agent shall account to the Company with
respect to Warrants exercised two business days thereafter and concurrently pay
to the Company all monies received by the Warrant Agent for the purchase of the
Warrant Shares through the exercise of such Warrants.
The Warrant Agent shall keep copies of this Agreement and any notices
given or received hereunder available for inspection by the Holders during
normal business hours at its principal office. The Company shall supply the
Warrant Agent from time to time with such numbers of copies of this Agreement as
the Warrant Agent may request.
SECTION 14. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF WARRANT AGENT.
Any corporation into which the Warrant Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party, or any corporation succeeding to
the corporation trust business of the Warrant Agent, shall be the successor to
the Warrant Agent hereunder without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Warrant Agent under
the provisions of Section 16 hereof. In case at the time such successor to the
Warrant Agent shall succeed to the agency created by this Agreement, any of the
Warrants shall have been countersigned but not delivered, any such successor to
the Warrant Agent may adopt the countersignature of the original Warrant Agent
and deliver such Warrants so countersigned; and in case at that time any of the
Warrants shall not have been countersigned, any successor to the Warrant Agent
may countersign such Warrants either in the name of the predecessor Warrant
Agent or in the name of the successor Warrant Agent; and in all such cases
Warrants shall have the full force provided in the Warrants and in this
Agreement.
In case at any time the name of the Warrant Agent shall be changed and
at such time any of the Warrants shall have been countersigned but not
delivered, the Warrant Agent may adopt the countersignatures under its prior
name and deliver such Warrants so countersigned; and in case at that time any of
the Warrants shall not have been countersigned, the Warrant Agent may
countersign such Warrants either in its prior name or in its changed name; and
in all such Warrants shall have the full force provided in the Warrants and in
this Agreement.
SECTION 15. CONCERNING THE WARRANT AGENT. The Warrant Agent undertakes
the duties and obligations imposed by this Agreement upon the following terms
and conditions, by all of which the Company and the Holders, by their acceptance
of Warrants, shall be bound.
-12-
<PAGE> 13
15.1 CORRECTNESS OF STATEMENTS. The statements contained
herein and in the Warrants shall be taken as statements of the Company and the
Warrant Agent assumes no responsibility for the correctness of any of the same
except such as describe the Warrant Agent or action taken by it. The Warrant
Agent assumes no responsibility with respect to the distribution of the Warrants
except as herein otherwise provided.
15.2 BREACH OF COVENANTS. The Warrant Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
contained in this Agreement or in the Warrant to be complied with by the
Company.
15.3 PERFORMANCE OF DUTIES. The Warrant Agent may execute and
exercise any of the rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents (which shall
not include its employees) and shall not be responsible for the misconduct or
negligence of any agent appointed with due care.
15.4 RELIANCE ON COUNSEL. The Warrant Agent may consult at any
time with legal counsel satisfactory to it and the Company (who may be counsel
for the Company) and the Warrant Agent shall incur no liability or
responsibility to the Company or to any Holder in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance with the
opinion or the advice of such counsel.
15.5 PROOF OF ACTIONS TAKEN. Whenever in the performance of
its duties under this Agreement the Warrant Agent shall deem it necessary or
desirable that any fact or matter be proved or established by the Company prior
to taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed
conclusively to be proved and established by a certificate signed by the
Chairman of the Board or President, a Vice President, the Treasurer or the
Secretary of the Company and delivered to the Warrant Agent; and such
certificate shall be full authorization to the Warrant Agent for any action
taken or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
15.6 COMPENSATION. The Company agrees to pay the Warrant Agent
reasonable compensation for all services rendered by the Warrant Agent in the
performance of its duties under this Agreement in accordance with the fee
schedule agreed to from time to time by the Company and the Warrant Agent, to
reimburse the Warrant Agent for all expenses, taxes and governmental charges and
other charges of any kind and nature reasonably incurred by the Warrant Agent in
the performance of its duties under this Agreement, and to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and counsel fees, for anything done or omitted by the Warrant Agent in the
performance of its duties under this Agreement except as a result of the Warrant
Agent's negligence or bad faith.
15.7 LEGAL PROCEEDINGS. The Warrant Agent shall be under no
obligation to institute any action, suit or legal proceeding or to take any
other action likely to involve expense unless the Company or one or more Holders
shall furnish the Warrant Agent with reasonable security and indemnity for any
costs and expenses which may be incurred, but this provision shall
-13-
<PAGE> 14
not affect the power of the Warrant Agent to take such action as the Warrant
Agent may consider proper, whether with or without any such security or
indemnity. All rights of action under this Agreement or under any of the
Warrants may be enforced by the Warrant Agent without the possession of any of
the Warrants or the production thereof at any trial or other proceedings
relative thereto, any such action, suit or proceeding instituted by the Warrant
Agent shall be brought in its name as Warrant Agent, and any recovery of
judgment shall be for the ratable benefit of the Holders, as their respective
rights or interests may appear.
15.8 OTHER TRANSACTIONS IN SECURITIES OF COMPANY. The Warrant
Agent and any stockholder, director, officer or employee of the Warrant Agent
may buy, sell or deal in any of the Warrants, or other securities of the Company
or become pecuniarily interested in any transaction in which the Company may be
interested or contract with or lend money to the Company or otherwise act as
fully and freely as though it were not Warrant Agent under this Agreement.
Nothing herein shall preclude the Warrant Agent from acting in any other
capacity for the Company or for any other legal entity.
15.9 LIABILITY OF WARRANT AGENT. The Warrant Agent shall act
hereunder solely as agent, and its duties shall be determined solely by the
provisions hereof. The Warrant Agent shall not be liable for anything which it
may do or refrain from doing in connection with this Agreement except for its
own negligence or bad faith.
15.10 RELIANCE ON DOCUMENTS. The Warrant Agent will not incur
any liability or responsibility to the Company or to any Holder for any action
taken in reliance on any notice, resolution, waiver, consent, order,
certificate, or other paper, documents or instrument reasonably believed by it
to be genuine and to have been signed, set or presented by the proper party or
parties.
15.11 VALIDITY OF AGREEMENT. The Warrant Agent shall not be
under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Warrant
Agent) or in respect of the validity or execution of any Warrant (except its
countersignature thereof); nor shall the Warrant Agent by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any Warrant Shares (or other stock) to be issued pursuant to this
Agreement or any Warrant, or as to whether any Warrant Shares (or other stock)
will, when issued, be validly issued, fully paid and nonassessable, or as to the
Warrant Price or the number or amount of Warrant Shares or other securities or
other property issuable upon exercise of any Warrant.
15.12 INSTRUCTIONS FROM COMPANY. The Warrant Agent is hereby
authorized and directed to accept instructions with respect to the performance
of its duties hereunder from the Chairman of the Board, the President, a Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officer for advice or instructions in connection with its duties, and shall not
be liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer or officers.
SECTION 16. CHANGE OF WARRANT AGENT. The Warrant Agent may resign and
be discharged from its duties under this Agreement by giving to the Company 30
days notice in
-14-
<PAGE> 15
writing. The Warrant Agent may be removed by like notice to the Warrant Agent
from the Company. If the Warrant Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Warrant Agent
or by any Holder (who shall with such notice submit his Warrant for inspection
by the Company), then any Holder may apply to any court of competent
jurisdiction for the appointment of a successor to the Warrant Agent. Any
successor warrant agent, whether appointed by the Company or such a court, shall
be a bank or trust company, in good standing, incorporated under the laws of the
United States of America or any state thereof and having at the time of its
appointment as warrant agent a combined capital and surplus of at least
$100,000,000. After appointment, the successor warrant agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Warrant Agent without further act or deed, but the former
Warrant Agent shall deliver and transfer to the successor warrant agent any
property at the time held by it hereunder, and execute and deliver for further
assurance, conveyance, act or deed necessary for the purpose. Failure to file
any notice provided for in this Section 16, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Warrant Agent or the appointment of the successor warrant agent, as the case may
be. In the event of such resignation or removal, the successor warrant agent
shall mail, by first class mail, postage prepaid, to each Holder, written notice
of such removal or resignation and the name and address of such successor
warrant agent.
SECTION 17. IDENTITY OF TRANSFER AGENT. Forthwith upon the appointment
of any subsequent transfer agent for the Common Stock, or any other shares of
the Company's capital stock issuable upon the exercise of the Warrants, the
Company will file with the Warrant Agent a statement setting forth name and
address of such subsequent transfer agent.
SECTION 18. NOTICES. Any notice pursuant to this Agreement by the
Company or by any Holder to the Warrant Agent, or by the Warrant Agent or by any
Holder to the Company, shall be in writing and shall be delivered in person or
by facsimile transmission, or mailed first class, postage prepaid (a) to the
Company, at its offices at ; or (b) the Warrant agent, to [Bank] . Each party
hereto may from time to time change the address to which notices to it are to be
delivered or mailed hereunder by notice to the other party.
Any notice mailed pursuant to this Agreement by the Company or the
Warrant Agent to the Holders shall be in writing and shall be mailed first
class, postage prepaid, or otherwise delivered to such Holders at their
respective addresses on the books of the Warrant Agent.
SECTION 19. SUPPLEMENTS AND AMENDMENTS. The Company and the Warrant
Agent may from time to time supplement or amend this Agreement without the
approval of any Holder, in order to cure any ambiguity or to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other provision herein, or to make any other provisions in regard to
matters or questions arising hereunder which the Company and the Warrant Agent
may deem necessary or desirable and which shall not be inconsistent with the
provisions of the Warrants and which shall not adversely affect the interests of
the Holders.
-15-
<PAGE> 16
This Agreement shall not otherwise be modified, supplemented or altered
in any respect except with the consent in writing of the Holders of Warrants
representing not less than 50% of the Warrants then outstanding; and provided,
further, that no change in (i) the number or nature of the securities
purchasable upon the exercise of any Warrant, (ii) the Warrant Price therefor,
(iii) the acceleration of the Expiration Date, or (iv) the anti-dilution
provisions of Section 10 hereof which would adversely affect the interests of
any Holder shall be made without the consent in writing of the Holder of the
certificate representing such Warrant, other than such changes as are
specifically prescribed by this Agreement as originally executed or are made in
compliance with applicable law.
SECTION 20. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Warrant Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
SECTION 21. MERGER OR CONSOLIDATION OF THE COMPANY. The Company will
not merge or consolidate with or into, or sell, transfer or lease all or
substantially all of its property to, any other corporation unless the successor
or purchasing corporation, as the case may be (if not the Company), shall
expressly assume, by supplemental agreement satisfactory in form to the Warrant
Agent and executed and delivered to the Warrant Agent, the due and punctual
performance and observance of each and every covenant and condition of this
Agreement to be performed and observed by the Company.
SECTION 22. APPLICABLE LAW. This Agreement and each Warrant issued
hereunder shall be governed by and construed in accordance with the laws of the
State of Ohio, without giving effect to principles of conflict of laws.
SECTION 23. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Warrant Agent, and the Holders any legal or equitable right, remedy or claim
under this Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Warrant Agent and the Holders of the Warrants.
SECTION 24. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
SECTION 25. CAPTIONS. The captions of the Sections and subsections of
this Agreement have been inserted for convenience only and shall have no
substantive effect.
-16-
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the day and year first above written.
JACOR COMMUNICATIONS, INC..
[SEAL] By:_____________________________
Title:__________________________
Attest:
_______________________
Secretary
KEYCORP SHAREHOLDER SERVICES,
INC.
as Warrant Agent
[SEAL] By:_____________________________
Title:__________________________
Attest:
_______________________
Corporate Trust Officer
-17-
<PAGE> 18
EXHIBIT A TO THE WARRANT AGREEMENT
VOID AFTER 5:00 P.M. EASTERN TIME, ________________, 2001
No. Warrants to Purchase
[_______] Shares of Common Stock
JACOR COMMUNICATIONS, INC.
COMMON STOCK PURCHASE WARRANTS
This certifies that, for value received, __________________________ or
registered assigns (the "Holder"), is entitled to purchase from Jacor
Communications, Inc., an Ohio corporation (the "Company") , at any time, at the
purchase price of $_______ per share (the "Warrant Price"), the number of shares
of Common Stock, without par value, of the Company ("Common Stock"), shown
above. The number of shares purchasable upon exercise of the Warrants and the
Warrant Price are subject to adjustment from time to time as set forth in the
Warrant Agreement referred to below.
Warrants may be exercised in whole or in part by presentation of this
Warrant Certificate with the Purchase Form on the reverse side hereof duly
executed, which signature shall be guaranteed by a bank or trust company or a
broker or dealer which is a member of the National Association of Securities
Dealers, Inc., and simultaneous payment of the Warrant Price at the principal
office of KeyCorp Shareholder Services, Inc. (the "Warrant Agent") in
________________. Payment of such price shall be made at the option of the
Holder hereof in cash or by certified or bank cashier's check drawn upon a bank
chartered by the government of the United States or any state thereof.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of ________________________, 1996, between the
Company and the Warrant Agent and is subject to the terms and
provisions contained in the Warrant Agreement, to all of which the Holder of
this Warrant Certificate by acceptance hereof consents. A copy of the Warrant
Agreement may be obtained by the Holder hereof upon written request to the
Company.
Upon any partial exercise of the Warrants evidenced by this Warrant
Certificate, there shall be countersigned and issued to the Holder hereof a new
Warrant Certificate for the shares of Common Stock as to which the Warrants
evidenced by this Warrant Certificate shall not have been exercised. This
Warrant Certificate may be exchanged at the office of the Warrant Agent by
surrender of this Warrant Certificate properly endorsed either separately or in
combination with one or more other Warrant Certificates for one or more new
Warrant Certificates evidencing the right of the Holder thereof to purchase the
same aggregate number of shares as were purchasable on exercise of the Warrants
evidenced by the Warrant Certificate or Certificates exchanged. No fractional
shares will be issued upon the exercise of any Warrant, but the
-18-
<PAGE> 19
Company will pay the cash value thereof determined as provided in the Warrant
Agreement. This Warrant Certificate is transferable at the office of the Warrant
Agent in the manner and subject to the limitations set forth in the Warrant
Agreement.
The Holder hereof may be treated by the Company, the Warrant Agent, and
all other persons dealing with this Warrant Certificate as the absolute owner
hereof for any purpose and as the person entitled to exercise the rights
represented hereby, or to the transfer hereof on the books of the Company any
notice to the contrary notwithstanding, and until such transfer on such books,
the Company may treat the Holder thereof as the owner for all purposes.
Neither the Warrants nor this Warrant Certificate entitle any Holder
hereof to any of the rights of a stockholder of the Company.
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
DATED:
COUNTERSIGNED:
[ Bank ]
Warrant Agent
By:________________________________
Authorized Signature
JACOR COMMUNICATIONS, INC.
Attest:____________________________ By:____________________________
Secretary Title:_________________________
-19-
<PAGE> 20
JACOR COMMUNICATIONS, INC.
PURCHASE FORM
(To be executed upon exercise of Warrant)
Warrant Agent
The undersigned hereby irrevocably elects to exercise the right to
purchase _____________ shares of Common Stock evidenced by the within Warrant
Certificate, according to the terms and conditions thereof, and herewith makes
payment of the purchase price in full by tendering cash or certified or bank
cashier's check drawn upon a bank chartered by the government of the United
States or any state thereof in the aggregate amount of $_________________. The
undersigned requests that certificates for such shares of Common Stock shall be
issued in the name of
___________________________________________________________________________
(Please print Name, Address and Social Security No.)
___________________________________________________________________________
___________________________________________________________________________
and, if said number of shares shall not be all the shares purchasable
thereunder, that a New Warrant Certificate for the balance remaining of the
shares purchasable under the within Warrant Certificate be issued in the name of
the undersigned Warrantholder or his Assignee as below indicated and delivered
to the address stated below.
DATED: ___________________, ______
Name of Warrantholder or Assignee:________________________________________
(Please Print)
Address:__________________________________________________________________
__________________________________________________________________
Signature:__________________________________________
Signature Guaranteed: (The above signature must correspond with
the name as written upon the face of this Warrant
Certificate in every particular, without alteration
or enlargement or any change whatever, unless this
Warrant Certificate has been assigned.)
-20-
<PAGE> 21
ASSIGNMENT
(To be signed only upon assignment of Warrant Certificate)
FOR VALUED RECEIVED, the undersigned hereby sells, assigns and
transfers unto ____
_______________________________________________________________________________
(Name and Address of Assignee Must be Printed or Typewritten)
the within Warrant Certificate, irrevocably constituting and appointing
______________________________________________________________, Attorney to
transfer said Warrant Certificate on the books of the Company, with full power
of substitution in the premises.
DATED: ________________________, ______
Signature:__________________________________
Signature Guaranteed: (The above signature must
correspond with the name as written
on the face of this Warrant
Certificate in every particular,
without alteration or enlargement
or any change whatever.)
-21-
<PAGE> 1
Exhibit 99.1
Date: February 12, 1996 Contact: Gregory C. Thomas
(513) 562-8007
For Release: Immediately
CITICASTERS ANNOUNCES MERGER WITH JACOR
(Cincinnati) Citicasters Inc. announced today that it had entered into
a definitive merger agreement with Jacor Communications, Inc. providing for the
acquisition of Citicasters by Jacor for cash in the amount of $29.50 per share
and certain warrants to purchase Jacor stock. If the Jacor transaction does not
close by September 30, 1996, the cash purchase price per share will be increased
by $.22125 for each full month thereafter ending prior to the closing of the
transaction. A five-year warrant to purchase approximately .2 shares of Jacor
common stock at $28 per share ($26 per share if the closing of this transaction
does not occur until on or after October 1, 1996) will be issued with respect to
each Citicasters share, subject to certain adjustments. John P. Zanotti, Chief
Executive Officer of Citicasters, stated "We believe this merger represents
tremendous value for our shareholders along with new opportunities for our
employees."
Certain entities and persons that control Citicasters have agreed to
execute irrevocable consents in favor of the Jacor transaction on March 13,
1996. These consents are sufficient to approve the transaction under applicable
law and, when delivered, will preclude the consideration of any other offers.
The consummation of the transaction is subject to certain conditions, including
the receipt of FCC and other regulatory approvals.
Salomon Brothers Inc. served as financial advisor to Citicasters in
connection with the transaction.
Citicasters currently operates 19 radio stations including 14 FM and 5
AM stations along with two network-affiliated television stations in major
markets throughout the country.
Citicasters common stock is quoted on NASDAQ National Market System
under the symbol CITI.
