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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
Date of Report: October 9, 1996
JACOR COMMUNICATIONS, INC.
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-12404 31-0978313
(Commission File No.) (IRS Employer Identification No.)
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
(513) 621-1300
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Item 2. Acquisition or Disposition of Assets
On October 9, 1996, Jacor Communications, Inc. (the "Company") entered into
an Agreement and Plan of Merger (the "Merger Agreement") with Regent
Communications, Inc. ("Regent"). Pursuant to the terms of the Merger Agreement,
Regent will merge with and into the Company (the "Merger"). After consummation
of the Merger, the radio stations operated by Regent subsidiaries will be
operated by indirect subsidiaries of the Company. Regent owns, operates or
represents 20 radio stations in five U.S. markets: Kansas City, Salt Lake City,
Las Vegas, Louisville and Charleston, S.C.
As contemplated by the Merger Agreement, the Company delivered into escrow
a letter of credit in the amount of $10.0 million. Also, the holders of more
than a majority of the outstanding shares of Regent capital stock delivered to
Regent their irrevocable written consents approving the Merger Agreement and the
Merger. No further action of the Regent shareholders will be required to effect
the Merger.
The completion of the Merger remains subject to various other conditions
including the receipt of consents from regulatory authorities, including the
approval of the Federal Communications Commission and the expiration or
termination of the applicable waiting periods under the Hart-Scott-Rodino Act.
Upon the expiration or termination of the applicable HSR waiting period, a
subsidiary of the Company will commence serving as time broker for the Regent
stations pursuant to time brokerage agreements.
The Company will acquire Regent in consideration by the Company of the
issuance of 3.55 million shares of Jacor common stock, warrants to purchase
500,000 shares of Jacor's common stock at an exercise price of $40 per share
and the assumption by the Company of up to $64 million of Regent debt. The
Company anticipates that the cash needed to consummate the Merger will be
obtained from borrowings under Jacor's existing June 12, 1996 credit facility
with Chase Manhattan Bank, as administrative agent, Banque Paribas, as
documentation agent, Bank of America Illinois, as syndication agent, and
the lenders named therein (the "Existing Credit Facility").
A copy of the Merger Agreement, the material exhibits thereto and the press
release issued by the Company announcing the execution of the Merger Agreement
are attached as exhibits hereto.
Item 5. Other Events
On October 21, 1996, the Company's wholly owned subsidiary, Citicasters
Inc. ("Citicasters"), purchased approximately $106.9 million in aggregate
principal amount of the 9 3/4% Senior Subordinated Notes due 2004 of
Citicasters. Such notes were repurchased following the Company's offer to
purchase same as required by the indenture under which the notes were issued
following a change in control of Citicasters. The Company's September 18, 1996
acquisition of Citicasters constituted a change of control. Citicasters funded
the purchase of the notes through borrowings under the Existing Credit Facility
and cash on hand.
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Item 7. Financial Statements and Exhibits
(a) Financial Statements of Businesses Acquired.
The financial statements required to be filed by the Company as part of
this Form 8-K require substantial effort on behalf of the Company and Regent and
have not yet been finalized on the date of this report. The Company anticipates
that such financial statements will be filed be amendment to this Form 8-K on or
around November 30, 1996 and in no event later than 60 days hereafter.
(b) Pro Forma Financial Information.
See 7(a) above.
(c) Exhibits
2.1 Agreement and Plan of Merger dated as of October 8, 1996 ("Merger
Agreement") between Jacor Communications, Inc. and Regent Communications,
Inc. (omitting schedules and exhibits not deemed material).
2.2 Form of Warrant Agreement between Jacor Communications, Inc. and KeyCorp
Shareholder Services, Inc., as warrant agent (included as Exhibit B to
Merger Agreement).
2.3 Escrow Agreement dated as of October 8, 1996 among Jacor Communications,
Inc., Regent Communications, Inc. and PNC Bank, as escrow agent (included
as Exhibit H to Merger Agreement).
2.4 Registration Rights Agreement dated as of October 8, 1996 among Jacor
Communications and the parties listed in Schedule I thereto (included as
Exhibit I to Merger Agreement).
99.1 Press Release dated October 9, 1996.
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 hereunto duly authorized.
JACOR COMMUNICATIONS, INC.
October 23, 1996 By: /s/ R. Christopher Weber
-----------------------------------------------
R. Christopher Weber, Senior Vice President
and Chief Financial Officer
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EXHIBIT 2.1
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
dated as of
October 8, 1996
BETWEEN JACOR COMMUNICATIONS, INC.,
AND
REGENT COMMUNICATIONS, INC.
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TABLE OF CONTENTS
Page
SECTION 1
DEFINITIONS
1.1 Defined Terms........................................................ 1
1.2 Other Defined Terms.................................................. 6
SECTION 2
THE MERGER
2.1 Surviving Corporation................................................ 7
2.2 Certificate of Incorporation......................................... 8
2.3 Bylaws............................................................... 8
2.4 Directors............................................................ 8
2.5 Officers............................................................. 8
2.6 Effective Time....................................................... 8
2.7 Effect on Capital Stock.............................................. 8
2.8 Long Term Debt Adjustment............................................ 13
2.9 Dissenting Shares.................................................... 15
2.10 Treatment of Regent Employee Stock Options........................... 15
2.11 Exchange of Regent Stock............................................. 16
2.12 Closing.............................................................. 18
SECTION 3
REPRESENTATION AND WARRANTIES OF REGENT
3.1 Corporate Standing................................................... 19
3.2 Power and Authority of Regent; Authorization......................... 19
3.3 Absence of Restrictions and Conflict................................. 20
3.4 Capitalization of Regent and Regent Subsidiaries..................... 21
3.5 Financial Statements................................................. 22
3.6 Title to and Condition of Assets..................................... 23
3.7 Trademarks, etc...................................................... 24
3.8 Legal Proceedings.................................................... 25
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3.9 Environmental Matters................................................ 25
3.10 FCC Authorization; Compliance with Laws.............................. 26
3.11 Employee Benefit Plans............................................... 27
3.12 Labor Relations...................................................... 29
3.13 Regent Material Contracts............................................ 30
3.14 Good Standing of Contracts........................................... 31
3.15 Major Customers...................................................... 32
3.16 Absence of Certain Changes and Events................................ 32
3.17 Insurance............................................................ 33
3.18 Tax Matters.......................................................... 33
3.19 Information Supplied for Registration Statement...................... 34
3.20 Brokers' and Finders' Fees........................................... 34
3.21 Takeover Statutes.................................................... 34
SECTION 4
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
4.1 Corporate Standing................................................... 35
4.2 Power and Authority of Acquiror; Authorization....................... 36
4.3 Absence of Restrictions and Conflict................................. 36
4.4 Capitalization of Acquiror........................................... 37
4.5 Acquiror Commission Reports and Financial Statements................. 37
4.6 Information Supplied for Registration Statement...................... 39
4.7 Qualification........................................................ 39
4.8 Brokers' and Finders' Fees........................................... 39
4.9 Tax Requirements..................................................... 39
SECTION 5
COVENANTS
5.1 Cooperation.......................................................... 40
5.2 FCC Consent and HSR Filing........................................... 41
5.3 Conduct of Business by Regent........................................ 41
5.4 Inspection and Access to Information................................. 46
5.5 Registration Statement............................................... 47
5.6 Regent Stockholder Matters........................................... 47
5.7 Stock Market Additional Shares Notification.......................... 47
5.8 Regent Affiliates.................................................... 48
5.9 Public Announcements................................................. 48
5.10 Financial Statements and SEC Reports................................. 48
5.11 Rule 144 Information................................................. 49
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5.12 Indemnification...................................................... 49
5.13 Employee Benefits.................................................... 50
5.14 Tax Treatment........................................................ 51
5.15 Environmental Inspection............................................. 51
5.16 Escrow Agreement; Registration Rights Agreement...................... 52
5.17 Notification......................................................... 52
5.18 Regent Accountant's Letter........................................... 53
5.19 Acquiror Accountant's Letter......................................... 53
5.20 Purchase, Sale and Option Agreements................................. 53
5.21 Time Brokerage Agreement............................................. 53
5.22 [Intentionally Left Blank]........................................... 54
5.23 FM Translator Stations............................................... 54
5.24 BFI Credit Line...................................................... 54
SECTION 6
6.1 Conditions to Each Party's Obligations............................... 55
6.2 Conditions to Acquiror's Obligations................................. 56
6.3 Conditions to Regent's Obligation.................................... 58
SECTION 7
Nonsurvival of Representations and Warranties
SECTION 8
TERMINATION
8.1 Termination.......................................................... 60
SECTION 9
MISCELLANEOUS
9.1 Confidentiality...................................................... 62
9.2 Notices.............................................................. 63
9.3 Third Party Rights................................................... 64
9.4 Parties in Interest; Assignment...................................... 64
9.5 Construction; Governing Law.......................................... 64
9.6 Entire Agreement; Amendment and Waiver............................... 64
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9.7 Severability......................................................... 65
9.8 Counterparts......................................................... 65
9.9 Expenses............................................................. 65
9.10 Time of Essence...................................................... 65
9.11 Knowledge............................................................ 66
9.12 Acknowledgement...................................................... 66
Exhibits
Exhibit A - Plan of Merger
Exhibit B - Form of Warrant Agreement
Exhibit C - Regent Shareholders' Tax Representations
Exhibit D - Regent Tax Representations
Exhibit E - Acquiror Tax Representations
Exhibit F - Form of Stockholders' Consent
Exhibit G - Form of Rule 145 Affiliate Letter
Exhibit H - Escrow Agreement (Letter of Credit)
Exhibit I - Form of Registration Rights Agreement
Exhibit J - Regent Time Brokerage Agreement
Exhibit K - TBA Consents
Exhibit L - Form of Credit Facility
Exhibit M - Opinions of Tax Counsel
Exhibit N - SRLV Time Brokerage Agreement
Exhibit O - Promissory Note
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER ("Agreement") dated as of October 8,
1996, between JACOR COMMUNICATIONS, INC., a Delaware corporation
("Acquiror"), and Regent Communications, Inc., a Delaware corporation
("Regent").
WITNESSETH:
The respective Boards of Directors of Acquiror and Regent have
approved, and deem it advisable and in their respective shareholders' best
interests to consummate, the business combination transaction (the "Merger")
provided for herein and in the Plan of Merger between Regent and Acquiror. A
copy of the Plan of Merger is attached to this Agreement as Exhibit A and
incorporated by reference herein as if fully set out herein (the "Plan of
Merger" or the "Plan").
Acquiror and Regent are willing to make certain representations,
warranties and agreements in connection with the Merger and also to prescribe
various conditions to the Merger.
For federal income tax purposes, it is intended that the Merger
qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations and warranties herein contained, and intending to
be legally bound, Acquiror and Regent agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the terms below shall have the
following meanings:
"Assigned Contracts" shall mean all contracts assigned to Citicasters
Co., as broker, under the TBA.
"Cash Election" shall mean any election by Acquiror to make any
adjustment to the Merger Consideration required pursuant to
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Sections 2.7(B) or 2.8(D) by making a payment in cash to the holders of
Regent Stock in lieu of additional shares of Acquiror Common Stock.
"Closing" shall mean the closing of the transactions contemplated herein
and in the Plan of Merger.
"Closing Date" shall mean the date and time specified pursuant to
Section 2.12 hereof as the date of the Closing.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Credit Agreement" shall mean the Credit Agreement dated October 25,
1995, among the Bank of Montreal, as Co-Agent, General Electric Capital, as
Co-Agent, the Lenders named therein and Regent, as amended.
"DGCL" shall mean the General Corporation Law of the State of Delaware.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"FCC" shall mean the Federal Communications Commission.
"FCC Authorizations" shall mean the radio broadcast licenses issued to
the applicable Regent Subsidiary by the FCC authorizing the operation of the
Stations.
"Final Order" shall mean action by the FCC (i) which has not been
vacated, reversed, stayed, set aside, annulled or suspended,(ii) with respect
to which no timely appeal, request for stay, or petition for rehearing,
reconsideration or review by any party or by the FCC on its own motion under
the express provisions of the Federal Communications Act or the FCC's rules
is pending, and (iii) as to which the time for filing any such appeal,
request, petition or similar document, or for the reconsideration or review
by the FCC on its own motion, has expired.
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"Governmental Authority" shall mean any governmental, quasi-
governmental, judicial, quasi-judicial or regulatory authority.
"Hazardous Wastes" shall include, without limitation: (i) hazardous
substances or hazardous wastes, as those terms are defined by the
Comprehensive Environmental Response, Compensation and Liability Act, 42
U.S.C. Section 9601 ET SEQ., the Resource Conservation and Recovery Act, 42
U.S.C. Section 6901 ET SEQ., and any other applicable federal, state or local
law, rule, regulation, ordinance or requirement, all as amended or hereafter
amended; (ii) petroleum, including without limitation crude oil or any
fraction thereof which is liquid at standard conditions of temperature and
pressure (60 degrees Fahrenheit and 14.7 pounds per square inch absolute);
(iii) any radioactive material, including without limitation any source,
special nuclear, or by-product material as defined in 42 U.S.C. Section 2011
ET SEQ.; (iv) asbestos, asbestos-containing materials or any asbestiform
minerals in any form or condition; (v) urea formaldehyde and polychlorinated
biplenyls; and (vi) any other material or substance regulated as toxic or
hazardous or as a pollutant or contaminant.
"KWNR" shall mean KWNR(FM) in Las Vegas, Nevada.
"KWNR Purchase" shall mean either (i) the pending purchase by Regent of
KWNR(FM) in Las Vegas, Nevada, pursuant to a Plan and Agreement of
Reorganization (the "Reorganization Agreement") dated July 19, 1996, among
Regent, as the buyer, and Southwest Radio Las Vegas, Inc. and Southwest
Florida Enterprises, Inc., as the sellers, pursuant to which Regent is
required to issue a 1996 series of convertible preferred stock to the sellers
or (ii) the acquisition of KWNR by Jacor pursuant to the Reorganization
Agreement, as amended by the agreement dated as of October 8, 1996, as the
context shall require.
"Material Adverse Effect" shall mean with respect to Regent, the
Surviving Corporation or Acquiror, as the context may require, 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 (i) results of operations of
Regent and its Subsidiaries, taken as a whole, shall not be a component of
Material Adverse Effect for events that occur after the TBA Effective Date;
(ii) after the TBA
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Effective Date, no Material Adverse Effect shall be deemed to have occurred
if such Material Adverse Effect can be attributed to any action or inaction
by Citicasters (or any successor) as the broker of the Stations under the
TBA; and (iii) no Material Adverse Effect shall be deemed to have occurred by
reason of a general deterioration in the economy or events or conditions in
the broadcasting industry.
"NASDAQ" shall mean the NASDAQ Stock Market's National Market System.
"Permitted Liens" shall mean the liens under the Credit Agreement and
certain liens related to certain seller financing provided in connection with
the acquisition of certain Stations, all as described in the Regent
Disclosure Letter, and (i) liens for taxes not yet due and payable or which
in good faith are being contested or litigated and are not material to the
business or operations of Regent, the Regent Subsidiaries and the Stations,
taken as a whole; (ii) statutory liens of landlords; (iii) deposits or
pledges to secure payments of workers' compensation, unemployment insurance
or other social security benefits; (iv) mechanics', carriers', workmens',
landlords' or other like liens arising in the ordinary course of business
securing obligations which are not delinquent; (v) zoning, building or other
restrictions, variances, covenants, rights-of-way, encumbrances, easements
and other minor irregularities in title; and (vi) purchase money security
interests entered into in the ordinary course of business, none of which,
individually or in the aggregate, (A) interfere with the present use or
occupancy of any property by Regent or any Regent Subsidiary, (B) have more
than an immaterial effect on the value thereof or its present use, or (C)
would impair the ability of Acquiror or the Surviving Corporation to use such
property for its present use.
"Person" shall mean any individual, corporation, partnership, limited
liability corporation, joint venture, trust, association, unincorporated
organization, other entity, group or Governmental Authority.
"Regent Expenses" shall mean all out-of-pocket fees and expenses
incurred or to be incurred by or on behalf of Regent or any of its
Subsidiaries in connection with the Merger or the consummation of any of the
transactions contemplated by this Agreement and the negotiation, preparation,
review and delivery of the agreements contemplated hereby, including all fees
and
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expenses incurred or to be incurred by Coopers & Lybrand, Goldman, Sachs &
Co., Wyatt, Tarrant & Combs, Cravath, Swaine & Moore and any other advisors
to Regent and Media Venture Partners.
"Regent Fully Diluted Share Number" shall mean the aggregate number of
shares of Regent Common Stock equal to the sum of (i) the aggregate number of
shares of Regent Common Stock outstanding on the Closing Date after the
exercise of all Options exercised on or prior to such date, (ii) the
aggregate number of shares of Regent Preferred Stock outstanding on the
Closing Date and (iii) 480,000 (which represents the number of shares of
preferred stock that would have been outstanding if Regent had completed the
KWNR Purchase).
"Regent Material Contracts" shall mean the contracts set forth in
Schedule 3.13A to the Regent Disclosure Letter; PROVIDED, HOWEVER, that on
and after the TBA Effective Date, the term "Regent Material Contracts" shall
no longer include the Assigned Contracts.
"Regent Stock" shall mean Regent Common Stock and Regent Preferred Stock.
"SEC" shall mean the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Laws" shall mean (i) the Securities Act; the Exchange Act;
the Investment Company Act of 1940, as amended; the Trust Indenture Act of
1939, as amended; and the rules and regulations of the SEC promulgated
thereunder, and (ii) all applicable state securities laws.
"Stations" shall mean the radio broadcasting stations identified in the
Regent Disclosure Letter, owned and operated by a Regent Subsidiary pursuant
to a license issued by the FCC.
"Subsidiary" shall mean 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 for the election of directors or similar governing body.
5
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"TBA Effective Date" shall mean the date the term of the TBA commences
pursuant to Section 5.21.
"Transaction Expense Schedule" shall mean a true and complete schedule
of all Regent Expenses for which invoices have been submitted (with a copy of
such invoices attached thereto). To the extent practicable, Regent shall
cause third parties to submit to Regent not later than two business days
prior to the Closing Date final bills for all Regent Expenses.
1.2 OTHER DEFINED TERMS. The following terms shall have the meanings
given such terms in the Sections set forth below:
Term Section
---- -------
Acquiror Common Stock 2.7
Acquiror Disclosure Letter 4
Acquiror Financial Statements 4.5
Application 5.2
Aggregate Average Value 2.7
Average Value of Acquiror Common Stock 2.7
Base Share Number 2.7
Benefit Plans 3.11
BFI 5.24
BFI Credit Line 5.24
BFI Note 5.24
Cash Election 2.7
Certificate 2.10
Citicasters 5.21
Conversion Number 2.7
Delaware Certificate of Merger 2.6
Determination Date 2.7
Dissenting Shares 2.8
Effective Time 2.6
Exchange Agent 2.10
Financial Covenants 5.24
GAAP 2.9
HSR Act 3.3
Information Statement 3.19
KWNR 6.2
KWNR Cash Adjustment 2.7
KWNR Stock Adjustment 2.7
KWNR Stock Consideration 2.7
Maximum Aggregate Regent Liabilities 2.7
Merger Preamble
6
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Merger Consideration 2.7
1996 Balance Sheet 3.5
New Merger Event 2.7
Notice of Disagreement 2.8
Options 2.10
Pension Plan 3.11
Plan of Merger or Plan Preamble
Property 3.6
Purchase and Sale Transaction 2.7
Regent Affiliates 5.8
Regent Common Stock 3.4
Regent Expenses 2.12
Regent Financial Statements 3.5
Regent Information 3.19
Regent Liabilities 2.9
Regent Preferred Stock 3.4
Registration Rights Agreement 5.16
Registration Statement 3.19
Senior Credit Obligations 5.24
Stock Consideration 2.7
Stock Market Additional Shares 5.7
Notification
SRLV 6.2
Surviving Corporation 2.1
Tax Continuity Level 2.7
TBA 5.21
TBA Stations 5.21
Transaction Expense Schedule 2.12
Warrant 2.7
Warrant Agreement 2.7
Warrant Consideration 2.7
SECTION 2
THE MERGER
2.1 SURVIVING CORPORATION. Subject to Section 2.7(H), the other
provisions of this Agreement and the DGCL, at the Effective Time, Regent
shall be merged with and into Acquiror, and the separate corporate existence
of Regent shall cease. Acquiror shall be the surviving corporation in the
Merger (hereinafter sometimes called the "Surviving Corporation") and shall
continue its corporate existence with all its rights, privileges, powers and
franchises under the laws of the State of Delaware unaffected
7
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and unimpaired by the Merger. The Merger shall have the effects set forth in
Section 259 of the DGCL.
2.2 CERTIFICATE OF INCORPORATION. The certificate of incorporation of
Acquiror shall be the certificate of incorporation of the Surviving
Corporation until thereafter duly amended in accordance with its terms and
the DGCL.
2.3 BYLAWS. The bylaws of Acquiror shall be the bylaws of the
Surviving Corporation until thereafter duly amended in accordance with their
terms and the DGCL.
2.4 DIRECTORS. The directors of the Surviving Corporation shall
consist of the directors of Acquiror immediately prior to the Effective Time,
such directors to hold office from the Effective Time until their respective
successors are duly elected and qualified or until the earlier of their
death, resignation or removal in accordance with the Surviving Corporation's
certificate of incorporation and bylaws.
2.5 OFFICERS. The officers of the Surviving Corporation shall consist
of the officers of Acquiror immediately prior to the Effective Time, such
officers to hold office from the Effective Time until their respective
successors are duly elected and qualified or until the earlier of their
death, resignation or removal in accordance with the Surviving Corporation's
certificate of incorporation and bylaws.
2.6 EFFECTIVE TIME. If all the conditions set forth in Section 6 shall
have been fulfilled or waived in accordance with the terms hereof and this
Agreement shall not have been terminated in accordance with Section 8 hereof,
the parties hereto shall cause a certificate of merger or other appropriate
documents (in any such case, the "Delaware Certificate of Merger") to be
properly executed and filed on the Closing Date according to the relevant
provisions of the DGCL with the Secretary of State of the State of Delaware.
The Merger shall become effective as of the time of filing of a properly
executed Delaware Certificate of Merger. The date and time when the Merger
becomes effective is herein referred to as the effective time (the "Effective
Time").
2.7 EFFECT ON CAPITAL STOCK. As of the Effective Time of the Merger,
by virtue of the Merger and without any action on the
8
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part of the holder of any shares of Regent Stock or any shares of capital
stock of Acquiror:
A. REGENT STOCK. Subject to Sections 2.7(B), 2.7(C), 2.7(G), 2.7
(I), 2.8, and 2.9, each issued and outstanding share of Regent Stock shall be
converted into the right to receive (i) the Conversion Number (as defined
below) of a fully paid and nonassessable share of Acquiror Common Stock (the
"Stock Consideration") plus (ii) a warrant (a "Warrant") to acquire a
fractional share (determined as provided below in Section 2.7(D)) (the
"Warrant Consideration") of the Acquiror Common Stock on the terms described
in the Warrant Agreement to be executed at Closing substantially in the form
attached hereto as Exhibit B (the "Warrant Agreement").
The term "Conversion Number" shall mean the number (rounded to the
nearest 1/100,000) equal to the quotient of (i) 3.55 million (the "Base Share
Number") and (ii) the Regent Fully Diluted Share Number; PROVIDED, HOWEVER,
that the Conversion Number shall be adjusted (x) pursuant to Section 2.7(B),
by multiplying the Conversion Number by the fraction set forth in Section
2.7(B)(a), (y) pursuant to Sections 2.7(C) and 2.8(C) (to the extent Acquiror
selects the 2.8(C) option to reduce Stock Consideration), by reducing the
Base Share Number by an amount equal to the aggregate amount of Acquiror
Common Stock determined in accordance with such Sections or (z) pursuant to
Section 2.8(D) (to the extent Acquiror selects the 2.8(D) option to increase
Stock Consideration), by increasing the Base Share Number by an amount equal
to the aggregate amount of Acquiror Common Stock determined in accordance
with such Section.
B. STOCK CONSIDERATION ADJUSTMENT FOR MINIMUM PRICE. If, on the
third business day preceding the Closing Date (which shall be a date on which
Acquiror Common Stock shall trade on NASDAQ) (the "Determination Date"), the
amount equal to (i) the Average Value of Acquiror Common Stock (as defined
below) MULTIPLIED by (ii) 3.55 million (such amount, the "Aggregate Average
Value") is less than $116 million, then, at Acquiror's sole option, with
respect to the Stock Consideration only:
(a) the Conversion Number determined pursuant to Section 2.7(A) shall be
adjusted by multiplying such Conversion Number by a fraction (i) the
numerator of which is equal to $32.67606 and (ii) the denominator of
which is
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the Average Value of Acquiror Common Stock on such Determination Date; or
(b) the Conversion Number shall remain the same and Acquiror shall pay, as
additional Merger Consideration, pro rata among the holders of Regent
Stock, an aggregate amount in cash equal to the difference between
(i) $116 million and (ii) the Aggregate Average Value on such Determination
Date; or
(c) no Stock Consideration shall be paid and Acquiror shall instead pay, as
part of the Merger Consideration, pro rata among the holders of Regent
Stock, in lieu of the Stock Consideration, $116 million in cash.
In the event that on the Determination Date an adjustment to the
Merger Consideration must be made under this paragraph (B), Acquiror shall
inform Regent in writing no later than 12:00 noon on the second business day
preceding the Closing Date as to which of the three options set forth in the
preceding sentence Acquiror has selected under this Section 2.7(B) to satisfy
its obligations hereunder.
The term "Average Value of Acquiror Common Stock" shall mean the
amount equal to the average of the average of the closing bid and asked
prices quoted on NASDAQ for the ten consecutive full NASDAQ trading days
ending on the third full NASDAQ trading day immediately preceding the Closing
Date.
C. STOCK CONSIDERATION ADJUSTMENT FOR MAXIMUM PRICE. If, on the
Determination Date, the Aggregate Average Value exceeds $156.2 million, then,
the aggregate amount of Stock Consideration shall be reduced, pro rata among
the holders of Regent Stock, by the aggregate amount of Acquiror Common Stock
equal to the quotient of (i) the amount equal to one-half of the difference
between (x) the Aggregate Average Value on the Determination Date and (y)
$156.2 million and (ii) the Average Value of Acquiror Common Stock on the
Determination Date.
D. THE WARRANT CONSIDERATION. Subject to adjustment pursuant to
Section 10 of the Warrant Agreement, the Warrant Consideration shall consist
of a warrant to acquire a fractional share of Acquiror Common Stock the
numerator of which is 500,000 and the denominator of which is the Regent
Fully Diluted Share Number. Subject to the terms of the Warrant Agreement
(including
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Section 10 thereof), the Warrants shall expire on the fifth anniversary of
the Closing Date and shall have an exercise price of $40.
E. THE MERGER CONSIDERATION. The "Merger Consideration" shall
mean the Stock Consideration, any cash consideration to be paid pursuant to
Sections 2.7(B) or 2.8(C) and the Warrant Consideration, as further adjusted
pursuant to Sections 2.7(C), 2.7(G), 2.7(I), 2.8(D) and 2.9.
F. EFFECT OF CONVERSION. As of the Effective Time of the Merger,
all such shares of Regent Stock shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Regent Stock shall
cease to have any rights with respect thereto, except the right to receive
the Merger Consideration and any cash in lieu of fractional shares of
Acquiror Common Stock to be issued or paid in consideration therefor upon
surrender of such certificate in accordance with this Section 2.7, without
interest.
G. ANTI-DILUTION. If, prior to the Effective Time, any event
occurs that would require an adjustment to the Warrants under Section 10 of
the Warrant Agreement, then the Stock Consideration shall be adjusted in the
same manner as the Warrants under the Warrant Agreement in order to preserve
the value of the Merger Consideration.
H. TAX STRUCTURE. In the event that the Tax Continuity Level
determined on the day before the Closing Date is less than 45% (such an
event, the "New Merger Event"), then instead of merging Regent into Acquiror
as provided for herein, a wholly owned subsidiary of Acquiror (to be
designated by Acquiror) shall be merged into Regent and Regent shall be the
surviving corporation with the certificate of incorporation, by-laws,
directors and officers as shall be designated solely by Acquiror. Acquiror
and Regent hereby agree that in the event of a New Merger Event, Acquiror and
Regent shall execute, if necessary, an appropriate amendment to this
Agreement in order to reflect the foregoing. For this purpose, the Tax
Continuity Level shall mean the product of A/B and (C+D), where (1) A equals
the value of the Stock Consideration, (2) B equals the value of the Merger
Consideration as reasonably agreed by Regent and Acquiror, (3) C equals the
percentage of shares of Regent Stock held by holders each owning less than 1%
of the total number of
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such shares, including holders indirectly owning less than 1% of such shares
through an entity that has represented that it will distribute the holder's
share of Stock Consideration received by such entity to such holder, and (4)
D equals the percentage of shares of Regent Stock held by holders (other than
persons or entities described in clause (3)) that provide the representation
described in Exhibit C with respect to such shares. Tax counsel for Acquiror
and Regent may jointly agree to modify this definition if they jointly deem
it appropriate to reflect "continuity of interest" in the Merger in
accordance with the Federal tax rules as developed under the rules of the
Code.
I. ADJUSTMENT FOR KWNR ACQUISITION. In order to adjust the
aggregate amount of Merger Consideration payable hereunder to holders of
Regent Stock in the event of the concurrent closing of the acquisition of
KWNR by Acquiror, (i) the per share amount of the Merger Consideration
payable to Southwest Florida Enterprises, Inc. ("SFE") shall be determined as
if 480,000 additional shares of Regent Stock were outstanding, (ii) the
aggregate amount of Merger Consideration payable in respect of such 480,000
shares of Regent Stock (the "KWNR Stock Consideration") shall be payable to
SFE, as the sole stockholder of Southwest Radio Las Vegas, Inc., in
connection with the KWNR Purchase, rather than to holders of Regent Stock
pursuant to this Agreement; PROVIDED, HOWEVER, that in the event that all or
any portion of the KWNR Stock Consideration would otherwise be payable in
cash, (i) such portion (the "KWNR Cash Adjustment") shall instead be payable
to SFE in Acquiror Common Stock, valued based on the Average Value of
Acquiror Common Stock on the Determination Date (the "KWNR Stock Adjustment")
and (ii) (x) the aggregate amount of Stock Consideration, if any, payable as
part of the Merger Consideration hereunder to holders of Regent Stock (the
"Regent Stock Consideration") shall be reduced by a number of shares equal to
the KWNR Stock Adjustment (or, if the shares constituting the Regent Stock
Consideration are less than the shares constituting the KWNR Stock
Adjustment, the number of shares constituting the Regent Stock Consideration)
and (y) the aggregate amount of cash payable hereunder as part of the Merger
Consideration shall be increased by an amount equal to the KWNR Cash
Adjustment to the holders of the Regent Stock (the "Regent Cash
Consideration"), PROVIDED, HOWEVER, that if the number of shares of Acquiror
Common Stock equal to the KWNR Stock Adjustment exceeds the number of shares
of Acquiror Common Stock equal to the Regent Stock Consideration, then the
Regent Cash Consideration shall be increased, if at all, in an amount equal
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to the Average Value of Acquiror Common Stock on the Determination Date
multiplied by the number of shares of Acquiror Common Stock equal to the
Regent Stock Consideration.
In the event that, after giving effect to the foregoing paragraph,
the payment of net Regent Expenses (the aggregate amount of Regent Expenses
less one-half thereof (up to a maximum of $1.5 million)) would result in the
KWNR Stock Consideration having an aggregate value (based on the Average
Value of Acquiror Common Stock on the Determination Date) of less than $12
million on the Determination Date, then (i) an amount of Acquiror Common
Stock equal to the shortfall (the "Regent Expenses Adjustment") shall be
added to the amount of KWNR Stock Consideration payable by Acquiror under the
previous paragraph and (ii) the amount of Regent Stock Consideration shall be
further reduced by the amount of Acquiror Common Stock equal to the Regent
Expenses Adjustment; PROVIDED, HOWEVER, that to extent that the number of
shares of Acquiror Common Stock equal to the Regent Expenses Adjustment
exceeds the number of shares of Acquiror Common Stock equal to the Regent
Stock Consideration, as adjusted pursuant to clause (ii)(x) in the foregoing
paragraph (such excess number of shares, the "Excess Number"), then (x) SFE
shall receive the amount of cash equal to the Average Value of Acquiror
Common Stock on the Determination Date multiplied by the Excess Number (the
"Adjustment Amount") and (y) the Regent Cash Consideration, as adjusted
pursuant to clause (ii)(y) in the foregoing paragraph, to be paid by Acquiror
hereunder shall be reduced by the Adjustment Amount; PROVIDED, HOWEVER, that
if the Adjustment Amount exceeds such adjusted Regent Cash Consideration,
then the holders of Regent Stock will pay Acquiror an amount of cash equal to
such excess.
2.8 LONG TERM DEBT ADJUSTMENT.
A. On the Determination Date, Regent shall prepare and deliver to
Acquiror a statement (the "Statement"), certified by the chief financial
officer of Regent, setting forth Regent Liabilities (as defined below) as of
the close of business on the Determination Date, together with (i) a
reasonably detailed calculation thereof and (ii) a letter from Coopers &
Lybrand, L.L.P., stating that based on the procedures set forth in such
letter, they concur in the calculation of Regent Liabilities.
B. The term "Regent Liabilities" shall mean, as of any date, (i)
the amount of long term debt of Regent (including the
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current portion thereof) on such date, calculated in the same way, using the
same methods, as the line items on the 1996 Balance Sheet PLUS (ii) to the
extent not already included pursuant to clause (i), the aggregate amount of
any dividends paid or to be paid prior to Closing to the holders of Regent
Preferred Stock (other than for dividends paid in Regent Stock) PLUS (iii) to
the extent not already included pursuant to clause (i), the aggregate amount
of all the Regent Expenses, MINUS (iv) to the extent included pursuant to
clause (i), the amount equal to one-half of all the Regent Expenses, which
deduction shall not in any event exceed $1.5 million, MINUS (v) to the extent
included pursuant to clause (i), the amount of debt outstanding on the
Determination Date under the BFI Credit Line and MINUS (vi) any amounts due
but not yet received under the sale contract set forth on Schedule 5.3A to
the Regent Disclosure Letter, to the extent it is still in full force and
effect.
C. In the event that the amount of Regent Liabilities on the
Determination Date is greater than the Maximum Aggregate Regent Liabilities
(as defined below), then the aggregate amount of Merger Consideration to be
received by the holders of Regent Stock shall be reduced, pro rata among the
holders of Regent Stock, at Acquiror's sole option by either (i) reducing the
aggregate amount of such Stock Consideration by the aggregate amount of
Acquiror Common Stock equal to the quotient of (x) the difference between the
amount of Regent Liabilities on the Determination Date and the Maximum
Aggregate Regent Liabilities and (y) the Average Value of Acquiror Common
Stock on the Determination Date or (ii) to the extent of the amount of any
Cash Election, reducing the amount of such cash consideration by the amount
of cash equal to the difference between the amount of Regent Liabilities on
the Determination Date and the Maximum Aggregate Regent Liabilities.
"Maximum Aggregate Regent Liabilities" shall mean the amount equal
to (i) $64 million MINUS (ii) the amount of debt outstanding, if any, under
the BFI Credit Line and MINUS (iii) to the extent that any purchase or option
transaction listed on Schedule 5.3A to the Regent Disclosure Letter (each, a
"Purchase or Option Transaction") has not closed prior to the Closing, the
aggregate cash committed to be paid under such Purchase or Option
Transactions that have not yet closed.
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D. In the event that the amount of Regent Liabilities on the
Determination Date is less than the Maximum Aggregate Regent Liabilities,
then the aggregate amount of Merger Consideration to be received by the
holders of Regent Stock shall be increased, pro rata among the holders of
Regent Stock, at Acquiror's sole option by either (i) increasing the
aggregate amount of Stock Consideration by the aggregate amount of Acquiror
Common Stock equal to the quotient of (x) the difference between the Maximum
Aggregate Regent Liabilities and the amount of Regent Liabilities on the
Determination Date and (y) the Average Value of Acquiror Common Stock on the
Determination Date or (ii) increasing the Merger Consideration by the amount
of cash equal to the difference between the Maximum Aggregate Regent
Liabilities and the amount of Regent Liabilities on the Determination Date.
E. In the event that an adjustment to Merger Consideration must be
made under paragraphs (C) or (D) above, Acquiror shall inform Regent in
writing no later than 12:00 noon on the second business day preceding the
Closing Date as to which option Acquiror has selected to make such adjustment.
2.9 DISSENTING SHARES. To the extent that appraisal rights are
available under Section 262 of DGCL, shares of Regent Stock that are issued
and outstanding immediately prior to the Effective Time and that have not
been voted for adoption of the Merger and with respect to which appraisal
rights have been properly demanded in accordance with Section 262 of the DGCL
("Dissenting Shares") shall not be converted into the right to receive the
consideration provided for in Section 2.7 hereof at or after the Effective
Time unless and until the holder of such shares becomes ineligible for such
appraisal. If a holder of Dissenting Shares becomes ineligible for such
appraisal, then, as of the Effective Time or the occurrence of such event
whichever later occurs, such holder's Dissenting Shares shall cease to be
Dissenting Shares and shall be converted into and represent the right to
receive the consideration provided for in Section 2.7 hereof. If any holder
of Regent Stock shall assert the right to be paid the fair value of such
Regent Stock as described above, Regent shall give Acquiror notice thereof
and Acquiror shall have the right to participate in all negotiations and
proceedings with respect to any such demands. Regent shall not, except with
the prior written consent of Acquiror, voluntarily make any payment with
respect to, or settle or offer to settle, any such demand
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for payment. Payment for Dissenting Shares shall be made as required by the
DGCL.
2.10 TREATMENT OF REGENT EMPLOYEE STOCK OPTIONS. At or prior to the
Closing Date, Regent will take all necessary steps to cause (i) the
outstanding options under the stock option plan and agreements listed on
Schedule 3.11A to the Regent Disclosure Letter (any options granted under
such plan and agreements, the "Options"), to vest and become immediately
exercisable and (ii) to terminate any Options not exercised on or prior to
the Closing Date.
2.11 EXCHANGE OF REGENT STOCK.
A. EXCHANGE AGENT. As of the Effective Time of the Merger, Parent
shall deposit with Key Corp Shareholder Services, Inc., a Delaware
corporation, or such other bank or trust company as may be designated by
Acquiror (the "Exchange Agent"), for the benefit of the holders of shares of
Regent Stock, for exchange in accordance with this Section 2.11, through the
Exchange Agent, certificates representing the shares of Acquiror Common Stock
issuable pursuant to Section 2.7 in exchange for outstanding shares of Regent
Stock. In the event that Acquiror makes any Cash Election, at the Effective
Time of the Merger, Acquiror shall also deliver to the Exchange Agent for
deposit into an escrow fund the amount of cash necessary to satisfy its
obligations under such Cash Election. As of the Effective Time, holders of
Regent Stock (other than holders of Dissenting Shares) shall become holders
of record of Acquiror Common Stock.
B. EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Exchange Agent shall make available to each record holder who, as of the
Effective Time, was a holder of an outstanding certificate or certificates
which immediately prior to the Effective Time represented shares of Regent
Stock (the "Certificate" or "Certificates"), a form of letter of transmittal
and instructions for use in effecting the surrender of the Certificates for
payment therefor and conversion thereof. Delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper
delivery of the Certificates to the Exchange Agent and, the form of letter of
transmittal shall so reflect. Upon surrender to the Exchange Agent of a
Certificate, together with such letter of transmittal duly executed, the
holder of such Certificate shall be entitled to receive in exchange therefor
one or more certificates as
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requested by the holder (properly issued, executed and countersigned, as
appropriate) representing that number of whole shares of Acquiror Common
Stock to which such holder of Regent Stock shall have become entitled
pursuant to the provisions of Section 2.7 hereof as well as any cash due to
such holder pursuant to any Cash Election, and the Certificate so surrendered
shall forthwith be cancelled. No interest will be paid or accrued on any
cash payable upon the surrender of the Certificates. If any portion of the
consideration to be received pursuant to Section 2.7 hereof, upon exchange of
a Certificate, is to be issued or paid to a Person other than the Person in
whose name the Certificate surrendered in exchange therefor is registered, it
shall be a condition of such issuance and payment that the Certificate so
surrendered shall be properly endorsed or otherwise be in proper form for
transfer. From the Effective Time until surrender in accordance with the
provisions of this Section 2.11, each Certificate shall represent for all
purposes only the right to receive the consideration provided in Section 2.7
hereof. All payments in respect of shares of Regent Stock that are made in
accordance with the terms hereof shall be deemed to have been made in full
satisfaction of rights pertaining to such securities.
In the case of any lost, mislaid, stolen or destroyed Certificate,
the holder thereof may be required, as a condition precedent to delivery to
such holder of the consideration described in Section 2.7, to deliver to the
Exchange Agent an affidavit and satisfactory indemnity agreement as Acquiror
may direct as indemnity against any claim that may be made against Acquiror,
the Exchange Agent or the Surviving Corporation with respect to the
Certificate alleged to have been lost, mislaid, stolen or destroyed.
C. UNEXCHANGED REGENT STOCK. After the Effective Time, there
shall be no transfers on the stock transfer books of the Surviving
Corporation of the shares of Regent Stock that were outstanding immediately
prior to the Effective Time. If, after the Effective Time, Certificates are
presented to the Surviving Corporation for transfer, they shall be cancelled
and exchanged for the consideration described in Section 2.7 hereof.
D. FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of Acquiror Common Stock shall be issued upon the surrender
for exchange of Certificates pursuant to this Section 2.11; no dividend or
other distribution by
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Acquiror and no stock split shall relate to any such fractional share; and no
such fractional share shall entitle the record or beneficial owner thereof to
vote or to any other rights of a stockholder of Acquiror. In lieu of any
such fractional share, each holder of Regent Stock who would otherwise have
been entitled thereto upon the surrender of Certificates for exchange
pursuant to this Section 2.11 will be paid an amount in cash (without
interest) rounded to the nearest whole cent, determined by multiplying (i)
the per share closing price on NASDAQ of Acquiror Common Stock on the date on
which the Effective Time shall occur (or, if the Acquiror Common Stock shall
not trade on NASDAQ on such date, the first day of trading in Acquiror Common
Stock on NASDAQ thereafter) by (ii) the fractional share to which such holder
would otherwise be entitled. As promptly as practicable after the Effective
Time, the Exchange Agent shall determine the aggregate amount of cash
necessary to pay holders of Regent Stock cash in lieu of fractional shares
and notify the Acquiror of such aggregate amount. On the second business day
following notification from the Exchange Agent, Acquiror shall deliver to the
Exchange Agent such aggregate amount of cash to be deposited into an escrow
fund until paid to the holders of Regent Stock pursuant to this Section 2.11.
E. RETURN OF UNCLAIMED ACQUIROR COMMON STOCK AND CASH. One
hundred and eighty days following the Effective Time, Acquiror shall be
entitled to cause the Exchange Agent to deliver to it any shares of Acquiror
Common Stock and cash for fractional shares and any Cash Election (including
any interest, dividends, earnings or distributions received with respect
thereto which shall be paid as directed by Acquiror) 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, of shares of
Acquiror Common Stock and any cash in lieu of fractional shares of Acquiror
Common Stock or to be distributed pursuant to any Cash Election and any
dividends or distributions with respect to Acquiror Common Stock.
F. EXPENSES. Acquiror shall pay all charges and expenses,
including those of the Exchange Agent, in connection with the exchange of
shares of Acquiror Common Stock for Certificates.
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G. NO LIABILITY. Notwithstanding anything to the contrary in this
Section 2.10, none of the Exchange Agent, Acquiror, Regent or the Surviving
Corporation shall be liable to a holder of a Certificate formerly
representing Regent Stock for any amount properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar
law.
2.12 CLOSING. The Closing shall take place at 10:00 a.m. at the offices
of Wyatt, Tarrant & Combs, Louisville, Kentucky, within ten days after the
date on which the last of the conditions have been satisfied (excluding
conditions that by their terms cannot be satisfied until the Closing Date)
set forth in Section 6 hereof, or at such other date, time and place as
Regent and Acquiror may agree in writing.
SECTION 3
REPRESENTATION AND WARRANTIES OF REGENT
With and subject to such exceptions and disclosures as are set
forth in a letter delivered by Regent to Acquiror contemporaneous with the
execution hereof (the "Regent Disclosure Letter") Regent hereby represents
and warrants to Acquiror as set forth below. Notwithstanding any other
provision to the contrary in this Agreement, Regent shall be deemed not to
have breached any of the representations and warranties set forth below to
the extent that any breach that would otherwise be claimed to have occurred
is attributable to any action or inaction by Citicasters (or any successor)
as the broker of the Stations under to the TBA.
3.1 CORPORATE STANDING. Regent and each Regent Subsidiary are
corporations duly organized, validly existing, and in good standing under the
laws of the State of Delaware. Regent and each Regent Subsidiary have all
requisite power and authority to own, lease and operate their properties and
to carry on their business as now being conducted and are duly qualified and
in good standing to do business in each jurisdiction in which the ownership
or leasing of their properties makes such qualification necessary, except
where the failure to so qualify would not have a Material Adverse Effect on
Regent. Regent has heretofore made available to Acquiror true and accurate
copies of the certificate of incorporation, bylaws and minute books, as
amended through the date hereof (containing the records of meetings and
written
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consents of the stockholders, the board of directors and any committees of
the board of directors), of Regent and each Regent Subsidiary. Such
certificates of incorporation and bylaws are in full force and effect and no
other organizational documents are applicable to or binding upon Regent. The
Regent Disclosure Letter contains a true and correct list of the
jurisdictions in which Regent and each Regent Subsidiary are qualified to do
business as a foreign corporation.
3.2 POWER AND AUTHORITY OF REGENT; AUTHORIZATION. Regent has all
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement and the Plan. The execution and
delivery of this Agreement and the Plan and the consummation of the
transactions contemplated by both documents have been duly authorized by all
necessary corporate action on the part of Regent. This Agreement has been
duly executed and delivered by Regent, and constitutes the legal, valid and
binding obligation of Regent enforceable against Regent in accordance with
its terms subject to applicable bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors' rights generally, general equitable
principles and the discretion of courts in granting equitable remedies. As
of the Closing Date, the Plan will be duly executed and delivered by Regent
and will constitute the legal, valid and binding obligation of Regent
enforceable against Regent in accordance with its terms subject to applicable
bankruptcy, insolvency and other similar laws affecting the enforcement of
creditors' rights generally, general equitable principles and the discretion
of courts in granting equitable remedies.
3.3 ABSENCE OF RESTRICTIONS AND CONFLICT. Subject to Regent's receipt
of the consents set forth in Regent's Disclosure Letter, the execution,
delivery and performance of this Agreement and the Plan, the consummation of
the Merger and the other transactions contemplated by this Agreement and the
fulfillment of and compliance with the terms and conditions of this Agreement
do not and will not, with the passing of time or the giving of notice or
both, violate or conflict with, constitute a breach of or default under,
result in the loss of any material benefit under, or permit the acceleration
of any obligation under, (i) any term or provision of the certificate of
incorporation or bylaws of Regent or any Regent Subsidiary, (ii) any Regent
Material Contract, (iii) any judgment, decree or order of any court or
Governmental Authority or agency to which Regent or any Regent Subsidiary is
a party or by which Regent or any Regent Subsidiary, or any of
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their properties is bound, (iv) any lease, mortgage, indenture, contract,
license, permit, instrument, trust agreement or other agreement to which
Regent or any Regent Subsidiary is a party or by which Regent or any Regent
Subsidiary or any of their properties may be bound, or (v) any statute, law,
regulation or rule applicable to Regent or any Regent Subsidiary, so as to
have in the case of subsections (ii) through (v) above, a Material Adverse
Effect on Regent. Except for compliance with the applicable requirements of
the FCC, Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), the Securities Laws and filing and recordation of the
Delaware Certificate of Merger as required by the DGCL, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
governmental agency or public or regulatory unit, agency, body or authority
with respect to Regent is required in connection with the execution, delivery
or performance of this Agreement by Regent or the consummation of the
transactions contemplated by this Agreement by Regent, the failure of which
to obtain would have a Material Adverse Effect on Regent.
3.4 CAPITALIZATION OF REGENT AND REGENT SUBSIDIARIES.
A. The authorized capital stock of Regent consists of Nine Million
Six Hundred Fifty Thousand (9,650,000) shares, consisting of Five Million
(5,000,000) shares of Class A Common Stock, par value of $.01 per share, One
Hundred Fifty Thousand (150,000) shares of Class B Common Stock, par value of
$.01 per share ("Regent Common Stock"), and Four Million Five Hundred
Thousand (4,500,000) Shares of Preferred Stock, par value of $.01 per share
("Regent Preferred Stock"), of which, as of the date hereof, Fifty Thousand
(50,000) shares of Class A Common Stock, Zero (0) shares of Class B Common
Stock and Three Million Seven Hundred Seventy-Four Thousand, One Hundred
Ninety-Four (3,774,194) shares of Preferred Stock are issued and outstanding.
Except as set forth in the Regent Disclosure Letter, all of such issued and
outstanding shares of capital stock of Regent are validly issued, fully paid,
nonassessable and free of preemptive rights. Except for the Two Hundred
Ninety-Two Thousand Five Hundred (292,500) Options outstanding and its
obligations in connection with the KWNR Purchase, Regent does not have
outstanding, nor is it bound by, any subscriptions, options, warrants, calls,
commitments or agreements requiring Regent to issue or entitling any Person
to acquire any additional shares of capital stock or any other equity
security, including any right
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of conversion or exchange under any outstanding security or other instrument,
and Regent is not obligated to issue any shares of its capital stock for any
purpose. There are no outstanding obligations of Regent to repurchase,
redeem or otherwise acquire any outstanding shares of stock of Regent. There
are no shares of capital stock held in the treasury of Regent and no
preemptive rights exist with respect to the Regent Stock.
B. Schedule 3.1A to the Regent Disclosure Letter lists all
subsidiaries of Regent as of the date hereof. All of the outstanding shares
of capital stock of each subsidiary are owned by Regent either directly or
indirectly through another subsidiary. No equity securities of any
subsidiary may be required to be issued (other than to the Company or another
Subsidiary) for shares of the capital stock of any Subsidiary. There are no
contracts, commitments, understandings or arrangements by which Regent or any
Subsidiary is or may be obligated to transfer any shares of the capital stock
of any Subsidiary. Except as set forth in the Regent Disclosure Letter, all
of the outstanding shares of capital stock of each Subsidiary held by Regent
or any Subsidiary are fully paid and nonassessable and are owned by Regent or
such Subsidiary free and clear of any claim, lien or encumbrance.
C. Except for interests in the Subsidiaries, neither Regent nor
any of the 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, (ii) promotional activities undertaken in the
ordinary course of business and (iii) accounts receivables produced in the
ordinary course of business.
3.5 FINANCIAL STATEMENTS. Regent has made available to Acquiror: (i)
the audited consolidated balance sheets of Regent and the Regent Subsidiaries
as of December 31, 1993, 1994 and 1995, and the related audited consolidated
statements of income, stockholders' equity and cash flows for the respective
fiscal years then ended, including the notes thereto, examined by and
accompanied by the report of Coopers & Lybrand, L.L.P., independent public
accountants with respect to Regent; and (ii) the unaudited consolidated
balance sheet of Regent and the Regent Subsidiaries as of June 30, 1996 and
the related unaudited consolidated statement of income and stockholders'
equity for the period then ended. All of the foregoing financial statements
are
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hereinafter collectively referred to as the "Regent Financial Statements" and
the balance sheet as of June 30, 1996, is hereinafter referred to as the
"1996 Balance Sheet." The Regent Financial Statements have been prepared in
accordance with GAAP applied on a consistent basis (except as disclosed in
the audited year-end financial statements) 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
Regent and the consolidated Regent 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). As of the date hereof,
Regent does not have any material liabilities or material obligations or
commitments except those disclosed in the Regent Financial Statements, those
entered into in the ordinary course of business since June 30, 1996,
consistent with past practices and which individually and in the aggregate do
not have a Material Adverse Effect on Regent, those disclosed in or permitted
by other sections or provisions of this Agreement or the Regent Disclosure
Letter, and those incurred in connection with the transactions contemplated
hereby.
3.6 TITLE TO AND CONDITION OF ASSETS.
A. Except as set forth in the Regent Disclosure Letter, Regent and
all Regent Subsidiaries have good and valid title to or valid leasehold
interests in (and with respect to real property owned in fee estate only,
good, valid and marketable title to) their material properties and assets,
tangible and intangible, reflected in the 1996 Balance Sheet or acquired
after the date thereof (other than properties sold or otherwise disposed of
in the ordinary course of business) (the "Property"), and all such Property
is held free and clear of all title defects, liens, encumbrances and
restrictions, except, with respect to all such properties, Permitted Liens.
The Property comprises all the material tangible and intangible assets owned
or used and necessary in the business of Regent and the Regent Subsidiaries,
as currently operated.
B. The Regent Disclosure Letter sets forth as of the date hereof a
true and complete list of all real property leases and agreements of Regent
and all Regent Subsidiaries granting possession of or rights to real property
and all Regent Material Contracts with respect to personal property
(collectively, the
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"Scheduled Leases"). All such Scheduled Leases and all other leases entered
into after the date hereof (the "Post-Signing Leases") are in full force and
effect and constitute the legal, valid, binding and enforceable obligations
of Regent or any Regent Subsidiary, as applicable, and, to Regent's
knowledge, are legal, valid, binding and enforceable in accordance with their
respective terms with respect to each other party thereto, in each case to
the extent material to the business and operations of Regent or any Regent
Subsidiary and subject, in each case, to applicable bankruptcy, insolvency
and other similar laws affecting the enforcement of creditors' rights
generally, general equitable principles and the discretion of courts in
granting equitable remedies. There are no existing material defaults of
Regent or any Regent Subsidiary with respect to such Scheduled Leases or
Post-Signing Leases or, to the knowledge of Regent, of any of the other
parties thereto (or events or conditions which, with notice or lapse of time,
or both, would constitute a material default). Except as disclosed in the
Regent Disclosure Letter, none of the Scheduled Leases or the Post-Signing
Leases are with an affiliate of Regent or contain any material terms or
conditions which make any such lease commercially unreasonable.
C. All tangible personal property leased, owned or used in the
business of Regent and the Regent Subsidiaries as presently conducted is in
good working condition, has been properly maintained, is suitable for the
purposes for which it is used, and conforms to the requirements of all
material laws, ordinances and regulations applicable to its use and ownership
or lease by the Company and each Subsidiary where the failure to so conform
will have a Material Adverse Effect.
D. All real property, buildings and structures (including but not
limited to towers) owned or leased by Regent and all Regent Subsidiaries are
in good operating condition and repair except for ordinary wear and tear; are
adequate and suitable in accordance with general industry practices for the
purposes for which they are currently used and intended to be used;
materially comply with applicable zoning laws; have reasonable access thereto
and there is no action pending, or, to the knowledge of Regent or any Regent
Subsidiary, threatened that would impair or result in the termination of such
access; and there are no easements or rights of way or rights of ingress or
egress on, over or through the real property that are not of record which
could materially interfere with the use of the real property, buildings and
structures as presently utilized.
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3.7 TRADEMARKS, ETC. Except as described in the Regent Disclosure
Letter, as of the date hereof and the TBA Effective Date, and thereafter,
subject to the exclusive license granted to Acquiror by Regent in the TBA,
Regent and the Regent Subsidiaries do not have any intellectual property,
trademarks, service marks, slogans, logos, jingles, trademark registrations
or applications therefor, trade names, copyrights, copyright registrations or
applications therefor, trademark or trade name licenses, or assignments
material to any of their respective assets or properties, taken as a whole.
The Regent Disclosure Letter contains a complete list or general description
of all such trademarks and any other intangible assets owned by Regent or any
Regent Subsidiary or used in the operation of the Stations, other than any
such trademarks and other intangible assets, the loss of which would not have
a Material Adverse Effect on Regent. Except as set forth in the Regent
Disclosure Letter, to Regent's knowledge, (i) neither Regent nor any Regent
Subsidiary is infringing in any material respect on any trademark, trade name
or copyright, nor has Regent or any Regent Subsidiary received any notice
alleging that it is infringing on any trademark, trade name or copyright,
and, (ii) to conduct its business as such business is currently being
conducted, Regent does not require rights under any trademark, trade name, or
copyright (or any application or registration respecting any thereof).
3.8 LEGAL PROCEEDINGS. Except as set forth in Regent's Disclosure
Letter: (i) there are no actions, suits, proceedings, arbitrations or
investigations pending or, to the knowledge of Regent, threatened against
Regent or any Regent Subsidiary, 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; (ii) none of the actions, suits,
proceedings, arbitrations or investigations, individually or in the
aggregate, would have a Material Adverse Effect on Regent if adversely
decided; and (iii) neither Regent, nor any Regent Subsidiary, is subject to
any judgment, order, writ, injunction, or decree that would have a Material
Adverse Effect on it.
3.9 ENVIRONMENTAL MATTERS. Except as disclosed in the Regent
Disclosure Letter or insofar as inaccuracies in the following statements
would not have a Material Adverse Effect on Regent: (i) the properties owned
or leased by Regent or any Subsidiary and properties formerly owned or leased
by Regent or any Subsidiary for which Regent has liability (the "Regent
Properties") are in compliance with all applicable federal, state
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and local environmental and Hazardous Waste laws and regulations; no
enforcement actions are pending or threatened against Regent or any
Subsidiary, and no notice of potential liability or any administrative or
judicial proceeding (including notices regarding clean up of off-site third
party Hazardous Waste sites) which, in either case, has not been fully and
finally resolved, has been received; the Regent Properties contain no
underground storage tank the presence or operation of which is a violation of
any environmental law; neither Regent nor any Subsidiary has knowledge of any
disposal or release of any Hazardous Wastes at, on or under the Regent
Properties, in violation of any applicable environmental law; all broadcast
facilities operated by Regent or any Subsidiary are, and at all times prior
hereto were, in compliance with all enforceable rules and regulations
relating to RF radiation produced by a broadcast station; and neither Regent
nor any Subsidiary has (A) given any release or waiver of liability relating
to any claim based on Hazardous Wastes to any current or prior tenant or
owner of any real property owned or leased at any time by either Regent or
any Subsidiary or to any party who may be potentially responsible for the
presence of Hazardous Wastes on any such real property; or (B) made any
promise of indemnification to any party regarding Hazardous Wastes that may
be located on any real property owned or leased at any time by either Regent
or any Subsidiary. The Regent Disclosure Letter contains a description of
environmental indemnities of which, as of the date hereof and the TBA
Effective Date, either Regent or any Subsidiary is a beneficiary.
3.10 FCC AUTHORIZATION; COMPLIANCE WITH LAWS. As of the date hereof,
the Regent Disclosure Letter describes for each of the Stations all of the
applicable FCC Authorizations. Complete and correct copies of the FCC
Authorizations have heretofore been made available to Acquiror. To Regent's
knowledge, except as set forth in the Regent Disclosure Letter, the
applicable Regent Subsidiary is operating the applicable Station in
compliance in all material respects with each FCC Authorization and has
fulfilled and performed in all material respects its obligations under each
FCC Authorization, no event has occurred and no condition or state of facts
exists which constitutes, or after notice or lapse of time or both would
constitute, a material breach or default thereof which would have a Material
Adverse Effect on Regent, and no notice of cancellation or default concerning
any such FCC Authorization, or of any event, condition or state of facts
described in the preceding sentence has been received by Regent, or is known
to Regent. Regent and all Regent
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Subsidiaries have complied in all material respects with and are not in any
material default under (and have not been charged with or received notice
with respect to, nor are threatened with or under investigation with respect
to, any charge concerning any material violation of any provision of) any
federal, state or local law, regulation, ordinance, rule or order (whether
executive, judicial, legislative or administrative) or any order, writ,
injunction or decree of any court, agency or instrumentality and no action,
suit, proceeding, or investigation has been filed or commenced against Regent
or any Regent Subsidiary alleging any failures to comply, which would have a
Material Adverse Effect on Regent.
Except as set forth in the Regent Disclosure Letter, there is no
reason related to Regent why the FCC would not approve the transfer of
control of Regent to Acquiror or any of its Subsidiaries and the renewal of
the FCC Authorizations upon the expiration of the current term of each such
FCC Authorization. Except as set forth in the Regent Disclosure Letter, all
reports, forms and statements required to be filed by Regent with the FCC
with respect to the Stations since the grant of the last renewal of the FCC
Authorizations 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 Regent.
3.11 EMPLOYEE BENEFIT PLANS.
A. Except as specified in the Regent Disclosure Letter, neither
Regent nor any Subsidiary has an "employee pension benefit plan" as defined
in Section 3(2) of 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
Regent Disclosure Letter shall be referred to collectively as the "Plans" and
individually as a "Plan"). All Plans (with the exception of any
multiemployer plan) are maintained by Regent.
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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, any and all collective
bargaining agreements and other contracts applicable thereto.
C. Except as specified in the Regent Disclosure Letter, each
Retirement Plan and related trust that is intended to be tax-qualified under
the Code has received a favorable determination letter from the Internal
Revenue Service with respect to the qualification and tax-exempt status of
the Retirement Plan and nothing has occurred (or failed to occur) since the
receipt of such determination letter to cause a loss of the Retirement Plan's
qualification and tax-exempt status.
D. All material required reports for the Plans (including IRS Form
5500) have been appropriately filed. All material descriptions (including
Summary Plan Descriptions and Summary Annual Reports) have been appropriately
distributed except where any failure to so distribute would not have a
Material Adverse Effect on Regent.
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 due to the Plans on or before the Closing
Date will be made prior to the Closing Date by Regent and each Subsidiary and
except as specified in the Regent Disclosure Letter, no Retirement Plans are
currently or shall be unfunded or underfunded as of the Closing Date.
G. 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 material liability to Regent have occurred and no reportable events
(as defined in Section 4043 of ERISA) have occurred.
H. 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, Regent, any Subsidiary or any fiduciaries (as defined in Section
3(21) of ERISA) of the Plans (including any action, suit, grievance,
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arbitration or other manner of litigation, or claim regarding conduct which
allegedly interferes with the attainment of rights under a Plan).
I. Except as set forth in the Regent Disclosure Letter, neither
Regent nor any Subsidiary is required to contribute to any "multiemployer
plans" (as defined in Section 3(37) of ERISA) and neither Regent nor any
Subsidiary has or will incur any material withdrawal liability with respect
to any such plans.
J. Except as set forth in the Regent Disclosure Letter, neither
Regent nor any 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).
K. Regent and each Subsidiary has complied with COBRA in all
material respects.
L. All insurance premiums (including premiums to the Pension
Benefit Guaranty Corporation) due and payable relating to the Plans have been
paid in full in a timely manner.
M. 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 Regent that has not been satisfied
in full.
N. None of Regent or its Subsidiaries has any post-employment
plans required to be reported under FAS 106.
3.12 LABOR RELATIONS.
A. To Regent's knowledge, Regent and all Regent Subsidiaries (i)
are in compliance in all material respects with all federal and state laws
respecting employment and employment practices, terms and conditions of
employment, wages and hours, and (ii) are not engaged in any unfair labor or
unlawful employment practice, which would have a Material Adverse Effect on
Regent. Except as set forth in the Regent Disclosure Letter, there is no (i)
unlawful employment practice discrimination charge involving Regent or any
Regent Subsidiary pending before
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the Equal Employment Opportunity Commission ("EEOC"), any EEOC recognized
state "referral agency" or any other governmental agency, (ii) unfair labor
practice charge or complaint against Regent or any Regent Subsidiary pending
before the National Labor Relations Board ("NLRB"), (iii) labor strike,
dispute, slowdown or stoppage actually pending or, to the knowledge of
Regent, threatened against or involving or affecting Regent or any Regent
Subsidiary, and no NLRB representation question exists respecting any of
their employees, or (iv) collective bargaining agreement that is binding on
Regent or any Regent Subsidiary.
B. Except as disclosed in the Regent Disclosure Letter, there is
no employment agreement, employee benefit or incentive compensation plan or
program or severance policy or program to which Regent or any 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.
3.13 REGENT MATERIAL CONTRACTS. Except as set forth in the Regent
Disclosure Letter or disclosed in the Regent Financial Statements or any
other section or provision hereof, or as may be entered into or incurred in
the ordinary course of business or consistent with industry practice, as of
the date hereof, neither Regent nor any Regent Subsidiary is a party to any
of the following:
(1) any bonds, debentures, notes, mortgages, indentures, letters
of credit, guarantees or similar agreements to which Regent or any Regent
Subsidiary is an obligor or by which any of Regent's or Regent's
Subsidiaries, properties or assets are bound;
(2) any agreement for the lease of personal property to or from
any Person providing for lease payments in excess of $25,000 during any
twelve-month period;
(3) any agreement for the purchase or sale of supplies, products,
or other personal property, or the
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furnishing or receipt of services, which involve consideration in excess of
$25,000 during any twelve- month period;
(4) any agreement concerning a partnership or joint venture;
(5) any agreement under which the consequences of a default or
termination could have a Material Adverse Effect on Regent;
(6) any collective bargaining agreement or other agreement with
any labor union or labor organization;
(7) any agreement, contract or commitment containing any covenant
materially limiting the freedom of Regent or any Regent Subsidiary to
engage in any line of business in any geographic area or to compete with
any Person, other than governmental restrictions applicable to the
broadcasting industry generally;
(8) except for employment agreements, any agreement for loans or
the provision, purchase or sale of goods, services or property, or other
contract or commitment with any director, officer, shareholder or employee
of Regent or any Regent Subsidiary involving payments in excess of $25,000;
(9) any contract or agreement requiring Regent to register its
capital stock or securities under Securities Laws;
(10) any management, consulting, employment, severance or similar
agreement requiring the payment of compensation in excess of $150,000
annually, other than agreements with on-air talent;
(11) any agreement with any national sales representatives; or
(12) to the extent not already included pursuant to clauses (1)
through (11) above, any agreement for the purchase or sale of any assets,
properties or rights for a price in excess of $100,000 in the aggregate,
whether or not
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in the ordinary course of business, other than sales of broadcast time in
the ordinary course of business.
3.14 GOOD STANDING OF CONTRACTS. The Regent Material Contracts are, to
Regent's knowledge, valid, binding and enforceable against each party thereto
in accordance with their respective terms subject to applicable bankruptcy,
insolvency and other similar laws affecting the enforcement of creditors'
rights generally, general equitable principles and the discretion of courts
in granting equitable remedies. Regent has made available to Acquiror true
and correct copies of all of the Regent Material Contracts. To the knowledge
of Regent, no event or condition has occurred or exists, or is alleged by any
of the other parties thereto to have occurred or existed, which constitutes,
or with lapse of time or giving of notice or both might constitute, a default
or breach under any of the Regent Material Contracts to which Regent or any
Regent Subsidiary is a party, which default or breach is reasonably likely to
result in a Material Adverse Effect on Regent; PROVIDED, HOWEVER, that Regent
shall make this representation and warranty hereunder only with respect to
events or conditions prior to the TBA Effective Date.
3.15 MAJOR CUSTOMERS. To Regent's knowledge, neither Regent nor any
Regent Subsidiary is engaged in any material dispute with any customers whom
Regent or any Regent Subsidiary billed on a net cash basis in the aggregate
more than $100,000 during the 12-month period ended December 31, 1995, except
as may be set forth in the Regent Disclosure Letter; PROVIDED, HOWEVER, that
Regent shall make this representation and warranty hereunder only with
respect to events or conditions prior to the TBA Effective Date.
3.16 ABSENCE OF CERTAIN CHANGES AND EVENTS. Except as set forth or
disclosed in the Regent Disclosure Letter, the Regent Financial Statements or
in any section or provision of this Agreement or as otherwise contemplated by
this Agreement, since July 1, 1996, to the date of this Agreement, Regent has
conducted its business only in the ordinary course, and has not:
(1) Suffered any casualty loss or destruction which is not
covered by insurance, which would have a Material Adverse Effect on Regent;
(2) Made any declaration, setting aside or payment of any
dividend or other distribution of assets (whether in
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cash, stock or property) with respect to the capital stock of Regent or any
direct or indirect redemption, purchase or other acquisition of such stock;
PROVIDED that Regent may declare and pay dividends on any outstanding
Regent Preferred Stock at or prior to the Closing;
(3) Materially increased the aggregate compensation payable or to
become payable to employees of Regent or any Regent Subsidiary or
materially increased any bonus, insurance, pension or other employee
benefit plan, payment or arrangement for such employees or entered into or
amended any employment, consulting, severance or similar agreement other
than increases and bonuses in the ordinary course of Regent's business or
consistent with industry practice;
(4) Paid, discharged or satisfied any claim, liability or
obligation which had a Material Adverse Effect on Regent;
(5) Sold, transferred or otherwise disposed of any of its assets
which had a Material Adverse Effect on Regent;
(6) Entered into any commitment or transaction which had a
Material Adverse Effect on Regent; or
(7) Agreed in writing, or otherwise, to take any action described
in this Section 3.16.
3.17 INSURANCE. The Regent Disclosure Letter sets forth as of the date
hereof all material insurance policies, including property, casualty,
liability and other insurance maintained with respect to the assets or
businesses of Regent and the Regent Subsidiaries. To the knowledge of
Regent, all such policies and bonds are legal, valid and enforceable and in
full force and effect and Regent is not in breach or default in any material
respect (including with respect to the payment of premiums or the giving of
notices) and no event has occurred which, with notice or the lapse of time,
would constitute such a material breach or default, or permit termination,
modification or acceleration under the policy by the insurer.
3.18 TAX MATTERS. Each member of the consolidated group of which Regent
is a member or has ever been a member (the "Group") has filed or caused to be
filed all federal and material state
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income tax returns required to be filed and in which the filing included or
was required to include Regent ("Income Tax Returns"), and all such Income
Tax Returns were correct and complete in all material respects. Each member
of the Group has filed or caused to be filed all other material tax returns,
including franchise, gross receipts, payroll, sales, use, withholding,
occupancy, excise, real and personal property, and employment, required to be
filed in which the filing included or was required to include Regent or any
Regent Subsidiary (the "Other Tax Returns") and all such Other Tax Returns
are correct and complete in all material respects, except for inaccuracies or
omissions which do not and will not have a Material Adverse Effect on Regent.
With respect to the Income Tax Returns and the Other Tax Returns, each
member of the Group has paid, or made adequate provisions for the payment of,
all material taxes, interest payments, penalties and additions shown on such
returns to be owed by it. The Income Tax Returns of Regent have not been
audited during its existence, and, to the knowledge of Regent, except as set
forth in the Regent Disclosure Letter, no audit, examination or investigation
is threatened against Regent by any taxing authority. No unpaid tax
deficiencies or additional liabilities have been proposed by any governmental
representative which have not been resolved as set forth in the Regent
Disclosure Letter; and no agreements for the extension of time for the
assessment of any amounts of tax have been entered into at the present time
by or on behalf of any member of the Group.
3.19 INFORMATION SUPPLIED FOR REGISTRATION STATEMENT. The information
supplied or to be supplied by Regent with respect to Regent, its officers,
directors and affiliates specifically to be included in the Registration
Statement (the "Regent Information") on Form S-4 relating to the shares of
Acquiror Common Stock and the Warrants to be issued in connection with the
Merger (the "Registration Statement") will not, at the time it becomes
effective and at the Effective Time, as such Registration Statement is then
amended or supplemented, 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.
3.20 BROKERS' AND FINDERS' FEES. Except as set forth in the Regent
Disclosure Letter, neither Regent, any Regent Subsidiary nor any of their
respective officers, directors, stockholders or employees, has employed any
broker or finder or incurred any
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liability for fees or commissions payable to any broker or finder in
connection with the negotiations relating to or the transactions contemplated
by this Agreement.
3.21 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 Regent is
applicable to the Merger or the other transactions contemplated hereby.
3.22 TAX REQUIREMENTS. Regent (a) believes that items C and D in the
definition of "Tax Continuity Level" will together exceed 50%, (b) believes
that in the absence of a New Merger Event, it will be able to provide the tax
representations required by it pursuant to Section 5.14, and (c) has
consulted with its tax counsel and received assurance that, based upon the
representations to be provided by Regent (substantially in the form of
Exhibit D), Acquiror (substantially in the form of Exhibit E), and (to the
extent necessary to prevent a New Merger Event) shareholders of Regent
(substantially in the form of Exhibit C), such counsel will (in the absence
of a New Merger Event) be able to provide on the Closing Date the opinions
required by Section 6.3(C).
Section 3.23 STATIONS TO BE ACQUIRED. The Schedules to the Regent
Disclosure Letter marked with a "B" set forth for the stations to be acquired
under the purchase and option agreements listed on Schedule 5.3 to the Regent
Disclosure Letter (the "To Be Acquired Stations") the disclosure information
required pursuant to Sections 3.1, 3.3, 3.4(B) and (C) and 3.6 to 3.18 with
respect to Regent's existing Stations. Regent hereby represents and warrants
that the representations and warranties set forth in such sections are true
and correct or will be true and correct upon the consummation of the
purchases contemplated by such purchase and option agreements. Regent
represents that it has made available the written information and documents
in its possession in connection with the To Be Acquired Stations and hereby
agrees to make available upon request all information and documentation
obtained about the To Be Acquired Stations hereafter.
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SECTION 4
REPRESENTATIONS AND WARRANTIES OF ACQUIROR
With and subject to such exceptions as are set forth in a letter
delivered by Acquiror to Regent prior to or simultaneously with Acquiror's
execution and delivery of this Agreement (the "Acquiror Disclosure Letter"),
Acquiror hereby represents and warrants to Regent as follows:
4.1 CORPORATE STANDING. Acquiror is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and has all requisite power and authority to own, lease and
operate its properties and to carry on its business as now being conducted.
Acquiror and each Acquiror Subsidiary are duly qualified and in good standing
to do business in each jurisdiction in which the ownership or leasing of
their properties make such qualification necessary, except where the failure
to so qualify would not have a Material Adverse Effect on Acquiror. Acquiror
has furnished to Regent true and accurate copies of the certificate or
articles of incorporation and bylaws of Acquiror, and all amendments thereto,
through the date hereof. Such certificate of incorporation and bylaws are in
full force and effect and no other organizational documents are applicable to
or binding upon acquiror.
4.2 POWER AND AUTHORITY OF ACQUIROR; AUTHORIZATION. Acquiror has all
requisite corporate power and authority to enter into and to consummate the
transactions contemplated by this Agreement. The execution and delivery of
this Agreement and the Plan and the consummation of the transactions
contemplated by both documents have been duly authorized by all necessary
corporate action on the part of Acquiror. This Agreement has been duly
executed and delivered by Acquiror, and constitutes the legal, valid and
binding obligation of Acquiror enforceable in accordance with its terms. As
of the Closing Date, the Plan will be duly executed and delivered by Acquiror
and will constitute the legal, valid and binding obligation of Acquiror
enforceable against Acquiror in accordance with its terms subject to
applicable bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors' rights generally, general equitable principles and
the discretion of courts in granting equitable remedies.
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4.3 ABSENCE OF RESTRICTIONS AND CONFLICT. Subject to Acquiror's
receipt of the consents set forth on Schedule 4.3 to the Acquiror Disclosure
Letter, the execution, delivery and performance of this Agreement, the
consummation of the Merger and the other transactions contemplated by this
Agreement, and the fulfillment of and compliance with the terms and
conditions of this Agreement do not and will not, with the passing of time or
the giving of notice or both, violate or conflict with, constitute a breach
of or default under, result in the loss of any material benefit under, or
permit the acceleration of any obligation under, (i) any term or provision of
the articles or certificate of incorporation or bylaws of Acquiror or any
Acquiror Subsidiary, (ii) any judgment, decree or order of any court or
Governmental Authority or agency to which Acquiror or any Acquiror Subsidiary
is a party or by which Acquiror, any Acquiror Subsidiary or any of their
respective properties are bound, or (iii) any statute, law, regulation or
rule applicable to Acquiror, or any of its Subsidiaries, so as to have, in
the case of subsections (ii) through (iii) above, a Material Adverse Effect
on Acquiror. Except for compliance with the applicable requirements of the
FCC, the HSR Act, the Securities Laws and filing and recordation of the
Delaware Certificate of Merger as required by the DGCL, no consent, approval,
order or authorization of, or registration, declaration or filing with, any
government agency or public or regulatory unit, agency, body or authority
with respect to Acquiror or any Acquiror Subsidiary is required in connection
with the execution, delivery or performance of this Agreement by Acquiror or
the consummation of the transactions contemplated by this Agreement by
Acquiror, the failure to obtain which would have a Material Adverse Effect on
Acquiror.
4.4 CAPITALIZATION OF ACQUIROR. The number of authorized, issued and
outstanding shares of capital stock (both common and preferred) of Acquiror
and all outstanding subscriptions, options, warrants, calls, convertible debt
and other securities and any other rights or agreements to acquire any
capital stock or options, warrants, convertible debt or other securities of
Acquiror as of the date hereof are set forth in the Acquiror Disclosure
Letter and the rights and benefits with respect thereto are set forth in
Acquiror's certificate or articles of incorporation, as amended, and no other
documents except those set forth in the Acquiror Disclosure Letter. All of
such issued and outstanding shares of capital stock of Acquiror are validly
issued, and, except as set out in the Acquiror Disclosure Letter,
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are fully paid, nonassessable and free of preemptive rights. The shares of
Acquiror Common Stock to be issued in connection with the Merger will be
validly issued, fully paid, nonassessable and free of preemptive rights.
4.5 ACQUIROR COMMISSION REPORTS AND FINANCIAL STATEMENTS. Acquiror has
heretofore made available to Regent (i) Acquiror's annual report on Form 10-K
for the year ended December 31, 1995, including all exhibits thereto and
items incorporated therein by reference, (ii) Acquiror's quarterly report on
Form 10-Q for the quarter ended June 30, 1996, including all exhibits thereto
and items incorporated therein by reference, (iii) the proxy statement
relating to Acquiror's most recent annual meeting of stockholders, and (iv)
all current reports on Form 8-K filed by Acquiror with the SEC since December
31, 1995, including all exhibits thereto and items incorporated therein by
reference (items (i) through (iv) in this sentence being referred to herein
collectively as the "Acquiror Commission Reports"). Until the Effective
Time, Acquiror will promptly make available to Regent all reports that it
files with the SEC. As of their respective dates, the Acquiror Commission
Reports did not, and all reports filed with the SEC after the date hereof
will not, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Since December 31, 1995, Acquiror has filed all forms,
reports and documents with the SEC required to be filed by it pursuant to the
Securities Laws each of which complied as to form, at the time such form,
document or report was filed, in all material respects with the applicable
requirements of the Securities Laws, including, but not limited to,
Regulation S-X.
The consolidated balance sheets of Acquiror and Acquiror Subsidiaries as
of December 31, 1994 and December 31, 1995 and the related statements of
operations, changes in shareholders' equity and cash flows for the year ended
December 31, 1995, together with the notes thereto, are included in
Acquiror's annual reports on Form 10-K for the fiscal years ended December
31, 1994 and December 31, 1995, respectively, as filed with the SEC, and the
unaudited consolidated balance sheets of Acquiror and Acquiror Subsidiaries
as of March 31, 1996 and June 30, 1996, and the related unaudited statements
of operations, changes in shareholders' equity and cash flows for the periods
then ended are included in Acquiror's quarterly
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reports on Form 10-Q for the quarters ended March 31, 1996 and June 30, 1996,
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 Acquiror and consolidated Acquiror
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). Acquiror and Acquiror Subsidiaries do not have any
material liabilities or material obligations, except those disclosed in the
Acquiror Financial Statements, those entered into in the ordinary course of
business since June 30, 1996, those disclosed or permitted by other sections
or provisions of this Agreement or the Acquiror Disclosure Letter and those
incurred in conjunction with the transactions contemplated hereby.
4.6 INFORMATION SUPPLIED FOR REGISTRATION STATEMENT. The information
included or incorporated by reference in the Registration Statement (other
than the Regent Information), will not, at the time it becomes effective and
at the Effective Time, as such Registration Statement is then amended or
supplemented, 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. The Registration Statement will comply as to
form with the applicable Securities Laws.
4.7 QUALIFICATION. Acquiror has no knowledge of any facts that would,
without giving effect to any potential waiver, under present law (including
the Communications Act of 1934, as amended) and present rules, regulations
and written policies of the FCC, disqualify or prevent Acquiror from
consummating the Merger at Closing, and Acquiror will not take or fail to
take any action which Acquiror knows will cause such disqualification or
prevention. To the knowledge of Acquiror, there are no pending FCC
inquiries, complaints or proceedings which are likely to impair Acquiror's
ability to consummate the transactions contemplated by this Agreement with
respect to any other radio stations owned or controlled by Acquiror or under
common control with Acquiror or otherwise.
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4.8 BROKERS' AND FINDERS' FEES. Except as set forth in Acquiror's
Disclosure Letter, neither Acquiror, the Acquiror Subsidiaries nor any of
their officers, directors or employees has employed any broker or finder or
incurred any liability for fees or commissions payable to any broker or
finder in connection with the negotiations relating to or the transactions
contemplated by this Agreement.
4.9 TAX REQUIREMENTS. Acquiror (a) believes that in the absence of a
New Merger Event, it will be able to provide the tax representations required
by it pursuant to Section 5.14, and (b) has consulted with its tax counsel
and received assurance that, based upon the representations to be provided by
Regent (substantially in the form of Exhibit D), Acquiror (substantially in
the form of Exhibit E), and (to the extent necessary to prevent a New Merger
Event) shareholders of Regent (substantially in the form of Exhibit C), such
counsel will (in the absence of a New Merger Event) be able to provide on the
Closing Date the opinions required by Section 6.2(F).
SECTION 5
COVENANTS
5.1 COOPERATION. Each of Acquiror and Regent shall proceed
expeditiously and cooperate fully in making application for all necessary
regulatory approvals, in the procurement of any other consents and approvals,
and in the taking of any other action and the satisfaction of all other
requirements prescribed by law or otherwise, necessary for consummation of
the Merger on the terms provided herein and in the Plan. Each of Acquiror
and Regent shall use all commercially reasonable efforts (i) to take, or
cause to be taken, all actions necessary to comply promptly with all legal
requirements which may be imposed on such party with respect to the Merger
and to consummate the transactions contemplated by this Agreement and the
Plan and (ii) to obtain (and to cooperate with the other party to obtain) any
consent, authorization, order or approval of, or any exemption by, any
governmental entity or any other public or private third party which is
required to be obtained or made by such party in connection with the Merger
and the transactions contemplated by this Agreement and the Plan.
Notwithstanding any provision of this Agreement to the contrary, each of
Regent and Acquiror shall obtain all consents required by contracts with
third parties, as
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disclosed in the Regent Disclosure Letter or the Acquiror Disclosure Letter,
respectively, prior to the TBA Effective Date except in the case of Regent,
as specified in Section 5.21, and except for the consents listed in items 1
and 2 on Schedule 3.3A of the Regent Disclosure Letter, which consents must
be obtained on or prior to the date hereof. Regent and Acquiror shall not,
and shall not permit any of their respective subsidiaries to, take any action
that would, or that could reasonably be expected to, result in (i) any of the
representations and warranties of such party set forth in this Agreement that
are qualified as to materiality becoming untrue, (ii) any of such
representations and warranties that are not so qualified becoming untrue in
any material respect or (iii) any of the conditions to the Merger set forth
in Section 6 not being satisfied.
5.2 FCC CONSENT AND HSR FILING.
A. Acquiror and Regent shall each cooperate and use their
respective best efforts to prepare and file with the FCC or cause to be
prepared and filed with the FCC, within five business days after execution of
this Agreement, all requisite applications, together with related
information, data and exhibits, necessary to request issuance of an order by
the FCC granting said application (the "Application"). Each party to this
Agreement will bear responsibility for the preparation of its respective
portion of the Application. The parties agree to prosecute the Application
and file any amendments or additional information requested by the FCC in
good faith and with due diligence.
B. Regent and Acquiror shall each make the necessary filings under
the HSR Act with respect to the Merger and the other transactions
contemplated by this Agreement within ten business days of the date hereof
and shall supply, as promptly as practicable to the appropriate Governmental
Authority any additional information and documentary material that may be
requested pursuant to the HSR Act.
C. In the event that after the date hereof the Acquiror shall
acquire an interest in a radio station or other media property (or enter into
a time brokerage or joint sales agreement or similar arrangement with respect
to a radio station or other media property) ("Acquisition Event") which
operates in the same market or has a relevant signal contour overlap with
radio stations or other media properties in (i) Kansas City, MO;
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(ii) Charleston, SC; (iii) Las Vegas, NV; (iv) Louisville, KY; and (v) Salt
Lake City, UT; and such Acquisition Event has the effect (whether direct or
indirect, intended or unintended) of materially impairing the likelihood that
the conditions specified in Sections 6.1(A) and (B) and 6.2(C) will be
satisfied, Acquiror shall take such actions as shall be necessary to remove
any such impediment, including any divestiture or other arrangement that may
be necessary in connection therewith.
D. The filing fees payable in connection with the foregoing
filings shall be paid one-half by Acquiror and one-half by Regent.
5.3 CONDUCT OF BUSINESS BY REGENT. From the date hereof to the
Effective Time, Regent will, subject to the provisions of the TBA and except
(i) for actions or inactions taken by Regent which are reasonably
contemplated by the TBA, (ii) as required in connection with the Merger and
the other transactions contemplated by this Agreement, (iii) as otherwise
disclosed in the Regent Disclosure Letter or under the provisions of this
Agreement or consented to in writing by Acquiror and (iv) as permitted under
this Agreement, including under Section 5.22:
A. Carry on its business in the ordinary course in substantially
the same manner as heretofore conducted and not engage in any new line of
business, make material changes to the operation of its business or enter
into any agreement, transaction or activity or make any commitment except
those in the ordinary course of business and not otherwise prohibited under
this Section 5.3;
B. Neither change nor amend (or propose to amend) its certificate
of incorporation or bylaws, without the prior written consent of Acquiror;
C. Except in connection with the KWNR Purchase or any stock
dividend made pursuant to paragraph D below, not issue, sell or grant
options, warrants or rights to purchase or subscribe to, or enter into any
arrangement or contract with respect to the issuance or sale of any of the
capital stock of Regent or rights or obligations convertible into or
exchangeable for any shares of the capital stock of Regent and, except as
contemplated by Section 2.9, not alter the terms of any presently outstanding
Options or make any changes (by split-up, combination, reorganization or
otherwise) in the capital structure of Regent;
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D. Not declare, pay or set aside for payment any dividend or other
distribution in respect of the capital stock or other equity securities of
Regent and not, directly or indirectly, redeem, purchase or otherwise acquire
any shares of the capital stock or other securities of Regent or rights or
obligations convertible into or exchangeable for any shares of the capital
stock or other securities of Regent or obligations convertible into such, or
any options, warrants or other rights to purchase or subscribe to any of the
foregoing, provided that Regent may either (i) declare and pay cash
dividends, including accrued dividends, on any outstanding Regent Preferred
Stock at or prior to the Closing in accordance with the certificate of
designation for such preferred stock or (ii) in lieu thereof, declare and pay
dividends on such preferred stock in additional shares of capital stock of
Regent (and make the appropriate amendments to Regent's Preferred Stock
certificate of designations and charter documents to allow such a stock
dividend);
E. Not acquire or enter into an agreement to acquire, by merger,
consolidation or purchase of stock or assets, any business or entity except
pursuant to the purchase, sale and option agreements set forth on Schedule
5.3A to the Regent Disclosure Letter;
F. Use its reasonable efforts to preserve intact the corporate
existence, goodwill and business organization of Regent, to keep the officers
and employees of Regent available to Acquiror and to preserve the
relationships of Regent, with customers, suppliers and others having business
relations with Regent;
G. Except in connection with its rights and obligations under the
purchase, sale and option agreements set forth on Schedule 5.3A to the Regent
Disclosure Letter, not (i) create, incur or assume any long term debt
(including obligations in respect of capital leases which individually
involve annual payments in excess of $50,000 and $250,000 in the aggregate),
except for (x) drawdowns up to the maximum availability under the revolving
credit facility under the Credit Agreement consistent with past practices and
(y) borrowings under the BFI Credit Line, (ii) except in the ordinary course
of business consistent with past practices under existing lines of credit,
create, incur or assume any short-term debt for borrowed money, (iii) pay or
retire any long term debt other than (x) for
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scheduled, amortized debt repayments, (y) payments of interest on any
indebtedness whenever it is due and (z) with the proceeds of the sales of
Stations listed on Exhibit K or the exercise of the Options, (iv) assume,
guarantee, endorse or otherwise become liable or responsible (whether
directly, contingently or otherwise) for the obligations of any other Person,
except in the ordinary course of business and consistent with industry
practice, (v) make any loans or advances to any other Person, except in the
ordinary course of business and consistent with industry practice, (vi) make
any capital contributions to, or investments in, any Person other than a
Regent Subsidiary, except in the ordinary course of business and consistent
with industry practices with respect to investments, or (vii) make any
capital expenditure involving in excess of $250,000 in the case of any single
expenditure or $250,000 in the case of all capital expenditures; PROVIDED,
HOWEVER, that notwithstanding the foregoing, between the Determination Date
and the Closing Date Regent shall not incur any additional Regent Liabilities
(including long term or short term debt) other than the payment of accrued
dividends on Regent Preferred Stock and the payment of Regent Expenses, in
each case to the extent included in the calculation of Regent Liabilities on
the Determination Date without the prior consent of Acquiror;
H. Not enter into, modify or extend in any manner the terms of any
employment, severance or similar agreements with officers and directors of
Regent and its Subsidiaries nor grant any increase in the compensation of
officers, directors or employees of Regent and its Subsidiaries, whether now
or hereafter payable, including any such increase pursuant to any option,
bonus, stock purchase, pension, profit-sharing, deferred compensation,
retirement or other plan, arrangement, contract or commitment other than
increases in the ordinary course of business consistent with past practices
and consistent with industry practices; PROVIDED, HOWEVER, that Regent shall
be permitted hereunder to (i) hire new employees for the Stations in the
ordinary course of business except that (x) the hiring of any employee with
an aggregate annual compensation in excess of $50,000 shall require the prior
approval of Acquiror and (y) the annual aggregate compensation for all such
new employees shall not exceed $200,000 and (ii) grant increases in the
annual compensation of employees at not more than four percent, the effect of
which would not materially increase the aggregate compensation payable or to
become payable to employees of Regent or Regent Subsidiaries;
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I. Perform in all material respects all of its obligations under
all Regent Material Contracts (except those being contested in good faith)
and not enter into, assume or amend any contract or commitment that would be
a Regent Material Contract other than contracts to provide services entered
into in the ordinary course of business consistent with past practices;
J. Use its reasonable efforts to maintain in full force and effect
and in the same amounts policies of insurance comparable in amount and scope
of coverage to that now maintained by Regent;
K. Use its reasonable efforts to continue to collect its accounts
receivable in the ordinary course of business and consistent with past
practices;
L. Not adopt any new employee benefit plan or make any change in
or to any existing Plans other than any such change that is permitted under
this Agreement, required by law, in the opinion of counsel is necessary or
advisable to maintain the tax qualified status of any such plan, or would not
materially increase, in the aggregate, the employee benefit plan liabilities
of Regent and the Subsidiaries, taken as a whole;
M. Not sell, lease or otherwise dispose of any of its assets
(including capital stock of Subsidiaries) or acquire any business or assets
except in connection with the purchase, sale and option agreements set forth
on Schedule 5.3A to the Regent Disclosure Letter or in the ordinary course of
business (any sale, lease or other disposition for an amount exceeding
$50,000 individually or $250,000 in the aggregate shall be deemed not in the
ordinary course of business);
N. Not mortgage or otherwise encumber or subject to any Lien any
material amount of properties or assets owned by Regent or any of the
Subsidiaries as of the date of this Agreement except for such of the
foregoing as are in the normal course of business;
O. Not make any material change to its accounting (including tax
accounting) methods or principles, except as may be required by GAAP or the
Internal Revenue Service;
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P. Not make any material tax election or settle or compromise any
material tax liability for an amount greater than reflected on Regent's
Financial Statements;
Q. Except as to liabilities accrued on the books of Regent as of
the date of this Agreement, not pay or agree to pay in settlement or
compromise of any suits or claims of liability against Regent, its directors,
officers, employees or agents, more than an aggregate of $100,000 for all
such suits and claims;
R. Not enter into any agreement providing the acceleration or
payment or performance or other consequence as a result of a change in
control of Regent;
S. Except in connection with the purchase, sale and option
agreements set forth on Schedule 5.3A to the Regent Disclosure Letter, not
purchase any radio stations, enter into any local marketing arrangements,
joint sales agreement or similar agreements; or
T. Commit to any of the foregoing.
Notwithstanding any provision of this Section 5.3, (i) nothing in this
Section 5.3 shall prohibit Regent from paying any Regent Expenses and
incurring indebtedness in connection therewith and (ii) no breach of this
Section 5.3 shall arise as a result of any action or inaction of Citicasters
(or any successor) as the broker of the Stations under the TBA.
5.4 INSPECTION AND ACCESS TO INFORMATION.
A. Between the date of this Agreement and the Effective Time, each
party hereto will provide each other party and its accountants, counsel and
other authorized representatives full access, during reasonable business
hours and under reasonable circumstances to any and all of its premises,
properties, contracts, commitments, books, records and other information
(including tax returns filed and those in preparation) and will cause their
respective officers to furnish to the other party and its authorized
representatives any and all financial, technical and operating data and other
information pertaining to its business, as each other party shall from time
to time reasonably request.
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B. All non-public information obtained by Acquiror or Regent or
any of their representatives pursuant to this Agreement (including in
connection with any environmental assessments conducted pursuant to Section
5.14) or in connection with the matters contemplated hereby concerning the
business, operations or affairs of the other will be kept confidential and
will not be used for any purpose other than the consummation of the
transactions contemplated hereby, or be disclosed to any other Person, except
for such disclosure to its employees, agents and representatives who have a
need to know the same and who have been advised of the confidential nature of
such information and who agree to abide by the terms hereof and except for
such disclosure as may be required by applicable law, court order or
governmental agency request. In the event this Agreement is terminated in
accordance with its terms, any non-public information furnished by any party
to any other party hereto will be promptly returned upon the written request
of the party seeking such return.
5.5 REGISTRATION STATEMENT.
A. Acquiror shall prepare and file with the SEC as soon as is
reasonably practicable the Registration Statement and shall use all
reasonable efforts to have the Registration Statement declared effective by
the SEC as promptly as practicable after such filing. Regent shall cooperate
with Acquiror to make such filing. Acquiror also shall take any action
required to be taken under state blue sky or securities laws in connection
with the issuance of the Acquiror Common Stock in connection with the Merger.
Acquiror and Regent will furnish each other with all information concerning
themselves, their subsidiaries, directors, officers and stockholders and such
other matters as may be necessary or advisable for the Registration
Statement, the Stock Market Additional Shares Notification, filings under
applicable blue sky laws, and any other statement or application made by or
on behalf of Acquiror or Regent to any governmental body in connection with
the Merger and the other transactions contemplated by this Agreement.
5.6 REGENT STOCKHOLDER MATTERS. Regent, through its Board of
Directors, shall recommend to its stockholders approval of this Agreement and
the transactions contemplated by this Agreement. Simultaneously with the
execution of the Agreement, Regent shall deliver to Acquiror irrevocable
written consents from the holders of at least a majority of the shares of
Regent
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Stock outstanding and entitled to consent to the approval and adoption of the
Agreement and consummation of the Merger and other transactions contemplated
hereby substantially in the form of Exhibit F, and Regent shall take all
actions (including obtaining new consents if necessary) prior to the Closing
Date necessary to keep such consents in full force and effect under the DGCL.
As promptly as practicable after the date of this Agreement and in any event
within any time period specified by the DGCL, Regent shall send any notice or
other documents required by the DGCL with respect to the Merger to any holder
of Regent Stock that has not already received such notice or other documents.
5.7 STOCK MARKET ADDITIONAL SHARES NOTIFICATION. Acquiror will file an
additional shares notification with NASDAQ to approve for quotation on NASDAQ
the shares of Acquiror Common Stock to be issued in connection with the
Merger and upon exercise of the Warrants (the "Stock Market Additional Shares
Notification") and the Warrants. Acquiror shall exercise reasonable good
faith efforts to cause such shares of Acquiror Common Stock and Warrants to
be approved for quotation on NASDAQ prior to the Effective Time.
5.8 REGENT AFFILIATES. Regent shall deliver to Acquiror a letter
identifying all Persons who are, at the time the Merger is submitted to the
stockholders of Regent for approval, "affiliates" of Regent for purposes of
Rule 145 under the Securities Act (the "Regent Affiliates") . Regent shall
cause each Person who is identified as a Regent Affiliate in such letter to
deliver to Acquiror on or prior to the Effective Time a written agreement
substantially in the form attached hereto as Exhibit G. Acquiror shall be
entitled to place legends on any certificates of Acquiror Common Stock issued
to such Regent Affiliates to restrict transfer of such shares as set forth
above; PROVIDED, HOWEVER, such legends shall be removed at the request of a
Regent Affiliate not earlier than two years after the Closing Date.
5.9 PUBLIC ANNOUNCEMENTS. The timing and content of all announcements
regarding any aspect of this Agreement or the Merger to the financial
community, government agencies, employees or the general public shall be
mutually agreed upon in advance (unless Acquiror or Regent is advised by
counsel that any such announcement or other disclosure not mutually agreed
upon in advance is required to be made by law or applicable rule of
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NASDAQ and then only after making a reasonable attempt to comply with the
provisions of this Section 5.9).
5.10 FINANCIAL STATEMENTS AND SEC REPORTS. Prior to the Effective
Time, each party hereto shall deliver to the other, as soon as available but
in no event later than forty-five days after the end of each fiscal quarter,
a consolidated balance sheet as of the last day of such fiscal period and the
consolidated statements of income, stockholder's equity and cash flows of
such party and its subsidiaries for the fiscal period then ended prepared in
accordance with generally accepted accounting principles with such exceptions
as are noted on such financial statements, and in the case of Acquiror, the
requirements of Form 10-Q (or Form 10-K as the case may be) under the
Exchange Act. Prior to the Effective Time, Acquiror shall deliver to Regent
as soon as available all forms, reports and other documents filed by Acquiror
with the SEC. Prior to the Effective Time, Regent also shall deliver to
Acquiror, as soon as available but in no event later than thirty days after
the end of each month, an unaudited balance sheet as of the last day of such
month and the related statements of income of Regent for the year-to-date
period then ended.
5.11 RULE 144 INFORMATION. Acquiror (or any successor thereto) shall
comply with the public information requirements set forth in Rule 144(c)
under the Securities Act for a period of three (3) years following the
Closing Date or such shorter period as may be necessary until all shares of
Acquiror Common Stock issued to affiliates of Regent have become freely
transferable or are no longer held by such affiliates.
5.12 INDEMNIFICATION.
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 Regent and the Regent Subsidiaries
("Indemnified Parties") from and against any and all claims, actions, suits,
proceedings or investigations (as used in this Section A "Claim" or "Claims")
arising out of or in connection with activities in such capacity, or on
behalf of, or at the request of, Regent, Regent 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,
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all rights to indemnification in respect of such Claims shall continue until
the final disposition of any and all such Claims.
B. Acquiror shall cause the Surviving Corporation to keep in
effect provisions in its certificate of incorporation, as amended, and bylaws
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 DGCL, 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 5.12. The provisions of this
Section 5.12 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 Regent or any Regent Subsidiary (and their heirs and
representatives).
5.13 EMPLOYEE BENEFITS.
A. Acquiror shall cause the Surviving Corporation, each Regent
Subsidiary and each successor thereto (if any) to provide the same
compensation and benefit arrangements, plans and programs to current, former
and retired salaried employees of Regent, each Regent Subsidiary and their
respective predecessors as those provided by Acquiror to Acquiror's similarly
situated current, former and retired salaried employees; PROVIDED, HOWEVER,
that nothing in this Agreement shall preclude or restrict the Surviving
Corporation from terminating the employment of any employee.
B. Acquiror shall cause any salaried employee of Regent or any
Regent Subsidiary that becomes a participant in any employee benefit plan,
practice or policy of Acquiror, any of its affiliates, the Surviving
Corporation or any of their respective
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successors, to be given credit under such plan, practice or policy for all
service prior to the Effective Time with Regent and Regent's 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
and similar agreements set forth in the Regent Disclosure Letter that were in
effect immediately prior to the date hereof.
D. At least 30 days prior to the Effective Time, the board of
directors of Regent shall have adopted a resolution ceasing further
contributions and benefit accruals under each tax-qualified retirement plan
providing for contributions described in Section 401(k) of the Code sponsored
or maintained by Regent or any Subsidiary (collectively, the "401(k) Plans")
and terminating the 401(k) Plans effective as of a date prior to the
Effective Time. Such resolution shall (i) be expressly contingent upon the
ability to distribute benefits in accordance with Section 401(k) of the Code,
and (ii) require that prior to the Effective Time, the termination of each of
the 401(k) Plans shall be submitted to the Internal Revenue Service for a
determination letter and shall provide for the distribution of benefits to
participants as soon as administratively feasible after the receipt of a
favorable determination letter. Regent shall provide Acquiror's counsel with
a copy of the board resolution and shall also provide Acquiror's counsel with
copies of the applications for such determination letters for its review at
least 5 days prior to the date such applications are to be filed with the
Internal Revenue Service. Individuals who receive an "eligible rollover
distribution," as defined in Section 401(a)(31) of the Code, from any of the
401(k) Plans shall be permitted to rollover all or any part of that
distribution to the Jacor Communications, Inc. Retirement Plan.
5.14 TAX TREATMENT. In order to permit tax counsel to Acquiror and
Regent to provide the opinions required by Sections 6.2(F) and 6.3(C), (a)
Regent and Acquiror shall provide representations to each such counsel
substantially in the form of Exhibits D and E, respectively, and (b) Regent
shall use its best efforts to cause a sufficient number of its shareholders
to provide representations to such tax counsel, substantially in the
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form of Exhibit C, to the extent necessary to prevent a New Merger Event
(and, to the extent feasible, to cause the Tax Continuity Level to equal or
exceed 50%). Neither Acquiror nor Regent shall take or cause to be taken any
action, whether before or after the Effective Time, that would disqualify the
Merger as a "reorganization" within the meaning of Section 368(a) of the Code
or cause such representations to be false.
5.15 ENVIRONMENTAL INSPECTION. Subject to Section 5.4, within
twenty-one calendar days of the date of this Agreement, Acquiror shall have
the right, at their own expense and risk, to commence a Phase I environmental
assessment of the properties of Regent and Regent Subsidiaries to verify the
accuracy of Regent's representations and warranties in Section 3.9. The
Phase I environmental assessment consultant must be reasonably acceptable to
Regent (and shall be deemed reasonably acceptable to Regent if Regent makes
no objection within three calendar days of receiving notice of who such
consultant shall be), and all Phase I environmental assessments must be
completed within sixty days from the date of this Agreement. In the event
that any Phase I environmental assessment shows reasonable cause to conduct a
Phase II environmental assessment, Acquiror shall have the right to cause
such environmental assessment at its own expense and risk; PROVIDED, HOWEVER,
that (i) any such Phase II environmental assessment shall be commenced as
promptly as practicable after the completion of the related Phase I
environmental assessments and, in any event, shall be completed within 120
calendar days of the date of this Agreement, (ii) the scope of such
assessment shall be subject to the reasonable and prompt approval of Regent
and (iii) such assessment shall be subject to Section 5.4(B). Regent shall be
given access to all information obtained by Acquiror through such assessments.
5.16 ESCROW AGREEMENT; REGISTRATION RIGHTS AGREEMENT.
A. Simultaneously with the execution and delivery of this
Agreement, Regent and Acquiror shall enter into an Escrow Agreement,
substantially in the form attached hereto as Exhibit H (the "Escrow
Agreement"). Pursuant to the Escrow Agreement, Acquiror will deliver or
cause to be delivered to Escrow Agent, as defined in the Escrow Agreement, an
irrevocable letter of credit in the amount of $10 million issued by an issuer
reasonably acceptable to Regent (the "Letter of Credit") or $10 million cash.
The Letter of Credit or cash shall be held,
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drawn on and paid only as provided in Section 8.1(B) of this Agreement and in
the Escrow Agreement.
B. Simultaneously with the execution and delivery of this
Agreement, a Registration Rights Agreement substantially in the form of
Exhibit I (the "Registration Rights Agreement"), shall be executed by
Acquiror. Acquiror shall, as promptly as practicable after the date hereof,
perform its obligations under such Registration Rights Agreement. As
promptly as practicable after the date hereof, Regent shall cause the Regent
Affiliates to execute such Registration Rights Agreement.
5.17 NOTIFICATION. Each of Regent 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.
5.18 REGENT ACCOUNTANT'S LETTER. Regent shall use its reasonable best
efforts to cause to be delivered to Acquiror a letter of Coopers & Lybrand,
L.L.P., Regent's independent auditors, dated the date on which the
Registration Statement becomes effective and addressed to Acquiror, in form
and substance reasonably satisfactory to Acquiror for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement.
5.19 ACQUIROR ACCOUNTANT'S LETTER. Acquiror shall use its reasonable
best efforts to cause to be delivered to Regent a letter of Coopers &
Lybrand, L.L.P., Acquiror's independent auditors, dated the date on which the
Registration Statement becomes effective and addressed to Regent, in form and
substance reasonably satisfactory to Regent for letters delivered by
independent public accountants in connection with registration statements
similar to the Registration Statement.
5.20 PURCHASE, SALE AND OPTION AGREEMENTS. Regent shall not terminate
any of the purchase, sale or option contracts set forth on Schedule 5.3A to
the Regent Disclosure Letter without the prior written consent of Acquiror
and shall exercise the options under the option contracts set forth on
Schedule 5.3A to the Regent Disclosure Letter prior to the Closing Date.
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5.21 TIME BROKERAGE AGREEMENT.
A. Simultaneously with the execution hereof, Citicasters Co., a
wholly owned subsidiary of Acquiror ("Citicasters"), Regent and the Regent
Subsidiaries shall enter into a Time Brokerage Agreement in the form of
Exhibit J hereto (the "TBA") pursuant to which Regent or its Subsidiaries
shall broadcast programming supplied by Citicasters over the broadcasting
transmission facilities of the Stations and Citicasters shall make certain
payments to Regent during the period and in accordance with the terms and
conditions set forth therein; PROVIDED, HOWEVER, that the terms of the TBA,
except for Attachment C thereto, shall not be applicable to any Station
listed on Exhibit K (the "TBA Stations"). As promptly as practicable after
the date hereof, Regent shall obtain consents to assign the existing time
brokerage agreements and joint sales agreements for the TBA Stations and once
obtained, Regent or the Regent Subsidiary shall, on or after the TBA
Effective Date, assign to Citicasters, and Citicasters shall assume, such
time brokerage agreements. Regent knows of no reason why it will be unable
to obtain such consents. In the event that Regent is unable to obtain such
consents to the TBA with respect to any Station, Regent hereby agrees to
enter into an equitable assignment to Acquiror of the rights, benefits and
obligations of brokering such TBA Station in a form and manner as shall be
mutually agreed upon. The term of the TBA shall commence within 3 business
days of the expiration or earlier termination of the waiting period under the
HSR Act.
B. Regent shall, and Jacor shall cause Citicasters Co. to, perform
their respective obligations under the TBA.
C. Simultaneously with the execution hereof, Citicasters and SRLV
shall enter into a Time Brokerage Agreement in the form of Exhibit N hereto
pursuant to which SRLV shall broadcast programming supplied by Citicasters
over the broadcasting transmission facilities of KWNR and Citicasters shall
make certain payments to SRLV during the period and in accordance with the
terms and conditions set forth therein.
5.22 [Intentionally Left Blank]
5.23 FM TRANSLATOR STATIONS. At or prior to the Effective Time of the
Merger, Regent shall use commercially reasonable efforts to seek the transfer
or assignment by Apollo Radio of
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Salt Lake City of the FCC licenses of FM translator stations K257AA, K285AB,
K221AC and K288AA to a third party acceptable to Acquiror, in Acquiror's sole
discretion, and qualified under the applicable FCC rules and regulations.
5.24 BFI CREDIT LINE. Acquiror shall cause Broadcast Finance, Inc., an
Ohio corporation ("BFI"), to extend to Regent a line of credit substantially
in the form of Exhibit L (the "BFI Credit Line") in the amount of $2,000,000,
for the purpose of providing to Regent sufficient funds to enable Regent to
remain in compliance with the three financial covenants (the "Financial
Covenants") set forth in Section 7.6 of the Credit Agreement, as such
Financial Covenants are in effect on the date of this Agreement. Regent
shall (i) have the right to borrow funds under the BFI Credit Line at any
time it is not in compliance with any Financial Covenant and (ii) have the
obligation to use such borrowings only for the purpose of making payments on
its "obligations" (as defined in the "Credit Agreement") under the Credit
Agreement.
The BFI Credit Line shall be evidenced by the promissory note attached
hereto as Exhibit O (the "BFI Note"), and shall be governed by the terms
thereof. In connection with the BFI Credit Line, Regent shall pay the fees
set forth in the BFI Note.
The BFI Note shall be guaranteed by all present and future subsidiaries
of Regent and shall be secured by Liens (as that term is defined in the
Credit Agreement) ("Liens") in all collateral now or hereafter securing the
"Obligations" (as defined in the Credit Agreement) (the "Senior Credit
Obligations"), pursuant to security agreements, mortgages, deeds of trust and
other collateral documents comparable to those securing the Credit
Obligations, all as more fully set forth in the BFI Note. The BFI note shall
be subordinated to the Senior Credit Obligations as set forth in the BFI Note
and the subordination document referenced therein.
SECTION 6
CONDITIONS
6.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS. The respective obligations
of each party to effect the Merger shall be subject
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to the fulfillment at or prior to the Closing of each of the following
conditions:
A. INJUNCTION. There shall be no effective injunction, writ or
preliminary restraining order or any order of any nature issued by a court or
governmental agency of competent jurisdiction to the effect that the Merger
may not be consummated as herein provided, no proceeding or lawsuit shall
have been commenced and be continuing by any Federal or state governmental or
regulatory agency for the purpose of obtaining any such injunction, writ or
preliminary restraining order and no written notice directed to either Regent
or Acquiror shall have been received from any such Federal or state agency
indicating an intent to restrain, prevent, materially delay or restructure
the transactions contemplated by this Agreement; PROVIDED, HOWEVER, that (i)
each of Regent and Acquiror shall have used all its commercially reasonable
efforts to prevent the entry of any such injunction or other order and to
appeal as promptly as possible any such injunction or other order that may be
entered and (ii) Acquiror shall be in compliance with Section 5.2.
B. HSR ACT. The applicable waiting periods shall have expired or
been terminated under the HSR Act.
C. REGENT STOCKHOLDER APPROVAL. This Agreement shall have been
approved and adopted by the affirmative vote or consent of the holders of a
majority of the outstanding shares of Regent's stockholders in accordance
with applicable law and Regent's Certificate of Incorporation, which vote or
consent shall remain in full force and effect as of the Effective Time.
6.2 CONDITIONS TO ACQUIROR'S OBLIGATIONS. The obligation of Acquiror
to consummate on the Closing Date the transactions contemplated by this
Agreement will be subject to the satisfaction of each of the following
conditions on or prior to the Closing Date, unless expressly waived in
writing by Acquiror:
A. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Regent 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 (i) for any such
representations and warranties made as of a specified date, which shall be
true and correct in all respects as of such date,
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(ii) 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 Regent 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, (iii) to the extent that such representations and
warranties are not true and correct by reason of any action or inaction by
Citicasters (or any successor) as the broker of the Stations pursuant to the
TBA and (iv) after the TBA Effective Date, the failure by Regent to comply
with any of its financial covenants under the Credit Agreement due to
insufficient Broadcast Cash Flow (as defined in the TBA) shall not constitute
a breach of any representation or warranty hereunder.
B. PERFORMANCE OF THIS AGREEMENT. Except for actions or inactions
by Regent reasonably contemplated by the TBA, each of the agreements and
covenants of Regent to be performed and complied with by Regent 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
nonperformance or noncompliance by Regent (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
Regent when compared to the state of facts which would exist if all such
agreements and covenants had been performed and complied with by Regent;
PROVIDED, HOWEVER, that after the TBA Effective Date, the failure by Regent
to comply with any of its financial covenants under the Credit Agreement due
to insufficient Broadcast Cash Flow (as defined in the TBA) shall not
constitute a failure to perform or comply with its obligations hereunder.
C. CONSENTS. All consents of the FCC to the transactions
contemplated by this Agreement shall have been obtained, are in effect and
have become Final Orders; PROVIDED that (i) Acquiror shall have performed
their obligations under Sections 5.1 and 5.2 and (ii) fifteen calendar days
prior to the first anniversary of the date hereof, Acquiror shall waive its
right to Final Orders in the event that initial FCC consents shall have been
received and the reason that Final Orders have not been issued is
attributable solely to Acquiror.
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D. DELIVERY OF CERTIFICATES. Regent shall have delivered to
Acquiror a certificate dated the Closing Date and signed by the chief
executive officer and the chief financial officer of Regent certifying as to
the matters set forth in Sections 6.2(A) and 6.2(B).
E. DISSENTING SHARES. Not more than 10% of the outstanding shares
of Regent Stock shall constitute Dissenting Shares.
F. TAX OPINION. Acquiror shall have received a written opinion of
Acquiror's tax counsel concerning certain federal tax consequences of the
Merger, substantially in the form attached hereto as Exhibit M; PROVIDED,
HOWEVER, that if a New Merger Event has occurred, such tax opinion shall no
longer be required.
G. CLOSING OF KWNR PURCHASE. Concurrently with the Effective Time
of the Merger, the closing of the KWNR Purchase shall have occurred on the
terms set forth in Plan and Agreement of Reorganization dated July 19, 1996,
among Regent, Southwest Radio Las Vegas, Inc. and Southwest Florida
Enterprises, Inc., as amended by that letter agreement between such parties
and Jacor dated October 8, 1996 or as such terms may be amended or waived
with the prior written approval of Acquiror.
6.3 CONDITIONS TO REGENT'S OBLIGATION. The obligation of Regent to
consummate, on the Closing Date, the transactions contemplated by this
Agreement will be subject to the satisfaction of each of the following
conditions on or prior to the Closing Date, unless expressly waived, in
writing, by Regent:
A. REGISTRATION STATEMENT. The Registration Statement and the
shelf registration contemplated by the Registration Rights Agreement (which
may form part of the Registration Statement) shall be effective under the
Securities Act and no stop order suspending the effectiveness of the
Registration Statement shall be in effect and no proceedings for such
purpose, or under the proxy rules of the SEC pursuant to the applicable
Securities Laws and with respect to the transactions contemplated hereby,
shall be pending before or threatened by the SEC. All applicable state
securities laws shall have been complied with in connection with the issuance
of Acquiror Common Stock and the Warrants to be issued in connection with the
Merger, and no stop order suspending the effectiveness of any qualification or
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registration of such Acquiror Common Stock or Warrants under such state
securities laws shall have been issued and pending or threatened by the
authorities of any such state.
B. NASDAQ LISTING. The shares of Acquiror Common Stock and the
Warrants issuable to Regent's stockholders pursuant to this Agreement and the
shares of Acquiror Common Stock issuable upon exercise of the Warrants shall
have been approved for quotation on NASDAQ, subject to notice of issuance.
C. TAX OPINION. Regent shall have received a written opinion of
Regent's tax counsel concerning certain federal income tax consequences of
the Merger, substantially in the form attached hereto as Exhibit M; PROVIDED,
HOWEVER, that if a New Merger Event has occurred, such tax opinion shall no
longer be required.
D. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Acquiror 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 (i) 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 and (ii) 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.
E. PERFORMANCE OF THIS AGREEMENT. Each of the agreements and
covenants of Acquiror to be performed and complied with by Acquiror 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
nonperformance or noncompliance by Acquiror (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
Acquiror when compared to the state of facts which would exist if all such
agreements and covenants had been performed and complied with by Acquiror.
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F. CONSENTS. All consents of the FCC to the transactions
contemplated by this Agreement shall have been obtained, are in effect and
have become Final Orders; PROVIDED that (i) Regent shall have performed its
obligations under Sections 5.1 and 5.2 and (ii) fifteen calendar days prior
to the first anniversary of the date hereof, Regent shall waive its right to
Final Orders in the event that initial FCC consents shall have been received
and the reason that Final Orders have not been issued is attributable solely
to Regent.
G. DELIVERY OF CERTIFICATE. Acquiror shall have delivered to
Regent a certificate dated as of the Closing Date and signed by the chief
executive officer and chief financial officer of Acquiror certifying as to
the matters set forth in Sections 6.3(D) and 6.3(E).
H. REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement executed by Acquiror on the date hereof shall be in full force and
effect and all the parties thereto shall have complied with the terms thereof.
I. REGENT EXPENSES. All the Regent Expenses set forth on the
Transaction Expense Schedule shall have been paid.
SECTION 7
NONSURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties contained in this Agreement by
any party hereto or set forth in any certificate or other instrument
delivered by or on behalf of the parties pursuant to this Agreement shall
expire at the Effective Time.
SECTION 8
TERMINATION
8.1 TERMINATION.
A. Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated at any time prior to the
Closing Date:
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(1) by the mutual written consent of Acquiror and Regent;
(2) by Acquiror or Regent if the Closing shall not have occurred on
or before the first anniversary of the date hereof unless such failure to
close 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;
(3) by Acquiror or Regent if the Application is rejected and not
appealed within the applicable time period or all appeals therefrom have been
unsuccessfully exhausted, upon fifteen days written notice to the other,
PROVIDED that the party seeking to terminate has prosecuted the Application
diligently and in good faith and has satisfied any and all requests by the
FCC for additional information with respect to the Application;
(4) by Acquiror, if Regent breaches any of the representations or
warranties of Regent set out in Section 3 of this Agreement which breach has
a Material Adverse Effect on Regent and shall not have been cured within
thirty days after written notice thereof from Acquiror to Regent, in which
case Acquiror shall have only the remedy set forth in Section 8.1(B) hereof;
(5) by Acquiror, if Regent breaches any of its covenants contained
in this Agreement, which breach has a Material Adverse Effect on Regent and
shall not have been cured within thirty days after written notice thereof
from Acquiror to Regent;
(6) by Regent, if Acquiror breaches any representation, warranty or
covenant of Acquiror contained in this Agreement which breach has a Material
Adverse Effect on Acquiror and shall not have been cured within thirty days
after written notice thereof from Regent to Acquiror, in which case Regent
shall have the remedy set forth in Section 8.1(B) hereof.
B. Except as otherwise expressly provided herein, no termination
of this Agreement on the grounds of a material breach of any covenant
contained herein shall relieve the breaching party from any liability for
such breach of any covenant or agreement contained herein giving rise to such
termination. As a material inducement for Regent to enter into this
Agreement,
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Acquiror and Regent agrees (i) that in the event Acquiror is entitled to
terminate this Agreement pursuant to Section 8.1(A) (4) hereof, Acquiror's
sole and exclusive remedies, if any, shall be (x) to terminate this Agreement
or (y) specific performance pursuant to Section 8.1(c) and, in any event,
Acquiror hereby waives any right to sue or otherwise recover damages from
Regent except to the extent such termination results from Regent's wilful and
material breach of any of its representations and warranties and (ii) in the
event that (x) the Acquiror fails to close the transaction contemplated by
this Agreement and the conditions to Acquiror's obligations to close provided
in Sections 6.1 and 6.2 are satisfied or (y) Regent is entitled to terminate
this Agreement pursuant to Section 8.1(A)(6) hereof, Regent shall be entitled
to be paid a termination fee in the amount of $10 million by drawing on the
Letter of Credit pursuant to the terms of the Escrow Agreement or shall be
entitled to specific performance pursuant to Section 8.1(C), and in any
event, Regent may sue or recover other damages if such termination results
from Acquiror's willful and material breach of any of its representations and
warranties.
C. ENFORCEMENT. Regent and Acquiror agree that irreparable damage
would occur and that neither Regent nor Acquiror would have any adequate
remedy at law in the event that any of the provisions of this Agreement were
not performed in accordance with their specific terms or were otherwise
breached. If any action is brought by either party to enforce this Agreement,
the other party shall waive the defense that there is an adequate remedy at
law. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in any
federal court located in the State of Delaware or in Delaware state court,
this being in addition to any other remedy to which they are entitled at law
or in equity.
SECTION 9
MISCELLANEOUS
9.1 CONFIDENTIALITY.
A. PRIOR TO CLOSING. Unless and until the Closing has occurred,
and except as may be otherwise required by applicable
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law, each party hereto shall, and shall cause its employees, agents, and
representatives to, maintain in confidence and not otherwise use information,
documents, data furnished to it, or to any Person on its behalf, by any other
party in connection herewith.
B. FAILURE TO CLOSE. If the Closing does not occur on the Closing
Date, each of Acquiror and Regent shall return all written information,
documents, and data furnished to the other party or to any Person on its
behalf and all copies thereof. Notwithstanding anything else in this
Agreement to the contrary, if the transactions contemplated by this Agreement
are not closed, the agreement of each party to maintain in confidence all
information received by it and not to use such information in competition
with the other shall continue in perpetuity and none of such information
shall be used by any party, its employees, agents, or representatives or
affiliates thereof in the business operations of any such Person, except to
the extent that such information was: (i) possessed by such party prior to
the disclosure thereof by the other party; (ii) disclosed to such party by an
independent third party without a violation of any obligation of
confidentiality on the part of such third party; or (iii) ascertainable from
public or published information or trade sources.
9.2 NOTICES. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be mailed by first class,
registered, or certified mail, postage
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prepaid, or sent via overnight reputable courier service, or delivered
personally or via facsimile with copy sent by mail as provided above:
If to Regent, to: Copy to:
Regent Communications, Inc. Wyatt, Tarrant & Combs
50 E. RiverCenter Boulevard 2800 Citizens Plaza
Suite 180 Louisville, Kentucky 40202
Covington, Kentucky 41011 Attn: Stewart E. Conner, Esq.
Facsimile No.: (606) 292-0352 Facsimile No.: (502) 589-0309
and
Cravath, Swaine & Moore
825 Eighth Avenue
New York, NY 10019
Attn: William P. Rogers, Jr.
Facsimile No.: (212) 474-3700
If to Acquiror, to: Copy to:
Jacor Communications, Inc. Graydon, Head & Ritchey
1300 PNC Center 1900 Fifth Third Center
201 East Fifth Street P.O. Box 6464
Cincinnati, Ohio 45202 Cincinnati, OH 45201
Facsimile No.: (513) 621-0090 Attn: John J. Kropp, Esq.
Facsimile No.: (513) 651-3836
or to such other address of which the addressee shall have notified the
sender in writing. Notices mailed in accordance with its situation shall be
deemed given three days after being mailed, and notices sent by overnight
courier service shall be deemed given one day after placed in the hands of a
representative of such service and notice given by facsimile shall be deemed
given on the date of transmission subject to sender's receipt of a
confirmation copy.
9.3 THIRD PARTY RIGHTS. Except as contemplated by Sections 9.4 and
5.13, it is the intention of the parties that nothing in this Agreement shall
be deemed to create any right with respect to any Person not a party to this
Agreement.
9.4 PARTIES IN INTEREST; ASSIGNMENT. All covenants and agreements
contained in this Agreement by or on behalf of any of
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the parties to this Agreement shall bind and inure to the benefit of their
respective heirs, executors, successors, and assigns, whether so expressed or
not. No party to this Agreement may assign its rights or delegate its
obligations under this Agreement to any other Person without the express
prior written consent of the other parties, except that (i) Acquiror may
assign its rights and delegate its obligations to one or more subsidiary or
affiliated corporation of Acquiror and (ii) in the event that Acquiror finds
it necessary under its existing bank credit facilities (or under any
refinancing related thereto) to provide to its lenders a collateral
assignment of Acquiror's interest in this Agreement or any related documents,
Regent will cooperate with Acquiror and such lenders requesting such
assignment including but not limited to signing a consent and acknowledgement
of such assignment; PROVIDED, HOWEVER, that Acquiror shall remain fully
liable as to all of its obligations and agreements whether or not delegated
or assigned.
9.5 CONSTRUCTION; GOVERNING LAW. The section headings contained in
this Agreement are inserted as a matter of convenience and shall not affect
in any way the construction of the terms of this Agreement. This Agreement
shall be governed by and interpreted in accordance with the laws of the State
of Delaware.
9.6 ENTIRE AGREEMENT; AMENDMENT AND WAIVER. This Agreement, including
the Exhibits hereto and the Regent Disclosure Letter and documents and
instruments executed and delivered at the Closing in connection herewith, the
Escrow Agreement, constitute and contain the entire Agreement among the
parties hereto with respect to the transactions contemplated hereby and
supersede any prior writing by the parties. The waiver of a breach of any
term or condition of this Agreement must be in writing signed by the party
sought to be charged with such waiver and such waiver shall not be deemed to
constitute the waiver of any other breach of the same or any other term or
condition of this Agreement. This Agreement may not be changed orally, but
only in a writing signed by the parties hereto.
9.7 SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of the
remaining provisions.
9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any one of which need not contain the
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signatures of more than one party but all of which taken together shall
constitute one and the same Agreement. Delivery of an executed signature
page to this Agreement by facsimile transmission shall be as effective as
delivery of a manually signed counterpart of this Agreement.
9.9 EXPENSES. Except as otherwise specifically provided in this
Agreement, each party to this Agreement shall pay any and all fees and
expenses that such party may incur in connection with the negotiation,
execution, or closing of this Agreement and the other transactions
contemplated by this Agreement.
9.10 TIME OF ESSENCE. Time is of the essence to the performance of the
obligations set forth in this Agreement.
9.11 KNOWLEDGE. Notwithstanding anything to the contrary contained
herein, the use of the word "knowledge", "known" or words of similar import
in this Agreement shall mean the "actual knowledge" of the particular party
hereto. In the case of Regent, "knowledge", "known" or words of similar
import shall mean the actual personal knowledge of Terry S. Jacobs, William
E. Stakelin or George E. Willett, each director and officer of Regent and
each Station manager of Regent and each Regent Subsidiary who would
reasonably be expected to have knowledge of the matter.
9.12 ACKNOWLEDGEMENT. The parties hereto acknowledge that the lenders
under the Credit Agreement have a security interest in this Agreement, the
TBA and any other documents contemplated hereby.
(signatures on next page)
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IN WITNESS WHEREOF, Acquiror and Regent have caused this Plan and
Agreement of Merger to be executed by their duly authorized officers as of
the day and year first written above.
JACOR COMMUNICATIONS, INC.,
by /s/ R. Christopher Weber
---------------------------
Name: R. Christopher Weber
Title: Senior Vice President and
Chief Financial Officer
REGENT COMMUNICATIONS, INC.,
by /s/ Terry S. Jacobs
---------------------------
Name: Terry S. Jacobs
Title: President
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EXHIBIT A
PLAN OF MERGER
THIS PLAN OF MERGER ("Plan of Merger") dated as of , 199 ,
between REGENT COMMUNICATIONS, INC., a Delaware corporation having an address
of 50 East RiverCenter Boulevard, Suite 180, Covington, Kentucky 41011
("Regent"), and JACOR COMMUNICATIONS, INC., a Delaware corporation having an
address of 201 East Fifth Street, Suite 1300, Cincinnati, OH 45202
("Acquiror").
WHEREAS, Acquiror has an authorized capital stock consisting of (i)
100,000,000 shares of Common Stock, par value $0.01 per share, of which
31,242,758 shares have been duly issued and are now outstanding; (ii)
2,000,000 shares of Class A Preferred Stock, $0.01 par value per share, none
of which have been issued or are now outstanding; and (iii) 2,000,000 shares
of Class B Preferred Stock, $0.01 par value per share, none of which have
been issued or are now outstanding,
WHEREAS, Regent has an authorized capital stock consisting of (i)
5,000,000 shares of Class A Common Stock, par value $0.01 per share, of which
50,000 shares ("Class A Shares") have been duly issued and are now
outstanding, (ii) 150,000 shares of Class B Common Stock, par value $0.01 per
share, none of which (collectively with the Class A shares, "Regent Common
Stock") have been issued and are now outstanding, and (iii) 4,500,000 shares
of Preferred Stock, par value $0.01 per share, of which 3,774,194 shares
("Regent Preferred Stock") have been duly issued and are now outstanding, and
WHEREAS, the Board of Directors of Acquiror and Regent, respectively,
deem it advisable and generally to the advantage and welfare of the two
corporate parties and their respective shareholders to effect a Plan and
Agreement of Merger (the "Agreement"), for the general welfare and advantage
of their respective shareholders, under which plan Regent would be merged
with and into Acquiror, in accordance with the terms of the Agreement and
this Plan, pursuant to the provisions of the General Corporation Law of the
State of Delaware (the "GCL").
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NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained and of the mutual benefits hereby provided, it is
agreed by and between the parties hereto as follows:
1. THE MERGER. Upon the terms and conditions set forth in this Plan of
Merger, at the Effective Time, as hereinafter defined, Regent shall be merged
with and into Acquiror (the "Merger") in accordance with the provisions of
and with the effect provided in the GCL. The terms of the Merger shall be as
set forth in the Agreement and in this Plan of Merger.
2. EFFECTIVE TIME OF MERGER. Upon the terms and conditions set forth
in the Agreement and this Plan of Merger, a Certificate of Merger (the
"Delaware Certificate of Merger") shall be duly prepared and executed by
Regent and Acquiror, and thereafter delivered to the Secretary of State of
the State of Delaware for filing on the Closing Date. The Merger shall
become effective upon the filing of a properly executed Delaware Certificate
of Merger with the Delaware Secretary of State (the "Effective Time").
3. SURVIVING CORPORATION. Acquiror shall survive the Merger (the
"Surviving Corporation") and shall continue to be governed by the laws of the
State of Delaware, but the separate corporate existence of Regent shall cease
forthwith upon the Effective Time.
4. CONVERSION OF SHARES OF REGENT CAPITAL STOCK. Shares of Regent
Common Stock and Regent Preferred Stock will be converted into the Merger
Consideration (as defined in the Agreement) pursuant to Section 2.7 and 2.8
of the Agreement.
5. CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
Acquiror as it exists on the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation following the Effective Time
unless and until the same shall be amended or repealed in accordance with the
provisions thereof, which power to amend or repeal is hereby expressly
reserved, and all rights or powers of whatsoever nature conferred in such
Certificate of Incorporation or herein upon any shareholder or director or
officer of the Surviving Corporation or upon any other persons whomsoever are
subject to the reserve power. Such Certificate of Incorporation shall
constitute the Certificate of Incorporation of Acquiror separate and
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apart from this Plan of Merger and may be separately certified as the
Certificate of Incorporation of Acquiror.
6. BYLAWS. The Bylaws of Acquiror as they exist on the Effective Time
shall be the Bylaws of the Surviving Corporation following the Effective Time
unless and until the same shall be amended or repealed in accordance with the
provisions thereof.
7. BOARD OF DIRECTORS AND OFFICERS. The members of the Board of
Directors and the officers of the Surviving Corporation immediately after the
Effective Time of the Merger shall be those persons who were the members of
the Board of Directors and the officers, respectively, of Acquiror
immediately prior to the Effective Time of the Merger, and such persons shall
serve in such offices, respectively, for the terms provided by law or in the
Bylaws, or until their respective successors are elected and qualified.
8. RIGHTS AND LIABILITIES OF REGENT. At and after the Effective Time
of the Merger, Acquiror shall succeed to and possess, without further act or
deed, all of the estate, rights, privileges, powers, and franchises, both
public and private and all of the property, real, personal, and mixed of each
of the parties hereto; all debts due to Regent on whatever account shall be
vested in Acquiror; all claims, demands, property, rights, privileges, powers
and franchises and every other interest of either of the parties hereto shall
be as effectively the property of Acquiror as they were of the respective
parties hereto; the title to any real estate vested by deed or otherwise in
Regent shall not revert or be in any way impaired by reason of the Merger,
but shall be vested in Acquiror; all rights of creditors and all liens upon
any properly of either of the parties hereto shall be preserved unimpaired,
limited in lien to the property affected by such lien at the effective time
of the Merger; and all debts, liabilities, and duties of the respective
parties hereto shall thenceforth attach to Acquiror and may be enforced
against it to the same extent as if such debts, liabilities, and duties had
been incurred or contracted by it.
9. LAW AND SECTION HEADINGS. This Plan of Merger shall be construed
and interpreted in accordance with the laws of the State of Delaware.
Section headings are used in this Plan of Merger for convenience only and are
to be ignored in the construction of the terms of this Plan of Merger.
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10. TERMINATION. Anything contained in this Plan of Merger
notwithstanding and notwithstanding adoption hereof by the shareholders of
Regent or Acquiror, this Plan of Merger may be terminated and the Merger
abandoned as provided in the Agreement.
11. CONDITIONS PRECEDENT. The obligations of Acquiror and Regent to
effect the Merger as herein provided shall be subject to satisfaction, unless
duly waived, of the conditions set forth in the Agreement.
12. MODIFICATIONS. The parties hereto may amend, modify or supplement
this Plan of Merger, before or after approval thereof by the shareholders of
Regent or Acquiror, in such manner as may be agreed by them in writing.
13. DEFINITIONS. Capitalized terms not otherwise defined herein shall
have the meaning ascribed to them in the Agreement.
IN WITNESS WHEREOF each of the corporate parties hereto, pursuant to
authority duly granted by the Board of Directors, has caused this Plan of
Merger to be executed by its authorized officer.
JACOR COMMUNICATIONS, INC.
By:
---------------------------
Title:
------------------------
REGENT COMMUNICATIONS, INC.
By:
---------------------------
Terry S. Jacobs, President
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EXHIBIT B
WARRANT AGREEMENT
WARRANT AGREEMENT, dated as of [ ], 1997 (the
"Agreement") between JACOR COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), and KEYCORP SHAREHOLDER SERVICES,
INC., a Delaware corporation, as Warrant Agent (the "Warrant
Agent") ("Agreement").
The Company proposes to issue warrants, as hereinafter described
(the "Warrants"), to purchase up to an aggregate of 500,000 shares of its
common stock, $0.01 par value per share ("Common Stock") (the shares of
Common Stock issuable on exercise of the Warrants being referred to herein as
the "Warrant Shares"), pursuant to the Agreement and Plan of Merger (the
"Merger Agreement") between the Company and Regent Communications, Inc.,
dated as of October [ ], 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 "Fraction").
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 holders 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.
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SECTION 2.01. 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.
SECTION 2.02. 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 firm which is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or by a
commercial bank or trust company having an office or correspondent in the
United States which is a participant in an approved Signature Guarantee
Medallion Program (each of the foregoing sometimes hereinafter referred to as
an "Eligible Institution"). 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
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.
SECTION 2.03. 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 Chief Executive Officer, its
President or one of its Vice Presidents, under its corporate seal reproduced
thereon
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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 500,000 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 certificate 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
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thereto a new Warrant certificate or certificates, as the case may be, as so
requested.
SECTION 5. TERM OF WARRANTS; EXERCISE OF WARRANTS.
SECTION 5.01. 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 and until 5:00 P.M. Eastern
Time, on [ ], [2002] [the fifth anniversary of the date of the
Effective Time (as defined in the Merger Agreement)] (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; PROVIDED, HOWEVER, if any or all of the Warrants
shall be called for redemption pursuant to Section 8.03 hereof, the right to
exercise the Warrants so to be redeemed shall expire at the close of
business, New York time, on the redemption date.
SECTION 5.02. 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 an Eligible Institution,
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
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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 right 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.
SECTION 5.03. RESTRICTION ON EXERCISES. 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 broadcast multiple ownership provisions of the Communications Act of
1934, as amended, or the rules and regulations in effect thereunder, the
Company shall notify such Holder and the Warrant Agent 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 5.03 shall then apply with respect to the proposed revised
transaction; PROVIDED, FURTHER that if after such proposed revised
transaction such Warrant would still not be exercisable pursuant to this
Section 5.03, the Company shall within five business days make an offer to
purchase such Warrant at a price equal to the excess of (x) the current
market price (as defined in
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Section 10.01(d)) on the date of such offer over (y) the Exercise Price
thereof.
SECTION 5.04. 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 DOCUMENTS. 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.
SECTION 8.01. 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
irrevokably authorized and directed at all times to reserve such number
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of 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
exercise of the rights thereby evidenced shall be canceled by the Warrant
Agent and shall thereafter be delivered to the Company.
SECTION 8.02. 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.
SECTION 8.03. CALL OF WARRANTS BY THE COMPANY. The Company shall
have the right to redeem any or all of the Warrants at a price per Warrant
equal to $12.00 multiplied by the Fraction, as adjusted from time to time as
provided in Section 10 hereof (the "Call Price") on or after the third
anniversary of the Effective Time.
If fewer than all the Warrants are to be redeemed, the Company shall
select by lot the Warrants so to be redeemed in such manner as shall be
prescribed by the Board of Directors of the Company. The Company shall give
the Warrant Agent written notice of the aggregate number of Warrants to be
redeemed and the prescribed manner of redemption .
Notice of the redemption shall be mailed to the Holders of record
not more than 45 days nor less than 15 days prior to the date scheduled for
redemption (the "Call Date") and shall be given by the Company to the Warrant
Agent prior to or concurrently with the mailing of notice of the redemption
to such Holders, all in accordance with the provisions of Section 18 hereof.
The notice of redemption also shall be given not more than 45 days nor less
than 15 days prior to the Call Date, by publishing it once in The Wall Street
Journal (national edition), and such notice
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shall state the date, place and price of such redemption. Each Holder shall
continue to have the right to exercise the Warrant until the close of
business, New York time, on the Call Date. No less than one business day
prior to the Call Date, the Company shall deposit with the Warrant Agent
funds sufficient to purchase all of the Warrants to be redeemed on the Call
Date which have not theretofore been exercised.
SECTION 8.04. 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, and shall thereafter
deliver any such cancelled Warrants to the Company.
SECTION 9. WARRANT PRICE. The price per share at which Warrant
Shares shall be purchasable upon exercise of Warrants shall be $40 (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, that
occur subsequent to the date of the Merger Agreement.
SECTION 10.01. 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
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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, of
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 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 of 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
(x) regular periodic cash dividends pursuant to an announced policy of the
Company payable out of consolidated earnings or surplus legally available
for dividends and (y) dividends or distributions referred to in
paragraph (a)) or rights, options or warrants, or convertible or
exchangeable securities containing the right to subscribe for or
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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 shareholder entitled to receive such distribution.
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 Section 10.1; PROVIDED, HOWEVER,
that no adjustment in respect of dividends or interest on such stock or
other securities shall be made during the term of a Warrant of 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 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
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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 make 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 and the Call Price
shall be adjusted by multiplying such Warrant Price and Call 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
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need be made for a change in the par value of the Warrant Shares.
(h) For the purpose of this Section 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 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 (g), inclusive,
above, and the provisions of Section 5 and Sections 10.02 through 10.04,
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.
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SECTION 10.02. 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 any rights or options to
subscribe for, purchase or otherwise acquire any shares of Common Stock, the
amount of the consideration other than cash received by the Company shall be
deemed to be the fair value of such consideration or as determined in good faith
by the Board of Directors of the Company. In case any shares of Common Stock or
any rights, options or warrants to subscribe for, purchase or otherwise acquire
any shares of Common Stock 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 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.
SECTION 10.03. 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.
SECTION 10.04. NOTICE OF ADJUSTMENT. (a) Whenever the number of
Warrant Shares purchasable upon the exercise of each Warrant or the Warrant
Price of such Warrant Shares is adjusted, as herein provided, 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) to complete such adjustment in accordance with the
terms of this Agreement and prepare a certificate 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 any such
certificate delivered pursuant to this Section 10.04 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
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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.
(b) Notwithstanding the foregoing, whenever the number of Warrant
Shares purchasable upon the exercise of each Warrant or the Warrant Price of
such shares is adjusted, as herein provided, to an extent that such adjustment
is equal to or greater than 1% of the Warrant Price in effect prior to such
adjustment, but is less than 5% of the Warrant Price in effect prior to such
adjustment, the Company shall deliver to the Warrant Agent a certificate 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. Notice of any such
adjustment or adjustments shall be given to each Holder but a certificate of a
firm of independent accountants shall not be required. At the time that such
adjustments shall, in the aggregate, be equal to or greater than 5% of the
Warrant Price in effect prior to all such adjustments, the aggregate of such
adjustments shall be treated in the manner provided in Section 10.04(a).
SECTION 10.05. NO ADJUSTMENT OF DIVIDENDS. Except as provided in
Section 10.01, no adjustment in respect of any dividends shall be made during
the term of a Warrant or upon the exercise of a Warrant.
SECTION 10.06. PRESERVATION OF PURCHASE RIGHTS UPON 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
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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 Section 10.06 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 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.
SECTION 10.07. 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
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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, upon
receipt of good funds from the Company, an amount in cash equal to the closing
price for one share of the Common Stock, as defined in paragraph (d) of
Section 10.01, 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 thereof; 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 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
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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 shareholder services 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 Warrants 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 so 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
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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 whether in its prior name or in its changed name; and
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.
SECTION 15.01. 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. The Warrant Agent will have no obligation
to make payment with respect to any Warrants presented unless it shall have been
provided by the Company with the necessary funds to pay in full all amounts
payable with respect thereto.
SECTION 15.02. 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.
SECTION 15.03. 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.
SECTION 15.04. RELIANCE ON COUNSEL. The Warrant Agent may consult at
any time with legal counsel
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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.
SECTION 15.05. 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, Chief Executive Officer 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.
SECTION 15.06. COMPENSATION; INDEMNITY. 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. The Company further agrees to indemnify and hold the Warrant Agent
harmless against costs, expenses (including reasonable expenses of legal
counsel), losses or damages, which, without gross negligence, willful misconduct
or bad faith on the part of the Warrant Agent, may be paid, incurred or suffered
by, or to which the Warrant Agent may become subject by reason of or as a result
of the administration of its duties hereunder or by reason of or as a result of
its compliance with the instructions set forth herein or with any written or
oral instructions delivered to the Warrant Agent pursuant hereto, or as a result
of defending its actions as Warrant Agent hereunder, including any claim against
the Warrant Agent by any Holder.
SECTION 15.07. 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
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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 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 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 respect rights or interests may appear.
SECTION 15.08. 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.
SECTION 15.09. 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.
SECTION 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.
SECTION 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 representations or warranty as to the authorization or
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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.
SECTION 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 Chief
Executive Officer, 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 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 of 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
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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 vent
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 the 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 1300 PNC Center, 201 East Fifth Street, Cincinnati,
Ohio 45202; or (b) the Warrant Agent, at its offices at 127 Public Square,
Fifteenth Floor, Cleveland, Ohio 44114. 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 and 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.
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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 or Call
Price therefor, (iii) the Expiration Date or Call Date (if such change would
have the effect of accelerating either such date), or (iv) the anti-dilution
provisions of Section 10 hereof which would adversely affect the interests of
any Holder shall be made without, in each case, 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.
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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 of this Agreement
have been inserted for convenience only and shall have no substantive effect.
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.,
by
--------------------------------
---------
Title:
[Seal]
Attest:
- -------------------------
- -------
Secretary
KEYCORP SHAREHOLDER SERVICES, INC.,
by
--------------------------------
---------
Title:
[Seal]
Attest:
- -------------------------
- --------
Corporate Trust Officer
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EXHIBIT A TO THE WARRANT AGREEMENT
VOID AFTER 5:00 P.M. EASTERN TIME, , 2002
No.
[ ] Warrants
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., a Delaware corporation (the "Company"), at any time, at
the purchase price of $40.00 per share (the "Warrant Price"), the number of
shares of Common Stock, $0.01 par value per share, of the Company ("Common
Stock"), equal to the number of Warrants shown above multiplied by the
fraction [ ] (the "Fraction"). The Fraction, 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 firm which is a member of a
registered national securities exchange or the National Association of
Securities Dealers, Inc. or by a commercial bank or trust company having an
office or correspondent in the United States which is a participant in an
approved Signature Guarantee Medallion Program, and simultaneous payment of the
Warrant Price at the principal office of KeyCorp Shareholder Services, Inc.,
(the "Warrant Agent") in the City of Cleveland. 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.
The Company shall have the right to redeem any or all of the Warrants
at a price per Warrant equal to $12.00 multiplied by the Fraction, as adjusted
from time to time as set forth in the Warrant Agreement, on or after three years
after the Effective Time as defined in the Warrant
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Agreement.
This Warrant Certificate is issued under and in accordance with a
Warrant Agreement dated as of , 1997, 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 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.
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<PAGE>
This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.
DATED:
JACOR COMMUNICATIONS, INC.,
by
--------------------------------
Title:
[Seal]
Attest:
- ----------------------
Secretary
COUNTERSIGNED:
KEYCORP SHAREHOLDER SERVICES, INC.,
as Warrant Agent
by
--------------------------
Authorized Signature
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<PAGE>
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 n 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
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<PAGE>
whatever, unless this Warrant Certificate has been
assigned.)
B-30
<PAGE>
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 Printer 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 Guaranteed: Signature:
---------------------------------------------
(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.)
B-31
<PAGE>
B-32
<PAGE>
EXHIBIT H
ESCROW AGREEMENT
THIS ESCROW AGREEMENT ("Escrow Agreement") made as of October 8, 1996,
by and among JACOR COMMUNICATIONS, INC., a Delaware corporation ("Acquiror"),
REGENT COMMUNICATIONS, INC., a Delaware corporation ("Regent") and PNC BANK,
OHIO, N.A., a national banking association ("Escrow Agent").
W I T N E S S E T H:
1. MERGER AGREEMENT. Regent and Acquiror hereby jointly deposit with
Escrow Agent an executed copy of an Agreement and Plan of Merger dated as of
even date herewith, by and between Regent and Acquiror (the "Agreement"). All
capitalized terms not otherwise defined herein shall have the meanings ascribed
to them in the Agreement.
2. ESCROW DEPOSIT. Acquiror hereby deposits an irrevocable letter of
credit in the principal amount of $10 million, with Escrow Agent named as
beneficiary (the "Letter of Credit"), with Escrow Agent as a deposit to be held
in escrow hereunder (the "Escrow Deposit"). Escrow Agent acknowledges that it
holds the Letter of Credit for the benefit of Regent and, subject to the
provisions contained in Section 4 hereof, Escrow Agent shall hold the Escrow
Deposit to fund the obligations under Section 5.16 and 8.1 of the Agreement.
3. LETTER OF CREDIT. The Letter of Credit is due to expire on the first
anniversary of the date hereof (the "Expiration Date"). If ten days prior to
the Expiration Date (or the expiration date of any subsequent letter of credit)
the Letter of Credit shall not have been replaced with a substitute letter of
credit having an expiration date no earlier than the Expiration Date, then
Escrow Agent shall immediately draw on the Letter of Credit and the proceeds
thereof (the "Cash Escrow") shall be payable to Escrow Agent and become the
Escrow Deposit hereunder. The Escrow Agent shall invest the Cash Escrow in
federally insured interest-bearing money market accounts or certificates of
deposit.
H-1
<PAGE>
4. DISPOSITION OF ESCROW FUND. The Escrow Agent shall disburse the Escrow
Deposit and any accrued interest thereon as follows:
A. Should the Escrow Agent be served with a notice from the Acquiror
and Regent specifying the Closing Date under the Agreement, then the Escrow
Agent shall return the Escrow Deposit to Acquiror at the Closing, and Regent and
Escrow Agent shall deliver instructions to Banque Paribas (or other issuing
bank) that the Letter of Credit be cancelled (if not previously converted to the
Cash Escrow).
B. Should the Escrow Agent receive a notice from Acquiror
("Acquiror's Notice") stating that the Agreement is to be terminated prior to or
on the Closing Date pursuant to Section 8.1(A) (2), (3), (4) or (5) of the
Agreement, then the Escrow Agent shall send a copy of Acquiror's Notice to
Regent and return the Escrow Deposit, together with any interest earned on the
Cash Escrow, to the Acquiror, as of the date of termination of the Agreement and
Regent and Escrow Agent shall deliver instructions to Banque Paribas (or other
issuing bank) that the Letter of Credit be cancelled (if not previously
converted to the Cash Escrow), PROVIDED, HOWEVER, that Escrow Agent shall not
disburse the Escrow Deposit until twenty days shall have elapsed after the date
on which the Escrow Agent sent a copy of Acquiror's Notice to Regent. If the
Escrow Agent receives during such twenty day period a conflicting notice from
Regent stating that the Acquiror is not entitled to the Escrow Deposit, then
Escrow Agent shall make no distribution of the Escrow Deposit unless and until
it is instructed by an arbitrator or a court of competent jurisdiction which has
resolved the dispute between the parties.
C. Should the Escrow Agent be served with notice from Regent
("Regent's Notice") specifying that (i) the Acquiror has failed to close the
transaction contemplated by the Agreement and the conditions to Acquiror's
obligations to close provided in Section 6.1 and Section 6.2 of the Agreement
are satisfied, or (ii) Regent is entitled to terminate the Agreement pursuant to
Section 8.1(A)(6) thereof, then the Escrow Agent shall send a copy of Regent's
Notice to Acquiror. On the fifth business day after Regent's Notice is given to
Escrow Agent, Escrow Agent will, upon Regent's request, draw on the Letter of
Credit, and the proceeds thereof shall be payable to Escrow Agent and become the
Escrow Deposit (if not previously converted to the Cash Escrow). Escrow Agent
shall pay the Escrow Deposit, including any interest earned on the Cash Escrow,
to Regent,
H-2
<PAGE>
as a termination fee, PROVIDED, HOWEVER, that Escrow Agent shall not disburse
the Escrow Deposit until twenty days shall have elapsed after the date on which
the Escrow Agent sent a copy of Regent's Notice to Acquiror. If the Escrow
Agent receives during such twenty day period a conflicting notice from Acquiror
stating that Regent is not entitled to the Escrow Deposit, then Escrow Agent
shall make no distribution of the Escrow Deposit unless and until it is
instructed by an arbitrator or a court of competent jurisdiction which has
resolved the dispute between the parties.
D. Notwithstanding the foregoing, the Escrow Agent shall comply with
any instructions signed by both Acquiror and Regent concerning disposition of
the Escrow Deposit.
5. CONFLICTING NOTICE. In the event conflicting notice is served upon
the Escrow Agent pursuant to Section 4(B) or 4(C) above, then the Escrow Agent
may, at its sole option, (a) continue to hold the Escrow Deposit and collect and
deposit all interest earned on the Cash Escrow until such time as joint
instructions are received from both parties or (b) advise all parties of the
filing of an interpleader action in the United States District Court for the
Southern District of Ohio, whereupon the Escrow Agent shall then promptly file
the interpleader action and place the Escrow Deposit in the registry of the
Court. Acquiror and Regent jointly and severally agree to pay the Escrow
Agent's costs, including reasonable attorney's fees, which the Escrow Agent may
expend or incur in such interpleader suit, the amount of such costs to be fixed
and judgment therefor to be rendered by the Court in such suit. Upon the filing
of the interpleader action and the payment of the Escrow Deposit into the
registry of the United States District Court, the Escrow Agent shall be fully
released and discharged from all obligations imposed on it in this Escrow
Agreement.
6. RESPONSIBILITIES OF ESCROW AGENT. Escrow Agent's duties and
responsibilities shall be limited to those expressly set forth in this Escrow
Agreement. Escrow Agent is acting hereunder as a depository only and shall not
be responsible or liable in any manner whatsoever for the sufficiency,
correctness, genuineness or validity of any instrument which Escrow Agent in
good faith believes to be genuine, or for the identity, authority or rights of
any person executing or delivering such instrument. Notwithstanding any
provision herein incorporating other
H-3
<PAGE>
instruments by reference, except as expressly set forth in Sections 2 and 4
hereof, Escrow Agent shall not be charged with notice of the terms of any such
instruments and its duties and responsibilities shall be determined solely by
reference to this Escrow Agreement.
7. NO PERSONAL LIABILITY OF ESCROW AGENT. In performing any of its duties
hereunder, Escrow Agent shall not incur any liability to anyone for any damages,
losses, or expenses except for actions taken or not taken in bad faith, willful
default or gross negligence, and it shall accordingly not incur any such
liability with respect (i) to any action taken or omitted in good faith upon
advice of its counsel given with respect to any questions relating to the duties
and responsibilities of Escrow Agent under this Escrow Agreement, or (ii) to any
action taken or omitted in reliance upon any instrument, including, but not
limited to Acquiror's Notice, Regent's Notice or other written instructions
contemplated herein, not only as to due execution of such instrument and the
validity and effectiveness of its provisions but also as to the truth and
accuracy of any information contained therein, which Escrow Agent shall in good
faith believe to be genuine, to have been signed or presented by a proper person
or persons and to conform with the provisions of this Escrow Agreement.
8. EMPLOYMENT OF COUNSEL. Regent and Acquiror, jointly and severally,
hereby agree to indemnify and hold harmless Escrow Agent against any and all
losses, claims, damages, liabilities and expenses, including reasonable costs of
investigation and counsel fees and disbursements, which may be imposed upon
Escrow Agent or incurred by Escrow Agent in connection with its acceptance of
appointment as Escrow Agent hereunder, or the performance of its duties
hereunder, including any litigation arising from this Escrow Agreement or
involving the subject matter hereof, except that there shall be no
indemnification for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the bad faith, willful misconduct or gross negligence of the
Escrow Agent.
9. RESIGNATION OF ESCROW AGENT. Escrow Agent may resign by giving thirty
days prior written notice to Regent and Acquiror; and thereafter, subject to the
right of Escrow Agent to be paid its reasonable fees for services and to be
compensated for its proper expenses and costs, the resignation of Escrow Agent
shall become effective and it shall deliver any remaining money held by it in
connection
H-4
<PAGE>
therewith upon the joint written order of the parties hereto, and, upon the
delivery of such money against the written receipt thereof by the party so
designated, Escrow Agent shall be fully released and acquitted of any further
obligation and responsibility under the Escrow Agreement.
Within 30 days after receiving such notice, Acquiror and Regent
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
Regent 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 its 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.
10. NOTICES. All notices, demands, orders or other directions to be given
under this Escrow Agreement shall be in writing, shall be signed by the persons
giving them and shall be deemed sufficiently given only if personally delivered,
sent by facsimile (electronically confirmed) or
H-5
<PAGE>
sent by certified mail, postage prepaid, return receipt requested, and addressed
as follows:
If to Regent, to: Copy to:
Regent Communications, Inc. Wyatt, Tarrant & Combs
50 E. RiverCenter Boulevard 2800 Citizens Plaza
Suite 180 Louisville, Kentucky 40202
Covington, Kentucky 41011 Attn: Stewart E. Conner, Esq.
Attn: Terry S. Jacobs Fax: (502) 589-0309
Fax: (606) 292-0352
and
Cravath, Swaine & Moore
825 Eighth Avenue
New York, N.Y. 10019
Attn: William P. Rogers, Jr.,
Esq.
Fax: (212) 474-3700
If to Acquiror, to: Copy to:
Jacor Communications, Inc. Graydon, Head & Ritchey
1300 PNC Center 1900 Fifth Third Center
201 E. Fifth Street 511 Walnut Street
Cincinnati, OH 45202 Cincinnati, OH 45202
Attn: Randy Michaels Attn: John J. Kropp, Esq.
Fax: (513) 621-0090 Fax: (513) 651-3836
If to Escrow Agent, to:
PNC Bank, Ohio, N.A.
201 East Fifth Street
Corporate Trust Department
Third Floor
Cincinnati, OH 45202
Attn: Jack Hannah
Fax: (513) 651-7901
or at such other addresses or to the attention of such other person as any of
the parties may designate to the other by written notice given in the manner
provided above.
11. ENTIRE AGREEMENT. This Escrow Agreement constitutes the entire
agreement between the parties hereto with respect to the subject matter hereof.
H-6
<PAGE>
12. NO ORAL CHANGES. This Escrow Agreement may not be changed, amended,
waived, discharged or terminated orally, but only by an instrument in writing
signed by all parties hereto.
13. SUCCESSORS AND ASSIGNS. This Escrow Agreement shall inure to the
benefit of and be binding upon the respective parties and their respective
successors and assigns.
14. COUNTERPARTS. This Escrow Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same instrument.
15. GOVERNING LAW. This Escrow Agreement shall be construed in accordance
with, and shall be governed by, the laws of the State of Ohio.
16. SECTION HEADINGS. The Section headings contained herein are inserted
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
17. ESCROW FEE. The Escrow Agent shall be paid an annual fee of $1,000
("Escrow Fee") which shall be paid upon the execution of this Agreement.
Provided that in the event the Escrow Agreement is renewed after the first
anniversary of the date hereof for each such renewal the Escrow Agent shall be
paid an additional $1,000. Acquiror and Regent shall each pay one-half of said
Escrow Fee.
IN WITNESS WHEREOF, Regent, Acquiror and Escrow Agent have caused this
Escrow Agreement to be executed and delivered in their names, by an individual
thereunto duly authorized, as of the day and year first above written.
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
----------------------------
H-7
<PAGE>
Title: President
--------------------------
JACOR COMMUNICATIONS, INC.
By: /s/ R. Christopher Weber
----------------------------
Title: Senior Vice President and
Chief Financial Officer
-------------------------
PNC BANK, OHIO, N.A.
By: /s/ Jack Hannah
---------------------------
Title: Assistant Vice President
-------------------------
H-8
<PAGE>
EXHIBIT I
REGISTRATION RIGHTS AGREEMENT dated as of October 8, 1996, among Jacor
Communications, Inc., a Delaware corporation ("the Company"), Regent
Communications, Inc., a Delaware corporation ("Regent"), and the individuals and
entities named in Schedule I hereto (herein referred to collectively as the
"Stockholders" and individually as a "Stockholder").
This Agreement is made pursuant to Section 5.16 of the Agreement and
Plan of Merger dated as of October 8, 1996 (the "Merger Agreement"), between the
Company and Regent Communications, Inc., a Delaware corporation. In order to
induce the Stockholders to consummate the transactions contemplated by the
Merger Agreement, and in further consideration therefor, the Company has agreed
to execute and deliver this Agreement and provide the registration rights set
forth in this Agreement.
Accordingly, it is hereby agreed as follows:
1. DEFINITIONS. Capitalized terms used but not otherwise defined
herein shall have the meanings assigned to such terms in the Merger Agreement.
For purposes of this Agreement the following terms shall have the following
meanings:
"EFFECTIVE PERIOD" means a period commencing on the date of this
Agreement and ending on the earlier of (i) the first date as of which all
Registrable Securities cease to be Registrable Securities and (ii) the later of
(A) the third anniversary of the Closing Date and (B) the first anniversary of
the date on which the last Warrant was exercised.
"HOLDER" means, subject to Section 9, a holder of Registrable
Securities.
"PROSPECTUS" means the prospectus included in the Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by
I-1
<PAGE>
reference in such prospectus.
"REGISTRABLE SECURITIES" means, collectively, (i) the shares of
Acquiror Common Stock issued to Regent Affiliates in connection with the Merger,
(ii) the shares of Acquiror Common Stock issuable upon the exercise of the
Warrants (the shares set forth in clauses (i) and (ii) referred to herein as the
"Shares"), (iii) the Warrants and (iv) any securities issued or distributed in
respect of any Shares or Warrants by way of stock dividend or stock split or in
connection with a combination of shares, recapitalization, reorganization,
merger, consolidation or otherwise.
"REGISTRATION EXPENSES" means any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation,
(i) all SEC and securities exchange registration and filing fees (including all
expenses incident to any filing with the National Association of Securities
Dealers, Inc.), (ii) all fees and expenses of complying with securities or blue
sky laws, (iii) all printing, messenger and delivery expenses, (iv) all fees and
expenses incurred in connection with the listing of the Registrable Securities
on any securities exchange pursuant to Section 6(h), (v) the fees and
disbursements of counsel for the Company and of its independent public
accountants and (vi) the reasonable fees and disbursements of one counsel, other
than the Company's counsel, selected by the Holders of a majority of the
Registrable Securities being registered to represent all Holders of the
Registrable Securities being registered in connection with such registration (it
being understood that any Holder may, at its own expense, retain separate
counsel to represent it in connection with such registration).
"REGISTRATION STATEMENT" means any registration statement of the
Company which covers Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, and all exhibits
and all material incorporated by reference in such Registration Statement, which
shall provide for the sale by the Holders of Registrable Securities from time to
time on a delayed or continuous basis pursuant to Rule 415 under the Securities
Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time.
I-2
<PAGE>
"SEC" means the Securities and Exchange Commission.
2. SECURITIES SUBJECT TO THIS AGREEMENT. The securities entitled to
the benefits of this Agreement are the Registrable Securities. For the purposes
of this Agreement, Registrable Securities will cease to be Registrable
Securities when (i) a Registration Statement covering such Registrable
Securities has been declared effective under the Securities Act and they have
been disposed of pursuant to such effective Registration Statement, (ii) such
Registrable Securities are distributed to the public pursuant to Rule 144 (or
any similar provision then in force) under the Securities Act, (iii) such
Registrable Securities shall have been otherwise transferred, new certificates
for such Registrable Securities not bearing a legend restricting further
transfer shall have been delivered by the Company and subsequent disposition of
such Registrable Securities shall not require registration or qualification of
such Registrable Securities under the Securities Act or any state securities or
blue sky law then in force, (iv) the Effective Period ends, (v) such Registrable
Securities shall have ceased to be outstanding, or (vi) in the written opinion
of counsel to the Company, when all Registrable Securities may be transferred by
the Holders without registration pursuant to Rule 144 under the Securities Act
without regard to the volume limitation or manner of sale limitations contained
therein.
3. SHELF REGISTRATION. The Company shall file and use all reasonable
efforts to cause to be declared effective, not later than the Effective Time, a
"shelf" Registration Statement on any appropriate form pursuant to Rule 415 (or
similar rule that may be adopted by the SEC) under the Securities Act for all
the Registrable Securities, which (i) shall be available for the sale of the
Registrable Securities in accordance with the intended method or methods of
distribution thereof and (ii) shall cover the issuance of Registrable Securities
pursuant to the exercise of Warrants. The Company agrees to use its best
efforts to keep such Registration Statement continuously effective and usable
until the end of the Effective Period; PROVIDED, HOWEVER, that the Company may
elect that such Registration Statement not be useable during any Blackout Period
(as defined in Section 4).
4. BLACKOUT PERIOD. The Company shall be entitled to (a) postpone
the filing of the Registration Statement otherwise required to be prepared and
filed by the
I-3
<PAGE>
Company pursuant to Section 3 or (b) elect that the Registration Statement not
be useable, in each case for a reasonable period of time, but not in excess of
60 days (a "Blackout Period"), if the Company determines in good faith that the
registration and distribution of Registrable Securities (or the use of the
Registration Statement or related Prospectus) would interfere with any pending
financing, acquisition, corporate reorganization or any other corporate
development involving the Company or any of its subsidiaries or would require
premature disclosure thereof and promptly gives the Holders of Registrable
Securities written notice of such determination, containing a general statement
of the reasons for such postponement or restriction on use and an approximation
of the anticipated delay; PROVIDED, HOWEVER, that the aggregate number of days
included in all Blackout Periods during any consecutive 12 months during the
Effective Period shall not exceed 120 days.
5. REGISTRATION PROCEDURES. In connection with the registration
obligations of the Company pursuant to Section 3 hereof, the Company shall use
its best efforts to effect or cause the registration of any Registrable
Securities under the Securities Act as provided in this Agreement, and the
Company will, as expeditiously as possible:
(a) prepare and file with the SEC amendments and post-effective
amendments to such Registration Statement and such amendments and
supplements to the Prospectus used in connection therewith as may be
necessary to maintain the effectiveness of such registration or as may be
required by the rules, regulations or instructions applicable to the
registration form utilized by the Company or by the Securities Act or rules
and regulations thereunder for shelf registration or as otherwise necessary
to keep the Registration Statement effective for the Effective Period and
cause the Prospectus as so supplemented to be filed pursuant to Rule 424
under the Securities Act, and to otherwise comply with the provisions of
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement through the end of the Effective
Period; PROVIDED, HOWEVER, that before filing the Registration Statement or
Prospectus, or any amendments or supplements thereto (other than reports
required to be filed by it under the Securities and Exchange Act of 1934,
as amended, and the rules and regulations adopted by the Commission
I-4
<PAGE>
thereunder), the Company will furnish to the Holders and their counsel for
review and comment, copies of all documents proposed to be filed;
(b) furnish to each Holder of such Registrable Securities such number
of copies of such Registration Statement and of each amendment and post-
effective amendment thereto (in each case including all exhibits), the
Prospectus and Prospectus supplement, as applicable, and such other
documents as such Holder may reasonably request in order to facilitate the
disposition of the Registrable Securities by such Holder (the Company
hereby consenting to the use (subject to the limitations set forth in the
last paragraph of this Section 5) of the Prospectus or any amendment or
supplement thereto in connection with such disposition);
(c) use its best efforts to register or qualify such Registrable
Securities covered by such Registration Statement under such other
securities or blue sky laws of such jurisdictions as each Holder shall
reasonably request, and do any and all other acts and things which may be
reasonably necessary or advisable to enable such Holder to consummate the
disposition in such jurisdictions of the Registrable Securities owned by
such Holder, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation in
any jurisdiction where, but for the requirements of this Section 5(c), it
would not be obligated to be so qualified, to subject itself to taxation in
any such jurisdiction, or to consent to general service of process in any
such jurisdiction;
(d) notify each Holder of any such Registrable Securities covered by
such Registration Statement, at any time when a Prospectus relating thereto
is required to be delivered under the Securities Act within the appropriate
period mentioned in Section 5(a), of the Company's becoming aware that the
Prospectus included in such Registration Statement, as then in effect,
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, and at the request of any such Holder, prepare and furnish to
such Holder a reasonable number of copies of an amendment or supplement to
the Registration
I-5
<PAGE>
Statement or related Prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such Registrable Securities, such Prospectus
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing;
(e) notify each Holder of Registrable Securities covered by such
Registration Statement at any time,
(1) when the Prospectus or any Prospectus supplement or post-
effective amendment has been filed, and, with respect to the
Registration Statement or any post-effective amendment, when the same
has become effective,
(2) of any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectus or for additional
information, and
(3) of the issuance by the SEC of any stop order suspending the
effectiveness of the Registration Statement or the initiation of any
proceedings for that purpose;
(f) otherwise use its best efforts to comply with all applicable rules
and regulations of the SEC, and make available to its security holders, as
soon as reasonably practicable (but not more than eighteen months) after
the effective date of the Registration Statement, an earnings statement
which shall satisfy the provisions of Section 10(a) of the Securities Act
and the rules and regulations promulgated thereunder; PROVIDED, HOWEVER,
that compliance with Rule 158 under the Securities Act shall be deemed to
satisfy the provisions of Section 10(a) of the Securities Act and the rules
and regulations promulgated thereunder; and
(g) use reasonable efforts to cause all such Registrable Securities to
be listed on any securities exchange on which the Common Stock is then
listed, or approved for trading through the Nasdaq Stock Market or any
other inter-dealer quotation system through which the Common Stock is then
traded, if such Registrable Securities are not already so listed or traded
and if such listing or trading is then permitted under the rules of such
exchange, provide a transfer agent and registrar for such Registrable
Securities covered by
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<PAGE>
such Registration Statement no later than the effective date of such
Registration Statement and provide certificates for Registrable Securities
covered by a Registration Statement without any restrictive legends.
The Company may require each Holder of Registrable Securities as to
which any registration is being effected to furnish the Company with such
information regarding such Holder and pertinent to the disclosure requirements
relating to the registration and the distribution of such securities as the
Company may from time to time reasonably request in writing.
Each Holder of Registrable Securities agrees that, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 5(d) or the commencement of a Blackout Period, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Prospectus or Registration Statement covering such Registrable Securities until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 5(d), and, if so directed by the Company, such Holder
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the period
mentioned in Section 5(a) shall be extended by the number of days during the
period from the date of the giving of such notice pursuant to Section 5(d) and
through the date when each seller of Registrable Securities covered by such
Registration Statement shall have received the copies of the supplemented or
amended Prospectus contemplated by Section 5(d).
6. REGISTRATION EXPENSES. The Company will pay all Registration
Expenses in connection with all registrations of Registrable Securities pursuant
to Section 3 upon the written request of any of the Holders, and each Holder
shall pay all other expenses, if any, relating to the sale or disposition of
such Holder's Registrable Securities pursuant to the Registration Statement.
7. INDEMNIFICATION; CONTRIBUTION. (a) INDEMNIFICATION BY THE
COMPANY. The Company agrees to indemnify each Holder of Registrable Securities,
its officers and directors and each person who controls such Holder (within the
meaning of the Securities Act), and any
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<PAGE>
agent or investment adviser thereof against all losses, claims, damages,
liabilities and expenses (including reasonable attorneys' fees and expenses of
investigation) incurred by such party pursuant to any actual or threatened
action, suit, proceeding or investigation arising out of or based upon (i) any
untrue or alleged untrue statement of material fact contained in the
Registration Statement, any Prospectus or preliminary Prospectus, or any
amendment or supplement to any of the foregoing or (ii) any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a Prospectus or a
preliminary Prospectus, in light of the circumstances then existing) not
misleading, except in each case insofar as the same arise out of or are based
upon, any such untrue statement or omission made in reliance on and in
conformity with information with respect to such indemnified party furnished in
writing to the Company by such indemnified party or its counsel expressly for
use therein.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In
connection with the Registration Statement, each Holder will furnish to the
Company in writing such information, including with respect to the name, address
and the amount of Registrable Securities held by such Holder, as the Company
reasonably requests for use in such Registration Statement or the related
Prospectus and agrees to indemnify and hold harmless (in the same manner and to
the same extent as set forth in Section 7(a)) the Company, all other prospective
Holders or any underwriter, as the case may be, and any of their respective
affiliates, directors, officers and controlling Persons, (within the meaning of
the Securities Act) against any losses, claims, damages, liabilities and
expenses resulting from any untrue or alleged untrue statement of a material
fact or any omission or alleged omission of a material fact required to be
stated in such Registration Statement or Prospectus or any amendment or
supplement to either of them or necessary to make the statements therein (in the
case of a Prospectus, in the light of the circumstances then existing) not
misleading, but only to the extent that any such untrue statement or omission is
made in reliance on and in conformity with information with respect to such
Holder furnished in writing to the Company by such Holder or its counsel
specifically for inclusion therein.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. Any Person entitled to
indemnification hereunder agrees to give prompt written notice to the
indemnifying party after the
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<PAGE>
receipt by such indemnified party of any written notice of the commencement of
any action, suit, proceeding or investigation or threat thereof made in writing
for which such indemnified party may claim indemnification or contribution
pursuant to this Agreement (provided that failure to give such notification
shall not affect the obligations of the indemnifying person pursuant to this
Section 7 except to the extent the indemnifying party shall have been actually
prejudiced as a result of such failure). In case any such action shall be
brought against any indemnified party and it shall notify the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under these indemnification provisions for any
legal expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation, unless in the reasonable judgment of any
indemnified party a conflict of interest is likely to exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the
reasonable fees and expenses of such additional counsel or counsels. The
indemnifying party will not be subject to any liability for any settlement made
without its consent (which will not be unreasonably withheld).
(d) CONTRIBUTION. If the indemnification from the indemnifying party
provided for in this Section 7 is unavailable to an indemnified party hereunder
in respect of any losses, claims, damages, liabilities or expenses referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities and expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party and indemnified party in connection with the actions which resulted in
such losses, claims, damages, liabilities and expenses, as well as any other
relevant equitable considerations. The relative fault of such indemnifying
party and indemnified party shall be
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<PAGE>
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission to state a material fact, has been made by, or relates to
information supplied by, such indemnifying party or indemnified party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7(c), any legal and other fees and expenses reasonably incurred by such
indemnified party in connection with any investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 7(d) were determined by PRO RATA
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 7(d), no Holder of Registrable
Securities shall be required to contribute any amount in excess of the amount by
which the total price at which the Registrable Securities of such Holder were
offered to the public (net of all underwriting discounts and commissions, if
any) exceeds the amount of any damages which such Holder has otherwise been
required to pay by reason of such untrue statement or omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 9(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 7, the indemnifying
parties shall indemnify each indemnified party to the full extent provided in
Section 7(a) or (b), as the case may be, without regard to the relative fault of
said indemnifying parties or indemnified party or any other equitable
consideration provided for in this Section 7(d).
(e) The provisions of this Section 7 shall be applicable in respect
of each registration pursuant to this Agreement, shall be in addition to any
liability which any party may have to any other party and shall survive any
termination of this Agreement.
8. RULE 144. Until the end of the Effective Period, the Company
covenants that it will file the reports
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<PAGE>
required to be filed by it under the Securities Act and the Securities Exchange
Act of 1934, as amended, and the rules and regulations adopted by the Commission
thereunder (or, if the Company is not required to file such reports, it will,
upon the request of any Holder of Registrable Securities, made publicly
available other information so long as necessary to permit sales under Rule 144
under the Securities Act), and it will take such further action as any Holder of
Registrable Securities may reasonably request, all to the extent required from
time to time to enable such Holder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the Commission. Upon the written request of any Holder of Registrable
Securities, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
9. TRANSFER OF RIGHTS. The rights of the Holders of Registrable
Securities and Warrants under this Agreement with respect to any Registrable
Security may be transferred to any one or more transferees of such Registrable
Security or Warrant; PROVIDED, HOWEVER, that such registration rights shall not
be transferred to any transferee of Registrable Securities that is entitled to
freely resell all of such Registrable Securities without registration or
qualification of such securities under the Securities Act or any state
securities or blue sky law then in force. Any transfer of registration rights
pursuant to this Section shall be effective only upon receipt of a written
notice from the relevant Stockholder stating the name and address of any
transferee and identifying the Registrable Securities with respect to which the
rights under this Agreement are being transferred.
10. THIRD-PARTY BENEFICIARIES. All Holders of Registrable Securities
that have not executed this Agreement as Stockholders are intended to be third
party beneficiaries hereof as to the shelf registration of the shares of
Acquiror Common Stock issuable upon the exercise of the Warrants, but not as to
the shares of Acquiror Common Stock or the Warrants issued to such persons in
the Merger.
11. MISCELLANEOUS. (a) REMEDIES. Each Holder of Registrable
Securities in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
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<PAGE>
rights under this Agreement.
(b) AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Securities then outstanding; PROVIDED,
HOWEVER, that to the extent any such proposed change should solely affect the
rights of the Regent Affiliates under this Agreement, such proposed change shall
require the Company to obtain the written consent of at least a majority of the
Holders that are Regent Affiliates.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by telex or telecopier, registered or
certified mail (return receipt requested), postage prepaid or courier
guaranteeing next day delivery to the parties at the following addresses (or at
such other address for any party as shall be specified by like notice, provided
that notices of a change of address shall be effective only upon receipt
thereof). Notices delivered personally shall be effective upon receipt, notices
sent by mail shall be effective three days after mailing, notices sent by telex
shall be effective when answered back, notices sent by telecopier shall be
effective when receipt is acknowledged, and notices sent by courier guaranteeing
next day delivery shall be effective on the next business day after timely
deliver to the courier:
(i) if to a Holder of Registrable Securities, at the address of such
Holder provided in Schedule I hereto or at such other address as the
applicable Holder may designate to the Company in writing; and
(ii) if to Regent at:
Regent Communications, Inc.
50 E. River Center Boulevard
Suite 100
Covington, Kentucky 41011
Facsimile No.: (606) 292-0352
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<PAGE>
with a copy to:
Wyatt, Tarrant & Combs
2800 Citizens Plaza
Louisville, KY 40202
Attention: Stewart E. Connor, Esq.
Facsimile No.: (502) 589-0309
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: William P. Rogers, Jr.
Facsimile No.: (212) 474-3700
(iii) If to the Company at:
Jacor Communications, Inc.
1300 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202
Facsimile No.: (513) 621-0090
with a copy to:
Graydon, Head & Ritchey
1900 Fifth Third Center
P.O. Box 6464
Cincinnati, OH 45201
Attention: John Kropp, Esq.
Facsimile No.: (513) 651-3836
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors of each of the parties; PROVIDED,
HOWEVER, that subject to Section 9, this Agreement and the provisions of this
Agreement that are for the benefit of the Holders shall not
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<PAGE>
be assignable by any Holder to any Person and any such purported assignment
shall be null and void.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of any executed
signature page by facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Agreement.
(f) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
(h) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be in any way
impaired thereby, it being intended that all remaining provisions contained
herein shall not be in any way impaired thereby, it being intended that all of
the rights and privileges of the Stockholders shall be enforceable to the
fullest extent permitted by law.
(i) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression and a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter hereof.
There are no restrictions, promises, warranties or undertakings with respect to
the subject matter hereof, other than those set forth or referred to herein and
therein. This Agreement supersedes all prior agreements and
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<PAGE>
understandings between the parties with respect to such subject matter.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
JACOR COMMUNICATIONS, INC.,
by /s/ R. Christopher Weber
---------------------------
Name: R. Christopher Weber
Title: Senior Vice President and
Chief Financial Officer
REGENT COMMUNICATIONS, INC.,
by /s/ Terry S. Jacobs
---------------------------
Name: Terry S. Jacobs
Title: President
[Signatures of parties listed on Schedule I
hereto]
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<PAGE>
SCHEDULE I
to the Registration Rights Agreement
Terry S. Jacobs
South Atlantic Venture Fund II, L.P.
South Atlantic Venture Fund III, L.P.
LN Capital Investment Company
Michael J. Connelly
Lepercq, de Neuflize & Co.
J. David Grissom
David A. Jones, Jr.
JG Partnership
William H. Lomicka
Lawrence, Tyrell & Ortale
Richland Ventures, L.P.
Electra Investment Trust, PLC
Southwest Florida Enterprises, Inc.
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<PAGE>
EXHIBIT 99.1
CONTACT: KIRK BREWER
847.256.9282
JACOR TO ACQUIRE REGENT COMMUNICATIONS
CINCINNATI, OCTOBER 9 -- JACOR COMMUNICATIONS, INC. (NASDAQ: JCOR) today
announced it has reached a definitive merger agreement to acquire Regent
Communications, Inc.
Regent, based in Covington, Ky., owns, operates or represents 20 radio
stations located in five U.S. markets: Kansas City, Salt Lake City, Las Vegas,
Louisville, and Charleston, S.C. (See attached listing of stations for details.)
The transaction is subject to regulatory review.
Jacor will acquire Regent for 3.55 million newly issued shares of Jacor
common stock, warrants to purchase 500,000 shares of Jacor common stock at $40
per share, and the assumption of Regent's $64 million of debt.
Randy Michaels, Jacor chief executive officer, said, "We are very excited
about this acquisition, which brings Jacor into four new markets with multiple
station ownership consistent with Jacor's core operating strategy. This
increases our presence in Kansas City, and provides us with established clusters
of stations in new markets that hold a great deal of growth potential."
Jacor completed its acquisition of Citicasters Inc. on September 18, and on
September 26 announced an agreement to trade WTSP-TV in Tampa for six radio
stations owned by Gannett Co. Inc.
<PAGE>
Jacor Communications is headquartered in Cincinnati. Including announced
pending acquisitions, Jacor owns, operates, represents or provides programming
for 92 radio stations in 20 U.S. markets. The company also owns WKRC-TV in
Cincinnati. Jacor plans to pursue growth through continued acquisitions of
complementary stations in its existing markets, and radio groups or individual
stations with significant presence in other attractive markets.
# # #
2
<PAGE>
STATIONS TO BE PURCHASED
BY JACOR IN REGENT TRANSACTION
KANSAS CITY
- -----------
KMXV-FM
KUDL-FM
SALT LAKE CITY
- --------------
KALL-AM KRKR-FM (JSA)
KKAT-FM KBKK-FM (JSA)
KODJ-FM
KUTQ-FM *
KZHT-FM *
LAS VEGAS
- ---------
KSNE-FM
KFMS-FM
KWNR-FM **
KBGO-FM #
LOUISVILLE
- ----------
WDJX-FM
WSFR-FM
WFIA-AM
WVEZ-FM
WSJW-FM #
CHARLESTON, S.C.
- ----------------
WEZL-FM
WXLY-FM
* Pending acquisition from Bountiful Broadcasting currently operating under a
Time Brokerage Agreement.
** Pending acquisition from Southwest Radio.
# Regent holds option to purchase station, currently operating under a Time
Brokerage Agreement.
3
